Articles Tagged ‘Congressional Budget Office’

Reid: Finance Committee will vote on Baucus bill next Tuesday

Thursday, October 8th, 2009

A day after the Congressional Budget Office released its latest scoring of Finance chairman Max Baucus‘ effort at health care reform, Senate Majority Leader Harry Reid announced that the Senate Finance Committee has scheduled a vote on the America’s Healthy Future Act when the Senate returns from Columbus Day weekend next Tuesday, October 13. While Democrats Kent Conrad and Blanche Lincoln have yet to announce whether they will vote in favor of the bill, the estimated price tag of  $829 billion is expected to be satisfactory to Democrats on the committee and put the bill in the hands of Reid in anticipation of a floor debate.

The Finance Committee bill is the only health care reform effort produced this year that has scored under President Obama’s declared veto threshold of $900 billion and is the only bill that does not include the politically charged government-run public option insurance plan. Both of those facts make it a favorite for approval by the United States Senate, but also set up a showdown between Senators and House Speaker Nancy Pelosi who earlier today promised that any bill passed by the House would include a public option.

Most pundits agree that a health care reform bill void of a public option will not garner the votes necessary to pass muster in the more liberal House Democrats. Yet, of the four public option driven bills currently being considered by Congress (three in the House alone), none have scored under $1 trillion dollars. Baucus’ cooperatives plan - which has drawn suspicion from conservatives for being a wolf in sheep’s clothing,  is therefore the best chance Democrats have of sending a reform bill to Obama’s desk in 2009 but is far from guaranteed to even make it out of the Senate.

Under the plan, 94 percent of Americans are expected to have health insurance by 2019 and revenues raised under the legislation - primarily through the introduction of new taxes, could actually reduce the budget by as much as $81 billion over the same time period.

  • According to CBO and JCT’s assessment, enacting the Chairman’s mark, as amended, would result in a net reduction in federal budget deficits of $81 billion over the 2010–2019 period.
  • By 2019, CBO and JCT estimate, the number of nonelderly people who are uninsured would be reduced by about 29 million, leaving about 25 million nonelderly residents uninsured (about one-third of whom would be unauthorized immigrants). (For the complete CBO analysis, click here.)

To the most liberal of Democrats, these cost savings come at the expense of approximately 16 million Americans (and another 8 million illegal immigrants) going without health insurance who they believe would be covered under a public option.To Republicans, the costs are too high to ensure too few and represent the single largest expansion of government entitlement programs in nearly four decades.

This is most likely why Reid has yet to back off of his threat to invoke the nuclear option of budget reconciliation should whip counts not provide the 60 votes he needs to get the bill through a full Senate floor debate. But, Reid has less than 48 hours after the Finance Committee votes to meet the October 15 deadline for invoking reconciliation. So, look for a Reid-authored Senate heath care reform bill to leak out well before the Finance Committee reconvenes next week.

Dispute Continues Over CBO’s Scoring of Baucuscare

Thursday, October 8th, 2009

Members of the mainstream media have claimed that the health care reform bill of Sen. Max Baucus (D-MT) would cost American taxpayers $829 billion over the next decade, but apparently that just isn’t so.

The Washington Post: “The bill would cost $829 billion over the next decade.”

The New York Times: “The budget office analyzed the bill … its newly projected cost — $829 billion over 10 years.”

The Wall Street Journal: “The latest Senate health bill will cost $829 billion over a decade.”

According to blogger Donald Marron, the number is more like $904 billion dollars. And he has the facts to prove it:

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“So let me once again implore everyone commenting on the health debate: There is a difference between the cost of the Baucus bill ($904 billion) and the cost of its provisions to expand coverage ($829 billion). It is understandable that most commentary focuses on the health insurance provisions. But we should not forget the other $75 billion in spending on other initiatives. Dollar-for-dollar they deserve as much scrutiny as the coverage expansions.”

Baucuscare Bill Vote Delayed for Cost Report

Tuesday, October 6th, 2009

What could very well result in a resounding death knell for public-option health care reform legislation at a time when the White House and the Congressional Democratic leadership have grown increasingly desperate in their efforts to push it forward, a key vote in the Senate Finance Committee has been pushed back to later this week, and perhaps into next week as well. Crucial fence riders, including Maine Republican Olympia Snowe and West Virginia Democrat Jay Rockefeller, await an estimate on how much Senator Max Baucus’s overhaul of the American health care system would cost before committing themselves either way for the bill.

