Senate Bill Would Reduce Deficit by $1.4 Trillion

The CBO score (.pdf) of the manager's amendment to the Senate healthcare reform bill is out, and according to the document, "Relative to the legislation as originally proposed, the expected reduction in deficits during the 2020-2029 period is larger for the legislation incorporating the manager's amendment."

To put that in plain English, I turned to a source close to the Senate leadership, who explained to me that deficit reduction in the second decade of the healthcare reform legislation now before the Senate would amount to $1.3 trillion, in addition to the $132 billion reduction in the deficit during the first decade of the bill. That's right, the Senate healthcare reform bill would reduce the deficit by more than $1.4 trillion over 20 years.

More as we hear it...

Tags: 111th Congress, healthcare reform (all tags)



This is just amazing

I still remember the GAO saying their analysis of the first version came back with a score cost-effecient and even scheduled to run a surplus and now news like this honestly gives you a real reason to vote for it , in the whole cloth.

Why should we back down on the key elements of the bill, now? The house version contains key and crucial provisions. Let the senate get their work done, the house merge the bill into the Senate version and we are on our way.

by Trey Rentz 2009-12-19 07:20AM | 0 recs
Re: Senate Bill Would Reduce Deficit

What the heck happens in the second decade to make the deficit reduction 10x larger than in the first decade??

Honestly I sense a bit of spin in the air...

by Steve M 2009-12-19 07:23AM | 0 recs
Re: Here's the Analysis for > 2019

from CBO:

Effects of the Legislation Beyond the First 10 Years

Although CBO does not generally provide cost estimates beyond the 10-year budget projection period (2010 through 2019 currently), many Members have requested CBO analyses of the long-term impact of broad changes in the nation's health care and health insurance systems. A detailed year-by-year projection, like those that CBO prepares for the 10-year budget window, would not be meaningful because the uncertainties involved are simply too great. CBO has therefore developed a rough outlook for the decade following the 10-year budget window.

All told, the legislation incorporating the manager's amendment would reduce the federal deficit by $16 billion in 2019, CBO and JCT estimate. In the decade after 2019, the gross cost of the coverage expansion would probably exceed 1 percent of gross domestic product (GDP), but the added revenues and cost savings would probably be greater. Consequently, CBO expects that the legislation, if enacted, would reduce federal budget deficits over the ensuing decade relative to those projected under current law--with a total effect during that decade that is in a broad range around one-half percent of GDP. The imprecision of that calculation reflects the even greater degree of uncertainty that attends to it, compared with CBO's 10-year budget estimates. The expected reduction in deficits would represent a small share of the total deficits that would be likely to arise in that decade under current policies.

Relative to the legislation as originally proposed, the expected reduction in deficits during the 2020-2029 period is larger for the legislation incorporating the manager's amendment. Most of that difference arises because the manager's amendment would lower the threshold for Medicare spending growth that would trigger recommendations for spending reductions by the Independent Payment Advisory Board.

Many Members have expressed interest in the effects of reform proposals on various other measures of spending on health care. One such measure is the "federal budgetary commitment to health care," a term that CBO uses to describe the sum of net federal outlays for health programs and tax preferences for health care--providing a broad measure of the resources committed by the federal government that includes both its spending for health care and the subsidies for health care that are conveyed through reductions in federal taxes. Under the legislation, CBO estimates that the federal budgetary commitment to health care during the next 10 years would be about $200 billion higher than under current law, driven primarily by the gross cost of the coverage expansions (including increases in both outlays and tax credits). Beyond 2019, the effects of the proposal that would tend to decrease the federal budgetary commitment to health care would grow faster than those that would increase it. As a result, CBO expects that the proposal would generate a reduction in the federal budgetary commitment to health care during the decade following the 10-year budget window.

