# "The Rapidly Shrinking Federal Deficit" **URL:** \ **Category:** Great Debates\ **Created:** [April 12, 2013, 12:05am UTC](https://boards.straightdope.com/t/the-rapidly-shrinking-federal-deficit/655454 "2013-04-12T00:05:54Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [April 13, 2013, 4:10am UTC](https://boards.straightdope.com/t/the-rapidly-shrinking-federal-deficit/655454/41 "2013-04-13T04:10:48Z")
> **[2008 United States federal budget](https://en.wikipedia.org/wiki/2008_United_States_federal_budget)** > > The 2008 United States Federal Budget began as a proposal by President George W. Bush to fund government operations for October 1, 2007 – September 30, 2008. > The requested budget was submitted to the 110th Congress on February 5, 2007. > The government was initially funded through a series of four temporary continuing resolutions. Final funding for the Department of Defense was enacted on November 13, 2007 as part of the Department of Defense Appropriations Act, 2008, while the remaining departme... > **[2012 United States federal budget](https://en.wikipedia.org/wiki/2012_United_States_federal_budget)** > > The 2012 United States federal budget was the budget to fund government operations for the fiscal year 2012, which lasted from October 1, 2011 through September 30, 2012. The original spending request was issued by President Barack Obama in February 2011. That April, the Republican-held House of Representatives announced a competing plan, The Path to Prosperity, emboldened by a major victory in the 2010 Congressional elections associated with the Tea Party movement. The budget plans were bot... State Dept-Went from $35 billion to $53.4 billion-34% increase Energy-Went from $24.3 billion to $42.3 billion-42% increase Agriculture-Went from $20.2 billion to $28.8 billion-29% increase Transportation-Went from $12.1 billion to $25.6 billion- more than doubled Education-Went from $56 billion to $79.1 billion-29% increase Within those departments, some programs got bigger increases than the average, some smaller. ---
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [April 13, 2013, 12:32pm UTC](https://boards.straightdope.com/t/the-rapidly-shrinking-federal-deficit/655454/42 "2013-04-13T12:32:07Z")
One thing I’ve never heard addressed from the crowd that sees perpetuate deficits as not a problem: What about interest payments? Shouldn’t we balance the budget AND pay down debt so that we are just wasting that money year after year? ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [April 13, 2013, 9:21pm UTC](https://boards.straightdope.com/t/the-rapidly-shrinking-federal-deficit/655454/43 "2013-04-13T21:21:44Z")
Remember that we’re talking about “the new baselines for agencies” by comparing 2008 to 2012. [Load this pdf,](http://www.whitehouse.gov/sites/default/files/omb/budget/fy2014/assets/hist.pdf) scroll down to page 123-124, where the discretionary budget authority is stated for each agency. This is the baseline operating budget for each agency. > [@adaher](#): > > State Dept-Went from $35 billion to $53.4 billion-34% increase Nope. State Department went from $22.1 billion to $29.1 billion. > [@](#): > > Energy-Went from $24.3 billion to $42.3 billion-42% increase Nope. Energy went from $24.1 billion to $26.4 billion. > [@](#): > > Agriculture-Went from $20.2 billion to $28.8 billion-29% increase Nope. USDA went from $26.1 billion to $24.1 billion. It got smaller, ya dig? > [@](#): > > Transportation-Went from $12.1 billion to $25.6 billion- more than doubled Nope. DOT went from $16.7 billion to $19.5 billion. > [@](#): > > Education-Went from $56 billion to $79.1 billion-29% increase. Nope. Ed went from $57.2 billion to $67.4 billion. Overall, discretionary spending went from $1.179 trillion in 2008 to $1.197 trillion in 2012. Wow. Those new agency baselines are exploding. $10 billion of discretionary growth in four years. That’s about 1% growth. The horror. Oh, the horror. ---
**Author:** ![krunen](https://avatars.discourse-cdn.com/v4/letter/k/c37758/32.png) [@krunen](https://boards.straightdope.com/u/krunen)\ **Post date:** [April 13, 2013, 10:00pm UTC](https://boards.straightdope.com/t/the-rapidly-shrinking-federal-deficit/655454/44 "2013-04-13T22:00:17Z")
> [@Ravenman](#): > > Overall, discretionary spending went from $1.179 trillion in 2008 to $1.197 trillion in 2012. Wow. Those new agency baselines are exploding. $10 billion of discretionary growth in four years. That’s about 1% growth. Are these figures adjusted for inflation? The inflation from 2008 to 2012 was 6.6%. $1.179 in 2008 was $1.257 in 2012. 1.257 to 1.197 is a 5% decrease. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [April 14, 2013, 1:18am UTC](https://boards.straightdope.com/t/the-rapidly-shrinking-federal-deficit/655454/45 "2013-04-14T01:18:49Z")
