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Repeal of Health Care Laws Will Increase Deficit, CBO Says

By Emily Ethridge, CQ Staff

January 6, 2011 -- Republicans' effort to repeal the health care overhaul would increase the deficit by an estimated $230 billion over 10 years, according to a nonpartisan budget report, fueling Democrats' accusations that the GOP is violating its promise to cut the deficit.

The Congressional Budget Office (CBO) called the report a "preliminary analysis" of the effects of a GOP bill (HR 2) to repeal the law (PL 111-148, PL 111-152) which Republicans plan to vote on next week.

The repeal's impact on the deficit is larger than originally estimated because CBO's report covers 2012-2021. For the 2012-2019 period, CBO found that repealing the law would "probably increase" budget deficits by approximately $145 billion. The analysis also found that repealing the law would leave about 32 million people without health insurance.

In a letter to House Speaker John A. Boehner of Ohio, CBO Director Douglas Elmendorf wrote, "CBO has seen no evidence to date" that implementation of the health care law "will yield overall budgetary effects that differ significantly" from those projected earlier.

Boehner brushed off the CBO analysis when asked about it at a news conference Thursday. "Well, I do not believe that repealing the job-killing health care law will increase the deficit. CBO is entitled to their opinion, but they're locked within constraints of the 1974 Budget Act."

Boehner's office released a competing analysis by House Budget Committee Republicans that said, "The health care law will cost the nation $2.6 trillion when fully implemented, and add $701 billion to the deficit in its first ten years."

The CBO report came as Republicans on the House Rules Committee attempted to report out a rule allowing no amendments to their repeal bill. The committee's hearing was often raucous, as Democrats assailed the GOP effort on both policy and fiscal grounds.

Republicans gave themselves an exemption in their new budget rules that would permit them to repeal the overhaul without replacing its estimated savings—a move Democrats blast as hypocritical. The rules require nearly all bills that affect spending to be paid for except for the one repealing the overhaul.

"The Congressional Budget Office confirms that just one day after taking over the House, the Republican rhetoric on fiscal discipline doesn't meet the reality test, as their plans to take away valued health benefits from the American people will balloon our deficit by $230 billion over 10 years," said House Ways and Means Committee ranking Democrat Sander M. Levin of Michigan.

Democrats also pounced on CBO findings that repealing the law would increase the number of uninsured non-elderly Americans by 32 million.

"Today, CBO confirmed the devastating effect their plan would have on the health of American families. If Republicans are successful, millions of Americans become uninsured, millions pay more than they should for their health benefits, and our deficit balloons. Republicans support an Insurance Company Bill of Rights—not the Patients' Bill of Rights," said Rep. Pete Stark, D-Calif.

If the overhaul were repealed, health insurance premiums for those who buy coverage in the individual market would be "somewhat lower," mostly because the average policy would cover a smaller share of enrollees' costs for health care and a slightly narrower range of benefits. But consumers might actually end up paying more because they would not be receiving subsidies through the state exchanges which the law creates, CBO said.

CBO also found that premiums for those who get insurance coverage through large employers would be slightly higher under the GOP bill, but it is unclear how premiums for those receiving coverage through small-business employers would be affected.

"The GOP's budget-busting repeal bill will kill jobs, raise costs and deny critical care to Americans who need it," said George Miller, D-Calif., ranking member of the House Education and Labor Committee.

CBO noted that it is working with the Joint Committee on Taxation to complete a more detailed estimate of the effects of repealing the overhaul.

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