Video: Reid dismisses $54 billion in tort-reform savings

Harry Reid struggles with math as well as with common sense in this clip from yesterday, which highlights Reid’s argument against considering tort reform as part of the overhaul of the American health-care system. Reid gets his numbers wrong, gets his scale wrong, and in the process admits that the actual cost of the Baucus plan is not $829 billion but $2 trillion:

SENATOR HARRY REID: He talked about CBO saying that there would be $54 billion saved each year if we put caps on medical malpractice and put some restrictions — tort reform — $54 billion. Sounds like a lot of money, doesn’t it, Mr. President? The answer is yes. But remember, we’re talking about $2 trillion, $54 billion compared to $2 trillion. You can do the math. We can all do the math. It’s a very small percent.

First, the actual scale for the CBO analysis is ten years, not each year.  That scale follows the Congressional stage-setting of costs over the next ten years for ObamaCare in order to determine the impact on the deficit.  With that in mind, remember too that the $54 billion is what the CBO expects in deficit savings, not overall savings to the health-care industry, which is what the Senate and the House claim they’re trying to accomplish.  The overall savings come to at least $110 billion over that same period, perhaps as high as $135 billion, or about 0.5% of the entire cost of the industry — which may still be a small percentage, but is significant in terms of actual money spent.  It would come to over $1000 per family in the first ten years.

For that matter, a comprehensive tort reform bill would save money in other industries as well, but the CBO hasn’t scored that yet.

As for doing the math, Reid appears to have two problems with it.  One is just the Beltwayitis that renders Senators and Representatives incapable of understanding that $54 billion is a lot of money, especially in savings to a ballooning deficit.  The more pressing political problem is his math on the Baucus plan.  Max Baucus sold this plan on the premise that it only costs $829 billion and that it would not inflate the deficit.  Others, such as Cato, have pegged the cost at $2 trillion, which would make it a huge deficit multiplier.  Reid seems to admit exactly this in his statement here.

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