Budget

Gimme Gimmicks: Getting Giddy Over the CBO's Latest Health Care Score

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Predictions are hard, especially about the future.

The latest—though likely not the last—Congressional Budget Office score for the Democrats health care overhaul is in, and after a harried week, it's making Rep. James Clyburn, the House Democrats' whip, "giddy."  What's worth squealing about? The score, which estimates the budgetary effects of the Senate health care bill in the context of the reconciliation changes proposed by House Democrats, officially projects that the bill will cost $940 billion and reduce the deficit by $130 billion over ten years. In the following decade, the CBO's crystal ball says the package conjures up $1.2 trillion in deficit reduction (maybe), a number which it also warns should be viewed as about as accurate as the predictions from most crystal balls.

Fans of budgeting gimmicks are in for a treat, as the document reads like a sort Greatest Hits of Budgeting BS. Jacob Sullum has already noted some of its many balance-sheet deceptions, including double counting Medicare savings and the inclusion of $19.4 billion in scored deficit reduction from a totally unrelated student-loan program, but here's a few more:

The score for the Senate bill includes $72 billion in revenues generated by the CLASS act, a federally-backed disability insurance program. But that $72 billion is just premium revenue that will eventually have to be used to pay out benefits. The score counts that revenue anyway, despite the fact that, according to the CBO, it would probably add to the deficit in the long term.

Even if you buy the projected deficit reductions—I'm skeptical—the bill achieves them at the cost of raising the national debt. At Fortune, Shawn Tully explains:

That forecast, however, doesn't mean that what the CBO counts as lower deficits will lead to less debt, as taxpayers might expect. In fact, it appears that it would require the Treasury to borrow almost 40 cents of every dollar in new spending the bill requires.

It's not an easy trick to reduce deficits and yet borrow more money. CBO does it because it has to. By law, the CBO is required to use "cash" or "unified budget" accounting. Under that system, the CBO projects all the new revenues and new expenses from the legislation it's requested to "score." If the extra revenues exceed the additional outlays, the bill is deemed to reduce deficits. That's the case with the health-care bill. The rub is that the measure gets a large portion of its revenues from new Social Security and Medicare taxes—plus levies it collects upfront to pay for a long-term care entitlement program.

Counting those taxes as deficit reducers presents two problems. First, the extra revenues are mainly needed to pay for higher benefits in the future. Second, they cannot be used to fund the lavish subsidies, tax credits for small employers, and other spending the bill mandates. "The law is clear," says Donald Moran, a former Reagan Administration budget official who runs a Washington, DC-based health-care consulting and research firm. "Revenues from those entitlement taxes must go into their trust funds. That money is not available to pay for the spending commitments of the health-care bill."

 Pay no attention to the budget gimmicks behind the curtain!

Indeed, as anyone who bothers to read the first paragraph of the CBO's letter will see, the entire report is arguably something of a cheat. See, House Speaker Nancy Pelosi promised that the CBO score for the reconciliation bill would be available 72 hours before taking a vote. She's also been pushing hard to schedule a vote by this weekend. And, sure enough, just in time, here's the score—in preliminary, subject-to-change, implicitly rushed-to-early-release form. Or, as the CBO says in its careful bureaucratese:

Although CBO completed a preliminary review of legislative language prior to its release, the agency has not thoroughly examined the reconciliation proposal to verify its consistency with the previous draft. This estimate is therefore preliminary, pending a review of the language of the reconciliation proposal, as well as further review and refinement of the budgetary projections.

Translation: We weren't really done yet, but House leadership wanted to vote this weekend, so we rushed this sucker out early. Granted, at this point the Democrats have so thoroughly gamed mastered the scoring process that the end result would likely be similar no matter when it came out. This is why leadership has been so confident that it could pick up the votes needed for passage: Many of those wavering votes, it now seems, were probably dependent on the deficit reduction figures in the CBO score—a score that leadership achieved by spending all week tweaking and resubmitting the legislative language in order to produce the desired result. Not surprisingly, the vote count now seems to be moving in their direction. If I were the Democrats' official vote-getter today, I suppose I'd be giddy too.

