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CBO: GOP Efforts To Defund Health Law Will Increase Federal Spending

By Igor Volsky  

"CBO: GOP Efforts To Defund Health Law Will Increase Federal Spending"

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Late last month, the GOP-controlled House passed a continuing resolution, which the Senate rejected yesterday, that sought to lower federal spending by defunding the Affordable Care Act for the remainder of the year. Rep. Denny Rehberg (R-MT) offered an amendment — which became section 4017 of the CR — that prohibits funds in the bill from being paid to any employee, officer, contractor, or grantee of any department or agency funded by the Labor, Health and Human Services, and Education, and Related Agencies portion of the bill to implement the provisions of the health care law. The measure passed by a vote of 239-187.

Well today, the Congressional Budget Office (CBO) released its cost estimate for Rehberg’s amendment and found that despite the Republican’s stated goal of reining in federal spending, defunding the ACA piece by piece increases costs over the long-term:

CBO estimates that enacting the prohibition on using new fiscal year 2011 funding to carry out those laws would reduce spending by $1.6 billion during the remainder of 2011, but would increase spending by $3.1 billion in fiscal year 2012 and by smaller amounts in each of the fiscal years 2013 through 2021. Net additional costs would total $3.9 billion over the 2011- 2016 period and $5.6 billion over the 2011-2021 period. In addition, CBO and JCT estimate that the prohibition would reduce federal revenues by $0.1 billion over both the 2011-2016 and 2011-2021 periods.

CBO explains that eliminating discretionary funding in 2011 would delay or postpone the completion of regulatory processes for ongoing programs, new programs, and reduce “compliance with changes to the tax code.” Consequently, the agency would not seek to recoup Medicare overpayments that would occur after the expected changes in payment rates, or benefit from all of the savings of delivery reforms (the agency would have less time to invest in such research). The IRS would also be prevented from administering tax credits and taxes, resulting in “some underpayment of the new excise taxes and some over-claiming of the new tax credits,” CBO concludes.

The report is another blow to the Republican effort to undo the health legislation. An earlier estimate of the GOP’s proposal to eliminate the entire ACA (which passed the House of Representatives on January 19, 2011) found that complete repeal would lead to an increase in the “federal budget deficits of $210 billion over the 2012-2021 period” and grow the number of uninsured by 33 million, “leaving a total of about 57 million nonelderly people” without coverage.

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