THE STASH SEPTEMBER 16, 2009
I just wanted to elaborate on an excellent point Jonathan made over at The Treatment earlier today:
In fact, one virtue of the Baucus bill--perhaps its chief virtue--is that it won't create red ink. On the contrary, projections suggest the combination of savings and revenues will pay for every dime of the program, as President Obama likes to put it, and actually start to generate small surpluses by the time the ten-year window is over. It's also supposed to save money after that period, actually curbing our medical expenditures.
Indeed. According to the CBO score of the bill, Baucus produces about $50 billion in deficit reduction over the next decade (see p. 2), then potentially large savings after that. This passage in particular (on p. 8) is pretty eye-catching:
All told, the Chairman’s proposal would reduce the federal deficit by $16 billion in 2019, CBO and JCT estimate. After that, the added revenues and cost savings are projected to grow more rapidly than the cost of the coverage expansion. Consequently, CBO expects that the proposal, if enacted, would reduce federal budget deficits over the ensuing decade relative to those projected under current law, with a total effect during that decade that is in a broad range around one-half percent of GDP [emphasis added].
According to CBO's most recent forecast of GDP for the 2020 to 2029 period (see this document), that half-percent of GDP would translate to over $1 trillion. And that's before you really add in a lot of the so-called "game-changers" the administration has been pushing--things like bundled payments to give hospitals incentives to care for patients upon release.
Like Jonathan, I think there's a lot not to like here--particularly the stinginess of Baucus's subsidies for lower-middle income people. But, if cost-savings are your thing, then this bill (and the CBO score) should get you pretty excited.