My good friend Gretchen noted that the new Congressional Budget Office evaluation of purported savings — or the lack thereof — in the health care reform bill was released on a Saturday, when fewer people would be paying attention:
For the second time this month, congressional budget analysts have dealt a blow to the Democrat’s health reform efforts, this time by saying a plan touted by the White House as crucial to paying for the bill would actually save almost no money over 10 years. A key House chairman and moderate House Democrats on Tuesday agreed to a White House-backed proposal that would give an outside panel the power to make cuts to government-financed health care programs. White House budget director Peter Orszag declared the plan “probably the most important piece that can be added” to the House’s health care reform legislation.
But on Saturday, the Congressional Budget Office said the proposal to give an independent panel the power to keep Medicare spending in check would only save about $2 billion over 10 years- a drop in the bucket compared to the bill’s $1 trillion price tag.
“In CBO’s judgment, the probability is high that no savings would be realized … but there is also a chance that substantial savings might be realized. Looking beyond the 10-year budget window, CBO expects that this proposal would generate larger but still modest savings on the same probabilistic basis,” CBO Director Douglas Elmendorf wrote in a letter to House Majority Leader Steny Hoyer on Saturday.
The article continued, with a most important line:
But scoreable offsets are the immediate savings that fiscally conservative Blue Dogs and other Democratic moderates have been pushing for precisely because they will help offset the bill’s cost.
Well, naturally the Administration doesn’t particularly like this development:
Posted: 09:03 AM ET
White House Budget Director Peter Orszag fired back Saturday at an estimate from the Congressional Budget Office.WASHINGTON (CNN) — The White House has criticized the Congressional Budget Office’s findings that the Obama administration’s proposal to control Medicare costs would yield a moderate savings of $2 billion over the next decade.
White House Budget Director Peter Orszag said the CBO’s analysis — which it relayed to House Majority Leader Steny Hoyer on Saturday — could feed a perception of the office’s bias toward “exaggerating costs and underestimating savings.”
“The point of the proposal … was never to generate savings over the next decade,” Orszag said in a letter posted on Saturday.
“Instead the goal is to provide a mechanism for improving quality of care for beneficiaries and reducing costs over the long term.”
At some point it has to be asked: if savings aren’t anticipated in the next ten years, how can there be any confidence in predictions that there will be savings beyond that? Just two years ago, there were few predictions — and those few weren’t accepted as probable — of a major recession in late 2008-2009, even though recessions come and recessions go in the economy; they are a natural part of the business cycle. If a normal, cyclical economic situation can’t be accurately forecast for beginning and duration, how can we have any confidence in a calculation that savings will occur in an untried program ten years from now?
I noted here, last March, the graph which had the Administration’s FY2009 deficit forecast at $1.75 trillion, while the CBO estimate was $1.85 trillion. Then, just 1½ months later, the Administration upped its deficit estimate to $1.84 trillion, very close to the CBO number. This leads me to two conclusions:
- The Congressional Budget Office has a better record at making such forecasts than the politically-motivated Obama Administration¹; and
- Such forecasts are very difficult to calculate even when we’re in the middle of the fiscal year being calculated!
As more and more of this gets out, the idea of government-run health care coverage will continue to lose support. A lot of people who are sort-of dissatisfied with the way health insurance works now are going to be less supportive of proposed change, when the results of that change are unknown, if there’s no real promise of actual savings.
One of the guys with whom I argue at work keeps saying that the government has got to “do something” about health care. One of the points I have made to him is that, as a veteran — he served four years in the United States Air Force — he ought to know better than most people that the government taking over something never makes it less expensive!
Saving money is something our government just doesn’t do well, because the motivations behind government aren’t efficiency or profit; they are motivations of public service, motivations of trying to do good, motivations of trying to make things better. Cutting costs normally don’t make things better for the consumers of government services; cutting costs usually makes things harder on the consumers of government services: they receive less rather than more. Cutting costs helps only the taxpayers, and we are such a huge group, yet a far more non-specific group than “customers,” that benefiting the taxpayers in general is ignorable, and ignored.
