When President Obama pitched his national health care legislation to a joint session of Congress in Sept. 2009, he declared that, “the plan I’m proposing will cost around $900 billion over 10 years.” This week, a new report by the Congressional Budget Office exposed the dishonesty of this claim.
As Democrats set out to craft national health care legislation in early 2009, they faced a problem. Obama had just signed a $787 billion economic stimulus package, the U.S. fiscal situation was rapidly deteriorating and Americans were starting to get antsy about excessive federal spending and debt.
Achieving anything close to universal health care would mean a multi-trillion dollar endeavor, but Democrats didn’t want to feed the narrative that they were the big spending party.
So they began tweaking and reverse-engineering health care legislation to produce a CBO score that, on paper, would peg the cost of the bill at under a trillion dollars, thus denying the GOP an easy talking point.
The resulting law has many components, but the bulk of the cost stems from expanding insurance coverage by adding 17 million people to Medicaid and providing subsidies to individuals to help them purchase government-designed insurance policies on new government-run exchanges.
Among the many accounting gimmicks Democrats employed to make the bill appear cheaper, the most egregious was to delay implementation of these major spending provisions until 2014.
Because the CBO was making projections based on a 10-year budget window that ended in 2019, using this tactic meant that its estimates would only include six years of actual costs. This made it easier for Democrats to claim that their bill wasn’t a budget buster.
Just before passage in March 2010, the CBO did project that the insurance coverage provisions of the legislation would cost $940 billion, and that was the number that made all the headlines.
But a closer look showed that Obamacare was a ticking time bomb. In reality, $923 billion, or 98 percent, of the projected spending came between 2014 and 2019, after the law’s major elements actually went into effect.
At the time, critics argued that the true 10-year cost of the law would be much higher. They have been proven correct. On Tuesday, the CBO released updated estimates with a new budget window from 2013 to 2022, and the gross cost has now ballooned to $1.76 trillion.
Keep in mind that this still isn’t a true estimate, because it only includes nine years of implementation. Based on the trend (the CBO projects costs of $265 billion in 2022 alone), by next March we’ll likely find out that the true 10-year cost of Obamacare is over $2 trillion.
Supporters of the law would dismiss this as irrelevant, instead focusing on estimates that show it would reduce deficits overall because new spending is offset by tax increases and Medicare cuts. The problem is, just because spending is “paid for” doesn’t mean money doesn’t get spent.
The money raised for Obamacare could have been used to extend the solvency of Medicare or reduce the deficit rather than to finance more than $2 trillion in new spending.
Furthermore, if Democrats would have fessed up to the fact that their legislation would actually cost $2 trillion over 10 years, rather than “around $900 billion,” it never would have passed Congress in the first place.
On the bright side, there’s some potential for poetic justice here. Historically, it’s been difficult to unravel welfare programs once people begin receiving benefits. But precisely because implementation has been delayed, it’s given opponents of Obamacare a window to fight for repeal.
Philip Klein is senior editorial writer for The Examiner. He can be reached at [email protected].