The Obama administration and Senate Majority Leader Harry Reid (D-Nevada) have put relentless pressure on the Chairman of the Senate Committee on Finance to schedule a vote on his health care reform bill, America’s Healthy Future Act of 2009, prior to the release of the program’s estimated cost by the Congressional Budget Office (CBO), to no avail. The reason behind this may be that the president knows that it is very likely the CBO’s findings will come out against him as so many, if not all, of their studies related to the health care issue this past summer have exactly that.

And while former Health and Human Services secretary under President George W. Bush and former governor of Wisconsin, Tommy Thompson, and former Democratic House Majority Leader Richard Gephardt have both urged Congress to overcome their differences and get the job done on health care reform, their rallying cry hasn’t exactly inspired confidence in the hearts of wavering senators. Thompson and Gephardt admitted that there still remained many “troublesome and unresolved” issues in the Baucuscare bill. What is more is that former Tennessee senator Bill Frist, who to TIME magazine expressed support for health care reform, recanted, saying that the proposal is “not where I want it to be. It’s going to cost way too much, and we’re not going to get all the uninsured into the marketplace.”

Even if the CBO report comes out against the Baucus bill and it fails to pass the Finance Committee with a majority vote, there still remains Senator Reid’s ‘nuclear’ option that he has threatened Republicans and Blue Dog Democrats with in the past should they fail to reach an agreement. And yet there is even doubt there would be enough Democratic support for that. Falling approval numbers for President Obama and the rise in the number of dissatisfied independent voters has many senators, if some who have been in office for quite some time, concerned about their job security. The ‘nuclear’ option, if passed, would likely be the president calling on Democratic senators to commit seppuku for the sake of progressivism; a call very few would care to endure.

WashPost: Wyden and Rockefeller may vote against Finance bill

Monday, October 5th, 2009

In today’s Washington PostCeci Connolly reports that Senate Democrats Ron Wyden and Jay Rockefeller “have refused to pledge support” for the Senate Finance bill expected to come to a vote this week. Should the two liberal Dems vote “no” on the amended America’s Healthy Future Act, health care reform would be dealt a serious blow as Finance chairman Max Baucus would be forced to reopen negotiation on the final bill needed to move the reform debate into the next phase.

“More needs to be done to hold insurance companies accountable, to hold premiums down for the American people,” Wyden said in an interview Sunday. “I want to continue these discussions.” (From Democrats Wyden, Rockefeller Withhold Support of Panel’s Bill in the Washington Post.)

Wyden and Rockefeller’s opposition comes as a result of Finance Committee defeats of public option amendments proposed by Rockefeller and Democrat Chuck Schumer. The Baucus bill is currently the only one of five bills in Congress that does not include some form of a government-run public option health insurance plan.

As things stand, Harry Reid is running out of time and options in the getting a bill through the Senate. He has yet to retract his promise to go nuclear and attempt to pass a health care reform bill via budget reconciliation, but in order to do so he must invoke that process no later than October 15. If the Finance Committee is forced to reopen debate, there is little chance the Congressional Budget Office could score a new bill in time for Finance to hold another vote and give Reid a bill to merge with the late Ted Kennedy’s HELP (Health, Education, Labor and Pensions) Committee over the next 10 days.

It was thought that Democrat proponents of the public option would allow the Finance Bill to pass out of committee and lobby Reid to drop the bill’s cooperatives in favor of Kennedy’s public option proposal before a floor vote in the Senate, but Wyden and Rockefeller have seemingly joined House Speaker Nancy Pelosi in her ‘public option or bust’ approach to health care reform.

Baucus aims for Tuesday vote on Senate Finance bill. Snowe’s vote still in question.

Sunday, October 4th, 2009

After a summer full of fits and starts, the health care reform debate is about to adopt a frenetic pace. As Republicans and Democrats wait for the last of the five health care reform bills to be scored by the Congressional Budget OfficeSenate Finance Committee chairman Max Baucus is anticipating a Tuesday or Wednesday vote on an amended America’s Healthy Future Act.

