Obama budget director fires back at CBO

White House budget director Peter Orszag on Saturday criticized the agency he used to work for after the Congressional Budget Office issued a cost estimate that has halted momentum for an independent Medicare panel that the Obama administration favors.

In a blog posting on the White House Office of Management and Budget's website, Orszag suggests he is puzzled by the methodology CBO used to estimate cost savings from a proposed Independent Medicare Advisory Council.

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Orszag, a former CBO director, wrote, "I can attest that CBO is sometimes accused of bias toward exaggerating costs and underestimating savings. Unfortunately, parts of today's analysis from CBO could feed that perception."

He faulted CBO for "somehow" concluding that the proposed Medicare panel could save tens of billions of dollars per year after 2019 "without specifying precisely how the various modifications would work." He later stated that "CBO seems to have overstepped" by relying on quantitative analysis of long-term effects from legislative proposals instead of qualitative analysis.

Orszag's blog posting criticizing CBO links to a posting on CBO Director Douglas Elmendorf's blog that discusses CBO's reliance on qualitative analysis.

Under budget rules, legislative savings after 2019 are not counted by Congress because it operates on a 10-year window.

Regardless, Orszag -- seeking to keeping the commission idea alive -- said CBO's proposed savings of $2 billion over 10 years is a positive development.

Others are unlikely to share Orszag's view.

Democrats, including Ways and Means Committee Chairman Charles Rangel (D-N.Y.) and Ways and Means health subcommittee chairman Pete Stark (D-Calif.), do not support allowing a panel outside of the legislative branch to cede its power to set and/or adjust Medicare reimbursement rates.

Republicans have also been critical of the idea, which has been touted by President Obama, Sen. Jay Rockefeller (D-W.Va.), Orszag and White House Chief of Staff Rahm Emanuel.