Looking through the CBO letter about the Baucus bill, there is one striking fact that most of the media is overlooking. The CBO claims in the report that they did not score the full bill. They admit to completely ignoring a huge provision that is projected to reduce the cost of the bill by roughly $44 billion, but would deprive millions of Americans of health insurance. The paragraph below, from page 8, has been widely criticized, but it is the start of the next paragraph (that I highlight) which should get more attention.

An amendment adopted by the committee would require that, beginning in 2012, the Director of the Office of Management and Budget (OMB) certify annually whether or not the provisions of the legislation are projected to increase the budget deficit in the coming year. If the Director determined that they were projected to increase the deficit, he or she would be required to notify the Congress, and exchange subsidies would be automatically adjusted to avoid the estimated increase in the deficit for that year.

The estimates presented in this preliminary analysis do not incorporate the potential effects of using this proposed failsafe mechanism, although CBO and JCT estimate that the amended mark would increase the deficit in fiscal years 2015 through 2018.

This means the CBO analysis being widely reported does not come close to reflecting the real cost of the bill, or the real increase in coverage. For some reason, the CBO did not report what they expect to be $44 billion in savings.

Looking at CBO chart on page 3: in 2015, money going to affordability tax credits would need to be cut by $10 billion (13%). In 2016, they would be cut by $20 billion (21%). In 2017 the cut would be $13 billion (8%), and in 2018 the cuts would only $1 billion (1%).

Depending on how the cuts to the affordability tax credits were structured, there would between one and six million more uninsured Americans each year from 2015 to 2017 than the CBO letter indicates. The preliminary CBO analysis did not “incorporate” this $44 billion in savings or the several million increase in the number of uninsured Americans.

I suspect this incredibly stupid “failsafe mechanism” will not make it into the final bill, but the CBO still should have scored this huge provision. It is currently part of the bill. The job of the CBO is to score the whole bill, and not to ignore provisions that would make the bill look bad.

I’m highly disappointed with the institution of the Congressional Budget Office. They must have known that their preliminary analysis would be widely reported without more critical examination. Sadly, the CBO report makes clear only on page 8 that their score does not come close to really modeling the effect of the passing the legislation they were given into law.