The White House is fighting back against accusations that the health care overhaul bills moving through Congress would actually increase health spending rather than save money over the long haul.
Congressional Budget Office Director Douglas Elmendorf touched off the dispute Thursday when he stated, “We do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount.”
That was the last thing nervous Democrats on Capitol Hill wanted to hear. So President Obama is stepping in to try to make sure the effort stays on track.
Elmendorf’s comments were widely interpreted to mean that the plans would increase the federal deficit over the next 10 years. That’s not the case.
What he was really saying was perhaps more disappointing to lawmakers crafting the bills: That the measures wouldn’t slow the nation’s total health spending in the long run, and might in fact increase federal spending.
In any case, the political damage was done. Obama hastily scheduled an appearance to reassure lawmakers that cost cutting remains a top priority.
“Let me repeat: Health insurance reform cannot add to our deficit over the next decade. And I mean it,” he said.
The administration also sent to Congress its own legislative proposal to aid in the cost-cutting goal – its first formal contribution to the health care effort.
The idea is based on one that has already been floating around on Capitol Hill for the past several weeks. It would significantly beef up the power of an existing agency known as the Medicare Payment Advisory Commission, or MedPAC.
“Every year there’s a new report that details how much waste and inefficiency there is in Medicare, how best practices are not always used, and how many billions of dollars could be saved. Unfortunately, this report ends up sitting on a shelf,” Obama said.
Under the president’s plan, MedPAC, or a new independent board just like it, would come up with a set of payment recommendations for health care providers, which the president and Congress could approve or reject, but not amend.
If the board was ordered to find savings, the process would clearly bend the cost curve, as the phrase goes, on health spending. But there’s one big problem. Congress likes to decide Medicare payments itself. There are hospitals and doctors in every single Congressional district, and adjusting payment levels is a popular form of Congressional pork.
So giving that payment power to outsiders hasn’t sat well with people like Senate Republican moderate Olympia Snowe of Maine.
“I think people ultimately expect Congress to weigh in and be accountable,” Snowe said. “And just doing an up or down vote without ever having alternative proposals or modifications, I think, would be very difficult.”
House Speaker Nancy Pelosi didn’t seem too thrilled with the idea, either, at her news conference Friday.
“We tasked the staff to figure out how we could come together so that we get the savings, but the responsibility of Congress would be reflected in the criteria we put forth and that the administration can have what they want,” she said.
In other words, it’s always the same old story with Congress: Spending money is easy; cutting spending is hard.