Posted by
Andrea on Friday, July 17, 2009 9:59:01 PM
Testimony from Congressional Budget Office Director Douglas Elmendorf that preliminary versions of health care legislation lack effective cost-containing mechanisms has roiled the nation's capital.
Democrats have had trouble swallowing the estimates. Those favorably disposed to reform have argued that the bills will eventually include provisions to reduce health care's cost. The moderates have urged that the party go back to the drawing board and craft better legislation. Republicans, through it all, have used Elmendorf's testimony to drive the message that Democratic health care will do nothing but balloon the deficit.
But before the political commotion slides out of control, it's worthwhile to pause a second. Should the CBO's testimony be treated as gospel?
While the Congressional Budget Office is the official "bean counter" for budgetary issues, even Elmendorf himself seemed to walk back his statement that reform, in its current incarnation, would not bend the health care cost curve, noting that there are a multitude of provisions yet to be added. More importantly, when considering the politics of federal spending, it is worth recalling just where the Washington, D.C. landscape -- including the CBO -- was during the major government initiatives of the last administration.
Throughout the course of the Bush years, the Republican Party, which now puts its stock in the CBO's numbers, continuously marginalized the organization for its accounting.
When the CBO predicted in 2004 that Bush's new tax and spending proposals would produce deficits of $2.75 trillion over ten years, a spokesman for the White House Office of Management and Budget declared that ''even CBO would admit we don't honestly know what these numbers will look like 10 years from now.''
That same year, the Bush administration pushed forward with its plans for Medicare Part D despite the fact that its internal cost estimates were $139 billion more than those offered by the CBO. Republicans on the House Ways and Means Committee had worked diligently to defeat the attempts of their Democratic colleagues to make those estimates public.
In a similar vein, conservatives were beside themselves when the CBO refused to run the 2004 Bush tax cuts through various economic models to see if the government could, in the end, make money by stimulating spending. Rather, the CBO used a "static" method and found $1.2 trillion worth of deficits through the next decade. Republicans, naturally, largely ignored the findings.
Perhaps the biggest caution flag for treating CBO numbers as gospel -- and one of the more illuminating benchmarks from which to compare the current debate over health care costs -- is the Iraq War.
In October 2003, the CBO was asked to do a study about the costs of the Iraq War. According to varying scenarios of troop deployment the total price tag ranged from $85 billion to $200 billion over a ten-year period. A year later, the projected costs had risen further. Having already spent $123 billion, the CBO was now estimating that the prosecution of both Iraq and Afghanistan would total roughly $1.1 trillion over the subsequent ten years.
"In the scheme of things, the war is not super-expensive, but it also sure ain't cheap," said Michael O'Hanlon, a Brookings Institution scholar and prominent war supporter.
By 2007, as the Iraq War had spiraled out of control, and with the surge of troops just beginning to take place, the price tag had jumped even more dramatically. The CBO was now projecting that the government would have to spend as much as $1.7 trillion over the next ten years on Iraq and Afghanistan. With interest, the number rose to $2.4 trillion -- $1.9 trillion of which was for Afghanistan alone.
Certainly, the costs of a war -- especially one as poorly managed as Iraq -- are far more difficult to predict than that for health care legislation. But, at the same time it is worth noting that the 2007 CBO projection for the ten-year cost of the Iraq and Afghanistan wars are roughly double the prospective 10-year cost projections for health care reform. And yet, owing to the inverse political power in D.C. at the time, Republicans two years ago were scoffing at the congressional budget office's projections while Democrats were deeply concerned.
"The number is so big, it boggles the mind," said then-Rep. Rahm Emanuel, (D-Ill.), who now serves at Barack Obama's chief of staff.
"Congress should stop playing politics with our troops by trying to artificially inflate war funding levels,"
argued Sean Kevelighan, a spokesman for the Bush White House budget office.
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