After painstaking analysis, the CBO estimated that the House health care reform bill, known as the Affordable Health Care for America Act, would reduce the federal deficit by about $109 billion during the first 10 years after it takes effect. To repeat: The bill passed by the House Democrats on the evening of Saturday, Nov. 7, “would yield a net reduction in federal budget deficits of $109 billion over the 2010-2019 period.”

The CBO experts also costed out the Senate Finance Committee bill and found that it would cut federal deficits by more than $80 billion during that first decade.

Those reassuring conclusions derive from other basic facts about reform that tend to be ignored or concealed. Reform will reduce wasteful spending by hundreds of billions of dollars annually, and will depend for financing on excise taxes imposed on the wealthiest 1 percent of the population.

Much of the misinformation about the costs of reform comes from the belief—fostered by conservatives—that the government-run health plan known as the “public option” would impose a huge burden on the federal budget. So says Joseph Lieberman, the independent senator from Connecticut who has threatened to filibuster the bill.

Section 322 of the Affordable Health Care for America Act says clearly and concisely that people insured under the public option will pay premium rates “at a level sufficient to fully finance the costs of health benefits provided by the public health insurance option; and administrative costs related to operating the public health insurance option.” In short, the public option will involve no new federal expenditure.

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