Post policy reporter Glenn Kessler analyzed how sequestration and the healthcare reform law will affect the deficit to fact check a statement from White House Council of Economic Advisers Chairman Jason Furman, who claimed the PPACA is the biggest thing cutting the deficit in the medium and long term.
According to Congressional Budget Office estimates, the sequester shrinks the deficit more in the short-term, reducing it by about $100 billion or 0.5 percent of the nation’s gross domestic product annually. However, sequestration ends after 2021 and doesn’t contain structural reforms that would lead to long-term deficit reduction, according to the report.
Meanwhile, the CBO has projected the PPACA will reduce the deficit by just $7 billion during its first five years of implementation. The CBO also estimated the law will shrink the deficit by 0.5 percent of GDP between 2023 and 2032.
Overall, the PPACA will have a larger and more sustained effect on the deficit than sequestration cuts, according to the report.
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