"According to the Congressional Budget Office, repealing Obamacare would increase the budget deficit."
Carol Shea-Porter on Friday, September 20th, 2013 in a press release
Carol Shea-Porter says repealing Obamacare “would increase the budget deficit”
Since the health care law proposed by President Barack Obama passed in 2010, Republicans have made it a top priority to dismantle the program. The latest attempt involves a House spending bill, which would keep the federal government running through mid-December, but also strip all funding for the Affordable Care Act.
Obama has already threatened to veto the bill, but as the proposal was being debated, U.S. Rep. Carol Shea-Porter, a Democrat, was quick to denounce it. When it came up for a vote on Sept. 20, 2013, Shea-Porter joined nearly every other member of her party in voting against the resolution, which passed the House, 230-189.
In a written statement, Shea-Porter called the resolution (H.J.Res.59) an "irresponsible political ploy," and said repealing Obamacare would increase the budget deficit. She cited information from the Congressional Budget Office, which provides nonpartisan analysis of the federal budget and the economy to Congress.
"I agree with most Americans that we should keep the government open, but Speaker Boehner and House Republicans are threatening to shut it down unless Congress defunds the Affordable Care Act, a law that was passed by Congress, signed by the President, and upheld by the Supreme Court," Shea-Porter said in the statement.
In addition to risking a government shutdown, she added, "according to the Congressional Budget Office, repealing Obamacare would increase the budget deficit."
We wondered if her claim was true, so we checked the CBO’s published research.
We found that the CBO has been asked to estimate the cost of repealing Obamacare twice previously. First, in July 2012, CBO projected that repealing the new health reform law would increase the deficit by an estimated $109 billion over a decade.
CBO was asked to study repealing Obamacare a second time in May 2013. The office determined it didn't have enough time to do a full study, and referred Congress to its earlier projections from 2012.
A closer look at the CBO’s research shows that repealing Obamacare would increase the deficit because the net savings from eliminating new insurance mandates would be offset by spending increases and revenue reductions. Here’s a broad look at the CBO’s calculations:
• The health care law expands health insurance coverage, but not without increasing some costs for the federal government. The law provides subsidies for some people who buy health insurance through new exchanges. It also increases spending on Medicaid and the Children’s Health Insurance Program, and establishes tax credits for certain small employers. Repealing the new coverage provisions would yield a net savings of $1,171 billion over 10 years.
• The new health care law would also bring in new revenue, mostly by increasing a payroll tax for Medicare hospital insurance and extending it to net investment income for high-income taxpayers. The law also imposes new excise taxes on some equipment manufacturers. Repealing those provisions would reduce revenues by an estimated $569 billion over 10 years.
• CBO has also calculated that the Affordable Care Act would produce major savings in health care costs, primarily through reductions in Medicare spending. Repealing those efforts would increase direct spending by an estimated $711 billion over 10 years.
We should note a few caveats, however.
First, the CBO acknowledges those projections are only estimates, since it’s still highly uncertain what the effects of the Affordable Care Act will be.
Second, the CBO analysis referenced above was based on a 2012 proposal to repeal Obamacare. In her press release, Shea-Porter blurs the difference between defunding and repealing Obamacare -- two approaches that sound similar but actually are somewhat different. Unlike a repeal of the law -- that is, completely striking it from existence -- defunding it would leave all of the provisions in place.
Because defunding is a more complicated proposal to analyze than a simple repeal, the CBO did not do a full analysis of the defunding proposal. So the most recent numerical CBO estimate of the impact on the budget deficit is one based on a prior proposal to repeal the law, not the more recent proposal to defund it.
Shea-Porter said that, "according to the Congressional Budget Office, repealing Obamacare would increase the budget deficit."
She phrased her press release carefully -- she said "repealing" the law would increase the deficit. The CBO did indeed make that projection more than a year ago. However, it’s worth noting that her release targeted a different legislative approach -- defunding Obamacare, rather than repealing it -- and that’s an approach about which the CBO has not yet passed judgment.
The statement is accurate but needs clarification or additional information. We rate it Mostly True.