Is the Deficit Being Used as a Distraction?
Jon Gabel had an important op-ed yesterday noting that the Congressional Budget Office has a fairly consistent record of underestimating the savings and overestimating the costs of changes to Medicare. In the 80s, the CBO estimated that payment changes would slow spending to $60 billion in 1986. The actual number was $49 billion. In the 90s, the CBO lowballed the savings from the Balanced Budget Act. In 1999 alone, the savings were 113 percent greater than CBO projected. Earlier in this decade, the CBO overestimated the costs of the Medicare drug benefit by a solid 40 percent.
That said, I'm not sure where this leaves us. The CBO is a cautious institution, but the people brandishing its estimates know that. The problem isn't the CBO. It's the Congress.
The Medicare Prescription Drug Benefit offers a nice example. At the time, the estimate was that it would cost $534 billion over 10 years. That money was borrowed -- it was not deficit neutral. And it passed atop Republican votes. The very same Republicans who championed that piece of legislation are now arguing that that Obama's bill -- which the White House promises will be deficit neutral, and which the CBO has broadly scored as such -- offers insufficient savings. Rep. Dave Camp, who said that the new deficit projections should kill Obama's health-care plan, voted for the Medicare expansion. Adding $534 billion to the deficit was evidently no biggie from a deficit-hawk perspective. Adding somewhere between negative $6 billion and $233 billion* over the next 10 years? Totally outrageous.
Nor are the deficit hawks arguing for more aggressive health-care reforms that could save money. The Wyden-Bennet Healthy Americans Act, which the CBO has scored as saving money, has fewer Republicans co-sponsors than it did a year ago. That's a pity. I would love to get behind a viable coalition for a much more radical bill that would substantially improve the fiscal outlook. But the people who are complaining about cost don't support that bill, and so it doesn't have enough support.
So I'm a bit skeptical about the practical utility of technical arguments about, say, whether the CBO underestimates the savings of changes to the health-care system. There's a whack-a-mole quality to all this. Knock back one set of charges and you're left with another. If the deficit argument doesn't work, maybe the government takeover gambit will do better. Or death panels. Or illegal immigrants. Or taxpayer-funded abortions. Or the need for bipartisanship. Meanwhile, the discussion is dominated by attacks and defenses, and supporters get distracted from discussing the virtues of the legislation.
*The House legislation includes a doctor's fix in Medicare that isn't really part of health-care reform, but costs $239 billion. Removing that wouldn't be good for Medicare, but it would leave you with a pure health-care reform that has a 6 billion surplus. Camp would argue that should be included in the analysis too, in which case the bill isn't deficit neutral, though it's much smaller than Medicare Part D. But Camp, of course, isn't arguing that Democrats should just delete the doctor's fix and pass the resulting bill that actually is deficit-neutral over the next 100 years.
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