Will political conflict stop the U.S. from tackling its healthcare spending problem?

The fierce political conflict among federal lawmakers is keeping the country from moving forward to tackle its long-term financial issues, Congressional Budget Office Director Douglas Elmendorf, PhD, said in a C-SPAN interview.

"The fundamental issue now is that members of Congress disagree strongly about what should be done to address the fiscal challenge, and absent greater agreement among the policy makers, and ultimately greater agreement among the American people about how to proceed, it's very hard to make more progress than has been made," he said.

In the interview, Mr. Elmendorf also addressed the CBO's cost estimates concerning the Patient Protection and Affordable Care Act, stating it's impossible to determine whether the agency's 2009 and 2010 estimates were accurate. In a footnote that flew under the radar until June, the CBO stated in an April report that it's no longer possible to assess the economic impact of certain provisions of the PPACA. The footnote states:  "The provisions that expand insurance coverage established entirely new programs or components of programs that can be isolated and reassessed. In contrast, other provisions of the [PPACA] significantly modified existing federal programs and made changes to the Internal Revenue Code. Isolating the incremental effects of those provisions on previously existing programs and revenues four years after enactment of the [PPACA] is not possible."

The decision has sparked concern that a halt to CBO assessment's will make it unclear whether the PPACA is actually reducing the federal deficit, in addition to shrinking the uninsured population. Earlier this month, Sen. Ron Johnson (R-Wis.) introduced legislation that would require the CBO to report annually on costs and revenues related to the PPACA. "CBO undoubtedly faces considerable challenges in separating the impact of the law from some of the other programs that interact with it, but it can and should be able to estimate those costs and impacts so that Congress and the American people understand the true scope of financial harm that Obamacare is causing," Sen. Johnson said.

Also in June, the CBO reiterated its March 2010 projection that the Patient Protection and Affordable Care Act will reduce federal budget deficits by a total of $124 billion from 2010 to 2019 and by approximately one-half of 1 percent of gross domestic product during the following decade. Mr. Elmendorf wrote on the agency's website that the CBO and Joint Committee on Taxation "have no reason to think that their initial assessment that the [PPACA] would reduce budget deficits was incorrect." However, he also noted a retrospective analysis of the impact of current law is significantly different from a cost estimate for a proposed measure, specifically because it requires establishing a benchmark scenario that would have unfolded if the law wasn't enacted, which is a "challenging undertaking that is beyond the scope of CBO's usual analyses."


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