HEALTH REFORM -- March 18, 2010 at 1:08 PM ET
CBO: $940 Billion Health Care Bill Would Trim Deficit Over Next Decade
Updated 4:05 p.m.
President Obama's health care reform bill would cost $940 billion over ten years and reduce the federal deficit by $138 billion over the same time period while expanding health insurance coverage to 95 percent of the population, according to an estimate released Thursday by the Congressional Budget Office.
The highly anticipated CBO report could set the stage for a House vote on the bill as early as Sunday. White House spokesman Robert Gibbs said Thursday that President Obama will delay a planned trip to Indonesia yet again in order to be present for the final health care reform negotiations. The president was set to leave Sunday morning on the trip, but he'll now wait until June.
The CBO report estimates the cost and deficit reduction potential of the Democrats' latest health care reform package -- a reconciliation bill with amendments to the original Senate bill that passed in Demember.
The reconciliation bill makes some significant changes to the Senate bill, including:
Eliminating the controversial "Cornhusker kickback" provision exempting Nebraska from paying the costs of a Medicare expansion.
Closing the Medicare prescription drug "donut hole" by 2011.
Reducing the penalty for individuals who choose not to buy insurance from $750 to $695.
Spending an additional $250 million to fight health care fraud and abuse.
Delaying the "Cadillac tax" on high-cost health insurance plans until 2018, and raising the limit for the cost at which it kicks in from $23,000 for families to $27,500.
Increasing tax credits for middle-income families making up to 400 percent of the poverty level to make health insurance more affordable.
The president touted the bill's deficit reduction in a statement to reporters Thursday: "This is but one virtue of a reform that would bring accountability to the insurance industry and bring greater economic security to all Americans," he said.
And Democratic leaders declared themselves thrilled with the cost estimate.
"We are absolutely giddy over the great news," said party whip Rep. James Clyburn of South Carolina.
You can read the CBO report here [PDF]. Here's an excerpt of what the report had to say on the deficit figures:
CBO and JCT estimate that enacting both pieces of legislation--H.R. 3590 and the reconciliation proposal-- would produce a net reduction in federal deficits of $138 billion over the 2010-2019 period as result of changes in direct spending and revenue (see the top panel of Table 1 and subtitle A of title II on Table 5). Approximately $85 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 the potential impact of the legislation on discretionary spending, which would be subject to future appropriation action.
According to the CBO, the final bill would cost $940 billion over ten years, which is more than the original Senate bill would have cost.
But due to new savings in the reconciliation bill -- including savings from student loan reforms that are now being packaged with the health reforms -- the final bill would actually reduce the federal deficit by more than the original Senate bill: $138 billion as opposed to $118 billion over 10 years. The bill would expand insurance coverage to 32 million people over those 10 years, according to the estimate.
Democratic leaders spent the week going back and forth with the CBO to get the bill's cost estimate to meet their target for deficit reduction. House Speaker Nancy Pelosi has has been working to round up the 216 votes she needs to pass the reconciliation bill. But many key members -- particularly fiscally conservative Blue Dog Democrats -- had said they would wait to see the CBO cost estimate, along with the final text of the bill, before making a decision.
Lawmakers have pledged that the text will be available online for at least 72 hours before a House vote, meaning that the earliest a vote could occur would be Sunday.