> [@Ravenman](#): > > Remember that we’re talking about “the new baselines for agencies” by comparing 2008 to 2012. [Load this pdf,](http://www.whitehouse.gov/sites/default/files/omb/budget/fy2014/assets/hist.pdf) scroll down to page 123-124, where the discretionary budget authority is stated for each agency. This is the baseline operating budget for each agency. > Nope. State Department went from $22.1 billion to $29.1 billion. > Nope. Energy went from $24.1 billion to $26.4 billion. > Nope. USDA went from $26.1 billion to $24.1 billion. It got smaller, ya dig? > Nope. DOT went from $16.7 billion to $19.5 billion. > Nope. Ed went from $57.2 billion to $67.4 billion. > > Overall, discretionary spending went from $1.179 trillion in 2008 to $1.197 trillion in 2012. Wow. Those new agency baselines are exploding. $10 billion of discretionary growth in four years. That’s about 1% growth. > > The horror. Oh, the horror. This is why budget math is so annoying. Different terms produce completely different results. “Discretionary baseline authority” is not the same as outlays, and as another poster pointed out, mandatory spending is actually controlled by Congress, just in a different way. Discretionary spending according to budget outlays went from $1.114 trillion in 2008: > **[2008 United States federal budget](https://en.wikipedia.org/wiki/2008_United_States_federal_budget)** > > The 2008 United States Federal Budget began as a proposal by President George W. Bush to fund government operations for October 1, 2007 – September 30, 2008. > The requested budget was submitted to the 110th Congress on February 5, 2007. > The government was initially funded through a series of four temporary continuing resolutions. Final funding for the Department of Defense was enacted on November 13, 2007 as part of the Department of Defense Appropriations Act, 2008, while the remaining depart... to $1.338 trillion in 2012: > **[2012 United States federal budget](https://en.wikipedia.org/wiki/2012_United_States_federal_budget)** > > The 2012 United States federal budget was the budget to fund government operations for the fiscal year 2012, which lasted from October 1, 2011, through September 30, 2012. The original spending request was issued by President Barack Obama in February 2011. That April, the Republican-held House of Representatives announced a competing plan, The Path to Prosperity, emboldened by a major victory in the 2010 Congressional elections associated with the Tea Party movement. The budget plans were bo... Which is a 20% overall increase. But that doesn’t mean the mandatory spending increases don’t count. THe mandatory increases that come from the recession and population aging doesn’t, because that would have been spent anyway, but that created by changing eligibility or starting new programs is. ---
**Author:** ![Shagnasty](https://avatars.discourse-cdn.com/v4/letter/s/9dc877/32.png) [@Shagnasty](https://boards.straightdope.com/u/Shagnasty)\ **Post date:** [April 14, 2013, 1:54am UTC](https://boards.straightdope.com/t/the-rapidly-shrinking-federal-deficit/655454/46 "2013-04-14T01:54:32Z")
> [@jtgain](#): > > One thing I’ve never heard addressed from the crowd that sees perpetuate deficits as not a problem: What about interest payments? Shouldn’t we balance the budget AND pay down debt so that we are just wasting that money year after year? Exactly. As a true fiscal conservative, I honestly don’t give a rat’s ass about who did what in the past. It is done. Deficit spending is bad except in exceptional emergencies and even then, the budget during normal times should include savings for such emergencies so that it isn’t an issue. People will tell you over and over that running a country isn’t like running your personal finances. That is lie through intentional confusion.The details are different and you have some more tools at your disposal when you are running a country but, when you really break it down, it is the same thing and everything else is just excuses. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [April 14, 2013, 3:15am UTC](https://boards.straightdope.com/t/the-rapidly-shrinking-federal-deficit/655454/47 "2013-04-14T03:15:05Z")
