Pelosi Claims Health Care Reform to Save $1.3 Trillion; No Mention in CBO Estimate

By Matt Cover, CNSNews.com Staff Writer
Mar. 26, 2010

House Speaker Nancy Pelosi (D-Calif.) said that the health care reform package the House passed on March 21 would ultimately save the country $1.3 trillion over the next 20 years. That claim, however, was not made by the Congressional Budget Office (CBO) in its cost estimate of the bill.

Pelosi, speaking to reporters at her weekly Capitol Hill press conference on Thursday, said that one of the most important reasons for passing the legislation was that it would save the government so much money.

“[O]ne of the main reasons to do the bill was that it saves the taxpayers $1.3 trillion — $1.3 trillion — over the life of the bill and the 10 years beyond,” she said.

However, no such figure appears in the Congressional Budget Office’s estimate of the package President Obama signed into law Tuesday.

According to a CBO letter sent to Pelosi on March 20, the day before that House passed the bill, the health reform bill and an accompanying package of amendments is expected to reduce the deficit by $143 billion over the 2010-2019 time period.

For the following decade, the CBO does not attempt to quantify the bill’s possible effects on the budget because, as it says, there are simply too many unknown factors for any estimate to be accurate.

“CBO has developed a rough outlook for the decade following the 2010–2019 period by grouping the elements of the legislation into broad categories and (together with JCT) assessing the rate at which the budgetary impact of each of those broad categories is likely to increase over time,” the report says.

The CBO did give a broad range that the package might reduce the deficit, saying that if Congress did not modify the law over the next 20 years, it could reduce the deficit “during that decade in a broad range between one quarter percent and one-half percent of gross domestic product (GDP).”

The CBO said that any estimates beyond 20 years were unreasonable, and declined to give any in their letter to Pelosi.

“CBO has not extrapolated estimates further into the future because the uncertainties surrounding them are magnified even more.”

While some press accounts attributed Pelosi’s figure to internal calculations based on the CBO’s 20-year projections, CNSNews.com could not confirm this despite repeated requests to the Speaker’s office asking to name the source of the figure.

In addition, in a March 19 letter to Rep. Paul Ryan (R-Wisc.) the CBO explained that the health care bill will begin adding to the deficit the moment congressional Democrats change the payment system Medicare uses to pay doctors.
Known as the “Doc Fix,” the change was removed from earlier versions of the bill in order to make it appear deficit- friendly. However, if Democrats go ahead with the changes as expected, the CBO explained that the deficit will rise by nearly $60 billion.

"CBO estimates that enacting H.R. 3961 [Doc Fix], by itself, would cost about $208 billion over the 2010–2019 period," the CBO informed Ryan. "CBO estimates that enacting H.R. 3961 together with those two bills [health care and a companion package of amendments] would add $59 billion to budget deficits over the 2010–2019 period."