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Obama Wars Title: Five Reasons The CBO Figures Are Phony Five Reasons The CBO Figures Are Phony By Ed Carson Thu., March 18, '10 12:20 PM ET Tags: CBO - Health Care - ObamaCare - Medicare - Taxes - Democrats The Congressional Budget Office’s preliminary “score” says the health care overhaul will cost $940 billion over the first 10 years, saving $138 billion over that time. But the CBO must assess legislation as written, rather than whether it will actually be carried out. Or, as the Economist put it, “The CBO is required to pretend to believe many impossible things before breakfast.” 1. Medicare cuts The Senate health care bill relied heavily on unprecedented cuts in Medicare spending increases. If implemented, this would have a huge impact on seniors’ care. But Congress has always balked at Medicare cuts. (See No. 3). 2. Delayed start To make the budget math work, Democrats plan on delaying the start of subsidies and other costly provisions for several years. The true 10-year cost is far higher. 3. The “doc fix” is excluded The Sustainable Growth Rate imposes automatic cuts in Medicare payment rates to doctors. For several years, fearing a revolt by doctors — and seniors — Congress has suspended those cuts. The original draft of the House health care bill included a permanent “doc fix.” But that ballooned deficits, so Democrats dropped it, even though everyone knows Congress isn’t going to slash doctors’ rates. The CBO has estimated a “doc fix” would cost $247 billion over 10 years. 4. Student loans are included Doctors’ payments are excluded from the health bill, but major student loan program changes are included? Yep. The reconciliation bill will end student loan subsidies to lenders. The CBO says this will save $19.4 billion over the first decade, accounting for virtually all of the $19.8 billion in deficit reduction from the health care reconciliation bill. Reconciliation bills must cut the deficit by at least $1 billion. So, without the non-health care items, the health care reconciliation bill would not pass muster. 5. It’s a CLASS act In the Senate health bill, a new, voluntary long-term care insurance program called CLASS accounted for some $72 billion of the deficit reduction. The Community Living Assistance Services and Supports program is supposed to be deficit-neutral long-term. But Democrats are counting the upfront premium surplus in the short term and ignoring the significant operating deficits after 2029. But wait, there’s more! Let’s assume that the cost savings materialize as planned. It still makes the long-term fiscal outlook worse. Why? Democrats are using up a lot of tax hikes, spending cuts and upfront payment just to get barely better than deficit-neutral. That leaves future lawmakers less scope to bring the nation’s finances into order. On a related note, Democrats continue to maintain the health bill would extend Medicare’s solvency by several years. But they plan to use those as-yet-unrealized Medicare cost savings for a huge new entitlement and to reduce the overall deficit.
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