> [@adaher](#): > > This is why budget math is so annoying. Different terms produce completely different results. “Discretionary baseline authority” is not the same as outlays… You’re the one that said that agencies’ baselines have changed. Outlays do not measure agency “baselines,” BA does. Congress does not approve outlays, Congress approves BA. Outlays are subject to quirks like the speed of liquidating obligations: for example, if we buy an expensive submarine or something, the BA appears all in one year, but the outlays will stretch for 5 years or more. The measure of new spending is, was and always must be BA, and you’re just simply wrong. > [@](#): > > Which is a 20% overall increase. But that doesn’t mean the mandatory spending increases don’t count. THe mandatory increases that come from the recession and population aging doesn’t, because that would have been spent anyway, but that created by changing eligibility or starting new programs is. Again, you said agency baselines changed by as much as 50%. Now you’re trying to shift the topic to entitlements. This happens every single time I call you out on anything relating to the budget: you throw out factual errors and then dissemble on what it was you were actually claiming. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [April 14, 2013, 3:27am UTC](https://boards.straightdope.com/t/the-rapidly-shrinking-federal-deficit/655454/48 "2013-04-14T03:27:16Z")
So why the higher baseline compared to outlays in 2008, yet much lower baseline to outlays in 2012? Your numbers make it look like discretionary spending didn’t increase much at all, yet it did go up: by 20%. And mandatory by even more due to policy changes by the Democrats. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [April 14, 2013, 3:48am UTC](https://boards.straightdope.com/t/the-rapidly-shrinking-federal-deficit/655454/49 "2013-04-14T03:48:06Z")
> [@adaher](#): > > So why the higher baseline compared to outlays in 2008, yet much lower baseline to outlays in 2012? You can’t compare BA in one year to outlays in another and gain some meaningful insight into the nature of the budget. They are two different measures: one is of new spending (BA), one is of old spending (outlays). Whatever has happened in 2012 to cause an increase in outlays would have been preceded by lower outlays in prior years, because over time, BA and outlays are going to be extremely close (BA will always be greater, however, because small amounts of appropriations expire before they can be spent). Changes in outlay rates track changes in BA and will differ depending what the money is being spent on. Anyway, if you look at table 8.7 on pages 176-177, outlays are listed for discretionary programs. Outlays in 2008 were $1.134 trillion. Outlays for 2012 were $1.286 trillion. That’s not as big an increase as you say. > [@](#): > > Your numbers make it look like discretionary spending didn’t increase much at all, yet it did go up: by 20%. And mandatory by even more due to policy changes by the Democrats. Once again, you said agency baselines went up and never came down. I have walked you through why that is wrong. New discretionary spending, which is measured by BA, is pretty much at the level it was in 2008. Will you acknowledge your error? ---
**Author:** ![NotfooledbyW](https://avatars.discourse-cdn.com/v4/letter/n/f475e1/32.png) [@NotfooledbyW](https://boards.straightdope.com/u/NotfooledbyW)\ **Post date:** [April 14, 2013, 3:53am UTC](https://boards.straightdope.com/t/the-rapidly-shrinking-federal-deficit/655454/50 "2013-04-14T03:53:36Z")
> [@adaher](#): > > Discretionary spending according to budget outlays went from **$1.114 trillion in 2008** : > > [2008 United States federal budget - Wikipedia](http://en.wikipedia.org/wiki/2008_United_States_federal_budget) Your **$1.114 trillion in 2008** Is false for your comparison. > [@](#): > > The Iraq War and the War in Afghanistan are not included in the regular budget. Instead they are funded through special appropriations.[1] ---
