The president pledged that health-care reform would not add a cent to the deficit. But the CBO and the Joint Committee on Taxation now estimate that the insurance-coverage provisions of the ACA will have a net cost of close to $1.2 trillion over the 2012–22 period.
Krugman wants a correction:
Readers are no doubt meant to interpret this as saying that CBO found that the Act will increase the deficit. But anyone who actually read, or even skimmed, the CBO report (pdf) knows that it found that the ACA would reduce, not increase, the deficit — because the insurance subsidies were fully paid for.
I very deliberately said “the insurance coverage provisions of the ACA,” not “the ACA.” There is a big difference.
Oh please. If you only include the costs – but not the revenues – in any law, of course it will add to the deficit. But since the point is whether the ACA adds a net trillion to the deficit, the only possible inference is that Niall deliberately distorted its plain meaning, while subsequently hiding behind a Clintonian parsing. Niall:
Krugman suggests that I haven't read the CBO's March 2010 report. Sorry, I have, and here is what it says:
“The provisions related to health insurance coverage—which affect both outlays and revenues—were projected to have a net cost of $1,042 billion over the 2012–2021 period; that amount represents a gross cost to the federal government of $1,390 billion, offset in part by $349 billion in receipts and savings (primarily revenues from penalties and other sources).”
What Niall doesn't do is include the rest of the paragraph. It continues, as Joe Weisenthal notes, thus:
"The other provisions related to health care and revenues will reduce budget deficits by an estimated $1,252 billion over that 10-year period— including $520 billion in revenues, mostly from new taxes and fees, and $732 billion in outlay savings for Medicare and other federal health care programs (see Figure 1). Those outlay savings reflect the net effect of some provisions that will reduce direct spending—such as lower payment rates in Medicare—and others that will increase direct spending, such as the expansion of Part D benefits and mandatory funding for a number of grant, research, and other programs."
This is not a matter of opinion. Krugman is right and Niall's response is embarrassing not because he didn't read the CBO report, but precisely because he did.