In modern business administration, people are taught to be responsive to the needs of their customers, even their internal customers. For example, an aggregate division is taught to be consider a ready-mixed concrete division as its customer, even though they may both be part of the same company; the consumer of your product is your customer, even internally.
This creates a real contradiction when it comes to government. Government provides services to people who pay for them only partially, if at all. Medicare, for example, has elderly people needing health care as its customers, and it has a natural desire to serve them. But the taxpayers in general are the customers of nobody; there is no one looking to serve their needs. The closest we come is that voters (a group different from taxpayers) are seen as customers by politicians. But voters in general are a huge group, the group to whom politicians make the broadest possible promises, promises which usually include tax cuts, or at least no tax increases. Even Barack Obama ran on a tax cut pledge!²
But politicians also see smaller subsets of voters as their customers, smaller groups which may be looking for one particular benefit or another. So while they make big, overarching promises of tax cuts/ no tax increases in general, they make all kinds of idiotic program promises to smaller groups, promises entirely at odds with their tax cut/ no tax increases promises.
President Obama and his Administration probably really do see health care reform as a great mission, something to do good. But all of the evidence points to huge new costs, and eventual tax increases, large tax increases. As more people realize this, as more people realize that there’s no free lunch for most people — along with the added benefit of paying for someone else’s lunch along the way — the more support for President Obama “doing something” about health care will wane.
Hat tip to Gretchen for both cited articles.
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Update: Brian add his 2¢.
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¹ – This has tended to be true for many, many years, and not just during the present Administration. All Administrations are politically-motivated.
² – I’d note here that every winning presidential candidate since 1980 has campaigned on a tax cuts, or at least no tax increases, platform. The one candidate who ran on a promise to increase taxes, Walter Mondale in 1984, carried just one state.
The CBO is completely ignoring the real savings built into Obamacare: ridding the system of those who place the greatest financial burden on the system. The patriotic elderly and country-loving infirm will be given counseling on how they can make a final, meaningful contribution to society. By electing to “go quietly into the good night,” those burdensome old people and bothersome sick people will “choose” to die without a fuss, after being counseled that they will be Budget Balancing Martyrs by doing so.
On page 425 of the House version of Obamacare, the Congress would make it mandatory that every five years, people receiving Social Security benefits, including those receiving Social Security disability benefits (SSI), have a counseling session every five years that will offer them patriotic solutions to ease the budget crisis by removing themselves from the system to make room for younger, more robust US occupants. (I don’t use the term “citizens,” since illegal aliens are included in Obamacare, so one can only surmise that illegal aliens, too, would be counseled on how to “opt out” of life for the good of society.)
It stands to reason that Social Security-receiving occupants will be advised on how to decline not only medicine and costly medical tests, but also how to decline nutrition, how to refuse hydration, and how enter into government-funded hospice care, rather than to drain the system by seeking medical care that may well extend their lives in a meaningful way–but which may be expensive. The bill expressly says that if a potentially serious illness is diagnosed–cancer, diabetes, emphysema, or any number of expensive-to-treat maladies–immediate end of life counseling will ensue–instead of maintaining the every five year mandates.
How can the CBO have ignored those cost-saving measures included in the House version of Obamacare?
Gretchen wrote:
No, we can’t do that, ’cause that would be racist! Please make a note of it.
I don’t use the term “citizens,” since illegal aliens are included in Obamacare, so one can only surmise that illegal aliens, too, would be counseled on how to “opt out” of life for the good of society.
No, we can’t do that, ’cause that would be racist! Please make a note of it. Dana Pico
Forgive me, but I included that racist comment in my post on purpose in hopes that our post-racial POTUS will invite me to the White House for a “brewski” and a “teaching moment” about my insensitivity.
Dana Pico, very good post. By the time this health care debacle is over with, there won’t be enough brews left to numb the Americans with common sense to this teaching moment in history. And they are illegal aliens and they sure chose the right country to break and enter into. This is going to work out really well for them.
