The Senate Budget Committee requested the report. Chairman Kent Conrad, North Dakota Democrat, and Sen. Judd Gregg of New Hampshire, the ranking Republican on the committee, said in a joint statement that health care costs must be dramatically reduced.
“CBO finds that paying for health reform over the next 10 years doesn’t guarantee long-term savings,” they said. “Any expansion of insurance coverage under a health reform bill would be phased in over time, so the 10-year budget window is not the best indicator of its ultimate cost.”
Health care costs represent about 17 percent of the American economy, the report said.
“Significant savings seem possible because the available evidence implies that a substantial share of spending on health care contributes little if anything to the overall health of the nation,” the report said. “Therefore, experts generally agree that changes in government policy have the potential to produce substantial savings in both national and federal spending on health care without harming health.”
White House press secretary Robert Gibbs said Tuesday that the cost of not enacting health care reform could be more expensive than the CBO estimate.
“Inaction is something we simply can’t afford,” he told reporters.
Ken Baer, a spokesman for the administration’s budget office, said the CBO report gives momentum to Mr. Obama’s health care plans.
“We welcome the analysis. It validates the administration’s belief that health care costs are growing at an unsustainable rate and that we cannot afford the status quo,” Mr. Baer said. “While they acknowledged it will not be easy, they also point to many policies that the CBO believes could reduce costs in the long term, and many of those have already been proposed by the administration.”
CBO, in a second report Tuesday, also knocked down the health care industry’s pledge to cut $2 trillion in spending over the next decade - a promise made at a White House event with Mr. Obama in May. The group tried to measure the promise but found that certain aspects couldn’t be measured and others didn’t involve the federal government; the remaining items didn’t add up to $2 trillion.
“As predicted, the $2 trillion savings pledge didn’t materialize from CBO’s perspective,” said Sen. Charles E. Grassley of Iowa, the ranking Republican on the Senate Finance Committee. “The headlines generated by the White House event a month ago don’t get us much closer to affording health care reform today.”
The bill from the Health, Education, Labor and Pensions Committee is just the first to be scored by CBO. The Senate Finance Committee is scheduled to introduce a bill this week, and a group of House Republicans is expected to announce its own proposal Wednesday.
• Stephen Dinan contributed to this report.