These longer-term calculations assume that the provisions are enacted and remain unchanged throughout the next two decades. However, the legislation would maintain and put into effect a number of procedures that might be difficult to sustain over a long period of time. Under current law and under the proposal, payment rates for physicians' services in Medicare would be reduced by about 21 percent in 2010 and then decline further in subsequent years. At the same time, the legislation includes a number of provisions that would constrain payment rates for other providers of Medicare services. In particular, increases in payment rates for many providers would be held below the rate of inflation. The projected longer-term savings for the legislation also assume that the Independent Payment Advisory Board is fairly effective in reducing costs beyond the reductions that would be achieved by other aspects of the legislation.

Based on the longer-term extrapolation, CBO expects that inflation-adjusted Medicare spending per beneficiary would increase at an average annual rate of less than 2 percent during the next two decades under the legislation--about half of the roughly 4 percent annual growth rate of the past two decades. It is unclear whether such a reduction in the growth rate could be achieved, and if so, whether it would be accomplished through greater efficiencies in the delivery of health care or would reduce access to care or diminish the quality of care.

by QTG 2009-12-19 07:35AM | 0 recs
Re: Here's the Analysis for > 2019

Thanks for that.  I think the next-to-last paragraph makes an important point - there is almost certainly a limit to how much savings we can squeeze out of Medicare by reducing reimbursement rates.

by Steve M 2009-12-19 07:40AM | 0 recs
efficiency equals online.
and online equals public option.
by Trey Rentz 2009-12-19 07:48AM | 0 recs
Re: efficiency

Are you being held prisoner in a fortune cookie factory??

by Steve M 2009-12-19 07:52AM | 0 recs
Re: Senate Bill Would Reduce Deficit by $1.4 Trill

Harry Reid and the moderates/conservatives in congress deserve some credit if the CBO is right .I don't see how the senators from Maine won't vote for this bill , it is a good one...

by lori 2009-12-19 08:28AM | 0 recs
Re: Senate Bill Would Reduce Deficit by $1.4 Trill

I am deeply disappointed in the Senators from Maine. If cretins like Bayh and Nelson can vote for this bill, they certianly can too - and if they voted fro this bill some of the more erogenous stupak-lite changes could have been avoided.

by vecky 2009-12-19 08:36AM | 0 recs
they are also liars

Snowe backed the Senate Finance Committee bill and indicated she might vote for a bill without a public option. Well, that's what we had, but she is still blocking it.

We should have gone for a more limited bill via reconciliation.

by desmoinesdem 2009-12-19 09:41AM | 0 recs
Re: Senate Bill Would Reduce Deficit by $1.4 Trill

There is no way you are a conservative. Sorry, but you aren't. I do not know one conservative defending a bill requiring private mandates on people.

by bruh3 2009-12-19 08:44AM | 0 recs
Re: Senate Bill Would Reduce Deficit by $1.4 Trill

Mitt Romney?

by vecky 2009-12-19 08:54AM | 0 recs
Re: Senate Bill Would Reduce Deficit by $1.4 Trill

Last I checked, he's a Republican conservative. Unless he too has moved to the Democrats to be a "moderate" your point only serves to underscore the mindset. Thankfully, many of the conservadems will lose next year. I expect people like lori to still whine it is because we are not conservative enough although the polls and the voting results indicate the real issue is that we vote against the interest of voters. The voters are not stupid. The Democratic leadership is.

by bruh3 2009-12-19 09:00AM | 0 recs
Re: Senate Bill Would Reduce Deficit by $1.4 Trill

" I do not know one conservative defending a bill requiring private mandates on people "

I didn't know this conservative had to be a democrat too.

by vecky 2009-12-19 09:10AM | 0 recs
Re: Senate Bill Would Reduce Deficit by $1.4 Trill

Yeah, vecky  keep playing games. That's what going to help you all win next year.

by bruh3 2009-12-19 10:11AM | 0 recs
Re: Senate Bill Would Reduce Deficit by $1.4 Trill

No, you're going to help US win. We're all in this together.

by vecky 2009-12-19 03:04PM | 0 recs
Re: Senate Bill Would Reduce Deficit by $1.4 Trill

Or maybe I'm right that many people are just not that concerned about their inalienable right to go without health insurance.  I know, I know, OH NOES TEH MANDATES and all that.

