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.