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Does Obama think Obamacare boosted deficits by $600 billion?

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Politics,Beltway Confidential,Philip Klein,Politics Digest

As part of the ongoing war over Medicare, the Obama campaign has lately been arguing that his national health care law actually extends the solvency of the program.

“The president … doesn’t just talk about Medicare solvency – he actually did something, and he did it in a way that enhances seniors’ benefits,” Obama spokesman Ben LaBolt said, according to the Politico. “President Obama extended the solvency of Medicare by 8 years by passing the Affordable Care Act, and his budget would add another two years to its lifetime.”

The problem is, the same Medicare cuts cannot simultaneously be used to help pay for Obamacare and extend the life of Medicare.

As the Congressional Budget Office has explained:

The key point is that the savings to the (Medicare Hospital Insurance) trust fund under the (Patient Protection and Affordable Care Act) would be received by the government only once, so they cannot be set aside to pay for future Medicare spending and, at the same time, pay for current spending on other parts of the legislation or on other programs. Trust fund accounting shows the magnitude of the savings within the trust fund, and those savings indeed improve the solvency of that fund; however, that accounting ignores the burden that would be faced by the rest of the government later in redeeming the bonds held by the trust fund. Unified budget accounting shows that the majority of the HI trust fund savings would be used to pay for other spending under the PPACA and would not enhance the ability of the government to redeem the bonds credited to the trust fund to pay for future Medicare benefits. To describe the full amount of HI trust fund savings as both improving the governments ability to pay future Medicare benefits and financing new spending outside of Medicare would essentially double-count a large share of those savings and thus overstate the improvement in the governments fiscal position.

Last month, a CBO report estimated that Obamacare would reduce deficits by $109 billion from 2012 through 2022. But that estimate includes about $700 billion in Medicare cuts. If the Obama campaign is saying that those cuts are being used, instead, to extend the solvency of Medicare, then Obamacare will run deficits of $600 billion.

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