GOP Challenges Dems On CBO Corrections, Senate Vote Monday

GOP Pounces On CBO Correction


The Congressional Budget Office issued additional information and a correction of its cost estimates today that have Senate Republicans calling for Democrats to slow action on the health reform bill to give officials a chance to digest the data.

CBO director Doug Elmendorf said that in the second decade the legislation would not cut the deficit as much as originally predicted. On his blog, he wrote: "The correction reduces the degree to which the legislation would lower federal deficits in the decade after 2019."

A CBO staffer also sent an email to Republican and Democratic leadership and key committees saying that the Medicaid funding deals included in the bill for Nebraska, Vermont and Massachusetts would cost $1.2 billion over the next decade. Because each state's deal was structured differently, it is unclear how the $1.2 billion breaks down for each state.

A spokesman for Patrick Leahy said the senator's home state of Vermont expects to receive $250 million more in Medicaid funding over the course of the six-year deal, which Leahy engineered.

Yesterday, Democratic aides estimated that the Medicaid deal for Democratic Sen. Ben Nelson's home state of Nebraska, which ensures the federal government picks up the tab for any new Medicaid beneficiaries added to state rolls under the bill, would cost about $45 million over the first decade.

“CBO typically issues additional information, corrections, clarifications and revisions following any big analysis release. In fact, five days after Reid’s merger was released, CBO was still releasing additional information and clarifications," said a Republican Senate leadership aide. "It's another reason why Congress shouldn’t rush to jam this vote in the dead of night.”

The Democrats are scheduled to take their first vote on the health care bill at 1 a.m. Monday.




CBO Issues Correction: Health bill Nixes Deficit Less Than Thought


The Congressional Budget Office (CBO) corrected its estimate of the Senate health bill's costs on Sunday, saying it would reduce deficits slightly less than they'd predicted.

In a letter to Senate Majority Leader Harry Reid (D-Nev.), CBO Director Douglas Elmendorf said that the nonpartisan budget office had overestimated the extent to which the legislation's new Independent Payment Advisory Board would bring down the deficit.

While the CBO's estimates of the board's and overall bill's impact in its first 10 years of the legislation are correct, Elmendorf wrote, the program's effects on deficit reduction during the second decade of the program were overestimated.

"CBO expects that the legislation, if enacted, would reduce federal budget deficits over the decade after 2019 relative to those projected under current law—with a total effect during that decade that is in a broad range between one-quarter percent and one-half percent of GDP," Elmendorf said. "In comparison, the extrapolations in the initial estimate implied a reduction in deficits in the 2020–2029 period that would be in a broad range around one-half percent of GDP."

In essence, Elmendorf explained on his Blog:

With this corrected reading, savings from changes to the Medicare program (along with other changes to direct spending that are not associated directly with expanded insurance coverage) would increase at a rate that is between 10 percent and 15 percent per year during the 2020–2029 period, compared with a growth rate of nearly 15 percent reported in the initial estimate.

The error reflects the greater uncertainty the CBO has about the bill's effects in its second decade, the director said, but said that the correction represents a "small share" of the expected deficit reductions in the health bill. Elmendorf also said that the amended version of the bill released on Saturday would still go further to reduce deficits than the initial version of the legislation had.


Sources: The Hill, Politico, CBO