White House defends healthcare law as reducing budget deficit

The White House on Wednesday rushed to defend the healthcare reform law after conservatives seized on Congressional Budget Office comments warning about unsustainable health spending.

Obama's budget director, Peter Orszag, fired back at the comments in a post on the White House blog.

While he acknowledged that more action must be taken to solve the country’s fiscal problem, Orszag said the healthcare law would trim the nation’s budget deficit by $1 trillion.

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“CBO estimates that the Act will reduce the deficit by more than $100 billion over the next ten years and more than $1 trillion in the ten years after that. That’s more deficit reduction than has been enacted in over a decade,” Orszag wrote.

“The fact that more action must be taken on the deficit even after enactment of the Affordable Care Act, however, is a distinct question from whether the health legislation helps to improve our fiscal course — which it does,” Orszag wrote.

Orszag’s post was a direct response to conservatives who have amplified comments last week by Congressional Budget Director Doug Elmendorf. The CBO director opened a presentation on health costs and the deficit at the Institute of Medicine with a slide reiterating the “challenge” ahead.

“Rising health costs will put tremendous pressure on the federal budget during the next few decades and beyond,” the slide reads. “In CBO’s judgment, the health legislation enacted earlier this year does not substantially diminish that pressure.”

The presentation concluded that “putting the federal budget on a sustainable path would almost certainly require a significant reduction in the growth of federal health spending relative to current law (including this year’s health legislation).”

The conservative Heritage Foundation’s blog, The Foundry, picked up on the presentation over the weekend.

“In other words,” the Heritage blog concluded, “our nation’s budget is on an unsustainable path and Obamacare did nothing to change that.”

Since then, a number of conservative Web sites have been amplifying the message, as have some industry critics of the new law.

The new law’s limited focus on keeping health costs under control has been one of its most enduring criticisms, and many observers worry that the promised subsidies for people to buy insurance may be unsustainable in the long run. In his presentation, Elmendorf acknowledged that some critics also caution that the CBO may have underestimated the cost of subsidies and did not take into account future changes in the law that could make the deficit even worse.

“The bottom line,” Orszag wrote, “is that we are on a long journey toward fiscal sustainability — but that should not diminish the importance and potential of the Affordable Care Act.”