Dems strategize to counter CBO estimate

Following a blow from the Congressional Budget Office, Democratic leaders in Congress likely will make the case this week that the healthcare reform plan has multiple benefits and cost savings that cannot be scored by independent congressional accountants.

Democrats are going to seek to convince skeptics that the healthcare overhaul has other provisions, such as prevention and wellness measures, that will provide benefits and save money, a House leadership aide told The Hill on Sunday.

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Democrats on Sunday appeared to hold their fire against Congressional Budget Office (CBO) director Douglas Elmendorf after he issued a cost estimate on Saturday that has halted momentum for an independent Medicare panel that the Obama administration favors.

Lawmakers take in stride estimates from the CBO, which is considered an independent umpire, the aide said.

Meanwhile, White House budget director Peter Orszag on Saturday criticized the CBO and suggested he was puzzled by the methodology the CBO used to estimate cost savings from a proposed Independent Medicare Advisory Council (IMAC).

In a letter sent to Majority Leader Steny Hoyer (D-Md.), the Congressional Budget Office (CBO) concluded that the IMAC would yield savings of $2 billion between 2010 and 2019 -- with all of the savings realized between 2016 and 2019. The overall healthcare overhaul is expected to have a price tag of $1 trillion.

But the House leadership aide downplayed any possible setback dealt by the CBO estimate.

“At CBO, they are accountants, but we still have to make our case,” the leadership aide said. “They are doing their thing and we are doing ours.”

“What people seem to forget is that we are making progress [with legislation], but that the [Energy and Commerce] committee is still talking and that the legislation is not finalized,” the aide said. Lawmakers are continuing to look at “other measures to save money or to slow the rate of growth -- all of those things are under discussion,” the aide added. 

While lawmakers’ reaction to the CBO has been muted this weekend, Orszag’s reaction to Elmendorf’s estimate stands out. It has also has given Republicans more fuel in their battle against the White House’s conduct toward the CBO.

Republicans have already faulted President Obama for meeting with Elmendorf last week, claiming it was an effort to curb the independence of the CBO after Elmendorf gave a high-priced estimate to a Senate bill the White House supports.

In a blog posting on the White House Office of Management and Budget's website, Orszag faulted the 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.

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

By hitting back at Elmendorf, Orszag also spurred some intense criticism across the media sphere.

Columnist Paul Krugman said on ABC’s "This Week" that healthcare economists were surprised at Elmendorf’s assessments.

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“Most of the healthcare economists I talk to think that the MedPac reform…would actually be quite important, especially if you go into the long run. So they were really kind of surprised,” Krugman said Sunday.

“There's a kind of sense that CBO, faced with – no one can put a hard number on this -- but CBO sort of said if we can't put a hard number on it, we're going to say it's zero. And that seems to be wrong. There's every reason to think that being more careful about what Medicare is willing to pay for can save a lot of money. And this was kind of a destructive comment by Doug Elmendorf at CBO."

The liberal blog Daily Kos also took big swipes at Elmendorf on Sunday in several posts. In one diary post, Elmendorf is called a “dyed in the wool, neo-classical” economist who believes “the market should always dominate decisions.” The blog also questioned why Elmendorf was chosen as director of the CBO.

“The question becomes far more sanguine as we begin to notice that Elmendorf is almost constantly setting the economics equivalent of road side bombs along the route of the health care reform process,” a blog post said.

Democrats have been splintered on how to tackle healthcare reform. 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 or adjust Medicare reimbursement rates.