Underestimating Underestimation

The artificial threshold for the total cost of health care reform set by President Obama was $900 billion. As if that amount is somehow chump change.

When Nancy Pelosi released H.R. 3962, her 1,990-page monstrosity, the official cost estimate from the Democrats was $894 billion. (After, of course, a $200+ billion provision was separated from the bill.) The Congressional Budget Office scored it at $1.055 trillion. And then the New York Post reexamined the CBO’s numbers and analysis, and maintained that the total cost was actually $1.8 trillion.

Now, with regard to the Senate bill–which, as just announced, will receive its first vote at 8:00 p.m. on Saturday–which carried an advertised price of $849 billion, the Post is once again scrutinizing the numbers, and once again has determined that the health care reform legislation will cost roughly twice as much as advertised.

Senate Majority Leader Harry Reid is touting the Senate’s newest health-care bill as costing $849 billion over 10 years. But this uses the same accounting trick as past versions: 99 percent of the costs don’t kick in until the fifth year of that “10 year” period. And the true 10-year costs are well over twice what Reid’s advertising: $1.8 billion.

The Democrats cite the bills’ projected costs from 2010-19. Yet, as the Congressional Budget Office reports, the bill would cost just $9 billion total from 2010 through 2013 — versus $147 billion in 2016 alone. In the first 40 percent of what the Democrats are calling the bill’s “first 10 years,” only 1 percent of its costs would yet have hit.

As the CBO analysis indicates, the bill’s real 10-year costs would start in 2014. And in its true first decade (2014 to 2023), CBO projects the bill’s costs to be $1.8 trillion — double the price Reid is advertising.

And that’s even though the CBO optimistically assumes the government-run “public option” wouldn’t cost a cent.

Other determinations made by the Post:

  • In its real first decade, the Senate bill would siphon $802 billion out of Medicare to spend elsewhere.
  • Among the $802 billion that Reid would divert from Medicare is $431 billion in cuts in doctors’ pay (far more than the misleading figure for 2010-19). The bill says it would cut payments to doctors for services to Medicare patients by 23 percent in 2011 — and never raise them back up, ever.
  • The Office of the Chief Actuary at the Centers for Medicare and Medicaid Services has just concluded that the House health bill — which the President also champions — would bend the curve upward, raising nationwide health-care costs by over half a trillion dollars by 2020 (and by $289 billion even in the unlikely event that doctors’ pay is actually slashed).

Furthermore, and perhaps most striking, the Post has found that Reid’s bill would increase taxes on Americans by $892 billion — more than the advertised cost of the bill itself. So much for promises made by the president not to increase taxes by a single dime for Americans making less than $250,000 per year. This is going to destroy people. This is going to destroy small business. This is going to mean the death not only of an exceptional health care system which has always relied upon the free market for advancements in technology and the best talent available from across the entire world.

The United States of America simply cannot afford this. Already, we pay $300 billion each year just to service our ever-expanding debt, essentially the equivalent of the minimum payment on our national credit card, and a number which will more than double by 2019.

It’s time to stand up and be heard, folks. Call your senators.



  1. Let us move forward says:

    Sorry, off topic.

    Jeff are you aware of this situation? As someone who is deeply involved in the legal world, what is your take on it?

    From TRSOL

    In an editorial by The Washington Prowler, “Obama goes to the Matresses”, we are told that Cassandra Butts, “a Harvard classmate of Obama’s and one of the administration’s highest-ranking African Americans . . . quietly resigned on Friday, November 6 . . .” .

    This resignation preceded that of her immediate superior, Gregory Craig, who left the position of White House Counsel only days ago.

    However, what The Washington Prowler writes is more telling in the intrigue and politics behind the Craig resignation and the ascendency of Robert Bauer, whose appointment to Craig’s old position was made last Friday:

    “[Bauer] knows where all the bodies are buried, and this indicates that there is something amiss with this White House, or at least someone is nervous about what is going on,” says a former Obama transition team adviser. “You don’t just make these kinds of changes for the sake of rearranging the deck chairs, and not at this time with at least three legislative and policy decisions looming that the Counsel’s office would have been deeply involved in.

    “This doesn’t come close to the ‘Saturday Night Massacre’ in the Nixon days, but it’s pretty damn weird,” says Washington, D.C.-based Democrat lawyer, who has held counsel positions both in the Senate and in previous presidential administrations. “I’m surprised not only that the press seems to be ignoring the fact that two presidential lawyers have left at about the same time, but that no one seems to care that for the first time, I think ever, we have a President’s personal attorney also serving as White House counsel. I don’t care if Bob [Bauer] recuses himself from future personal legal business, this should be troubling to anyone who cares about the Executive Office of the President.” [emphases original]

  2. Leah says:

    One of the best you wrote Jeff. You hit the nail on the head. I don't get it. Is there anyone out there that DOES want the reform? Because I sure haven't seen or heard from them.

    Posted this on my wall on FB Jeff.

  3. tennman59 says:

    Senator Judd Greg stated on fox, Gretta's show, a couple of days ago, the true cost was nearer 3 trillion due to reporting income on 10 years and expenses on only 6 years.

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