CBO: Wyden-Bennett Health Bill Will Self-Finance By 2014

Thu. May 1, 2008


CBO and the Joint Taxation Committee today released a preliminary analysis of a universal healthcare bill sponsored by Sens. Ron Wyden, D-Ore., and Robert Bennett, R-Utah, projecting that their proposed system would be deficit-neutral within six years of enactment. In the years following, "the proposal would tend to become more than self-financing and thereby would reduce future budgets or increase future surpluses," CBO Director Peter Orszag and JCT Chief of Staff Edward Kleinbard said in a letter to Wyden and Bennett. JCT and CBO worked closely over the last several months to analyze the proposal. "This collaboration reflects both the novelty of the undertaking and the intimate connection between the revenue and expenditure components of your proposal," the letter said. If the bill was enacted this year, CBO and JCT said it would be fully operational by 2012 and self-funded by 2014.

Wyden hailed the findings after a closed-door briefing with CBO and JCT staff. "It is a breakthrough because historically, past approaches to covering everybody meant big taxes, huge increases in government spending," he said. "Now, the federal government's go-to people, the Congressional Budget Office and the Joint Tax Committee, said that's not so." The bill would require individuals to purchase private health insurance and establish state-run purchasing pools for that purpose. A federal system of premium collections and subsidies would facilitate those purchases. Individuals also would receive tax deductions for their coverage that are currently only available to employers. The proposal also essentially eliminates the current system of employer-based coverage. In the first two years after enactment, employers would transfer money that they had been spending on health benefits to wages.

Several co-sponsors of the bill appeared with Wyden and Bennett to illustrate that its support spans a wide spectrum, including Sens. Bob Corker, R-Tenn., Joseph Lieberman, D-Conn., and Debbie Stabenow, D-Mich. Wyden said he expects the next president to examine the proposal closely. "I have spoken with all of the candidates about this development. We have, essentially, all of the campaigns represented by the senators in this coalition. I think we know a senator is going to get elected president. Now they got a lot of senators who will work with them."--by

by Fawn Johnson