Study: Obama's health care law will add at least $340 billion to deficit

Public Trustee Charles Blahous speaks during a press conference at the US Treasury Department in Washington, DC, May 13, 2011 / Getty

(AP) WASHINGTON - Reigniting a debate about the bottom line for President Barack Obama's health care law, a leading conservative economist estimates in a study to be released Tuesday that the overhaul will add at least $340 billion to the deficit, not reduce it.

Charles Blahous, who serves as public trustee overseeing Medicare and Social Security finances, also suggested that federal accounting practices have obscured the true fiscal impact of the legislation, the fate of which is now in the hands of the Supreme Court.

Officially, the health care law is still projected to help reduce government red ink. The Congressional Budget Office, the government's nonpartisan fiscal umpire, said in an estimate last year that repealing the law actually would increase deficits by $210 billion from 2012 to 2021.

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The CBO, however, has not updated that projection. If $210 billion sounds like a big cushion, it's not. The government has recently been running annual deficits in the $1 trillion range.

The White house dismissed the study in a statement late Monday. Presidential assistant Jeanne Lambrew called the study "new math (that) fits the old pattern of mischaracterizations" about the health care law.

CBSNews.com Special Report: Health Care

Blahous, in his 52-page analysis released by George Mason University's Mercatus Center, said, "Taken as a whole, the enactment of the (health care law) has substantially worsened a dire federal fiscal outlook.

"The (law) both increases a federal commitment to health care spending that was already unsustainable under prior law and would exacerbate projected federal deficits relative to prior law," Blahous said.

The law expands health insurance coverage to more than 30 million people now uninsured, paying for it with a mix of Medicare cuts and new taxes and fees.

Blahous cited a number of factors for his conclusion:

The health care law's deficit cushion has been reduced by more than $80 billion because of the administration's decision not to move forward with a new long-term care insurance program that was part of the legislation. The Community Living Assistance Services and Supports program raised money in the short term, but would have turned into a fiscal drain over the years.

The cost of health insurance subsidies for millions of low-income and middle-class uninsured people could turn out to be higher than forecast, particularly if employers scale back their own coverage.

Various cost-control measures, including a tax on high-end insurance plans that doesn't kick in until 2018, could deliver less than expected.

The decision to use Medicare cuts to finance the expansion of coverage for the uninsured will only make matters worse, Blahous said. The money from the Medicare savings will have been spent, and lawmakers will have to find additional cuts or revenues to forestall that program's insolvency.

Under federal accounting rules, the Medicare cuts are also credited as savings to that program's trust fund. But the CBO and Medicare's own economic estimators already said the government can't spend the same money twice.

Blahous served in the George W. Bush White House from 2001-2009, rising to deputy director of the National Economic Council. He currently is a senior research fellow at the Mercatus Center.

His study was first reported late Monday by The Washington Post.

[realist2010]

Of course a Republican economist has bad things to say about the health care law. That's his religion.

[olyboy]

And he continues to put out ads claiming that all the healthcare needs of women are "free" under Obamacare. How are all those women going to feel when the ability of the US government to borrow ends and we are thrust into a depression or worse? How will they feed their children when they have no husbands to hunt for and protect them? How will their children survive without food or clothing? Obama is a fool leading fools.

[1Todd212]

In no way could adding the costs of 30 million more people to an already strained healthcare system with inflated individual healthcare costs and at a horrible time in our economy do any of us any good, including those 30 million. This measure does more to put at risk the entire system breaking down and shortens the time on the "ticking clock" of when the money runs out to pay for healthcare. The idea of a single payer system, like Canada, is impractical in our huge healthcare market. What makes the most sense, in terms of reducing the cost of healthcare and subsequently lowering the premiums to rates more people can afford, is to make the markets more competitive, and include a government run plan as a choice in the market along with private providers of insurance. If you really want to lower the costs of healthcare, go after the the giant profits being made, not the lack of coverage. It is in lowering these costs that will make healthcare more affordable to more people. It's hard to justify giving away more healthcare when the individual costs are already over inflated.

[anne623]

Health costs would go up anyhow under the current system and the government would be paying for many of them via tax credits to hospitals that see patients who can't pay. Aside from that, what truly exploded the debt would have been two wars funded on credit from China, not to mention tax giveaways to the very wealthy. Do we need rational tax reform, of course we do. Do we need healthcare reform, yes we do. In either instance (taxes and healthcare) the status quo is damaging the country.

[hypnotoad72]

http://www.forbes.com/sites/aroy/2011/10/11/how-mitt-romneys-health-care-experts-helped-design-obamacare/

"Romneycare"

If all this is playing chess, Obama has done an awesome job at tripping up his opposition.

[audemus]

Charles Blahous is a conservative, with ties to the Mercatus Center which is a conservative think-tank with guys like Charles Koch (of the infamous Koch brothers), sitting on its board of directors.

