"The Government Accountability Office estimated (Obamacare) will add to the long-term deficit by $6.2 trillion."
Morgan Griffith on Thursday, May 16th, 2013 in a news release.
Morgan Griffith says GAO estimates Obamacare will add $6.2 trillion to long-term deficits
U.S. Rep. Morgan Griffith says Obamacare will be a drag on the nation’s budget for decades to come.
"The Government Accountability Office estimated that it will add to the long-term deficit by $6.2 trillion," Griffith, R-9th, said in a May 16 news release.
That eye-popping number, which has been repeated by other Republicans and conservative organizations critical of the health care law, caught our attention. So we checked whether the GAO report really did say the law would put the U.S. another $6.2 trillion into the red.
Griffith spokesman Andrea Pivarunas pointed us to a GAO report released in January. The study, requested by Sen. Jeff Sessions, R-Ala., examined Obamacare’s potential effect on the country’s "primary deficit" -- the gap between spending and revenues that leaves out interest payments on the national debt.
The GAO analyzed two vastly different scenarios on Obamacare’s budgetary impact over the next 75 years.
One scenario assumed the law would remain intact and that all of its provisions to slow the growth of federal healthcare spending work as intended. In this rosy case, the GAO found that the nation’s deficit, when compared to its Gross Domestic Product, would decrease by 1.5 percent over 75 years.
There are good reasons to question whether things will pan out that way.
Medicare’s trustees, the CBO and the Office of the Chief Actuary have questioned whether Obamacare’s costs containment measures for healthcare can be sustained over the long term. The law is based on assumptions that mandated productivity gains in health care will spur providers to cut costs. But what happens if the productivity goals are not attainable?
To answer that question, the GAO considered a second scenario in which Obamacare’s mandates for expanding health care coverage remained intact, but all of its cost containment measures are phased out starting in 2019.
Under that gloomy setting, the report said the nation’s deficit, when compared to GDP, would increase by 0.7 percent over 75 years.
We couldn’t find the $6.2 trillion figure Griffith cited anywhere in the report. There was a good reason why.
"We did not make such an estimate," emailed Susan Irving, a GAO analyst who co-authored report.
The deficit number was computed by Republican staff members on the Senate Budget Committee, where Sessions is the ranking member. The aides compiled the total value country’s GDP over 75 years using data from the U.S. Centers for Medicare and Medicaid Services.
Those figures show GDP is expected to total $883 trillion between 2011 and 2085. Running that number through the GAO report, 1.5 percent of GDP over 75 years would come to $13.25 trillion. That would be the savings under the rosy scenario.
On the other hand, 0.7 percent of GDP over 75 years would total $6.2 trillion. That would be the increased debt under the gloomy scenario.
Griffith, in his statement, only mentions the bad scenario.
But Irving, the GAO analyst, told us the report does not say whether one outcome or the other is more likely. The study, in fact, states that Obamacare’s long-range impact on the budget "depends" on whether the cost containment measures work, which is unknown.
Christopher Conover, an adjunct scholar with the conservative American Enterprise Institute, wrote in a recent web post that the gloomy scenario is a more realistic for two reasons:1) the cost containment measures may not work and, if they do; 2) Congress will not have not have the political will to continue reforms that become unpopular.
Josh Gordon, policy director at the centrist Concord Coalition, said it’s a "meaningless critique" to judge the health care reform law by that $6.2 trillion figure.
"It’s always good to know the worst case scenario, but it doesn’t make sense to criticize a piece of legislation for the worst case scenario," said Gordon, whose group advocates deficit reduction. "The worst case scenario is not what’s enacted."
Gordon said although there are concerns that some of the containment measures may not work, "that’s very different than saying all of them at once will not work and thus the deficit will increase by ‘X’ amount."
Henry Aaron, a senior fellow at the Brookings Institution who supports Obamacare, was perplexed by Griffith’s statement. "Why one would say that the (health care reform law) is unbalanced because one runs estimates of a program that differs from the (health care reform law) escapes me entirely," he said.
Griffith said the GAO estimated Obamacare will add $6.2 trillion to deficits over the next 75 years.
That figure isn’t in the GAO report that Griffith’s office cited. Republicans came up with the number by adding reasonable computations to a worst-case scenario laid out by the GAO early this year.
Griffith failed to mention that the report also contained a rosy scenario showing Obamacare could substantially reduce long-term deficits. The GAO did not say in its report which of the scenarios is more likely to occur. Many experts say the reality likely will fall somewhere in the middle.
So Griffith’s statement contains a trace of fact, but creates a deceptive claim about what the GAO report said. We rate his statement Mostly False.