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Senate Reform Bill Budget Neutral?

This afternoon, the Congressional Budget Office released a statement saying that the Senate Finance Committee Reform Bill (the Baucus Bill) prices out at $829 billion over ten years.  At this price-tag, given the revenue assumptions (fees, cuts, taxes, etc.) contained in the Bill, the CBO estimates that the Bill actually produces a modest deficit reduction – $81 billion over ten years.  The CBO further estimates that the Bill will provide coverage to 94% of Americans.  Now, as the late Paul Harvey would say, “stay tuned for the rest of the story”.

The number provided by the CBO is based on a summary of the Bill’s summarized provisions, not the legislative text of the Bill itself.  Senate Democrats who control the Committee (and the Senate for that matter), have decided not to release to the CBO or to the public, the legislative text and accompanying mark-ups.  Without the full legislative text of the Bill available, the CBO has no ability to provide even a reasonably accurate scoring of the Bill.  Plainly stated, the $829 billion is an EWAG (Educated Wild Ass Guess) at best.  Further, given the CBO’s history of under-estimating legislation price-tags, the number provided can’t be taken for anything other than what it is – the by-product of fuzzy math.

There is another problem with the press release; the estimation of how many Americans are or will be covered.  Without the legislative text for the Bill, there is no accurate way of measuring exactly how the Bill will create this level of coverage.  For example, the Bill contains no provision requiring employers to provide health insurance for employees.  Further, while the bill requires Americans to purchase health insurance, how this requirement will be enforced, implemented and monitored is unknown sans the actual legislative text.  Finally, there are wide discrepancies in the numbers of uninsured in America, in total and demographically.  As this uninsured population remains somewhat nebulous, it is literally impossible for the CBO to presume that the Bill will cover 94% of Americans and in all likelihood, even with the legislative text available, this level is unattainable.

The rest of the story?  My read is that the Senate Democrats are trying to avoid the inevitable – a complete and accurate scoring of the Baucus Bill (again, to the extent that the CBO can be accurate) which would conclude quite differently.  There is about as much chance that the Baucus Bill is budget neutral and deficit cutting as there is for the Detroit Lions to win the Super Bowl.  The age old adage that the Devil is in the details applies here. 

Let the games begin as the next steps precluding a vote will be interesting as pro-reform Democrats will use the very preliminary CBO estimate as ammunition for a vote while Republicans will call foul and conservative Democrats will lobby to see the legislative text and to have the CBO re-score the Bill the right way.  President Obama is certain to step forward and proclaim his support for passage again, supporting the illogical conclusion that this Bill is somehow budget neutral and deficit reducing.  We do live in interesting times.

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October 7, 2009 - Posted by | Policy and Politics - Federal | , , ,

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