CBO scores Baucus bill as deficit reducer

Posted on October 7, 2009

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The Congressional Budget Office released its scoring of the current version of the Baucus health care bill, giving it a projected cost of $829 billion over ten years. More importantly, it scored the bill as reducing deficits by $81 billion over the same time period. Sen. Baucus is obviously pleased, but he must now put his own bill up for a vote before merging it with another bill produced by the Senate Health, Education, Labor and Pensions Committee.

The scoring is good news for Baucus bill supporters and tough to hear for critics who argued against the program’s cost. Temper your elation or your fear (whichever is the case), because there’s a major reason Baucus can pay down the deficit and that’s taxes. One set of taxes puts additional costs on medical devices Class II and above that cost more than $100, which includes items like dentures, extended wear contact lens, pumps for breastfeeding mothers, mammograms, and dialysis catheters.

Another set of taxes is on high-end insurance plans, the so-called “Cadillac plans.” Whatever revenue is initially earned from taxing these plans will decrease as they are gradually taxed out of existence. It’s also important to note that this provision also affects union plans, a fact that prompted 150 House Democrats to pen a letter to Speaker Pelosi opposing the tax. This doesn’t even touch the value-added tax that Pelosi floated on Monday to help pay for government programs like the health care bill.

It’s also important to consider that the CBO’s estimate, in its own words, is “subject to substantial uncertainty.” Add to that the Baucus bill exists only in plain English form and not legislative language. Add to that the Baucus bill will have to be merged with other Senate bills and reconciled with a House bill. And add to that the Baucus bill doesn’t contain a public option that many on the left are still hoping to add on and we’re still left with many question marks as to the final cost of the bill and any real budgetary savings or shortfalls.

Still, the CBO report is a victory of sorts for Democrats (those that don’t hate the Baucus bill, anyway) and provides cover for moderate Democrats and even some Republicans to support it. As a result I would now expect to see the bill easily voted out of committee when it comes up in the next few days. It would be a mistake, however, to assume that this is the final word one way or another on the final cost of health care reform as there are still too many steps remaining and too many opportunities to tack on more costly items or more taxes for America.

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Posted in: News, Politics