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Congressional Budget Director-Proposed Health Care Reform Would Increase Costs

By: AP Email
By: AP Email

(AP)WASHINGTON – Democrats' health care bills won't meet President Barack Obama's goal of slowing the ruinous rise of medical costs, Congress' budget umpire warned on Thursday, giving weight to critics who say the legislation could break the bank.

The sobering assessment from Congressional Budget Office Director Douglas Elmendorf came as House Democrats pushed to pass a partisan bill through committees, while in the Senate a small group of lawmakers continued to seek a deal that could win support from both political parties.

With the pressure mounting on all sides, Senate Majority Leader Harry Reid, D-Nev., dismissed as "a waste of money" a television ad campaign by Obama's political organization aiming to nudge moderates of both parties off the fence. He called it "Democrats running ads against Democrats." A spokesman later said Reid has no problem with the effort.

From the beginning of the health care debate, Obama has insisted that any overhaul must "bend the curve" of rapidly rising costs that threaten to swamp the budgets of government, businesses and families.
Asked by Senate Budget Committee Chairman Kent Conrad, D-N.D., if the evolving legislation would bend the cost curve, the budget director responded that — as things stand now — "the curve is being raised."
Explained Elmendorf: "In the legislation that has been reported, we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount. And on the contrary, the legislation significantly expands the federal responsibility for health care costs."

Even if the legislation doesn't add to the federal deficit over the next years, Elmendorf said costs over the long run would keep rising at an unsustainable pace.

Part of the reason is that Obama and most Democrats have refused to accept a tax on high-cost health insurance plans as part of the overhaul. There's wide agreement among economists that such a tax would give businesses and individuals an incentive to become thriftier consumers of health care. Senate Finance Committee Chairman Max Baucus, D-Mont., said Thursday that Obama's position isn't helping matters.

White House officials played down the significance of the budget director's assessment, calling it premature. "At the end of the day, we'll have significant cost controls," presidential adviser David Axelrod told The Associated Press.

Senate Republican leader Mitch McConnell of Kentucky said the budget director's warning should be "a wake-up call," adding, "instead of rushing through one expensive proposal after another, we should take the time we need to get things right."
For the fourth straight day, Obama used a public forum — a political rally for New Jersey Gov. Jon Corzine — to argue for health care overhaul, saying, "It affects the stability of our entire economy."

Despite the flashing yellow light from the budget office, Congress pushed ahead Thursday.

On the heels of the Senate health committee's approval Wednesday of a plan to provide coverage to the uninsured, three House committees shifted into action on their version of the legislation. The Democratic bills also call for the creation of a government-sponsored insurance plan to compete with private coverage, although they differ on the details.

House Democrats won a coveted endorsement of their legislation from the American Medical Association, saying the bill "includes a broad range of provisions that are key to effective, comprehensive health system reform. The insurance industry said it opposes key elements of the bill, saying a government plan "will cause millions of patients to lose their current coverage."
The House Education and Labor Committee passed an amendment to speed up access to health insurance for people with preexisting medical conditions. The bill as written would have stopped insurance companies from denying coverage because of such conditions, starting in 2013. The panel agreed Thursday to move up the date for group plans to six months after the bill takes effect.

The tax-writing Ways and Means Committee also was working on a piece of the legislation, which seeks to provide coverage to nearly all Americans by subsidizing the poor and penalizing individuals and employers who don't purchase health insurance. It would boost taxes on high-income people and slow Medicare and Medicaid payments to providers.

Majority Democrats on both committees turned back GOP efforts to strip key provisions from the bill, rejecting Republican amendments to delete a new government-run benefits plan and eliminate requirements on employers to provide health coverage, among other things.
A third House committee, Energy and Commerce, also was considering the measure Thursday, but the road was expected to be rougher there.

A group of fiscally conservative House Democrats called the Blue Dogs holds more than a half dozen seats on the committee — enough to block approval — and is opposing the bill over costs and other issues.
Rep. Mike Ross, D-Ark., chairman of the Blue Dogs' health care task force, said the group would need to see significant changes to protect small businesses and rural providers and contain costs before it could sign on. "We cannot support the current bill," he said.
Obama was doing all he could to encourage Congress to act. He met Thursday morning with two potential Senate swing votes, Sens. Ben Nelson, D-Neb., and Olympia Snowe, R-Maine. On Wednesday, he met with a group of Senate Republicans in the White House in search of a bipartisan compromise and appeared in the Rose Garden for the latest in a series of public appeals to Congress to move legislation this summer.

In another ad campaign backing the president's goal, Harry and Louise — the television couple who helped sink a health care overhaul in the 1990s — are returning to the small screen, this time in support of revamping the health system.


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