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About that $115 billion ...

I wrote a post yesterday explaining what the CBO was talking about when it said health-care reform could lead to $115 billion in further discretionary spending if Congress so chose. What I didn't know was that the majority of the money in the CBO's estimate -- $86 billion, to be exact -- was for existing programs. "For example," writes CBO director Doug Elmendorf in a post meant to clarify the report, "those potential costs include $39 billion authorized for Indian health services that already receive appropriations every year." That is to say, we'd be spending that money with or without the Affordable Care Act. To make this a bit clearer, I broke the $115 billion figure out into a graph:

disretionarychart.jpg

Of the new spending that does exist, it may or may not ever come to pass. It's up to a future Congress, and a future appropriations bill, to decide its fate. And, in any case, there's not much of it.

By Ezra Klein  |  May 13, 2010; 11:03 AM ET
Categories:  Health Reform  
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Comments

Yes and no. The programs exist, but the constituency served is being rather dramatically increased by the PPACA. Like the various Federal programs considered by the CBO, States face a similar upsurge in additions to entitlement roles; that is, as the entitlement program enrollment increases, there is in most instances both a Federal and a State portion. The CBO considers only the Federal portion, with the State portion being an unfunded mandate which, despite being contrary to the Unfunded Mandates Act, has been levied upon the States by the Pelosi/Reid Congress.

In Indiana, for example, "new estimates show that Indiana could be forced to spend as much as $3.6 billion through the next decade to comply with the federal health care law. [...] The federal law will make more than 500,000 more people in Indiana eligible for Medicaid. That means one in four Hoosiers will qualify for the program when it expands in 2014, compared with one in six today." Indiana's estimates "assume that every individual and family that qualifies for Medicaid will join the program, even though about 47 percent of them already have other insurance."

Most States face a similar problem: the entitlement roles increase in part due to the addition of THOSE WHO ALREADY HAVE INSURANCE yet are now entitled by the PPACA to receive Medicaid benefits.

So, while, yes, the programs exist, the program enrollment and costs increase solely due to the PPACA: it is rather misleading to ascribe such costs to continuance existing programs.

Posted by: rmgregory | May 13, 2010 11:20 AM | Report abuse

it is rather misleading to ascribe such costs to continuance existing programs. Isn't that par for the course on this blog.

Posted by: obrier2 | May 13, 2010 11:41 AM | Report abuse

kind of like adding 15 million people to the rolls of Medicaid? Why didn't they just strip that cost out too? I mean Medicaid was an "existing program".

Heck they could've really made this thing look good.

Posted by: visionbrkr | May 13, 2010 11:49 AM | Report abuse

I bet this hurts so bad to write Ezra.

"And, in any case, there's not much of it"

Just the beginning my friend - its been what? Three months? And we already wipe out all the defict "savings." If this report said a trillion dollars I bet you'd still be trying to find a justification or scapegoat.

I remember your blog before the vote about how you thought the savings would exceed projections (ridiculous). I look forward to reading future entries as more and more about the costs come out (I hope you mention that the head of Medicaid just said the bill would increase spending by $311 Bil.)

Posted by: Holla26 | May 13, 2010 3:08 PM | Report abuse

Obama has also put the country on a course of reckless government spending that has mortgaged the future of all Americans especially future generations. The only way to fix this long term structural problem is to create a pro-growth atmosphere for business. To do this we must reduce taxes NOW. How many different taxes does a business or individual pay on a regular basis? We must eliminate number and complexity of all these taxes and reduce the tax burden.

REMEMBER IN NOVEMBER…VOTE THEM OUT!!!

The American people are finally realizing just how dysfunctional our government is. It all starts at the top. Look at the dirty, secret backroom deals that were made to pass healthcare. Just look at how the Administration and Congress continue to push an agenda that the majority of Americans do not want.

Earmarks, pork projects, dirty backroom deals, wasteful spending, and disregard for our system of government and Constitution by Congress and the Administration must end.

REMEMBER IN NOVEMBER…VOTE THEM OUT!!!

We need to eliminate much of the complexity of government regulation. How many different regulations does a business have to try to comply with? How many forms does a business fill out to comply with government regulations? All of that effort has a cost and the cost is very high. That inhibits growth and jobs. REMEMBER IN NOVEMBER…VOTE THEM OUT!!!

How many government programs to help the poor and others are so riddled with paperwork and regulation that much of the money spent on them actually goes to pay for the paperwork and regulations. We need to greatly reduce the number and complexity of government programs and eliminate the ineffective ones. REMEMBER IN NOVEMBER…VOTE THEM OUT!!!

Most of all we need to eliminate the dirty backroom politics and deal making. A law should be for one purpose without unrelated "pork" included to buy votes in the Congress. All bills and meetings should be held and debated with complete transparency.

REMEMBER IN NOVEMBER…VOTE THEM OUT!!!

Obama does not think the American people are competent enough to manage their own affairs so he wants government to do it for us.

REMEMBER IN NOVEMBER…VOTE THEM OUT!!!

Posted by: AngryMobVoter | May 13, 2010 4:40 PM | Report abuse

Ezra Klein is still a child. The whole purpose of not including the "doc fix" in the health care bill, even though we all knew it had to be done, was to hide the total costs. It is no different here. We either include all the costs originally or we add them in later. Klein wants to not include them in measuring the total cost and that is incorrect. Tricky, but incorrect.

Posted by: RickCaird | May 14, 2010 3:49 PM | Report abuse

Wow. The trolls are out in full force today. I'm still confused by how so many people can have absolutely no problem with $1.5 trillion on wars, $1 trillion given away to the pharmaceuticals via plan D, but still think its this, at worst, deficit neutral plan that is going to wreck this country's financial status.

And to complain that what we really need are tax cuts when we just passed a lot of tax cuts to the point that we're paying the lowest taxes since Truman? And the cognitive dissonance needed to think that deficits are bad and that lowering revenue will fix that?! All that and I don't even think I'm through the first couple sentences of that troll post...

Posted by: nylund | May 14, 2010 3:50 PM | Report abuse

I hope Klein get's paid well by the whitehouse for his insanity.

What Klein is saying now is equal to saying "hey I know we cut Medicare by $500 Billion to pay for our new entitlement but we didn't use some of the $500 Billion cut in Medicare to fund the doc fix because it was funded before." So the extra $230 Billion in costs to medicare won't be paid by the cuts in medicare.

Klein and the leftists in office now live in a land of smoke and mirrors.

Posted by: robtr | May 14, 2010 4:29 PM | Report abuse

the difference is a white republican spent the money or added it to the deficit. that doesn't count.

Posted by: merlallen1 | May 14, 2010 7:33 PM | Report abuse

rmgregory,
You are assuming that every person that has insurance but will also qualify for expanded Medicaid will leave their private insurance. A lot of those people with private insurance work for large companies and get good health benefits - and relatively low wages to qualify for new Medicaid.

Posted by: ElrodinTennessee | May 14, 2010 10:07 PM | Report abuse

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