Douglas Holtz-Eakin Scores The Health Care Reform Bill

by Pejman Yousefzadeh on March 21, 2010

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And in doing so, he points out the shortcomings of the CBO scoring process:

ON Thursday, the Congressional Budget Office reported that, if enacted, the latest health care reform legislation would, over the next 10 years, cost about $950 billion, but because it would raise some revenues and lower some costs, it would also lower federal deficits by $138 billion. In other words, a bill that would set up two new entitlement spending programs — health insurance subsidies and long-term health care benefits — would actually improve the nation’s bottom line.

Could this really be true? How can the budget office give a green light to a bill that commits the federal government to spending nearly $1 trillion more over the next 10 years?

The answer, unfortunately, is that the budget office is required to take written legislation at face value and not second-guess the plausibility of what it is handed. So fantasy in, fantasy out.

In reality, if you strip out all the gimmicks and budgetary games and rework the calculus, a wholly different picture emerges: The health care reform legislation would raise, not lower, federal deficits, by $562 billion.

Be sure to read the whole thing. Those who claim that the health care reform bill would reduce the deficit are simply talking through their hats. They either don’t get the CBO scoring process, or they don’t care what the results of that process are, so long as a health care reform bill is passed.

I should add that this entire episode illustrates the difference between political types who are satisfied with good intentions, and political types who actually believe that good outcomes are the most important metric by which to judge the formulation and implementation of policy.

UPDATE: More reasons to doubt the accuracy of CBO’s scoring of the health care reform bill.

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