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How to Get a Good CBO Score: An Interview With Sen. Ron Wyden

wydengrassleysebelius.jpg

The last week has seen one health reform bill after another wounded by unwelcome estimates from the Congressional Budget Office. Getting a good "score" -- the term for the CBO's price tag on a piece of legislation -- turns out to be a hard thing to do. But one senator has actually done it. The Healthy Americans Act, the brainchild of Sen. Ron Wyden (D-OR), was not only scored as budget neutral by the CBO, but as improving the deficit after four years. I spoke with him yesterday about the experience. A lightly edited transcript follows.

The last week has been one bad Congressional Budget Office score after another. Your bill, the Healthy Americans Act, is a universal coverage bill that managed to get a good score from the CBO. It was revenue neutral in two years and actually improved the deficit after four years. Tell me about the process behind that score.

I was shot in the tailbone with good luck from the standpoint of the timetable. Peter Orszag, who was then the director of the CBO, and I spent 18 months together. It was every week on the sofas in our office going back and forth with various iterations and alternatives for the legislation. The reason I say I was lucky was that this was the last year and a half of the Bush administration, where for all practical purposes, there were no major domestic initiatives being put on the table. You don't get many windows in life where the timing is such that you can really go at it for 18 months with principals like Peter Orszag and the CBO team.

Was that different than the normal process?

The track record is a bit gloomy. Congressperson X goes out and toils toils toils, spends hundreds of hours on a bill, sends it to CBO, CBO says it costs a gazillion-trillion dollars, and everyone goes away disappointed.

But I found that if you can get the time of the CBO and go through the process of trying different iterations out, you can find your way to the promised land: a score that doesn't blow you out of the water. Our whole objective was to try to get to budget neutrality. We were thrilled when it said in the third year that we started bending the cost curve downward. But to get there, we had to go at it week after week.

What do you think about the scores we're seeing now?

Much of the discussion today on the Hill has revolved around the delivery system reforms in Medicare. I happen to think that what the administration and Chairman Baucus and the HELP folks are saying makes a lot of sense and we should pursue these reforms. But I think it's hard to realize savings quickly with those approaches. It puts you in conflict with cultural practices in American medicine that are hard to change.

I want to be clear: I support those reforms, they make sense, and they'll pay off big in the long term. But I always thought that making changes to the private sector of health insurance would let you get savings more quickly -- and you'd get them using the market -- than if just trying to get delivery system savings by reforming the public sector programs.

I also think that what makes this so hard right now is that we're trying to find a political consensus that brings together Democrats and Republicans and we're trying various versions of these bills out on the CBO at a time when the CBO is getting bombarded with a whole ton of challenges. They're trying to deal with stimulus and financial services and climate change and transportation and everything else. As I look back on it, I also just think we were very lucky in our timing.

What role do you think the Healthy Americans Act will play going forward?

I think that a lot of what was done during that 18-month period where we were working with CBO can be incorporated into the president's bill. I hope what they'll say is that there are ideas in the HAA and there are Republican and Democratic sponsors attached to it and there's a finished score and all those things can be very helpful to the president and the chairmen and can be incorporated into the good work they're doing.


Photo caption: Sen. Ron Wyden talks with Sen. Chuck Grassley and Health and Human Services Secretary Kathleen Sebelius; Photo credit: Susan Walsh of the AP.

By Ezra Klein  |  June 19, 2009; 6:06 PM ET
Categories:  Health Reform , Interviews  
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Comments

Due to the dismissal of Dan Froomkin I am boycotting the WAPO including all of its op-ed and bloggers.

Posted by: mickster1 | June 19, 2009 6:27 PM | Report abuse

The comment about it taking 18 months to work with CBO on scoring is a little intimidating. But perhaps because CBO went through the process with Wyden, they have ways to score now that they did not then? And the fact that it was Peter Orzsag who was doing it could help in terms of providing advice from OMB to the Senate folks. I wonder what Wyden would say if you asked him, "What aspects of your bill showed the greatest potential savings?"

Posted by: LindaB1 | June 19, 2009 7:45 PM | Report abuse

I would feel better if I knew the CBO score was meaningful. Did Wyden learn how to make a plan that saves money or just a plan that "scores" well in an artificial set of rules. I have no idea.

Posted by: Hopeful9 | June 19, 2009 9:32 PM | Report abuse

Hopeful9,

My understanding is that the CBO is pretty strict with their scoring. Unless what you're proposing has been proven to save money, they're not going to sign off on it.

Posted by: SteveCA1 | June 19, 2009 11:21 PM | Report abuse

The result of the negotiations between Ron Wyden and Peter Orszag are not a secret. A "good" CBO score is defined by a revenue-neutral federal budget, not by controlling the excess growth in combined public and private health care spending. Several changes were made that would maintain federal budget neutrality, but those changes shifted future excess cost increases to the individuals insured through the private plans. Individuals are already overburdened with health care costs, and Wyden/Bennett would make that worse. A brief explanation is available at this link:
http://www.pnhp.org/news/2008/may/cbo_looks_at_wydenb.php

Posted by: dmccanne | June 20, 2009 2:50 PM | Report abuse

Gee, it's really too bad that Democrats' dreams of free everything hits the brick wall of reality.

"Economics - Not just a good idea. IT'S THE LAW!"

Posted by: ElViajero | June 20, 2009 7:37 PM | Report abuse

If you want to expand coverage in the cheapest possible way, simply put all the uninsurance on Medicare and make them pay 12% of their income as a premium. It would be dramatically cheaper than any of this elaborate health exchange.

Posted by: JonWa | June 22, 2009 7:28 AM | Report abuse

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