Obama has claimed we have to pass government health care to control costs, so what happens now?

It is pretty basic economics. If you increase spending, prices will go up. I would also argue that government is less efficient, but that doesn't appear to be one of CBO's points. From Fox News:

The director of the Congressional Budget Office issued a warning to Democrats Thursday that their health care proposals would raise costs, not lower them.

One day after a Senate panel approved its version of the health care reform plan, the first committee to do so, CBO Director Doug Elmendorf gave a dose of bad medicine to a separate committee.

Asked by Senate Finance Committee Chairman Kent Conrad, D-N.D., whether costs would be lowered -- also known as "bending the curve" -- Elmendorf responded: "The curve is being raised."

Subsidies to help uninsured people would raise federal health care spending, which is already growing at an unsustainable rate, Elmendorf explained at the hearing. The Medicare and Medicaid cuts that lawmakers have offered to pay for the coverage expansion aren't big enough to offset the cost trend, particularly in the long term, he said.

House Republican Leader John Boehner seized on the comments, calling on Democrats to scrap their plans in light of the assessment.

Senate Republican Leader Mitch McConnell called it a "wake up call" for Democrats.

"The director of the Congressional Budget Office confirmed today what we have been saying for weeks -- the health care spending plan that some are trying to rush through Congress would actually make things worse," McConnell said.

CBO's numbers come at an inopportune time for Democratic leaders who are trying push through and merge several different health care reform plans in the coming weeks, on orders from President Obama. . . . .

Here is Biden making the claim that government taking over the rest of health care is necessary to save money.

Vice President Joe Biden told people attending an AARP town hall meeting that unless the Democrat-supported health care plan becomes law the nation will go bankrupt and that the only way to avoid that fate is for the government to spend more money.

“And folks look, AARP knows and the people with me here today know, the president knows, and I know, that the status quo is simply not acceptable,” Biden said at the event on Thursday in Alexandria, Va. “It’s totally unacceptable. And it’s completely unsustainable. Even if we wanted to keep it the way we have it now. It can’t do it financially.”

“We’re going to go bankrupt as a nation,” Biden said.

“Now, people when I say that look at me and say, ‘What are you talking about, Joe? You’re telling me we have to go spend money to keep from going bankrupt?’” Biden said. “The answer is yes, that's what I’m telling you.” . . . .

This might produce problems with the so called Blue Dog Democrats.

U.S. Rep. Mike Ross, D-Ark., a leader of fiscally conservative House Democrats, said Wednesday a House plan to overhaul the U.S. health-care system is losing support and will be stuck in committee without changes.

"Last time I checked, it takes seven Democrats to stop a bill in the Energy and Commerce Committee," Ross told reporters after a House vote. "We had seven against it last Friday; we have 10 today."

Three House committees are slated to begin considering the $1 trillion-plus bill this week, but the Energy and Commerce looms as the biggest challenge. That's because it counts among its 36 Democratic members seven members of the Blue Dog Coalition, a fiscally conservative bloc that is opposing the House Democrats' effort.

Ross said the bill, introduced Wednesday by House Democratic leaders, doesn't include provisions adequate to curb rising health care costs, including what the government spends on healthcare.