Free Markets, Free People

The CBO’s math and reality

The just released CBO scoring for the Senate bill and reconciliation package comes in at $940 billion over ten years.

A reminder: the benefits (i.e. spending) don’t begin until 2014. The taxation (revenue collection) begins immediately.

A true number? The CBO says the cost over the first 4 years would be $17 billion. The last 6 would equal $923 billion. So isn’t this a better representation of true cost?

$923/6*10 = $1,538 trillion or over 1.5 trillion dollars if the spending is factored evenly over the 10 years like it will be the following 10 years.

And that doesn’t include the $200 billion yearly “doc fix” which was deliberately taken out of the bill to make it seem like less spending.  Add that to their claimed “net” and see what it gets you.  It’s certainly not $794 over 10 years or any deficit reduction.

Note also the chart in the CBO report how the “net cost” is accomplished:

Taxes and penalties. Penalties on individuals and employers. Taxes on “Cadillac” plans. Question – what happens when those all dry up as revenue streams?  The scoring assumes a constant stream.  I think we all know better than that.  Of course the answer is they must find new revenue streams, i.e. new taxes (or “penalties” as they’re sure to deem them).  Additionally full into the spending curve of the plan, we’re looking at around 200 billion a year.  Over 10 years that 2 trillion dollars.

Again, remember – the CBO’s scoring assumes absolutely no changes in the bill, revenue streams or projected spending over those 10 years.  That’s absolute nonsense on a saltine cracker and we all know that.  There is no way those revenue streams remain constant, there’s no way the spending on health care – if this is enacted – won’t be increased as the bill is built upon and despite the CBO’s guess for the following 10 years in which it says it will continue to “save” money, there’s very little to support that premise.  In fact, the most telling line in the whole CBO report is this one:

Our analysis indicates that H.R. 3590, as passed by the Senate, would reduce federal budget deficits over the ensuing decade relative to those projected under current law—with a total effect during that decade that is in a broad range between one-quarter percent and one-half percent of gross domestic product (GDP).3 The imprecision of that calculation reflects the even greater degree of uncertainty that attends to it, compared with CBO’s 10-year budget estimates.

You can believe all this nonsense if you wish, but even the CBO isn’t real keen on its own calculations.  And by the way, this post isn’t a swipe at the CBO – they score what they get and do it according to the statute under which they operate.  But that doesn’t render the GIGO rule invalid.

In the meantime, the House has just passed the “Slaughter Resolution” which would allow it to “deem and pass” this monstrosity.  All 222 who voted yes were Democrats.  That means Democrats badly want cover on this thing and if they can get it, they’ll let it pass.  The House is scheduled to meet at 1pm on Sunday to do so.

If they pass it through “deem and pass”, we’ll essentially have become a Banana Republic.



57 Responses to The CBO’s math and reality

  • Am I reading that incorrectly, or does a large portion of the cost reduction rely on people and companies paying penalties for either not buying insurance or having ‘cadillac plans’?  What is the effect on the budget if more people and companies buy in, and groups drop cadillac plans for lesser insurance coverage?  Does that push the costs down, or up?

    • Up. That’s my point. That means, as I said in the post, that as those revenue streams dry up (and they will), new ones will have to be found. To keep costs “down” (and trust me, without the “doc fix” numbers included, that’s a misleading term) they’ll have to match that income as it dries up.

      • OK, that’s what I suspected.  So this is another of those “dynamic vs static” analysis situations, that actually depends on people not following the rules.  Sadly, that part pales in comparison to the other chicanery, not just the hidden costs involved with the lies about the doc fix, but also the way they hide a significant portion of the costs by leaving those costs up to the individual states to pick up.  I’m not curious to see how NY or CA deal with the added local costs of Obamacare if it passes…

    • “Does that push the costs down, or up?”
      Cost to who?  If a significant number of companies drop the cadillac plans they reduce the expected revenue stream to the government….but it’s actually private insurance companies who are covering the medical costs incurred by people using the cadillac plans….the government revenue stream can hardly improve by suddenly losing what is effectively a punitive form of income for which they technically experience no additional cost….

  • Hope and Change = Deem and Pass.
    Transparent.  Ethical.  Amazing.

