Affordable Care Act Reduces The Deficit

CBO: The Affordable Care Act Will Reduce Deficits By Over $200 Billion From 2012-2021. According to Congressional Budget Office Director Douglas Elmendorf’s testimony before the House on March 30, 2011: “CBO and JCT’s most recent comprehensive estimate of the budgetary impact of PPACA and the Reconciliation Act was in relation to an estimate prepared for H.R. 2, the Repealing the Job-Killing Health Care Law Act, as passed by the House of Representatives on January 19, 2011. H.R. 2 would repeal the health care provisions of those laws. CBO and JCT estimated that repealing PPACA and the health-related provisions of the Reconciliation Act would produce a net increase in federal deficits of $210 billion over the 2012–2021 period as a result of changes in direct spending and revenues. Reversing the sign of the estimate released in February provides an approximate estimate of the impact over that period of enacting those provisions. Therefore, CBO and JCT effectively estimated in February that PPACA and the health-related provisions of the Reconciliation Act will produce a net decrease in federal deficits of $210 billion over the 2012–2021 period as a result of changes in direct spending and revenues.” [“CBO’s Analysis of the Major Health Care Legislation Enacted in March 2010,” CBO.gov, 3/30/11]

• July 2012 Report Affirmed Projection That ACA Will Reduce Deficits. According to a Congressional Budget Office Report titled “Estimates for the Insurance Coverage Provisions of the Affordable Care Act Updated for the Recent Supreme Court Decision”: “CBO and JCT have not updated their estimate of the overall budgetary impact of the ACA; previously, they estimated that the law would, on net, reduce budget deficits.” [CBO.gov, July 2012]

FactCheck.org : GOP’s Claim That Obamacare Adds $700 Billion To The Deficit Relies On Faulty “Partisan Analysis.” As FactCheck.org explains, the claim that the Affordable Care Act increases the deficit by $700 billion “relies on a partisan analysis by the House Budget Committee’s Republicans” and depends on false premises:

• It rests largely on a claim that hundreds of billions of dollars in projected Medicare savings are being “double-counted.” But CBO is simply not doing that.
• The GOP’s $700 billion figure also includes more than $200 billion for a permanent “doctor fix” to prevent a cut in Medicare payments to doctors. But that is not even a part of the new law, and many Republicans endorse the “doctor fix” anyway.
• The GOP claims the law will cost $115 billion to administer, but that isn’t true. CBO actually puts those costs at roughly $10 billion to $20 billion over the next 10 years. [FactCheck.org, 1/19/11]

“Wasted” Recovery Spending Created Millions Of Jobs

Recovery Act “Succeeded In…Protecting The Economy During The Worst Of The Recession.” From the Center on Budget and Policy Priorities: “A new Congressional Budget Office (CBO) report estimates that the American Recovery and Reinvestment Act (ARRA) increased the number of people employed by between 200,000 and 1.5 million jobs in March. In other words, between 200,000 and 1.5 million people employed in March owed their jobs to the Recovery Act. […] ARRA succeeded in its primary goal of protecting the economy during the worst of the recession. The CBO report finds that ARRA’s impact on jobs peaked in the third quarter of 2010, when up to 3.6 million people owed their jobs to the Recovery Act. Since then, the Act’s job impact has gradually declined as the economy recovers and certain provisions expire.” [CBPP.org, 5/29/12]

At Its Peak, Recovery Act Was Responsible For Up To 3.6 Million Jobs. According to the nonpartisan Congressional Budget Office:

CBO estimates that ARRAs [sic] policies had the following effects in the third quarter of calendar year 2010:

• They raised real (inflation-adjusted) gross domestic product by between 1.4 percent and 4.1 percent,
• Lowered the unemployment rate by between 0.8 percentage points and 2.0 percentage points,
• Increased the number of people employed by between 1.4 million and 3.6 million, and
• Increased the number of full-time-equivalent (FTE) jobs by 2.0 million to 5.2 million compared with what would have occurred otherwise. (Increases in FTE jobs include shifts from part-time to full-time work or overtime and are thus generally larger than increases in the number of employed workers). [CBO.gov, 11/24/10]

Recovery Act Included $288 Billion In Tax Cuts. From PolitiFact: “”Nearly a third of the cost of the stimulus, $288 billion, comes via tax breaks to individuals and businesses. The tax cuts include a refundable credit of up to $400 per individual and $800 for married couples; a temporary increase of the earned income tax credit for disadvantaged families; and an extension of a program that allows businesses to recover the costs of capital expenditures faster than usual. The tax cuts aren’t so much spending as money the government won’t get — so it can stay in the economy.” [PolitiFact.com, 2/17/10]

The Rescue Of The Auto Industry Worked

Under Obama, The Automotive Industry Has Gained “More Than 100,000” Jobs. According to the Washington Post’s Glenn Kessler: “The BLS data show that much of the decline in auto industry employment took place in 2008, before Obama became president. Just in 2008, some 254,000 jobs disappeared in vehicle and vehicle parts manufacturing and 211,000 at vehicle dealerships. The numbers are equally grim if you just look at auto manufacturing and dealerships. But since January 2009, when Obama took office, overall there has been an increase in jobs. The number of jobs hit a low point in November 2009, but then it has slowly inched upward so that Obama can point to the auto industry and says there has been a net gain. In vehicle and vehicle parts manufacturing, the total number of jobs has increased by 73,000. For dealers, the gain has been nearly 30,000. So, all told, that’s more than 100,000.” [WashingtonPost.com, 5/18/12]

