by Caitlin Kenney

Senator Max Baucus, chairman of the Finance Committee, has been getting some tough marks on his health care bill. Much of the criticism has focused on the bill's proposed insurance subsidies which are much lower than those proposed by the House. The Center on Budget and Policy Priorities does a great job crunching the numbers on how the subsidies will impact low- and moderate-income individuals. While James Kwak, over at Baseline Scenario points out that the lower cost of Baucus' bill may just be some tricky accounting. He writes:

One reason the Baucus bill is "cheaper" than the House bill is that it has lower subsidies. For illustration, let's assume that the whole $140 billion difference is due to lower subsidies. Relative to the House bill, then, the Baucus bill costs the government $140 billion less; but it costs middle-income people exactly $140 billion more, since they have to buy health insurance. The difference is that in the House bill, the money comes from taxes on the very rich; in the Baucus bill, it comes out of the pockets of the middle-class people who are getting smaller subsidies. Put another way, the Baucus bill is the House bill, plus a $140 billion tax on people making around $40-80,000 per year. That' s not only stupid policy; it's stupid politics.

Baucus says his bill will cost $860 billion over ten years, the Congressional Budget Office puts that number closer to $770 billion.