Which party is better on the deficit? Maybe the one trying to reduce the deficit.
Megan McArdle has a really good post demonstrating how seriously Democrats took deficit reduction in the health-care bill, only she seems to think it's a post about how they didn't take it all that seriously. It's really odd.
The examples she uses are the 1099 rule, where Democrats infuriated small businesses by trying to collect more from them in taxes, and the Independent Payment Advisory Board, where Democrats infuriated seniors by creating a body able to cut costs and reform procedures in Medicare without congressional approval.
One thing to note here: Neither makes up a big portion of the bill's scored savings. The 1099 rule is good for less than $20 billion over 10 years. IPAB doesn't really kick in until 2018, and so has very little to do with the bill's first 10 years, which is where the main claim of deficit reduction comes in.
Nevertheless, McArdle says that these two proposals "don't really make it seem that deficit reduction is a critical Democratic priority." The 1099 rule proves this because the small-business lobby hated it so much -- and made enough compelling arguments against the amount of paperwork it would require -- that Democrats are now open to reforming it. In fact, they tried to do so the other day, exempting smaller purchases from the rule so that it cut down on paperwork and making up the savings by cutting oil and gas subsidies. That seems like exactly what you'd do if you were both fiscally responsible and willing to revisit issues if constituent groups made strong enough arguments. Republicans filibustered the effort.
As for IPAB, well, that's harder: McArdle says "it's a high-risk strategy." True! And it may not work if cuts in Medicare prove "politically unviable." Also true! But if that's true, then we're pretty much cooked one way or the other, as cost control is impossible. Meanwhile, Republicans have been trying to prove the point, singling the proposal out as a special target in their efforts to undermine the bill. So you've got Democrats including a politically vulnerable idea that wasn't necessary for PayGo reasons simply because they believe it'll cut spending far into the future and you have Republicans trying to specifically repeal that proposal because cutting Medicare spending at any time is unpopular.
Then, of course, there are the major savings in the health-care reform bill: The $500 billion in Medicare cuts that's been a staple of Republican advertising this election. The excise tax on high-value health-care insurance that made the unions throw up. McArdle dismisses these, as she'd prefer to have seen them used to reduce the deficit, rather than to pay for health-care reform while reducing the deficit. But neither policy would have passed as part of a deficit-reduction-only package. And the point of being fiscally responsible isn't that you're never allowed to make progress on priorities that require money. It's that when you do so, you pay for it. In the case of health-care reform, the Democrats did -- and then some.
It's when you don't pay for things that deficit reduction stops looking like a critical priority.
Contrast the Democrats' health-care reform bill with the Medicare Prescription Drug Benefit, which was paid for by the deficit. Or the Bush tax cuts, which were paid for by the deficit. Or "CutGo," in which tax cuts would never have to be paid for.
McArdle has two examples of Democrats not only trying to pay for things, but making unpopular choices to pay for things. Then she's got a bill in which Democrats decided to pay for more than the whole thing, and made a bunch of unpopular decisions to do so -- decisions which Republicans are attacking mercilessly. And this is her evidence for a post which asks the question, "Which Party Is Better on the Deficit?" and finds it impossible to answer.
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