Wednesday, October 12, 2011

Repeal and Reconciliation

The Hill yesterday quoted Budget Committee Chairman Conrad as saying a Republican plan to utilize the reconciliation process to repeal Obamacare in 2013 would be an inappropriate use of reconciliation, because in his words the Congressional Budget Office claimed that “repealing the entire health care law would dramatically increase the deficit.”  It’s worth unpacking that statement a bit more, to examine all the ways in which CBO’s conclusions have been undermined just in the past two weeks:

  • The future of the CLASS program – and its supposed $86 billion in budgetary “savings” – were thrown into grave doubt, when the program’s actuary left his job and all the other employees were reassigned.  Even Chairman Conrad has disparaged this program, famously calling it a “Ponzi scheme of the first order” – yet much of Obamacare’s supposed “deficit reduction” comes from premiums paid into the program in its first few years (even though the program will have major solvency problems thereafter).
  • The liberal Center for Budget and Policy Priorities released a report citing as conventional wisdom the belief that Obamacare’s insurance subsidies will have to be increased – thus reducing the law’s supposed “savings.”
  • A little-noticed passage of the Institute of Medicine’s report about the essential health benefits package cited two separate studies suggesting that Exchanges might attract sicker-than-average individuals.  But when analyzing the bill in 2009, CBO assumed that Exchanges would enroll healthier-than-average Americans due to the individual mandate.  If the two studies cited in the IOM report are right and CBO is not, then premiums in the Exchange – and thus federal spending on subsidies – could be much higher than expected.

Of course, these developments don’t even begin to address the biggest issue in the room:  The many studies, papers, briefs, reports, employer questionnaires, consultant presentations, surveys, op-eds, interviews, and quotes suggesting that employers will drop coverage in much higher numbers than CBO first anticipated, leading spending on subsidies to explode – shattering the deficit reduction “savings” in the process.

But Chairman Conrad’s comments implicitly raise another question, and that’s this:  In March 2010 President Obama barnstormed around the country asking for an “up-or-down vote” on the 2,700 page bill.  Leader Reid and Democrats complied, sending a letter to then-Speaker Pelosi stating that “We support an up-or-down majority vote” to enact Obamacare.  After all their exhortations about an up-or-down vote to pass Obamacare in 2010, do Democrats believe that a Republican President in 2013 should have the same opportunity for an up-or-down vote to repeal Obamacare?  Or does the Obama talk of “I won” and Harry Reid’s policy to “Stand up and vote” only apply to passing Democrat laws and not Republican ones?