Battle Of The Math Nerds: Two Number Crunchers Square Off Over Health Care
On Saturday, for about the third time since the health care debate really picked up steam on Capitol Hill, the Congressional Budget Office released an analysis that triggered bad headlines for health care reformers and big head aches for the White House.
According to CBO Director Doug Elmendorf, a proposal widely touted by the White House to give an external panel the authority to reform Medicare and Medicaid would save a mere $2 billion over a 10 year time horizon--less than one percent of the overall cost of the legislation.
"CBO deals new blow to health plan" blared a headline at Politico--conventional wisdom that threatened to provide new momentum to reform opponents on the Hill and within the greater Republican machine.
There are a number of analytical problems with this framing--sort of what you'd expect when cool kids (like, ahem, the Politico team) stop tormenting their favorite dweebs and start trying to understand their science projects. But as if to underscore just how seriously the administration took the political threat, the White House quickly blasted out a response from Peter Orszag, director of the Office of Management and Budget, which called the CBO's work--and by proxy its director--into question.
As a former CBO director, I can attest that CBO is sometimes accused of a bias toward exaggerating costs and underestimating savings. Unfortunately, parts of today's analysis from CBO could feed that perception. For example, and without specifying precisely how the various modifications would work, CBO somehow concluded that the council could "eventually achieve annual savings equal to several percent of Medicare spending...[which] would amount to tens of billions of dollars per year after 2019." Such savings are welcome (and rare!), but it is also the case that (for good reason) CBO has restricted itself to qualitative, not quantitative, analyses of long-term effects from legislative proposals. In providing a quantitative estimate of long-term effects without any analytical basis for doing so, CBO seems to have overstepped.
A predictably nerdy response to a particularly nerdy insult. But that's also polite Washington-ese for, "Step off!"
And it's easy to see why Orszag, 40, might be frustrated. As you might expect from somebody who makes a career out of churning budget numbers and hoping everything adds up to zero, Orszag, like Elmendorf, 47, places a premium on minimizing the federal deficit. You can imagine the two men joining the same chess club, or castigating a posse of tie dyed progressives for not appreciating the elegance and importance of a balanced federal budget. Though Orszag was mentored by liberal luminary Joseph Stiglitz and Elmendorf studied under conservative Martin Feldstein, Orszag eventually found himself under the spell of progressive bete noir Robert Rubin, many of whose views he appears to share. During the Bush era, he directed the Brookings Institution's decidedly middle of the road Hamilton Project--a Rubin initiative, which Elmendorf himself briefly ran in 2008.
But over the last several weeks, at the requests of members of Congress, Elmendorf has crossed his natural ally, repeatedly zinging the budget king, and fueling the efforts of health care reform's most entrenched opponents.
Herewith, a rundown of the perceived slights:
Analyzing an incomplete version of Senate HELP Committee legislation, CBO found last month that the panel--the more liberal of the two Senate panels with jurisdiction over the issue--would cost a trillion dollars while leaving more than half of the uninsured without insurance.
That was the first blow--and though the analysis was soon superseded by a more thorough and promising one, it nonetheless became the source of GOP talking points repeated to this day.
Then, two weeks ago, after the House unveiled its own draft bill, Elmendorf told the Senate Budget Committee that none of the legislation he'd seen would do anything to address the inflation of health care costs over time.
Now the CBO's at it again, and Orszag's seemingly had enough. Unfortunately for him, though, there's little else he can do aside from writing testy blog posts. The CBO is a congressional agency, hailed by pols and observers alike for its cautiousness, and ability to eschew partisanship whether Republicans or Democrats are running the show. And if Orszag did more than simply register disappointment, he would likely invite yet another political headache for the White House--the charge that the President is trying to influence what should ultimately be an unbiased and statistical, rather than political, project.
But with so much on the line, it's easy to see why the administration is losing its patience. This is ultimately a familiar story. During the budget wars of the early 1990s, it was a CBO report that many Democrats claim dealt Clinton Care its fatal blow. Like Orszag now, Clinton's then OMB-chief, Alice Rivlin (a one-time CBO director herself) was furious with her successor, Robert D. Reischauer, for running the numbers the way he did.
