WaPo: ObamaCare doesn’t do anything to reform deficits
posted at 2:20 pm on November 30, 2009 by Ed Morrissey
And that’s a generous analysis by Lori Montgomery. It assumes that everything Harry Reid says about the Senate bill is both true and will come to pass, and it also blithely ignores the “doctor fix” that eliminates cuts in federal reimbursements for Medicare. And even with the Washington Post dancing on fairy wings in Fantasy World, Montgomery still comes to the shocking conclusion that spending an extra $200 billion a year won’t help the deficit much:
But they see scant evidence that those ideas would quickly bear fruit, and in the short term they fear that the initiative would leave Washington struggling to pay for a new $200 billion-a-year health program even as existing programs require vast infusions of cash to care for the aging baby-boom generation.
Those concerns were magnified by the release of Reid’s bill, which the Senate will begin debating on Monday. Democrats were thrilled when the nonpartisan Congressional Budget Office reported that the package was fully “paid for” — meaning lawmakers had identified spending cuts and tax increases sufficient to cover the cost of expanding coverage to 30 million additional people.
But the measure would not deliver on Democrats’ most ambitious claims, the CBO found. While the package would not worsen the nation’s record deficits, it would not significantly improve them, either now or in the future. Reid’s bill would shave less than 2 percent from deficits projected to top $9 trillion over the next decade. And it would make only “small reductions” after that, the CBO said — about 0.25 percent of GDP — to deficits projected to balloon to roughly 14 percent of the economy by 2035.
“The hope that health-care reform would take care of our budget problem has evaporated,” said Isabel Sawhill, a fiscal expert at the Brookings Institution.
Many budget experts also worry that lawmakers may not have the stomach to keep the new taxes and spending cuts intended to pay for the package. Republicans are already planning to offer an amendment to strike more than $400 billion in proposed Medicare cuts from the package, a move that would blow a huge hole in financing for the bill.
In merging bills drafted in committee, meanwhile, Reid significantly watered down two of the most important cost-containment provisions: a tax on high-cost health insurance policies that was opposed by labor unions and an independent commission that had been designed to automatically and methodically restrain Medicare spending. Senior White House officials have called those provisions critical, but House leaders are adamantly opposed to both.
Montgomery never mentions the “doctor fix” at all in her analysis. The House passed the bill as part of its rules package for the Pelosi version of ObamaCare, and it would increase federal spending over $200 billion in the first ten years by canceling cuts to reimbursement rates. Reid’s bill (as well as the version passed by the House) rely on those cuts to meet their spending goals for ObamaCare. Yet without that rescission of the cuts, the AMA would have opposed ObamaCare. Reid himself tried sneaking it through the Senate, but got caught in a cloture vote and will have to find another way to pass it.
The article mentions that the CBO has bolstered Reid’s claim of deficit neutrality. It fails to mention that the CBO re-scored the Pelosi plan after its passage, this time with the “doctor fix,” and determined that it would increase deficit spending by $89 billion in the first decade and by more than $200 billion in the second decade. When discussing deficits and new entitlement spending, that piece of information may have been helpful to the Post’s readers.
Meanwhile, the AP has a more cogent analysis of the p0litics of Reid’s bill in the Senate:
Senate Democrats face deep divisions within their ranks as they begin debate Monday on President Barack Obama’s health care overhaul, with the recent all-hands-on-deck coalition frayed over abortion and the option of government-run insurance.
While majority Democrats will need 60 votes to finish, some in the party say they’ll jump ship from the bill without tighter restrictions on abortion coverage. Others say they’ll go unless a government plan to compete with private insurance companies gets tossed. Such concessions would enrage liberals, the party’s heart and soul. …
Of the many issues senators have to weigh, abortion funding and the option of a government insurance plan promise to be the most difficult.
On abortion, no compromise seems possible. On the public plan, a deal may yet be had.
Reid still wants to jam this through the Senate in the next three weeks, but that seems rather ambitious for a bill that barely got enough votes to start debate. The diametrically opposed positions within the Democratic caucus on both abortion and the public option spells trouble for Reid to get a cloture vote at the end. Keep telling your Senators that you oppose this bill, and add your voices to the wealth of polling that shows that American voters are highly skeptical of the approach taken by Democrats.