• Michigan Gained Jobs In 2011 For The First Time In A Decade. From Bloomberg: “Last year, Michigan gained 66,000 net jobs, the first increase since the turn of the century, according to a Jan. 13 state report. The University of Michigan’s Research Seminar in Quantitative Economics predicts a net rise of 101,300 by 2015.” [Bloomberg, 2/17/12]

Auto Bailout Saved 1.4 Million American Jobs In 2009-2010. From the Wall Street Journal: “The Center for Automotive Research said today the government’s bailouts of the U.S. auto industry spared more than 1.14 million jobs last year alone, and prevented ‘additional personal income losses’ of nearly $97 billion combined for this year and last. Another 314,400 jobs were saved this year thanks to the $80 billion in taxpayer lifelines extended to GM, Chrysler, and the GMAC and Chrysler Financial financing businesses, CAR said. The research organization based its conclusions on the potential impact of auto-industry collapse for jobs at U.S. auto makers and suppliers, and cascading effects on the economy at large.” [Wall Street Journal, 11/17/10]

GM Has Returned To Being The Global Leader In Car Sales. From CNNMoney: “General Motors is once again No. 1 in global auto sales, after three years out of the top spot. It’s a comeback that became official Thursday when it reported final 2011 sales figures of 9 million vehicles, its best sales total since 2007.” [CNNMoney, 1/19/12]

“$85 Billion” Ultimately Cost Closer To $20 Billion. According to the Detroit News: “The Treasury Department has reduced its forecast for auto bailout losses by more than $2 billion as General Motors stock price has improved. NI a monthly report to Congress released Tuesday, the Treasury Estimates losses from the $85 billion auto bailout of 21.7 billion, down from $23.77 billion.” [Detroit News, 4/12/12]

Bush Policies And Recession ‘Ballooned’ The Debt

Prior To President Obama’s Inauguration, President Bush Had Already Created A Projected $1.2 Trillion Deficit For Fiscal Year 2009. From the Washington Times:  “The Congressional Budget Office announced a projected fiscal 2009 deficit of $1.2 trillion even if Congress doesn’t enact any new programs. […] About the only person who was silent on the deficit projection was Mr. Bush, who took office facing a surplus but who saw spending balloon and the country notch the highest deficits on record.” [Washington Times, 1/8/09]

NYT: President Bush’s Policy Changes Created Much More Debt Than President Obama’s. The New York Times published the following chart comparing the fiscal impact of policies enacted under the Bush and Obama administrations:

[New York Times, 7/24/11]

Recession Added Hundreds Of Billions In Deficits By Increasing Spending On Safety Net While Shrinking Tax Revenue. The Center on Budget and Policy Priorities (CBPP) explains: “When unemployment rises and incomes stagnate in a recession, the federal budget responds automatically: tax collections shrink, and spending goes up for programs like unemployment insurance, Social Security, and Food Stamps.” According to CBPP: “The recession battered the budget, driving down tax revenues and swelling outlays for unemployment insurance, food stamps, and other safety-net programs. Using CBO’s August 2008 projections as a benchmark, we calculate that the changed economic outlook alone accounts for over $400 billion of the deficit each year in 2009 through 2011 and slightly smaller amounts in subsequent years. Those effects persist; even in 2018, the deterioration in the economy since the summer of 2008 will account for over $300 billion in added deficits, much of it in the form of additional debt-service costs.” [CBPP.org, 11/18/10; CBPP.org, 5/10/11, citations removed]

Over The Coming Decade, The Bush Tax Cuts Are The Primary Cause Of Federal Budget Deficits. The Center on Budget and Policy Priorities prepared a chart showing the deficit impact of the Bush tax cuts (orange), the Iraq and Afghanistan wars, the recession itself, and spending to rescue the economy:

[CBPP.org, 5/10/11]

CBPP: Bush Tax Cuts And Wars Are Driving The Debt. According to the Center on Budget and Policy Priorities:

The complementary chart, below, shows that the Bush-era tax cuts and the Iraq and Afghanistan wars — including their associated interest costs — account for almost half of the projected public debt in 2019 (measured as a share of the economy) if we continue current policies.

[Center on Budget and Policy Priorities, 5/20/11]

• Boswell Opposed The 2001 Bush Tax Cuts. Rep. Boswell voted “nay” on the Economic Growth and Tax Relief Reconciliation Act of 2001. Rep. Latham voted “yea.” [H.R. 1836, Vote #149, 5/26/01]

• Boswell Opposed The 2003 Bush Tax Cuts. Rep. Boswell voted “nay” on the Jobs and Growth Reconciliation Tax Act of 2003. Rep. Latham voted “yea.” [H.R. 2, Vote #225, 5/23/03]