Critical Condition

Baucus Caucus Misstates Price Tag

The official cost estimates of the Baucus bill are “full of magical math and budgetary sleight-of-hand designed primarily to serve political ends.”

That’s not a Republican senator or a conservative think-tanker talking. That’s an observation by James Oliphant and Kim Geiger, Chicago Tribune reporters and authors of a news analysis of what the Baucus Caucus says about the bill and what is actually true. Here’s a key passage:

Despite the soaring cost of health care, for example, and the need for federal subsidies if lower-income Americans are required to buy medical insurance, the Baucus bill projects that by 2019 it will have a surplus of $49 billion.

And Baucus announced Monday evening that he would use this projected surplus to pay for added provisions to make health care more affordable for low- and middle-income consumers.

“Baucus learned a lot of lessons about how you have to construct the bill to get what you want,” said Douglas Holtz-Eakin, a former chief of the Congressional Budget Office.

The CBO provides cost estimates that lawmakers use to tout the frugality of their proposals.

Baucus holds down the total cost of his proposals by assuming that there will be cuts in Medicare reimbursements to doctors. Yet Congress has repeatedly blocked those cuts in recent years and is widely expected to do so again. Not making the cuts would cost the government more than $200 billion in health care spending.

Baucus also underestimates the number of Americans who will drop their newly taxed “Cadillac” health plans, thus overestimating how much money the new tax will bring in.

Along similar lines, the Associated Press just called out President Obama on his odd claim that a federal tax designed to enforce a health-insurance mandate would not be a tax. What’s this, journalists doing their jobs? What’s next, Charlie Rangel paying his taxes?

The Latest