I hope you are not seriously questioning Lori's bona fides after all this time.

by Steve M 2009-12-19 08:58AM | 0 recs
Re: Senate Bill Would Reduce Deficit by $1.4 Trill

the problem for a lot of people isn't just the mandate.

It's the fear of a mandate without sufficient protections to keep them from being victimized by a for-profit industry that often victimizes people.

you can force me to buy insurance if you can guarantee it is not going to be a giant financial hardship and that i will get something decent for it.

by jeopardy 2009-12-19 09:01AM | 0 recs
Re: Senate Bill Would Reduce Deficit by $1.4 Trill

As I've always said, if there's a problem at the end of the day it will be the failure to deliver affordable coverage to enough people, not the mandate per se.

Do you agree with the argument that anyone who does not see an individual mandate as a complete dealbreaker cannot possibly be a real conservative?

by Steve M 2009-12-19 09:05AM | 0 recs
Re: Senate Bill Would Reduce Deficit by $1.4 Trill

I agree with jeopary - it's not the mandate per see, it's FEAR of the mandate. FEAR is what the GOP is very very good at.

The only people a mandate is going to hit are the rich and well off who can afford a HC plan anyway. Even then it's not really a mandate, more like a tax deduction. So if your well off and still don't have insurance, no deduction for you.

But the GOP will spin it as hitting the little guy where it hurts.

by vecky 2009-12-19 09:13AM | 0 recs
Re: Senate Bill Would Reduce Deficit by $1.4 Trill

If you consider someone making 45k in NYC the "well off", you are pretty clueless about economic reality in this country. The average college student graduating has 20k or more debt. The housing cost in NYC is around 1k for an apartment. I can go on and on. Then, there is the pesky issue of saving for retirement because everyone in my generation is being told that social security will not be around after the baby boomers, and on and on. These are the economic realities that people are facing.

by bruh3 2009-12-19 09:16AM | 0 recs
Re: Senate Bill Would Reduce Deficit by $1.4 Trill

Bit of an embicle aren't you... I lived in NYC and made far less than that. I have student debt too. I can go on and on...

by vecky 2009-12-19 03:06PM | 0 recs
Re: Senate Bill Would Reduce Deficit by $1.4 Trill

If you decouple the conversation from fundamental problem that requires reform (and that is being ignored by leadership now), then of course, you can make the argument. But when we take it back into the real world, premiums were rising in the last decade at about 7 to 8 percent, and will increase from 12k to 23k in the next decade. This is not even addressing the issue of higher and higher co-payments and other caps and expenses. Thus, in the real world scenario, rather than how DC frames it, I do not see your argument as particularly useful to many actual voters. As I said, the way that policy matters is how voters feel it in their own lives. I am racing down the road to how they feel it in their  lives, and on that level this bill is crap.

by bruh3 2009-12-19 09:14AM | 0 recs
Re: Senate Bill Would Reduce Deficit by $1.4 Trill

The mandate only applies if you can find a plan on the exchange for less than 8% of wages. That exempts a whole bunch of poor and middle-income folk. And if insurance continues to rise even less will be hit by the mandate. At 23K a year the only households required to buy insurance will be those who make in excess of 250K a year. And ya, i'm not shedding any tears for them.

by vecky 2009-12-19 03:14PM | 0 recs
Even then, that would be an improvement

my parents pay over 28k a year in healthcare costs, but they take home a combined income of somewhere over 250k.

by ND22 2009-12-19 07:43PM | 0 recs
Re: Senate Bill Would Reduce Deficit by $1.4 Trill

a) The polls say otherwise regarding your theory. And I agree with Jane Hamsher that it will only get worse. I am planning to put up a diary sometime soon about the issue of those of us not covered by subsidies, but because of other life expenses (student loans, mortgage, eating, transportation etc) the expected hyperinflation in health care will represent for us a supertax. it is a direct transfer of wealth from the middle class for anyone above 45 k as individual and 88 k as a family.  For us, this bill makes the situation worse.

