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Does The Senate Health Bill Really Cost $2.5 Trillion?

By Igor Volsky on November 24, 2009 at 11:43 am

"Does The Senate Health Bill Really Cost $2.5 Trillion?"

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Over at TPMDC, Brian Beutler takes apart the Republican argument that the mischievous Democrats fooled the non-partisan Congressional Budget Office (CBO) into thinking that the cost of the Senate bill is $848 billion over 10 years, when the real figure — GOP staffers discovered — is $2.5 trillion:

It appears as if the number comes from a press release from Budget Committee ranking member Judd Gregg (R-NH), written the morning after the CBO released its analysis, which reads “American taxpayers are about to see an unprecedented expansion of the federal government that will cost a staggering $2.5 trillion when fully implemented.”

On Saturday, Republicans repeated the figure over and over while debating the motion to proceed:

Moving the start date of the exchanges and most other benefit-heavy policies to 2014 helps bank more money for reform (and meet the President’s $900B limit), but the bill doesn’t exactly hoard away billions to pay for benefits. According to the CBO, between 2013 and 2015, the government takes in $54 billion, but pays out $12 billion to insure Americans who are denied coverage in the individual market and gives tax credits to small businesses that choose to offer health insurance coverage. Over that time period, the bill collects taxes from the health care industry — cuts the industry has already generally agreed to — and banks $42 billion for implementing reform and expanding the system to accommodate 31 million newly-insured Americans.

The government spends more on health care in the first 10 years but during the decade following the 10-year budget window, “the increases and decreases in the federal budgetary commitment to health care stemming for this legislation would roughly balance out, so that there would be no significant change in the commitment.” As Beutler points out, “the critique elides the fact that, whatever the federal responsibility for health care becomes as a result of this bill, it’s projected to dramatically reduce the deficit in both the near and long term.” And that’s something Republicans didn’t care for until the Democrats introduced legislation taking on the health insurance industry.

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