CBO: Health care reform to increase federal cost

Congress’ budget watchdog warned Thursday that Democrats’ health care bills would not lower skyrocketing costs and would drive up government spending, undermining one of President Obama’s chief arguments for the overhaul.

Congressional Budget Office (CBO) Director Douglas Elmendorf said the plans already released by the House and Senate would keep costs rising at an unsustainable pace, fueling criticism from Republicans and some conservative Democrats that the overhaul will bankrupt the country.

“Today’s CBO testimony should be a wake-up call,” said Senate Minority Leader Mitch McConnell, Kentucky Republican. “Instead of rushing through one expensive proposal after another, we should take the time we need to get things right - especially at a time when hundreds of thousands of Americans are losing jobs every month.”

Meanwhile, a bipartisan group of senators on the Finance Committee ended negotiations for the week without a piece of legislation, putting the aggressive timetable sought by Mr. Obama and Senate leaders in doubt.

House Speaker Nancy Pelosi, California Democrat, criticized the CBO analysis for not calculating the savings from prevention and wellness measures in the bill that proponents say would promote a healthier population.

Still, she said, Congress will look for more ways to keep down costs, which White House officials predicted will alleviate the budget director’s assessment.

“I think we can bend the curve more. I think that we definitely can,” she said. “And that is what I think we should try to do.”

The verdict from CBO, Congress’ nonpartisan accountant, also underscored objections from the House’s conservative Blue Dog Democrats, whose break with Democratic leaders last week over the high cost of the plan stalled attempts to quickly advance the bill.

Democratic leaders are struggling to placate the faction, which has enough members on the Energy and Commerce Committee to kill the measure.

The Blue Dogs, a group of more than 50, issued a joint statement Thursday pledging its commitment to health care reform but putting Democratic leaders on notice that it is watching every penny.

“We cannot fix these problems by simply pouring more money into a broken system,” the Blue Dogs said in the statement.

Mr. Obama has repeatedly said that any reform measure must “bend the cost curve” and has warned that health care costs would continue to skyrocket unless the industry is reshaped.

But Mr. Elmendorf, in testimony before a Senate panel, said “the curve is being raised” by the health bills.

“We do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending,” he said. “On the contrary, the legislation significantly expands the federal responsibility for health care costs.”

Lawmakers have complained about the CBO throughout the health care debate, whether it’s about the time it takes to receive reports or the CBO’s reluctance to measure attempts to cut costs.

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