Thursday, October 8, 2009

CBO And JCT Score The So-Called Baucus “Bill”

As many of you no doubt heard, the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) released their scoring on the so-called Baucus “Bill”.  The trick here is that there really is no bill. What the Senate Finance Committee submitted was not an actual bill but rather the concepts they have been working on. NO LEGISLATIVE LANGUAGE was submitted.  In other words one can suggest concepts A, B and C and then turn around and write legislation for X, Y and Z.

William Jacobson at Le·gal In·sur·rec·tion describes it best: 
The CBO scored the concepts described by the Baucus Committee. There is no legislative text. None. Baucus and his Democratic colleagues refused to reduce their concepts to actual legislation prior to a vote. Here is the CBO's disclaimer:
CBO and JCT’s analysis is preliminary in large part because the Chairman’s mark, as amended, has not yet been embodied in legislative language.
The Baucus Concepts are disasterous, but that's for another post. For this post, let me get across a simple concept: THERE IS NO BAUCUS BILL. 
Sounds deceptive you say? Well it is. William Jacobson goes on to describe the deception: 
The actual legislation will be drafted in secret by Harry Reid and a few other people, including staffers whose names and political connections you never will know, and the resulting legislation will be rammed through the Senate and House before anyone gets to read and analyze it. 
Now you know why they do not want to post the legislation on the Internet 72 hours before they vote because they are planning a bait and switch. 

So what were the concepts that the CBO and JCT scored?  From the CBO’s Director’s blog
Among other things, the Chairman’s mark, as amended, would establish a mandate for most legal residents of the United States to obtain health insurance; set up insurance “exchanges” through which certain individuals and families could receive federal subsidies to substantially reduce the cost of purchasing that coverage; significantly expand eligibility for Medicaid; substantially reduce the growth of Medicare’s payment rates for most services (relative to the growth rates projected under current law); impose an excise tax on insurance plans with relatively high premiums; and make various other changes to the Medicaid and Medicare programs and the federal tax code. 
These are very bad concepts all around; you can almost see the unintended consequences that will result from them.
What did the CBO and JCT find from these concepts? Again from the Director’s blog: [emphasis added, mine] 
According to CBO and JCT’s assessment, enacting the Chairman’s mark, as amended, would result in a net reduction in federal budget deficits of $81 billion over the 2010–2019 period. The estimate includes a projected net cost of $518 billion over 10 years for the proposed expansions in insurance coverage. That net cost itself reflects a gross total of $829 billion in credits and subsidies provided through the exchanges, 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 $201 billion in revenues from the excise tax on high-premium insurance plans and $110 billion in net savings from other sources. The net cost of the coverage expansions would be more than offset by the combination of other spending changes that CBO estimates would save $404 billion over the 10 years and other provisions that JCT and CBO estimate would increase federal revenues by $196 billion over the same period. In subsequent years, the collective effect of those provisions would probably be continued reductions in federal budget deficits. Those estimates are all subject to substantial uncertainty. 
First and foremost pay close attention to the very last line. That being said, $81 billion is not even a spit in the bucket compared to the $12 TRILLON in debt we will be carrying over the same time period. If Obama’s stated goal was to significantly reduce health care costs in order to lower the deficit, then these concepts are an Epic Fail!  Secondly, I don’t buy the $829 billion price tag for a hot second. How can anyone add millions more to the system, increase the quality of care and reduce costs all at the same time? The whole thing is BS wrapped up in a delusional fantasy.

1 comment:

Anonymous said...

Keep in mind, the so-called deficit reduction numbers assume 2 things:

1. Congress will actually reduce $400 billion of "waste , fraud, and abuse" from Medicare/Medicaid.

2. The states will not balk at having most of the increases in Medicaid pushed down to their own state budgets, through another unfunded federal mandate.

Both are questionable, in terms of real achievement.

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