Democrats Manipulate CBO

April 12, 2010

It’s sobering that 58 percent of American voters support the repeal of Obamacare just three weeks after Congress passed it, and that’s probably without even realizing the extent of the tainted cost estimates from the Congressional Budget Office or the tax consequences of the bill. If accurate accounting and the actual tax consequences were to be fully publicized, this nightmare would be even less popular.

The White House would disagree, of course, but don’t be fooled. The newspaper The Hill reports that White House budget director Peter Orszag says the CBO numbers actually underestimate the savings from the bill.

Orszag cites two reasons. One is that “on major pieces of legislation,” the CBO historically has been “too conservative rather than too optimistic” in its projections. The other is that the CBO’s scoring “largely does not take into account this evolution toward paying for quality,” which, Orszag thinks, “in this decade will begin to pay off.”

Well, the first reason — that the CBO historically has been “too conservative” — says nothing about the scoring of this particular bill. We know that government estimates involving health care programs have been grossly underestimated in the past, such as the government’s cost projections in 1965 that Medicare Part A would rise to $9 billion by 1990; its actual costs were $67 billion. The government’s 1987 projections for the Medicaid special hospitals subsidy were underestimated by a staggering factor of more than 100; they projected annual costs to be $100 million, and they ended up being $11 billion by 1992. American voters instinctively understand this phenomenon. In a Wall Street Journal op-ed last month, Scott Rasmussen and Doug Schoen argued that the main reason Obama hasn’t been able to move the skeptical public toward supporting Obamacare is that “people simply don’t trust the official projections. … Eighty-one percent of voters say it’s likely the plan will end up costing more than projected.”

Orszag’s second reason appears to be that Obama’s bureaucrats will start denying payments for treatments and procedures they deem unwarranted. That is, they’ll start dictating care decisions — something they’ve vehemently denied — and they’ll ration and pay only for that which they approve. So even if there are some savings here — which is highly doubtful — they will be achieved at the cost of patient and physician choice and the quality of care.

You would think the administration wouldn’t look a gift horse in the mouth and would leave the CBO’s ultimately favorable scoring alone because further scrutiny might backfire on the White House.

Former CBO Director (2003-05) Douglas Holtz-Eakin maintained on Fox News that CBO’s scoring grossly understates Obamacare’s costs, which he quickly explained is not CBO’s fault because it has to use the information given to it by Congress.

There are glaring problems with the information Congress provided. First, said Holtz-Eakin, it omitted some inconvenient spending: “We’re going to have to spend $250 (billion) to $300 billion more on Medicare doctors over the next 10 years; they just left that out. It’s going to cost $115 billion to implement this bill; they left that out. So it underestimates the cost dramatically.”

Holtz-Eakin didn’t have time to finish expounding on his points, but he provided more detail in a March 20 New York Times op-ed (

In that piece, he noted that the $70 billion in premiums expected to be raised in the first 10 years is counted as deficit reduction, but the benefits they will have to finance are assumed not to materialize in the first 10 years, so they are not figured into the costs. It’s a complete gimmick, which others have also pointed out. Holtz-Eakin cited other gimmicks and inaccuracies, but the “most amazing bit of unrealistic accounting” is that the legislation contemplates shifting $463 billion from Medicare spending to finance insurance subsidies without any reforms to recover those losses from an “already bleeding” Medicare.

The bottom line, said Holtz-Eakin, is that Obamacare “would raise, not lower, federal deficits, by $562 billion. … And the nation would be on the hook for two more entitlement programs rapidly expanding as far as the eye can see.”

This is horrifying stuff, folks, which the public already understands in its gut. We were headed for national bankruptcy before Obamacare, but this will seal the deal, unless repealed.

In addition, Holtz-Eakin, in a paper published on his American Action Forum Web site, shows Obamacare will likely increase taxes for 25 percent of filers making less than $200,000 — and for 52 percent of all taxpayers — the impact of which will pass through to small-business owners when unemployment is already skyrocketing. How’s Obama’s “no new middle-class taxes” pledge working out for us now?

But costs and taxes aren’t even the main reasons to fear Obamacare. Try the evaporation of our personal liberties.