The Democratic party has 60 votes in the Senate and can spare over 38 defections in the House, yet President Obama, presumably not wanting to alienate his own party, is still looking for someone else to blame for Congress’s failure to enact his health-care agenda by the August recess. In one of the few tough questions he faced during his prime-time press conference last week, a reporter challenged him on his frequent attempts to blame Republicans. Over the weekend, his administration settled on a new target: the Congressional Budget Office.
Over the last several months, the administration’s struggles with the CBO over health-care cost estimates have resembled a chess match: The CBO releases a cost estimate of a draft bill; the administration doesn’t like the estimate, so its allies in Congress make a few tweaks in the draft and send it back to the CBO; and the process begins all over again. But last weekend’s outburst from Obama’s budget director, Peter Orszag, was the equivalent of a player upending the chess board and calling his opponent a cheater.
The irony is that, just a few months ago, Orszag was on the other side of the board. Before Obama appointed him to run the Office of Management and Budget, Orszag was in charge of the CBO. And just before he left the legislative for the executive branch, he took measures to make sure the CBO would be well equipped to play its role in the health-care debate, expanding the number of health-care economists on staff and ordering a new computer capable of modeling the effects of complicated legislation.
Orszag can’t very well claim that the CBO isn’t up to the task without criticizing his own preparations, so instead he has chosen to criticize his successor, Douglas Elmendorf. In a Saturday post on his White House blog, Orszag implied that the CBO’s latest analysis was guilty of “exaggerating costs and underestimating savings,” and he said that the agency had “overstepped” its bounds.
Alice Rivlin, now a senior fellow at the Brookings Institution, served as the first CBO director from 1975 to 1983, and as the OMB director from 1994 to 1996, during President Clinton’s health-care push. She said, “It’s normal that the administration wants to make its proposals look good, and CBO is more skeptical.” However, she seemed surprised at Orszag’s particular line of criticism. “When I was at OMB, I was certainly critical of [CBO director Robert] Reischauer’s scoring of our health-care proposals, although I did it on the merits,” she said. “I didn’t talk about overstepping bounds.”
Former CBO director Douglas Holtz-Eakin was more direct: “I’ve never seen a sitting OMB director do that.”
What prompted Orszag’s reaction? In a letter to House Majority Leader Steny Hoyer, Elmendorf wrote that the administration’s latest gambit — an independent commission with the power to make cost-saving changes to Medicare that would have the force of law unless overturned by Congress — would yield only meager savings, if it yielded any savings at all. With that, the administration was cornered: The only cost-saving measures remaining would involve major concessions such as equalizing the tax treatment of employer-provided and independent insurance coverage, a measure that organized labor opposes and that Obama chided John McCain for supporting. Check, with mate in the offing.
In his response, Orszag said that the CBO overstepped in providing specific savings estimates, arguing that the independent commission was “a game changer not a scoreable offset.” The point of the commission was “never to generate savings over the next decade,” he wrote, but “to provide a mechanism for improving quality of care for beneficiaries and reducing costs over the long term.”
Kent Smetters, a former CBO economist now teaching at the University of Pennsylvania’s Wharton School, says the CBO had no choice, because of the nature of what Congress asks it to do. “CBO must do an estimate of potential cost saving in order to do a score. That’s a no-brainer,” Smetters wrote in an e-mail. “And, it would be irresponsible for the nation’s nonpartisan budgetary authority to simply assume the White House’s cost-saving estimates; CBO has never done that in the past.”
Holtz-Eakin also stresses that administrations often point the finger at the CBO when the real question is, Who in Congress requested the score? “I think it’s important to recognize that CBO works for Congress and gets used by Congress in particular ways,” he says. Citing Elmendorf’s recent testimony before the Senate Budget Committee, Holtz-Eakin says, “He was asked in a Senate hearing by a Democrat, Kent Conrad, ‘Does the House bill meet the tests for cost savings we’ve applied?’ And Conrad knew the answer when he asked it.” The administration’s problem is not with Elmendorf, Holtz-Eakin says. Its problem is with Kent Conrad and the other Blue Dogs in Congress.
For now, the administration can blame Republicans, it can blame the CBO, and it can blame it on the rain. But ultimately, if Obama is unable to get the health-care plan he wants, it will be because his own party could not agree on a way forward.
– Stephen Spruiell is an NRO staff reporter.