Everyone in Washington and the wonkosphere seemed to be waiting for the CBO’s preliminary analysis of the Senate Finance Committee version of ObamaCare — and were relieved (on the Left) or freaked out (on the Right) that it suggested it may reduce the deficit by $81 billion. However, no one ever convinced me that any of the amendments were going to significantly increase the costs of the original Baucus proposal. Had the final product generated red ink, the number would have been small enough to be fixed by Baucus with a minor tweak or two.
If people want to focus on the fact that the Finance Committee does not have legislative language for the CBO to score, I guess that’s okay. If Peter Suderman wants to remind us that the Medicare cuts designed to pay for much of the bill’s tab are not going to happen, I guess that’s okay, too — though he admits that criticism will have a hard time getting any political traction in the Senate.
It might be more useful to look at the fact that the CBO’s preliminary estimate, with its cost-bending deficit numbers, relies on $201 billion in revenues from an excise tax on high-premium insurance plans. However, today, more than 150 House Democrats sent a letter to Speaker Nancy Pelosi opposing a new tax on expensive insurance plans. While the letter is supposedly concerned with any such tax eventually hitting middle-income Americans, the reality is that these House Dems are acting at the behest of their Big labor masters, which means they are (ahem) unlikely to change their minds on the issue. Indeed, a White House that was willing to take over much of the US auto industry to save the UAW is probably not keen on tax, either.
Moreover, the other Senate bill (Kennedy-Dodd, HELP) does not specify what spending will be cut or what taxes will be raised to pay for the increased spending. That was the job of the Finance Committee. And the House bills rely on larger cuts to Medicare and Medicare Advantage, which are (as noted above) imaginary, but will nevertheless tend to scare the Hell out of Seniors who already oppose ObamaCare and are more likely to vote in midterm elections. The GOP has already signaled that it plans to hit the Dems hard on these points if and when a bill reaches the Senate floor.
So the $201 billion question is when the Democrats are going to decide whether to soak seniors or their union base to pay for their government takeover of the US healthcare system.
Update (AP): Rove is first out of the gate among prominent Republicans in pushing back against CBO.
The CBO report claims the bill won’t add to the budget deficit until 2015—but the bill only manages that feat by delaying benefits and imposing taxes and Medicare and Medicaid cuts up front.
The CBO report does shed some light on the cost for each person the Baucus plan would add to the ranks of the insured. CBO estimates the plan would insure about 29 million people. If that is right and if the total price tag is also accurate, the average cost per year per person for the seven-and-a-half years benefits will be in force during the program’s first decade would be $3,811. That compares favorably to private insurance. On average, a single person now pays $4,824 a year for health coverage and a family of four pays $3,344 per family member per year, according to the Kaiser Permanente Institute for Health Policy.
But the CBO numbers are almost certainly overly optimistic—there has only been one large-scale federal health program that has come in at or under its projected cost, the Medicare prescription drug benefit enacted under the previous administration, which is costing 40% less than estimated.
This post was promoted from GreenRoom to HotAir.com.
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