Josh is writing a proper analysis of the CBO score. Let me just refresh your memory on a few key points that haven’t changed under the reconciliation bill:
(1) Donald Marron has explained how the near-term budget savings have been gamed:
The near-term budget savings are exaggerated by the inclusion of the CLASS Act; adjusting for that, the ten-year deficit reduction is $48 billion.Another item familiar to long-time readers, the CLASS Act would create an insurance program for long-term care. Premium income, which reduces the reported deficit, would start much faster than benefit payouts, so the program generates surpluses in the near-term. But it won’t in the long-run. So most budgeteers view the inclusion of the CLASS Act here as a gimmick. Netting out the $70 billion in budget savings from the CLASS Act, and you have deficit reduction of $48 billion over the next decade.
(2) Tim Carney has explained how a new revenue-enhancer — nationalizing the student-loan industry (which, incidentally, isn’t necessarily a bad idea, given the crony capitalism inherent in the existing student-loan industry) — also improves the picture.
The budget reconciliation bill being used as a sidecar to the Senate health care bill also contains a federal takeover of the student loan industry. …
Over the next decade, between reduced subsidies to private lenders and interest collected from students, the expected profit is $60 billion. Student aid would be increased by about $40 billion, leaving the U.S. Treasury $19.4 billion in the black thanks to this takeover. That profit gets counted toward the reconciliation bill’s score from the Congressional Budget Office, and voila! more deficit reduction from the health care reform bill.
Carney goes on to make a very astute observation.
While nationalizing student loans may seem irrelevant to “reforming” health care, there is something fitting in pairing the two undertakings in one bill — it’s almost a foreshadowing. Student lenders have long fed at the federal trough, pocketing so many subsidies that Democrats were justified in asking why there needed to be a private sector in that industry at all.
(3) And while the health bill will include a revenue-enhancing provision that addresses student loans, it will not factor in the cost of fixing SGR, as an e21 staff editorial explained.
Note that the docfix was a part of earlier version of the health reform bill designed to appeal to medical providers. It vanished when the headline numbers had to be massaged downwards.
None of this is dispositive. The case against the bill, and for the bill, has to factor in many, many other things. It is, however, worth keeping in mind.