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  1. Here’s the good news: I just turned 60.
    I got lots of savings, an NG pension. I’ll be long gone before this shit really hits the fan.

    1. I’ll be long gone before this shit really hits the fan.

      According to the mortality tables at Social Security Online your life expectancy is 20.42 more years. This shit will be hitting the fan way before then so buckle up buttercup and start stocking up on Kal Kan.

      1. Oh c’mon. All those fresh faced college kids backing the Obamassiah are going to turn on us oldsters when the bill is presented? They’re idealistic! They’re altruistic! They love everyone’s grandma and grandpa! We’ll live in a collectivist paradise!

      2. Here’s the good news: I own income producing property in another country.
        I got some savings, and income producing property. I’ll be long gone before this shit really hits the fan.

      3. I wouldd like to see the republicans challenge the democrats to publicly promise that they will never vote to undo the Medicare cuts that are being used to finance this bill. Including this year’s doc fix pariuri sportive

    2. You, sir, will get it just when you really don’t need it. Fancy the last few years being intolerable and pressured? It’s coming. Wrong attitude, you have.

  2. I have a friend who works for a major insurance company. He says word from up high is the Dems have the votes and the company is getting prepared for the bills passage.

    We are fucked. What time is the revolution?

    1. It was in November 2008.

      But I’m sure the literally TENS of teabaggers who showed up to the latest two-minutes hate will mount an impressive opposition.

      1. I thought revolutions were about change. We have an arrogant party in charge, a president who continues to deny Civil Liberties, rescues banks, is greatly expanding the deficit, and is about to commit his own version of Iraq – only this time it is called Health Care Bill. I could go on for many more paragraphs about how this administration sucks just as much as the last one in so many of the same ways. You call that a revolution? Obama/Bush — show me the difference.

        1. HOOOOOOPE! CHAAAAAANGE! Don’t you get it yet? Obama’s completely different from Bush in every way! Look at the monkey!

          1. Jesus, even if I were a true-blue leftist I’d despise Obama. He’s screwing them as much as everyone else. In partnership with the rest of his party’s leadership.

            The administration does the same shit–almost to a point of identity–as the previous, reviled administration, with a an even more inept foreign policy, a desire to trash the economy, and a tin ear for politics not seen since, well, I’m not even sure when.

            1. Bartered Wife Syndrome.

            2. Sweet Nancy’z Law, Tulpa.

      2. Whoa, there was a revolution happening all around me and I didn’t even know it. I must be even more blase than I thought.

        1. Red Douche sucked and left office, and Blue Douche got elected and continued the tradition of sucking. It’s a whole big sucking thing.

      3. But I’m sure the literally THOUSANDS of teabaggers who showed up to the latest two-minutes hate will mount an impressive opposition.

        Fixed it for you. You must be thinking of the astorturfing Coffee Party.

        Oh wait your an idiot. I forgot.

  3. From Revelation 6:6 through the lips of Johnny Cash himself:

    And I heard a voice in the midst of the four beasts…
    And I looked and behold, a pale horse
    And his name that sat on him was Death
    And Hell followed with him

    Yeah, it is going to get real fucking bad! At least Mexico is a real close drive just in case I don’t feel like spending several years on a waiting list for a knee surgery, etc.

    1. Don’t count on Mexico–if the U.S. goes down the toilet, we’ll take them with us.

      You’d be better off studying medicine online and start practicing surgery on the rabbits in your vegetable garden. Once you’re ready you could treat yourself. Then homeschool your wife to do it too.

  4. Man I hate these people. Reason, why can’t you tell me sweet sweet lies like Obama so I can get to sleep at night?

    I guess I should have figured this was coming but I silently hoped that it would fail. Sad.

    1. No lies, but if you want a chuckle you can read Gerry Mak’s rebuttal to that article the other day.

      1. Argh. Now you’ve just frustrated me even more =)

        What’s sad is that guy has no idea how pathetic he is. When confronted, he just responds with a heaping of post-modern angst and trite liberal arts shibboleths….

        e.g. the sadly hilarious comments thread.

