KHN Morning Briefing

Summaries of health policy coverage from major news organizations

CBO Questions Democratic Claims On Medicare Savings

Roll Call: "Senate Republicans refused Wednesday to throw in the towel in their rhetorical war with Democrats over health care reform, accusing the majority of using accounting gimmicks to hide their use of Medicare Trust Fund money to pay for new programs in the overhaul," after Sen. Jeff Sessions, R-Ala., released a new letter from the Congressional Budget Office. The letter says because "savings to the Medicare program under the bill 'would be received by the government only once ... they cannot be set aside to pay for future Medicare spending and, at the same time, pay for current spending on other parts of the legislation or on other programs'" (Stanton, 12/23).

"The real score on this legislation is that it would cause the deficit to increase, and not be a surplus as the president has promised," Sessions told Fox News. "And a lot members of our Congress have said I won't vote for this bill unless it's deficit neutral. It's not deficit neutral. It will add to the debt. That's clear today."

Sen. Judd Gregg, R-N.H., added, "This is Bernie Madoff accounting and it's an outrage" (12/23). 

In the letter, Bloomberg reports, the "Congressional Budget Office challenged claims by health-care overhaul proponents that Medicare savings in Senate legislation would help finance expanded coverage and postpone the bankruptcy of the medical program for the elderly. The nonpartisan agency said the $246 billion it projected the legislation would save Medicare can't both finance new programs and help pay future expenses for elderly covered under the federal program. Nor could those savings be used to extend the solvency of Medicare, set to run out of money in 2017. … The estimated Medicare savings in the legislation overstate 'the improvement in the governments fiscal position,' the CBO said in the letter. 'The true increase in the ability to pay for future Medicare benefits or other programs would be a good deal smaller,' the budget office said."

"'Today's letter deals explicitly with Medicare, not the overall short and long-term budgetary impact of the legislation,' Jim Manley, a spokesman for Senate Majority Leader Harry Reid (D-Nev.) said by e-mail. 'Manley said the CBO still projects that the bill will reduce the deficit the first 10 years by $132 billion and by $650 billion to $1.3 trillion in the second decade" (Rowley/Gaouette, 12/23).

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