The Congressional Budget Office on Thursday released a revised cost analysis of the health care bill that the Senate adopted on Dec. 24.
The new cost analysis does not include the various changes that President Obama and Congressional Democrats are planning to include in an expedited budget package. But the updated numbers are necessary for Democrats to move forward with the budget reconciliation process.
The new budget office analysis puts the price tag of the new insurance coverage provisions in the Senate-passed bill at about $875 billion over 10 years, an increase of about $4 billion from the previous estimate. Because the cost would be more than offset by revenues from new taxes and reductions in government spending, particularly to slow the growth of Medicare, the budget office predicted that the bill over all would reduce future federal deficits by $118 billion over 10 years.
In its earlier estimate, the budget office said the bill would reduce future deficits by $132 billion.
The budget office said that the changes largely stemmed from technical corrections, but it also included adjustments for some amendments that Democrats made to the legislation after the last cost estimate was released on Dec. 19. The budget office said the only change with a “significant budgetary impact” was a package of preventive health care services for women added by Senator Barbara Mikulski, Democrat of Maryland. The budget office said those services would cost about $1 billion over 10 years.
The budget office said it also had to make adjustments to account for the drawn-out legislative process. The new analysis, it said, “reflects an updated assumption about when the legislation would be enacted, a step that is now assumed to occur in the spring of 2010; the previous estimate assumed enactment by the end of December 2009.”
In its updated analysis, the budget office reaffirmed its projection that the Democrats’ legislation would reduce the number of uninsured Americans by 31 million through 2019, as compared with current law.
Lawmakers are anxiously awaiting a cost analysis of the proposed changes to the health care legislation that would be included in a budget reconciliation package. Those changes are expected to raise the price tag of the new insurance coverage provisions to roughly $950 billion. Mr. Obama and Congressional Democrats seem intent on keeping the 10-year cost below $1 trillion out of concern that people will view the bill as too expensive.
The cost figures can often be difficult to put into context, with some people focused on the 10-year cost, others focused on the average annual cost, and still others more concerned with whether it will increase or lower future deficits. Because of the new tax revenue and cuts in government spending, the budget office predicts the health care legislation would reduce future federal deficits by perhaps $1 trillion between 2020 and 2029.
But those projections are highly uncertain, and Republicans are warning that Congress will not have the stomach to follow through with many of the spending reductions.
On Friday, however, House Speaker Nancy Pelosi cited the new analysis as evidence that Democrats were committed to adopting fiscally responsible health care legislation. “It showed over $100 billion in savings for the first 10 years of the bill, and a trillion dollars over the second 10 years,” she said. “That is exactly what we — or better — what we hope to do with the reconciliation bill, to sustain those numbers.”
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