CBO Numbers for Health Care

Much is riding on the Congressional Budget Office's (CBO) numbers concerning the health care bill. This past week the CBO reported that the health care bill will provide about $138 billion in savings for the deficit over the next 10 years. One point needs to be stressed here: the CBO can only issue a report based on the numbers Congress provides within the bill. If those numbers are not correct, or if there is no way those numbers will ever be realized, then the CBO numbers will be wrong. But the CBO has to go with Congress' numbers, with no qualifications.

To put this in perspective, let's say I want to buy a $1 million house, something that is beyond my ability. I fill out a loan application and tell the lender that I plan on marrying a wealthy heiress in about four or five years. In addition I plan on tripling my business, in large part by working 3 times harder than I do now. I attach numbers to these things, which in the end give the appearance that I will be making a lot more in 5 years than I do now. Additionally, I leave off of the loan application that I owe a neighbor $200,000. So, based on this information, should the lender give me a loan? If the lender was Nancy Pelosi, the answer would be yes. So what happens when I get this loan from Nancy Pelosi and none of these things come about. There is no way I can pay back the loan. I go in default, or bankruptcy.

This is essentially what is happening with the CBO numbers. There are two main sources of "income" that Congress has provided to the CBO to goose their numbers: 1) roughly $500 billion in Medicare savings by eliminating fraud, waste and abuse, and 2) a tax on cadillac insurance plans (mostly union related) that is supposed to be imposed starting in 2018 (roughly $130 billion). So, do you really believe that those numbers will become a reality? I sure don't. What are the chances that Congress, under pressure from unions, will repeal the cadillac tax? Even democrat leader Stenny Hoyer admitted that Congress will have to show courage in the future to make that happen. Yeah, right. And the $500 billion in Medicare waste and fraud? They have been talking about that for years, with absolutely no "courage" to do anything about it. And then there is the doctor fix in Medicare. That item, which has to happen, will cost an additional $200 billion; but that is a cost which won't look good on the CBO numbers, so it has been left off the health care bill and placed into a separate bill to be voted on later.

So when democrats throw around the CBO numbers, don't believe them. It would be like giving me a loan for my million dollar house, although I am still working on the rich heiress.