Congressional leaders are gleefully reporting that the Congressional Budget Office score of their health care proposal released yesterday shows that their legislation would reduce the federal deficit by $138 billion in the first ten years. Not so fast—consummate professionals though they are, CBO provides a projection based on assumptions about the future conduct of Congress that do not always represent reality.
Ruth Marcus of the Washington Post, not exactly a supporter of the GOP, puts it this way: “…Democrats will be pointing to this preliminary CBO score as if it is engraved on stone tablets. Republicans will proclaim their respect for the CBO and proceed to argue that its estimates should not be taken too seriously in this instance. This may come as a surprise, but I think the Republican argument is closer to correct. To crow, as did House Speaker Nancy Pelosi, that the package is “a triumph for the American people in terms of deficit reduction” is premature at best, delusional at worst.”
The reasons to expect wide discrepancies between the actual and projected cost of the bill lie in the gimmicks employed within the language of the bill to make it score as less expensive than it actually is. Included are the usual suspects we have seen time and again, including:
- Exclusion of the doc fix. The “doc fix,” which repeals a $371 billion Medicare cut for physician fees, is rolled into a separate bill. Lawmakers must remember: just because it’s not included in the official health bill doesn’t mean it doesn’t count as real spending.
- Double-counted savings from the CLASS Act. The CLASS Act included in the bill creates a new entitlement for which beneficiaries would pay premiums upfront for benefits received further down the road. Marcus explains: “Of the $138 billion saved in the first 10 years, $70 billion represents premiums collected for a new long-term-care program, money the government will have to pay in benefits later.” The revenue from the CLASS Act thus represents a false offset to other new spending.
- Dubious savings from Medicare. The bill contains billions in cuts to Medicare to offset other costs. As Marcus points out, “The CBO is required to assume that Congress will do what it promises”, making the point that politically unpopular spending cuts are unlikely to ever come to fruition—as best evidenced by the “doc fix” that occurs every year, adding to the deficit.
- A false ten year cost window. CBO scored the first ten years of enactment of the bill, which includes several years of raising revenue and fewer years of expenses. According to budget expert James Capretta, “Over a full ten years of implementation, the cost of the new entitlement spending would reach $2.5 trillion, at least, not $1 trillion as advertised by the White House.”
The reconciliation package also includes new gimmicks and questionable sources of revenue:
- Delay of an unpopular tax. Under the reconciliation bill, the excise tax on high cost plans would be implemented in 2018, thus reducing the total ten year revenues from the projected $149 billion under the Senate bill to just $32 billion. More interestingly, the reconciliation bill would index the application of the tax to growth in the Consumer Price Index (general inflation), which means that more and more middle class Americans would be affected by the tax once its collection began in 2018. Kicking this tax down the road to a future President and Congress portrays the unwillingness of lawmakers to collect it. Marcus questions, “Will the tax really be collected…long after many of those voting for it will have left office, long after the benefits it is helping to finance have kicked in?”
- Decreased value of subsidies. Says Capretta, “to jury-rig “long-term deficit reduction,” the latest plan would first increase the premium assistance subsidies paid to low and moderate wage families above the levels in the Senate-passed bill, but then index their value to something below the growth in premiums to give the appearance of deficit reduction in the decade after 2019.”
Though the White House and congressional leadership continue the charade of fiscal responsibility, the American people and other members of Congress, including Democrats, have long caught on. David Herzenhorn of the New York Times notes that even among Congressional Democrats, the cost impact of the legislation remains a deep and abiding concern:
“But even some lawmakers who voted for the Senate bill have been calling in recent weeks for additional steps to be taken to guarantee that new spending will not spiral out of control. They also want to ensure that Congress will follow through on proposed cuts, especially reductions to slow the growth of Medicare.
Many experts have warned that members Congress may not have the stomach to carry out the proposed cuts in the future. In January, five Democratic senators, including Michael Bennet of Colorado and Mark Warner of Virginia, sent a letter to the Senate majority leader, Harry Reid of Nevada, urging him to include a “fail-safe” mechanism in the final bill that would result in cuts if spending were to exceed estimates.”
Blue Dog Democrats’ lingering suspicions regarding this bill’s spending spree are justified. Only in Washington is massive spending incorrectly attributed as the way to control costs. The American people have shown in poll after poll that they clearly understand this, even as the ideologically driven Congressional leadership refuses to listen to them.
