Phil notes that the Congressional Budget Office has stated that the Republicans’ bill to repeal Obamacare would increase the deficit, and delves into the various reasons for thinking that the CBO’s projections don’t reflect reality and that repeal would decrease the deficit. The reason the CBO’s score matters, as Avik Roy at National Review explains, is that having a bill that the CBO scores as reducing the deficit is important for parliamentary reasons. Republicans probably won’t be able to pass a bill repealing Obamacare in 2012 (or whenever) without using the reconciliation process, which requires that the repeal measure does not increase the deficit in the CBO’s judgment.
While the parliamentary considerations may be a little murky, there is no doubt that repealing Obamacare would be the fiscally responsible thing to do. Even accepting the Democrats’ premises that Obamacare cuts the deficit by over $100 billion, it’s still a fiscally irresponsible bill. Obamacare lowers the deficit by offsetting massive new spending measures with even larger tax hikes and spending cuts elsewhere. It increases government health care spending by (very roughly) $900 billion, and then raises taxes by a little over $500 billion and cuts other spending (mostly Medicare) by a little over $500 billion, leaving roughly $140 to pay down the deficit. In other words, it cuts the deficit but leaves Congress with more spending and less room to decrease spending or raise taxes.
The tax hikes and spending cuts in Obamacare, if they all materialize, are measures no longer available for deficit reduction. The government needs as much deficit reduction as possible in order to avoid accumulating unsustainable debt — not to finance more entitlement spending.
And those are only the on-budget considerations of Obamacare. According to the only estimate I’ve seen of the individual mandate’s effects on private spending, the bill would cause Americans to spend roughly $550 billion more on health care than they would otherwise. Repealing the bill would undo the individual mandate and free up those funds for other purposes.
In other words, whether or not repealing Obamacare would increase the deficit by the CBO’s scoring, doing so would give Congress more flexibility for cutting spending and addressing the debt problem.