  • Banana Republic (eyes rolling).   The so called “deem and pass” is very common, and has been used OFTEN by both parties.   The reason they want it is not to avoid voting on health care reform, but to make sure that the rules require the Senate to fix it’s version in the way the House wants before it becomes law.
    You are getting really over the top on your virulent rhetoric, so are many on the right.   Yet over at “Politics done right” there’s a poll showing almost all liberals and I believe a majority of independents support the bill.  Only 9% of conservatives do.   The opposition is hardly broad based.   You also realize Pelosi will be deemed one of the most successful House leaders in recent history if she pulls this off, and it could be the start of a rejuvenated Obama Presidency.  Perhaps that’s why you’re letting your emotion show.   Oh well, either way it goes, it’s interesting.

    • “used very often by both parties” – and lighting a candle for light in your house is EXACTLY the same as pouring gasoline all over your kitchen, lighting it up, and using the subsequent light to find your car keys, huh sparky.
      “support the bill”  – how can any reasonable adult support it, they don’t even know what’s IN it.
      Pelosi will be something if she pulls this off all right, but I don’t think in the end it will be something we envy.

    • You really are a fool, Scotty.  Not worth responding to you other than that.

    • It’s all good Scott.

      Just remember this when the next GOP congress just deems whatever they want to have been passed.

    • Why, you’re almost weightless, Scott, you’re so light in those loafers.

    • Scott, Yeah, Banana Republic. Like Obama’s buddy, Hugo Chavez. Same tune.

    • Erb, here is what the polling looks like outside the echo chamber.

    • “Oh well, either way it goes, it’s interesting.”

      And as a child you probably said that while pulling the wings off flies.

  • So let’s review…$138B in deficit reduction over the next ten YEARS.
    February 2010 deficit – $250~ Billion.
    So basically we get about 2 1/2 weeks worth of deficit reduction over 10 years, assuming the CBO fiction, and Dems are celebrating this????
    God, these guys are idiots.  Only the 9/11 terrorists had more motivation to self-immolate than the Democrats right now. It used to be they’d lose 40 seats.  Then 80.  After Slaughter? 120 minimum is my prediction.  With some indictments to follow.
    All for 2 weeks on the deficit.  And a big IOU to the Chinese.

    • 120 minimum is my prediction.

      <GRIN> Can you imagine the media crapping themselves when the new House is 315-120? And a 62-38 Senate? The R’s will merely deem ObamaCare rescinded.
      And hopefully a slew of other garbage.
      I’m hoping they’ll MANDATE firearms ownership! 🙂

  • McQ If they pass it through “deem and pass”, we’ll essentially have become a Banana Republic.

    Sadly, I agree.  The only thing stopping the government – under ANY party – from doing whatever it pleases, no matter how totalitarian, is the collective conscience of its members. 

    God help us.

    • Certain members will never get a conscience unless it’s forcibly beaten into them. Maybe the GOP can “deem and pass” censure of Pelosi? Maybe they can “deem and pass” a repeal, tax cuts, evisceration of unions etc. and all sorts of great things once they retake power.

      Maybe we can have them deem and pass an Obama impeachment and conviction.

      Possibilities are endless.

      • Why thank you Shark!
        I’m feeling better about Deem and Pass all of a sudden.  Here I was worrying about silly things like following the Constitution and preservation of a semblance of our Constitutional Republic so that it doesn’t become the Republic of Parador.  I had no appreciation for the future opportunities for ‘my’ side to get all the pie it wants when they regain control in November 2010.  I’m such a shortsighted fool.

        • Looker, I don’t like it any more than you do, but while you worry about the Constitution, it’s thislcose to being gutted regardless.

          And what I post is not about my side “getting their pie” It’s about teaching a lesson – this stuff works both ways.  They don’t understand that.  It will either teach them to never do this again, and if it doesn’t, then it screws them good and hard for a long time.  How else do you propose to stop the Dems from EVER doing this again? Electoral losses? They just showed you they really don’t care.

          Once they pass this, you and me and all of us live in Parador.  It only takes 1 side to gut the constitution. 

          • No dude, sorry if the sarcasm intended for the leftish class washed over onto you.  I knew exactly what you meant and wasn’t digging at you on this one.