As recently as a week ago, the CBO was calling for at least two weeks to score an amended bill as the Finance Committee prepared to debate 564 amendments, but the Baucus bill escaped the mark-up process relatively unscathed, so there is no telling how long it will take CBO to produce its analysis. Most notably, Democrats failed to pass amendments by Jay Rockefeller and Chuck Schumer which would have put a government-run public option health insurance plan at the center of the bill and thereby fundamentally changing its initial CBO score of $774 billion by 2019. President Obama has promised to veto any health care reform bill that costs more than $900 billion.

While there is little doubt the bill will pass out of committee as a result of the Democrats 13-10 edge in membership, there is still a great deal of uncertainty as to which way Republican Olympia Snowe will vote on the Baucus bill. Unlike many of her Republican colleagues who have repeatedly called on Democrats to “start over” on health care reform, Snowe has committed herself to finding a way to work with Democrats to get affordable health care into the hands of Americans as soon as possible.

Snowe’s vote for the Finance bill may have been won over when she and Schumer successfully passed an amendment late Thursday night which exempts from the individual mandate (and the penalties related to it) any American who cannot find a health insurance plan that costs less than eight percent of their annual income.

Exemptions from the excise tax will be made for individuals where the full premium of the lowest cost option available to them (net of subsidies and employer contribution, if any) exceeds eight percent of their AGI. (From page 35 of the amended bill.)

The individual mandate - which requires Americans to obtain and maintain a minimum standard of health insurance - and the public option were the primary obstacles to a “yes” vote on reform in the mind of Snowe. With no public option and a lowered threshold for the individual mandate, Snowe could very well break with her party and join Democrats in voting the bill out of committee.

Rep. Paul Ryan: Obama Breaking Pledge to Seniors

Thursday, October 1st, 2009

Wisconsin Representative Paul Ryan has remained one of the leading Republican opponents of the president’s public-option health care reform proposal, in spite of the pathetic attempts by the national Democratic leadership and far-left activists in his own home state to falsely discredit him on this issue. Keeping the conservative fight within the health care battle on the offensive, Rep. Ryan published a detailed article with the Journal Times about how President Obama has broken his pledge with American seniors over Medicare.

Repeatedly President Obama has falsely told the American public that if you like your current health care coverage, you can keep it under his health care reform proposal; time and again the majority of the people have patently refused to believe a word this charlatan has said. The president lied directly to the faces of one hundred and eighty thousand people, many of them seniors on Medicare, at an AARP event, saying, “Nobody is talking about cutting Medicare benefits.” But, as Rep. Ryan correctly points out, there is a “yawning gap between the President’s rhetoric and the actual substance of the legislation being pushed through Congress.”

Two of the biggest issues in this country’s health care debate that have failed to be addressed, let alone acknowledged, by the Congressional Democratic leadership have been the cost of the president’s proposal and how it will be paid for. Some Democratic legislators has chosen to play dumb on the issue while others have attacked those who bring up the topics as being against health care reform in the first place. Sooner or later, preferably the former, supporters of the president’s health care bill, particularly seniors, will have to face the fact that in order to pay for Obama’s legislation, we are going to have to do exactly what he said he wasn’t, which was to cut Medicare benefits.

The Congressional Budget Office (CBO), Ryan says, has repeatedly countered the lies of the White House, insisting that the changes as proposed under HR 3200 “would reduce the extra benefits that would be made available to beneficiaries through Medicare Advantage plans” and, what’s more, “could lead many plans to limit the benefits they offer, raise their premiums, or withdraw from the program.” The language of the resolution itself, Ryan points out, directly contradicts the president by stating specifically in Section 1161 that $156.3 billion in Medicare Advantage will be cut. This, Ryan argues, will lead to an “estimated six million current Medicare Advantage beneficiaries” to “no longer be able to afford their current plans or lose access all together.”

What is worse, however, is the blatant attempts by the Obama administration, through the use of the Center for Medicare and Medicaid Services (CMS), a division the U.S. Department of Health and Human Services, to place a gag order “Medicare Advantage providers for sharing information with their enrollees about pending changes to their plans.” Not only are they lying to the American people, they are using government programs designed to help the public to cover it up.

Representative Paul Ryan argues that Medicare Advantage serves as precise indicator of how many politicians in Congress operate, breaking what works rather then fixing what is broken. The Wisconsin legislator’s own health care proposal, HR 2520, titled The Patients’ Choice Act, “includes a provision to force Medicare Advantage plans to compete against each other.” Competition stemming from said bidding “would allow the market, not a bureaucratic formula, to set reimbursement rates for Medicare Advantage plans.”

