Shaky CBO Deficit Projections Help Healthcare Reform Bill Pass House

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When the comprehensive healthcare reform bill won approval from the House on Sunday, some of the swing lawmakers were won over by a new Congressional Budget Office (CBO) analysis showing the bill will slash the deficit by over $1.3 trillion over the next 20 years.

But at a time when the U.S. budget is already saddled with hefty doses of red ink, there's a growing debate about whether the new bill will reduce the deficit or evolve into another entitlement program that will expand the country's debt beyond already record levels.

Even though the bill – which President Barack Obama has hailed as the "most significant effort to reduce the deficit since the Balanced Budget Act" of the 1990s – will cost the federal government $940 billion over a ten-year period, the CBO said it will increase revenue and cut other costs by an even greater amount.

The U.S. budget deficit widened to a record $221 billion in February, up 14% from the $194 billion shortfall in February 2009, the Treasury Department said on March 10. The figures indicate the deficit this year will probably surpass the record $1.4 trillion in the fiscal year that ended in September.

In fact, no one really knows how the future will play out with the true cost of healthcare. The legislation is so complicated, with so many moving parts, that it's virtually impossible to foresee how all its facets will interact and how this will change current estimates of revenues and costs.

Even the CBO itself is hedging its bets, saying the chances its estimates are accurate are about 50/50.

"The budgetary impact of broad changes in the nation's health care and health insurance systems is very uncertain…as a result, we believe that CBO's estimates of the net savings that would result from the legislation have a roughly equal chance of turning out to be too high or too low," CBO chief Doug Elmendorf wrote in a blog titled "Uncertainty in Estimates for Health Care Legislation."

The Director's blog goes on to note that the estimate is preliminary and based on "projections of direct spending and revenue effects that would result…without any further legislation (and) does not encompass discretionary spending, which would be subject to future action in appropriation bills."

"Whether any of the provisions-and if so, which ones-might be changed in the future is not for CBO to judge."

That will feed critics who are skeptical Congress can change its poor record on matters of cost control.

And there are still uncertainties about what final form the bill will take, as the reconciliation process will undoubtedly fuel more horse-trading on some unresolved details.

Senator Judd Gregg, R-NH, who will help coordinate the Republicans' efforts, said his party will try to saddle the bill with "massive amounts" of amendments on unrelated issues from gun control to immigration.

If Republicans can get the Senate parliamentarian to agree with them even once, whatever ultimately passes the Senate will force the House to vote on the reconciliation bill, further complicating the effort.
"We're ready to tackle that if that's what they want to do," Senator Richard Durbin, D-IL, said on CBS's "Face the Nation" program. "We're ready to deal with honest amendments. There will come a time when the American people say enough, this is about politics."

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  1. Lou Soyer | March 23, 2010

    Your article indicates "There will come a time when the American people will say , enough this is about politics " Don't you think enough destruction of captalism and the change of America to Socialism is now being done and continues to be done by the present Socialist Democreats and their one term President? And, next,his target of importance to "capitalism" is the Stock Market! Are we all to invest our money in Brazil,Russia,India and China now? It could happen! I am very angry at Mc Cain for making the wrong running mate prior to the election-his chances were extremely good to win with Romney or another candidate other than the Governer of Alaska- He even admitted that" " I screwed uo" on Leterman's show.

    • Michael | March 29, 2010

      Buddy, if McCain made such a bad and obvious mistake in his campaign, how do you think he would do with the critical economic malaise we are dealing with now? At least BO has the capacity and judgement to understand what's going on. And as far as labeling his efforts as Socialism, as if its a bad word, try using "socialistic components of a democratic government". The only governments right now in the world that are solvent happen to use socialistic programs wisely, viz, Sweden, Norway, etc.

      Isn't it better to support the current President and see what he can do rather than undermine him in an effort to poison the only chance we have? I guess the concept of team player is lost in today's emotional political landscape that you seemed to have bought into.

