Obama Criticizes CBO Numbers on Healthcare Cost

Blog – Don Irvine  |  By Don  |  June 27, 2009


President Obama cried foul over the numbers the Congressional Budget Office attached to the Democrats healthcare proposal.

From ABC News’ Jake Tapper

A question many on Capitol Hill are asking today after watching last night’s ABC News “Prescription for America” health care discussion: Is President Obama preparing to dismiss whatever price tag the Congressional Budget Office eventually places on the final draft of the congressional Democrats’ health care reform proposal?

he reason politicians and their staffers are wondering is because for the first time, last night the president expressed frustration at the way CBO – long regarded as a fair and non-partisan arbiter – makes its analyses.

 President Obama’s Budget director, Peter Orszag, is former CBO director. But in recent weeks as the CBO has provided $1-$1.6 trillion estimates for two draft health care reform bills, some  Democrats have claimed the CBO analyses aren’t fair. 

“One of the things that’s disappointing about CBO — and frustrating — is all the work…done on prevention” that the CBO doesn’t factor in, Sen. Chris Dodd, D-Conn., said last week.

“You don’t get the benefit in CBO of cost-savings with prevention programs. They’ll tell you how much an anti-smoking program may cost. They don’t tell you the benefit occurs when a number of people stop smoking.”

 Dodd was responding to the fact that the CBO said that draft legislation penned by him and Sen. Ted Kennedy, D-Mass. would cost $1 trillion over 10 years but add only a net increase of 16 million Americans to the ranks of the insured — leaving tens of millions uninsured. 

“The way CBO scores some things sometimes doesn’t make a whole lot of sense — I mean, real-life sense,” said Sen. Tom Harkin, D-Iowa, according to The Hill.

 Last night the president added his voice to that chorus. 

Responding to a questioner who asked “how and who will pay for the national health care system,” the president outlined the need to do something since “costs are going to keep on going up 6, 7, 8 percent per year, and government, businesses, and families are all going to find themselves either losing their health care or paying a lot more out of pocket.  That’s going to happen if we do nothing.”

 CBO estimates at how much the bill will cost, the president said, “have been anywhere from a trillion to $2 trillion.  But what we’ve said is, what my administration has said, what I’ve said, is that whatever it is that we do, we pay for.  So it doesn’t add to our deficit.” The president promised that “about two-thirds of the cost would be covered by reallocating dollars that are already in the health care system — taxpayers are already paying for it — but it’s not going to stuff that’s making you healthier.” Roughly a third more “will come from new revenue” – a tax increase on wealthier individuals. 

“There’s a way of paying for this that doesn’t add to the deficits,” President Obama said. “All this money that I just talked about, those are hard dollars.  We know they are and so we know that this would not add to the deficit. It doesn’t count all the savings that may come from prevention, may come from eliminating all the paperwork and bureaucracy because we’ve put forward health IT, it doesn’t come from the evidence-based care and changes in reimbursement that I’ve already discussed about.”

 Continued the president, “the Congressional Budget Office, the CBO, which sort of polices what all various programs cost, they’re not willing to credit us with those savings.  They say, ‘That may be nice, that may save a lot of money, but we can’t be certain.’ So we expect that not only are we going to pay for health care reform in a deficit-neutral way, but that’s it also going to achieve big savings across the system — including in the private sector where the Congressional Budget Office never gives us any credit — but if hospitals and doctors are starting to operate in a smarter way, that’s going to help you even if you’re not involved in a government system.” 

A week ago, House Speaker Nancy Pelosi, D-Calif., said that “it’s always been a source, yes I will say frustration, for many of us in Congress that the CBO will always give you the worst case scenario on one initiative and never … any credit for anything that happens if you have early intervention, health care. If you have prevention, if you have wellness … you name any positive investment that we make, that we know reduces cost, brings money to the Treasury in the case of education but never scored positively by the CBO. Yes, it is frustrating.”

 Pelosi said, “I hope we will see them say, ‘This is what we see the cost of something. We have not accounted for the benefits’ because they don’t and they haven’t and it should not be inferred from what they do that they have.” 

White House press secretary Robert Gibbs was asked last week if the White House believes CBO is an effective and reliable arbiter of the scoring of health care proposals, given Democrats’ frustration.

 “Maybe some of that frustration is the fact that right now CBO is looking at older proposals or half measures,” Gibbs said. “I think the Dodd legislation that originally was scored wasn’t a final product.  I don’t think there were savings mechanisms in there about bending the cost of health care. But look, the President, as I said pretty clearly today, the President is going to look for health care reform that’s fully paid for.” 

By the measurement of the Congressional Budget Office? Gibbs was asked.

 “Unless or until somebody comes up with something different, yes,” Gibbs said.

The Democrats apparently thought that since they were in power that the CBO would give them a pass on a bill that will cost far more than they want the public to believe it will.  Now they are left to scramble to somehow explain how the very office that they have praised in the past when it was scoring Republican proposals unfavorably is now somehow unrealiable.