Vivek Rajasekhar contributed to this post.
This week, NBC News and The Wall Street Journal released poll results that are disturbing but by no means surprising. The March 11th – 14th poll of 1000 American adults showed that only 17% of respondents approve of the job Congress is doing in Washington. And as bad as that number is, the reason why Congress’ approval rating is so low is even more disturbing: a full 76% of Americans simply do not trust the U.S. Congress. This was the lowest level of trust for any representative entity tested by NBC/WSJ.
It is no coincidence that these record low ratings come amid current debate over health care in Congress. Yesterday, former U.S. Attorneys General Edwin Meese III and William P. Barr released the following statement:
The convoluted and questionable method under discussion by both Houses of Congress for final passage of the long-debated health care legislation raises serious constitutional concerns, which, at best, will lead to protracted and wholly avoidable litigation and continued doubt about the bill’s validity. Members of Congress from both parties have criticized the use of such sleights of hand, and The Washington Post has rightly editorialized against such “unseemly” and “dodgy” maneuvers for the health care bill. Beyond the obvious practical concerns shared by all citizens, the use of such obscure “rules” for final passage is even harder to justify in light of the real constitutional doubt and the erosion of public confidence in government that it will cause.
Contrary to what President Obama and some congressional leaders have been repeating of late, the American people do care passionately that the process for consideration of health care reform be both constitutional and fair. At a bare minimum, article I, sec. 7, cl. 2 of the U.S. Constitution requires that before it becomes law “(1) a bill containing its exact text was approved by a majority of the Members of the House of Representatives; (2) the Senate approved precisely the same text; and (3) that text was signed into law by the President.” Clinton v. City of New York, 524 U.S. 417, 448 (1998).
The “deem and pass” and similar options under consideration in the House of Representatives plainly violate at least the spirit of the Constitution’s bicameralism and presentment requirements. Those constitutional requirements were intended to ensure democratic transparency with a straightforward up-or-down vote in each House on all bills that become law. More importantly, these requirements were designed to ensure that the new national government actually followed “the consent of the governed,” which the Declaration of Independence had declared to the world was the only basis of legitimate government.
The “deem and pass” options under consideration in the House and the subsequent use of a “reconciliation” process that is reserved for budget issues in acts already signed into law further erode confidence in the rule of law. Some past uses of the “deem and pass” or “self-executing” rules raise similar concerns, but none was as convoluted as the proposed use, and significantly, there may have been no one with legal standing to challenge prior uses in court. Many individuals will have standing to challenge any health reform legislation that restructures one-sixth of the American economy, and the contemplated use of the “deem and pass” maneuver in this instance may be combined with questionable procedural steps in the Senate that render it much more subject to challenge.
There is no need to engage in such procedural machinations, and no asserted reason for doing so exists other than to avoid the traditional legislative safeguards in the Senate and to obscure the appearance that Members of the House actually voted for the Senate bill, which is a prerequisite for genuine reconciliation. The constitutional requirement of bicameralism should not be jettisoned under any circumstances—and certainly not for such trivial and partisan reasons.
Members of Congress take an oath to uphold the Constitution. Members should violate neither the letter nor spirit of the Constitution, especially when there is so much at stake, not only as a policy matter, but when the very legitimacy of the legislative process is in question. Given that many parts of the underlying legislation itself raise substantial constitutional concerns, these “unseemly” and “dodgy” procedures underscore the justified concern the American people have that their elected representatives are blatantly disregarding the Constitution, and as a result, undermining the rule of law.
Quick Hits:
- Bowing to public and private complaints from lawmakers, President Barack Obama delayed his trip to Indonesia and Australia to lobby for his health care bill.
- According to Gallup, pluralities of the American people believe Obamacare will make things worse for middle-income families, hospitals, doctors and “you and your family.”
- According to Fox News, 55% of Americans oppose the health care reforms being considered in Congress.
- A new analysis by the Joint Economic Committee and the House Ways & Means Committee minority staff estimates up to 16,500 new IRS personnel will be needed to collect, examine and audit the new tax information Obamacare requires families and small businesses to provide.
- Sen. Tom Coburn (R-OK) promised to block any nominations of House Democrats who vote for Obamacare to any Senate-approved federal position.