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  • The Baucus Bill: A Closer Look at the CBO Report


    Looking beyond the media hype, taxpayers should remember a few crucial facts about the recent CBO/JCT analysis of the Finance Committee’s provisions for the America’s Healthy Future Act of 2009. As former CBO Director Donald Marron has pointed out, there is more to CBO’s analysis than short term budget estimates.

    • The analysis is preliminary. As the letter points out, the analysis is still not based on legislative language. Moreover, Senate Leaders have to merge the bill with the HELP Committee bill before the bill comes to the floor. Therefore, it is highly unlikely that the current analysis will be relevant to the debate much past the upcoming Finance Committee vote.
    • Cost. The projected $829 billion ten year cost is no guarantee of anything. Virtually all cost estimates of government programs underestimate the true cost. Take for example Medicare. In 1965, it was projected to cost $12 billion in 1990, but its actual cost in 1990 was over $100 billion. Just recently, the SCHIP program with a fixed 10 year budget of $40 billion was reauthorized for five years at a new price tag of close to $70 billion. A long term cost projection is a missing, but important component to understanding the true cost of a proposal.
    • Taxes. The proposed offsets in the bill fall in two categories – taxes and cuts. On the tax side, CBO estimates $4 billion will be raised by imposing a tax on individuals who don’t buy government qualified coverage. $23 billion will be raised by imposing a tax on employers who don’t offer government qualified coverage, a cost that will be borne by workers in lower wages and fewer jobs. Over $200 billion is raised by adopting a new tax on health insurance plans. While this tax sounds like it will hit insurers, the reality is taxes on goods will ultimately be passed on the consumers. Hiding new taxes through fees and penalties don’t fool anyone.
    • Cuts. The Finance proposal also depends heavily on Medicare to fund its new entitlement program. Besides cuts to Medicare Advantage plans, which put benefits of millions of seniors at risk, there are billions of dollars in provider payment cuts. Traditionally, such cuts rarely come to fruition. Special interests lobby to stop any real cuts from occurring after the bill is passed. Therefore, before spending one dime on coverage expansions, Congress should have to “show us the money”. If Congress were to be fiscally responsible, it would bank the savings first before spending the taxpayers money.
    • Impact. Today, 85 percent of Americans have health coverage. After spending over $800 billion dollars to cover the uninsured, the Finance proposal still leave 26 million without health care coverage. And of the ones the bill reaches, the majority will be enrolled in Medicaid – a program sorely in need of reform itself.
    Posted in Obamacare [slideshow_deploy]

    18 Responses to The Baucus Bill: A Closer Look at the CBO Report

    1. Pingback: Keeping Your Wits and Staying the Course in the face of socialist “Intimidation”; A Must Read « VotingFemale Friends Speak!

    2. Chuck Bolder,W4448 B says:

      I wish my home calculator worked as good as the one used by CBO. How can you make a $829 BILLION over ten years expence reduce deficits by $81 Billion per year?? The math I took some 50 years ago in school doesn't get me there no matter how hard I try!!!

    3. bruud burlington w says:

      taxpayers sure can pay for everything but what happens when we(taxpayer) not working. we add to the list of unemployed. then who pays you the senators,congressman who make huge salaries that better health insurance then we have or ever can afford.who do nothing for taxpayers outside of spend our money put us in the hole.same with the president and speaker of the house,but then again we are stupid even to pay her trips to and from home at 60000.00 tax dollars every time and she can afford to pay for it herself with her corporate jet? voted no when cost of minium wage bill came for a vote,then she would have to pay her employees more that would have cost her profits.

    4. Pingback: Broken Promises: Government Transparency and Accountability « Lighthouse Patriot Journal

    5. Ray Barrington, ri says:

      October 9, 2009

      SPIN – “The cost analysis by the Congressional Budget Office was a crucial test. If the numbers had come in much higher — if, for example, the price tag had exceeded $900 billion — they could have delayed or derailed Democrats’ effort to pass a bill this year.”

      But here’s what the Congressional Budget Office actually said:

      The budget office said Medicare savings and revenues from new taxes would grow at a brisk pace beyond 2019, so the bill would probably “reduce federal budget deficits over the ensuing decade, relative to those projected under current law.”

      • This is an indication of how Congress tries to deal with real world problems. It pushes everything off into the sunset when they are long ago retired on their generous pensions, cannot be held accountable, and can claim in retrospect that they were somehow fooled by some scapegoat.

      • Is this what we vote for?

      • In addition, Congress is not even considering what has universally been arguably called the biggest real financial problem for our government over the next 15 years:


    6. TerryP, Nebraska says:

      If my math is correct the cost per person that is added to the insurance rolls is approximately $40,000 per person ($800 bill+/roughly 20 million). So for a family of four that we add to the rolls it would cost roughly $160,000. This plan isn't doing any favors for people who already have insurance so how is this even remotely a good deal? Only in Washington does this sound good. Why aren't these numbers being brought up by the politicians who oppose gov't healthcare. Either they don't oppose gov't spending as much as they say or they can't add. They told us the whole point of healthcare reform was to lower costs and cover more people with health insurance but maybe I was wrong. Obviously it is about more power and more gov't control and spending.

    7. ItsMe, PA says:

      But we can HOPE for a CHANGE. Come on people, just give PEACE a chance. It's a NOBEL idea. (had to stretch that last one.)

      It's about POWER not HEATHCARE, Stupid. (I think I have a new t-shirt)

      Will we survive?

    8. Pingback: Lipstick on a Pig - Taxpayer Soapbox

    9. Pingback: Another Reason We Don't Need Cap-And-Trade - AIP Blog - American Issues Project

    10. Charles B Monell says:

      There has been so many pros and cons one doesn't know who to believe. One thing is for shore middle America once again will have to foot most of the costs.Some where along the way, Congress missed the first object right front the start. That was to provide health care for those without (Insurance plan)health care.As a retired Project Manager for the FAA. Projects were constructed in stages. To accomplish a total Health Plan all at once will leave holes in the plan. Again lets stay focused and help those with out an insurance plan first.

    11. tina frost says:

      It seems the way Democrats and Obama are going about this healthcare bill would be considered unconstitutional,the people are not for this.It seems they are constantly bending the laws and stepping on the constitution. It's got to stop.

    12. Pingback: Morning Bell: Obamacare Sends Deficits Off Cliff | Fix Health Care Policy

    13. Pingback: Compromise Legislation is Rather Leftward Leaning – Civitas Review Online

    14. Pingback: If You Still Think The Baucus Bill Is Deficit Neutral... - AIP Blog - American Issues Project

    15. James Frazee, Arkans says:

      OK, the Democrats have all Bills out of Committee. I can sort of understand the Liberal bias due to the Liberal Left leadership and the fact that many in Congress have NO experience in anything except being a Bureaucrat.

      Democrats believe in the Public Option, which is Socialism, if the insurance companies don’t meet the challenge of affordability or they just believe in the Public Option as the affordable option.

      But now that the Democrats have their Bills, why is the news media not asking one simple question.

      What is affordable insurance and for what coverage???

      What are the premiums, deductibles, and co pays?

      Can Democrats answer that?

    16. Pingback: Morning Bell: Obamacare Sends Deficits Off Cliff | Conservative Principles Now

    17. Pingback: High Cost of Obamacare and Health Care Reform | Fix Health Care Policy

    18. Pingback: What is wrong with gov’t healthcare? « GOODNESS WORLD LIFE BLOG

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