AT THE END of 2019, Congress repealed three significant tax components of the Affordable Care Act, a.k.a. Obamacare. Each of them had been included in the initial legislation to raise the revenue required to pay for the new spending the law called for.
The biggest of the three was the so-called Cadillac tax, which was expected to raise about $197 billion over the next decade. Congress also nixed the law's health insurance tax, projected to raise $150 billion over 10 years, and the medical device tax, projected to raise $25.5 billion. All three taxes were eliminated as part of a $1.4 trillion year-end budget bill that President Donald Trump signed at the last possible minute in order to keep the government open.
The repeal of these taxes was predictable. Implementation of the Cadillac tax had already been delayed, thanks to pressure from unions, among others, who worried that it would hit their high-priced health benefits. The health insurance and medical device taxes both faced opposition from the industries for which they were named.
What's the problem with the repeal of a bunch of taxes no one ever really liked? That's probably what the lawmakers who voted to end the taxes were thinking too. The main effect will be to increase the deficit by a little more than $373 billion over the next decade--and, in the process, to further weaken a central argument made by supporters of the legislation.
Obamacare was passed on a promise that it would be deficit-neutral...