  2. Barbara | March 23, 2010

    I am no fan of John McCain but you can't blame him for losing the presidency because of his VP choice. This country was so fed up with Bush that they were going democratic no matter who the choice was. The Republicans blew it by not practicing sound fiscal policy while in office. Hopefully they have learned their lesson from being out of office. The Democrats' determination to destroy our capitalist system with their ever expanding federal government reach and their imprudent legislation is the result of that. We need to get back to the Articles of Confederation with states speaking up and refusing to be bullied by the federal government and with the ordinary citizen demanding their rights. Gov. Perry suggested that Texas might consider secession from an overweeming and bullying federal government. Other states might want to consider this as well. This country was founded on individual rights and liberties and WE THE PEOPLE – not tyranny of the majority and WE THE BUREACRATS. The income tax and the AMT were supposed to be temporary measures. Why are they still in existence? WE THE PEOPLE need to tell this government that we no longer are willing to pay to cover their over spending and fiscal imprudence.

    • Suddencall | March 28, 2010

      Voting republican ( supporting terror) is not a choice it is a mistake. The indepentdents in this country are cutting their own throats by jumpimg from -arty to party every election. Stop and think befor you jump ,with out giving your choice a chance to work.

  3. AcesLucky | March 23, 2010

    So you're upset that the Healthcare Reform Bill actually REDUCES the Deficit, while insuring millions of Americans?

    You're upset that Obama is guilty of being RESPONSIBLE towards fiscal results? You're upset that he and Congress put the needs of Americans before the needs of exorbitant profits at the doctor's office?

    "There will come a time when the American people say enough, this is about politics."

    'Couldn't have been a truer statement.

    That's why he became our President. Enough is enough.

  4. Dom Brunone | March 23, 2010

    Barbara – You are right on the money, excellent comment. Unless we Republicans take our share of the blame and humbly admit that we will get it right next time, we have no reason to expect to be entrusted again. Republicans must go back to their conservative roots in order to win back the trust of the people.

    • Suddencall | March 28, 2010

      Republicans can never win back the trust ,because they have never been honest and never had any intention of helping the republic. they are only interested in bleeding the public out of their vote and their money.

  5. Richard Lefcourt | March 23, 2010

    What a shame that so many African-Americans don't realize that their hero, Mr. Obama, is hurting them the most. After countless decades of struggle, many of their ranks are finally getting ahead, saving money, investing in small businesses, hiring workers, only to be ultimately squashed by the taxes and regulation coming from Obama's headlong dive into socialism. And just as sad is the fact that it's all of our lowest income friends and neighbors who will be hurt the worst as the purchasing power of their meager funds is eroded by the rampant inflation the Socialists are in the process of creating. Some may argue that the poor have little to lose. I would suggest that the poor must also accept the fact that their chances of ever getting ahead (and their children's chances as well) shrink with the passing of each entitlement program. More taxation equals less opportunity for all of us. Mr. Obama has given up on his people. I refuse to.

  6. AcesLucky | March 25, 2010

    Sometimes ideology blinds to the facts. Here are just few:

    1. Socialism? The government will neither own nor operate the Health Care industry, nor any other means of its production. The claim to Socialism is a false talking point scare tactic.

    2. There are no higher taxes with this Health Reform Bill, (see interview with the President; CBSNEWS [http://tinyurl.com/naslyc]). The claim to higher taxes is a talking point scare tactic. NOTE: the CBO report was a joint report with the Joint Committee on Taxation.

    3. The Bill REDUCES the federal deficit over the short term (by over $130 billion) and by approximately $1.2 Trillion savings over the long. The claim of "our lowest income friends and neighbors" getting squashed by the Bill is to claim that without it, they wouldn't. We (everyone not rich) were getting squashed ANYWAY with 50% of bankruptcies the result of medical costs, and that's for people WITH insurance! Talk about getting squashed!!

    4. White Americans are the racial majority with 80% of the U.S. population. Black Americans are next, comprising nearly 13% of the population. More than 130 million people voted in the 2008 presidential election with 52.9% voting for President Barack Obama (a 365 Electoral vote to McCain's 173).

