Senate Democrats got the numbers they needed from the Congressional Budget Office on health care reform legislation: $829 billion over 10 years and $81 billion shaved off the federal deficit. The favorable-looking analysis should let their bill reach the full Senate in the next few weeks.
Unfortunately, the Mark Twain line — or at least someone else’s line that Twain made famous — about “lies, damned lies and statistics” comes to mind.
CBO did its best to price Finance Committee Chairman Max Baucus’ bill, but the budgeteers could only work with the data they were given. Ultimately, CBO’s conclusions were based on assumptions that almost surely can’t come true — for which U.S. taxpayers will pay.
Stunning is the fact that even after $829 billion in spending, tax increases on high-dollar private insurance, insurance mandates, government subsidies for the poor and all the rest, CBO said the legislation would still leave 25 million Americans uninsured. Odd, we thought covering everyone was the point.
Yet the bill is a mirage. CBO’s estimate of the plan “substantially understates its true cost because it is based on key assumptions that will never hold up over time,” economist James Capretta writes for National Review Online.
These include unrealistic cuts to Medicare provider reimbursement rates, other reductions to Medicare and Medicaid and a mechanism in the bill that Capretta writes will keep millions of lower-income Americans from receiving enough in government subsidies to pay for their insurance. Employers will be left to pick up the balance — another illusion, he says, because employer-paid premiums ultimately are borne by workers through lower wages.
“The vast majority of American workers would get no additional federal assistance due to the ‘firewall,’ even as the government pushed the cost of compulsory health insurance much higher with regulations, taxes and fees,” Capretta writes. “This is how Sen. Baucus shoehorns a $1.5 (trillion) to $2.0 trillion ‘universal coverage’ scheme into an $830 billion sack.”
The deficit reduction highlighted by CBO doesn’t result from actual savings in the legislation. “It is all tax increases and more,” says the Pacific Research Institute’s Benjamin Zycher. “Will those higher taxes be limited to those making in excess of $250,000 per year? Please.”
If that isn’t concerning enough, Americans must remember there are other health care bills alive on Capitol Hill. At some point there’ll be a melding, the legislation’s final look determined by Democratic leaders. “The real bill will be another 1,000-page, trillion-dollar experiment,” top Senate Republican Mitch McConnell said.
Which recalls another saying — about lipstick and pigs. Mr. Twain again?