CBO Director Rains on the Health Care Bill Parade

Senator Kent Conrad, (D-ND)
"So Mr. Elmendorf, are we going to save money with this plan?"

"No, Senator."


Thursday, Douglas Elmendorf, director of the non-partisan Congressional Budget Office, testified before the Senate Budget Committee regarding the proposed Democrat health bill. Chairman Kent Conrad (D-ND) asked Mr. Elmendorf about the cost savings aspect of the proposed plan.
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Senator Conrad: "Dr. Elmendorf, I am going to really put you on the spot because we are in the middle of this health care debate, but it is critically important that we get this right. Everyone has said, virtually everyone, that bending the cost curve over time is critically important and one of the key goals of this entire effort. From what you have seen from the products of the committees that have reported, do you see a successful effort being mounted to bend the long-term cost curve?

Mr.Elmendorf: "No, Mr. Chairman. In the legislation that has been reported we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount. And on the contrary, the legislation significantly expands the federal responsibility for health care costs…

As we wrote in our letter to you and Senator Gregg, the creation of a new subsidy for health insurance, which is a critical part of expanding health insurance coverage in our judgement, would by itself increase the federal responsibility for health care that raises federal spending on health care. It raises the amount of activity that is growing at this unsustainable rate and to offset that there has to be very substantial reductions in other parts of the federal commitment to health care, either on the tax revenue side through changes in the tax exclusion or on the spending side through reforms in Medicare and Medicaid. Certainly reforms of that sort are included in some of the packages, and we are still analyzing the reforms in the House package. Legislation was only released as you know two days ago. But changes we have looked at so far do not represent the fundamental change on the order of magnitude that would be necessary to offset the direct increase in federal health costs from the insurance coverage proposals."
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Fousesquawk comment: Are you sorry you asked that question, Sen. Conrad? Isn't it time more people in Congress actually read this 1,000+ document that the White House and the Dems in Congress are rushing head-long to pass? Of course, we all know the reason for the hurry. With Obama's approval ratings dropping, he wants to spend as much political capital as he still has while it's there. They also know that the longer it takes and the more time passes, more people in this country will decide it is a terrible idea-and it will fail.

Let's pay careful attention to what Mr Elmendorf told Congress this week.