Dems' Chicago Accounting on Health Care

The Congressional Budget Office reported Wednesday that Democrats are double-counting savings in their so-called "reform" bill which passed the Senate on a party-line vote on Thursday morning of 60-39, with only retiring Republican Jim Bunning (R-Ky.) not voting.  

Senate Leader Harry Reid’s (D-Nev.) claims of deficit reduction are based almost entirely on the money “saved” in Medicare reductions. But those cuts have yet to be made, and Congress has routinely refused to do. Not just once, but for decades.

The deficit reductions are imaginary, but the huge costs imposed by the bill — taxation of healthcare “Cadillac” plans and many other taxes — are entirely real.

The sleight-of-hand, covering about $300 billion over 10 years, means that the Senate bill, even with its massive up-front tax hikes and delayed “benefits”, will add about $170 billion to the deficit (and that’s accepting the Democrats’ unrealistic assumptions) rather than the initial claim that it will cut $130 billion.  In all likelihood, the numbers will be much worse as consumers and employers change their behavior to avoid costs or get their free lunch.

CBO Director Doug Elmendorf is tired of the Democrats’ gaming CBO scores for political purposes.  In his letter (pdf) to Sen. Jeff Sessions, Mr. Elmendorf was as devastating to Democrats’ claims as someone in a highly visible non-partisan position could be:

“To describe the full amount of HI (Medicare health insurance) trust fund savings as both improving the government’s ability to pay future Medicare benefits and financing new spending outside of Medicare would essentially double-count a large share of those savings and thus overstate the improvement in the government’s fiscal position.”

Or, as Sessions put it after speaking with Elmendorf, “Either you’ve weakened the Medicare substantially or you’re going to have no money to spend on the new program that’s being created," he said. "You cannot spend this money twice.”

Sen. Judd Gregg (R-N.H.) called the Democrats’ claims of savings "Madoff Accounting".

On Thursday, Senate Democrats ignored the news when they passed Reid’s bill on a party-line vote. By that time they had little choice. They’ve allowed themselves to be led down a path by Harry Reid and, to quote Dick Armey, they forgot that when you make a deal with the devil, you’re the junior partner.

Just when congressional Democrats should have been frightened by the political ramifications of being forced to support a bill that is not even popular with the liberal base (because the bill isn’t sufficiently redistributionist and statist for them), the CBO’s “clarification” has made their predicament even worse.  Several Democrats, including so-called “Blue Dogs” — more like Pelosi’s lap dogs at the last health care vote — have said that they will only support a bill that is deficit-neutral or better.  How can they rely on the CBO report that CBO says is gamed, and which Elmendorf said was “double counting”?  But they will, predictably.

In a statement that doesn’t pass the giggle test, Harry Reid’s spokesman argued that the CBO score is just about this bill and that on its own, considering just Medicare, it does decrease the deficit. That argument is like saying that buying something with a credit card isn’t actually spending money because you still have the cash in your wallet. And, as is typical of Democrats’ economic thinking, they assume the bill will never arrive in the mail. They also incorrectly assume the American public is as fiscally incompetent as they are, forgetting that citizens balance their dwindling checkbooks while watching Harry Reid pay Cash for Cloture.

The House version of health care “reform” passed by 5 votes, which is to say that if three votes changed it would have failed.  And one of those five votes was by the lone Republican “aye” vote, Joseph Cao (La.), who only voted for the bill once the Democrats had enough to pass it. In other words, if two Democrat supporters of the bill change their minds, the House could be the place where this bill dies.

This assumes that Nancy Pelosi can’t arm-twist other Democrats who were originally “no” votes to switch to “yes”, such as Colorado’s Betsy Markey who got permission to vote “no” the first time. And that’s not necessarily a good assumption. Nancy Pelosi cares not a whit for the political careers of Blue Dogs — or anyone else. After all, Pelosi views the Democrats’ health care measures as historic. Indeed they are, but for quite different reasons than she believes.

If Pelosi does not have the votes to simply concur with the Senate bill (the quickest path toward passing something), she may — as the Wall Street Journal’s John Fund suggests — “replace the traditional conference committee with a ‘ping-pong’ game in which health care is finalized behind closed doors with little public scrutiny before the bill is rushed to the floor of each chamber for a final vote.” Pelosi has used this tactic before, ignoring the legitimate complaints of Congressmen who said their legislative prerogatives were being trampled. Given the Senate Democrats’ repeated willingness to violate long-standing Senate rules to pass a bill, Pelosi will need little encouragement to follow a similarly corrupt path.  

Rumors abound that Pelosi and Reid will come up with a compromise bill on their own, behind closed doors. The only remaining question is, if they do, how many Dems will bolt? Few, if any.  They fear Pelosi and Reid more than they fear their constituents.  

Any Democrat who claims to support fiscal responsibility or political transparency and is thinking of supporting this bill at the final vote can already see the campaign ads which will be run against him or her at the next election: "You lie!" Blue Dogs, beware.