Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, February 9, 1994 TAG: 9402090214
SECTION: NATL/INTL PAGE: A1 EDITION: METRO
SOURCE: Knight-Ridder/Tribune
DATELINE: WASHINGTON LENGTH: Medium
Testifying before the tax-writing House Ways and Means Committee, budget office Director Robert Reischauer released an 81-page report that said Clinton's plan would increase the deficit by $74 billion over the next six years, instead of cutting it by $59 billion as the White House claims.
The report also flagged a potential new drawback to health-care reform. Reischauer said up to 1 percent of the labor force - 1.3 million people - might decide to quit working if they could count on health insurance from the government. That would dampen economic activity and increase the burden on taxpayers.
Clinton, who has repeatedly stressed deficit reduction as one of his main motives for reforming the health-care system, downplayed the CBO cost estimates.
``We'll fix that,'' the president said after pitching health-care reform to General Motors workers in Louisiana. ``That's a Washington policy-wonk deal. No serious person out here in the real world will be too troubled by that.''
Reischauer said the main reason for the $133 billion gap in deficit projections is that the administration underestimated the cost of its comprehensive benefit package by 15 percent. That would require more government subsidies to help small businesses and low-income Americans pay for the benefits.
According to the budget office, Clinton's health-care reform plan would not start pushing down consistently on the federal deficit for 10 more years.
However, Reischauer said the country as a whole would begin to see significant savings around 2000. Employers' health insurance costs would drop by about $20 billion that year.
By 2004, Americans would be spending 7 percent less on health care than if the current system were left unchanged, said the office.
Democrats said the estimates support Clinton's case that health-care reform would save Americans money while guaranteeing coverage for all. ``That's what the president has been saying all along,'' said Paul Begala, one of Clinton's closest political advisers.
In a final twist to his testimony, Reischauer invited Clinton into a political minefield.
The budget office recommended that the mandatory insurance premiums required of businesses and individuals under health-care reform be listed as part of the federal budget, like Social Security.
That would buttress Republican charges that health insurance ``premiums'' required by the government are tantamount to taxes. The White House insists that the premiums would be a private expense and should not appear on the government's books.
The effect of including the health-care program in the budget is sobering. For example, the office estimates Social Security costs for 2004 at $414 billion. Health care would amount to $513 billion - $99 billion more.
The budget office, the official bookkeeper of Congress, is virtually unknown outside Washington, but its tradition of independence has earned it a solid reputation on Capitol Hill and in the administration. Its directorship alternates between a Democrat and a Republican.
The agency reviews the cost of all legislation, and a negative assessment can derail a bill or force a major rewrite.
The impact on Clinton's health-care bill could include cutting
by CNB