U.S. Markets close in 5 hrs 16 mins

The next big fight over Obamacare repeal

Rick Newman
Columnist

The White House foretold the next big battle over health care reform this week, in a strange attack on a government agency that’s actually one of the most competent in Washington.

During one of his daily briefings, White House spokesman Sean Spicer assailed the credibility of the Congressional Budget Office, the nonpartisan group of professional analysts that estimates the cost of proposed legislation. What’s up with that?

Here’s what: The CBO is in the process of “scoring” the health-reform bill officially unveiled this month by House Speaker Paul Ryan, which is supposed to repeal portions of the Affordable Care Act and impose new laws instead. Trump backs the Ryan plan and recently tweeted that the Republican effort to repeal and replace the ACA will end with “a beautiful picture.” He has also promised that every American will have insurance under his plan.

But the picture is going to get uglier before it gets prettier. The Ryan plan would eliminate all the new taxes passed under the Affordable Care Act, aka Obamacare, which almost certainly means it will add more to the national debt. Obamacare, by contrast, essentially paid for itself through those taxes. The Ryan plan would still provide subsidies to help lower-income Americans buy health insurance, but they’d be less generous than those offered under Obamacare. That means fewer people will use subsidies to buy health insurance. The Ryan bill would also cut federal spending on Medicaid, the health care program for the poor, pushing even more people off health insurance.

Some private analyses have attempted to predict what the CBO’s much-awaited predictions will be. The Brookings Institution, for instance, thinks the Ryan plan will reduce the number of Americans with health insurance during the next decade by 15 million or more. The Committee for a Responsible Federal Budget points out that the tax cuts in the Ryan bill would deplete federal coffers by about $60 billion per year. The CBO is usually considered the official arbiter of such estimates, with sound accounting principles meant to assure credible numbers when it comes to the use of taxpayer dollars.

How wrong (or right) was the CBO?

Spicer, presumably anticipating bad news, tried to argue that the CBO was way off on its Obamacare estimates back in 2010, when the law passed. “If you’re looking at the CBO for accuracy, you’re looking in the wrong place,” Spicer said. “They were way, way off the last time in every aspect of how they scored and projected Obamacare.” By that logic, the CBO’s estimates on the Republican replacement ought not be credible, either.

But Spicer’s wrong; the CBO actually did a pretty good job on the ACA, especially considering that the law endured unanticipated Supreme Court challenges, years of bad publicity and dreadful technical glitches when it first rolled out in 2013. In 2015, the nonprofit Commonwealth Fund analyzed the CBO’s predictions regarding the ACA from a few months before the law passed in 2010. “Despite the many unforeseen factors surrounding the law’s rollout,” Commonwealth found, “the CBO’s forecast was reasonably accurate.”

CBO predicted, for instance, that 7 million Americans would sign up for subsidies to help purchase insurance during the ACA’s first year. The actual number was 6 million. So CBO overshot by 17%. But it was still the most accurate of 5 major estimates. As for cost, CBO estimated the price tag for subsidies in the first year would be $19 billion; the actual cost turned out to be $15 billion: Again, too high, but only one of the four other projections was closer.

Spicer says the White House’s own projections on the Republican plan are likely to be more accurate than the CBO’s. But this would be the same White House that has made dubious claims about federal wiretaps on Candidate Trump last year, and peddled myriad other alternative facts—on voter fraud nobody else can find, an escalating murder rate that in reality is decliningterrorist attacks that didn’t happen, and the “biggest electoral college win since Ronald Reagan,” even though Obama won by bigger margins, twice.

So the next phase of the Obamacare repeal will pit good-faith estimates on cost and coverage from the CBO against alternative facts from the Trump White House. Where the Ryan legislation goes from there probably depends on whether there’s a public backlash once the CBO figures are out. Ryan already faces blanket opposition to his plan from Democrats and select opposition from some Republicans, with passage far from guaranteed.

A key factor is whether Trump can use the persuasive powers of the presidency to unify Republicans and neutralize doubt among voters. Trump relishes conflict, and he might think that picking a fight with the CBO will pay off among the portion of voters who distrust everything about the government. But we have to believe something when it comes to actual legislation that will affect real people, and GOP efforts to repeal Obamacare could turn out to be a test of the power of alternative facts. Starting any moment.

Read more:

Why Trump’s tax cuts are looking iffy

Trump’s absurd claim about the US labor force

Trump now owns Obamacare

Confidential tip line: rickjnewman@yahoo.com

Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjnewman