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When OMB directors stop being polite and start getting real


OMB Director Peter Orszag goes hard at the Wall Street Journal editorial board:

The editorial board that did more to bring supply-side economics – or in George H.W. Bush’s immortal words, "voodoo economics" – to Washington is raising the specter of a fiscally irresponsible health reform bill in which efforts to rein in health-care cost growth are an "illusion." But the ironies run richer, since an editorial that hurls accusations of overselling cost containment itself displays more impressive rhetoric than substantive content. The Journal makes three fundamental claims. The first is that health reform represents a huge risk to the federal budget, and will end up exploding the deficit, because it relies on an array of speculative policies to control costs. What the Journal misses is the crucial difference between this health reform effort and the flawed supply-side economics that drove the country into the deep deficits of the 1980s: We are insisting that the legislation be deficit neutral as scored by the Congressional Budget Office (CBO) in addition to including a variety of delivery system reform and other cost-containment measures for the long term. In other words, unlike supply-siders, we are not waiting for magic savings to appear. Instead, we are relying on hard, scoreable savings – not the long-term cost-control measures – to pay for the expansion of health care coverage. This "belt and suspenders" approach provides a crucial fiscal backstop, and it's the prudent, realistic, and wise thing to do. (Note to the Journal ed board: here's the link to the CBO score of the Senate legislation, in case you'd like to read it.)

Oh, snap! But isn't this punching down? I mean, even I don't bother to take issue with the Wall Street Journal's editorial board. It's the proverbial "dining-room table" of economics commentary.

Photo credit: By Charles Dharapak/Associated Press

By Ezra Klein  |  December 14, 2009; 12:32 PM ET
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Peter Orszag is wrong.

The whole point is that the federal government is using flawed accounting with regard to Medicare and Social Security, understating the true burden of these entitlement programs to the government and society as a whole.

Using Medicare cuts and tax increases to create a new entitlement program is very bad in principle because these devices might otherwise be used to deal with Medicare's sustainability.

Obviously this guy would never contradict the president, so why does Ezra keep on putting this guy on his blog since this guy is clearly biased and wrong?

Posted by: RandomWalk1 | December 14, 2009 1:03 PM | Report abuse

Maybe it's punching down, but who's punching at the level? It's not like the Washington Post is going to point out the WSJ editorial page's consistent spouting of BS.

I'm personally glad that this White House takes the occasional moment to remind people of just who has any journalistic cred, and who doesn't. Somebody's got to do it, and while lefty blogs do a good job of it, most Americans still don't read lefty blogs.

Posted by: rt42 | December 14, 2009 1:07 PM | Report abuse

RandomWalk1, is that supposed to be an argument you just mounted? because the basic premise of an "argument" is that it make some logical sense: otherwise, it's just a bunch of words, which is what you have produced.

as for the reason i intended to comment: you, ezra, may well realize that the wsj editorial page is written by crazed liars, but in right-wing circles, this kind of material is regarded as on the money, so yes, it does make sense to take a shot at the morons who produce this piffle.

(my favorite moment in wsj editorial history, by the way, was its insistence, in 1993, that the clinton tax hike was going to destroy the economy and plunge us into recession, which showed up, right on forecast, 20M jobs, significant GDP growth, and a balanced general fund budget later in 2001.)

Posted by: howard16 | December 14, 2009 1:09 PM | Report abuse

"When OMB directors stop being polite and start getting real"

Maaaaaad real.

Posted by: jadamvogt | December 14, 2009 1:16 PM | Report abuse

howard16, you don't understand logic.

Tens of trillions of dollars of unfunded liability. And here we have the OMB guy suggesting he knows more about fiscal prudence than others.

And the phrase "crazed liar" is inflammatory. I guess that phrase enhances the arguments you constructed.

Posted by: RandomWalk1 | December 14, 2009 1:37 PM | Report abuse

howard16, you are wrong.

you forgot to mention that the republican congress helped balance the budget.

and who excatly are these "crazed liars?"

Posted by: RandomWalk1 | December 14, 2009 1:41 PM | Report abuse

randomwalk1, the crazed liars are, exactly, the people who write the wall street journal editorial page under the direction of paul gigot. we know they are crazed liars by reading their material, which is typically both deranged and inaccurate. are you disputing that?

as for the republican congress helped balance the budget: you're frickin' kidding me, right? i normally am perfectly happy to let success have a thousand parents, and i'm far from saying that all that happened good in the economy was because of bill clinton.

but what led to a balanced general fund budget was not a republican congress, it was a democratic-supported tax hike, opposed, as i recall, by every single republican member. after the tax hike was in place, yes, congress (including republicans) was willing to work within PAYGO, but that was with a democratic leadership in the white house that understood fiscal responsibility.

unlike the bush white house and the republicans in congress in this past decade, who, of course, produced several trillion dollars in general fund deficit with pride and an insistence that the war in iraq in particular be fought entirely with borrowed dollars (and i say to you again: can you demonstrate that you opposed this? because otherwise, i'm not interested in what you have to say about fiscal matters at all.)

as for "logic," you're still not saying anything that forms an argument about medicare. let me know when you actually summon one up: i'll be waiting.

Posted by: howard16 | December 14, 2009 1:57 PM | Report abuse

...when the discussion is political there is no room for rational discussion and though you would never know it reading WSJ editorials it is possible to write an editorial addressing economics without it being stridently political and irrational..

come to think of it you would never know it reading the WPost's alleged economics "expert" Robert J. Samuelson either...

Posted by: teoc2 | December 14, 2009 2:07 PM | Report abuse

teoc2, to pick up on your point, for example, i rarely agree with bruce bartlett, but he is neither crazed nor a liar; he is simply an honest conservative economist, and i'll read him any time.

of course, bartlett was thrown out of the right wing for not being sufficiently obsequious to george bush and the republican policies of this decade, a crime the wsj editorial page would never commit!

Posted by: howard16 | December 14, 2009 2:23 PM | Report abuse

That was a pretty solid rebuttal to the ideological babble that often fills the WSJ Op-Eds.

I really like hiting this term fiscal "nihilism" that Ezra and now the OMB director are using. It is a 100% accurate discription of the fiscal critics of this bill, which prove that their real answer is to do nothing.

Posted by: truth5 | December 14, 2009 5:46 PM | Report abuse

Budget SURPLUS when Bush took office...around $250 billion. Third year in a row Clinton ran surpluses...the first time since 1957 that U.S. had run any surplus. DEFICIT when Bush left office...$1.3 trillion.

National DEBT when Bush took office...around $5.5 trillion. It was around $1 trillion and falling when Reagan took office in 1981. After 12 years of Raygun and Daddy Bush...$5.5 trillion. DEBT when Bush left...$11 trillion.

It was projected in 2000 that at the continuing rate of SURPLUS, the national DEBT would be paid off in 10 years. Instead we got Bush and a doubling of the DEBT to $11 trillion.

Posted by: tslynch27 | December 15, 2009 12:27 AM | Report abuse

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