CBO Director Simply Does Not Care For Democratic Health Plans

Ouch times a billion! The heroic Congressional Budget Office has gone through the sexy new health care bills from the House and Senate and, because he is racist against Obama, has determined that neither comes close to doing what they need to do: Bending The Cost Curve down, in the long run, to save the federal government from debt default and apocalypse, in the medium run. This is potentially terrible news for Democrats, many of whom were already scared as the dickens of voting for party-line $1 trillion overhaul that they won't bother justifying to their constituents. So: will the leadership pussy out and just give poor people a few bucks to buy some Advil, or will they get tough and make it work?

Here is Sen. Kent Conrad, chair of the Senate Budget Committee, chatting up CBO director Doug Elmendorf at a hearing today.

Conrad: Dr. Elmendorf, I am going to really put you on the spot because we are in the middle of this health care debate, but it is critically important that we get this right. Everyone has said, virtually everyone, that bending the cost curve over time is critically important and one of the key goals of this entire effort. From what you have seen from the products of the committees that have reported, do you see a successful effort being mounted to bend the long-term cost curve?

Elmendorf: No, Mr. Chairman. In the legislation that has been reported we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount. And on the contrary, the legislation significantly expands the federal responsibility for health care costs.

Conrad: So the cost curve in your judgement is being bent, but it is being bent the wrong way. Is that correct?

Elmendorf: The way I would put it is that the curve is being raised, so there is a justifiable focus on growth rates because of course it is the compounding of growth rates faster than the economy that leads to these unsustainable paths.

Rats!

He adds that if you want to overhaul health care on this magnitude -- which all of these Democrats supposedlyreally wanted to doduring the election, when they were giving speeches, and people were approving, COME ON NOW -- "there has to be very substantial reductions in other parts of the federal commitment to health care, either on the tax revenue side through changes in the tax exclusion or on the spending side through reforms in Medicare and Medicaid."

Elmendorf suggested, as he has been suggesting, and as health care people from both sides of the aisle suggest, because it is a good thing to suggest, that unless you really slash the potatoes out of Medicare and Medicaid, you must either eliminate or cap the tax exclusion protecting employer-based health insurance -- a subsidy that encourages unnecessarily expensive and getting expensive-er health plans. Barack Obama, for one, has demanded this option be kept off the table, because it might push workers out of employer plans that they like, which he promised never to do. He also promised to never tax anyone making less than $250,000 a year, so... goddamnit.

If Democrats want to make this reform worth the effort, they're going to have to suck it up and cast difficult votes, for the first time in their lives. But what's the point of liberals building "political capital" if not to eventually exhaust it all on a good health care overhaul?

 CBO Sees No Federal Cost Savings in Dem Health Plans [The Note]