Tags: CBO | healthcare | coverage

'CBO' Means 'Can't Bank on It'

Friday, 09 Oct 2009 10:35 AM

By Ernest Istook

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Call it the tipping point. Or the point of no return.

While many fixate on bogus claims that phantom healthcare legislation bill will reduce the deficit, the new Congressional Budget Office (CBO) report shows that bill would quickly shift 37 million Americans to government-paid healthcare.

Added to 87 million already on taxpayer health programs (Medicare, Medicaid, military) and about 8 million in children’s programs, the tilt is accelerating against private care and insurance.

Whoever pays your bills gets to pick your doctor and decide what care you can receive. So be nice to Uncle Sam.

The CBO projected the 37 million figure based on the leading proposal from the Senate Finance Committee, even though that plan still isn't written. And that’s just for starters: A study done for The Heritage Foundation projects that 103 million Americans eventually would be moved into government-run care under the House-backed proposal.

But CBO calculates that 13 million more people would get care by expanding Medicaid and children's programs; 23 million would get subsidies to help pay premiums as they are put into government-run "insurance exchanges." It’s all done by expanding the definitions of who qualifies as needy.

And for everyone else? We get to pay for it. As Sen. Charles Grassley, R-Iowa, said, “Most Americans with health insurance will see their premiums increase.” By how much? Nobody will know until Senate secrecy ends and lawmakers release actual language. But one projection says an extra $900 a year for a family of four.

Yet the rush is on to persuade Americans that everything is okay because the deficit — a monstrous $1.4 trillion a year right now — won’t get worse. CBO says that, by enlarging government, we nevertheless knock off an average $8 billion a year from the deficit. Compared with $1.4 trillion, it’s less than half of one percent improvement in the annual deficit. And even that’s artificial.

Yet the spin is out there. Two typical headlines said, “CBO Says Senate Health Bill Would Expand Coverage, Reduce Deficit” and “Healthcare Bill Gets Green Light in Cost Analysis.”

“Reduces the deficit” is newspeak code that means “raises taxes” while making government ever-bigger. In this case, the tax increases are about $227 billion, says the CBO. The overall cost is projected at $829 billion. That’s not a guaranteed figure. CBO could stand for “Can’t Bank On it” because projections are notoriously understated. Their analysis of Sen. Max Baucus’ proposal admits as much, stating that it’s “subject to substantial uncertainty.”

That caveat is missing from many media reports. Also overlooked is CBO’s caution that it has not been given legislative language to review (who has?), and so was required to follow only the “outlines” the committee provided, plus what CBO labels “the major additional corrections and clarifications provided by the committee staff.”

Nobody can check CBO’s numbers because a lot are based on oral conversations and private communication. That’s further proof the public’s right to know is denied while glowing claims are given to the media. Nobody can read or analyze the bill until it exists; the process needs to be slowed down so we all can see the dirty details.

In addition to higher taxes, the entire charade also depends upon phantom savings to support the claim of cutting the deficit. $404 billion, according to the CBO, would come from reducing Medicare spending. If such savings actually happened, they should be used to shore up Medicare’s shaky finances, not to justify an expansion of government.

But it’s fantasy to think such savings will occur. “These projections assume that the proposals are enacted and remain unchanged throughout the next two decades, which is often not the case,” the CBO writes. “The long-term budgetary impact could be quite different if those provisions were ultimately changed or not fully implemented.”

Year after year, Congress has claimed it would make future reductions in Medicare spending and doctor and hospital payments. Then lawmakers consistently vote to repeal the reductions before they occur.

All supposed savings should be accomplished and put in the bank before Congress spends it.

Everything in the legislation unravels once you recognize it’s built upon phony claims of savings and very real claims of tax increases. And for what? To expand the number of people with health coverage from the current 85 percent to what they claim will be a 94 percent level, by raising taxes and dictating that everyone must buy insurance. Yet Grassley says the bill "still leaves 25 million people without health insurance. That's not much bang for the buck.” Adding more taxes to pay for more subsidies would send costs even higher.

Congress has abandoned the pretense of making care more affordable to focus on making government bigger.

Even liberal Democrats are rebelling against those new taxes, which would come mostly from taxing existing health insurance (by claiming that it’s “high-end” coverage). This week 157 Democrats — 60 percent of those in the House — sent Speaker Nancy Pelosi a mass letter objecting to this plan. Now Speaker Pelosi has floated the notion of a European style VAT tax instead. Another big new tax, this time on everyone.

Despite some media raves, the Baucus plan is not a magic bullet. But it is a typical liberal approach to tax everyone else for a big government giveaway.

It’s more proof that the era of big government is not over — it's overwhelming.

Ernest Istook served 14 years as a congressman and is now a distinguished fellow at The Heritage Foundation.

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