Judging from today’s papers and the left-leaning blogosphere, the Democratic line on yesterday’s CBO report is that it shows the bill “saves money.” Saves money? Let’s be clear: The Baucus bill proposes to spend more than $800 billion in the midst of an explosion of federal spending and debt to create a new entitlement program, the cost of which CBO says will grow at more than 8 percent a year (faster than health care costs grow now), and to raise taxes by almost $200 billion in the midst of a recession. It then proposes to make up the difference by massive cuts in Medicare which, as CBO notes, are unlikely to actually materialize.
Neither raising taxes nor spending $800 billion constitutes saving money. Creating a huge new entitlement doesn’t either. Each of the elements of the proposal is a bad idea in itself, and the combination — carefully calibrated with staggered start-dates and assorted gimmicks to look roughly deficit neutral in the ten-year window CBO has to look at — is a colossally expensive step toward a colossally inefficient health-care system.