The Congressional Budget Office thinks Obama’s 10-year budget is a money-saver – and that a big chunk of those savings will come from Medicare.
 
The CBO's analysis of the President's budget, which predicts the White House plan would cut the deficit by $1.1 trillion over ten years, was released last Friday.
 
Under this budget, the deficit will go up to about 4.2% of GDP until 2015, but then start to sink, hitting 2.2% of GDP or less by 2023 the CBO estimates.
 
The CBO is quick to acknowledge that Obama's health-related initiatives will lead to savings, whether in the near or far term. They note, for example, that Obama's aggressive cigarette taxing will cut $83 billion over 10 years – and adds that it may save another $2 billion "because improvements in people’s health would reduce expenditures by Medicaid and Medicare."
 
Though getting rid of the SGR, as Obama plans, turns a theoretical 24.4% cut into a much smaller non-theoretical one, the CBO buys that a proposed shift to "new payment models" will make up for some of the revenue lost, leading to a relatively modest $139 billion loss in 2014–2023.
 
The CBO is optimistic about other features of the Obama Medicare plan – including the idea to "modify payments to health care providers, such as hospitals and skilled nursing facilities" and "modify cost-sharing responsibilities” – and predicts the net budget gain will be $364 billion over 10 years. That's not far off from the $370 billion the White House is claiming.
 
Of course the wild card in the U.S. health care spending outlook is Obamacare, which is portrayed as either a budget-buster or a budget-saver, depending on which side the portrayal is coming from.