Ryan insists that the plan President Obama and the Congressional Democratic leadership is pushing through Congress goes far beyond what he calls ‘common sense reform.’  Said changes would “dramatically increase premiums for seniors or simply kill Medicare Advantage outright.” It appears as though Mr. Obama has reneged on another one of his promises. But let’s cut him some slack, shall we? He has probably done it so many times during the course of his relatively short tenure in office that it is likely it has become second nature to him, like breathing.

Senate Republican Policy Committee: Baucus Proposals Would Break Obama Pledge

Tuesday, September 29th, 2009

The Senate Republican Policy Committee (SRPC) has released an analysis that they believe indicates that the proposals of Sen. Max Baucus (D-MT) break the pledge President Obama made to the American public that his health care initiatives would not increase taxes on the middle class.

According to the SRPC, the Joint Committee on Taxation and the Congressional Budget Office have both confirmed that “at least 71 percent of the individual mandate penalties in the Baucus bill would fall on the backs of Americans earning less than $250,000.” They argue that if the bill were to pass, it would “directly violate the President’s pledge on the campaign trail that he wouldn’t raise taxes on families earning less than $250,000 “one single dime.‘”

The table below indicates that at least $2 billion of the $2.8 billion raised from the fines imposed upon those choosing not to purchase insurance in 2016 would “come from Americans earning less than 500 percent of the Federal Poverty Line, or $120,000 for a family of four ($59,000 for a single person).” The SRPC concludes that at least a portion of the remaining $800 million  in penalties from those earning more than 500 percent of the poverty line will come from families who earn less than $250,00 annually. The table does not estimate how much, though.

Check out the Distribution of Penalties in 2016.

 

Individual Mandate Penalties

AGI Relative to the

Total

Share of

Federal Poverty Level (FPL)

Payments

Payments

 

($ billions)

(%)

Less than 100% ($24k)

0.0

0

100% to 200% ($24k to $48k)

0.6

20

200% to 300% ($48k to $72k)

0.6

20

300% to 400% ($72k to $96k)

0.5

18

400% to 500% ($96k to $120k)

0.3

12

Greater than 500% ($120k+)

0.8

29

Total

2.8

100

 

 

 

 

 


CBO throws wrench in Dem plans to fast track health care reform

Wednesday, September 23rd, 2009

On the opening day of the Senate Finance Committee’s mark-up of Max Baucus‘ America’s Healthy Future Act, Congressional Budget Office director Doug Elmendorf threw a wrench into Senate Democrat plans to fast track health care reform ahead of the October 15th deadline for budget reconciliation.

(Thanks to Talking Points Memo for pulling together this video package.)

A formal cost estimate [of a final package including all amendments passed during mark-up] would require … would really require two weeks of work by us once a package is settled.

Most senators are in agreement that a final vote by Finance cannot happen without a formal CBO estimate of the costs of the bill - particularly if any Republicans are expected to sign on in support. This seriously complicates any hopes Democrats might have to use reconciliation as a strategy for passing a reform bill out of the Senate. As aforementioned, there would have to be a final Senate bill - which means passing a Finance bill out of committee and merging that bill with the HELP (Health, Education, Labor and Pensions) Committee bill - prior to October 15 for the Democrats to invoke reconciliation and pass the bill out of the Senate on a partisan vote.

Best case scenario - which assumes Baucus can move the Finance bill through mark-up by the end of the week - means an October 12 vote by the Senate Finance Committee which leaves Harry Reid very little time to merge the two Senate bills into something that could  pass muster within a divided Democrat party. Baucus clearly recognizes this is ready to apply the pressure to Elmendorf and CBO to “help us get out of this box.”

O’Leary/Zogby: Health Care Issues Loom Large for 2010 Elections

Wednesday, September 23rd, 2009

The O’Leary Report newsletter teamed up with Zogby International recently to better gauge how much of an impact the ongoing health care debate was having in shaping competitive 2010 Senate and House races across the country. The polling data they accumulated, while not all that surprising for those deeply involved, has to be quite unsettling both for the incumbent legislators in those races as well as for the White House.

The recurring theme of the survey was that any form of government-run health care was extremely unpopular with voters who were likely to participate in the 2010-midterm elections. About fifty-eight percent of respondents in states with competitive 2010 Senate races opposed a single-payer option, a system in which the payment and distribution of health care is placed directly in the hands of the federal government. Results improved only slightly when it came to states with competitive House races, with fifty-five percent opposing the system.

