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O N MARCH 23, 2010, President Obama signed HR 3590 (PL 111-148).1 When combined with a second and smaller bill approved a week later, this law is the most sweeping federal entitlement legislation in almost half a century—since, in fact, the passage of Medicare and Medicaid in 1965.2 This result was far from inevitable, even after the election of Obama in 2008. Over the fourteen months between the president’s inauguration and passage of the bill, health care reform had a great many births, deaths, and rebirths. To an even greater extent than in 1994, CBO was in the middle of the debate—writing advance papers to provide guidance, producing cost estimates, working behind the scenes to advise Congress on the cost of various proposed changes. It is clear that the structure of the health care reform that passed was fundamentally influenced by CBO’s advice. That is, without CBO, the health care reform that passed would have—for better or worse—looked fundamentally different. Three factors contributed to enhance CBO’s position in the 2009 debate. First, as important a role as CBO had played in 1993 and 1994, its role at that time took some by surprise. By 2009 everyone who followed health care reform (or Congress generally) knew that CBO would eventually play an important role if Congress considered a bill with large revenue and spending effects—which of course describes health care reform. Second, Obama had (as Clinton had before him) given CBO a role because of his pledge that the health care reform bill would reduce the deficit. Any such pledge necessarily raises the profile of the scorekeepers . The mood of the country—in light of substantial increases in federal spending and deficits over the previous two years—made a deficit-reducing health care bill more than simply a promise of President Obama. A deficit-reducing bill was a political necessity if majorities in Congress were to be put together to pass the legislation. Third, that a tactical decision was made to work through the congressional process meant that CBO would play its normal role at the center of the give-and-take, or at least estimating the results of the give and take. This chapter outlines the role that CBO played in the process of passing this landmark health care reform, starting with the preparatory work in advance of the proposed bills, moving to the role that the agency played in the legislative Chapter 7 Obama Health Care Reform 180 Chapter 7 process, and reaching several conclusions on the effect that the agency played on the process and the result. Health Reform, 1994–2008 In the wake of the failure of the Clinton health care reform, some in Congress continued to push the same agenda. Political realities, however, dictated that any realistic chance needed to wait for another day. After the Democrats lost control of Congress in the 1994 midterm elections, Clinton necessarily played defense for the remainder of his term. As outlined in chapter 3, the necessity to focus on deficit reduction, and that the Republicans had won control with a strategy that opposed any health care reform efforts, meant that no reform would occur as long as the Republicans controlled Congress. The election of George W. Bush to the presidency only reinforced that reality, and even after the Democrats regained Congress in 2006, any health care reform would have faced a major hurdle in the form of a presidential veto. In fact, the only significant health-related legislation enacted in the Bush administration was the Medicare prescription drug bill passed in 2003 (see chapter 4). The fiscal reality, however, was that some change in the health care system—in cost if not coverage—seemed inevitable. Although health care costs totaled oneseventh of all costs in the US economy in the early 1990s, they were slowly edging upward, and were projected to reach one-sixth of spending by 2005. During this interim period CBO attempted to prepare by continuing to do research on those issues likely to surface when the next health care reform was considered. When Peter Orszag took over as director of CBO in January 2007, he was almost single-mindedly committed to having the agency well-prepared to serve Congress when the reform came about. One practical step was to lobby Congress, now controlled by Democrats more likely to be sympathetic to health care reform , to increase the number of CBO staff working on health care...

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