ObamaCare Gets a Red Light from Congressional Budget Office
The Democrats' plan not only won't save a dime, it will cost us billions over the next decade. (Also see PJTV: Nationwide Protests Target ObamaCare)
Doug Elmendorf, director of the nonpartisan Congressional Budget Office, was testifying before the Senate Budget Committee yesterday when he dropped a bombshell on the gathering that put a whole new spin on the effort by the Obama administration to reform the health care system.
The exchange with Democrat Kent Conrad was a shocker:
Conrad: Dr. Elmendorf, I am going to really put you on the spot because we are in the middle of this health care debate, but it is critically important that we get this right. Everyone has said, virtually everyone, that bending the cost curve over time is critically important and one of the key goals of this entire effort. From what you have seen from the products of the committees that have reported, do you see a successful effort being mounted to bend the long-term cost curve?
Elmendorf: No, Mr. Chairman. In the legislation that has been reported we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount. And on the contrary, the legislation significantly expands the federal responsibility for health care costs.
Conrad: So the cost curve in your judgement is being bent, but it is being bent the wrong way. Is that correct?
Elmendorf: The way I would put it is that the curve is being raised, so there is a justifiable focus on growth rates because of course it is the compounding of growth rates faster than the economy that leads to these unsustainable paths. But it is very hard to look out over a very long term and say very accurate things about growth rates. So most health experts that we talk with focus particularly on what is happening over the next 10 or 20 years, still a pretty long time period for projections, but focus on the next 10 or 20 years and look at whether efforts are being made that are bringing costs down or pushing costs up over that period.
As we wrote in our letter to you and Senator Gregg, the creation of a new subsidy for health insurance, which is a critical part of expanding health insurance coverage in our judgment, would by itself increase the federal responsibility for health care that raises federal spending on health care. It raises the amount of activity that is growing at this unsustainable rate and to offset that there has to be very substantial reductions in other parts of the federal commitment to health care, either on the tax revenue side through changes in the tax exclusion or on the spending side through reforms in Medicare and Medicaid.
Elmendorf made additional news yesterday by scaring the hell out of everyone when he released the latest CBO report on the long-term budget outlook that, in technical terms, says that we are in very big trouble:
Under current law, the federal budget is on an unsustainable path, because federal debt will continue to grow much faster than the economy over the long run. Although great uncertainty surrounds long-term fiscal projections, rising costs for health care and the aging of the population will cause federal spending to increase rapidly under any plausible scenario for current law. Unless revenues increase just as rapidly, the rise in spending will produce growing budget deficits. Large budget deficits would reduce national saving, leading to more borrowing from abroad and less domestic investment, which in turn would depress economic growth in the United States. Over time, accumulating debt would cause substantial harm to the economy. …
Measured relative to GDP, almost all of the projected growth in federal spending other than interest payments on the debt stems from the three largest entitlement programs — Medicare, Medicaid, and Social Security. For decades, spending on Medicare and Medicaid has been growing faster than the economy. CBO projects that if current laws do not change, federal spending on Medicare and Medicaid combined will grow from roughly 5 percent of GDP today to almost 10 percent by 2035. By 2080, the government would be spending almost as much, as a share of the economy, on just its two major health care programs as it has spent on all of its programs and services in recent years.
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Rick Moran is PJM Chicago editor; his own blog is Right Wing Nut House.
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50 Comments
1. billslayer:So what you’re saying is that by spending more money we’re actually…spending more money?
Jul 17, 2009 - 12:20 pm 2. Mike:And the Democrats say that we rushed into Iraq! The President’s plan is to “surge” this bill into law, but with no hope of victory.
Jul 17, 2009 - 12:33 pm 3. DanRampage:We have to make sure that anyone in Congress that ignores the realities in these decisions being made has to be ousted – and that they never work in that town again. If these bills do get passed, it’ll take us 30 years to get them reversed.
Jul 17, 2009 - 12:34 pm 4. antaine:@ Mike – oh, with great hope of victory, since actually improving health care quality and availability are not conditions of victory for them.
control, egalitarianism, and a system that will make it easier to integrate us into an EU style North American union are…and to those ends will succeed fantastically.
