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CBO: New Baucus Deficit Neutral Bill Costs $829B, Will Reduce Deficit By $81 Billion Over Next Decade

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"CBO: New Baucus Deficit Neutral Bill Costs $829B, Will Reduce Deficit By $81 Billion Over Next Decade"

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The Congressional Budget Office has estimated that the new version of the Senate Finance Committee’s health bill “will result in a net reduction in federal budget deficits of $81 billion over the 2010-2019 period.” The Committee’s deficit neutral proposal will cost approximately $829 billion, about $55 billion more than the original pre mark-up version, but about $71 billion less than President Obama’s $900 billion target. The full Committee is expected to vote on the final bill sometime next week.

During 7 days and more than 80 hours of mark-up, the Committee considered over 140 different amendments and voted on 103. In fact as Chairman Max Baucus (D-MT) pointed out throughout the hearings, “it has been 15 years since this committee has held mark-up that took five days.” “Since then we have held more than 150 mark-ups and most of those took one or two days.” Baucus reminded Republicans that “the 2001 tax cut bill was a $1.3 trillion bill, we spent, I don’t know how many days on that, not too many days. This is a $900 billion bill…this committee hasn’t spent actually more than two days in mark-up for ten years. But this is a big bill and we’re just trying to find away to find the right balance here, the balance between understanding the bill on one hand, and acting on the other,” Baucus said.

Per the Chairman’s instruction, the committee’s health care bill had to remain deficit neutral and cost less than $900 billion over 10 years. Today, the CBO concluded that the committee met its goal. Here is a comparison of how the bill evolved during mark-up:


Old CBO Score Of Baucus Bill New CBO Score Of Baucus Bill
Costs Reduce deficits: $49B/10yrs
Net Cost: $500B/10yrs
Gross cost: $774B/10yrs
Spends on subsidies: $463B/10yrs
Reduce deficits: $81B/10yrs
Net Cost: $518B/10yrs
Gross cost: $829B/10yrs
Spends on subsidies: $461B/10yrs
Insured Uninsured reduced by: 29M
Uninsured in 2019: 25M
In Exchanges: 25M
In Medicaid: 11M
Uninsured reduced by: 29M
Uninsured in 2019: 25M
In Exchanges: 23M
In Medicaid: 14M
Revenue Tax high cost plans: $215B/10yrs
Mandate penalty: $20B/10yrs
Free rider penalty: $27B/10yrs
Indirect offsets: $12B/10yrs
Tax high cost plans: $201B/10yrs
Mandate penalty: $4B/10yrs
Free rider penalty: $23B/10yrs
Indirect offsets: $83B/10yrs
Medicare
and
Medicaid
Total savings: 409B/10yrs
Payment updates: $182B/10yrs
Medicare Advantage: $123B/10yrs
DISH Payments: $48B/10yrs
Medicare Commission: $23B/10yrs
Total savings: 404B/10yrs
Payment updates: $162B/10yrs
Medicare Advantage: $117B/10yrs
DISH Payments: $45B/10yrs
Medicare Commission: $22B/10yrs

Despite the positive CBO score and the bipartisan nature of the bill, it incorporates many conservative ideas, Republicans are still dismissing the legislation. In fact, during the last few minutes of mark-up, Sen. Chuck Grassley (R-IA), the ranking member on the committee conceded that regardless of the CBO score, “There is a product here that all of the people on my side may not vote for.”

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