'Gang Of Six' Moving Goal Posts On Health Care Costs
President Obama promised last week, in his address to Congress, that he wouldn't sign any health care reform bill that added "one dime to the deficit, now or in the future."
That pledge could get him in trouble as the Senate Finance Committee considers asking the Congressional Budget Office to change the way it calculates an impact on the deficit.
Instead of measuring the impact of health care reform over ten years, the CBO will use a 20-year window, Sen. Kent Conrad (D-N.D.) told reporters Tuesday. "You have to do that if you're going to know whether you're bending the cost curve," he said.
He wants the timeline to apply to the Senate Health Committee and the House bills, as well. "Everything needs to be scored in a similar way," he said.
He added, significantly, that the bill would not need to be paid for with spending cuts and revenue increases over the 20-year period. Rather, Conrad stressed that ir would merely need to show that it was reducing the rate of the increase iin health care costs and it would only need to be paid for over the first decade to meet his criteria.
The CBO has been largely dismissive of reforms that Democrats insist will lead to cost savings, such as prevention efforts or the establishment of an independent commission to set Medicare reimbursement rates. At the same time, the White House has taken drug-price negotiations and other cost-saving efforts off the table in deals with industry groups.
The upshot: CBO is likely to estimate that the second decade of the reform bill's life will add to the deficit, giving fuel to critics who say it is too expensive. It would also force backers of the bill to trim subsidies, increase revenue somehow, or break Obama's pledge.
In a statement to the Huffington Post, Conrad mentioned Obama's promise in the first sentence:
"The President has told the Congress he will not sign a health care reform bill that adds one dime to the deficit, either now or in the future. That is the right thing to do. Not only must we not add to the deficit, but we must ensure that health care reform bends the cost curve over the long run. I - and a number of my colleagues - welcome the Congressional Budget Office's review so that Congress and the Administration can be sure that our bill is fiscally responsible, now and over time. We simply must pay for reform and bend the long-term cost curve in the right way on health care," he said.
The CBO decision to extend its analysis out to 20 years reopens a fight with the White House Office of Management and Budget. OMB chief Peter Orszag has pointed out in the past that CBO head Doug Elmendorf promised not to do qualitative research but rather to stick to quantitative analysis.
The 20-year look at the effect of health care reform is a decidedly subjective and qualitative analysis. Indeed, the congressionally-chartered Institute of Medicine differs with the CBO and says that it is being "stingy" in its estimate of cost savings. A forthcoming IOM report intends to rebut the CBO's analysis. House Speaker Nancy Pelosi (D-Calif.) has also spoken out against the CBO's refusal to score certain provisions as cost-saving.
Conrad said that he agrees with the IOM judgment. "I think that's true. I really do," he said of their "stingy" descriptor. "I think the cost savings in this package, especially the payment reforms, the delivery system reforms, the savings will be greater than CBO is showing."
"But, you know, they are the scorekeeper and we've got to have somebody that we give this responsibility to and that we follow," he said.
HuffPost asked Conrad if he was worried the longer-term projection would tank the reform effort.
"No, but it makes it more challenging," he said.
Conrad is a member of the Finance Committee's Gang of Six and has opposed pursuing health care reform in 2009 because of concerns over the budget deficit.
He fought earlier attempts to tabulate the cost of the bill at five years, insisting instead on ten. And in the spring he battled Democratic leadership's efforts to include reconciliation language in the budget. He lost that fight but managed to write the language narrowly enough to make using the process - which allows Democrats to pass reform legislation with a simple majority because it prevents a filibuster - more difficult than it otherwise would have been.
Democratic aides were alarmed Tuesday to learn of the CBO's plans, which were first reported by CQ. One Senate Finance Committee aide, however, said that the 20-year estimate would not be an official "score" but rather a broad estimate.
Other longtime aides noted that any estimate after five years is just a guess because of the variables at work and they were hard-pressed to think of any prior occasion in which a 20-year window of time had been used. Monkeying around with the window, however, is one of the older tricks in the budgetary bag.
Some aides speculated that Conrad wouldn't want to do anything to harm the finance committee bill, which he is invested in. But others noted that while it would harm that bill, it would likely be more damaging to the more generous health committee and House bills. The more parsimonious finance committee package would be relatively less impacted, elevating its stature.
The CBO didn't return a call for comment.