**Author:** ![NotfooledbyW](https://avatars.discourse-cdn.com/v4/letter/n/f475e1/32.png) [@NotfooledbyW](https://boards.straightdope.com/u/NotfooledbyW)\ **Post date:** [April 14, 2013, 4:27am UTC](https://boards.straightdope.com/t/the-rapidly-shrinking-federal-deficit/655454/51 "2013-04-14T04:27:57Z")
> [@Shagnasty](#): > > Exactly. As a true fiscal conservative, I honestly don’t give a rat’s ass about who did what in the past. It is done. Deficit spending is bad except in exceptional emergencies and even then, the budget during normal times should include savings for such emergencies so that it isn’t an issue. People will tell you over and over that running a country isn’t like running your personal finances. That is lie through intentional confusion.The details are different and you have some more tools at your disposal when you are running a country but, when you really break it down, it is the same thing and everything else is just excuses. What kind of true fiscal conservative does not give a rat’s ass about bad fiscal behavior of the past and then goes on to say that the corrective action for the Federal Government is the same as that for a family’s household budget that has gone awry? What kind of reasoning is this? There are two basic ways for a family budget to go broke. One is total non-fiscally conservative behavior by one or both of the adults in the marriage or family arrangement. Perhaps the dependents can run a family budget amok but whatever the case how does Shagnasty claim to be a fiscal conservative and then not give a rats ass about behavior that is opposite what a fiscal conservative supposedly believes in. The second way a family is forced to spend way beyond its means and lose control of its budget is some type of catastrophe such as sudden job loss or health issues not covered by insurance. For Shagnasty to not give a rats ass about families suffering a catastrophe demonstrates a lack of compassion for his fellow man. That is bad enough, but then Shagnasty attempts to compare the financially troubled household model to the Federal Government whereas Shagnasty also claims no concern about the behavior of the past president and Congress that led the Federal Government to its current high deficit condition. How does Shagnasty compare a family to the Federal Government when we all know that a family’s budget is run by the couple who many times are joined in holy matrimony for life. Kids don’t vote every four years for whom they want their mommy and daddy to be. Likewise the governed of the country as a whole do not put trust in one person for life and expect them to manage money quite ‘fiscally conservative’ in the exact appropriate manner that they have decided is best for them. There are many competing interests in the Federal Budget that all have a say. It is silly to think that a president of the USA can run a country and manage a budget just like a typical family household. A president can manage a budget as best he can with what he inherits coming into office. Or he can blow it. But it sure matters what the president before him and the Congress before him did and the make-up of the Congress that the electorate has forced him/her to work with. And it matters if he starts his term in the midst of a huge recession. How many more times will we have to see this quaint little fairy tale posted? ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [April 14, 2013, 5:19am UTC](https://boards.straightdope.com/t/the-rapidly-shrinking-federal-deficit/655454/52 "2013-04-14T05:19:36Z")
If the deficit is shrinking then where did [this](https://www.google.com/search?q=US+debt&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a&um=1&ie=UTF-8&hl=en&tbm=isch&source=og&sa=N&tab=wi&ei=LDtqUee3AZSr2AWyooGYCw&biw=1047&bih=435&sei=xDtqUfCHHIHK2gXO4oDgBw#imgrc=q0xfOsDmIDEVoM%3A%3B1NHsG3oNaOQrIM%3Bhttp%253A%252F%252Fwww.futuretimeline.net%252Fsubject%252Fimages%252Fus-debt-graph-2020.jpg%3Bhttp%253A%252F%252Fwww.futuretimeline.net%252Fsubject%252Fbusiness-politics.htm%3B750%3B1397)come from? ---
**Author:** ![NotfooledbyW](https://avatars.discourse-cdn.com/v4/letter/n/f475e1/32.png) [@NotfooledbyW](https://boards.straightdope.com/u/NotfooledbyW)\ **Post date:** [April 14, 2013, 7:06am UTC](https://boards.straightdope.com/t/the-rapidly-shrinking-federal-deficit/655454/53 "2013-04-14T07:06:37Z")
> [@NotfooledbyW](#): > > Will Republicans/Tea Partiers/their pundits and pols and all anti-big bovt goofballs everywhere be forced to quit the constant lie that Obama and Democrats are big government spenders that are solely responsible for the deficit woes that started with the crash of the economy at the end of Bush’s eight years at the helm. > > “The Rapidly Shrinking Federal Deficit” > > by Bill McBride on 4/11/2013 11:58:00 AM > > Read more at [Calculated Risk: "The Rapidly