Republicans Can Still Go After Obamacare

According to Mother Jones, now that Republicans control Congress, they’re again threatening to end Obamacare. On Monday, Senate Majority Leader-elect Mitch McConnell (R-Ky.) vowed to hold a repeal vote when Republicans take over the upper chamber in January, adding that GOPers “will go at that law…in every way that we can.”

Obamacare is not going anywhere as long as President Barack Obama is in office. But there is a sneakier way GOPers could deal a blow to the health care law in the next two years: They can make the law look more costly than it is, boosting the case for dismantling it.

In 2012, the Congressional Budget Office (CBO)—which produces official budget projections—calculated that the combined effect of the tax increases and spending cuts in the Affordable Care Act will reduce the deficit by $109 billion over the next decade. (This is the CBO’s most recent estimate.)

Conservatives cried foul, saying that the CBO double-counted savings in the law and ignored billions in health care spending in order to make the economic effects of the law seem rosier than they were. They charged that Obamacare actually adds billions to the deficit.

But how does health care spending affect the deficit? Only the Medicaid expansion is government run insurance. The insurance on the exchanges is from private companies, so that wouldn’t affect the government budget.

The Bright Side: They Might Reduce The Deficit

During the last two years of the Clinton administration – when there was a Democratic President and Republican Congress – budget deficits were reduced, and (if the numbers are real), the federal government was actually running a surplus.

Wikipedia states: “The surplus in fiscal year 2000 was $237 billion—the third consecutive surplus and the largest surplus ever.”

Graph from Wikipedia.

According to Politico, in 2009, when the Barack Obama took office, the budget deficit was $1.4 trillion, and in 2015 it is projected to be $478 billion.

The Storied Met Opera Just Ended Its Season With A $22 Million Deficit

The Metropolitan Opera’s deficit rose $22 million last year, the company told The New York Times.

Weak contributions and ticket sales, combined with expenses related to the company’s labor talks, created its largest deficit since 1984.

News of financial problems surfaced during labor negotiations earlier this year. The company won concessions from its unions and agreed to make cuts of its own.

The deficit for the 2013-14 season was roughly eight times that of the previous season.

The 2013-14 season shortfall was almost 7 percent of its budget of $316 million, according to the Times.

Welfare Freeze Proposed In Britain?

In the UK, George Osborne – a British Conservative Party politician – proposed a freeze on working-age welfare benefits if the Conservatives are elected in 2015.  But its effect may cause some to reflect.

The Chancellor calculates that it will save £3.2 billion over two years, 2016/17 and 2017/18. Treasury figures suggest the total welfare bill across those two years will be roughly £356 billion – so the saving would amount to about 0.9% of the total.

To put it another way, the freeze would not affect 99.1% of welfare spending. Nevertheless, £3 billion is not an insignificant sum and some will argue it would be an important contribution to cutting the deficit.

The question, however, is whether the real-terms cut targets the right people. Around two-thirds of those affected by the freeze are in working households.

Government figures show that some 67% of those receiving child or working tax credits are designated to be “in-work families”. Most of those in receipt of child benefit will also be working.

It will also hit some of the poorest families in Britain. Income Support, which is included in the freeze, is a benefit specifically targeted at the poor. Child benefit can be the difference between just getting by and going without the basics for some low-income families.