CBO & JCT Report H.R. 3762 to Reduce Federal Deficit up to $472 Billion Over 10 Years
On December 11, 2015, the Congressional Budget Office (CBO) released a report regarding the effects of reconciliation bill H.R. 3762, the Restoring Americans’ Healthcare Freedom Reconciliation Act. According to the CBO and the Joint Committee on Taxation (JCT), the bill would reduce the deficit by up to $474 billion from 2016 to 2025.
Since reconciliation bills can only apply to budget matters, such as spending and taxes, the majority is made up of federal spending and deficit reduction provisions. This once-a-year boost for the majority party can’t be filibustered, however, the president has promised a veto once it reaches his desk. Social Security will be unaffected since changes to Social Security cannot be made under a reconciliation bill.
WHERE THE REDUCTIONS COME FROM
The CBO and JCT estimate that the $474 billion reduction would be two-part: increases in economic output as a result of the bill would reduce the deficit by approximately $193 billion. In addition, the provisions of the Act itself would further reduce deficits by another estimated $282 billion, without an increase in direct spending.
IT DOESN’T REPEAL OBAMACARE
The Act, passed by the Senate on December 3, 2015, is not a full repeal of Obamacare, but it does amend some key of the key provisions of the Patient Protection and Affordable Care Act (PPACA).
WHAT IT DOES… Highlights
- repeals both the individual and employer mandates & associated tax penalties
- repeals the medical device tax
- repeals the Cadillac plan tax
- shuts down the Independent Payment Advisory Board (IPAB)
- places a 1 year moratorium on federal Medicaid funding for Planned Parenthood
- closes some Obamacare slush funds shown to be unaccountable
- Beginning in 2018, the Act would repeal subsidies for health insurance coverage obtained through an exchange.
- Starting in 2017, eliminate the limit on the amount a person is required to repay if their premium tax credit exceeds the amount allowed, based on their actual income.
THE TRICKY PART
The GOP reports that a two-year period of transition would apply keeping subsidies intact until the next administration’s plan is in place.
The CBO also notes that over 20 million people eligible for coverage under Obamacare, may no longer be eligible if the PPACA is repealed. However, many GOP candidates have announced alternative plans to fix the problem. According to the CBO report, their estimates of the number of uninsured people who may be affected are based on current law projections and many experts believe this skews those estimates.
Since one of the goals of the Act is to reduce the deficit, many of PPACA’s resulting tax increases are not a part of H.R. 3762, because including them would have pushed the bill toward a deficit increase.
Republicans would need support from two-thirds of both the House and Senate to override an Obama veto which both parties agree is very unlikely to happen. Since 1789, less than 5% of presidential vetoes have been overridden.