Reactions to the Congressional Budget Office Reports
By Hygeia | Wednesday, December 24th, 2008Two reports recently released by the Congressional Budget Office, Key Issues in Analyzing Major Health Insurance Proposals, and Budget Options, Volume 1: Health Care, have dominated discussions this week.
Jane Zhang of the WSJ reported:
The Congressional Budget Office analyzed 115 options to change health care, some costly and others that would save the government and consumers some money.
…
Among the findings:- If no changes occur, CBO says health care spending will rise to 25% of GDP by 2025 from 16% last year.
- If the federal government required all employers with more than 50 workers to provide insurance or pay a penalty, federal revenue would increase by $13 billion in four years and $47 billion over nine years.
- Allowing non-federal workers and companies to buy into the Federal Employees Health Benefits Program would cost the federal government about $2 billion over four years and $6.2 billion over nine years.
Ezra Klein explained the importance of these reports and the impact they could have on healthcare reform plans:
How do we decide how much a government program costs? It’s an essential question. Programs need prices, because the government has to produce a budget. But pricing legislation in advance is impossible… But you still need a number. So Washington operates amidst a tacitly agreed-upon imprecision. What the CBO says, goes. “In this town,” says Henry Aaron, a senior economics fellow at the Brookings Institution, “it’s not infrequent to hear people say it doesn’t make any difference what it really costs. It only matters what CBO says it costs.”
The books that the CBO released this week are essentially a guide to the CBO’s scoring process. They tell congressmen, in advance, how the Number will be built. The Wonk Room and The New York Times are focusing on the equations. But they’re not what’s changed. Rather, the difference is that Congress knows what they’ll be in advance. The scoring process will still be a minefield, but now legislators will have a map. There won’t be a situation analogous to 1994, when the White House was shocked by an unwelcome assumption and their legislation was mortally wounded by a staggering price point. Obama and his allies in Congress, along with Orszag’s help, will be able to build a bill able to survive the scoring process. They can, effectively, decide their own Number.




