Saturday, February 23, 2013

Psst, Speaker Carter: the CBO says ACA reduces debt

Posted By on Sat, Feb 23, 2013 at 2:16 PM

House Speaker Davy Carter has been staking a position for himself over the last week that sounds a little like Republicans in other states who’ve come out in favor of Medicaid expansion (Carter hasn’t gone there yet). The Affordable Care Act still stinks, he says, but given that it’s the law, maybe expansion makes sense for the state. He has repeatedly said that he is “absolutely convinced that the federal government cannot afford to do this” but looking “solely through the prism of Arkansas” MAYBE it’s a good deal.

We’ve argued from the get-go that this is the way local Republicans ought to look at expansion, so bravo! But if he’s going to go around saying that the federal government can’t afford the ACA, we should point out that the nonpartisan Congressional Budget Office says that the ACA actually projects to reduce the debt by more than $100 billion over ten years. (The CBO released an update in March of last year and another after the Supreme Court decision, both of which lowered projections of the law’s costs.) Yes, Medicaid expansion costs a significant amount of money, but the ACA pays for it, largely via reductions in Medicare reimbursement rates and new taxes that mostly fall on the wealthy. The difference between savings/revenues and costs increases over time, so the law actually projects to reduce the debt by $1 trillion in its second decade.

In fact, when U.S. Speaker John Boehner and the congressional Republicans tried to repeal Obamacare, the CBO reported back that doing so would make budget deficits higher.

It’s true that expansion in a vacuum falls on the cost side of the ACA. If a state rejects it, it will reduce the overall cost of the ACA, and thus lead to less federal spending, albeit by an amount less than a rounding error in comparison to the national debt. But that just circles back to the question of whether Arkansas wants to pay for Medicaid expansion in other states (for example via reimbursement cuts to Arkansas hospitals, in effect regardless of what we decide on expansion) without gaining any of the benefits here at home.

Obvious caveat here: long-term budget scoring is inevitably controversial and politicized. The CBO is a highly respected institution often cited by both parties, but these projections aren’t a crystal ball. Maybe the costs will be higher or lower than the CBO thinks, maybe the savings and revenues will be higher or lower. But if Carter says he is "absolutely convinced" that the nation can’t afford the healthcare law, the burden is on him to explain why. The fact that a trillion is a really big number doesn’t count.

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