In anticipation of the February 25th health care summit with members of Congress, the President released his proposal for pricey, government-run health care. The White House estimates the cost of the proposal to be $950 billion over a decade, decreasing the federal deficit. However, health policy expert James Capretta, a former senior official of the Office of Management and Budget (OMB), shows in a recent paper that this is not only inaccurate, but far from reality. Capretta’s research shows that ten full years of implementation of the President’s proposal would cost closer to $2.5 trillion, with the strong likelihood of far exceeding this amount. Here’s how:
- The President’s proposal ignores “doc fix” legislation, which would cost roughly $200 billion over ten years. As Capretta notes, it is ironic that the President does not account for this provision, but includes several other Medicare provisions in his proposal.
- Non-coverage spending would add about $90 billion to the cost of the bill.
- Cost estimates for the President’s plan should apply to the ten year window from 2011 to 2020—not to 2019. This would add approximately $200 billion more to the cost of the bill.
- The President’s plan includes the CLASS Act, premiums from which are double-counted. Fixing this adds $72 billion to the cost of the bill.
- The true ten year window of the bill, including spending reductions, new revenues, and new spending, is 2014 to 2023. During this period, the Senate bill would cost $2.3 trillion. Adding the President’s additional provisions, at $75 billion, as well as the aforementioned provisions, arrives at a grand total of over $2.5 billion.
According to Capretta, the newly created entitlement programs created by the bill are likely to expand over time to include more Americans. In addition, spending cuts to current entitlement programs have little chance of coming to fruition, as these cuts would put several institutions in financial trouble. Capretta’s full analysis can be read here.
House Cloakroom:
Major Floor Action
- Cybersecurity Bill – Next week, the House will consider H.R. 4061, a cybersecurity enhancement bill which was approved by the Science Committee by voice vote in November 2009. The bill would reauthorize several National Science Foundation programs that aim to enhance cybersecurity. CBO estimates (PDF) that H.R. 4061 would cost $639 million over five years and $320 million after 2014.
- Debt Limit Increase – The House could consider a $1.9 trillion increase of the statutory debt limit as early as next week. The bill would increase the debt limit by 15.3 percent, from $12.394 trillion to $14.294 trillion. The $1.9 trillion increase is expected to ensure that Democrats will not have to bring another increase before Congress prior to the November elections.
Major Committee Action
- House Budget Committee will hold a hearing on the Fiscal 2011 budget with Timothy Geithner, Secretary of the Treasury, on Wednesday.
- House Ways and Means Committee will also hold a hearing on the 2011 budget with Peter R. Orszag, director, Office of Management and Budget, on Wednesday
Senate Cloakroom:
Analysis
The President will release his budget next week, kicking off weeks of hearings and discussions about funding our nation’s priorities. However, the real news will once again be what is happening behind closed doors. Private discussions will continue on yet another stimulus and liberals must try to find a way to move Obamacare, perhaps through the politically poisonous reconciliation process. Even after the President’s State of the Union address, many questions remain in the Senate.
Major Floor Action
The Senate will try to dispense with two nominees early next week: M. Patricia Smith to be solicitor of the Department of Labor and Martha Johnson to be administrator of the General Services Administration. Senator-elect Scott Brown (R-MA) could be sworn in next week as well.
Major Committee Action
- The Armed Services Committee will hold a hearing on the Fiscal Year 2011 defense budget and on the military’s “Don’t Ask, Don’t Tell” policy.
- The Senate Banking Committee will hold a hearing on efforts to control high-risk activities by banks.
- The Finance Committee will hold a hearing on various health care proposals.