Not So Fast, CBO

Assigned Reading: CATO: Baucus Bill Would Cost More than $2 Trillion
(FROM: Cato @ Liberty)

The media are reporting that the Baucus bill would reduce the deficit by $81 billion over 10 years. Wrong.

The Baucus bill assumes that Congress will allow the “sustainable growth rate” cuts in Medicare’s physician payments to occur beginning in 2012. Yet Congress has routinely and repeatedly blocked those cuts, making Baucus’s assumption preposterous. The CBO handled the issue delicately, but essentially said, “Sure, provided that the sun rises in the west in 2012, then yes, this bill would reduce the deficit.”

That means Baucus will come up at least $200 billion short on the revenue side, making his bill a budget-buster.

The media are reporting that the Baucus bill would cost just $829 billion over 10 years. Wrong.

As Donald Marron observes, that number omits as much as $75 billion in new federal spending. It also omits a $33 billion unfunded mandate on state governments.

But the worst part is that the Congressional Budget Office’s preliminary cost estimate omits the cost of the private sector mandates in the Baucus bill. In Massachusetts, those costs accounted for 60 percent of the total cost of reform. That suggests the actual cost of the Baucus bill – $829 billion plus $75 billion plus $33 billion, times 2.5 – is well over $2 trillion.

Yet the CBO score pretends those costs aren’t even there. It’s like a mystery novel that’s missing the last 50 pages. And the media aren’t even curious.

I told you yesterday — I smell crap. I’m not saying that Cato’s numbers are right; I’m just saying that the CBO’s numbers were hopelessly optimistic. When looking at the federal government and spending versus saving, we should always err on the side of fiscal irresponsibility.

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Comments

  1. cher-pa says:

    Liars ,Liars I am tired of being lied too. Its time to take it further than tea partys.Everyone needs to come together Republican Democrat and Independent.Lets March right up to congress and tell them to get out now!!!

  2. Anonymous says:

    Just yesterday my wife told me that not opening the credit card bills didn't mean they will go away.

    Today she suggested I go work for the CBO…. Hmmm ! I have been out of work for a while…..

  3. Anonymous says:

    sounds like Pelosi, Reid and Obama said to the CBO "Fix your numbers, or we'll fix yours."

  4. THIS MUST END says:

    cher-pa,

    Whiskey Rebellion

  5. USE THE FARCE LUKE says:

    CBO
    Cannot Besmirch Obama

  6. Robin says:

    I will have an oped on the CBO's interpretation of the Senate Finance Committee proposal in The New York Post next Monday, and a different piece on the alleged reduction in the number of uninsured in forbes.com fairly soon.

    Alan Reynolds, Cato Institute

  7. Rix says:

    CBO used to be a relatively nonpartisan institute but I have a gut feeling that their arms were twisted mercilessly to wring the benefitial numbers out of them. No one wants to die prematurely or see their kids disappear, and I certainly believe Obama's cronies to be capable of THIS level of persuasion. The ends justify the means, that's how the Democrats of the world operate.

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