CORRECTED: GOP Budget Ignores CBO To Claim Health Care Repeal Will Save Money

April 5, 2011 7:36 a.m.

[Correction: This post was based on a misreading or the GOP budget, and on Republican claims that the budget would save money by repealing the the health care law. The budget itself doesn’t claim that repealing the health care law will reduce the deficit as we reported. It claims repeal will reduce spending outlays, and at times characterizes those reductions as “savings”. That’s true so far as it goes. But the budget does not grapple with the fact that repealing the law’s taxes and other savings would more than make up for the spending reductions, resulting in a deficit increase. We regret the error.]

The budget plan unveiled by Rep. Paul Ryan (R-WI) Tuesday does a neat trick: It claims that repealing the health care reform law will actually reduce the federal budget deficit — despite extensive analyses by the Congressional Budget Office that show exactly the opposite.

The CBO — which is the gold standard for budget analysis and number crunching on Capitol Hill — has issued a series of reports which conclude that the health care law will reduce the deficit and, by corollary, that repealing the health care law will cause the deficit to go back up.

This is a problem for Republicans, who dismiss CBO findings out of hand. Indeed, the budget they unveiled Tuesday morning relies on unofficial numbers to create the impression that repealing the health care law will reduce the deficit.

According to the GOP budget, repealing the health care law will reduce the deficit by $1.4 trillion by 2022. CBO, by contrast, holds that repealing the health law now will add well over $200 billion to the deficit over the same time frame.

It’s not clear where Ryan is getting his numbers. Asked about this disparity at a Capitol briefing Tuesday, House Budget chairman Paul Ryan claimed to have used CBO figures and not to have dictated assumptions to its analysts.

When the 112th Congress began, Republicans had to exempt health care repeal and other deficit busting ideas from their own House rules package, which nominally are intended to prevent new deficits.

It’s also worth pointing out that the budget also cites a Heritage Foundation study that claims Ryan’s plan will reduce unemployment to levels below full employment, which is impossible under central bank policy.

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