My bottom line still remains: if the public option isn’t good enough for Congress, then it isn’t good enough for me (and mine) either. Either they join the huddled masses or we join them.
Other Dana: “My bottom line still remains: if the public option isn’t good enough for Congress, then it isn’t good enough for me (and mine) either. Either they join the huddled masses or we join them.”
Incorrect, Dana, Congresspeople do have a public option!
http://theplumline.whorunsgov.com/health-care/house-dem-calls-out-dem-and-gop-colleagues-you-have-public-health-plan-why-not-american-people/
I think it must be born in mind that we do not yet have a complete bill ready for the President’s signature. Until we do, criticism’s like the above serve no good purpose, instead, spread doubt on the entire idea of pushing for healthcare reform.
If the critics would offer alternatives that would resolve the serious healthcare shortfall we have, that would be constructive.
Instead, these ideologues from the Right are content to cast dispersions and spread doubt, and delay serious progress toward the creation of a final bill out of Congress to the President. Meanwhile, approximately 14 thousand Americans per day lose their healthcare insurance.
Wasn’t Orzag head of the CBO recently??? Nothing like turning against your own.
If the critics would offer alternatives that would resolve the serious healthcare shortfall we have, that would be constructive. (Perry)
Perry, I’m not surprised that you are unaware of the Republican plans to bring real healthcare reform because the Democratic leadership, including the president, have done all they can to stifle Republican input on any and all levels. Few media sources will even acknowledge that GOP alternatives to the Democrats’ incredibly expensive, throw-grandma-under-the-bus-to-save-bucks healthcare plan.
This is from Healthcare News.
A group of four Republicans has submitted a legislative alternative to the Democratic Party’s government-centric health care reform proposals.
Sens. Tom Coburn, M.D. (R-OK) and Richard Burr (R-NC), along with Reps. Paul Ryan (R-WI) and Devin Nunes (R-CA), introduced their Patients’ Choice Act of 2009 in their respective bodies of Congress in June.
According to a statement released by its sponsors, the measures attempts to “achieve universal access to quality, affordable health care without bankrupting our children with trillions more in debt or imposing draconian tax hikes on all Americans.”
Coburn, Ryan, and their colleagues are pursuing the same goals Democrats, including Sen. Max Baucus (D-MT) and President Barack Obama, claim to want: lower health care costs, greater access for patients, and “universal” health coverage. The Republicans’ alternative takes a more market-friendly approach to those goals.
Reforming Tax Treatment
A key feature of the Patients’ Choice Act is a $5,700 annual tax credit for families ($2,300 for individuals) designed to cover employees’ out-of-pocket share of employer-sponsored health plans—an average annual cost of $4,200 per family.
The provision is similar to Sen. John McCain’s (R-AZ) campaign proposal to reform the tax treatment of health insurance by offering tax credits to help workers afford their choice of health coverage. But the Patients’ Choice Act doesn’t alter the tax code for employers, meaning businesses won’t see their tax burdens spike as a result of their employees’ newfound freedom to choose their own health care plans.
Peter Orszag, director of the Office of Management and Budget, explained the benefit to be gained from revising the federal government’s tax treatment of employer health plans in testimony before the Senate Finance Committee in June 2008.
“Imagine what the world would be like if workers [understood] that today it was costing them $10,000 a year in take-home pay for their employer-sponsored insurance, and that could be $7,000 and they could have $3,000 more in their pockets today if we could relieve these inefficiencies out of the health system,” Orszag said.
The Republicans’ plan would increase workers’ take-home pay and decrease their tax burdens, allowing them to better afford the health insurance policy and benefits of their choice.
Better Care for the Poor
Another provision of the Patients’ Choice Act is aimed specifically at lower-income Americans who are currently relegated to bureaucrat-run programs such as Medicaid and the State Children’s Health Insurance Program.
Recognizing those government-administered programs are so inefficient and undesirable that nearly half of prior-enrolled individuals and families decline to sign up for more than one year of nearly free benefits, the act’s sponsors included a provision establishing a path to private coverage and efficient medical care for those poorest Americans.