  • Here’s the fun thing about Banana Republic- the peons very often express their opinions in very uncertain terms……with gunplay.

  • Become a Banana Republic?   

    Where were you from 2000 to 2008?

    • Same place you were – one difference – I was sane and have remained so.

    • What’s up Retief? You didn’t like your 2006-2008 legislature?  What was wrong with it?

    • We were not a Banna Republic, but we came close in 2000 when we were looking at the possibility of President Gore.

      Can you image if Mr. Fake Science won?

  • The detachment from reality involved in this suggests that the Democrats who vote for it are laying the groundwork for an insanity defense.

    A “Yes” vote shall be deemed an admission of guilt, however.

    And it’s a hanging offense, of course.

  • For your consideration:

    Where do we go from here?  Is this just another year in America?  Is it 1775?  1786?  1894?  1964?

  • Well, now that the standard has been established, I’m sure that Erb won’t have any problem when the new Republican majority comes in in 2011 and uses “deem and pass” to rescind Obamacare.  This is probably a good thing in the big picture because people like Erb are showing how dishonest they really are.  The problem isn’t just with idiots like Pelosi and Reid and Obama, it is with the Democrat electorate.  They are truly dishonest people.  

    I am afraid that this monster will never be repealed via normal processes because Obama would veto any such legislation for the next several years and liberals in the Senate will filibuster any repeal if we get a Republican president on 2013.  Our only hope is that it is declared unconsitutional because of the way it was passed and/or things like the individual mandate are found invalid.

    • jt007The problem isn’t just with idiots like Pelosi and Reid and Obama, it is with the Democrat electorate.  They are truly dishonest people.  

      Add in “stupid”, “clueless”, “self-rightous”, “credulous” and “selfish” and you’ve got a pretty good description of the average democrat.

      I used to think that they were like normal people, only misguided.  No more.  It’s clear to me that at the very least they are willing pawns to the gangsters who lead their party, a flock of especially stupid sheep who will gladly obey the orders of their masters and rationalize any decision that the party oligarchy cares to make (and “Republicans do it, too!” is more than enough to rationalize anything).  At worst, they are a pack of thieves who find it not only acceptable to steal from others but outright virtuous and commendable so long as they are told that “it’s for the poor” or in the interests of “social justice”.

      • I don’t know, you guys with silly name calling and demonizing all who disagree with your perspective are acting more like the epithets you hurl at Democrats fit you.   Everyone who thinks differently than the right wing is stupid, clueless, dishonest…there is ONE way to think in your world, and whose who do not follow that party line are stupid sheep, pawns, etc.   Gee, that’s only a step away from declaring those who do not think properly to be mentally imbalanced and thus needing to go to psychiatric hospitals.   Hmmmm, where has that happened?   Oh yeah, Stalin!   Actually, I know it’s just emotion getting the better of you because you’re so pissed you might lose this fight.  It’s really OK, the Republic will survive just fine.  And unlike the Iraq war, this won’t lead to death and destruction while wasting massive amounts of money, but will actually save lives.

        • “but will actually save lives”

          Well, there Erb, here you are betting your life on the outcome.  I have been a company man (company as in Government – military and then support contractor) all of my working life and there is one thing outside of the military I will not do – that is rely on government when my life is at stake! 

          But the problem here is you are not only betting your life but those of your children also.  It’s not your children’s fault that their father is a tool.  So why punish them.

    • No problem, we just ‘deem and pass’ the override to the Presidential veto – since deem and pass can be done with a simple majority and doesn’t require 2/3’s .  After all we can deem the override of the veto.  As long as we’re going to f*ck the Constitution with rules like reconciliation and deem and pass, let’s just go full bore, pull out the stops.
      In a way I’m glad I’m here to see it so I can participate in fixing it in some way shape size and form.

    • You obviously don’t understand how the House Rules Committee works.    Both parties have used this if they want to make sure that certain things happen before a law comes into play.  This isn’t anything new — but the right wing propaganda machine is pretending like it is.   I don’t know if you’re just playing along with that machine, or if you really believe what you’re writing.   Also, I think you may be really surprised by the election results in 2010 and 2012.

