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At Least 100 Reasons to Worry That Congress Won’t Follow Through on the Hard Choices in Health Care Reform

November 21st, 2009 . by economistmom

senate_floor

Hooray! Tonight we’re one step closer to getting a deficit-neutral health care reform bill that has at least some hope of “bending the health cost curve” in the future.

Oh wait, maybe not…

As David Broder worries about in his Sunday column in the Washington Post (emphasis added):

I have been writing for months that the acid test for this effort lies less in the publicized fight over the public option or the issue of abortion coverage than in the plausibility of its claim to be fiscally responsible.

This is obviously turning out to be the case. While the CBO said that both the House-passed bill and the one Reid has drafted meet Obama’s test by being budget-neutral, every expert I have talked to says that the public has it right. These bills, as they stand, are budget-busters.

Here, for example, is what Robert Bixby, the executive director of the Concord Coalition, a bipartisan group of budget watchdogs, told me: “The Senate bill is better than the House version, but there’s not much reform in this bill. As of now, it’s basically a big entitlement expansion, plus tax increases.”

Here’s another expert, Maya MacGuineas, the president of the bipartisan Committee for a Responsible Federal Budget: “While this bill does a better job than the House version at reducing the deficit and controlling costs, it still doesn’t do enough. Given the political system’s aversion to tax increases and spending cuts, I worry about what the final bill will look like.

Yes, the big (perhaps trillion-dollar) question is whether Congress will have the political will to keep these bills as CBO has scored them (here’s the (revised) House score and the Senate score)–as (at least ten-year) deficit-neutral, paid-for bills, where the costs of the expansion of public health insurance are offset by a combination of cuts in health spending, increases in health-spending-related revenues, and other tax increases.  As Broder continues (emphasis added):

[T]here is plenty in the CBO report to suggest that the promised budget savings may not materialize. If you read deep enough, you will find that under the Senate bill, “federal outlays for health care would increase during the 2010-2019 period” — not decline. The gross increase would be almost $1 trillion — $848 billion, to be exact, mainly to subsidize the uninsured. The net increase would be $160 billion.

But this depends on two big gambles. Will future Congresses actually impose the assumed $420 billion in cuts to Medicare, Medicaid and other federal health programs? They never have.

And will this Congress enact the excise tax on high-premium insurance policies (the so-called Cadillac plans) in Reid’s bill? Obama has never endorsed them, and House Democrats — reacting to union pressure — turned them down in favor of a surtax on millionaires’ income.

The challenge to Congress — and to Obama — remains the same: Make the promised savings real, and don’t pass along unfunded programs to our children and grandchildren.

Why am I worried that the at-least-deficit-neutral-and-hopefully-deficit-reducing quality of the health reform bills won’t persist?  In large part because what happened today in the Senate has me worried that we won’t even get started on the right path, with Senate Republicans suggesting that every single fiscally-responsible part of the bill should be opposed:

Republicans portrayed the action Saturday night as tantamount to an endorsement of the underlying bill, or “a vote for higher premiums, cuts to Medicare, and more taxes,” as Sen. Lamar Alexander (Tenn.) declared.

…and with Senate Democrats doing their best to eat away at the deficit-reducing elements of the bill with the “concessions” that are being made to win their votes.  Dana Milbank’s report this evening is really troubling:

Staffers on Capitol Hill were calling it the Louisiana Purchase.

On the eve of Saturday’s showdown in the Senate over health-care reform, Democratic leaders still hadn’t secured the support of Sen. Mary Landrieu (D-La.), one of the 60 votes needed to keep the legislation alive. The wavering lawmaker was offered a sweetener: at least $100 million in extra federal money for her home state.

And so it came to pass that Landrieu walked onto the Senate floor midafternoon Saturday to announce her aye vote — and to trumpet the financial “fix” she had arranged for Louisiana. “I am not going to be defensive,” she declared. “And it’s not a $100 million fix. It’s a $300 million fix.”

It was an awkward moment (not least because her figure is 20 times the original Louisiana Purchase price). But it was fairly representative of a Senate debate that seems to be scripted in the Southern Gothic style. The plot was gripping — the bill survived Saturday’s procedural test without a single vote to spare — and it brought out the rank partisanship, the self-absorption and all the other pathologies of modern politics. If that wasn’t enough of a Tennessee Williams story line, the debate even had, playing the lead role, a Southerner named Blanche with a flair for the dramatic.

After Landrieu threw in her support (she asserted that the extra Medicaid funds were “not the reason” for her vote), the lone holdout in the 60-member Democratic caucus was Sen. Blanche Lincoln of Arkansas. Like other Democratic moderates who knew a single vote could kill the bill, she took a streetcar named Opportunism, transferred to one called Wavering and made off with concessions of her own. Indeed, the all-Saturday debate, which ended with an 8 p.m. vote, occurred only because Democratic leaders had yielded to her request for more time.

