For the second time in nearly a week, the Congressional Budget Office (CBO) has dealt President Obama’s health care reform bill a decisive blow and might well have severely dashed any-and-all hopes Congressional Democratic leaders held out for a last-minute compromise with Blue Dog Democrats before the August 7th recess.
On Tuesday, July 21st, a tremendous breakthrough was made in the practically immobile stalemate between liberal legislative leaders and conservative Democrats, many of whom have vowed to vote down the president’s health care proposal should significant changes to the bill not be enacted. A key representative, Henry Waxman, Chairman of the House Energy and Commerce Committee, and his fellow Blue Dog Democrats had at last agreed to a White House-backed proposal that would have, according to Peter Orszag, White House budget director, alleviated some of the legislation’s considerably high costs, a notable sticking-point for moderate Democratic representatives. The proposal gave an outside, independent panel, rather than Congress, the power to make cuts to government-financed health care programs, specifically Medicare, in order to rein in spending.
The Independent Medicare Advisory Council (IMAC), as it would be called, would be made up of five individuals, appointed by the President of the United States and confirmed by the Senate, with “specialized expertise in medicine or health care policy.” The council would have two tasks – first, to recommend how much to increase payment rates for different types of Medicare providers each year, and, secondly, to recommend “broader Medicare reforms” that “improve the quality of medical care” or “improve the efficiency of Medicare.”
By Saturday, July 25th, however, Douglas Elmendorf, director of the Congressional Budget Office, had burst the White House’s bubble, noting that only $2 billion over ten years, or $200 million per year, would be saved using this proposal. Placing the supposed ‘savings’ directly against the legislation’s $1 trillion price tag made it quite a pittance indeed. Comparisons can easily be drawn between this scenario and Obama’s request to the various departments of the federal government to ‘cut’ $100 million from each of their respective budgets at the same time he was proposing a $3 trillion-plus ‘economic stimulus’ plan. It should be noted that very few departments of the federal government followed through with this inquiry. In a letter to House Majority leader, Steny Hoyer, Elmendorf wrote, “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.”
Peter Orszag, however, spun the news so that attention was diverted from the office’s small probable savings numbers and toward the speculative long-term benefits. “The point of the proposal, however, was never to generate savings over the next decade. … Instead, the goal is to provide a mechanism for improving quality of care for beneficiaries and reduced costs over the long term,” he said. “In other words, in the terminology of our belt-and-suspenders approach to a fiscally responsible health reform, the IMAC is a game changer not a scoreable offset.” Orszag’s statement saying that the goal of the IMAC is to reduce “costs over the long term” is contradictory to the CBO’s judgment that the proposal “would generate larger but still modest savings.”
Keith Hennessey, senior White House economic advisor to President George W. Bush (August 2002 – January 2009), however, points out that the two tasks IMAC is entrusted to carry out …
… would be limited to making recommendations that do not increase Medicare spending. There is no requirement that the IMAC’s recommendations save any money.
The proposal creates a fast-track process in which the President has to send the council’s recommendations to Congress with a binary yes-or-no recommendation. If the President approves the recommendations, he would have the authority to implement them unless both Houses of Congress voted to stop him within 30 days. The details of the Congressional disapproval procedure mean that you would effectively need at least one more vote than 2/3 of the House and 2/3 of the Senate to overrule recommendations made by the IMAC and approved by the President.
Perhaps what is more disturbing, however, is that “this would be an enormous transfer of policymaking authority and power from Congress to the Executive Branch,” which any law student can tell you is categorically unconstitutional. And its certainly something territorial Congressional committee chairmen and Medicare provider interest groups would not have taken kindly to. So even if the CBO had not issued its letter slapping down the White House’s proposal, it would have died of its own accord. At this point, all the administration has up its sleeves are hollow gimmicks.
Once again the ratings for President Obama’s latest primetime network appearance were down, but not as badly as some had anticipated. His latest press conference in which he spoke largely about his healthcare reform bill and the need for Congress to ‘get the job done’ brought in 24.7 million viewers. This was down fourteen percent from his last primetime conference on April 29th. While this is certainly not something the White House is excited about, all things considering it could have been a lot worse had it taken place during a different season when it would had to compete against more original programming.
