Repealing the health care law "would save $95 billion in 2016."
Mitt Romney on Friday, November 4th, 2011 in an op-ed in USA Today
Mitt Romney said repealing 'Obamacare' would save $95 billion in 2016
Mitt Romney has recently been emphasizing one of the favorite themes of the tea party movement: cutting government spending.
He’s been getting pretty specific about some of his ideas, both in an op-ed in USA Today and in speeches on the campaign trail. His plans include ending subsidies for Amtrak, stopping funding the Corporation for Public Broadcasting, and eliminating foreign aid to countries "that oppose America’s interests."
He also wants to save money by rolling back President Barack Obama’s signature health care law.
He made the point in the USA Today op-ed, suggesting he would "repeal ObamaCare, which would save $95 billion in 2016."
We were surprised by his suggestion. As we remembered the health care negotiations, Democrats took pains to make sure the 2010 health care law was projected to reduce the deficit, and they bragged repeatedly about their numbers.
We contacted the Romney campaign, which referred us to an analysis by the nonpartisan Congressional Budget Office, the agency that independently calculates the cost of laws proposed by both parties.
In February 2011, the CBO published an analysis of a Republican measure to fully repeal the health care law. The analysis was for H.R. 2, "the Repealing the Job-Killing Health Care Law Act," a simple repeal bill that House Republicans approved on Jan. 19, 2011.
Keep in mind, though, that repealing the health care law doesn’t only cut spending. The law had many moving parts, some of which were revenue sources to offset the spending and reduce the overall federal deficit.
The law spent money on providing tax subsidies to help people buy insurance and by expanding the Medicaid health insurance for the very poor.
But it offset those additional costs by slowing the growth of future spending on Medicare, the health insurance program for Americans over age 65.
And, it generated revenues for the government by creating new excise taxes on high-cost health insurance plans (the "Cadillac" plans); adding new Medicare taxes on people with high incomes; and charging new fees to health insurance companies and health care manufacturers.
In other words, if you fully repeal the law, you would also be repealing things that reduce the deficit, such as cost reductions and higher taxes.
Romney cited a reduction of $95 billion in 2016, but that number only counts what the law spends that year. Most of the spending is for subsidizing coverage for the uninsured.
That same year, the law also is projected to raise revenues of $78 billion, largely through new taxes on the wealthy and new fees on the health care industry.
So according to the CBO analysis, a full repeal of the bill would reduce the deficit by $16 billion in 2016, much less than the number Romney cited.
And then there’s the broader picture: When the CBO looked at the first 10 years of repeal, from 2012 to 2021, it found that repeal added $210 billion to the deficit. So the deficit would actually be lower if the law is not repealed.
Finally, we should note that a repeal of the law would not necessarily be "easy. "Romney would need to have solid Republican majorities in Congress, including 60 members in the Senate to block filibusters.
If Romney had only criticized the law as an expansion of government spending, he would have been on firmer ground. Instead, he asserted that a repeal of the law would save significant money -- $95 billion. In fact, the law included new taxes and cost reductions so that the actual savings for the year he cited would be much smaller -- $16 billion. And, over the long haul, repealing the law actually adds significantly to the deficit. So we rate his statement False.