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Politics & Policy

What The CBO Score Means

Today’s hot new news on the Obamacare ”replacement” front is the release late this afternoon of the “score” by the Congressional Budget Office, which purports to show that the bill currently under consideration would cut spending by $1.2 trillion over ten years, cut taxes by over $800 billion over the same period, and thus reduce the deficit by  $337 billion over that period. Those figures are based on assumptions about the number of people who would have insurance, and the CBO estimates about 24 million fewer people would be insured, including 14 million fewer on Medicaid, by 2026. It’s also based on projections of insurance premiums.

What does all this mean? Obviously, a bunch of bad headlines for the House bill. But in practical terms, the most important figure is the deficit reduction, and here’s why. Congressional procedure requires the CBO to “score” the budget impact of any new proposal over a ten-year economic horizon, and imposes significant obstacles to passing bills that score as increasing the deficit. The scoring system affects the structure of bills themselves, ranging from the counterproductive (Bush phasing in his tax cuts gradually, against all the best economic advice, then letting them sunset after ten years) to the baldly fraudulent (Obamacare only passed by phasing in the taxes for four years before starting the spending, then pretending that this 10-pays-for-6 scam created a sustainable budgetary impact in future years when one year’s spending would need to be paid for by one year’s taxes).

The whole thing is a silly system, given that CBO scores are thus classic “Washington facts” that have power totally unrelated to whether or not they are accurate. The CBO has been wrong every time in the past it has tried to project the number of people with health insurance, including being off by 24 million people when it updated its projections after the Supreme Court struck the mandatory nature of its Medicaid expansion in 2012. But rules are rules even if they require you to declare that the sun’s not yellow, it’s chicken. The projections of who will and won’t be insured don’t actually mean anything. But the projections of deficit reduction mean a lot, whether or not they are accurate – because they give the bill the procedural green light to go forward.

And that is how the game is played in Washington.


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