Herszenhorn's Shallow Analysis of CBO's Obama-Care Numbers: Imagine a Fruit Salad

David Herszenhorn's shallow analysis of the CBO cost estimates for Obama-care framed the outcome as a political triumph for Obama. By contrast, the Washington Post actually drilled into the numbers and questioned the validity of the CBO's methods.
Prospects for Obama-care got a boost Thursday with the release of a preliminary cost estimate from the Congressional Budget Office, concluding the plan would reduce the federal budget deficits by $138 billion over the next decade. Health care led Friday's paper: "Democrats Gain With A Promise On Health Costs," and a text box on the jump page relayed Democratic joy: "'We are absolutely giddy,' a Democrat says of a report."

The Times certainly didn't break into the happiness with any kind of hard analysis of the CBO numbers. Obama-care beat reporter David Herszenhorn Friday A16, "The Numbers Come Out Just Where Obama Wanted, With No Magic Involved."

Herszenhorn's shallow analysis framed the outcome as more as a political triumph for Obama without actually drilling into the numbers to check their validity.

Love it or hate it, one thing that is indisputable about the Democrats' big health care legislation is that the cost figures are going to come out right where President Obama said he wanted them.

When the president finally came forward with an outline of his own proposal, aimed at bridging differences between the House and Senate versions of the legislation, he said it would have a 10-year price tag of about $950 billion and would reduce federal deficits over that same time period by more than $100 billion.

A preliminary cost estimate of the final legislation, released by the Congressional Budget Office on Thursday, showed that the president got almost exactly what he wanted: a $940 billion price tag for the new insurance coverage provisions in the bill, and the reduction of future federal deficits of $138 billion over 10 years.

So how did the numbers come out just right? Not by accident.

Congressional Democrats have spent more than a year working with the nonpartisan budget office on the health care legislation, and as they fine-tuned many of the bill's various provisions in recent weeks, they consulted repeatedly with its number-crunchers and the bipartisan staff of the Joint Committee on Taxation.

Herszenhorn made no attempt to explain the vagaries of the bill, instead using a silly supermarket analogy:

Think about it this way: Building the health care legislation was not some wild shopping spree in Macy's, running through the store grabbing whatever looked nice off the racks and then heading to the cash register with credit card and a bunch of coupons in hand, only to let the cash register render its verdict.

Rather, it was more like a trip to the local fruit stand with a set amount of money in hand, and every item clearly marked with a price per pound. The precise mix of apples, oranges, pears and grapes could be adjusted - a little more of this, or a little less of that - so there would be just the right amount of ingredients to make a fruit salad, without blowing the budget.

Compare that trip to the mall to the dense front-page analysis by Neil Irwin in the Washington Post, which cast doubt about the validity of the CBO's process: "Congressional Budget Office's sunny forecast carries big uncertainties."

But perhaps the biggest risk that could cause the budget impact to diverge from the CBO estimates comes from Congress. The estimates assume that the legislation plays out as written over the coming decade, which would mean reining in the growth of payments to doctors and hospitals and implementing a tax on high-cost health insurance plans.

Those two policies are responsible for bringing in the revenue and cost savings that allow the plan to expand coverage to 32 million more Americans yet, according to the projections, bring down the deficit.

But that falls apart if a future Congress finds the cuts or taxes too painful to handle and overturns them.

There is precedent for that. The alternative minimum tax, for example, is a policy that under law would increasingly affect more middle- and upper-middle-income people and bring the government tens of billions of dollars. But Congress invariably adjusts the tax every year, preventing it from ensnaring those additional American families.