Breaking: CBO releases the actual report; Update: Almost all $940 billion incurred in just six years; Update: Preliminary

posted at 11:25 am on March 18, 2010 by Ed Morrissey

It’s much as advertised. Thanks to its spending provisions mainly starting in 2014, the reconciliation bill combined with the Senate version has a total cost of $940 billion, with deficit savings of around $138 billion (via No Runny Eggs):

CBO and JCT previously estimated that enacting H.R. 3590 by itself would yield a net reduction in federal deficits of $118 billion over the 2010-2019 period, of which about $65 billion would be on-budget. The incremental effect of enacting the reconciliation proposal—assuming that H.R. 3590 had already been enacted—would be the difference between the estimate of the combined effect and the previous estimate for the Senate-passed bill, H.R. 3590. That incremental effect is an estimated net reduction in federal deficits of $20 billion over the 2010-2019 period over and above the savings from enacting H.R. 3590 by itself; almost all of that reduction would be on-budget (see the bottom panel of Table 1 and subtitle A of title II on Table 5). …

Although CBO does not generally provide cost estimates beyond the 10-year budget projection period, certain Congressional rules require some information about the budgetary impact of legislation in subsequent decades, and many Members have requested CBO’s analyses of the long-term budgetary impact of broad changes in the nation’s health care and health insurance systems. Therefore, CBO has developed a rough outlook for the decade following the 2010-2019 period by grouping the elements of the legislation into broad categories and (together with the staff of the Joint Committee on Taxation) assessing the rate at which the budgetary impact of each of those broad categories is likely to increase over time. Our analysis indicates that H.R. 3590, as passed by the Senate, would reduce federal budget deficits over the ensuing decade relative to those projected under current law—with a total effect during that decade that is in a broad range between one-quarter percent and one-half percent of gross domestic product (GDP).3 The imprecision of that calculation reflects the even greater degree of uncertainty that attends to it, compared with CBO’s 10-year budget estimates.

Using that same analytic approach, the combined effect of enacting H.R. 3590 and the reconciliation bill would also be to reduce federal budget deficits over the ensuing decade relative to those projected under current law—with a total effect during that decade that is in a broad range around one-half percent of GDP. The incremental effect of enacting the reconciliation bill (over and above the effect of enacting H.R. 3590 by itself) would thus be to further reduce federal budget deficits in that decade, with a total effect that is in a broad range between zero and one-quarter percent of GDP.

Undoubtedly, this is good news for Nancy Pelosi and the Democrats. The overall deficit reduction number from the CBO, as well as the under-$1 trillion price tag, gives them some momentum towards winning the votes of reluctant moderates. Whether they can overcome the issues of abortion and Demon Pass will still have to be seen, but at least on cost they have some ammunition.

That also applies to the reluctance in the Senate to take this bill back up again.  The House version with the reconciliation package saves more money off of the deficit than the Senate version alone, at least according to the CBO.  If the Senate balks at considering the reconciliation changes, they’ll essentially be writing off supposed savings to the deficit.

Republicans set part of their argument against the House effort on the CBO response, but not all of it.  This doesn’t help build opposition to the bill, but it doesn’t stop it on the other grounds.  Expect the GOP to push hard on abortion and the individual mandate, as well as Demon Pass in response.

Update (AP): Here’s the key table from CBO’s letter to Pelosi. Via Philip Klein, want to see what a shabby fraud these cost estimates are? Check out the line for “Gross Cost of Coverage Provisions”:

cbo

This is why they’re delaying the start of the program, of course. If it kicked in right away, the decade-long estimate would obviously be well into the trillions. So they simply stalled it for four years, incurring just $17 billion in costs — or 1.8 percent of the total 10-year estimate — through 2013 so that wavering Democrats could go back to their districts and tell baldfaced lies to their constituents about the pricetag. A perfect ending to this travesty.

Update (Ed): I’ve received a lot of e-mail asking me to emphasize that this is a preliminary CBO report.  That’s true, but that’s exactly what was promised, too.  Politically, I doubt it makes much difference — and generally speaking, the preliminary reports are in the ballpark with the eventual final analysis.


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What these Obama boot licking MSM idiots fail to realize is that when Obamacare and Obama’s other job killing bills cause our economy to tank, many of these lamebrained MSMers will join the unemployment rolls too.

There is not going to be enough government money to cover healthcare for all 300 million without breaking the bank. Look at Massachusetts!

sarahpalinfan99 on March 18, 2010 at 9:33 PM

Massachusetts passed a Health Care Reform act in 2006. It greatly resembled the current bill under consideration albeit on a smaller scale and without the throw ins like student loan reform, so worries about escalating costs were conservative as compared to this House bill. The result? From Wikipedia (emphasis mine):

In February 2008 the Boston Globe reported that Commonwealth Care covered 169,000 people and had a projected cost of $618 million for the fiscal year. By June 2011 enrollment is projected to grow to 342,000 people at an annual expense of $1.35 billion. The original projections were for the program to ultimately cover approximately 215,000 people at a cost of $725 million.

In March 2008 (a scant 2 years into the program) the Boston Globe reported that some “safety-net” hospitals serving low-income individuals in urban areas were facing budget shortfalls due to the combination of reduced “free-care” payments from the state and low enrollment in Commonwealth Care. The reduced state payments anticipated that by reducing the number of uninsured people Commonwealth Care would reduce the amount of charity care provided by hospitals.[44] In a subsequent story that same month the Globe reported that Commonwealth Care faced a short-term funding gap of $100 million and the need to obtain a new three-year funding commitment from the federal government of $1.5 billion. The Globe reported that a number of alternatives were under consideration for raising additional funding, including a $1 per pack increase in the state’s cigarette tax. Health care costs in the state were rising at an annual rate of 10 percent, and the state budget deficit was $1.3 billion.

And this from Wikipedia no less. Commonwealth (of Massachusetts) Care was billed almost exactly like this bill under consideration. Any of this sound at all familiar?

Huckabye-Romney on March 18, 2010 at 9:40 PM

Still more from Wikipedia:

A paper published to be published in Entrepreneurship Theory and Practice[46] analyzes the impact of Massachusetts approach to health financing reform, insurance mandates, on the rate of new business starts in Massachusetts versus New Hampshire. Along with an earlier dissertation published in April of 2008, it finds that new business starts were reduced in Massachusetts by 16%, and that this reduction included displacement of new firm starts across the state line into New Hampshire.

Massachusetts’ problem of overcrowded waiting rooms and overworked primary-care physicians (who were already in short supply) has been exacerbated by the influx of patients now covered.One criticism of the program is that it has done nothing to realign incentives for MDs to provide primary care.

Please, Washington – LISTEN TO US!

Huckabye-Romney on March 18, 2010 at 9:45 PM

I often wonder if Obama has the Constitution printed on his toilet paper? The way he seems to treat it, it’s a legitimate question.

George_Canada on March 18, 2010 at 11:20 PM

Obama and Nancy Pelosi get married. Big wedding, big house, big future. Obama gets all snuggly on the first night of the honeymoon and Nancy slaps hin upside the head. He sits right up and in his best Ron Reagan imitation says, I paid for this right so it’s mine to have when I want it.
Nancy bats her botoxed eyes and him and says, “yes dear, and you shall – but first you’ll have to wait six years.” “What? Where did you learn that wee wee stuff?”
“You taught me dear, when you showed me how we should handle healthcare to make it seem like a savings.”

Don L on March 19, 2010 at 6:40 AM

We must spend more to save more!

And lie more to get the real truth told!

Mottos of the Moot.

profitsbeard on March 19, 2010 at 9:39 AM

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