Hypocritical congress manipulates CBO esimtates.

An old theory states that regulated industries ultimately "capture" the relgulators and are able to mold the rules to their own advantage. Too bad the theory always seems to work in practice. Now we're seeing it in the manipulation of the CBO scoring process by the "regulated" Congress. Keith Hennessey posted an example of how the House has crafted a Medicaid provision in the reconciliation bill that requires states to pay doctors the same as Medicare pays them, and HAVE THE FEDERAL GOVERNMENT PICK UP THE TAB, without being charged with a $52 billion ten-year cost that CBO estimated for that provision in the original House Bill. The reconciliation bill limits the years in which those increased fees would apply to only two --- 2013 and 2014 -- which brings the cost down to only $8 billion over ten years.

Of course, everyone knows that once those increases go into effect, Congress will never let the fees go back to the old rules. Look what's happened to the physician fee reductions passed in 1997 for Medicare. Each year Congress passes an over-ride, and the reductions are "delayed" for another year. That's what will happen here. So, the health reform bill will effectively federalize Medicaid and add it to the Medicare fee-for-service system (the system that "works so well"). State leaders will love it. Less payout for Medicaid. Doctors will like it, and more of them will participate in Medicaid, which is good for poor people, and by extension the rest of us. Let's face it, though...our deficit hole will just grow and grow and grow.

CBO has no choice but to score the bill this way. It has to assume the law will operate as it says in the bill it's scoring at the time, not as it will play out in reality. This manipulation of legislative language by Congress has improved over time, so at this point the "CBO score" is largely a political football, with the majority using it to hide major new cost-raising changes.

This is just one of dozens of little "surprises" lurking in the bill -- which I admit I still have not read in full and probably never will. What I'm learning is from newspapers and internet. Keith Hennessey's blog is a jewel . I may not agree with him on priorities, but he's an excellent analyst of policy and politics. And he's not lazy. He actually read the reconcilation bill.