What she couldn't have known at the time, though, is that one of the analysts who contributed to that report would later bedevil health care reform efforts in a more public role. His name: Doug Elmendorf.


















Ezra Klein theorizes that Elmendorf is helping Baucus by down-scoring everything so that the Finance Committee can include dumping the tax break for employer helath care. He theorizes that is what Baucus really wants and why he is slowwalking.
Thoughts?
July 27, 2009 3:55 PM | Reply | Permalink
You are spot on it's all political cover for Baucus because the CBO director favors taxing employee benefits as well as killing a public plan.
July 27, 2009 8:52 PM | Reply | Permalink
Should I be suprised that this "cage match" happens between a WH and a supposedly independent non-partisan oversight body?
"And if Orszag did more than simply register disappointment" ... I love this public, loud, pushy, "cage match" that is nothing but an innocent expression of disappointment. No undue pressure at all!
On second thought, given that Obama has just changed the lobbyist rules (don't expect to hear about that on Twitter or TPM), I probably shouldn't be surprised.
Obama's WMD that's all this is.
It's only a breach of separation of powers when Bush does it.
July 27, 2009 3:59 PM | Reply | Permalink
That's a pretty vague set of assertions. Are your fillings just getting poor reception, or do you need to add another layer of tin-foil to your hat?
July 27, 2009 4:09 PM | Reply | Permalink
http://thehill.com/leading-the-news/white-house-eases-stimulus-lobbyist-restrictions-2009-07-25.html
July 27, 2009 4:12 PM | Reply | Permalink
"Lobbyists can make their cases -- and agency officials can listen to them -- at "widely attended gatherings." Government officials have to ask whether the person they are talking to at such events is a federally registered lobbyist speaking on behalf of a client.
Agency officials are required to promptly disclose on the Internet all oral and written communications with lobbyists concerning policy or projects funded under the recovery act. They also have to disclose any written communications with lobbyists regarding pending applications for competitive funding.
The one caveat, however, is that lobbyists can talk to agency representatives only about logistical issues or general questions regarding stimulus grants. Agency officials have to document any discussion with a lobbyist that veers toward advocacy of stimulus policy or a particular project.
Government officials are still banned from talking to lobbyists representing companies that have already applied for grants and are awaiting a competitive decision. In those cases, agency officials are allowed to accept "oral communication" only if the matter is purely logistical."
Yeh, just like the Bush administration, except the agency officials are receiving "oral communication", instead of wearing knee pads, and eagerly giving it to the lobbyists.
July 27, 2009 4:21 PM | Reply | Permalink
Did you even read the article. The change in lobbying rules was supported by CREW, ACLU and ALL not exactly a full card monte but also not too bad a group for all us muckrackers.
Come on Lalo, unless you were being just reading the headlines of articles to use against you dreaded enemy, President Obama, then you simply threw this out there to confuse people.
Here is a another highlight from the article you snipped, "Getting us back to the table and ensuring that we are treated equally has been the main goal for ALL. We are also thankful to our partners in this effort, especially the Citizens for Responsible Ethics in Washington (CREW) and the American Civil Liberties Union (ACLU). Between the main three groups and others, we made a diverse and strong coalition that advocated for these revisions."
July 27, 2009 4:25 PM | Reply | Permalink
"In March, President Obama announced that government officials would not be allowed to consider the views of lobbyists regarding specific stimulus projects unless the requests are put in writing. The materials also had to be posted on an agency’s website within three business days of receipt. Lobbyists have said that the policy was one more example of the administration's disdain for their industry."
So which "rule" was wrong then, the one back in March? Or the new one, this week?
Or are they both equally right? And why now?
July 27, 2009 5:08 PM | Reply | Permalink
Let's see here Lalo, You seem to have a problem with the fact that a rule change is taken place? If so what do have against an evolving policy, one that seeks to improve upon itself as times change?
