Doug Elmendorf, the head of the Congressional Budget Office, told the Senate Budget Committee yesterday that nothing in its proposed health care bill will substantially reduce the rate of growth of health care growth. This assessment is clearly not helpful to the Obama administration's efforts to get a bill through Congress, but how bad is it? Well, the Post told readers that it was "devastating." This characterization appeared in the first sentence of a front page news story, not in a column or editorial. It is worth noting that the Congressional Budget Office's assessments have often proven to be highly inaccurate. It completely failed to anticipate the collapse of the housing bubble and the resulting economic crisis. Back in 2001, their budget projections over-estimated capital gains revenue for the next decade by $450 billion because they assumed the stock bubble would persist indefinitely. More recently, CBO hugely over-projected the number of homeowners who would take advantage of the Hope for Homeowners mortgage modification program passed by Congress last summer. CBO projected that 400,000 homeowners would take advantage of the program through 2011. As of April of this year, there had been less than 1,000 applications and just 51 closings.
--Dean Baker