Jul 17, 2009 - 12:48 pm 5. antaine:@ Dan – only 30? Social Security is 74 years and counting. No, the Republic will fall before such a massive entitlement can be done away with. It will never be a politically viable agenda to abolish it once it’s in place.
Jul 17, 2009 - 12:51 pm 6. Sebastian Shaw:Universal Health Care in any form needs to die before it is made into law. President Obama’s poll numbers is sinking faster than a rock in dense gravity; likewise, the same is true for the Democrats. The more people know about the plan, the more they reject it. THe CBO’s projections are off by untold amount of money. The truth is Universal Health Care will be a bottomless pit of money from the public with substandard services; it can be an estimated $9-10 billion dollars & this is only the beginning of the financial black hole Obama wants to put us in so he can control us. Call your Senators & House of Representatives ASAP! Melt the phones.
Jul 17, 2009 - 12:53 pm 7. Sebastian Shaw:Make that $9-10 TRILLION, not billion.
Jul 17, 2009 - 12:54 pm 8. john m e:today the “Word of the day”…..leitmotif….the obama white house leitmotif…DECEIT! 30 years is too long to wait…a great first step to
Jul 17, 2009 - 12:58 pm 9. The Shadow:stop the bleeding might be the purchase of the nyt..and a subsequent return
to objective truthful reportage…a dash of conservative bias would not be entirely unwelcome…where’s the patriot with the wealth it will take and the income statement that can absorb the losses? We need him now!
Just so we have all the facts:
“The key thing to remember about Elmendorf’s remarks is that CBO has, so far, seen just two pieces of legislation. One is the bill that the Senate Health, Education, Labor, and Pensions (HELP) Committee passed earlier this week. That bill doesn’t include the types of reforms that would make a big difference in long-term spending trends, but that’s mostly a function of jurisdiction. HELP can’t touch Medicare or Medicaid, nor can it fiddle with the tax code. Yet it’s through those two levers Congress would most likely influence the growth in health care costs. (It remains to be seen what the Senate Finance Committee, which has that jurisdiction, will do.)
The other piece of legislation CBO has seen–the bill produced by three House committees working together–is another story. That’s a complete bill, including Medicare, Medicaid, and the tax system. And the experts who have studied the language closely–or, at least, those I’ve contacted in the last few days–seem to agree with Elmendorf: The bill, they say, doesn’t include the sorts of big reforms that would reduce costs significantly.
But that bill is still very much a work in progress, as House leaders themselves acknowledge. And the White House, among others, has some ideas about how to shape it.
Despite a vow not to draw lines in the sand about reform legislation, President Obama has been adamant that any bill make substantial progress on cost reduction–a pledge his Budget Director, Peter Orszag, reiterated in the course of a brief (and previously scheduled) interview he gave TNR Thursday afternoon. “The legislation that emerges from this process has to contain key provisions that will bend the curve over the long term,” Orszag said. “The president has said that and we’re in the middle of a legislative process, so it’s not surprising that, as you go through that process, there are modifications that are necessary.”
Jul 17, 2009 - 1:16 pm 10. Class Clown:A few weeks ago, I actually had a Democrat say to me, “but once we quit paying for Bush’s war in Iraq, we will have that money to pay for these things”.
In terms of relative cost, that’s like saying you are going to pay your rent by not buying a morning coffee.
People really don’t understand math at all.
Jul 17, 2009 - 1:18 pm 11. Ruebacca:Democrats can’t do anything right. Obama was gonna give us health care, but every month of his presidency 500k lost there jobs and there helth care.
Democrats are all fantastic lierers. Obama, Edwards, both Clintons, Pelosi, Biden, Waxman and I could go on.
Jul 17, 2009 - 1:19 pm 12. fear obama:I still believe it won’t pass.
22 freshmen democrats are saying no way can we pay for this.
But just as Bambi baited and switched us on the GM takeover he plans to bait us and switch us to the Crap and Trade bill.
Watch your backs,
democrats will be hell bent for leather to pass their next massive tax increase.
Electric bills will triple and gas will be 8 dollars a gallon.
Jul 17, 2009 - 1:26 pm 13. Delia:Keep smokin’ those cigs, Barack.