Shrinking Federal Deficit"](http://www.calculatedriskblog.com/2013/04/the-rapidly-shrinking-federal-deficit.html#5EgtlKkMYP4mEpXx.99) > [@Magiver](#): > > If the deficit is shrinking then where did [this](https://www.google.com/search?q=US+debt&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a&um=1&ie=UTF-8&hl=en&tbm=isch&source=og&sa=N&tab=wi&ei=LDtqUee3AZSr2AWyooGYCw&biw=1047&bih=435&sei=xDtqUfCHHIHK2gXO4oDgBw#imgrc=q0xfOsDmIDEVoM%3A%3B1NHsG3oNaOQrIM%3Bhttp%253A%252F%252Fwww.futuretimeline.net%252Fsubject%252Fimages%252Fus-debt-graph-2020.jpg%3Bhttp%253A%252F%252Fwww.futuretimeline.net%252Fsubject%252Fbusiness-politics.htm%3B750%3B1397)come from? You posted a lot of charts, so I could not tell if a single one of them dealt with the Original Question (see first quote above) at the start of this thread. And yes the deficit is ‘shrinking’ in the terms and context from which the question is asked. Why are Obama and Democrats **solely responsible for the deficit woes** that started with the crash of the economy at the end of Bush’s eight years at the helm. > [@](#): > > ``` > Near-term deficits to shrink, but debt to deepen: **CBO** Tue, Feb 5 2013 By David Lawder WASHINGTON (Reuters) > > ``` > > CBO forecast that the deficit for fiscal 2013, which ends September 30, will shrink slightly to $845 billion after four straight years above $1 trillion. The reason is an improving economy and higher taxes paid by wealthy Americans. > > The CBO analysis, which will feed into Congress’ bitter debate over how to tame deficits, assumes that $85 billion in automatic spending cuts will launch as scheduled on March 1. > > It said the fiscal tightening from these across-the-board cuts and from higher taxes will slow economic growth to an anemic 1.4 percent by the end of 2013, causing the unemployment rate to edge higher to 8.0 percent by then from about 7.9 percent currently. > > The analysis is the first from the non-partisan budget agency to incorporate the New Year’s deal to avert the “fiscal cliff,” which restored pre-2001 tax rates on income above $450,000 for couples and let a temporary payroll tax reduction expire. The automatic spending cuts were only delayed for two months until March 1. > > But after absorbing these headwinds, the economy will regain momentum in 2014 and fill federal coffers at a faster pace, even without further spending cuts or tax hikes, CBO said. It forecast a $616 billion deficit in fiscal 2014 and a $430 billion deficit in fiscal 2015, equivalent to 2.4 percent of U.S. gross domestic product at that time, a level that many economists view as sustainable. > > [Deficits to shrink through 2015, but debt to deepen: CBO | Reuters](http://www.reuters.com/article/2013/02/05/us-usa-fiscal-cbo-idUSBRE9140ZQ20130205) ---
**Author:** ![AlienVessels](https://avatars.discourse-cdn.com/v4/letter/a/ba8739/32.png) [@AlienVessels](https://boards.straightdope.com/u/AlienVessels)\ **Post date:** [April 14, 2013, 7:15am UTC](https://boards.straightdope.com/t/the-rapidly-shrinking-federal-deficit/655454/54 "2013-04-14T07:15:25Z")
> [@Shagnasty](#): > > Exactly. As a true fiscal conservative, I honestly don’t give a rat’s ass about who did what in the past. It is done. Deficit spending is bad except in exceptional emergencies and even then, the budget during normal times should include savings for such emergencies so that it isn’t an issue. People will tell you over and over that running a country isn’t like running your personal finances. That is lie through intentional confusion.The details are different and you have some more tools at your disposal when you are running a country but, when you really break it down, it is the same thing and everything else is just excuses. Borrowing money should be just fine if the cost of borrowing is low. Emergencies by their nature are unpredictable. Sometimes you spend a bundle because you can save a bundle, even if the return is long term, longer than you could “save up” for reasonably in a democracy. The finances of the country should not be compared to personal finances. It’s not the same. But then that’s the trick isn’t it? “I get to define the terms and scope of the argument and anyone that disagrees is just BSing you.” ---