        A guy:“A good plumber is worth 100 bad artists. Plus he doesn’t need food stamps. A good artist (Ravel, Stravinsky, Picasso, etc) is of incalculable value, but is only 1 out of millions of mediocre hacks. Contemporary art is, for the most part, a sick and sad wasteland.”

        Gerry Mak:“Creative jobs includes editors, graphic designers, videographers, and copywriters. Not everyone can be a plumber or a construction worker or a cop. Also, you don’t get to dictate what profession someone else chooses.

        WTF!!! The gall!!!!! And you don’t get to take my fucking money to buy organic foods!

        I do appreciate the chuckle/rage though wingnutx.

        1. Also, you don’t get to dictate what profession someone else chooses.”

          No dipshit, but you make the decision, you have to live with the aftermath of it.

    2. It hasn’t even gotten crazy yet. Wait for the vote tally.

  5. I did some math at lunch today.

    Based on a 2,700 page bill, printed on both sides of standard 8.5×11″ paper, I came up with the total square inches of text in the bill. By my calculations, we could print 2000 copies of the bill, for each of the 535 members of Congress, on sheets of $100 bills, and it would still only cost just a hair over $900 Billion, $40 Billion less than the actual bill, itself. I have a very, very high confidence level in that calculation. Much higher than the CBO’s confidence in their own numbers. If it’s really “only” 2,400 pages, my price gets even cheaper, but theirs doesn’t.

    Better still, if we gave every one of those cocksuckers $20 million each out of petty cash, that’s only $10.7 Billion. It would be well worth that amount if they would all just shut the fuck up and do nothing for the next few years.

    1. Wouldn’t that be great!?!?! I’m all for that!

  6. Main Entry: 1 gid?dy
    Pronunciation: \?gi-d?\
    Function: adjective
    Inflected Form(s): gid?di?er; gid?di?est
    Etymology: Middle English gidy mad, foolish, from Old English gydig possessed, mad

    Yeah, that sounds about right.

  7. Only $940 billion, eh? So, if we go by Medicare estimates, the real cost will be about $9 trillion.

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    1. Oh come on. Can’t we get a better class of bot?

      1. No, no, knowledge is power.

        1. Knowledge is power
          Power corrupts
          Corruption is bad
          Knowledge is bad

  9. the bill will cost $940 billion and reduce the deficit by $130 billion over ten years…the package conjures up $1.2 trillion in deficit reduction (maybe)

    No, not “maybe.” NPR said the same thing this morning, so it must be true.

    While we’re on the subject of CBO predictions, has anyone bothered to look at their track record over the years? How reliable a prognosticator have they really been? Does anyone even care at this point in our decline?

  10. I’d like to see the Republicans challenge the Democrats to publicly promise that they will never vote to undo the Medicare cuts that are being used to finance this bill. Including this year’s doc fix.

  11. This would be a good time to view The Bloody History of Communism and Jonestown: The Life and Death of People’s Temple.

    Trust me.

  12. The latest vote count this morning, from the Dems, is that they are 6 votes short. There are reportedly around 16 undecideds left.

    Query: what can the Dems do to flip an undecided at this point?

    They can’t change the bill itself. There is pure pressure, of course.

    There are unrelated goodies, like the water for the two California Congressscum, but that was doled out administratively, and there can’t be much left in that bag.

    There are appointments to cushy jobs for retiring Congressscum, like the NATO ambassadorship and the NASA administrator, but the Republicans have called them out on that, so that gambit is probably done for.

    A promise of some legislation in the future? This session is just about done for, and it would have to be huge, and passed this session, to help a Congressscum get re-elected.

    Looks to me like the cupboard is about bare. If the Kill the Bill folks can keep the pressure up through the weekend, they just might win.

    1. You forgot a step w/ the cushy job appointments. 1) Don’t pay your taxes. 2) Cushy job appointment. We know Republicans don’t have to stones to stop it, and we know the public will go along with it.

