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The Affordable Care Act Reduces the National Debt (Part Two in a Series)

| Jul 30, 2012 | Access to Health Care, Affordable Health Care Act, healthcare, Legal, Medicaid, Medicaid Expansion, Obamacare |

The Affordable Care Act (ACA) reduces the national debt according to the most reliable evidence. Howling about the cost of the ACA is misplaced.

How can the ACA possibly reduce the deficit?

Partisan hysterics shriek that the ACA insurance coverage provisions, including Medicaid expansion, will cost $1.7 trillion between 2012 and 2022. The program will actually reduce the debt, not add to the deficit, regardless of how often or how loudly it is repeated. If revenue exceeds the cost, debt is reduced—not increased. This is not a new or difficult concept, and it applies universally.

When revenue from a product or program exceeds its costs money is made—not lost.

Since the get-go, the Congressional Budget Office (CBO) has consistently concluded that the revenue provisions of the ACA will exceed its costs. The ACA will not add to the national debt—it will reduce it.


After a few states exclaimed they will reject Medicaid expansion because—well—they don’t like it, the CBO looked at the numbers again. And once again the CBO concluded the ACA’s revenue will exceed its costs.

In fact, if some states reject Medicaid expansion, leaving many of their poorest citizens without any health coverage, the ACA will reduce the debt even more. The CBO projected that some states may actually reject the billions of dollars in federal funds that would pay for Medicaid expansion.

The result? The ACA will reduce budget deficits by about $700 billion dollars.

The CBO reported its most recent conclusions and the basis for them in writing July 24, 2012. This is what they have done with all ACA projections—formally reported their economic conclusions and the basis for them. The world is invited to study and critique their work.

Tellingly, the primary opposition to the CBO is to ignore it altogether and belabor the ACA’s costs. What the opposition is ignoring is the discussion about revenue generation.

How reliable is the CBO Budgeting?

The Congressional Budget Office is missioned as a non-partisan group. This is a fact. The CBO has consistently concluded that the ACA will reduce the debt substantially—not add to it. This is a fact. Challenging the reliability of the CBO’s conclusions is fair, but ignoring it is unreasonable.

The CBO’s report, for example, can be fairly challenged on a number of grounds. For example, the CBO is making projections based on assumptions.

Reasonable minds can certainly differ on expense and revenue projections. The ACA is a massive program. It is a unique program. While the projections and assumptions are routine with any new venture, the scope of the ACA demands reasoned scrutiny of economic assumptions.

Where is scrutiny of the CBO’s projections?

If ACA opponents have a reasoned critique of the CBO’s conclusion that the ACA will reduce the national debt rather than add to it, they should report them. Yammering about costs without considering revenue is meaningless. What do you think?

© Jack Edward Urquhart