CBO chief Doug Elmendorf testified before the Senate Budget Committee today and spoke words that will invariably come back to haunt Democrats. "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," Elmendorf told chairman Kent Conrad (D-ND). "On the contrary," he said, "the legislation significantly expands the federal responsibility for health-care costs."
This is true, but it's also more complicated than that. First of all, the CBO has analyzed two bills so far: The Senate HELP Committee's bill and the House's so-called tri-committee bill. But, crucially, the HELP Committee doesn't have jurisdiction over Medicare and Medicaid where many of these savings can--and likely will--be found. And, just as crucially, the CBO hasn't scored those parts of the House bill either.
"The analysis issued today does not take into account other parts of the proposal that would raise taxes or reduce other spending (particularly in Medicare) in an effort to offset the federal costs of the coverage provisions," Elmendorf wrote with regard to the House bill on the CBO's blog two days ago. In fact CBO has only analyzed "the major provisions related to health insurance coverage that are contained in draft legislation." Most of the provisions that would reduce the trajectory of federal health care spending, though, will not be found in the sections of the legislation that pertain to expanding coverage.
But that doesn't mean either the House or the Senate is working on legislation that will maximize the reduction in federal health care spending. As Ezra Klein notes, many of the hypothetical provisions that would work dramatically on that score have been eschewed for political reasons.
Words are words, though. Conservatives are already beginning to use the words of an anonymous Democratic aide against the House's health care reform bill. And they'll likely latch on to this as well.