CBO pours cold water on Obama admin’s claims about “savings” from ObamaCare


Here’s a blow to President Obama and Democrats pressing health care reform.

One of the main arguments made by the President and others for investing in health reform now is that it will save the federal government money in the long run by containing costs.

Turns out that may not be the case, according to Doug Elmendorf, director of the nonpartisan Congressional Budget Office.

Answering questions from Democrat Kent Conrad of North Dakota at a hearing of the Senate Budget Committee today, Elmendorf said CBO does not see health care cost savings in either of the partisan Democratic bills currently in Congress.

Conrad: Dr. Elmendorf, I am going to really put you on the spot because we are in the middle of this health care debate, but it is critically important that we get this right. Everyone has said, virtually everyone, that bending the cost curve over time is critically important and one of the key goals of this entire effort. From what you have seen from the products of the committees that have reported, do you see a successful effort being mounted to bend the long-term cost curve?

Elmendorf: No, Mr. Chairman. In the legislation that has been reported 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. And on the contrary, the legislation significantly expands the federal responsibility for health care costs.

There are various reports out there on the likelihood that there will be no “bipartisan agreement” on ObamaCare reached this week, while other reports suggest that a “bipartisan agreement” will be reached “soon.” So far, the only real advancement on ObamaCare is that the House Ways and Means Committee has approved the “healthcare” bill. Suffice it to say that thanks to the CBO’s remarks on the “savings” aspect of the bill, the Senate’s going to be debating this one for quite a bit longer. The House, OTOH, doesn’t really care. Pelosi’s main focus is making it look like the House “accomplished” something by passing a deeply flawed “healthcare” bill then actually being concerned about the fine print.

Related to all this – and something you don’t see discussed very much in the MSM – is how this bill would affect small businesses. Jimmie Bise has a great piece published today titled “Let’s Put Some Real Faces on the Casualties of Obamacare.” Here’s an excerpt:

On Wednesday, the Wall Street Journal reported that the President and his Democratic allies in Congress intend to force small business with payrolls more than $250,000 per year to provide health insurance to their employees. Failure to do so would be punishable by a fine up to 8 percent of payroll. The article also noted that there are approximately one million businesses with between five and nine employees and average payrolls comfortably in the Democrats’ target range and that only about half of those provide health insurance


Consider Company A, which employs seven people: a manager, an assistant manager, and five workers. The owner pays himself a salary of $70,000 per year (about $35/hour), the manager $52,000 ($25/hour), the assistant manager $35,000 ($20/hour), and the five employees $21,000 (about $10/hour). That makes a payroll of $262,000. Now, the article doesn’t say how much the fine for a payroll that size would be, so I’ll assume either 6 percent ($15,720) or 4 percent ($10,480). The lowest total, as you can see, is more than half the salary of one of the worker bees and the higher figure is even worse. If I were running that business, I’d say the easiest way to solve my problem would be to fire one of the worker bees. That would reduce my payroll to escape the fine and it would leave me with more money as well. Sure, my business would be less productive, but it’s not terribly difficult to get make up for that one lost employee by having my other six work a little bit harder.

So what kind of businesses might fit Company A’s profile? How about a small restaurant or a neighborhood grocery store? Many franchised convenience stores could meet that description, as could any number of local insurance companies, construction companies, and contractors.

Let’s up the ante a little bit. Company B consists of an owner, who also doubles as general manager (and pays herself a rather modest $80,000 per year), and ten part-time employees who each make $35,000, for a payroll of $430,000. That’s large enough to trigger the full 8 percent penalty, which comes to $34,400. Well, that’s just about one employee’s salary, so out he goes, which not only covers the fine but also brings Company B under the $400,000 threshold, which means a potential smaller fine next year. Bonus!

Make sure to read it all. Keep in mind, too, that the Democrats want to slap single people who choose not to or can’t get “affordable healthcare” with a $1000 fine (families would be slapped with higher fines). This is not because they believe these single folks/families should be “forced” to get healthcare, but instead because those fines would go towards paying for roughly a third of this monstrosity of a bill.

President Obama campaigned on “change” that supposedly wouldn’t punish “the little people” (remember, only the “rich” were going to bear the brunt of Obama’s billion-dollar policies?). The last 7 months have taught us that that promise was just one more in a growing list of lies told to a gullible American public by an inexperienced, deceptive first term Senator who relied on “just words” – and charm – to carry him all the way to Pennsylvania Ave.

Related: President Obama Continues Questionable “You Can Keep Your Health Care” Promise

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