American Elephants


How Much Will It Cost? Way More Than They Expect! by The Elephant's Child
July 29, 2009, 5:04 pm
Filed under: Capitalism, Economy, Health Care | Tags: , , ,

President Obama is trying to find someone to blame if his party is unable to pass a health-care reform bill before August 1.  His target is the Congressional Budget Office and director Douglas Elmendorf.  Remember that the office is intended to be completely non-partisan, and oriented towards giving congress good and responsible estimates of what a bill will cost.

The administration was so upset over the estimate that the CBO produced over the health-care bill that they summoned Elmendorf to the White House, a very improper step.  The CBO is expected to be free of interference from the administration and from congress.

Peter Orszag, President Obama’s Budget Director, was previously Director of the CBO.  He should know what the rules are.

Stephen Spruiell notes at National Review:

Last weekend’s outburst from Obama’s budget director, Peter Orszag, was the equivalent of a player upending the chess board and calling his opponent a cheater.

The irony is that, just a few months ago,  Orszag was on the other side of the board.  Before Obama appointed him to run the Office of Management and Budget, Orszag was in charge of the CBO.  And just before he left the legislative for the executive branch, he took measures to make sure the CBO would be well equipped to play its role in the health-care debate, expanding the number of health-care economists on staff and ordering a new computer capable of modeling the effects of complicated legislation.

In a Saturday post on his White House blog, Orszag implied that the CBO’s latest analysis was guilty of “exaggerating costs and underestimating savings,” and he said that the agency had “overstepped its bounds.”

The Washington Times chimed in last week to point out that the CBO had vastly underestimated the number of small businesses and the number of people from that source who would switch to the government plan.  They said:

CBO — incredibly — assumes that only 3 million people will switch from employer-provided coverage to government insurance.  But the Lewin Group, a health care policy research and management consulting firm, estimates that 119 million Americans will switch from their current private insurance to government insurance.  If these figures are accurate, the program’s cost could easily be $4.5 trillion over 10 years, not the $1.04 trillion CBO is claiming. That new financial burden would be a disaster for the deficit.

The House bill, however contains: (Pg. 50, Section 152) Health Care will be provided to ALL non U.S. citizens, illegal or otherwise.  I wonder if the CBO is including in its estimates the entire non-citizen population? Intelligent guesstimates suggest around 1.3 million illegal immigrants. I don’t know if the CBO  includes adding them the the health insurance rolls.

Government bills or policies that come in costing less than estimated are as rare as an occasion when Obama did not blame the Republicans.  This is his mess, and at some point he will have to own up to misleading the public.


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