The White House has unleashed a torrent of criticism on a leading conservative economist – approved by President Obama in 2010 as a Republican trustee overseeing Medicare and Social Security finances — for concluding in a new study that the Affordable Care Act will add to the deficit instead of reduce it.
Charles Blahous, a former economic adviser to George W. Bush on retirement security issues and deputy director of the National Economic Council, says in a report released today that, contrary to other independent estimates, the health law will add $340 billion to the deficit.
“Taken as a whole, the enactment of the [law] has substantially worsened a dire federal fiscal outlook,” he wrote in a 52-page analysis released by George Mason University’s Mercatus Center, where he is a research fellow.
Democrats say the attack on Obama’s signature piece of legislation is a purely political blow.
“It’s not surprising to see a partisan economist put forward these new numbers who, like his greatest supporter [Republican Sen.] Mitch McConnell, is more interested in defeating Obama than working with him to solve the nation’s health care problems,” said the Center for American Progress, a liberal think tank, in a column circulated by Democrats and the White House.
The group called Blahous a “Koch-funded economist,” a reference to the Mercatus Center’s primary underwriter — the Koch Family Foundation — a nonprofit group run by billionaire conservative oil magnates Charles and David Koch, who have vowed to help defeat Obama in 2012.
“The Koch brothers and their allied organizations first spent millions of dollars attacking the President in an attempt to maintain taxpayer subsidies for oil and gas companies that are making record profits and boosting their own bottom line. Now, they have bought and paid for a false, partisan report,” said Obama campaign spokesman Ben LaBolt.
The White House accused Blahous of making false claims in an attempt to “refight the battles of the past.”
“One former Bush Administration official is wrongly claiming that some of the savings in the Affordable Care Act are ‘double-counted’ and that the law actually increases the deficit,” wrote Jeanne Lambrew, deputy assistant to the president for health policy, on the White House blog Monday night.
“This new math fits the old pattern of mischaracterizations about the Affordable Care Act when official estimates show the health care law reduces the deficit,” she said.
Obama appointed Blahous in 2010 for one of two positions that oversee the finances of Medicare and Social Security. Traditionally, they are held by one Republican and one Democrat.
“It is a matter of tradition to appoint members of both parties, and this was somebody who was appointed in consultation with Republican leaders in Congress,” White House press secretary Jay Carney said today. “It does not mean that the president agrees with his economic analysis.”
The Congressional Budget Office – the nonpartisan group that provides official estimates of the fiscal impact of legislation – said last year that the law would reduce the federal budget deficit over the next decade while repealing it would increase deficits by $210 billion.
The Mercatus Center, which is registered with the IRS as a 501(c)3 nonprofit group, describes itself as “the world’s premier university source for market-oriented ideas.”
“Researchers select their own projects and are committed to the highest standards of academic quality and credibility for our research procedures and products,” the Center says on its website.
Contrary to Democrats’ suggestions that Blahous’ research may have been politically motivated, the Center claims its scholars “do not do directed research or research for hire.”
This post has been updated.