      • First, there is a difference and it is disengenuous of you to portray it otherwise.  In every other instance where “deem & pass” has been employed, the exact wording of the bill had not changed from that previously voted on.  Only the amendments were addressed by the overriding vote and the previously passed bill was D&P’d.

        This Health Care bill has never been voted on by the house.  Never!  And to suggest otherwise is to be either stupid or a Liar.  This may put me out on a limb but I feel confident that you are at least a:


        Second:  The only thing that will surprise me about the November mid-terms is if the Republicans do not take at least 50 seats away from the Dems in the House and 8 seats in the Senate.  I would ask you if you would care to make a wager but knowing your track record in the past I wouldn’t trust you to ever even accept the fact that you had lost.

      • House Rules – here’s a rule
        “Each House shall keep a journal of its proceedings, and from time to time publish the same, excepting such parts as may in their judgment require secrecy; and the yeas and nays of the members of either House on any question shall, at the desire of one fifth of those present, be entered on the journal.”
        And how will the yeas and neas appear after Deem and Pass on the health care Bill professor?
        You aren’t worthy of citizenzhip.

  • I’ve also seen some people hanging their hats on the hope that Obamacare will become unpopular when waiting times increase and costs go up.  Unfortunately, that is a pipe dream as well.  The government will lie about all of that.  Just wait, we’ll start seeing shitty service in about 8-10 years and just like the pigs in Animal Farm the government will tell us how wonderful the system is operating and how our health care is better than ever.  They wll tell us not to believe our lying eyes.  The government will also lie about the true costs.  Did anyone see the CATO Institute’s recent study about how public school systems across the country are lying about how much they spend per capita?  The media will never report their dishonsety and we will be even farther down the rabbit hole.

    • I suspect we will see shity service in about 4 years, when benifits cut in. In the past such programs benifitted from a more robust economy, and they pump money into it in the beginning. There is no money to pump now, let alone in 4 years.

    • Oh, it’s not just the government that will lie.  MiniTru will make heroic efforts to convince us that the chocolate ration has been increased.  I recall back in ’92 when hardly a day went by without a heartbreaking story about the homeless.  Oh, it was terrible… AND ALL GEORGE H. BUSH’S FAULT.  The day after Slick Willie was elected… Homeless?  What’s that?  More recently, we’ve seen the two-sided coverage of the Iraq war.  Bush is in office: daily body counts and a running tally of dead Americans.  Imeme is in office: Iraq?  Iraq?  Oh, that place…

      Anyway, people seem to adjust pretty quickly to new realities.  Americans of a generation or two ago would have been flabbergasted and outraged at the taxes we pay and the regulations imposed upon us.  But most Americans today hardly even grumble.  The frog is being boiled slowly and so he doesn’t even realize it.

      • Don’t forget how,  under Bush, ONLY 200,000 new, net, jobs was a disaster; now ONLY 400,000 jobs LOST is a recovering economy.

  • So, does the revenue go into a “trust fund” until 2014?
    /sarc off

  • Being a federal employee for the last 18 years, I’ve learned that the govt cant run ANYTHING efficiently and can’t estimate its way out of a paper bag. ANYONE who says they believe these numbers is either a LIAR or a FOOL.  If you want to see what the future holds after we implode under our debt, watch Greek TV…..

  • OK, say the GOP sweeps in 2010…if they try to rescind, then Obama vetos.
    You think that will make people happy to see him veto the Congress on the main issue they were elected to handle? Methinks that means Obama goes in 2012. (Barring the usual GOP stupidity.)

    • Just deem his veto to be overridden.

      Then deem him to be impeached.

      I tell you, the possibilities are endless.

    • Harun, you really don’t understand American politics.   The anger you see on health care is really only within a small sub group.   Most who may tell pollsters they oppose it aren’t certain, and with the right sales and imaging, will come around to thinking it’s OK.   Most people in the fall, and especially 2012 will be thinking of other issues.  Moreover, when this passes, the media show about the “Historic victory” for Obama and Pelosi will probably boost Obama’s approval, and rejuvenate the Democratic base.  The base wins off year elections, Obama needs them pumped.   Moreover, the idea that the Republicans could sweep both Houses just isn’t feasible.  And if they did, could they overcome a Senate filibuster and actually force Obama to veto?
      No, if Obama wins this (and I think he will), he’ll be in office until 2016, and health care will be a permanent part of the US future — with tweaks and reforms.    The GOP will be driven by a false belief that the rage the base feels is more widespread, and that will create an opening for the Democrats to actually maintain their majority probably at least through 2016.   Then the Republicans will have to move away from extremism and embrace a more pragmatic middle ground to have a chance to turn it around.   Obama will do for the left what  Reagan did for the right — slightly shift the center a bit more in his direction.
      Keep this post.   Save it.   Throw it in my face if I’m wrong.   I won’t even refer back to it if I’m right, because we’ll both know.

