CBO on Health Care: July 14th to 20th & MSM Distortions
by Bruce Webb
Last week was kind of a busy time for CBO scoring with the result that some stories got over-reported and others not reported at all. So lets back up a little.
Tuesday July 14. CBO scores the coverage costs of HR3200, the House Tri-Committee Bill. The CBO Director’s Blog puts this announcement out House Democrats’ Health Reform Proposal: Preliminary Analysis of Major Provisions Related to Insurance Coverage Bottom line: increasing coverage to 97% of legal non-elderly residents will cost $1.048 trillion over ten years. Spending and revenue provisions of the bill not yet scored.
Thursday July 16. CBO director testifies to Senate and House Committees. The Director’s Blog describes this here: The Long Term Budget Outlook. And from the graphs included this seems to be mostly just another presentation of the LTBO released on June 25th and announced on the Director’s Blog under the same title as that on the Senate testimony Long Term Budget Outlook. The rest of this post will be exploring what Director Elmendorf actually said here as compared to how it was reported.
Friday July 17. CBO releases a new score for HR3200 which now includes the spending and revenue provisions not scored on Tuesday. PRELIMINARY ESTIMATE OF THE EFFECTS ON THE DEFICIT OF H.R. 3200, THE AMERICA’S HEALTH CHOICES ACT OF 2009 . New bottom line? $239 billion over 10 years.
Saturday July 18th. The CBO Director’s Blog announces the release of the above report released the night before. The delay between the release Friday night and CBO and Ways and Means Committee public announcements creates a major kerfluffle on dKos with accusations of hoaxing. The dust settled a little after the Director’s Blog put out this: Preliminary Analysis of the House Democrats’ Health Reform Proposal confirming the numbers above.
Saturday July 18th to Monday July 20th, the Speaker and various Chairmen release Press Releases saying that the CBO confirmed that the House Bill in combination with an additional piece of legislation actually would produce a $6 billion surplus over those same ten years. This created a lot of confusion over the weekend, did CBO report $239 billion deficit? Or confirm a $6 billion surplus? Well both and for those who wish please revisit some of the past posts here at AB from last weekend.
But I want to focus on the reporting, in particular how sound bites from the Thursday testimony seem to have overwhelmed anything else. That coming below the fold.
(UPDATE: There is some weirdness in the HTML at this point that I can’t find. The page is supposed to break, and a link from CNN display. Neither happens. The title of the CNN article is “Health Reform Bill Won’t Reduce costs, and it is datelined on Friday. I give up. It works fine in Preview).
Health reform bills won’t reduce costs and summarized with this opening:
The health reform bills released so far would increase government spending on health care without sufficiently reining in health care costs.
And at least initially they aren’t likely to significantly lower premiums for the majority of Americans with employer-sponsored health insurance.
That’s the sobering takeaway from testimony Thursday by Congressional Budget Office Director Douglas Elmendorf.
Elmendorf’s preliminary conclusions were based on a bill jointly released by three committees in the House this week and another bill passed by the Senate health committee on Wednesday.
The WaPo reported on it in much the same tone: Lawmakers Warned About Health Costs: CBO Chief Says Democrats’ Proposals Lack Necessary Controls on Spending
Congress’s chief budget analyst delivered a devastating assessment yesterday of the health-care proposals drafted by congressional Democrats, fueling an insurrection among fiscal conservatives in the House and pushing negotiators in the Senate to redouble efforts to draw up a new plan that more effectively restrains federal spending.
Under questioning by members of the Senate Budget Committee, Douglas Elmendorf, director of the nonpartisan Congressional Budget Office, said bills crafted by House leaders and the Senate health committee do not propose “the sort of fundamental changes” necessary to rein in the skyrocketing cost of government health programs, particularly Medicare. On the contrary, Elmendorf said, the measures would pile on an expensive new program to cover the uninsured.
. (Before going on we could note that it really isn’t the business of news reporters to insert editorial comment like “devastating”, but then again that is characteristic of much of Lori Montgomery’s reporting.) At this point lets take a little stock. The Director’s Blog informs us that the topic of the testimony Thursday was on the Long Term Budget Outlook and not explicitly on the Health Care bills themselves. Moreover we know now, as Director Elmendorf knew then his staff was still working up the numbers on the full cost of the Tri-Committee Bill and wouldn’t release them for a full day plus after his testimony. Yet the WaPo story immediately drops any substance of the testimony and launches right into process questions and reactions by the political players with Elmendorf’s actually testimony reduced to out of context snippets.
The CNN reporting has a little more substance and focuses on testimony by Elmendorf that claims the current bills do not do enough to reduce the bend points in the CBO trendlines, trendlines themselves the product of the Long Term Budget Outlook. Well fair enough, on the other hand it is not at all clear that that end was the particular focus of these bills to start with, that is I don’t know where anyone promised that simply providing a public option would solve long-term health care cost trends, only that they would produce a bill that was paid for under CBO scoring criteria. Plus the reporting was spun in a way that confused ‘doesn’t subtract from’ future deficits transforms to ‘adds trillion to’ without acknowledgement of scoring from Friday and announcements from Saturday end up with a House Bill at least that is fully paid for.
I guess my real point is that you have to parse the claims you see closely. Not slowing the growth rate of health care is not the same as adding to the deficit. Nor are the goals of bringing coverage to the uninsured and controlling overall costs the same. To the extent we could achieve both goals great, and in the current political climate maybe we can’t get the first without some claims to be addressing the second. But that is a political calculation and not a policy consideration per se.Instead the question should be moving forward is as the President said in somewhat different words, how does it measure against the status quo, and our we measuring that as a percentage of national health care costs or as a percentage of the federal budget?
In my opinion Director Elmendorf blurred the line between two roles: one as the scorer of the impact of legislation over the next ten-years, in which case the House Bill does very well, and two as the evaluator of the long-term economic outlook. Credulous reporters and cynical politicians (or perhaps the other way around) seem to have seized on Elmendorf’s conclusion on the latter to implicitly judge the former.
So yes the Tri-Committee Bill adds a trillion dollars to federal health care spending to achieve coverage, on the other hand it has direct spending savings, proposed revenues, and a change to Pay-Go rules to make it officially budget neutral over the official scoring period. We should not let those concepts get fatally confused.