Jul 17, 2009 - 1:34 pm 14. Ben Blankenship:Our snake-oil promoter, aka Obama, just preached a short sermon this afternoon, then took no questions. He ignored the damning report by the CBO about the huge costs of what Congress is proposing, threw lots of numbers at us, talked of “forcing Congress” to do this or that, then stalked out of the room. Still totally lacking: tort reform. Thus, failure.
Jul 17, 2009 - 1:37 pm 15. steeple:He’ll sure be mad. Too bad.
Shadow, not sure what “substantial progress on cost reduction” means to a President who just said a few months ago:
“It is,” he replied. “None of these things alone are going to make a difference. But cumulatively, they make an extraordinary difference because they start setting a tone … $100 million there, $100 million here _ pretty soon, even here in Washington, it adds up to real money.”
Yeah, with a $2 Trillion deficit looming for this year before Health Care Reform and Waxman-Markey,(if one is realistic about actual tax receipts and not capitalizing TARP funds such that they aren’t excluded from the deficit calcuations), $100MM cut 20,000 times would get us back to balanced.
So my humble view is that the CBO carries a little more gravity when it comes to opining on budgetary matters.
Jul 17, 2009 - 1:42 pm 16. Sherab Zangpo:Will it cost a lot ? Will it maim the budget ?
PERFECT !
That is EXACTLY the purpose of this administration.
Cap and Trade is supposed to do the same (be totally useless, cost a lot).
The goal is TO REDUCE America’s power, because this will allow the internationalist subversives to proceed with their plans.
And the other goal is to make America POOR, to keep the American People under control.
Perfectly planned, and on its way to be done.
Only honest politicians can stop the train of subversion…
Smile !
The concept of “honest politician” is rather interesting…
Thank you for the opportunity to comment.
Jul 17, 2009 - 1:44 pm 17. Carl Gordon:What we deny is not death but the awareness that, before we die, nothing is going to happen. That big vague thing, that redemptive fulfillment, is an illusion, a beckoning bribe to keep us loyal. A symphony has a climax, a poem builds to a burst of meaning, but we are unfinished business. No coming together of strands. The game is called because of darkness.
Jul 17, 2009 - 1:44 pm 18. Sherab Zangpo:#6 Sebastian Shaw
“The truth is Universal Health Care will be a bottomless pit of money from the public with substandard services; it can be an estimated $9-10 Trillion dollars & this is only the beginning of the financial black hole Obama wants to put us in so he can control us.”
Just for the sake of precision: this is not the “beginning”.
The subversive plan entered its full executive phase when Fannie Mae and Freddie Mac have been used to bankrupt the whole credit system.
The subversives had planned it well, following Alinsky’s manual: they have created a demend for home-loans credit that was IMPOSSIBLE to satisfy,
THEN
they have made laws to compel the banking system to comply with the irrational demand for credit
THEN
they have used the 2 FMs to produce TRILLIONS of toxic assets.
At that point the collapse of the American (and international) credit system just waited to be triggered by someone, anyone, willing to say that the King was naked.
And they did it just before the elections, causing a wave of fear.
Fear elected Obama, and now he proceeds with Alinsky’s manual, creating MORE demands impossible to satisfy and imposing laws to “satisfy” them.
This will bankrupt the federal budget… and the next step of the socialist revolution will be attained.
Unluckily, we do not have politicians honest enough to appear in front of the American People and tell them the truth.
Thank you for the opportunity to comment.
Jul 17, 2009 - 2:03 pm 19. Delia:17. Carl Gordon,
Or, perhaps it is the fear of being ’snuffed out’ before you’ve had a chance to do all you want to do in this world? The tragedy of death is often the ‘what-ifs?’ for the living who are left behind.
Jul 17, 2009 - 2:04 pm 20. AtheistConservative:As much as I love to see my suspicions confirmed, and have the Obamabots insist that ‘cost reform’ will be a reality … it absolutely amazes me how they fall in line with the talking points.
What product or service has ever increased in quality and decreased in cost with government intervention?
How can expanding benefits to millions of uninsured … lower overall costs?
How can we expect to lower costs by adopting a model that is as inherently broken as Medicare?
How can they say with a straight face that they will lower costs when they can’t even lower the costs on Medicare, and the existence of Medicare is one of the biggest influences on high prices?