The act would provide low-income Americans with $5,000 debit cards for purchasing private insurance or paying for health care out of pocket, thereby giving them the resources to acquire effective health care.
Up to 25 percent of any unspent dollars on the debit card would roll over and be added to the next year’s balance, creating an incentive for recipients to exercise wisdom and restraint in using their health care money.
State-Based Exchanges
The Patients’ Choice Act provides for state insurance exchanges, allowing states to set up localized exchanges for their residents. By pushing for more state control over health care, the bill offers an alternative to more federal-centric proposals that would extend the inefficiencies of current government programs.
The states, not Washington, are where health care policy should be made, and the Patients’ Choice Act provides incentives for legislatures to creatively address such problems as cost-increasing health insurance mandates and Medicaid programs that are multibillion-dollar millstones around the necks of state governments.
No Massachusetts Miracle
It is troubling that the authors of the Patients’ Choice Act chose, in their discussion of state-level health care reform successes, to include Massachusetts’s attempt at universal coverage via mandate, which has turned out to be an utter disaster for the Bay State.
Far from fulfilling the intent of its creator, then-Gov. Mitt Romney (R), of insuring every citizen of the Bay State while lowering health care costs and improving access to quality care, Massachusetts’s program has expanded state bureaucracy and government control over the health care market and provider-patient dealings while simultaneously increasing health care costs and creating a chronic shortage of providers—all at an annual price tag more than twice the originally estimated $600 million.
The Bay State’s failure notwithstanding, states do need to be allowed the opportunity to sink or swim without having to answer to an overly expansive federal government for every health care policy decision.
Effective Alternative
The Patients’ Choice Act is light-years ahead of the government-run alternatives being championed by Obama and the Senate Democrats.
The willingness to attack the currently problematic tax treatment of health care and help poor Americans divorce their medical fates from the whims of government bureaucrats is a giant leap in the right direction.
http://www.heartland.org/full/25700/Patients_Choice_Act_Moves_Debate_in_a_MarketFriendly_Direction.html
Here is a .pdf file of the bill as presented to Congress: http://www.house.gov/ryan/PCA/PCAsummary2p.pdf
I think it must be born in mind that we do not yet have a complete bill ready for the President’s signature. Until we do, criticism’s like the above serve no good purpose, instead, spread doubt on the entire idea of pushing for healthcare reform.
By the time a bill is actually voted on, Perry, it is too late for input. If there are parts of the plan that are lousy, they need to be criticized early on so they will be dropped or changed.
Brian’s two cents concluded with a rib-splitting “common knowledge” BP classic about how the health care system is overloaded with people who go to the doctor when they don’t need to, complete with plenty of sources no sources at all for the claims – best laugh I’ll have today I’d guess, so thanks for that
(plenty of sources i.e. no sources at all)
CNSNews.com
Conyers Sees No Point in Members Reading 1,000-Page Health Care Bill–Unless They Have 2 Lawyers to Interpret It for Them
Monday, July 27, 2009
By Nicholas Ballasy, Video Reporter
(CNSNews.com) – During his speech at a National Press Club luncheon, the chairman of the House Judiciary Committee, Democratic Congressman John Conyers (D-Mich.), questioned the point of lawmakers reading the health care bill.
“I love these members, they get up and say, ‘Read the bill,’” said Conyers.
“What good is reading the bill if it’s a thousand pages and you don’t have two days and two lawyers to find out what it means after you read the bill?”
lol @ guys who write thousand-page bills & then complain about “government waste”
Thomas Tallis:
lol @ guys who write thousand-page bills & then complain about “government waste”
That and complain they didn’t know “X” was in there and are surprised!!!!
Very well said. After all, what’s the point of having democracy and freedom of speech if we can’t criticize and debate stuff like this, but must instead just accept whatever the Dear Leader tells us, because, hey, he knows best what’s good for us!
Surely you understand: if people actually read the bill, and know what’s in it, all sorts of objections arise.