**Author:** ![NotfooledbyW](https://avatars.discourse-cdn.com/v4/letter/n/f475e1/32.png) [@NotfooledbyW](https://boards.straightdope.com/u/NotfooledbyW)\ **Post date:** [April 14, 2013, 8:27am UTC](https://boards.straightdope.com/t/the-rapidly-shrinking-federal-deficit/655454/55 "2013-04-14T08:27:56Z")
> [@Fotheringay-Phipps](#): > > You’ve repeated this nonsensical argument twice in this thread, so it’s worth noting. > > The two statements do not contradict each other (although I think you meant “deficit neutral” rather than “revenue neutral” - the ACA is supposedly the former, but it’s certainly not the latter). > > If a given program or law spends six trillion dollars and also increases taxes by six trillion dollars, then it is both deficit neutral and costs taxpayers six trillion dollars. > > For some reason, supporters of ACA have a tendency to make specious arguments of this sort, confusing deficit reduction with cost. > > [Note: I don’t know about whether it’s $6 trillion specifically - I imagine it depends of the time horizon. I’m addressing the logic.] I meant “budget neutral” or better than that the ACA beats "budget neutral’ it increases revenues and cuts costs over ten years. This was the first score, and I know the ACA has been scored by CBO since, but the ACA remains to be better than “Budget Neutral”. > [@](#): > > Comprehensive health care reform will cost the federal government $940 billion over a ten-year period, but will increase revenue and cut other costs by a greater amount, leading to a reduction of $138 billion in the federal deficit over the same period, according to an analysis by the Congressional Budget Office, a Democratic source tells HuffPost. It will cut the deficit by $1.2 trillion over the second ten year period. > > The source said it also extends Medicare’s solvency by at least nine years and reduces the rate of its growth by 1.4 percent, while closing the doughnut hole for seniors, meaning there will no longer be a gap in coverage of medication. The CBO also estimated it would extend coverage to 32 million additional people. > > The CBO score is the last piece House Speaker Nancy Pelosi (D-Calif.) was waiting on before putting the puzzle together on the House floor. A contingent of Blue Dogs has been holding out support, insisting that the bill be fully paid for and not increase the deficit. The numbers give a major boost to Pelosi and her leadership team, which can now begin the whip count in earnest and can specifically point to the cost savings. This is why Sean Hannity is a liar when he declares the ACA is going to cost trillions of dollars. > [@](#): > > [http://obamacarefacts.com/costof-obamacare.php](http://obamacarefacts.com/costof-obamacare.php) > Cost of ObamaCare: Obama Care Cost > > What Does ObamaCare Cost? > > What is the cost of ObamaCare? ObamaCare, Obama’s new health care law, is said a massive impact on health care costs. ObamaCare’s cost is estimated at up to $1.1 trillion dollars over the next 10 years. The truth is that Obamacare costs, it will save the government money by reducing the health care costs of many Americans via a healthcare plan that results in a net decrease of the deficit. > > Obamacare is projected to cut the national deficit by over $200 billion during it’s first 10 years and over $1 trillion over the next two decades. This helps offset the up-front cost of ObamaCare which is shared by taxpayers and cuts and reformations to the health insurance and health care industry. > (Cost of ObamaCare Image Public Domain) > The Cost of Not Having ObamaCare > > The cost of not having ObamaCare?: In a study by FamiliesUSA reported that each week 502 Americans die due to a lack of health insurance. That is 2,175 Americans dead each month. The true cost of Obamacare isn’t in healthcare costs and taxes, it’s in the lives of Americans like you and me. > > The same study showed that between 2005 and 2010 that the number of people who died prematurely due to a lack of health coverage a year rose from 20,350 to 26,100. > > (These figures are from 2010, Obamacare signed on Oct 1st 2010 made its first steps toward providing quality affordable health insurance to individuals and families struggling with rising health care costs.) > > So while there are costs, it is both economic reform and healthcare reform that will decrease payments of many Americans and only impact those who can afford to pay a little more. > > The cost of not having ObamaCare isn’t just a human issue. ObamaCare helps to reduce health care spending. Currently the $2.8 trillion U.S. healthcare system costs nearly $9,000 a year for every man, woman and child. Growth in health care spending has long outpaced inflation by wide