CBO: Repealing ObamaCare to Reduce Gross Spending By $1.4 Trillion Over Next Decade

Did you ever wonder why implementation of Obamacare is not until 2014?

Today Doug Elmendorf, Director of the Congressional Budget Office, wrote a letter to Speaker John Boehner setting out the CBO's current view of the budgetary impact of H.R. 2, the Republican-sponsored bill that would repeal Obamacare and related legislation. Elmendorf says that for the fiscal years 2012 through 2021, repealing Obamacare would reduce federal deficits by more than $1 trillion:

CBO and JCT [the staff of the Joint Committee on Taxation] estimate that the repeal of the provisions of PPACA [Obamacare] and the Reconciliation Act affecting health insurance coverage would result in a net decrease in federal deficits of $1,042 billion over fiscal years 2012 through 2021 (see Table 3). That estimate includes a $674 billion reduction in net federal outlays for Medicaid and CHIP and $677 billion in savings resulting from the elimination of the exchange subsidies and related spending. In addition, the repeal of the tax credit for certain small employers who offer health insurance is estimated to save $40 billion over 10 years. Those savings would be partly offset by lower revenues or higher costs, totaling about $350 billion over the 10-year budget window, from four sources: a decline in net revenues from eliminating the excise tax on high-premium insurance plans, totaling $111 billion; eliminating the penalty payments by uninsured individuals, which would reduce revenues by $27 billion; eliminating penalty payments by employers whose workers would receive subsidies via the exchanges, which would reduce revenues by $82 billion; and other budgetary effects, mostly on tax revenues, associated with shifts in the mix of taxable and nontaxable compensation resulting from changes in employment-based health insurance coverage, which would increase deficits by $130 billion.

It is critically important to understand that the CBO crunches numbers based on assumptions that it is given by Congress. The CBO does not comment on how plausible those assumptions are. Thus, garbage in/garbage out is the applicable rule. So when you get rid of the Democrat gimmicks, add in the taxes, and then use 10 years of taxes for ten years of services ... poof go the lies.

The Democrats are promising to make $1.2 trillion in future Medicare and Social Security cuts, to offset the $1 trillion additional costs that will be imposed by Obamacare. Whom are they kidding? The CBO has to accept the Democrats' assumptions, for purposes of telling the Democrat's lies, but anyone else would be crazy to believe them.