Why is the status quo ‘untenable’? The vast majority of Americans are happy with their health care.
Try to get any left-winger to answer a single one of these questions. They can’t. They just want socialized medicine, no matter the cost, no matter the impact. It’s insanity.
Jul 17, 2009 - 2:12 pm 21. Professor Guvinoff:Here is what’s wrong with common sense: It keep getting in the way of folly. Darn!
Jul 17, 2009 - 2:17 pm 22. Sebastian Shaw:President Obama’s news conference was a joke. He lectured from the podium like any liberal college professor then went off in a huff as he seems to think he is the greatest of them all in his own tiny little mind; he can see his bills for Universal Health Care, Crap & Tax, & Card Check collapsing before his eyes & cannot understand why. After all, Obama spoke the magic words from his teleprompter. President Obama is on his way to his own personal meltdown.
Jul 17, 2009 - 2:20 pm 23. Sebastian Shaw:Here’s a segment of his news conference via Hotair.com:
http://hotair.com/archives/2009/07/17/president-boldly-vows-my-economy-wrecking-health-care-bill-will-pass-this-year/
President Obama is desperate when the people have said a resounding “NO” to his Socialist propposals. Furthermore, the Democrats are split 2 ways: half of the democrats are not supporting the bill because it is not socialist enough while the Blue Dogs, another half of the Dems, are ready to walk because the bill is too socialist. President Obama, in the meantime, cannot provide the leadership as he whines like a spoiled Affirmative Action brat pitching a temper tantrum.
Jul 17, 2009 - 2:30 pm 24. ashok:There’s a lot of people in America who want this, who could care less for your warning about projections:
“Medicare is a perfect example. When the program was created in 1965, it cost taxpayers around $3 billion. At that time, the House Ways and Means Committee estimated that Medicare would cost $12 billion by 1990 — and that number was adjusted for a predicted rate of inflation. The actual cost of the program in 1990 was $107 billion. And today, Medicare costs the U.S. taxpayer $440 billion.”
There’s lots of people who also believe wars never need to be fought, that the government can shoot down missiles independent of missile defense, that 9/11 was an inside job, etc.
At some point we need to lump harmless but mistaken ideas about politics in with the explicitly harmful: the costs add up over time, quite literally. If you’re willing to bankrupt the country to humiliate the other party b/c you really believe they’re pure evil, you shouldn’t have the right to vote, let alone serve in Congress.
Jul 17, 2009 - 2:33 pm 25. "progressive"watch:The objective of Obama-anything is control and power; the deconstructin of the American way and replacing it with Marxist mandates.
Jul 17, 2009 - 2:37 pm 26. NCBob:If some corrupt form of Obamacare is foisted on America by year end, it MUST also cover all members of Congress and all public employees, federal, state and local.
Jul 17, 2009 - 2:43 pm 27. Moogie:#20 AtheistConservative: And here’s another VERY important question: WHY NOW???? Why MUST they work like frenetic little mindless ants right now? The health care non-crisis is not going to suddenly pitch into high gear if it’s left alone for awhile – during which time our economy MIGHT have a chance to recover (if the government would leave it alone!).
They need to put the socialized medicine concept down, (I refuse to call it “universal” or health “care”) and slowly back away. They need to leave it the hell alone. Same with cap and tax. Stop the headlong rush – we aren’t running out of time. Well, unless they’re worried the sleeping nihilists will suddenly wake up from their stupor and recognise what is being done to them.
Here’s a nice quote for everyone:
Jul 17, 2009 - 3:28 pm 28. Moogie:“The American people would never vote for socialism, but under the name of liberalism, the American people will adopt every fragment of the socialist program.” – Norman Thomas, Socialist
#26 NCBob: But you know they are exempting themselves from this new “public” medical plan, right? They will have coverage for life; freedom to choose what doctors they see; no waiting in line while some stranger makes a decision about whether they should get treatment or not; and it will be completely free for them.
Jul 17, 2009 - 3:31 pm 29. Sebastian Shaw:President Obama is going down in flames. He’s desperate enough to waste what’s left of his political capital on an ego-driven news conference on Wednesday night in prime time. He’s toast.