Even when she finally announced her support, at 2:30 in the afternoon, Lincoln made clear that she still planned to hold out for many more concessions in the debate that will consume the next month. “My decision to vote on the motion to proceed is not my last, nor only, chance to have an impact on health-care reform,” she announced.

Landrieu and Lincoln got the attention because they were the last to decide, but the Senate really has 100 Blanche DuBoises, a full house of characters inclined toward the narcissistic. The health-care debate was worse than most. With all 40 Republicans in lockstep opposition, all 60 members of the Democratic caucus had to vote yes — and that gave each one an opportunity to extract concessions from Senate Majority Leader Harry M. Reid.

Sen. Ron Wyden (D-Ore.) won a promise from Reid to support his plan to expand eligibility for health insurance. Sen. Ben Nelson (D-Neb.) got Reid to jettison a provision stripping health insurers of their antitrust exemption. Landrieu got the concessions for her money. And Lincoln won an extended, 72-hour period to study legislation.

And the big shakedown is yet to occur: That will happen when Reid comes back to his caucus in a few weeks to round up 60 votes for the final passage of the health bill…

I’ve said before that that’s the trouble with how political “compromises” get worked out in Congress these days.  Instead of “I’ll give up this, if you give up that” it’s “if you’re going to get that, then I’m going to get this.”

I’m worried that all the Senators want for Christmas is for the curve-bending health reform to not bend the curve so much, and for the deficit-neutral budget constraint to not really be a binding one.  And that’s even before they have to negotiate with the House.  It could be a very long and winding and expensive path that this health reform bill takes before it lands on the President’s desk.

So there are “at least 100 reasons” to worry about Congress’ ability to “follow through” on the tough choices required to make health care reform a fiscally responsible proposition… and maybe even at least 535.  We’ll have to keep cheering on the courageous.

4 Responses to “At Least 100 Reasons to Worry That Congress Won’t Follow Through on the Hard Choices in Health Care Reform”

  1. comment number 1 by: Jim Glass

    More in the same fiscal line from former CBO head Douglas Holtz-Eakin.

    But I have no concern…

    “I will not sign a plan that adds one dime to our deficits — either now or in the future. Period” — President Barack Obama

    … for we have a president who has brought a new kind of politics to DC, and who when making a solemn promise to the public would not fib.

    It’s a good thing too, because as to the health care merits of the whole plan, which all this budget gaming and busting would buy us if he did, we have Harvard Medical School Dean Jeffrey Flier.

  2. comment number 2 by: murf

    I’m not worried at all. They will not. Period.

  3. comment number 3 by: Brooks

    I’ve said before that that’s the trouble with how political “compromises” get worked out in Congress these days. Instead of “I’ll give up this, if you give up that” it’s “if you’re going to get that, then I’m going to get this.”

    Indeed. Tragedy of the Commons:
    At the point when the carrying capacity of the commons was fully reached, a herdsman might ask himself, “Should I add another animal to my herd?” Because the herdsman owned his animals, the gain of so doing would come solely to him. But the loss incurred by overloading the pasture would be “commonized” among all the herdsmen. Because the privatized gain would exceed his share of the commonized loss, a self-seeking herdsman would add another animal to his herd. And another. And reasoning in the same way, so would all the other herdsmen. Ultimately, the common property would be ruined. http://www.econlib.org/library/Enc/TragedyoftheCommons.html

  4. comment number 4 by: SteveinCH

    Diane,

    I completely agree that Congress will not make the hard compromises. Look at the discussion on diagnostic testing that occurred this week for a small taste of how government run health care is incapable of cost/benefit tradeoffs.

    More broadly however, neither the House bill not the Senate bill is budget neutral in the way a normal human being would use those words.

    On an annualized basis, neither bill is budget neutral. The Senate bill spends only $9 billion between now and 1/1/14 while starting revenue raises on 1/1/10 so 6 years of spending and 10 years of revenues. That’s hardly a normal definition of budget neutral.

    Second, both bills rely on some form of override to make the CBO score them as budget neutral. In effect, they say some commission will cut spending enough to balance the bills. While that may work for the CBO, it isn’t what normal people would consider funded.

    Finally, the scoring process itself is broken. The revenue increases in the bill (with the exception of the penalties/taxes for noncompliance) have nothing to do with the bill and thus could be applied to the existing deficit. As a consequence, the bills are budget neutral, they are deficit sustaining while reducing flexibility to deal with the existing deficit.

    So while I agree with your point on the tragedy of the commons, the fiscal issues with the bills extend far beyond that.