margins, and following the U.S. recession of 2008 and 2009 has contributed to weak job creation, low expansion of wages and a high level of personal bankruptcies. > > ObamaCare Cost for The Federal Government > > The ObamaCare cost for the Federal Government is a $1.1 trillion net cost. This number is an updated estimate by the Congressional Budget Office (CBO). However, a number of factors including taxes, fees and penalties will reduce the federal deficits by $210 billion over the 2012-2021 period. > > Gross additional costs of ObamaCare include $1.5 trillion for Medicaid, the Children’s Health Insurance Program (CHIP), as well as tax credits and other subsidies for the ObamaCare exchanges and small businesses, among other things. These costs are offset by penalty payments, health care cost cuts, new health care industry taxes, and a new excise tax on high-premium insurance plans. > > Want to know more about the cost of ObamaCare check out the CBO Budget 2013-2014 or our resources page for more official documents detailing ObamaCare’s costs and how they fit into the US budget.. > > How Do We Pay For ObamaCare Costs? > > Many sections of the Affordable Health Care Act cover the cost of Obamacare and how we will pay for national healthcare reform over the next decade. Here are some of the measures that will help pay for the Obama’s healthcare reform: > > First in order to help pay for the cost of Obamacare businesses and families will pay an additional .9% tax on taxable income and 3.8% capital gains exceeding $200k / $250k. > > Obamacare also cuts $716 billion from Medicare and invests it back into Medicaid, Medicare and the healthcare system, so a lot of the money is coming from cutting waste, not just in Medicare but in the health care industry as a whole. > > There is also a $63 dollar fee on insurance plans (it decreases every month until 2017) that covers high-risk pools for pre-existing conditions. > > Most of the other funding for ObamaCare comes from taxes on the healthcare industry including, a tax on companies who manufacturer non-generic drugs and some medical device manufacturers. Read the complete list of ObamaCare taxes and their costs. > > Most American families, those making under $250k will see up to a $4k reduction in their healthcare costs after tax credits, of course the more you make the less you save. The quality of your healthcare and the security of knowing you can’t be dropped for be sick or denied for a preexisting condition is a protection most Americans couldn’t rely on before ObamaCare. > > If you choose not to purchase insurance (and can afford it) there is a 1% tax in 2014, it raises to a 2.5% tax in 2016 and adjusts for inflation. This tax is the “income tax” you may hear about, and is the only income tax hike in ObamaCare and the only tax most Americans will pay. > > In order to ease the burden of Obama Care’s cost 19 million Americans will receive tax credits to help pay for healthcare. IT does not ‘cost’ anything over the long run if the ‘savings’ and ‘revenues’ exceed the up front costs and overall costs. And the ACA does reduce the deficit in ten years while delivering a better system for health care providing than doing nothing would. IF health care insurance were as understandable as building a bridge across a river to a major populated area where the nearst river crossing is twenty miles away perhaps you could see why Sean Hannity is misleading his audience. The Government spends $50 million of tax revenue to build a bridge that will save local residents $100 million in fuel and maintence costs over ten years by getting across the bridge at an optimum location. But when put in operation the bridge will collect tolls to pay for it for ten years and then the tolls go away. The tolls are projected to remimburse the cost of building the bridge in full. That is ‘budget neutral’. Then benefits go on for decades afteword. That is the ACA in simple terms. ---
