Nearly Half of Obamacare Defecit Reduction Wiped Out!

October 14, 2011 4:29pm
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Half of Obamacare's deficit reduction wiped out byPhilip Klein Senior Editorial Writer
Follow on Twitter:@PhilipAKlein

Nearly half of the deficit reduction that Democrats claimed when President Obama signed the national health care law would be wiped away by the administration's recomendation against implementing a doomed long-term care program.

As Obamacare's critics noted at the time, Democrats' deficit reduction claims were based on a series of accounting gimmicks. One of the most obvious was the inclusion of the Community Living Assistance and Support Services Act, a program that was slated to collect five years of premiums before paying out any benefits. Though it was unsustainable over time, on paper it produced surpluses during the Congressional Budget Office's 10-year budget window.

At the time of final passage, the CBO found that the health care law would reduce deficits by $143 billion, and $70 billion of that was attributable to the CLASS program.

Earlier, I noted a new HHS report recomending against implementing the program. HHS Secretary Kathleen Sebelius has now sent a letter to Congress conceding that there's no path forward.

UPDATE: The Washington Post's Sarah Kliff has more. To prevent any confusion, I should emphasize again that the $70 billion number I referred to was the estimate at the time of passage, when the timeframe was 2010 to 2019. The CBO's ten-year timeline has since moved forward, and over the next 10 years, as Kliff points out, the reduction in revenue from killing the program would be $86 billion. You'll probably see both sets of numbers floating around, so I wanted to be clear.