Ignoring key CBO findings, Fox News' Cameron misleads on cost of Senate health bill
Research ››› ››› JUSTIN BERRIER
In a report on the Senate health care reform bill for Fox News' Special Report, chief political correspondent Carl Cameron cited the Congressional Budget Office (CBO) to claim that the Senate health care bill would increase federal health care spending over 10 years and that, in the decade after 2014, "the cost nearly triples to well over 2 trillion." But Cameron ignored CBO's conclusions that the bill would reduce federal deficits in both of the next two decades and that in the second decade, the bill would not increase net federal health care spending.
Cameron selectively quoted CBO on the cost of the Senate health care bill
Cameron: Bill increases "federal commitment" to health care. On the November 19 edition of Special Report, Cameron claimed the legislation "was supposed to reduce health care costs, but the nonpartisan Congressional Budget Office says, quote, 'Federal outlays and the federal budget commitment for health care would increase over the 2010-19 period by a net amount of about $160 billion.' " Cameron also quoted Sen. John Thune (R-SD) claiming, "[Democrats] have tried to figure out a way to wrench it into a budget window that somehow makes it looks like it costs less, but at the end of the day, it actually costs more."
Cameron claimed bill costs "well over 2 trillion" during decade after 2014. Cameron stated, "Democrats get their 10-year, $848 billion cost by calculating between now and 2019, but the actual spending in the legislation doesn't begin until 2014. And if you add up the decade following that, the cost nearly triples to well over 2 trillion."
But Cameron ignored CBO conclusion that bill reduces deficits
CBO: Bill yields "a net reduction in federal deficits of $130 billion" over 10 years. From CBO's November 18 cost estimate:
CBO and JCT estimate that, on balance, the direct spending and revenue effects of enacting the Patient Protection and Affordable Care Act would yield a net reduction in federal deficits of $130 billion over the 2010-2019 period (see Table 1). Approximately $77 billion of that reduction would be on-budget (other effects related to Social Security revenues and spending as well as spending by the U.S. Postal Service are classified as off-budget). CBO has not completed an estimate of all of the legislation's potential impact on spending that would be subject to future appropriation action.
CBO expects bill to reduce deficit by around $650 billion during decade after 2019. The CBO concluded that the bill will continue to reduce the deficit beyond the 10-year budget window that ends in 2019 by "around one-quarter percent of GDP." As FoxNews.com reported, this reduction amounts to "as much as $650 billion." From the cost estimate:
In the decade after 2019, the gross cost of the coverage expansion would probably exceed 1 percent of gross domestic product (GDP), but the added revenues and cost savings would probably be greater. Consequently, CBO expects that the bill, if enacted, would reduce federal budget deficits over the ensuing decade relative to those projected under current law -- with a total effect during that decade that is in a broad range around one-quarter percent of GDP.
CBO: After 2019, "no significant change" in federal budgetary commitment. As Cameron noted, the CBO estimated that the net increase in federal health care spending from 2010-19 is $160 billion. However, the CBO estimated that "during the decade following the 10-year budget window, the increases and decreases in the federal budgetary commitment to health care stemming from this legislation would roughly balance out, so that there would be no significant change in that commitment." Washington Post blogger Ezra Klein noted that according to the CBO, in the decade after 2019 the bill "leaves the government spending no more on health care than it otherwise planned to. That's impressive stuff given that some 94 percent of the country has health insurance [under the Senate bill]":
One actual surprise is that the Senate bill doesn't just pay for itself. It balances itself out. That is to say, the bill is not deficit neutral because it costs a billion dollars and then the government raises a billion more dollars in taxes. In that scenario, the government is spending more, but paying for it. Rather, "CBO expects that, during the decade following the 10-year budget window, the increases and decreases in the federal budgetary commitment to health care stemming from this legislation would roughly balance out, so that there would be no significant change in that commitment."
In the first 10 years, in other words, the bill improves the deficit a bit, but the government is spending $160 billion more on health care than it otherwise would have. In the second decade, however, that ends: The savings from Medicare and Medicaid, paired with the excise tax (which CBO says "is effectively a reduction in the existing tax expenditure for health insurance premiums") and a handful of other changes, leaves the government spending no more on health care than it otherwise planned to. That's impressive stuff given that some 94 percent of the country has health insurance. And it implies, of course, that in the third decade, the federal commitment actually goes down relative to expectations. The curve, as they say, is bent.