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July 25, 2009

CBO Uncowed By Obama Meeting; Slams ObamaCare Again, Reporting That Supposed Cost-Saving Provisions Would Save Almost No Money At All

Not really all that surprising, given that the Democrats' plan is not to save money at all, but rather to simply obscure the facts with a confusing mechanism by which they can merely claim it will save money. They're relying upon the machinery of this being so obscure and convoluted that no one can say with any certainty what the hell the effect on cost will be, thus permitting them to make any claims they wish.

You know when some huckster is offering vague, odd, and impenetrable contract provisions to you? Yeah. Those hard-to-decipher provisions are not intended to benefit you.

But the CBO is not fooled.

CBO deals new blow to health plan

For the second time this month, congressional budget analysts have dealt a blow to the Democrat's health reform efforts, this time by saying a plan touted by the White House as crucial to paying for the bill would actually save almost no money over 10 years.

A key House chairman and moderate House Democrats on Tuesday agreed to a White House-backed proposal that would give an outside panel the power to make cuts to government-financed health care programs. White House budget director Peter Orszag declared the plan "probably the most important piece that can be added" to the House's health care reform legislation.

But on Saturday, the Congressional Budget Office said the proposal to give an independent panel the power to keep Medicare spending in check would only save about $2 billion over 10 years- a drop in the bucket compared to the bill's $1 trillion price tag.

"In CBO's judgment, the probability is high that no savings would be realized ... but there is also a chance that substantial savings might be realized. Looking beyond the 10-year budget window, CBO expects that this proposal would generate larger but still modest savings on the same probabilistic basis," CBO Director Douglas Elmendorf wrote in a letter to House Majority Leader Steny Hoyer on Saturday.

The proposal's meager savings are a blow to Democrats working furiously to bring down costs in order to win support from their party's fiscally conservative Blue Dogs, who have threatened to vote against the bill without significant changes.

Seems to be Obama's and the Democrats' SOP: Pass a trillion dollar bill and then offer up $100 million in trivial "cuts" which, incidentally, also never happen.

This whole thing is a scam. The basic problem is that there is no political will to cut federal spending on health care -- seniors would flip out. Such cuts are a political impossibility.

So the Congress proposes handing off cuts to an independent body. But the body is not in fact independent; it's an executive creature, and of course then bendable to the executive's will, and also presumably reports to Congress, and is therefore bendable to congressional will as well.

So the basic problem -- Cuts are needed to sell this abortion as "deficit neutral," yet we don't have the will to make the cuts ourselves -- remains. It's not as if a creature of the executive and legislative branches is going to exhibit much more political courage than the branches it reports to. Further, even if it did make a cut, Congress would immediately pass legislation to undo the cuts.

The CBO recognizes this as the nonsense it is, and rightly projects that the entity will in fact save no more money than Congress acting in its own name.

If Congress is serious about cutting spending on health care, they'll have to sign the line that is dotted and enact such cuts by their own authority.

But they won't, of course. They don't have the will to do so. And for the same reasons the entity they create, ultimately subordinate to themselves, will not make any cuts either.

If they're serious about cutting costs, then they should tell the American people up-front precisely what cuts they have in mind. Informed consent of the people is the standard for republican governance, not endlessly passing the buck to supposedly "independent" bodies which do not represent the people.

But, again, they're not serious about this, so they don't do that. They're basically trying to sell Americans on a Magic Box inside which we'll find cost savings that our paid, elected representatives are unable to identify, announce, and enact themselves.

There are no Magic Boxes.

Thanks to AHFF Geoff.

Abba continues to explain it all:

Two Alternatives: This "plan" -- really an evasion -- will either go one way or the other.

First, they really could make the cuts. In which case, it's rationing imposed by an independent body over which Congress, the people's representatives, disclaims any control or influence. The machinery is thus set up so that health care can be taken away from those currently receiving it in order to be given t o those not receiving it. Seniors get their benefits chopped, so that the wealth can be spread to uninsured non-seniors.

The problem with this is unfair surprise to seniors and an end-run around the principle that if laws are passed, legislators and the president should pass them, not pass the buck to unelected, unresponsive bureaucrats.

The other possibility -- and the more likely one -- is the one I focused on above, in which no cuts are made, so no "savings" occur, so the additional expense of covering the uninsured is unmitigated by any savings elsewhere.

In which case the plan is being dishonestly sold, with its true price tag hidden from voters. A cost-saving mechanism is proposed, and the plan is sold on the promise of cost-savings materializing, but the system is set up such that no such savings ever come and the taxpayers are hit with 1) the new costs of insuring millions of uninsured 2) plus the ever-escalating and still unchecked costs of the currently insured.

Incidentally, Charles Krauthammer had a great point. Obama is claiming we need to pass his plan in order to "bend the curve" in later years and keep the system from becoming insolvent. But then he proposes to merely make his plan "deficit neutral."

Well, the problem here is obvious (but not so obvious that I noticed before Krauthammer pointed it out): To accomplish Obama's claimed goal of reducing costs, it's not merely enough that the plan be deficit neutral. It's necessary that the plan be deficit non-neutral, in the direction of lowering total effective costs, not merely keeping them at zero total effective new costs.

So Obama continues, as he has in the past, to offer a crisis as the need for immediate action, but then offering a plan that does not in fact address the very crisis which supposedly makes the plan necessary.

Oh, and, by the way, his plan won't even be close to deficit neutral, either.

So, take your pick: Either this "plan" offers hidden, unfair-surprise rationing, or it offers no savings that are any more than perfectly trivial. Either we will have surprise benefit-cuts which the public has not agreed to, or we will have surprise cost-increases which the public has not agreed to.

One or the other, and neither good.

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posted by Ace at 03:41 PM

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