Out of Control Policy Blog

Health Care Passes Senate as Even as CBO Discredits Cost Savings Claims

The Senate version of health care reform passed this morning, with a little fanfare from Majority Leader Sen. Harry Reid. From Politico:

At 7:16 a.m., the Senate passed on a 60-39 party line vote a sweeping health care bill that will tighten insurance regulations, provide insurance for 31 million more Americans and cost $871 billion over the next decade. "This is for my friend Ted Kennedy, aye," said Sen. Robert Byrd as he cast his vote.

Clearly exhausted, Senate Majority Leader Harry Reid mistakenly voted no before changing his vote to yes, which got a laugh in the chamber, especially from Senate Republican Leader Mitch McConnell. After the vote, Reid joked, "I spent a very restless night last night trying to figure out how I could show some bipartisanship and I think I was able to accomplish that for a few minutes." [...]

With Vice President Joe Biden presiding over the session, Democrats gathered in the chamber before sunrise on the day before Christmas to cast a vote long in coming but in the end, hardly a surprise, a 60-39 tally that was the fourth time in as many days that Democrats proved they could muster the winning margin.

The bill now moves to conference between the House and Senate with huge issues to smooth out, including the public option, Medicare reforms, and the funding of abortions. Another matter to be discussed will be the endless debate over cost savings. The President has promised he will only sign a bill that is deficit neutral. But if the final bill passed includes stuff like this below story, he may be put in a pickle:

The Congressional Budget Office challenged claims by health-care overhaul proponents that Medicare savings in Senate legislation would help finance expanded coverage and postpone the bankruptcy of the medical program for the elderly.

The nonpartisan agency said the $246 billion it projected the legislation would save Medicare can’t both finance new programs and help pay future expenses for elderly covered under the federal program.

Nor could those savings be used to extend the solvency of Medicare, set to run out of money in 2017, the budget office said in a letter to Senate Republicans.

“What we’ve seen is a colossal manipulation” by Democrats “of the accounting scores of CBO” and the independent actuary of the Centers for Medicare and Medicaid, said Alabama Senator Jeff Sessions, the Republican who requested the analysis from CBO. He called the letter “a potential game-changer.”

The estimated Medicare savings in the legislation overstate “the improvement in the government’s fiscal position,” the CBO said in the letter.

Read the rest of the Politico story on passage here.

Read the rest of the Bloomberg story on the CBO here.

Anthony Randazzo is Director of Economic Research


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