Honesty from the CBO reveals the emptiness of Democratic plans for health care reform
All along the democrats have been pretending that they could somehow wavea magic wand and pay for their public health care option by finding enough cuts in Medicare spending and other cost-cutting devices. Unfortunately, this is impossible and today the head of the CBO, a man put in place by the Democrats, revealed how hollow that pretense is.
The chairman of the Senate Budget Committee, Sen. Kent Conrad (D-N.D.), also has taken a leading role in the Finance Committee negotiations. Yesterday, when Elmendorf appeared before Conrad's committee to testify about the nation's long-term budget problems, Conrad focused his questions on the House and Senate committee measures, which were drafted without Republican input.
"I'm going to really put you on the spot," Conrad said. "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 responded: "No, Mr. Chairman." Although the House plan to cover the uninsured, for example, would add more than $1 trillion to federal health spending over the next decade, according to the CBO, it would trim about $500 billion from existing programs -- increasing federal health spending overall.
Some provisions of the bill have the potential to trim spending further, Elmendorf said, but "the changes that we have looked at so far do not represent the sort of fundamental change, the order of magnitude that would be necessary, to offset the direct increase in federal health costs that would result from the insurance coverage proposals."
Asked what provisions should be added, Elmendorf suggested changing the way Medicare reimburses providers to create incentives for reducing costs. He also suggested ending or limiting the tax-free treatment of employer-provided health benefits, calling it a federal "subsidy" that encourages spending on ever-more-expensive health packages.
Well, that certainly punctured their balloon. Poor Elmendorf honestly answered a question asked him by a Democrat. They can't be happy with his response.
For her part, Speaker Pelosi says the tax increases that have the Republicans so fired up may not be necessary if cuts can be found elsewhere. "I believe the most of the cost of the health care bill can come from squeezing out savings," Pelosi said, a statement explicitly designed to increase support from the Blue Dog Democrats, a group of fiscally conscious democrats who have said this themselves in the past few days and feel as if the Democratic leadership has let their issues fall away from the overall legislation.
Where are these massive savings that she hopes to find? It's ludicrous. Perhaps she should pay attention to what Elmendorf just said to the Senate. Does she expect anyone to believe such malarkey? And then to top things off, she vows to raise taxes anyway even though she just said that they could pay for this massive endeavor solely by "squeezing out savings."
But Pelosi made it clear that Democrats still plan to tax the rich and said if the money isn't needed to pay for health care, it would be directed at the nation's budget deficit.
"There is going to be a revenue change at the high end," she said. "It will be directly to reduce the deficit or by helping to cover the cost of this initiative."
She wants to raise taxes on the rich and gosh darn it, she will do it. If she gets her way. Apparently, she doesn't believe any of that nonsense about how bad it is to raise taxes during a recession.
So what's the rush. We keep hearing that this has to be done by the August recess. There's the fear that, with the need to pass the budget, and the 2010 election season approaching, the Congress can't manage a big, controversial bill simultaneously. The Democrats also fear that the longer their proposals are out there and the American people learn about them, the more pressure there will be on congressmen to oppose the bill. Much better to rush it through without extensive debate or examination of the entire bill. That's the way they like to roll with their hugely unpopular bills. But it's pretty bad, when even Olympia Snowe, is voicing skepticism and asking for things to be slowed down.
Sen. Olympia Snowe (R-Maine) said she delivered that message directly to Obama at the White House yesterday, and strongly urged him to give up his August deadline so bipartisan negotiators in the Senate Finance Committee can craft a new reform plan that does more to control costs.
"I think it would be prudent for the president to be patient," said Snowe, whom Obama is courting aggressively. Bipartisan approval of a finance bill "can provide huge impetus for the success of this legislation and achieving broader support as it goes through the legislative process."
Unfortunately for the Democrats, now that the CBO has removed their fig leaf of pretending that these magic savings could pay for most of the bill, they have to consider undesirable choices such as taxing employer-provided health insurance. That is what Elmendorf recommended, but that is just a bridge too far for the Democrats.
Asked what provisions should be added, Elmendorf suggested changing the way Medicare reimburses providers to create incentives for reducing costs. He also suggested ending or limiting the tax-free treatment of employer-provided health benefits, calling it a federal "subsidy" that encourages spending on ever-more-expensive health packages.
Key senators, including Conrad, have been pressing to tax employer-provided benefits, but Senate leaders last week objected, saying that the idea, which Obama opposed on the campaign trail, does not have enough support to win passage. Yesterday, Baucus said White House opposition had hindered acceptance of the tax, which critics said would target police and firefighters who receive generous benefits packages.
Grassley said he urged Obama earlier this week to reconsider the tax, which the CBO has repeatedly identified as one of the best tools available for driving down long-term federal health spending. Obama said he could not do that, Grassley recalled. "Does he really want to bend the cost curve? He ought to be out in front on this issue and endorse it," he said.
Of course, that would mean violating one of his fundamental campaign pledges and doing exactly what he hammered for McCain for supposedly proposing. Obama has shown a strong ability to learn from the mistakes of his predecessors and so he definitely doesn't want to give Republicans an opportunity to beat him like Democrats beat George H.W. Bush for breaking his "read my lips" pledge. But Obama will have to decide what means more to him - keeping his campaign promise not to raise taxes on the middle class and not to tax employer health care or to give up hope for his promise to provide health insurance for everyone. It's a tough call, but then, if it were easy, we would have had a universal plan back when Harry Truman wanted to do it in the 1940s.
