Former CBO Director: House Health Care Bill Will Add To Deficit

By Leah Valencia - University of New Mexico/Talk Radio News Service

Former Congressional Budget Office Director Doug Holtz-Eakin said Monday that the House health care legislation is not deficit neutral and will not be fiscally sustainable over time.

“The heart of this bill is to repeat two of the greatest policy errors this country has made: To create large unfunded entitlement spending programs and to have a tax law that is not politically viable over the long haul,” said Holtz-Eakin.

Holtz-Eakin said the bill is on track to produce over one trillion dollars of debt in the first ten years. He argued that Democrats are using gimmicks to balance the bill in the eyes of the Congressional Budget Office.

“The best we could do with the health care reform is break even,” said Holtz-Eakin “Genuinely be honest about how much new spending they are proposing and genuinely be honest about raising the revenue to cover it. [Democrats] are doing neither of those things.”

He said the actual gross cost to expand Medicaid would be $1.055 trillion, and other spending provisions in the bill would add up to a gross figure of $230 billion, totaling well over the $900 billion promised by House leaders.

“I think as a result, that these are reforms that are not durable in any deep sense and are not desirable from the point of view of policy.”

Former CBO Director: Public Option Won't Help Health Care

By Leah Valencia, University of New Mexico- Talk Radio News Service

Former Congressional Budget Office Director and George W. Bush economic adviser Doug Holtz-Eakin said Monday that a public option will not solve the fundamental problems in the U.S. health care system, warning lawmakers that it would ultimately present the same problems as Medicare.

“Public plans are not going to be able to negotiate any more effectively with every local hospital and doctor in a geographic area than private insurers,” Holtz-Eakin said during a conference call hosted by the Galen Institute. “Indeed they might negotiate worse.”

Holtz-Eakin said that the options for a public plan had a remarkable resemblance to Medicare, and if it were to reimburse on the basis of Medicare payment rates, it would only add to the problem.

“Medicare payment policies are one of the problems with the American health care system,” he said. “It is not something we want to spread more broadly throughout the system, it is something we want to move away from.”

Holtz-Eakin noted that the other widely discussed option to run a public plan like a private insurance company would not increase competition because it would be too difficult for the government to politically cut out select hospitals.

“That leads us right to the solution 'let’s have more competition in the insurance market and that has nothing to do with a public option',” he said. “It is something we do not need in the debate. We need real reform.”

Minority Leaders In House And Senate Fight Obama’s Health Care Agenda

By Learned Foote- Talk Radio News Service

The minority leaders in the Senate and the House of Representatives—Mitch McConnell (R-Ky.) and John Boehner (R-Ohio) respectively—sought to preemptively counter an address set to be delivered by President Obama on health care reform Wednesday evening.

During a press conference Wednesday afternoon, Rep. Boehner warned that Obama will “repeat some of the myths that he’s been repeating over the last several months.” He said that Obama will claim that the reform proposal will reduce costs, keep the deficit from rising, and allow Americans to keep their current health care plan.

The House Majority Leader cited a report recently released by the nonpartisan Congressional Budget Office to combat these arguments. He said that the plan will spend 1.6 trillion dollars in costs, increase the deficit by $239 billion, and give employers the incentive to move millions of Americans from private to public coverage.

Senator McConnell criticized a meeting that occurred yesterday between President Obama and CBO Director Doug Elmendorf. He said that the CBO should remain free of political pressures, and likened the meeting to “the owner of the team asking the umpires to come up to the owner’s box.”

The Republican leaders rejected the idea that their opposition is inspired by political attacks on President Obama. “This is not about the President,” said McConnell. “This is about the issue, and taking the time to get it right. He said that the President criticizes “unnamed” opponents of health care reform, adding“I can’t find a single member who is not for trying to improve America’s health care system."

