Dems brace for CBO score

Senate Democrats are bracing for what they expect will be a huge price tag connected with revamping the nation’s healthcare system.

The soon-to-be-delivered estimate on Democratic healthcare reform proposals is expected to be so expensive that lawmakers are talking about changing the chamber’s normal accounting procedures.

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Some Democrats are arguing behind the scenes that they should not use the non-partisan Congressional Budget Office’s (CBO) cost estimate, as is custom. Instead, they would use cost estimates from the White House Office of Management and Budget (OMB).

This unusual option could give Democratic leaders hundreds of billions of additional dollars to work with as they draft their plans. But Republicans would call it an accounting gimmick and a huge spending loophole.

A few Democrats have spoken out about the possibility of using cost projections from the OMB, which is headed by Peter Orszag, a former CBO director.

Sen. Barbara Boxer (D-Calif.) has proposed that Congress could instead use  cost estimates provided by the OMB.

“We’re going to look at OMB and CBO and make our own decision as to who is right,” said Boxer.

Boxer said she would not feel obliged to abide by CBO’s work if it does not take into account savings from preventive healthcare and other reforms.

“I haven’t seen [the CBO score] but if they don’t take into account prevention, I certainly won’t. I will not follow it  — we just heard from the CEO of Safeway, who said his insurance costs went steadily down since they instigated incentives for prevention.”

“Any scoring that doesn’t understand that, is not relevant to the way we work.”

The issue is of paramount importance in the debate over healthcare reform because Democratic leaders have pledged to pay for its entire cost.

Complaints about CBO’s scoring of preventive benefits is not new. Republicans routinely blasted CBO on this issue when they controlled Congress during the Bush administration. CBO experts say they can only rely on hard data in assessing savings, not anecdotal information.

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A spokeswoman for Finance Committee Chairman Max Baucus (D-Mont.) vigorously denied that her boss is considering discarding CBO’s projections.

“It’s true that healthcare reform will save money for families, businesses and the American economy that won’t show up in federal budget scorekeeping,” said Baucus spokeswoman Erin Shields.

“But Sen. Baucus has been absolutely clear that his healthcare reform bill will be paid for and that CBO will make that determination.”

Democrats expect to receive a budget score for several healthcare proposals as soon as Monday and they are already taking shots at the CBO.

“CBO doesn’t like to calculate prevention, and that’s outrageous and ridiculous,” said Sen. Mark Begich (D-Alaska), who saw the financial benefit of preventive healthcare when he served as mayor of Anchorage.

“Prevention is an actual savings; I’ve seen it in my own city and what we did there. That’s where some of this disagreement comes in.”

He said that Democrats should push back against a CBO estimate that will show a modest level of savings.

“We have to question those,” he said.

House Speaker Nancy Pelosi (D-Calif.) reiterated that promise in a Thursday press conference.

“That is our intention, that is the work we’re doing now,” Pelosi told reporters. “It will be paid for.”

President Obama said Thursday that healthcare reform “will obviously cost a good deal of money at a time where we don’t have extra to spend. That’s why I have already promised that reform will not add to our deficit over the next 10 years.”

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But he added that even with the savings he has identified, “reform will require additional sources of revenue.”

“That’s why I’ve proposed that we scale back how much the highest-income Americans can deduct on their taxes back to the rate from the Reagan years — and use that money to help finance healthcare,” Obama said.

Democrats on Capitol Hill do not want to raise personal income taxes to pay for healthcare reform. They have instead floated the idea of changing the healthcare employer tax exclusion. Yet this idea is also controversial because it would be a significant tax increase to businesses and employees.

Healthcare industry groups have vowed to offer $2 trillion in cost reductions over 10 years to help pay for healthcare reform, but the details of those savings have not been ironed out and some are skeptical they will ever be realized.

Baucus told The Hill Thursday that he estimates that roughly 50 percent of the cost of reform would be covered by savings generated from reforms such as greater emphasis on preventive medicine, improvement of information technology and coordination of healthcare.

Those savings, however, are in the eye of the beholder. And Democrats grumble that CBO is unwilling to recognize the full value, hundreds of billions of dollars worth, of savings they say will be generated by various reforms.

One Democratic aide suggested that Baucus could find the money using CBO scoring.

“The policy options for financing healthcare reform put a significant amount of money on the table,” said the aide. “It’s not clear the support each of those options have, but there are a lot of options.”

The push within Democratic ranks to ignore CBO faces a major obstacle in Sen. Kent Conrad (D-N.D.), chairman of the Senate Budget Committee.

Conrad would have to agree to shelve the CBO cost estimate and issue his own, a seldom-used process known as directed scoring. But Conrad, a longtime stickler on budget discipline, has stated in no uncertain terms that he will not cast aside the CBO score.

“I’ve already been approached and asked on other matters to do directed scoring, which I have the power to do. I don’t do it,” Conrad said in an interview.

“If this system is going to have integrity, you’ve got to have some scorekeeper. Now look, I disagree seriously with CBO’s score on coordination of healthcare. I believe that it will save a lot of money.”

One lawmaker who said CBO should not be allowed to interfere with a once-in-a-lifetime opportunity to reform healthcare expressed hope that Conrad will change his mind. The lawmaker, who requested anonymity, suggested that Conrad could be persuaded to use a different set of projected healthcare savings if enough colleagues leaned on him.

Conrad said he has not yet been pressured to change his commitment to use CBO’s score.

In 2003, Democrats cried foul when the Bush administration estimate of the Medicare prescription drug bill emerged.

The Bush OMB score was nearly $140 billion more than the CBO’s estimate.

Walter Alarkon and Sam Youngman contributed to this article.