Last year, Sen. Jeff Sessions (R-Ala.) claimed, to great fanfare in conservative media, to have real proof that the Affordable Care Act would create massive deficits and add trillions of dollars to the debt. This, of course, was the exact opposite conclusion of literally every other independent study of the law’s fiscal impact, but Sessions said he was sure – and that was good enough Fox News, Rush Limbaugh, National Review and Drudge.
They were all wrong. Sessions played a little game in which he only counted half the ledger – the Alabama Republican noted the ACA’s expenditures, but ignored the ACA’s savings and receipts. It’s comparable to the coach of the Miami Dolphins doing an analysis of the season, but only counting the points his team scored. “Good news, team! We we’ve won every game in a shutout!”
We’re apparently running into the same trouble all over again, and this time, Sessions has apparently snookered one of his colleagues.
Sen. Lamar Alexander (R-Tenn.) said President Obama’s healthcare law would increase the federal debt by $131 billion.“Instead of insulting the intelligence of Tennesseans by saying this law is working, this administration should admit ObamaCare is a failure and start working with Republicans to repair the damage it has done – putting in place policies that move us step by step toward more freedom, more choices, and lower costs,” Alexander said Tuesday.Alexander cited a new report from Senate Budget Committee ranking member Jeff Sessions (R-Ala.) that stated the Affordable Care Act, also known as ObamaCare, would increase the federal deficit by approximately $131 billion by 2024.
Alexander, ostensibly one of the Senate Republicans who at least shows an interest in the details of public policy, was apparently in high dudgeon. He not only accused those pointing to reality of “insulting the intelligence of Tennesseans” – an unfortunate choice of words given how very wrong he was – but Alexander added that Democratic promises are at odds with reality.
“Today’s Budget committee report says that ObamaCare is driving up the debt our children and grandchildren will owe by $131 billion,” Alexander added.
It’d be a good point, if only Alexander didn’t have his facts completely wrong.
On the one hand, we have the non-partisan Congressional Budget Office, the Office of Management and Budget, and the Joint Committee on Taxation, all of which have found that “Obamacare” will reduce the deficit by hundreds of billions of dollars. On the other hand, we have a report from Jeff Sessions, whose track record with numbers can charitably be described as poor.
So how did Sessions and the Republicans on the Senate Budget Committee reach their dubious findings? Paul N. Van de Water explains:
First, they produced an estimate of savings from the health reform provisions that reduce Medicare and other program costs that’s significantly lower than CBO’s. They did so by assuming that health reform had nothing whatsoever to do with the substantial slowdown in health care cost growth in the past few years…. Even under the conservative assumption that health reform accounts for only a small part of the slowdown in health care costs, it would more than offset the Senate Republicans’ reduction in health reform’s estimated Medicare savings.Second, the Senate Republican analysis overstates the budgetary impact of changes in labor supply (that is, the total hours of work that workers choose to supply) under health reform. CBO estimates that health reform will cause a small reduction in the labor supply, in significant part because some people who now work mainly to obtain health insurance – a situation known as “job lock” – will choose to retire earlier or work somewhat less; that reduction will shrink total labor compensation by roughly 1 percent from 2017 through 2024, according to CBO. The Senate Republican analysis assumes that the overall amount of income subject to tax will drop by the same percentage.But wages and salaries, in fact, represent only about 70 percent of adjusted gross income, which also includes interest, dividends, rental income, capital gains, and some retirement distributions. Thus, a 1-percent cut in labor compensation would shrink tax revenues by much less than 1 percent.
To Alexander’s construct, instead of insulting the intelligence of Americans by saying this law is increasing the deficit, congressional Republicans should admit the Affordable Care Act is working and start working with Democrats to make it even better.