Jul 17, 2009 - 3:35 pm 30. Mike2:26. NCBob:
“If some corrupt form of Obamacare is foisted on America by year end, it MUST also cover all members of Congress and all public employees, federal, state and local.”
Dream on, the corrupt politicians would never put themselves at the level of us, their servants and that’s precisely how they see the rest of us.
Jul 17, 2009 - 3:56 pm 31. LeighB:Dang, even the teleprompter revolted this week (from over-use). Can we all agree that we don’t listen to a word he says until the Dow is above 12,000?
He is like a teenager with money burning a hole in their pocket. Barry, stop shopping! It’s not your money.
Jul 17, 2009 - 4:36 pm 32. LeighB:P.S. But keep smoking. Delia’s got it right. Stop shopping. Keep smoking.
Jul 17, 2009 - 4:37 pm 33. Войска ПВО:29. Sebastian Shaw writes:
“President Obama is going down in flames. He’s desperate enough to waste what’s left of his political capital on an ego-driven news conference on Wednesday night in prime time. He’s toast.”
Sebastian, that’s not desperation; here’s desparation.
Jul 17, 2009 - 4:43 pm 34. Rick:we cant afford this program…… it must not pass. there are much better ways do provide what needs to be done.
Jul 17, 2009 - 4:45 pm 35. Sebastian Shaw:What do you call a person who cannot shut-up & listen to the people? Who constantly speaks, yet says nothing at all? He can speak for hours upon end while answering no real substantive questions? Heck he cannot even answer light fluffy questions unless he knows the script. Who is this man? He is the current President of the United States, Barack Obama, the man-child, the incarnate unbridled version of out-of-control liberalism, the Marxist thug from Chicago…
Jul 17, 2009 - 4:56 pm 36. Sebastian Shaw:#33 (sorry I cannot pronounce your name), that’s funny. It’s priceless. It also proves no one is in charge of the White House. Where’s the leadership?
Jul 17, 2009 - 4:58 pm 37. Chris:33 Войска ПВО:
And there you have it folks-
The depression is over!
Bwhahahah.
Jul 17, 2009 - 5:21 pm 38. steveg:Walter Cronkite dead at 92. Do not expect any news for a couple of days.
Jul 17, 2009 - 6:18 pm 39. Anonymous:What boggles my mind is that someone had to tell liberals we couldn’t afford it. The economy sucks and the government spends to much money now, so lets spend a whole lot more money we don’t have?
Jul 17, 2009 - 6:19 pm 40. Shef Rogers:To quote an old punch line, “Whaddaya mean ‘us,’ Paleface?”
Jul 17, 2009 - 6:31 pm 41. Meryl:So a paid bureaucrat has publicly stated what all of us peasants have known for months. I do not assume for a minute that this momentary flash of reality (in their world) will change their decisions.
What do you think it will look like when the boy king realizes the jig is up?
When do you think the jig will actually be up for him? Sometimes really bad things have a way of living on….and on……and on….and on.
Public meltdown is what I’m hoping for.
Jul 17, 2009 - 7:58 pm 42. The Famous Mo:I propose Good-For-The-Goose legislation. If this health care plan is so jaw-droppingly wonderful, then Obama and the rest of the DC Dunce Caps must abolish their own health care/insurance/whatever and get on the same program they expect us to endure.
Same goes for spending; if I spent so far beyond my means that I could not pay any of my bills, I would lose my electricity, my water, my gas, I would not be able to afford food or fuel for my care, let alone auto or health insurance. If I can’t make a credit card payment, eventually the card people will cut me off, and stick me with massive late fees, overdraft fees, and heightened interest rates.
Likewise, if I were to break the rules at work (ignore the Constitution), lie through my teeth to my bosses (as they lie to We the People on a second-to-second basis), and actively try to undermine my company to customers and competition alike (Apology tours), I would be sacked and possibly sued. Why should elected officials get such a golden parachute? Why should they only be held accountable in election years?
Jul 17, 2009 - 11:42 pm 43. WhyamInotsurprised?:Democrats are either insane, on drugs, or both. In either case, the whole bunch should be carted off to the funny farm. What they want to do is just unreal. What they are doing is not only unconstitutional, it is irresponsible, immature, ignorant, well …. far left mental illness!
