Blue Dog Democrats seek answers on healthcare reform bill cost savings

Centrist House Democrats are questioning the cost savings and deficit assumptions that Speaker Nancy Pelosi touted in introducing a healthcare bill designed specifically to win their support.

The four leaders of the fiscally conservative Blue Dog Coalition have drafted a letter to Congressional Budget Office (CBO) Director Douglas Elmendorf – which the Blue Dogs plan to send Thursday night. In the letter, they ask for additional calculations and explanations about whether the $1.055 billion House bill would reduce federal spending on healthcare and would reduce the deficit, as Pelosi has promised.

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This comes after Pelosi (D-Calif.) kept a more liberal version of a government-run health insurance option out of the bill, a necessary move to secure votes from some Blue Dogs.

Pelosi and Democratic leaders on Thursday morning said the bill would cost $894 billion over 10 years and, as Pelosi said repeatedly, would not add “one dime” to the federal deficit. That number got Democrats below the $900 billion threshold laid down by President Barack Obama, but the CBO pegged the legislation’s full cost at $1.055 trillion in a report issued Thursday afternoon after calculating more than just the bill’s health insurance “coverage” costs.

"The president said $900 billion. That's what we have," said Energy and Commerce Chairman Henry Waxman (D-Calif.), after acknowledging that $894 was a "coverage" number.

"That's a problem,” Blue Dog Co-Chairman Rep. Baron Hill (D-Ind.) said. “That means it’s over a trillion.”

Pelosi's office also said the bill would cut the deficit by $30 billion, but the CBO score suggested the House plan could reduce the federal deficit more – by $104 billion across the next 10 years. In the 10 years after that, the plan would "probably" create "slight reductions" in the deficit, the report said, but noted that such an estimate is "subject to substantial uncertainty."

But Blue Dogs aren’t taking either Pelosi or CBO at their word.
In the letter, signed by the four leaders of the 52-member Blue Dog Coalition, the group told Elmendorf they would “appreciate clarification on factors contributing to your projection that deficits may decrease over the second ten years.”

“To what degree of certainty, can you determine that this legislation will not increase the deficit in the second ten years?” read the letter.

The Blue Dogs are also questioning the assumptions that the House bill would reduce federal spending on healthcare over the long term -- what’s generally referred to as “bending the cost curve” downward -- and have asked CBO to calculate how policy changes could further “bend the curve.”

“Your [report] leaves unclear,” they wrote Elmendorf, “whether the Affordable Health Care for America Act takes the steps necessary to effectively ‘bend the cost curve.’”

“Would this legislation reduce the long-term rate of growth in federal health spending?,” the letter reads. “What policy changes, if any, to this legislation could reduce the rate of growth in federal health spending?”

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What’s more – and what may cause the biggest headache for Pelosi – is that the Blue Dog leaders said their ability to support the House bill is contingent upon CBO’s timely response, and possibly on what that response says.

“In order to make an informed decision about the legislation, we believe it is necessary to have a full and clear description of its long-term budgetary effects as CBO can provide,” they wrote.

Blue Dogs in July were able to force into the Energy and Commerce healthcare draft bill a public option with negotiated rates, and their continued insistence led to the inclusion of that version of the public option in the final bill introduced Thursday.

How this renewed stand over costs affects the final vote tally remains to be seen, but Democratic aides were hopeful that, at the very least, it would not affect their preferred timeline of having the bill voted on before Veteran’s Day.

“Lowering health care costs over the long-term is very important to these Members,” a leadership aide said. “They simply want clarification of CBO’s analysis.”