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CBO: Obamacare repeal will reduce deficit by $337 billion

 

The Congressional Budget Office has released their long-awaited score for the American Health Care Act—the ACA replacement legislation. The 37-page cost estimate details the spending implications of enacting this legislation, a report many members of Congress had wanted to see before the expected vote takes place.

 

CBO has determined that the new legislation would reduce outlays by $1.2 trillion and reduce revenues by $0.9 trillion. This would have a net reduction in the federal deficit of $337 billion over the next 10 years. Over the next five years, the deficit would grow about $9 billion, before dropping off by $337 billion over the 2017-2026 time frame.

 

One caveat is that this estimate is solely taking direct spending into account—CBO has yet to score the discretionary implications. These savings would largely come from a reduction in Medicaid outlays and the elimination of nongroup health insurance subsidies. The largest costs of the legislation would be from the elimination of much of the taxes and fees that were in the Affordable Care Act and a new tax-credit for health insurance.

 

This report is not immune to some important criticism, and CBO admits that there is uncertainty with the accuracy of the scoring because of the various factors that contribute to the costs. Between the insurance companies, states, individuals, federal agencies, employers, and so on, it’s difficult to get every prediction entirely accurate.

 

There are several reasons that fiscal conservatives should be cautious about this legislation — and it’s well worth noting that a full repeal would save more and insure more individuals. But finding meaningful ways to decrease the deficit over the long-term is undoubtedly something to celebrate.

 

Here’s hoping Congress continues to improve the legislation and pushes through a full repeal and free-market healthcare once and for all.

Where Did the Fiscal Conservatives Go?

 

Fiscal Conservatism has been the bedrock of the Republican Party for years. From Reagan to Ryan, McConnell to Cruz, Republicans have prided themselves on small government and fiscal restraint. But how true are these claims, really? Are all Republicans fiscal conservatives? Sadly, the answer is no.

 

Jennifer Rubin of the Washington Post recently criticized Republicans for taking spending off the table to pay for tax cuts, saying: “If Republicans want tax simplification and fairness and still want significant spending (on health care and defense), they must pay for it. Period.”

 

While it is not our place to delve into tax policy, Ms. Rubin is right on one point: Massive spending, major tax cuts, and no focus on reducing spending is a foolhardy plan. And as Republicans twist themselves deeper into discussions of just how exactly to raise massive tax revenue, fiscal conservatives ought to ask instead: What happened to cutting spending, anyway?

 

For all their talk of fiscal responsibility, Republicans have not yet offered a plan to cut spending and debt – and even the long-vaunted Obamacare repeal seems to be in some danger. Fiscal conservatism should not include only tax cuts – in fact, in cannot.

 

Fiscal conservatives should keep a close watch moving forward to ensure that politicians – especially those who claim to care about spending – do not forget how important true reform really is.

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