CBO Maintains Original $124B PPACA Savings Estimate

In response to an inquiry from Congress, the Congressional Budget Office has reiterated its March 2010 projection that the Patient Protection and Affordable Care Act will reduce federal budget deficits by a total of $124 billion from 2010 to 2019 and by approximately one-half of 1 percent of gross domestic product during the following decade.

CBO director Douglas W. Elmendorf wrote on the agency's website that the CBO and Joint Committee on Taxation "have no reason to think that their initial assessment that the [PPACA] would reduce budget deficits was incorrect." However, he also noted a retrospective analysis of the impact of current law is significantly different from a cost estimate for a proposed measure, specifically because it requires establishing a benchmark scenario that would have unfolded if the law wasn't enacted, which is a "challenging undertaking that is beyond the scope of CBO's usual analyses."

In a footnote that flew under the radar until earlier this month, the CBO stated in an April report that it's no longer possible to assess the economic impact of certain provisions of the PPACA. The footnote states:  "The provisions that expand insurance coverage established entirely new programs or components of programs that can be isolated and reassessed. In contrast, other provisions of the [PPACA] significantly modified existing federal programs and made changes to the Internal Revenue Code. Isolating the incremental effects of those provisions on previously existing programs and revenues four years after enactment of the [PPACA] is not possible."

The decision has sparked concern that a halt to CBO assessment's will make it unclear whether the PPACA is actually reducing the federal deficit, in addition to shrinking the uninsured population. Earlier this month, Sen. Ron Johnson (R-Wis.) introduced legislation that would require the CBO to report annually on costs and revenues related to the PPACA. "CBO undoubtedly faces considerable challenges in separating the impact of the law from some of the other programs that interact with it, but it can and should be able to estimate those costs and impacts so that Congress and the American people understand the true scope of financial harm that Obamacare is causing," Sen. Johnson said in a news release.

More Articles on the Congressional Budget Office:
Republican Bill Would Require Annual CBO Analysis of PPACA  
CBO to Stop Measuring PPACA Budgetary Impact: 5 Things to Know  
CBO Lowers Estimate of Uninsured Who Will Pay PPACA Penalty: 5 Things to Know 


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