CBO Confirms Health Bill Neutrality and Batman to the Rescue? Waxman confirms it’s not true!

I’ve been avidly following the health care debate going on in congress and as early as Sunday the 19th I’ve been finding all sorts of stories on the internet about how the CBO has confirmed that the current Health Plan in congress is deficit neutral.

I was shocked, so I went to the CBO website to confirm their findings. All I could find was their July 17th report showing that the current bill still caused a $239 billion deficit.

The Chart of the CBO Scoring Below


If the stories about the CBO confirming deficit neutrality were true, the major news outlets were ignoring it on Monday. All the articles I found were still touting how the CBO director sunk Obama’s “we must curb the health cost curve” rhetoric. With no viable leads to solve the mystery, I chalked it up to news media misprints. After all Orszag is out there saying the bill is deficit neutral and he used to be the head of the CBO before joining team Obama.

It was Nameless Cynic, of all commenters (hat tip to Nameless), who was able to point me in the right direction. Last night Henry "the Batman" Waxman posted “CBO Scores Confirms Deficit Neutrality of Health Reform Bill” on the Committee on Energy and Commerce’s website. Not only is it neutral, Waxman is confirming that there is a $6 billion surplus. Clearly, the headline cannot be mistaken. Plus, who can dispute the accuracy of the Honorable Henry Waxman? Still I couldn’t reconcile the CBO study showing a deficit of $239 billion. Was there another scoring done that was not released? If so, how in the world could they justify being off $245 billion in less than a week? Then it all started making sense once I read the last two sentences from Congressman Waxman.

“The bill's long-term reform of Medicare's physician fee schedule to eliminate the potential 21 percent cut in fees, and put payments on a sustainable basis for the future, will cost about $245 billion. Those costs, however, are not included in the net calculations above, as they will be absorbed under the upcoming statutory "pay go" legislation that is pending in the House.”

Here is the Math in case you wondered:

$239 billion deficit from Health Bill
-$245 billion reduction in costs from magical Pay-Go bill that is “pending”
Equals $6 billion dollar surplus

So, the CBO has not created any new scoring. Waxman simply, “verbally” removed the troublesome budget deficit in the amount of $239 billion from the CBO scoring on the idea that there is some other bill that is going to fix it all. I understand that in the politics today the word trillion is thrown around as if we had trillion dollar denominations floating around in everyone’s pockets (maybe one day this is true), but $239 billion is still quite literally a very large amount of cheese to cut threw via program cuts or taxes. The $239 billion figure is almost exactly one quarter of the cost of Obama’s overall health plan. Earlier this year Obama proposed small cuts to the tune of $17 billion and congress rejected them before the ink dried on the newspapers. I wonder why they’ve decided to work the amount needed to cover the deficit into another bill and not the health bill so that the CBO could actually deem the bill deficit neutral?

To answer the question of whether the CBO has scored the health bill deficit neutral; according to Waxman the answer is No! I would like to thank Batman for coming to the rescue and ensuring that the title of his committee's post was not misleading in any shape or form (*sarcasm*).

On a side note, deficit neutrality is nice, but not the big issue here. Deficit neutrality is not what the Director of the CBO meant when he said that the health bill did not have “the sort of fundamental changes necessary to rein in the skyrocketing cost of government health programs.” Tomorrow I'm planning on posting the truth about the cost curve debate over health care reform, so please remember to stop by.
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Update #1: Democratic Rep-MO Carnahan gets laughed at for trying to repeat what Waxman has debunked.



Update #2: Looks like AP has finally caught up with me. Just remember I out scooped them by 10 hours.