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Health Care Fight Pivots to Economic Impact with New Jobless Numbers Out

By Jane Norman, CQ HealthBeat Associate Editor

January 7, 2011 -- Democrats turned the contention that the health care law is a "job killer" right back at Republicans, arguing that the GOP's proposed repeal would increase the deficit and dim a slowly brightening economic picture shown in new unemployment numbers.

Meanwhile, Republicans and their allies contended that a preliminary Congressional Budget Office (CBO) analysis of repeal that has undercut their argument that it would save money is built on a shaky foundation. And, they say, employers are afraid to add jobs while health care cost increases loom.

The loud struggle for the high ground in public opinion revolves around a CBO analysis that its own authors describe as preliminary, as well as a drive for repeal likely destined to stall on the Senate steps. But it shows how sensitive members in both parties will be to any insinuation that the health care law—still three years away from full implementation—could harm a fragile economy pulling out of recession.

The December jobs report showed that unemployment had dropped to 9.4 percent, the lowest level in 19 months. And 103,000 jobs were added to the U.S. economy, though that job growth didn't meet economists' expectations.

The letter from the CBO released Thursday estimated that repeal of the overhaul (PL 11-148, PL 111-152) would increase the deficit by $230 billion from 2012 to 2021. About 54 million people would be without health insurance in 2019 were the law to be repealed, CBO said.

The analysis was met with a dueling report from House Budget Committee Republicans led by Chairman Paul D. Ryan who contended that the law would cost $2.6 trillion when fully implemented and add $701 billion to the deficit in its first decade.

CBO Director Douglas Elmendorf issued cautions and a promise of more complete data to congressional leaders in his letter taking a first look at the impact of repeal on the nation's budget. "CBO has not yet developed a detailed estimate of the budgetary impact of repealing [the health care law], though it is working with the staff of the Joint Committee on Taxation to complete such an estimate in the near future," he said.

Meanwhile, Democrats in the White House and in the congressional ranks said repeal would hit the U.S. economy hard at a time when there is some improvement.

Stephanie Cutter, White House special projects director, said in a blog post that more than one million private sector jobs have been created since President Obama signed the law in March and the unemployment rate has dropped from 9.7 percent in March 2010.

"So, at a time when our economy is getting stronger, repealing the law would hamper that important economic progress by increasing costs on individuals and businesses, weakening the benefits and protections that Americans with private insurance are already enjoying and adding more than a trillion dollars to our deficits," Cutter wrote.

Cabinet secretaries chimed in. Agriculture Secretary Tom Vilsack said in a conference call with reporters Friday that talk of repeal will create a climate of uncertainty for business owners who might otherwise be thinking about expansion. Small businesses and farmers would lose the tax credit they gained in the law that offsets health insurance costs, he said.

In Congress, Sen. John D. Rockefeller IV, D-W.Va., slammed repeal as a "stunt" that would blow up the budget and increase taxes. Two House Democratic backers of the law, Henry A. Waxman of California and Frank Pallone Jr. of New Jersey, said they'll release statistics on Monday showing the impact of repeal on every congressional district and major metro area.

But Republican Fred Upton, chairman of the House Energy and Commerce Committee, countered that the jobs report showed that the unemployment rate has been above 9 percent for 20 months straight and thus much work clearly remains to be done. "Our new majority is committed to turning the economy around and putting folks back to work," he said, pointing to repeal of the health care law as the first step.

House Speaker John A. Boehner continued to cast doubt on the CBO numbers. "Only in Washington can you stop payment on a $1 trillion check and claim it will increase your debt," said Boehner, R-Ohio.

Grace-Marie Turner, a health analyst with the Galen Institute who's a supporter of Republican leaders, slammed the CBO letter as "based upon gimmicks, double-counting, and phony assumptions that were deliberately written into the law to hide its true cost." She said that employers spooked by the law are trying to either shed employees or figure out how to escape the mandates and it's "ridiculous" to claim the law has contributed to job growth.

The debate will likely only grow over the weekend as members of Congress descend on the Sunday talk shows in advance of a critical House vote on health care. In a 236-181 vote, the House on Friday approved the rule (H Res 26) for the repeal bill (HR 2) and a resolution (H Res 9) to instruct certain committees to report replacement health care legislation. Votes are scheduled for Jan. 12.

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