      • “I won’t even refer back to it if I’m right, because we’ll both know.”

        If your actions in the the past is any indication, you will deny you ever made the statement.  Even after it is recalled, reprinted and thrown in your face.

  • The so-called “health care reform” bill is going to pass and I’ll have to dodge bullets in Juarez to get a filling or pair of glasses. Eventually, I’ll have to buy salt, sugar and lard on the black market. For now, though, I’m content to read Obamanesque pontifications from McQ.

  • Just a friendly reminder that Candidate Obama opposed mandated health insurance and challenged Clinton specifically about the taxes and penalties that were “hidden” in her plans–ones that he opposed!
    Can this bill get repealed under a GOP congress? Just wondering.

  • Repealing is easy.  Did you know welfare reform was repealed in last year’s stimulus bill?  All you have to do is pass new laws that are different from the old laws and, to the extent they conflict, the new law takes precedence.  You don’t need to repeal the whole package.  Just a few new laws here and there to negate the worst aspects of the old laws and pretty soon, you’ve got a whole new set of laws without ever having had a “Repeal Act of 2011” or anything of the sort.  You can even stick it in the fine print of a new law on a completely different subject (see welfare reform repeal, above).  Of course, you need a president to sign it, so 2013 looks like a likely year for new health care reform laws.

    • Why bother to pass new laws?  Just “deem” them passed.

      And as far as getting Imeme to sign… Members of Congress have already admitted that they don’t read the bills they vote on, so it’s not a stretch to believe that Imeme will bother to leaf through a 3000 page omnibus spending bill while washing down his wagyu and arugula salad with a bottle (or two) of Dom Perignon.  Just set things up so that he thinks whatever he signs will be “historic”, make sure lots of cameras are there, and he’d sign his own death warrant.

  • just curios how will the part time employee loophole be affected by this bill companies routinely keep employees under 40 hours to prevent them from having to provide insurance so what now???

  • Professor Erb:  “The so called “deem and pass” is very common, and has been used OFTEN by both parties.   The reason they want it is not to avoid voting on health care reform, but to make sure that the rules require the Senate to fix it’s version in the way the House wants before it becomes law…[To Ssheill:}  You obviously don’t understand how the House Rules Committee works. [You are stupid and I am smart.  Also, I know something that you don’t.]   Both parties have used this if they want to make sure that certain things happen before a law comes into play.  This isn’t anything new…” [My emphasis]
    SSheill:  “First, there is a difference and it is disengenuous of you to portray it otherwise.  In every other instance where “deem & pass” has been employed, the exact wording of the bill had not changed from that previously voted on.”  [My emphasis]   “Only the amendments were addressed by the overriding vote and the previously passed bill was D&P’d.
    This Health Care bill has never been voted on by the house.  Never!  And to suggest otherwise is to be either stupid or a Liar.  This may put me out on a limb but I feel confident that you are at least a:
    So, the gauntlet is down.  Not only has Ssheill challenged the revealed wisdom of the putative guru, he has labeled it an obvious (or unforgivably negligent) lie.  Now, me, I go for the negligent.  Progressives like Professor Erb are famous for their disregard for the truth, often substituting their conjecture when it supports their position rather than looking up the correct information.  Exchanging this (dis)information is how they build up their (errant) narratives.  SSheill then gives the correct information.
    The rules on this point are clear:  When called out as a liar, one must:  1) respond with proof that their point is correct and include a rebuttal of the information supplied against it.  2) admit that they have honestly or stupidly, erred.
    Eluding the accusation is an admission that one has, indeed, lied and that one does not give a damn and will continue to lie at will.
    Professor Erb:  “I don’t know, you guys with silly name calling…”