    2. I still contend they can’t get the votes. If the undecideds were yes votes Pelosi would get them to commit for momentum. The funding tricks and shady deals have turned the bill radioactive. Never bet against the survival instinct of a politician. The bill fails on Sunday

      1. The bill fails on Sunday

        There’s already word that the vote may be pushed back to Monday or Tuesday.

    3. It’s an insider’s game involving knowledge that I don’t have at this point, so I don’t want to predict the outcome (though my sense, at this moment, is that there’s a ~75% chance of passage). But Pelosi and leadership can offer additional goodies: DCCC money, an Obama stump in your district, etc. But the thing is, we don’t actually know if those undecideds are *really* undecided. Yes-voting members will frequently declare themselves on the fence when what they’re really looking for is for leadership to make them an offer — basically, “At this point, I know you need my vote. What are you willing to offer for it?”

      1. Yes-voting members will frequently declare themselves on the fence when what they’re really looking for is for leadership to make them an offer

        Good point. Still, the pressure to declare so Pelosi can end the agony of the Party must be immense.

        After the election debacles of last fall, just how much will an offer of DCCC money and Obama’s personal appearance be? They were used, and failed, repeatedly last fall. And Obama’s stock is dropping, fast.

        Anybody got a good list of the undecideds? Hopefully paired up with how their district voted in the Presidential election?

        1. This one is pretty good:
          http://thehill.com/homenews/ho…..healthcare

  13. I’m not sure whether an Obama stump in your district is a promise or a threat.

  14. Uh-Oh. I don’t drink but I think today is a good day to start.

  15. And the revolt begins.

  16. The problem is that most of the MSM are merely stenographers for the Democrats and the Obama administration.

    They slavishly repeat whatever the Democrats say about the CBO scoring and don’t make any effort whatsoever to delve into all the gaming and trickery that were involved in producing the score – or any detailed analysis of the caveats the CBO reported or the uncertaintly levels of assumptions critical to the estimates.

  17. Health care is such a divisive topic in this country. No easy solutions.

    1. Guess they should all move out and find apartments in croatia – hahah

  18. It will be interesting to see the final cost by the time all items are passed. Hopefully someone will request a cost assessment by the CBO of total healthcare costs to federal govt. per year since Health and human services budget already runs at $900 Billion per year.

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  22. The MSM is reporting on a subject that has the White house and the IMF and the World bank appearing together? The MSM is reporting the Stock Market has dropped 39%? Hey, isn’t it news when the President speaks? Didn’t He say this is the worst post world war 2 crisis in our markets we have faced? Isn’t this news? Even if it hurts the markets all they are reporting is truth. Do you want a Pravda media?

    Speaking of Pravda I was shocked Faux and friends spent more time on Acorn than the economy this morning. It would merit the attention if the law didnt require Acorn to turn in all registrants whether they believe them valid or not. Yeah, it is the STATE’s role to decide someone isn’t qualified to vote. Since no one has names of those who voted who shouldn’t of I guess govt is doing a good job. IMO there are serious issues here but they don’t trump what happened on Wall st this week

  23. In my opinion the MSM has lost nearly all of its credibility. Just as politicians they should have a (D) or (R) after the reporters name.exchange rate

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  27. CBO cannot take into account the money saved from preventati?ve care. I know I sound like a broken record but blood pressure pills are cheaper than the cost of stroke care. Colonoscop?ies are cheaper than the often futile treatment of colon cancer. A pap smear is cheaper than cercivical cancer. I could go on and on as a former nurse but surely the bright people can see the point I’m trying to make. The CBO doesn’t take into account those savings of preventati?ve care. The picture may be better than the savings projected.

  28. Why is it that Republicans keep breaking things and asking what Democrats are going to do to fix it? I really don’t think this civil war is going to end any time soon.

  29. Amy it’s only getting worse! Riots all over the world are erupting because people feel like they are being taken advantage of by a small group of individuals. Soon we will all have to hide under rig mats

  30. Power corrupts. We need to vote them all out, and appoint me the savior of the nation. You can trust me! 🙂
    rock the vote!

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