My point was simple, that normally when I read your comments they are contrarian or smart alic IMHO. In this case you cited an article that had little direct relationship with the article above. This was distracting but I decided to give your little link a read. Guess what, it was an interesting read, and although I am not a lobbyist (although I do know one - retired state level in TX - quite personally) and the groups cited by the Hill in support of this change are the ACLU and CREW. Not being a Lobbyist myself but concerned for their ability to shape government policy I have often found myself reading such article as the one you cited. I have to admit that I also can never fully trust a NGO completely as sometimes I find myself at odds with certain platforms they may be advocating however, more often than not, I like what the ACLU stands for, I applaud the efforts of CREW in most respects as well (which is why I too would like the POTUS to be more transparent about certain WH visitor log). So I answered your citation with my comment, I hope that some of the context helps you understand my perspective.
As far as an evolving policy, one which may require amendments and rule changes as time moves on, I have no concerns about that ability (you know as verb as opposed to a noun). However I do care about what those changes mean, which is why I am reading articles such as the one above when it comes to issues like health-care. I think there needs to be some rule changes in our national policy regarding health-care and health-care industries. I also think that our constitution recognizes that time necessitates amending our Constitution, as does our history of Congress passing amendments to it. What those changes are is essentially where the disagreements start, perhaps.
July 27, 2009 6:22 PM | Reply | Permalink
You don't think it's a little fast for Obama to change the policy that was unveiled with such great fanfare?
Didn't liberals trip all over themselves calling Bush a sell-out to lobby interests?
Come on now.
July 27, 2009 9:52 PM | Reply | Permalink
Might try adjusting reception on tooth filling antenna
July 27, 2009 4:16 PM | Reply | Permalink
lalo can't even keep his trolling coherent any more. rough times.
July 27, 2009 4:15 PM | Reply | Permalink
"..rough times..."
- I guess so, what else would bring you be here?
July 27, 2009 4:47 PM | Reply | Permalink
Josh, are you sure it's wise to give Lalo your personal attention?
July 27, 2009 4:48 PM | Reply | Permalink
Lalo is a antique here at the TPM, so Josh is just reaching out to a long-time customer. Don't worry Lalo can fight for himself and I doubt Josh cares too much about how something "looks"
July 27, 2009 4:57 PM | Reply | Permalink
More likely Josh is focused on quickly and pre-emptively framing this as just an innocent "battle of the nerds", no undue issues or concerns?
July 27, 2009 4:59 PM | Reply | Permalink
Josh..not unlike paying attention to birthers
July 27, 2009 4:52 PM | Reply | Permalink
She gets paid per comment, Lalo is TPM's queen of the trolls.
July 27, 2009 4:55 PM | Reply | Permalink
Sorry, Josh, but I always find it shockingly bad form for you to target individual commenters with public disdain. If you care so much about trolls, then stooping to such trollish comments yourself only encourages a troll-like atmosphere at TPM. (Note the pile-on that follows; does that make for a better discussion?)
I thought the TPM comment policy advocated attacking the argument, not the person, yet you often attack the person. This is the second time you've done it to Lalo that I've seen, but you've done it to other people as well. It's your site, and in the end, you're the one who's responsible for the level of discourse here. Of course it could be argued that some of your front page commentaries attack people too, rather than their arguments, so maybe that's your M.O.
To be clear: I am attacking your comment, as it reveals hypocritical behavior, attitude, and standards. The Troll Trifecta.
July 27, 2009 5:20 PM | Reply | Permalink
Gasket, I think he's perfectly justified.
I committed a cardinal sin by attacking Obama. I compared his search for non-existent health-care savings to Bush's search for non-existent WMDs, and for Obama's public pressure on CBO to "find" them to Bush's pressure on CIA et al to "find" the evidence.
And I tried to undermine Josh's effort to paint this as a pretty picture of two nerds having an academic debate that has no policy or legislative consequence or urgency.
This is a site for Obama partisans. What else are they supposed to do, except to attack me back?