Call out the men with the white coats with the restraint jackets and don’t let them sign another damn thing!
Jul 18, 2009 - 12:20 am 44. Realist:Obambi is a classic narcissist who loves the sound of his own voice which is why he is constantly making speeches. But ask yourselves this so many speeches and say the TOTUS writes most of them but Obambi has to rehearse so he can deliver them so when does he do any REAL WORK . Or is it as I suspect Obambi THINKS his only job is to give the speeches TOTUS tells him to?
Jul 18, 2009 - 1:13 am 45. Brian Richard Allen:And the odds are??
[That any of the Soros and/or other sinister Socialist-Internationale-serving Svengali-steered sail-eared simpleton's maignant-mouthed moronically marijuana-mumbling mobbed-up modified-Marxist Mussolini-modeled murtadd-Muslim empty-galabiyah-glove-puppet-pursuing pukes and crapheads (AKA the "Democrats" and as the RINOs*) will take the slightest notice of the CBO?]
I’ll bet New York City to a single brick: None! Not the slightest notice!
Brian Richard Allen
Los Aangeles – Califobambicated 90028
And the Far Abroad
* “Democrats” in “republican” costumes
Jul 18, 2009 - 4:49 am 46. WarpublicaN:Another Rick Moran Epic Fail – this was released last night:
For Immediate Release:
Energy & Commerce Contact: ******(202) 225-5735
Ways & Means Contact: ******(202) 225-1417
Education and Labor Contact: ****(202) 669-6874
July 17, 2009
CBO Scores Confirms Deficit Neutrality of Health Reform Bill
Washington, D.C. — The Congressional Budget Office (CBO) released estimates this evening confirming for the first time that H.R. 3200, America’s Affordable Health Choices Act, is deficit neutral over the 10-year budget window – and even produces a $6 billion surplus. CBO estimated more than $550 billion in gross Medicare and Medicaid savings. More importantly, the bill includes a comprehensive array of delivery reforms to set the stage for lowering the future growth in health care costs.
Net Medicare and Medicaid savings of $465 billion, coupled with the $583 billion revenue package reported today by the House Committee on Ways and Means, fully finance the previously estimated $1.042 trillion cost of reform, which will provide affordable health care coverage for 97% of Americans.
“This fulfills the strong commitment of the President and House leadership to enact health reform on a deficit-neutral basis,” said Chairman Henry A. Waxman, Chairman Charles B. Rangel, and Chairman George Miller. “The reforms included in this legislation will help control health care costs and expand access to quality, affordable coverage to all Americans in a fiscally-responsible manner.”
The estimates also cover important reinvestments in Medicare and Medicaid, including phasing in the closing of the “donut” hole in the Medicare drug benefit. The bill’s long-term reform of Medicare’s physician fee schedule to eliminate the potential 21 percent cut in fees, and put payments on a sustainable basis for the future, will cost about $245 billion. Those costs, however, are not included in the net calculations above, as they will be absorbed under the upcoming statutory “pay go” legislation that is pending in the House.
Jul 18, 2009 - 6:21 am 47. Moogie:#46: Link? I need a link.
Jul 18, 2009 - 9:17 am 48. Steve:I am not sure which is worse Larry Summers saying the economy must be improving because of less searches on Google for “Economic Depression” or Joe Biden telling the AARP that the only way to to keep the country from going bankrupt is by spending more money. I used to think that democrats were insane and now I know that they are.
Jul 19, 2009 - 9:42 am 49. Moon Slayer:What ever is passed for the american public should be good enough for ALL~~~ALL govermentment emloyees to embrace as their medical plan.
Please let your elected reps know this. Also, there are some sneaky Repubs out there.
OMG…start yelling !! don’t let them drown us in this bull. All Government employees..on any level… You can call, you can write, you can email them…you can go to town meetings your elected bozos have…Don’t just sit here and text…
It’s not just medical, it’s the fact that they are passing things that will bring our country to her knees. They don’t read bills, yet pass them into law for the everyday citizen.
Biden and Summers are fools.
Jul 19, 2009 - 7:10 pm 50. Will:My honest opinion is,that we should pay our congress and senate to stay home. Every thing they do to solve one problem,they create three more !!!!!
Jul 21, 2009 - 9:54 am