    If President Barak Obama is the "hero" of the African-American, you have conveniently overlooked the rest of America. And note: "Only 32% think that insurance should be left to private enterprise." [http://tinyurl.com/mmvxc3]

    No sir, Obama hasn't given up on "his" people. He is in tune with America, which, by the way, are his people.

    • joe | March 28, 2010

      The CBO estimated Medicare would cost only 100 billion over 20 years but in 1985 Medicare cost was 106 billion per year. yup they got that right. Also if there are no higher taxes on this bill why was one of the talking points by the democrats to raise the taxes on the rich?
      The problem with this country is half of the people pay no federal tax so they believe in a free lunch & every business is EVIL because the make money.What do you call a person who works for money?EVIL!

    • Art | March 28, 2010

      You're sadly mistaken if you think government involvement ever, ever, results in reduced cost for anything. You have certainly drunk the koolaid. What a fool you have been taken for, but we'll all suffer for your ineptitude.

  7. Realist | March 28, 2010

    AcesLucky,
    If you really believe the crap you are spueing, your head is in the sand.
    CBO can't count. Just check how well Medicare, Medicaid, and Social Security are doing.
    ObamaCare reducing the deficit is a pipe dream and a blatant lie.
    Last year's estimate of when social security would go in the red said seven years, but your economy killers achieved that in just one year.
    Pull your head out of the sand, or just shut up.
    And, if you think it is fine to tax the rich for ObamaCare and other social programs, please realize that whatever new tax costs are given to the rich, will just be passed back to the middle class consumers by the rich raising the prices of everything you must consume. The rich will keep their profits, at the expense of the middle class. Other ways the rich will offset the new tax burdens is to cut employment, and to reduce and/or defer raises, again hurting the middle class.
    Pull your head out of the sand, or just shut up.
    All this spending is what is killing the economy. And your big mouth, and confused mind, are partly to blame, for perpetuating the garbage information.
    Pull your head out of the sand, or just shut up. You are doing more harm than good.

  8. Dom Brunone | March 28, 2010

    AcesLucky has some big problems.
    1. Socialism occurs here because the government controls the Health Care industry under this scheme. That is why the Dems didnt force a public option. Who needs it when the government controls the insurance companies?
    2. 0bama has demonstrated that nothing he says should be believed. He is master of the half truth. You cannot add thirty million people to an entitlement without charging more or reducing the services provided to everyone else. The CBO is forced to score Health Care on the assumptions provided. And one of the assumptions provided was that the doctors would be forced to accept a 30% pay cut. It WONT happen. Congress will pass the "Doc Fix" before the elections, mark my words. The Doc Fix restores the Doctors pay, and is OFF BUDGET!

    3. The Bill may reduce the Federal deficit in the first ten years because you tax people for ten years and provide services for six years. READ THE BILL. However, the Bill also robs $500 billion from Social security andd Medicare over that period, conveniently ignoring the fact that those programs are in the red already and about to go bankrupt.

    I dare you to provide a credible source that documents 50% of personal bankruptcies for people WITH insurance are the result of medical costs. Total BS.

    4. No one is arguing that Osama won the election. What we are stating is that 40% of his supporters now have Buyers remorse, thinking that they were voting for a centrist. See you in November, AcesLucky, you will need some magic to retain a liberal majority.

  9. Larry Wangen | March 28, 2010

    I am amused when the Republican Party pretends to be fiscally conservative. Big time deficit spending started during the Reagon years, slowed during the first Bush administration, was reversed during the Clinton administration and came back in a major way during the second Bush administration. The Republican Party lost its credibility as fiscal conservatives long ago. They lost it even more when they decided to stage a justifiable war in Afghanistan and a pre-emptive war in Iraq but not pay for either.

    As for returning to conservative roots, what does that mean to today’s Republican Party? I wait for some sign of positive programs rather than just saying no.

    Conservatives need to decide what positive government actions they are for rather than what they are against.

