CBO, Joint Committee on Taxation analyze impact of permanent tax credits on deficit – Financial Regulation News

The Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) analyzed the impact on the federal deficit if a proposal to make permanent the enhanced premium tax credit structure is approved.

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The tax credits are designed to lower the out-of-pocket monthly premium contributions for health insurance through the Affordable Care Act. However, the CBO and JCT estimate that if the enhancements became permanent, federal deficits would increase by $247.9 billion over the 2023-2032 period. This would be the result of $181.4 billion in increases in spending and a $66.5 billion decrease in revenue. It is partially offset by higher revenues from a shift in employee compensation from tax-favored health insurance to taxable wages.
The analysis was done at the request of Republican Sens. Mike Crapo (R-ID), Richard Burr (R-NC), and Lindsey Graham (R-SC).

“The Congressional Budget Office and the Joint Committee on Taxation have confirmed what we already knew: the true cost of Democrats’ Obamacare tax subsidies is astronomically more than they’ve publicly admitted and plan to account for,” the senators said in a joint statement. “Making these ‘temporary’ subsidies permanent would add $248 billion to the federal deficit over the next decade. There would be more individuals who would be forced off of their current plans than individuals who would gain new coverage under this policy. According to CBO and JCT, 2.3 million people would lose their current employer-subsidized coverage, forcing individuals and families off the plans. The effect would be to make more people dependent on government. Even worse, people earning more than $100,000 per year receive billions in taxpayer-funded subsidies.”

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