Obama’s Budget Chief Doesn't Know Total Cost of Obama's Health-Care Plan

February 26, 2009 - 10:34 PM
The president's budget contains $630 billion in money for health-care reform, but Peter Orszag, the director of the White House Office of Management and Budget (OMB), is unable to say what the total cost for Obama's plan will be.
Washington (CNSNews.com) – Even President Obama’s budget chief doesn’t know how much it will eventually cost to enact the president’s vision of health-care reform.
 
The proposed $3.5 trillion budget for the 2010 fiscal year, which would raise the federal deficit to $1.75 trillion, contains $634 billion for health-care reform to come from tax increases and “savings” in the medical system – money to expand health coverage for Americans currently without health insurance.
 
But Peter Orszag, the director of the White House Office of Management and Budget (OMB), was unable – when asked by CNSNews.com – to come up with the total cost for Obama’s plan to reform the nation’s healthcare system.
 
Orszag described the $634 billion the administration built into the new budget over the next 10 years -- as a “down payment” for health reform.
 
The former head of the Congressional Budget Office would only say that “more” money will be necessary as the administration works with Congress on its health-care initiatives.
 
“There are different plans out there,” Orzsag told CNSNews.com at a Thursday news conference on the newly unveiled budget. “If you look at any of them, this is a very substantial down payment. We acknowledge that more is necessary and we will work with Congress to fill in any additional resources that are required to finance healthcare reform,” Orzag explained.
 
Obama’s budget sets aside a “reserve fund” to pay for his health-care reforms even though OMB’s budget overview released Thursday admits that $634 billion is not enough.
 
“The president recognizes that while a very large amount of money and a major commitment, $630 billion is not sufficient to fully fund comprehensive reform,” the document reads.
 
Nearly $320 billion of the $634 billion total will be financed primarily through tax increases on top income earners, something the administration calls “encouraging shared responsibility.”
 
Many of the tax increases come in the form of reducing itemized deductions for joint filers making $250,000 per year or more.
 
But Republican congressional leaders, including Sen. Judd Gregg (R-N.H.) -- Obama’s former pick to head the Commerce Department – said Thursday the budget plan amounts to nothing less than raising taxes to finance government-controlled health-care.
 
The cost will go far beyond $630 billion.
 
“It sounds to me like they’re talking over $1 trillion (for health care),” Gregg said. “The $634 billion was really what they could figure out to up the ante, to have enough to cover it, but they’re really talking $1 trillion or more.”
 
The Republican lawmakers said President Obama's plan to raise taxes for families earning more than $250,000 a year would harm small businesses, eliminate jobs, deepen the recession and increase the national debt.
 
"It's a ‘spend, tax and borrow our way to prosperity’ budget,” said Republican Rep. Paul Ryan of Wisconsin. “It proposes bigger government with higher spending, higher taxes, and higher debt as a means to produce prosperity in America," said Republican Rep. Paul Ryan of Wisconsin.
 
But Sen. Kent Conrad (D-N.D.), the chairman of the Senate Budget Committee, praised the blueprint, which he said takes “important steps” toward reforming the health care system – while “cutting the deficit in half.”
 
The goals of Obama’s health-reform plan are explicit, meanwhile, even if the real price tag has yet to be announced:
 
-- Reducing premiums and other health-care costs
 
-- Reducing administrative and other costs for “unnecessary” medical tests and services
 
-- Placing the U.S. on a “clear path” to universal healthcare
 
-- Making coverage portable and put an end to denying coverage due to pre-existing conditions
 
-- Giving people the option of keeping their current plan
 
-- Invest in “public health measures” to combat problems such as obesity, smoking, and “sedentary lifestyles”
 
-- Improving safety and quality of care, including through “medical interventions”
 
-- Pay for itself through a combination of cost reductions, improved productivity, and “dedicating additional sources of revenue”
 
The “additional” sources of revenue will pay for over half of the known costs of the plan.