Melody Barnes during White House forum on health care in March. (Getty)
The White House is trying out a new argument to ease concerns over
those sky-high estimates of the cost of overhauling the health care system. The federal government wouldn’t really be spending more money on health care, the argument goes — just shifting money that’s already in the system and spending it more efficiently.
It’s a dangerous argument for the White House to make, though, because it’s too easily shot down.
On ABC’s Good Morning America this morning, Melody Barnes, director of the White House Domestic Policy Council, used the argument to dismiss the Congressional Budget Office’s estimates that various versions of the health care bill could cost anywhere from $1 trillion to $1.6 trillion.
“I think people thinking that this is brand-new money that’s being printed,” she said. “There’s already $2 trillion worth of health care that’s being spent already. This is redirecting that money so that it’s more efficiently and effectively used and so that people are getting better quality health care.”
The problem is that the Congressional Budget Office was pretty clear that it is brand-new money — at least, on the federal spending side, which is what Congress has to worry about.
In its estimate of an early draft of the Senate Health, Education, Labor and Pensions Committee bill, the office said the bill would create a “net increase in federal deficits” of $1 trillion in the first decade, thanks to new subsidies to help people buy health coverage and a credit to help small businesses cover their workers.
White House officials aren’t wrong to suggest that some of the new federal spending will simply be a shift in spending that’s already happening on the private side. By covering more uninsured people, for example, an overhaul could put less strain on emergency rooms that have to provide so much routine medical care — at a cost that gets passed on to everyone else. “Yes, there will be some savings. There will be less demand for emergency rooms,” said Maya MacGuineas, executive director of the Committee for a Responsible Federal Budget, a deficit watchdog group affiliated with the New America Foundation.
But it’s not right to suggest that the entire cost will just be a redirection of money that’s already being spent, MacGuineas said. “The expansion in coverage is going to come through new spending,” she said. “This is, overall, going to increase the amount of resources being devoted to health care.”
Clearly, the White House is looking for ways to keep these cost estimates from sinking the entire effort. So far, President Obama has gotten a lot of traction by focusing on the likely costs of not overhauling the health care system — how rising premiums will keep eating into people’s paychecks and the bottom line of businesses throughout the country.
But they’re not likely to get very far trying to pretend there won’t be a cost to the overhaul itself.
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Comments
One little noted fact about the CBO report on the Kennedy bill (the only CBO report yet released) is that it estimated that the federal government would gain $257 billion in additional income tax revenues on the increased income employees would receive if the cost of their health insurance was shifted from their employer to the federal government. I don't know what rate the CBO uses to make these projections, but I would assume this means $800 billion to a $1 trillion in additional income for American workers. Health care reform will, it is hoped, improve the health of Americans, bring down the total cost of health care (which will be probably $35 billion over the next ten years), and increase the wages of American workers. Yet the media can talk only about the CBO bottom line.
Posted by: tim
| June 23, 2009 8:56 AM
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