Amazingly, what was even less popular was a provision in the health care bill of Senator Max Baucus (D-Montana) that imposed penalties of $750 and $950 on those three hundred percent below the poverty line and families three times above it, respectively, who failed to comply with federal quality standards. A whopping sixty-eight percent of those surveyed in competitive Senate race opposed such a provision, while seventy percent in competitive House races challenged it. Resistance to the Chairman of the Senate Finance Committee’s pay-or-play employer mandate, requiring large and small businesses with fifty-plus employees to provide health care coverage or face fines, was just about even between states with aggressive Senate and House races, showing fifty-nine and sixty percent opposition, respectively.

There was very slim support for President Obama’s recommendation that an Independent Medicare Advisory Council (IMAC) be created to make cuts to government-financed health care programs, specifically Medicare, in order to rein in spending. Many likely chose to listen to Douglas Elmendorf, director of the Congressional Budget Office (CBO), or Keith Hennessey, senior White House economic advisor to President George W. Bush (August 2002 – January 2009), instead. Only twenty-nine percent of those in close 2010 House races supported it compared to thirty-one percent in tight Senate elections.

In terms of how President Obama and the Congressional Democratic leadership intend on financing highly expensive piece of legislation, there is little, if any, approval for an increase in taxes. Seventy-seven percent of voters in 2010 Senate races and eighty percent in House races reject imposing new taxes on employer-provided health care benefits while seventy-seven and seventy-six percent of midterm Senate and House campaign voters oppose new taxes in general to help pay for the program.

So in what areas of the health care debate was there tremendous support? Nothing, of course, the Obama administration or progressive legislators would ever dare touch. Eighty percent in competitive Senate races and seventy-eight percent in House campaigns want Congress to pass tort reform and lower the cost of medical malpractice insurance. Additionally, eighty-two percent of voters in aggressive Senate races want legislators to life current regulatory barriers in order to allow people to purchase health insurance from providers located outside their own home states, while eight-four percent of voters in House races do.

Should Obama and the incumbent Democratic legislators continue to ignore these findings, anger over the health care issue, in addition to the resentment toward the nation’s economic situation and other areas of concern such as Cap-and-Tax, could very well carry over into 2010, potentially creating a dramatically different Congressional landscape.

Can the CBO Call Congress a Bunch of Liars?

Monday, September 21st, 2009

Originated from Statehousecall.org

By David Strom

CBO scoring will probably determine fate of health care reform

One of the major insights of political science is that process matters at least as much as substance in how policy decisions are made. We can see a great example of that fact in how the health care policy debate is taking place in Washington DC.

Everybody knows that the Congressional Budget Office is the official scorekeeper of the fiscal impact of various bills and proposals as they wend their way through Congress. The fate of such proposals is often determined by the fiscal impact projected by the CBO.

At several points in the current debate CBO projections have been used as a very effective cudgel to beat up proposals when their fiscal impact was shown to exceed $1 trillion. Why $1 trillion is a magic number of affordability is a mystery to me, but that has become the benchmark against which all proposals seem to be measured.

Of course every scoring system can be gamed, and the CBO’s is no different. The latest health care proposals have incorporated an evilly brilliant way of doing so by putting into place so-called “automatic” spending cuts that are supposed to kick in if certain spending levels are exceeded.

The result of this chicanery is obvious: Congress can promise all manner of wonders for what is deemed a reasonable cost, all the while keeping the budget line lower by promising that costs will be kept in check through automatic spending cuts that are extremely unlikely to ever be implemented.

In essence they are promising everyone a Lexus, are budgeting for a Chevy, and promising that if the Lexus costs more than what they now project it will they will simply provide the Lexus for the cost of a Chevy. The CBO is pretty much forced to go along lest they base their projections on the assumption that lawmakers are liars. That may be a fair assumption in reality, but not one that an arm of Congress can tenably maintain.

How likely are the automatic spending cuts to be implemented? About as likely as Congress allowing the Alternative Minimum Tax to apply to the millions of middle class taxpayers who are exempted every year. It would be political suicide, so it won’t happen.

In short, the very same CBO scoring system that has doomed earlier reform proposals over the past year is now about to be gamed effectively to make its passage more likely.