CBO’s score: Cloudy with a chance of bankruptcy
–Peter J. Pitts is President of the Center for Medicine in the Public Interest. The views expressed are his own. —
Today, the Congressional Budget Office released its latest estimate of the price tag of the Democrats’ health reform package. At $940 billion, this version of reform will cost more than the measures passed by the House and Senate late last year. More is not always better.
CBO also says the bill will reduce the deficit by $130 billion over the next 10 years and by $1.2 trillion over the following decade. That’s right. It will reduce the deficit by significantly increasing federal spending. Only in America.
While they’re at it, they should also predict the weather for the next decade.
Let’s face it: Uncle Sam has a poor track record of forecasting how much new programs will cost. Medicare’s progenitors, for example, stated in 1967 that the entitlement would cost $12 billion by 1990. Actual Medicare spending in 1990 amounted to $110 billion — nearly 10 times the initial estimate. Oops.
CBO’s deficit-reduction estimates are further divorced from reality because they don’t include as much as $371 billion in new spending to fix reimbursement rates for doctors who treat Medicare patients. Imagine that — health reform legislation that doesn’t include payments to doctors. Only in Washington, DC.
Absent congressional action, Medicare reimbursement rates will fall 21 percent next year. Congress has no intention of letting that happen. But the Democrats have decided that they don’t have to include this so-called “doctor fix” in their healthcare reform package — even though it’s critical to preserving Medicare.
No wonder the CBO was able to conclude that the Democrats’ health reform package would reduce the deficit by $130 billion. The bean-counters simply ignored the $371 billion in spending needed to fix Medicare reimbursement rates.
Democrats point to the favorable CBO score as proof that their health reform package is a model of fiscal responsibility. But it’s likely that the next generation of lawmakers will look back on these cost estimates with the same astonishment reserved for Medicare’s naïve forecasters back in 1967.