I know your point isn't about me but about the rules and level of discourse, but how else would an average Obama supporter be expected to react?
July 27, 2009 5:35 PM | Reply | Permalink
He's not average, he's freakin' Ivy League. So I expect his commentary to match his education level.
July 27, 2009 5:44 PM | Reply | Permalink
I have to agree with you gasket. Aside from the issue of name calling, while lalo is given to misdirection and obfuscation as often as not with his positions, if he's in fact a troll, he's a welcome respite from the kind of troll who occasionally appears here regurgitating GOP soundbites ad infinitum. I generally find his/her comments to be informative and at times challenging, (kind of like the way the GOP would present arguments in our dreams).
July 27, 2009 5:46 PM | Reply | Permalink
Are you under the mistaken impression that anybody cares what you think?
July 27, 2009 4:15 PM | Reply | Permalink
a supposedly independent non-partisan oversight body
CBO is not an oversight body.
but you shouldn't be surprised at any conflict between OMB and CBO. that is, if you actually knew anything about OMB and CBO.
of course your staggering lack of knowlege about anything you comment on should only prepare you for a continuous state of surprise. sunrises likely cause you all sorts of head scratching wonderment.
July 27, 2009 4:17 PM | Reply | Permalink
Thanks Brian!
The Orzag-elemendorff thing has been bothering me for a while
July 27, 2009 4:13 PM | Reply | Permalink
Interesting. CBO sez public option wouldn't be the End of Civilization (or private health insurers): http://news.yahoo.com/s/ap/20090727/ap_on_go_co/us_health_care_overhaul/print
No analysis on DeMint's assertion that this is how Hitler and the Nazis got started.
July 27, 2009 4:14 PM | Reply | Permalink
In the battle of the wonks, Orzag wins hands down
Jonathan Cohn is worth a read:
Problem, as Brian points out, is more a matter of atmospherics and the rising stench from the Congressional sausage making operation
70% of Americans favor comprehensive reform now or soon (Gallup) and just out today 62% favor the Obama Plan (whatever that is)
Again from TNR...Chait captures the political problem nicely..
Republicans are irrelevant to the process...the success or failure will be rightly viewed as Democratic
July 27, 2009 4:22 PM | Reply | Permalink
I don't care ! I am tired in living in "the greatest county on earth" with NO health care - fix it.
July 27, 2009 4:24 PM | Reply | Permalink
But America can't AFFORD affordable health care!
Direct Cost of Wars since 2001 - 900 Billion (this minute)
Cost of Bush Tax Cuts, 10 year - $1.3 trillion
July 27, 2009 4:37 PM | Reply | Permalink
We can always afford to finance the killing machine. It's so expensive, though.
No health care reform kills for free. Think of the savings!
July 27, 2009 7:33 PM | Reply | Permalink
A little slow...
July 27, 2009 4:38 PM | Reply | Permalink
THanks Chris...now maybe I will respond to today's DCCC fundraising Email from Paul Begala - "Vampires"
Just don't give any of my hard earned to Blue Dogs
July 27, 2009 4:39 PM | Reply | Permalink
Speaking of the mathematics... Here's some interesting math on our budget: It only takes $30 billion annually to end world hunger!
Yet... we are spending $550 billion annually on the defense budget.
The Borgen Project has some good information on the cost of addressing global poverty (www.borgenproject.org).
July 27, 2009 7:19 PM | Reply | Permalink
The bottom line is who thinks there is only $2 billion in waste and fraud in Medicare with their fee per service system. The real savings would be in the hundreds of billions over ten years. This is a complete sandbag deal by the CBO director to give cover for Baucus.
July 27, 2009 8:55 PM | Reply | Permalink
$2.4 trillion for Iraq War.
$1.3 trillion of tax cuts.
$800 billion for Medicare Part B.
$500 billion for DHS.
That was all fine even though no increase in revenue was even considered. But based on the last CBO even though they admit they can't calculate savings it ended up being a $64 billion plan over 10 years cannot get passed congress.
July 27, 2009 8:58 PM | Reply | Permalink