Elmendorf says effects of health care likely to change from initial estimates

Overall budgetary effects of the new comprehensive health care law reflect the middle of possible outcomes but are largely uncertain and will probably differ from current estimates, CBO Director Doug Elmendorf wrote Monday on his blog. 

Elmendorf addressed questions raised about that the Congressional Budget Office "misestimated" the effect of changes to the budget by the new health care law. CBO has estimated that the law will reduce federal deficits by $143 billion between 2010-2019 and will increase outlays by $411 billion and revenue by $525 billion over the next 10 years. That number excludes the education provisions that are expected to reduce outlays by $19 billion during the same period. 

"Our estimates reflect the middle of the distribution of possible outcomes based on our careful analysis and professional judgment, drawing upon relevant research by other experts," he said today on his blog. "Nevertheless, estimates of the effects of comprehensive reforms are clearly very uncertain, and the actual outcomes will surely differ from our estimates in one direction or another."

Elmendorf also addressed questions about the effects on discretionary spending, explaining that the CBO estimates don't misrepresent or hide certain effects of the law. Instead he explained the estimates provided focus on direct spending and revenues because those figures are relevant for pay-as-you-go rules and they will go into effect without further legislative action. CBO has said the law will lead to increases in discretionary spending that aren't included in the current estimates. 

Although CBO doesn't make policy judgments or recommendations, Elmendorf noted that he has "frequently noted the long-run unsustainability of the nation's current budgetary polices and indicated that using savings in existing programs to finance new programs would necessitate even stronger policy actions in other areas."