Health Care: Making It All Add Up

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There’s a real chicken-and-egg conundrum going on up on Capitol Hill. Lawmakers are clamoring to see the final health care legislation. But their leaders can’t settle on a bill until they know it gets a favorable “score” from the Congressional Budget Office. But the Congressional Budget Office can’t issue its number until it has a bill. But they can’t finish the bill until they see the score. ….

In other words, there are a lot of numbers flying back and forth across the I395 freeway that separates the Capitol from the nondescript office building that houses the Congressional Budget Office. (Trivia: CBO’s offices are on a floor where J. Edgar Hoover used to store his fingerprint files.)

In today’s Washington Post, Lori Montgomery has a good explanation of why it is taking so long to get to the bottom line:

Democrats hoped to receive the Congressional Budget Office report on the legislation’s budgetary impact late Tuesday night. Because Democrats are using special budget rules, known as reconciliation, to protect the package from a Republican filibuster, the measure must reduce the deficit by at least $2 billion over the next five years and avoid increasing the deficit in any year thereafter. Under normal circumstances, that rule would require the bill simply to contain enough revenue-raising provisions to offset new spending. But, like so much else in the health-care debate, this time it is more complicated.

Instead of being measured against current law, the deficit-reduction potential of the “fixes” package will be measured against the Senate bill, which must be passed by the House before the Senate can approve the fixes. The Senate bill would trim $118 billion from the deficit over the next decade and hundreds of billions of dollars in the following 10 years. For the fixes package to comply with reconciliation rules, it must also promise significant long-term deficit reduction, aides said.

But virtually everything House Democrats want to achieve in their package costs money. For example, Obama and House leaders have promised to increase government subsidies to help lower-income people purchase insurance, to fully close the coverage gap known as the doughnut hole in the Medicare prescription drug program, and to extend to all states the deal cut with Nebraska Sen. Ben Nelson (D), under which the federal government would pay for a proposed expansion of Medicaid.

Meanwhile, House leaders want to dramatically scale back one of the most powerful deficit-reduction tools in the Senate bill: a 40 percent excise tax on high-cost insurance policies. Obama has proposed to delay implementation of the tax until 2018 and to limit the number of policies that would be subject to the tax.

Obama and House Democrats have proposed to pay for their changes by raising Medicare taxes on the wealthy. They were hoping to reduce deficits further by incorporating Obama’s plan to overhaul the federal student loan program to cut out private lenders.

Those changes are unlikely to match the long-term savings proposed in the Senate bill, aides and lawmakers said, leaving House leaders scrambling to come up with additional sources of cash. Failure to comply with the reconciliation rules would imperil the package in the Senate and could cause big problems in the House, where the votes of many fiscally conservative Democrats hinge on the ability of health-care legislation to rein in soaring budget deficits.

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