I'm sort of struggling with how to write this post. Paygo rules are important but boring. Posts that repeat the word "budget" too many times tend to make people's eyes glaze over. But this post is about paygo rules and the budget and reconciliation. It's a cluster bomb of legislative arcana. By this point, you've heard, over and over, that the House and Senate budgets differ. In particular, you've heard that they differ on reconciliation. The House budget has instructions for reconciliation. The Senate budget doesn't. But there's another difference important to the future of health reform. The Senate budget has paygo provisions that mandate that health reform prove deficit-neutral over 11-years. The House budget has paygo provisions that say it has to be deficit-neutral over six years. That's a huge difference. In health care, you have to make certain investments now to save money later. Health IT, for instance, will cost billions in the short-term and save billions in the long-term. Same goes for comparative effectiveness research and many delivery system reforms. As example, imagine a business with an inefficient air conditioning unit. Replacing the unit will cost $5,000 this year but save them $8,000 over 10 years. It's a good investment. But if they have to write a budget that's balanced for this year rather than one that takes into account longer-term payoffs, they might be unable to afford the new unit. They might lose money in the long-term to save money in the short-term.
