Health Care Cost Estimates Challenged, But Media Skip Criticism of 'Non-Partisan' Agency

- Since Obama took office, only 16 percent of health care stories mentioning the Congressional Budget Office (CBO) included any criticism of their accounting, despite criticism from many conservative and libertarian experts as well as the former head of CBO.

- Networks reporters and guests emphasized the CBO's integrity calling them "non-partisan," "independent" and the "referee" or "arbiter" of legislation costs. CBS's Nancy Cordes even declared them to be "trusted by both parties as the authority on budget matters."


The new majority in the House of Representatives has made it clear that voting on a full repeal of ObamaCare is its top priority, something a majority of Americans support. But their resolution, H.R. 2, has come under fire from the left and the liberal news media over the deficit.

Democrats, including Rep. Rob Andrews, D-N.J., claimed that House Republicans "are breaking their first promise in their first week" because the Congressional Budget Office (CBO) said that repealing the health care bill would add $230 billion to the deficit over 10 years.

CBS's Katie Couric called it "new ammunition" for Democrats on Jan 6, 2011, and on the network news that proved to be the case.

That "ammunition" used to portray the GOP as fiscal hypocrites has also been criticized as "nonsense," not that you'd know it from the network news media.

The CBO's deficit claim was repeated by CBS and NBC in the first week of January, often without skepticism of the CBO. In fact, CBO scores were often portrayed as incontrovertible by all three broadcast networks in recent years despite consistent criticism from deficit experts, economists and the former director of the CBO itself.

The Business & Media Institute found that out of 203 stories about health care legislation that mentioned the CBO after Obama took office, only 16 percent (33 stories) included any criticism of the CBO despite being dramatically wrong on health care (and other) estimates in the past. The true cost of Medicaid DSH payments in 1992 was $17 billion, 17 times greater than the $1 billion it was estimated to cost by the CBO in 1987, The Daily Caller found.

Instead of examining flaws or questioning the way CBO scores health care legislation in the past two years, the networks praised the "independent," "non-partisan" "referee" of legislation.

CBS's Nancy Cordes went a step further March 18, 2010, in an "Evening News" story about the latest cost estimates for health care reform. "[T]he number is $1.3 trillion, the amount by which the final health care bill would reduce the deficit over the next 20 years. That's according to the non-partisan Congressional Budget Office, which is trusted by both parties as the authority on budget matters," she said.

Not hardly.

Douglas Holtz-Eakin, former CBO director, called the data "nonsense" and a product of "Garbage In, Garbage Out" (GIGO) accounting in a recent National Review post.

"The CBO is simply running in reverse an enormous exercise in GIGO - so think of this as GOGI budgeting. Recall that the rules forced CBO to incorporate a wide range of budget gimmicks in their original estimate of the health care law," Holtz-Eakin wrote. "[T]here was never any reason to believe that the [health care] law reduced the deficit by roughly $140 billion over ten years."

Holtz-Eakin isn't alone. Tax and deficit experts from conservative and libertarian groups have found fault with the CBO for a long time.


Networks Mostly Ignore 'Budget Shenanigans'

The health care legislation that Obama supported and eventually signed into law was praised in the networks stories for slashing the deficit, many of which ignored the "creative accounting" necessary to come up with those figures.

NBC's Savannah Guthrie cited President Obama "touting" the figures from the CBO on March 18, 2010. He called the health care package "the most significant effort to reduce deficits since the Balanced Budget Act in the 1990s." Guthrie failed to challenge that claim.

That was the same night CBS's Cordes emphasized the honesty of the CBO saying it is "trusted by both parties as the authority on budget matters." Unsurprisingly, her report included zero criticism of the CBO's accounting of the legislation.

Even on the rare occasion a news anchor asked a skeptical question about the CBO, it could go unanswered. That was the case Dec. 9, 2009, when ABC's Charles Gibson asked George Stephanopoulos "how accurate" CBO estimates tend to be. Stephanopoulos dismissed the question without a real answer saying, "That's a great question, but you know what? They're the only game in town. They are the referees."

On Jan 6, 2011, House Speaker John Boehner responded to critics of his repeal by repeating criticism of the health care reform legislation. "CBO can only provide a score based on the assumptions that are given to them," he said, according to Politico. "And if you go back and look at the health care bill and the assumptions that were given to them, you see all of the double counting that went on, you see the fact that the 'doc fix' wasn't even part of the bill." That quote from Boehner did not appear in the network newscasts BMI analyzed.

What were those assumptions? According to Holtz-Eakin, the health care bill left out $115 billion it would cost to implement the legislation, counted $70 billion in premiums for the "CLASS" provision while ignoring the "unsustainable" spending for the program that would rise after 10 years, ignored the cost of paying Medicare doctors, "pretended" that Medicare could be cut by $450 billion "without changing [the program] in any real way" and assumed a tax on "Cadillac" health plans that was already "gutted" by the unions.

Conservative economists, budget experts like David Walker, Holtz-Eakin and others all complained as the health care reform legislation was being debated that the CBO numbers were based on those unrealistic assumptions, yet 84 percent of stories on ABC, CBS and NBC about health care legislation had no criticism whatsoever of the agency.


Historically Partisan Budget Office

Despite network labeling of the CBO as "nonpartisan," the history and founding of the group was left-wing. The agency was created in 1974, "one of the most partisan years in American political history," according to Brian Domitrovic author and teacher at Sam Houston State University.

Domitrovic explained in a Roll Call op-ed that the creation of the CBO was an attempt by Democrats to find a way around President Nixon's "impounding" of funds Congress wanted to spend on pet projects and prevent tax cuts.

"[T]he CBO was devised by a historically partisan Democratic majority in the service of forestalling an up-and-coming idea from the downtrodden opposition: tax cuts. And sure enough, in its first years, the CBO proved a loyal fighter in the service of the Democratic status quo," Domitrovic wrote. He explained that the economic models they used were biased against tax cuts. "They made sure to tweak their econometric models such that they told the CBO what it wanted to hear."

A 1977 forecast was so "preposterous," according to Domitrovic that the modelers "set to figuring out how the theory of supply-side economics might be fit into his model, just in case the Republicans won control of the CBO some day."

Dan Mitchell of the libertarian Cato Institute has said that CBO "favors deficits and debts" when looking at spending bills, but "conveniently changes its tune when the discussion shifts to tax increases."

The conservative think tank Heritage Foundation has given the CBO some credit for the independence of its forecasts, but plenty of criticism for bias on the issue of taxes. "By and large, CBO does a credible job maintaining a non-partisan approach to policy - with one glaring exception. The CBO continues an inherently politically biased approach to expiring tax provisions."

CBO baselines do not drop expired spending out of the spending baseline, but they do drop expiring tax provisions out of its revenue forecasts, according to Heritage. "This disparate treatment by CBO of spending and taxes is illogical. It is also de facto entirely partisan. Congress should require the CBO to correct this flagrant bias immediately."

Julia A. Seymour
Julia A. Seymour
Julia A. Seymour is the Assistant Managing Editor for the MRC's Business and Media Institute.