This all without going into how the subsidies themselves are inadequate and represent shuffling of the deck chairs on the Titanic because while lori is "happy" the result is fewer and fewer American jobs due to our lack of competitiveness being even worse in the next decade, especially ironically in area of higher wage jobs.

b) lori says whatever she thinks is the "moderate" Democratic position is whether it makes sense fiscally or not. Her bona fides is not substantive. She is for deficit reduction as the "moderates" see it, but not for actual deficit reduction unless it is as they see it. She is for American jobs except when economic policies are set up as "moderate" that do not save or promote American jobs. Lastly, now, apparently she's for private mandate as a "great legislation" I know real conservatives. They are going through the roof. I know real moderates. The same. She's neither. She's primarily acting like a centrist.

by bruh3 2009-12-19 09:10AM | 0 recs
Re: Senate Bill Would Reduce Deficit by $1.4 Trill

The polls say NOTHING about the relative importance of the mandate.  You need to watch and re-watch the West Wing episode where Marlee Matlin explains it all to you.

You are also acting irrationally in expecting people who disagree with you politically to think in terms you consider logical.  If they subscribed to your brand of logic, they wouldn't disagree with you politically.

I know plenty of "real conservatives" who aren't particularly exercised over the mandate.  Do you think I am lying when I say that?

by Steve M 2009-12-19 09:15AM | 0 recs
Re: Senate Bill Would Reduce Deficit by $1.4 Trill

a) The West Wing is a television show.

b) I expect people who say they are conservative to actually expouse what is commonly understood to be conservative ideals. It has nothing to do with me other than I am pulling from a common set of values that are defined by others are conservative and evaluating lori's claims against those set of values. My role in the process is comparing and contrasting.

c) I don't know any conservatives who favor mandates, and I think the polls say that conservatives I know reflect a closer link to what the aggregate of conservatives and moderates believe.

by bruh3 2009-12-19 09:19AM | 0 recs
Re: Senate Bill Would Reduce Deficit by $1.4 Trill

I didn't see anywhere that Lori said she favored mandates.  You appear to be taking her failure to view mandates as a deal-breaker as an admission that she loves mandates, when it seems like she simply doesn't care about that aspect of the bill.

As for the explanation of polling on the West Wing that I alluded to, I'm going to give you a second chance to come back with a non-childish response.

by Steve M 2009-12-19 09:29AM | 0 recs
Re: Senate Bill Would Reduce Deficit by $1.4 Trill

You think it is a childish response to point out that you are referring to a television show? Wow. Okay.

by bruh3 2009-12-19 09:31AM | 0 recs
Re: Senate Bill Would Reduce Deficit by $1.4 Trill

If a true statement is made by a fictional character, that does not make it untrue.  Your attempt at deflection is weak and a sign of someone who lacks a real argument.

It is a simple statement of fact that a poll which tells you how many people favor or disfavor something does not tell you how strongly they feel about it.  Just because 60% of Americans favor a flag-burning amendment does not mean 60% of Americans view it as a voting issue.  If 70% of Americans say they oppose foreign aid to Ghana, that does not mean any politician who votes for foreign aid to Ghana automatically gets turned out on their ear.

You cannot point to polling that shows how many people favor or oppose a mandate and conclude that Democrats will get crushed at the polls if they pass a mandate.  Well, you can, because you have, but it's not logical.

by Steve M 2009-12-19 09:39AM | 0 recs
Re: Senate Bill Would Reduce Deficit by $1.4 Trill

Steve M

I like you because you tend to often actually debate the issues, but you seriously are wrong here.  My issue with you mentioning the TV show is that it seemed out of place to be mentioning a TV show in the context of real world polling and policy data. Frankly, it still does, but now that you actually explained your idea- let's discuss that idea further. Because the idea is something that I can debate.

Here's some of the polling data:

"If Congress does not pass a public option as part of health care reform, will that make you more likely or less likely to vote in the 2010 general election, or no effect?"

"Among Dems, 33% say it would make them less likely, while less than one fourth that amount, 7%, say it would make them more likely. Sixty percent say it would have no effect.

