The Washington Times reported that the Congressional Budget Office (CBO) found the House health care reform bill “will have a gross cost of $1.06 trillion but, with $167 billion in new penalty taxes imposed on businesses and individuals, the net cost is $894 billion.” But the Times' report is misleading; at no point did it explain that the $894 billion figure it cited is actually the net cost of coverage provisions, which CBO found “would be more than offset,” nor did the report explain that CBO estimated the bill would generate a “net reduction in federal budget deficits of $104 billion” over the next decade.
Wash. Times: House health care bill's “net cost is $894 billion”
The October 30 Washington Times article on the American Affordable Health Choices Act (H.R. 3962) claimed that "[t]he Congressional Budget Office says the bill will have a gross cost of $1.06 trillion but, with $167 billion in new penalty taxes imposed on businesses and individuals, the net cost is $894 billion."
But Wash. Times ignored CBO's findings that bill offsets coverage costs, reduces deficit
Wash. Times falsely suggested bill costs not paid for. Contrary to The Washington Times' claim that the “net cost” of the House bill “is $894 billion,” the CBO explained that that figure represents the “net cost of coverage provisions.” CBO found that those provisions “would be more than offset by the combination of other spending changes, which CBO estimates would save $426 billion, and receipts resulting from the income tax surcharge on high-income individuals and other provisions, which JCT [the Joint Committee on Taxation] and CBO estimate would increase federal revenues by $572 billion over that period.”
Wash. Times ignored CBO's finding that bill “would result in a net reduction in federal budget deficits of $104 billion.” Despite reporting that “the bill does raise several key levies,” including “a 'surcharge' of 5.4 percent on individual taxpayers who earn $500,000 or couples with incomes of $1 million,” The Washington Times did not mention that CBO says the bill would reduce the deficit by $104 billion over the next decade, fulfilling President Obama's requirement that health care reform "[w]on't add a dime to the deficit." From CBO's score:
Estimated Budgetary Impact of H.R. 3962
According to CBO and JCT's assessment, enacting H.R. 3962 would result in a net reduction in federal budget deficits of $104 billion over the 2010--2019 period (see Table 1). In the subsequent decade, the collective effect of its provisions would probably be slight reductions in federal budget deficits. Those estimates are all subject to substantial uncertainty.
The estimate includes a projected net cost of $894 billion over 10 years for the proposed expansions in insurance coverage. That net cost itself reflects a gross total of $1,055 billion in subsidies provided through the exchanges (and related spending), increased net outlays for Medicaid and the Children's Health Insurance Program (CHIP), and tax credits for small employers; those costs are partly offset by $167 billion in collections of penalties paid by individuals and employers. On balance, other effects on revenues and outlays associated with the coverage provisions add $6 billion to their total cost. [CBO score, 10/29/09]
Zachary Pleat is an intern at Media Matters for America.