CBO: Health Care Legislation Increases the Deficit

The House Democrats’ health care legislation will increase the budget deficit by $89 billion over the next 10 years, and would continue increasing thereafter, according to figures released today by the Congressional Budget Office [CBO] – a finding that directly contradicts the Democrats’ claims of deficit reduction. CBO’s analysis counts all Federal health costs – including a Medicare payment increase to physicians known as the “doc fix” – which House Democrats removed from their health care bill (H.R. 3962) to bring it up as a separate measure, H.R. 3961.

“[E]nacting both H.R. 3961 and H.R. 3962 would add $89 billion to budget deficits over the 2010-2019 period,” CBO wrote. The budget office also said “federal budget deficits during the decade following the 10-year budget window would increase relative to those projected under current law.” Salient points of the analysis, requested by the Ranking Republican of the House Budget Committee http://www.cbo.gov/doc.cfm?index=10732 :

  • Congress has typically increased Medicare payments to physicians from their scheduled rates, but has offset the cost in the past. This Medicare physicians’ payment bill increases spending and deficits by $210 billion over 10 years. It also increases seniors’ Medicare Part B premiums by $49 billion.
  • CBO also estimates the cost of a rule as adopted this year by the Department of Health and Human Services that removed physician-administered drugs from the physician reimbursement formula. This administrative action adds $78 billion of additional Medicare spending – which would drive total physician increases to $288 billion.
  • The administration has insisted on a deficit-neutral health care bill by CBO numbers:
    • “[W]hat we are saying is that health care reform must be deficit neutral using CBO-scored, hard, scoreable offsets, over 10 years and in the 10th year.” – Peter R. Orszag, Director of the Office of Management and Budget, at House Budget Committee hearing on statutory pay-as-you-go legislation, 25 June 2009.
    • “I will not sign a plan that adds one dime to our deficits – either now or in the future.” – President Obama, address to a Joint Session of Congress concerning health care legislation, 9 September 2009.
  • The press has noted the House Democrats’ sleight-of-hand, including:

Read the full report here.