Among independent voters, 21% say it would make them less likely, and 13% say it would make them more likely, with 66% saying it would have no effect, suggesting that passing a public option would have a marginal impact among indys." -care/poll-one-third-of-dems-less-likely -to-vote-in-2010-if-public-option-dies/

I do not happen to believe that all these less likely to vote people will really be that strongly against voting come November 2010 just for the public option. I do believe that some of them will. That is the danger- only a percentage need not show up to decide outcomes.

The other problem is that we are not just looking at a Democratic Congress ignoring the base on this issue alone. As I have said before, each of these policies are just more straw on the back of the camel, and that's the problem I see. Whether it is jobs, the bailout or whatever, it is the totality. Mandates are just a part of a long list of issues which people are feeling sold out.

I include mandates due to recent polling data:

"A health care bill with a public option has 59% support.  A health care bill with a public option and Medicare expansion has 58% support.  The current proposed health care bill with mandates, but no public option or Medicare expansion, has 33% support." /114114/55

There is some question about the accuracy of the polling data: ncharitable-take-on-liberal-poll.html

Nate Silver being one of the more ardent Ezra Klein like supporters of any bill right now, but nevertheless a smart numbers analyst, I am uncertain how to take the numbers. My best guess is that mandates alone will harm us with a significant number of people for the reasons that Big Tent Democrat states as the problem with the mandate- they are an exise tax on the middle class (thus why anyone claiming as one commentator does that 45k per year is taxing the "rich" is not serious): /9504/1425

Now, he comes to a different view than I do, but what he is not doing is denying the impact of such a mandate on the middle class.

Do I think this issue alone with be the sole issue of which people vote? For many- the answer is no. Do I think it will impact a significant enough number in a base year election to matter- the answer is yes. Do I think that this is more straw on the backs of people to become apathetic about the Democrats? The answer is yes. I think that any given poll is not going to show that. But I think, 2009's election outcome in NJ and Va illustrate the point, and I think the polling data overtime in aggregate does.

The problem here is that this is not just one issue. It is many, and they are all saying the same thing-that the party is captured by corporatism.

by bruh3 2009-12-19 10:39AM | 0 recs
Well Snowe just said

she will oppose it because it's being rushed.

Will someone put an ad up in Maine..."Democrats worked six plus months to draft this legislation that has been a century in the making. Democrats made enough of an effort to get Senator Snowe's vote in OCTOBER in the FINANCE COMMITTE. So why, more than two months after Senator Snowe voted for this bill in the Finance Committee, is our good Senator opposing this bill because it's too rushed? Call Senator Snowe, tell her to do the right thing, this has taken long enough"

by ND22 2009-12-19 09:41AM | 0 recs
Re: Senate Bill Would Reduce Deficit by $1.4 Trill

Is this the same CBO that recently lost credibility by saying that requiring a 90 percent medical loss ratio will result in 'government take over" of private health insurance? If so, I believe they are just making shit up at this point.

by bruh3 2009-12-19 08:43AM | 0 recs
Re: Senate Bill Would Reduce Deficit

The Senate, The House, The Administration, collectively and individually have failed us. The CBO has failed us. Ted Kennedy's widow and the Big Dog have betrayed us.

Why am I so happy, then?

by QTG 2009-12-19 09:35AM | 0 recs
The Bill

"I turned to a source close to the Senate leadership"

Well then it must be true. A source close to the senate leadership wouldn't mislead us.

by Alvord 2009-12-19 09:40AM | 0 recs
Re: The Bill

Yes, I find it disappointing that JS would recount a dramatic claim (re $1.3 trillion deficit reduction) without any substantiation.  Has he accepted a position as congressional stenographer?  

by orestes 2009-12-19 09:55AM | 0 recs
Re: The Bill

It is the knee-jerk "trust the Democratic leadership" that's really starting to gall me. They have not shown any reason to trust them.

by bruh3 2009-12-19 10:13AM | 0 recs
Re: The Bill

Prefer to get your news from the MSM? Fine. Here's NBC News reporting the exact same thing:

CBO puts the price tag of the bill at $871 billion, and it says it will reduce the deficit by $132 billion over the first 10 years and then $1.3 trillion over the second 10 years.
by Jonathan Singer 2009-12-19 11:15AM | 0 recs


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