The hot topic now is Obamacare, especially when it comes to reducing the deficit. Supporters, citing the CBO say it will. Opponents say it won’t. Nobody says what is really in CBO reports.
Keep a couple of things in mind when you choose what to believe. Generally, the CBO makes projections over a ten year period and a lot can happen in ten years, especially given that Congress controls all this spending.
Even more important in understanding these projections is that the CBO builds assumption based on what the law says will happen. For example, Medicare costs are based on the assumption that physician fees will be cut because that’s what the law says even though the SGR law has been overridden by Congress every year since it was enacted.
Obamacare contains new taxes, fees and penalties yet to go into effect, if they go into effect. There are scores of new care management programs assumed to save money, but years away from proving success or failure.
The CBO must work with the facts it has. There is no other reasonable way to make such long range projections. However, all this is hardly a good basis for crowing about deficit reduction and the success of Obamacare. Talk about counting your chickens before they hatch.
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