Obama Threatens Veto of Obamacare as Cost Estimates Soar Above $1 Trillion

Wednesday, 12 May 2010 09:02 PM

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Reacting to the surprise announcement that congressional budget referees now predict healthcare reform could top $1 trillion, the Obama administration threatened Wednesday to veto parts of its own healthcare bill.

The politically explosive revelation, which is likely to give new impetus to the GOP’s repeal movement, came after the Congressional Budget Office (CBO) said the law potentially could add at least $115 billion to government healthcare spending over the next 10 years.

This comes after a separate Medicare office report found that the bill would raise spending by about 1 percent during the next decade. Still the Office of Management and Budget (OMB) stood by the administration's original claims that the law would reduce the deficit. Obama tasked Congress with making that happen through tax increases or spending cuts. If that doesn’t happen, the administration is vowing to make program cuts itself.

OMB spokesman Kenneth Baer said Wednesday that the healthcare law "will reduce the deficit by more than $100 billion in the first decade, and that will not change unless Congress acts to change it. If these authorizations are funded, they must be offset somewhere else in the discretionary budget.

“The president has called for a non-security discretionary spending freeze, and he will enforce that with his veto pen."

House Minority Leader John Boehner, R-Ohio, said the new CBO analysis "provides ample cause for alarm," according to a report on ABC News.

"This comes just weeks after the Obama administration itself released an analysis confirming that the new law actually increases Americans’ healthcare costs," Boehner said. "The American people wanted one thing above all from healthcare reform: lower costs, which Washington Democrats promised, but they did not deliver. These revelations widen the serious credibility gap President Obama is facing."

Meanwhile, Jennifer Hing, spokeswoman for Republicans on the House Appropriations Committee, told Fox News: "If Congress were to approve all of this new discretionary funding authorized in the healthcare bill, almost all of the administration's highly touted savings would be made null and void."

If Congress approves all the additional spending called for in the legislation, it would push the 10-year cost of the overhaul above $1 trillion — an unofficial limit the Obama administration set early on.

The CBO said the added spending includes $10 billion to $20 billion in administrative costs to federal agencies carrying out the law, as well as $34 billion for community health centers and $39 billion for Indian healthcare.

The costs were not reflected in earlier budget office estimates, although Republican lawmakers argued strenuously that they should have been. Part of the reason is technical: the additional spending is not mandatory, leaving Congress with discretion to provide the funds in follow-on legislation — or not.

"Congress does not always act on authorizations that are put into legislation by drafters," Baer explained. "Authorizations for discretionary spending are not expenditures."

Congressional estimators also said they simply had not had enough time to run the numbers. Costs could go even higher, because the legislation authorizes several programs without setting specific funding levels.

The healthcare law provides coverage to some more than 30 million now uninsured, offering tax credits to help buy health insurance through new competitive markets that open for business in 2014. When Congress passed the bill in March, the CBO estimated the coverage expansion would cost $938 billion over 10 years, while reducing the federal deficit by $143 billion.

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