Congressional Budget Office Analysis on Health Care Bill--It Will Reduce the Federal Budget Deficit

The CBO and the Joint Committee on Taxation came out with a new preliminary finding on the cost estimate of the Affordable Health Care for America Act. Their findings suggest that the health care bill will actually reduce the federal budget deficit. Here's just one portion from their letter:

Estimated Budgetary Impact of H.R. 3962
According to CBO and JCT’s assessment, enacting H.R. 3962 would result
in a net reduction in federal budget deficits of $104 billion over the 2010–
2019 period (see Table 1). In the subsequent decade, the collective effect of
its provisions would probably be slight reductions in federal budget
deficits. Those estimates are all subject to substantial uncertainty.
The estimate includes a projected net cost of $894 billion over 10 years for
the proposed expansions in insurance coverage. That net cost itself reflects
a gross total of $1,055 billion in subsidies provided through the exchanges
(and related spending), increased net outlays for Medicaid and the
Children’s Health Insurance Program (CHIP), and tax credits for small
employers; those costs are partly offset by $167 billion in collections of
penalties paid by individuals and employers. On balance, other effects on
revenues and outlays associated with the coverage provisions add $6 billion
to their total cost.

Over the 2010–2019 period, the net cost of the coverage expansions would
be more than offset by the combination of other spending changes, which
CBO estimates would save $426 billion, and receipts resulting from the
income tax surcharge on high-income individuals and other provisions,
which JCT and CBO estimate would increase federal revenues by
$572 billion over that period.1

Here's the link to the CBO's Letter to Congressman Rangel: http://www.cbo.gov/ftpdocs/106xx/doc10688/hr3962Rangel.pdf
The letter has the details on the budget deficit savings.