Is the House Health Plan Really Paid For?

Alison Acosta Fraser / July 22, 2009

Confused about whether the House health care bill, H.R. 3200, is deficit-neutral? No wonder. House Leadership maintains the bill will be “fully paid for and not contribute to the deficit.” On the other hand, CBO has said the bill will add $239 billion to the deficit over 10 years. Leadership’s statement is true, but only if you assume larger deficits every year.

Larger deficits are deficit-neutral? How can this be? Leadership says, simple! They will pass PAYGO legislation first, and health care reform second. PAYGO – a key policy objective of the Blue Dogs because it is supposed to keep the deficit from getting bigger – requires that any new entitlement spending (or tax cuts) must be paid for by new spending cuts (or tax increases), all measured against a current services baseline. (more…)