You have no doubt heard that the Democrats’ health care reform proposal would cost the federal government $1 trillion in the first 10 years. Leading Republicans quote it and so do hundreds of newspapers and radio and television stations. Most Americans have heard it so often that they assume it is true.
It’s not.
Here’s how it started:
On July 17, the Congressional Budget Office, a highly regarded nonpartisan body that is the federal lawmakers’ chief source of budgetary information and analysis, gave Congress a cost estimate of HR 3200, the health care reform bill introduced by Rep. John Dingell of Michigan and other Democrats. Sure enough, the CBO projected the 10-year cost of the bill’s insurance coverage provisions at the huge figure of $1,042 billion — a good bit over one trillion dollars.
But the CBO went on to say that this amount would be partly offset by net spending changes estimated at $219 billion over the same period and by revenue provisions that would increase federal revenues by about $583 billion over those 10 years. The CBO concluded that the legislation “would result in a net increase in the federal budget deficit of $239 billion over the 2010-2019 period.”
What many did — whether deliberately or through negligence — was to take the gross figure and disregard the offsets. Ever since, they have been pinning that trillion-dollar price tag on health care reform. It’s a powerful lever to turn people against reform when the national debt has already soared as a result of Bush administration deficits and the continuing high cost of dealing with the financial collapse and current recession.
Reporters may have overlooked the true net cost appraisal because of CBO Director Douglas Elmendorf’s harsh testimony in the same session that congressional leaders were promoting an expensive new health care program instead of proposing fundamental changes to rein in the mounting costs of government health programs, particularly Medicare. Instead of altering the “cost curve,” he said, “The curve is being raised.”
White House Budget Director Peter Orszag has said that the plan was never to generate savings over the next decade. He wrote in his blog that “the goal is to provide a mechanism for improving quality of care for beneficiaries and reducing costs over the long term.” He predicted greater savings in future years.
But opponents have seized on that phony $1 trillion figure, and the Web site MediaMatters seems to have been the only voice to knock it down.
Sad to say, Karl Rove, Republican leaders, and even National Public Radio and The New York Times are all to blame for continuing to circulate the inaccurate trillion-dollar figure. Sadly, this sloppy reporting has, in part, changed the debate over health care reform, making it look more expensive than it is.
Lawmakers and the public should of course talk about the cost of reform and how to pay for it. Using accurate numbers, however, is essential to a debate that results in the right solutions.