That’s why President Obama wanted the bill done so fast: There was a basic majority in favor of “doing something” about health care, a majority which would support the bill, as long as they didn’t really know what was in it.
But as more information becomes available, and more people find out that, “Wait a minute, this won’t help me, and will probably cost me more money to boot,” then opposition develops.
Support was there when the people thought that they’d get better — or at least the same — service, for less money. Once they find out that they’ll get poorer service, find their health care rationed, and have to pay more on top of it all, support will vanish.
Gretchen wrote:
Unfortunately, as you probably already realize, so-called “health care system reform” is no more exclusively about legally ensuring maximum consumer medical insurance options, plan affordability, and state of the art medical treatment, than the Federal income tax is just about generating operating revenue for the government, or the Social Security program is just about old age insurance and supplemental financial security.
If it were, health savings plans with larger caps, and big tax credits for medical expenditures, would be among the first things they would think of, rather than the last.
In each instance however, instead of merely accomplishing the ostensible goal, the program is just as much about wrangling everyone within political reach into a further layered, and inescapable, social solidarity, equity, and redistribution network. One promising a place for everyone, and everyone in his contributory place. As determined and portioned through expert bureaucratic analysis and judgment, of course.
And the lefties – because of their peculiar personalities and moral sensibilities – like that kind of airless system, just fine.
What a suffocating drag they are.
where were you when the “patriot act” was getting rammed through in the exact same fashion?
Mr Tallis asked:
Seems to me that the Congress had plenty of time to examine the issue, given that the Patriot Act was reauthorized once. Of course, since I’m assuming here that you are saying it was wrong to pass the Patriot Act, and the rapidity with which the first one was passed was a problem, are you saying that because the Patriot Act was passed rapidly, the health care legislation should be passed just as precipitously?
Montgomery Scott will say, about 200 years from now:
With a 1,018 page bill trying to “improve” health care, you might as well figure out that the drain will get jammed up!
” … where were you when the “patriot act” was getting rammed through in the exact same fashion?”
He’s here now, opposing a badly conceived bill. Problem with that?
Implying, maybe, that you were pleased with the Patriot Act result and you want a repeat?
Or … are you just being cranky?
Dana Pico wrote:
So, you already said it.
Next time I leave a comment, I’ll post it immediately after writing, instead of walking away for 5-10 minutes …
Thomas Tallis:
That’s why President Obama wanted the bill done so fast: There was a basic majority in favor of “doing something” about health care, a majority which would support the bill, as long as they didn’t really know what was in it.
where were you when the “patriot act” was getting rammed through in the exact same fashion?
Was there a Medical Jihad declared at the Mayo Clinic?
Until we do, criticism’s like the above serve no good purpose, instead, spread doubt on the entire idea of pushing for healthcare reform. If the critics would offer alternatives that would resolve the serious healthcare shortfall we have, that would be constructive.
Oh piffle, Perry. We can and should criticize this bill before we are all subjected to it. That you willingly and easily submit, is a shame.
I believe if my government is pushing hard to rush through anything that would dramatically change (permanently)a system we’ve had for something they claim we *need*, it’s a giant red flag. Proceed with caution.
Perry wrote:
Why not? Some people think that the entire idea of health care reform is a bad one.
Your argument is one that expects us to concede the idea that health care reform must be undertaken, and that we are simply arguing over the details. I do not concede that basic premise.
these ideologues from the Right are content to cast dispersions and spread doubt, and delay serious progress toward the creation of a final bill out of Congress to the President. Meanwhile, approximately 14 thousand Americans per day lose their healthcare insurance.
There may be ideologues, but what you choose to ignore is that there are also millions of intelligent, savvy taxpaying citizens who are doubtful and suspicious of this and not because they’ve been instructed to be but because they themselves have investigated, read, researched and drawn their own conclusions. Not everyone is gullible and buys the company line.
And it it is precisely this citizenry that must hold government accountable. And if government is possibly attempting to pull a ‘fast one’, what a great and good thing it is to have people paying such close attention.