Some of the positions supported by Mercatus, like global warming being beneficial to mankind, are simply laughable. Others, like their support of rollbacks of EPA standards when it comes to air quality standards, pose serious threats to us all, and are nothing more than insane efforts at supporting positions that make it easier for the new breed of robber barons, like the Koch brothers, to continue their pillage and plunder of our planet's resources.

I cannot take seriously the words of people who are pawns of the rich and irresponsible, who think and act like this planet is their private cookie jar, and that issues of life and death for many are nothing more than speed bumps and minor irritants encountered along their way to winning some twisted version of Monopoly.

[luadda22]

So just because Charles Blahous is conservative he's wrong and Paul Krugman, because he is a liberal, is right?? And the Koch brothers are "robber barons", yet George Kaiser (who also is in the oil business and a multi-billionaire) can do no wrong because he supports Obama? And yet again Richard Siegmund Lindzen with MIT is wrong because of his views on man-made warming yet James E. Hansen with NASA is correct.


What a simple world you live in.

[audemus]

Charles Blahous is not wrong because he's a conservative, Charles Blahous is wrong because he isn't right. Let's discuss these people you mentioned here.

George Kaiser IS in the oil business and IS very wealthy, (you have a problem with people being wealthy ?), he's also one of Americas top 50 philanthropists. Among the causes he supports are fighting childhood poverty, and promoting early childhood education. He organized the largest community foundation in the U.S., which currently has over 4 billion dollars in assets that are used to help out people in need. Being in the oil business, it was surprising when in 2009, he advocated elimination or reduction of tax incentives for the oil and gas industries, and instead proposed the money be used for health care or education programs or for tax-cuts for other taxpayers. He is among those who have taken "The Giving Plan", a commitment to give away half of his wealth for charitable purposes....sounds like a self-centered phony to me.

James E. Hansen, professor at Columbia University and head of the Goddard Institute for Space Studies in NYC, has done intensive work and research into radiative transfer, models which calculate the transfer of electromagnetic radiation through a planetary atmosphere, such as Earth's. He's applied and refined these models to understand the Earth's atmosphere, in particular the effects that aerosols and trace gases have on Earth's climate. Hansen is best known for his research in the field of climatology...his testimony on climate changes to congressional committees has helped raise awareness of global warming. He has become an activist for action to mitigate the effects of climate change, even being arrested for taking part in protests against global warming. His science is serious, and widely accepted as truth and not propaganda.

Richard Siegmund Lindzen. Well known for his dismissals of claims that support theories of global warming, and his advocacy against those who believe global warming is a reality. However, satellite data from CERES has led researchers investigating Lindzen's theories to conclude that what he called the "Iris Effect", would actually warm the atmosphere, as opposed to his position that the effects of CO2 warming actually lowered the climate's sensitivity to infrared radiation. Often characterized as a contrarian who deliberately takes positions opposed to the majority...no matter how unpopular or refuted, he is generally supported only by those with one political or another.

Finally, my world may indeed be a simple one, (or not), however, at least it's not close-minded and brain-washed by the selfish interests of a bunch of disconnected fat-cats only interested in where their next buck is coming from.

Peace.

[marychgo]

I can't believe CBS or any other news source thinks this is "news"! A GOP economist, who opposes PPACA and works for a Koch-funded institute at a university known for its right-wing views, writes a report that says PPACA might be more expensive than we think. Are we supposed to be surprised? And when you drill down for the details, all he's saying is a bunch of "could"s and "might"s -- aka hand-wringing, aka concern-trolling. Why are you wasting our time?

[TimeToEvolve]

Conway you are not entitled to your own facts. It is well know this is the Bush Recession based on his spending like a drunken sailor. And you would know that if you did not listen to Fox Rush Boobs.

[TimeToEvolve]

Good example Aldrich. It is why I say that whatever a conservative says it is exactly the opposite. They are for fiscal responsibility but then spend us into ruin. They are pro-life but pro unregulated gun laws and pro-war.

A good recent example is the CONSERVATIVES on the "Supreme" Court voted for anti civil rights intrusive searches of crime suspects.

[aldrich617]

Imagine if part of the Obamacare mandate was to force employers to prepay for 50 years of health benefits even if it put companies out of business, costing thousands of jobs. I think you should expect The Tea Party to be foaming at the mouth in rage, threatening
insurrection. But no, they are actually the ones pushing the idea - call it Congresscare - and it applies only to the Post Office. They
are using a defective statute to rob the mailman (again), and they
refuse to explain why they love that extortionary health care mandate and not the mild one in Obamacare. Perhaps their need for
money simply trumps any pretense of fairness or principle.

What arguments would the Supreme Court consider about the postal mandate if it ever came to their attention, and is it likely that it would be overturned? There seems to be a conspiracy of silence on
the subject, and it is my guess that the coverup of the theft of
many billions of postal assets will continue.