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Lieberman Doesn't Understand the Public Option

October 28, 2009 - by Donny Shaw

Sen. Joseph Lieberman [I, CT] went on Fox this afternoon to restate what it would take for him to break from a Republican filibuster and allow an up-or-down vote on the Senate’s health care bill. Via The Hill:

“Just take this government-created, government-run health insurance company that will cost the taxpayers, premium payers and the debt a lot of money — take it off the table,” Lieberman said.

This is basically how he talked about the public option yesterday as well. Thing is, he seems to completely misunderstand what the public option actually is and how it would work.

Taking his statement point-by-point, he is correct that it would in fact be a “government-created, government-run health insurance company.” But he’s wrong on the other points. The public option would not cost taxpayers or the debt a cent. The Congressional Budget Office (CBO) has repeatedly scored public option plans as saving the government money. The bigger and more “robust” the plan, the more it saves. And as for Lieberman’s claim that it would cost premium payers, CBO has estimated that it would save premium payers up to 10% on the cost of their insurance.

As I’ve stated repeatedly on this blog, the public option is entirely funded by taxpayer premiums. It is not an entitlement program, like Lieberman claimed it was yesterday, and it is not run with federal funds. Both the House Tri-Committee bill and the Senate HELP bill that includes a public option provide start up money ($2 bln in the House bill, unspecified in the HELP bill) for the public option but require it to be payed back in full over a 10-year period.

The House bill even contains the following paragraphs in its start-up funding section just to make it extra clear that the federal funds are limited to start-up costs and that no other federal funds can be appropriated to it, even to save it if it’s failing:

C) LIMITATION ON FUNDING- Nothing in this section shall be construed as authorizing any additional appropriations to the Account, other than such amounts as are otherwise provided with respect to other Exchange-participating health benefits plans.

(3) NO BAILOUTS- In no case shall the public health insurance option receive any Federal funds for purposes of insolvency in any manner similar to the manner in which entities receive Federal funding under the Troubled Assets Relief Program of the Secretary of the Treasury.

The final Senate bill that Lieberman will be voting on is not publicly available yet, but you can be sure that it will include similar limitations on federal funding for the public option. As soon as it’s available, I’ll find the bill text relating to funding for the public option and post it to this blog for all to read.

Meanwhile, faced with Lieberman’s opposition to a public option plan that doesn’t even exist, Democratic leaders are reminding the world that they still have an procedural option available that would make Lieberman irrelevant — budget reconciliation — and they’re not afraid to use it.

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