Soldevila.com Blog

CBO says Democrats' Health care bills could break the national bank!!

Posted by Dale Soldevila on Thu, Jul 16, 2009

WASHINGTON (AP) -- Democrats' health care bills would not meet President Barack Obama's goal of slowing the ruinous rise of medical costs, Congress' budget arbitrator warned Thursday, giving weight to critics who say the legislation could break the national bank.

The sobering assessment from Congressional Budget Office Director Douglas Elmendorf came as Democrats in the House of Representatives pushed to pass a partisan bill through committees. In the Senate, a small group of lawmakers continued to seek a deal that could win support from both Republicans and Obama's fellow Democrats.

Obama has made a new health care system the chief domestic goal of his first term. Among developed countries, the United States alone has no comprehensive health care plan for all its citizens, and close to 50 million of the 300 million Americans lack health insurance.

With pressure mounting on all sides, Senate Majority Leader Harry Reid dismissed as "a waste of money" a television ad campaign by Obama's political organization aiming to nudge moderates of both parties off the fence. He called it "Democrats running ads against Democrats." A spokesman later said Reid has no problem with the effort.

From the beginning of the health care debate, Obama has insisted that any overhaul must "bend the curve" of rapidly rising costs that threaten to swamp the budgets of government, businesses and families.

Asked by Senate Budget Committee Chairman Kent Conrad, a Democrat, whether the evolving legislation would bend the cost curve, the budget director responded that, as things stand now, "the curve is being raised."

Explained Elmendorf: "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."

Even if the legislation would not add to the federal deficit during the next years, Elmendorf said costs over the long run would keep rising at an unsustainable pace.

Part of the reason is that Obama and most Democrats have refused to accept a tax on high-cost health insurance plans as part of the overhaul. Wide agreement exists among economists that such a tax would give businesses and individuals an incentive to become thriftier consumers of health care. Senate Finance Committee Chairman Max Baucus, also a Democrat, said Thursday that Obama's position is not helping matters.

White House officials played down the significance of the budget director's assessment, which they said was premature. "At the end of the day, we'll have significant cost controls," presidential adviser David Axelrod told The Associated Press.

Senate Republican leader Mitch McConnell said the budget director's warning should be "a wake-up call," adding, "instead of rushing through one expensive proposal after another, we should take the time we need to get things right."

Despite the flashing yellow light from the budget office, Congress pushed ahead Thursday.

On the heels of the Senate health committee's approval Wednesday of a plan to provide coverage to the uninsured, three House committees shifted into action on their version of the legislation. The Democratic bills also would create a government-sponsored insurance plan to compete with private coverage, although they differ on the details.

House Democrats won a coveted endorsement of their legislation from the American Medical Association, which said the bill "includes a broad range of provisions that are key to effective, comprehensive health system reform." The insurance industry said it opposes key elements of the bill, saying a government plan "will cause millions of patients to lose their current coverage."

Tags: National Health Reform