McConnell said that health care reform should take place on a “large bipartisan basis,” and mentioned some plans to cut costs, including preventing frivolous malpractice suits and encouraging Americans to lead healthier lives. He said that the high numbers of uninsured Americans could be reduced by equalizing tax treatment of individuals and corporations, since only companies receive deductibles by providing health insurance.

Boehner stated that the President should “scrap” the plan proffered by the House Democrats, and that negotiations should begin anew and include both parties.

Steele Condemns Democrats' Approach To Health Care Reform

By Learned Foote- Talk Radio News Service

Republican National Committee Chairman Michael Steele condemned proposals for health care reform advanced by the Democratic Party and criticized the legislative process that he says has excluded the GOP in an address at the National Press Club on Monday.

Steele called President Obama a “good man who cares deeply about this country, but he is determined...to transform it into something none of us would recognize.”

Steele argued that the primary affliction of the health care system in the U.S. is rising costs, noting that the U.S. spends over 15% of its GDP on health care, whereas comparable countries spend about 10% of their GDP with similar outcomes. He said that “our uninsured are a symptom of that cost problem.”

Steele claimed that both Republicans and Democrats would like to see the costs associated with private health care significantly reduced, but argued that "the “Democrats’ plan to save money will cost us more money,” and that their “plan to reduce health care costs will cost us trillions more in tax dollars.” He cited a report released by the Congressional Budget Office last Friday as evidence, and also said that this report did not account for the administrative costs associated with the legislation, which he said would be even more expensive.

Steele suggested some solutions to curb these rising costs. These suggestions included posting the prices and outcomes of various procedures online, simplifying health insurance contracts to promote competition, protecting doctors from frivolous lawsuits, enacting penalties against those who unethically profit from the health care system, encouraging small businesses to form health care plans and coops, cutting Washington bureaucrats out of the equation, allowing people to retain health insurance as they move from job to job, and enabling Americans to purchase health insurance from various states, regardless of their home state.

Steele also said that “much about our health care system is in very good shape,” and said that the Democratic proposals could “lead to a 119 million Americans being dumped out of their private coverage into a cheaper, government-run health care program.”

He said that Harry Reid and Nancy Pelosi, the Democratic leaders of the Senate and House respectively, “aren’t really doctors, they’re just trying to play one on Capitol Hill by experimenting with health care and insisting on a big government takeover.”

Steele criticized the legislative process, which he says is occurring too quickly for Congress to read the legislation at hand, saying that the Democrats are “determined to shove this bill through without permitting any meaningful scrutiny,” and are leaving Republican leadership out of the discussion. “The Democrats have no intention to have a bipartisan bill,” he added.

Long term health care budget likened to a dysfunctional relationship

The long term budget outlook for slowing the growth of health care costs was discussed at a hearing before the U.S. Senate Committee on Finance. Panelist Dr. Peter R. Orszag, Director of the Congressional Budget Office (CBO), gave the analogy of a dysfunctional relationship to illustrate the unsustainable state of the federal budget. Orszag said that, like such a relationship, there was no telling how long the budget would last but the end was bound to be messy.

Panelist Mr. Gene Dodaro, Acting Comptroller General of the Government Accountability Office (GAO) cautioned that Social Security cash surplus would start declining in 2011. Dodaro said that this would force increased borrowing from the public, reduced spending or increased revenue. Dodaro also said that American standard of living would be affected in terms of how the types of services would be funded.

Chairman Max Baucus (D-Mont.) noted that Congress would be able to help more if given more data regarding health care costs and guidelines. Orszag agreed and discussed ways to constrain costs without adversely affecting health benefits. Orszag recommended increasing the salience of health costs and improving health care efficiency. He said that might result in a change in cost-consciousness which would shift demand. Orszag also recommended generating more information about effectiveness and changing incentives such that people pay for ‘better care and not just more care’. Lastly, Orszag stressed the importance of adopting measures that promote healthier living such as increasing cigarette tax to discourage smoking.