Sunday, March 21, 2010
Five Reasons The CBO Figures Are Phony
...1. Medicare cuts
The Senate health care bill relied heavily on unprecedented cuts in Medicare spending increases. If implemented, this would have a huge impact on seniors’ care. But Congress has always balked at Medicare cuts. (See No. 3).
2. Delayed start
To make the budget math work, Democrats plan on delaying the start of subsidies and other costly provisions for several years. (The bill spends just $17 billion through 2013). The true 10-year cost is far higher.
3. The “doc fix” is excluded
The Sustainable Growth Rate imposes automatic cuts in Medicare payment rates to doctors.
For several years, fearing a revolt by doctors — and seniors — Congress has suspended those cuts. The original draft of the House health care bill included a permanent “doc fix.” But that ballooned deficits, so Democrats dropped it, even though everyone knows Congress isn’t going to slash doctors’ rates. The CBO has estimated a “doc fix” would cost $247 billion over 10 years.
4. Student loans are included
Doctors’ payments are excluded from the health bill, but major student loan program changes are included? Yep. The reconciliation bill will end student loan subsidies to lenders. The CBO says this will save $19.4 billion over the first decade, accounting for virtually all of the $19.8 billion in deficit reduction from the health care reconciliation bill. Reconciliation bills must cut the deficit by at least $1 billion. So, without the non-health care items, the health care reconciliation bill would not pass muster.
5. It’s a CLASS act
In the Senate health bill, a new, voluntary long-term care insurance program called CLASS accounted for some $72 billion of the deficit reduction. The Community Living Assistance Services and Supports program is supposed to be deficit-neutral long-term. But Democrats are counting the upfront premium surplus in the short term and ignoring the significant operating deficits after 2029. Update: Democrats also are counting on projected additional Social Security revenues from payroll taxes on higher wages in lieu of lower health benefits. Again, those benefits have to be paid out....