**Author:** ![NotfooledbyW](https://avatars.discourse-cdn.com/v4/letter/n/f475e1/32.png) [@NotfooledbyW](https://boards.straightdope.com/u/NotfooledbyW)\ **Post date:** [April 14, 2013, 9:15am UTC](https://boards.straightdope.com/t/the-rapidly-shrinking-federal-deficit/655454/56 "2013-04-14T09:15:51Z")
> [@](#): > > Originally Posted by Fotheringay-Phipps > You’ve repeated this nonsensical argument twice in this thread, so it’s worth noting. > > If a given program or law spends six trillion dollars and also increases taxes by six trillion dollars, then it is both deficit neutral and costs taxpayers six trillion dollars. Since we are discussing the ACA, there is a flaw in your reply that must be pointed out. The ACA does not ‘cost taxpayers’ as a whole for the cost of the ACA. Just certain taxpayers will offset some the the cost of the ACA. Some the cost is being offset by cost reduction measures. The balance will be offset by very few specific taxpayers. Ninety Eight percent of current taxpayers with employer provided health care insurance will not see an increase in taxes as a result of the passage of the ACA. That is significant to keep in mind, and it is dishonest not to mention that fact. The top 2% are being asked to defray some of the costs of the ACA in order to bring more people into the system and reduce costs and save lives by given better access to more people than currently being served. A few companies will pay a higher tax or penalty. When anyone claims that the ACA will cost the ‘taxpayers’ to pay for Obama Care it is disingenuous to leave the impression that ‘all’ taxpayers will be hit. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [April 14, 2013, 10:01am UTC](https://boards.straightdope.com/t/the-rapidly-shrinking-federal-deficit/655454/57 "2013-04-14T10:01:11Z")
Not at all. All taxpayers will be hit, because there are numerous little taxes(such as on tanning beds) that will affect everyone at some point. And taxes aren’t the only cost of the ACA. If you’re young and healthy, you’re paying bigtime to subsidize the older and sicker. Then there’s the extra mandates, those all raise the price of insurance. As for Sean Hannity, the CBO is not God. They estimate costs in a fair way, but that does not mean they are always right. In fact, they are always wrong. that’s the nature of estimates, they are always off, sometimes by a little, sometimes by a lot. What was Medicare supposed to cost again? Oh yeah, $9 billion by 1990. That wasn’t the CBO, but supporters of Medicare liked to cite that as a “fact” back then too. time to learn some humility when it comes to estimates rather than tarring those who think those estimates wrong as liars. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [April 14, 2013, 12:19pm UTC](https://boards.straightdope.com/t/the-rapidly-shrinking-federal-deficit/655454/58 "2013-04-14T12:19:11Z")
> [@adaher](#): > > time to learn some humility when it comes to estimates rather than tarring those who think those estimates wrong as liars. Speaking of humility, I asked you whether you acknowledged that you were wrong about the “the stimulus established new agency baselines that are as much at 50% higher than 2008” error. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [April 14, 2013, 12:22pm UTC](https://boards.straightdope.com/t/the-rapidly-shrinking-federal-deficit/655454/59 "2013-04-14T12:22:01Z")
We still haven’t established that you identified the baselines correctly. From what I understand, what was appropriated in year 1 is the baseline for year 2. Actual spending did go up by 20-30% in many departments, and pulling out one particular accounting definition of the spending doesn’t change that. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [April 14, 2013, 12:25pm UTC](https://boards.straightdope.com/t/the-rapidly-shrinking-federal-deficit/655454/60 "2013-04-14T12:25:28Z")
Baseline budgeting uses current spending levels as the “baseline” for establishing future funding requirements and assumes future budgets will equal the current budget times the inflation rate times the population growth rate > **[Baseline (budgeting)](https://en.wikipedia.org/wiki/Baseline_%28budgeting%29)** > > Baseline budgeting is an accounting method the United States Federal Government uses to develop a budget for future years. Baseline budgeting uses current spending levels as the "baseline" for establishing future funding requirements and assumes future budgets will equal the current budget times the inflation rate times the population growth rate. Twice a year—generally in January and August—CBO prepares baseline projections of federal revenues, outlays, and the surplus or deficit. Those proje Ac... My earlier cites were what was actually appropriated. Those are the actual baselines. [Previous page](https://boards.straightdope.com/t/the-rapidly-shrinking-federal-deficit/655454.md?page=2) [Next page](https://boards.straightdope.com/t/the-rapidly-shrinking-federal-deficit/655454.md?page=4)