WASHINGTON – A former Bush administration official and leading conservative economist says President Obama’s health care law will add at least $340 billion to the national deficit, a claim the White House denies.
In a study to be released Tuesday, Charles Blahous, who serves as public trustee overseeing Medicare and Social Security finances, says federal accounting practices have obscured the true fiscal impact of ObamaCare.
Officially, the health care law is still projected to help reduce government red ink. The Congressional Budget Office, the government’s non-partisan fiscal umpire, said in an estimate last year that repealing the law actually would increase deficits by $210 billion from 2012-2021.
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.
“Taken as a whole, the enactment of the (health care law) has substantially worsened a dire federal fiscal outlook,” Blahous wrote in his 52-page analysis, released by George Mason University’s Mercatus Center. “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 cited a number of factors for his conclusion:
— The health care’s law 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 turn, 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.
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