    From an Independent voter and fiscal conservative.

  10. Sago | March 28, 2010

    For clarification, we are all Americans, but there are profound racial differences in how we voted in this or past elections . Obama won 95% of the black vote, compared to just 4% for Mr McCain. He also won 66% of the hispanic vote. McCain led among white voters, by 55% to 43%, but Obama cut the Republican lead among this group compared with the 2004 election. With the perceived shift from moderate to leftist in Obama's first year, it would be interesting to see how the numbers would break out today. There is little question that purchasing power for all of us will shrink because of increased taxes and inflation. It is obvious that you can not squeeze enough out of the "rich" to cover our coming revenue needs with or without the present DC spending spree. In addition, the city, county, and state governments are hurting and will be taxing anything they can. Ultimately, we will find our way to VAT taxes at a federal level to go with all of the nickel and dime local taxes. These are all regressive and will clearly impact the lower socioeconomic groups the most.

  11. Bert | March 29, 2010

    If you really think Obama has the best interests of the common man in his heart regarding "health care reform", why did the stock prices of all of the insurance providers jump when the bill was passed? Their net worth jumped millions on it's signing, "Follow the money and you get to the truth."

    • AcesLucky | March 31, 2010

      "…why did the stock prices of all of the insurance providers jump when the bill was passed?"

      93 million more customers tend to have that effect on a business

  12. Woe are we | March 29, 2010

    Let us not forget all the voter fraud cases against Acorn.
    Obama is NOT for the people! Aces, you are SO in the dark!
    You cannot multiply wealth by dividing it. (ie. share the wealth)
    When the "rich" people run out of money or take it out of the country,
    where will more $$$ come from to support everyone?
    All big companies will try to get around the health care reform or will
    leave the country. This is the biggest job killer America has ever seen.
    Obama was a huge mistake and America better wake up. Problem is,
    it might already be too late! And congress pressing China to let their
    currency float is another huge mistake! The dollar is only marginally
    strong right now due to the fact the euro is weak. China is undoubtedly
    the wealthiest country in the world and everyone would go to yuan for
    safety. (I would) Our dollar will turn into a peso. So yea Aces, lets continue
    to let Obama, Pelosi, Reed spend spend spend!!
    The government cannot even run the post office – get real – the CBO is
    a joke! Not an ounce of deficit reduction will ever come out of this bill!

  13. AcesLucky | March 30, 2010

    Dom wrote:

    "I dare you to provide a credible source that documents 50% of personal bankruptcies for people WITH insurance are the result of medical costs. Total BS."

    —–
    Study cited by Washington Post
    [source: http://tinyurl.com/lyuj3r

    New Study: Bankruptcy Tied To Medical Bills

    By Sarah Lovenheim (excerpt)

    Sixty-two percent of all bankruptcies filed in 2007 were linked to medical expenses, according to a nationwide study released today by the American Journal of Medicine. That's nearly 20 percentage points higher than that pool of respondents reported were connected to medical costs in 2001.

    Of those who filed for bankruptcy in 2007, nearly 80 percent had health insurance. Respondents who reported having insurance indicated average expenses of just under $18,000. Respondents who filed and lacked insurance had average medical bills of nearly $27,000.

    Since 2007, the number of Americans without insurance has increased and filing for bankruptcy has become more difficult due to more stringent laws, according to the report.
    ———

    You can find the study here in .pdf: [http://tinyurl.com/lt4vnm]

    That being done, it is clear from your comments (and many others) that it was never going to matter what "Osama" did or does.

    And let me guess, no source that I provide is going to be "credible" if it disproves your opinion, right? Well, if the CBO can't get it right with all their experience and resources, what qualifies YOU? (Don't answer, I already know.)

  14. 25mm | March 30, 2010

    AcesLucky, what your link fails to mention is the so called link to a medical issue. If you dig deeper, which you won't, these people who filed bankruptcy lost their ability to EARN A LIVING, not put into bankruptcy because of their medical bills.

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