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Elmendorf Says CBO Score Does Not Measure Whether Bill Will Bend Cost Curve

By Philip Klein on 10.13.09 @ 11:48AM

While President Obama has made bending the health care cost curve central to his drive to overhaul the nation's health care system, Congressional Budget Office director Doug Elmendorf testified this morning that last week's much-touted analysis by the CBO did not measure whether the Senate Finance Committee would achieve this.

Under questioning by Sen. Mike Crapo during today's Finance Committee hearing, Elmendorf said that the CBO's analysis focused only on the bill's effects on the federal budget, but not on whether it would reduce national health care expenditures overall.

This is an important distinction. It's easy to achieve deficit reduction in a bill -- at least on paper -- if you simply raise taxes by more than you increasing spending. Because the Finance Committee bill raises taxes and promises cuts to Medicare that may never materialize, the CBO  estimated that it would reduce the deficit by $81 billion over 10 years. But that doesn't mean it the CBO is saying it would decrease the overall amount that the nation is spending on health care, lower the cost of insurance premiums, or reduce health care spending as a percentage of GDP.