CBO: Deficit estimate for 2012 increased to $1.2 trillion; Baby boomers' health costs continue as long-term concern

Mar 15 2012

The Congressional Budget Office issued a new round of estimates that also included revisions of the health law's costs and coverage expansion.

The Associated Press: CBO: Deficit Estimate For 2012 Hiked To $1.2T
While the short-term deficit mess is largely a product of the recent recession and slow recovery, the long-term crisis is a result of the impact baby boomers will have on federal retirement programs and the large projected increases in health care inflation. ... The budget office estimated somewhat lower costs for covering the uninsured under President Barack Obama's health care overhaul law, as well as slightly fewer people gaining coverage. Assuming the Supreme Court does not overturn the law, it would reduce the number of uninsured by 30 million in 2016, or 2 million fewer people than estimated last year. Total costs from 2012-2021 are about $50 billion lower than estimated last year. That's due to a combination of factors, including overall health care costs rising more slowly than in the recent past (Taylor, 3/13).

Reuters: CBO Cuts Cost Estimate For Obama Healthcare Law
The estimated net costs of expanding healthcare coverage under President Barack Obama's landmark restructuring have been reduced by $48 billion through 2021, though fewer people would be covered under private insurance plans, a new analysis from the nonpartisan Congressional Budget Office showed on Tuesday. The CBO also revised its overall federal budget deficit estimates to show a $92 billion increase in the projected fiscal gap for 2012, confirming a fourth straight year of $1 trillion-plus deficits (Lawder, 3/13).

The Hill: CBO: Obama's Health Law To Cost Less, Cover Fewer People Than First Thought
President Obama's healthcare reform law coverage provisons will cost less but cover fewer people than first thought, the nonpartisan Congressional Budget Office said Tuesday. The revised estimate of the law's coverage provisions shows about 2 million fewer people gaining coverage by 2016, reducing the number of uninsured Americans by 30 million instead of the 32 million projected a year ago. That would leave about 27 million people uninsured in 2016, two years after the law's insurance exchanges go online (Pecquet, 3/13).

USA Today: Obama Budget Deficit Rises With Payroll Tax Cut
Those gloomy figures are based on what CBO calls its "alternative fiscal scenario." Its basic projections are much rosier but are based on existing laws, rather than likely changes. Because Congress and the White House are almost certain to extend expiring tax cuts and avoid Medicare payment cuts to doctors, for instance, the alternative scenario becomes more likely (Wolf, 3/13).

Politico: White House Setbacks On Health Care, Energy
The White House ran into two bumps in the road on domestic policy Tuesday: higher gross costs for healthcare reform and stiffer Senate resistance to wind and solar power subsidies backed by President Barack Obama. … The uptick in healthcare costs is largely attributed by CBO to the slow economic recovery. And while the deficit doesn't suffer as a result, the numbers suggest that the level of coverage achieved will be less than once hoped. The biggest single cost increase is in Medicaid and CHIP programs. … At the same time, cuts by Congress in the past year have reduced the cost of projected subsidies and tax credits for those enrolled through the state exchanges (Rogers, 3/13).