Friday, January 14, 2011

Extreme Budget Illogic At the CBO

I've noted this issue repeatedly: health care reform will not and cannot reduce federal spending. Only in the absurd world of Congress can you pretend "The cuts are coming!" year after year, always delaying them, and yet count those "cuts" as savings. Do you really believe Congress is going to cut payments to doctors by 20% or more? Do you really believe Congress is going to increase taxes on union health plans 20-50% in four years?

But, as long as Congress claims it is going to cut, the CBO has to pretend the cuts will happen. Viola! Health care reform cuts the deficit! No, it does not. It will not, it cannot.

Read this at Real Clear Politics:

Extreme Budget Illogic At the CBO

It's simple: the CBO has to use the fake numbers provided by Congress. If the Congress claimed taxes will be 100% and no jobs will be lost, the CBO would have to use those assumptions. That's how the CBO functions — lots of garbage in, tons of garbage out. Sadly, the CBO knows this, so every report from the CBO includes warnings that the estimates are unlikely to be accurate. Those admissions are what the press should report.

We could reform the health care and insurance markets. We could, but we won't.

Some quick cost control measures:

1. End direct employer-provided insurance, making employees pay for insurance. This would make insurance both portable and a real expense to employees.

2. Allow insurance purchases and transfers across state lines. This does mean national insurance standards instead of the state-by-state patchwork of mandates and compliance rules. One set of rules, one large insurance market. Insurance would be interstate commerce, definitely, and therefore a federal concern. Yes, it's a compromise of libertarian ideals, but the trade is a competitive market.

3. Tort reform! I wouldn't mind banning the commercials for lawsuits against drug companies, device manufacturers, and doctors, too. In return, let's also end direct advertising of most drugs. I'll make the compromise, even though it goes against my libertarian impulses. Drugs are regulated as interstate commerce, so tell the medical companies: we'll improve safety and testing standards, but you'll have less advertising in return for legal liability limits.

The list could be much longer, but I wouldn't need 2000 pages to develop real health care reform.

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