All along the democrats have been pretending that they could somehow wavea magic wand and pay for their public health care option by finding enough cuts in Medicare spending and other cost-cutting devices. Unfortunately, this is impossible and today the head of the CBO, a man put in place by the Democrats, revealed how hollow that pretense is.
The chairman of the Senate Budget Committee, Sen. Kent Conrad (D-N.D.), also has taken a leading role in the Finance Committee negotiations. Yesterday, when Elmendorf appeared before Conrad's committee to testify about the nation's long-term budget problems, Conrad focused his questions on the House and Senate committee measures, which were drafted without Republican input.
"I'm going to really put you on the spot," Conrad said. "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 responded: "No, Mr. Chairman." Although the House plan to cover the uninsured, for example, would add more than $1 trillion to federal health spending over the next decade, according to the CBO, it would trim about $500 billion from existing programs -- increasing federal health spending overall.
Some provisions of the bill have the potential to trim spending further, Elmendorf said, but "the changes that we have looked at so far do not represent the sort of fundamental change, the order of magnitude that would be necessary, to offset the direct increase in federal health costs that would result from the insurance coverage proposals."
Asked what provisions should be added, Elmendorf suggested changing the way Medicare reimburses providers to create incentives for reducing costs. He also suggested ending or limiting the tax-free treatment of employer-provided health benefits, calling it a federal "subsidy" that encourages spending on ever-more-expensive health packages.
Well, that certainly punctured their balloon. Poor Elmendorf honestly answered a question asked him by a Democrat. They can't be happy with his response.
For her part, Speaker Pelosi says the tax increases that have the Republicans so fired up may not be necessary if cuts can be found elsewhere. "I believe the most of the cost of the health care bill can come from squeezing out savings," Pelosi said, a statement explicitly designed to increase support from the Blue Dog Democrats, a group of fiscally conscious democrats who have said this themselves in the past few days and feel as if the Democratic leadership has let their issues fall away from the overall legislation.
Where are these massive savings that she hopes to find? It's ludicrous. Perhaps she should pay attention to what Elmendorf just said to the Senate. Does she expect anyone to believe such malarkey? And then to top things off, she vows to raise taxes anyway even though she just said that they could pay for this massive endeavor solely by "squeezing out savings."
But Pelosi made it clear that Democrats still plan to tax the rich and said if the money isn't needed to pay for health care, it would be directed at the nation's budget deficit.
"There is going to be a revenue change at the high end," she said. "It will be directly to reduce the deficit or by helping to cover the cost of this initiative."
She wants to raise taxes on the rich and gosh darn it, she will do it. If she gets her way. Apparently, she doesn't believe any of that nonsense about how bad it is to raise taxes during a recession.
So what's the rush. We keep hearing that this has to be done by the August recess. There's the fear that, with the need to pass the budget, and the 2010 election season approaching, the Congress can't manage a big, controversial bill simultaneously. The Democrats also fear that the longer their proposals are out there and the American people learn about them, the more pressure there will be on congressmen to oppose the bill. Much better to rush it through without extensive debate or examination of the entire bill. That's the way they like to roll with their hugely unpopular bills. But it's pretty bad, when even Olympia Snowe, is voicing skepticism and asking for things to be slowed down.
Sen. Olympia Snowe (R-Maine) said she delivered that message directly to Obama at the White House yesterday, and strongly urged him to give up his August deadline so bipartisan negotiators in the Senate Finance Committee can craft a new reform plan that does more to control costs.
"I think it would be prudent for the president to be patient," said Snowe, whom Obama is courting aggressively. Bipartisan approval of a finance bill "can provide huge impetus for the success of this legislation and achieving broader support as it goes through the legislative process."
Unfortunately for the Democrats, now that the CBO has removed their fig leaf of pretending that these magic savings could pay for most of the bill, they have to consider undesirable choices such as taxing employer-provided health insurance. That is what Elmendorf recommended, but that is just a bridge too far for the Democrats.
Asked what provisions should be added, Elmendorf suggested changing the way Medicare reimburses providers to create incentives for reducing costs. He also suggested ending or limiting the tax-free treatment of employer-provided health benefits, calling it a federal "subsidy" that encourages spending on ever-more-expensive health packages.
Key senators, including Conrad, have been pressing to tax employer-provided benefits, but Senate leaders last week objected, saying that the idea, which Obama opposed on the campaign trail, does not have enough support to win passage. Yesterday, Baucus said White House opposition had hindered acceptance of the tax, which critics said would target police and firefighters who receive generous benefits packages.
Grassley said he urged Obama earlier this week to reconsider the tax, which the CBO has repeatedly identified as one of the best tools available for driving down long-term federal health spending. Obama said he could not do that, Grassley recalled. "Does he really want to bend the cost curve? He ought to be out in front on this issue and endorse it," he said.
Of course, that would mean violating one of his fundamental campaign pledges and doing exactly what he hammered for McCain for supposedly proposing. Obama has shown a strong ability to learn from the mistakes of his predecessors and so he definitely doesn't want to give Republicans an opportunity to beat him like Democrats beat George H.W. Bush for breaking his "read my lips" pledge. But Obama will have to decide what means more to him - keeping his campaign promise not to raise taxes on the middle class and not to tax employer health care or to give up hope for his promise to provide health insurance for everyone. It's a tough call, but then, if it were easy, we would have had a universal plan back when Harry Truman wanted to do it in the 1940s.