Morning Bell: CBO Deals Another Crushing Blow to Obamacare

Conn Carroll / July 27, 2009

For the second time in less than two weeks, the independent and non-partisan Congressional Budget Office (CBO) has dealt a crushing blow to President Barack Obama’s health care plans. First, on July 17th, CBO director Doug Elmendorf sent a letter to House Ways and Means Chairman Charlie Rangel (D-NY), explaining that, in direct contradiction to President Obama’s promise that his health plan would not add “even one dime to our deficit over the next decade,” the House health plan would actually increase the budget deficit by $239 billion over ten years.

Reeling from this setback, the White House then put all of its cost-containing reform eggs in one basket: a massive transfer of power from Congress to the Executive branch in the form of an “Independent Medicare Advisory Council” (IMAC) that would be “the equivalent of a federal health board determining how health care was rationed for all seniors.”

But as draconian as that solution would be, the CBO again refused to toe the White House line. In a letter to Majority Leader Steny Hoyer (D-MD), Elmendorf writes:

The proposed legislation states that IMAC’s recommendations cannot generate increased Medicare expenditures, but it does not explicitly direct the council to reduce such expenditures nor does it establish any target for such reductions. … As proposed, the composition of the council could be weighted toward medical providers who might not be inclined to recommend cuts in payments to providers or significant changes to the delivery system. … In CBO’s judgment, the probability is high that no savings would be realized … CBO estimates that enacting the proposal, as drafted, would yield savings of $2 billion over the 2010–2019 period. (more…)