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Posted at 9:10 AM ET, 01/19/2011

Health-care Rashomon

By Ezra Klein

The Congressional Budget Office serves a very particular purpose in our political system: They provide politically independent, fairly cautious estimates and explanations of legislation so that when we debate, we can at least work off the same basic set of facts, or, if not facts, then educated guesses. They've safeguarded this reputation quite effectively over the years, repeatedly disappointing Republicans and Democrats alike. Many blame them for killing Bill Clinton's health-care bill by deciding to count payments to private insurers as part of the federal budget, which vastly expanded the apparent size of the budget. Democrats were pretty angry at the CBO in 2009, too, as the scorekeeper refused to give them credit for delivery-system reforms and technological improvements that they -- and many health-care experts -- believed would save the system a lot of money. That meant Democrats had to include blunter, surer financing mechanisms, like Medicare cuts and taxes. They may not have agreed with the CBO's estimate, but they recognized it as a legitimate and credible guess, and responded.

But the Republicans have refused to play by those rules. They have claimed, as Doug Holtz-Eakin, Joseph Antos and James Capretta do in today's Wall Street Journal, that the CBO's work is now the product of "budget gimmicks, deceptive accounting, and implausible assumptions used to create the false impression of fiscal discipline." They have created a separate world for themselves when it comes to this bill, a world where there are no accepted estimates except the ones they choose to accept (notably, they regularly mention the CBO results that they think help their case), where there is no neutral arbiter who can be relied on to set the premises of the debate, and thus, where policy debate is not really possible.

It doesn't take long for the bad-faith arguments underlying the case against the CBO to present themselves. Holtz-Eakin, Antos and Capretta mockingly wonder how "the ACA magically convert[s] $1 trillion in new spending into painless deficit reduction," knowing full well that the deficit reduction isn't painless at all: It's more than $500 billion in Medicare cuts that Republicans used to slaughter Democrats in the midterm election, and it's a tax on expensive health-care plans that almost drove unions out of the Democratic coalition on the bill.

They say that the Medicare cuts -- which are smaller than the cuts we successfully made to Medicare in the 1990s -- can't possibly be sustainable, but they know full well -- and admit in the op-ed -- that Medicare requires cuts that are many orders of magnitude larger over the coming decades. And notice how this argument, that these cuts are implausible, conflicts with another common conservative argument, that these cuts represented the "low-hanging fruit" that should've been saved for a future deficit-reduction bill.

And then there are the straightforwardly wrong and dishonest arguments that get tossed around: that the costs of fixing a disastrous Medicare reform that Republicans passed in 1997 should be attached to the Democrats' health-care reforms in 2010. That the $115 billion of discretionary spending that is either already in the budget or won't be appropriated without further action from Congress has been unfairly left out of the bill. That the CBO is "double-counting" Medicare savings, when it's doing nothing of the kind (something even Rep. Paul Ryan admits).

You could spend all day knocking these arguments around. Trust me: I've done it. But the point isn't the arguments themselves, but their cumulative effect. If you're a conservative and you consume conservative media, you now live in a world where it's simultaneously preposterous to believe that the health-care law saves money and commonly asserted that it cuts Medicare to the bone and raises taxes all across the country. You live in a world so different from the one that Democrats share with the CBO that no argument is really possible. Democrats say the bill reduces the deficit. Republicans say that the bill explodes the deficit. And when the scorekeeper tries to intervene, Republicans take aim at the scorekeeper.

Real debate isn't possible under those circumstances. But that's not the only danger here: When you have a scorekeeper respected by all sides, legislation ends up being more fiscally responsible. Fear of a bad score is why Democrats, though they disagreed with the CBO's modeling and thought their reforms would save more money with less pain, went back to the drawing board and include cost-saving provisions that they didn't like and that they knew might hurt them in the polls. The end result? A vastly more fiscally responsible bill. The process worked.

But since that put Republicans in a bind -- after all, how bad could this legislation be if it fulfilled its goals while paying for itself? -- they've turned on the process. That's not only left the two sides arguing from different sets of facts, but undermined the incentives of future congressional majorities to work with the CBO to release fiscally responsible legislation in the future. After all, if no one cares about the score, why kill yourself chasing it?

By Ezra Klein  | January 19, 2011; 9:10 AM ET
 
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Next: House Republicans discover that the Senate doesn't work very well

Comments

Ezra Klein............ why not do a story on how the dirty dishonest WASHINGTON POST was caught Red-handed pimping for Obamacare for between $25K and $250K ?

And it seems like the POST JOURNOLISTS are still "pimping" for this bribe-ridden partisan HC plan.............lol

And the POST backs up its story's with "cooked polls" .........lol

POST = zero creditabilty as a honest "news" source.........sorry.

YOU earned it......

Posted by: allenridge | January 19, 2011 9:31 AM | Report abuse

@allenridge: what are you talking about? (...lol?) And what's with the second "o" in journalist?

Ezra Klein: Nice job. Congress needs a ref like the CBO. If there is truly something awry with the CBO, Republicans should propose how to fix it.

Posted by: JefComment | January 19, 2011 9:51 AM | Report abuse

It's all too easy to poke fun at PPACA advocates -- there are few who fail to chuckle at the YouTube-hosted cell phone video coverage of yesterday's PPACA Supporters' Summit (PPACASS?), when tens of MOCs, Congressional staffers, lobbyists, and their allies met in the Visitor Center lobby and proclaimed their own success through their dysfunctional microphones. Hearing a child in the background of the video say "Mommy, their mouths are moving but nothing's coming out" is just icing on the cake.

Despite the buffoonery of PPACA advocates, the rising cost of Medicaid and other indigent care programs must be addressed. Agreeing to leave the CBO estimates behind seems like an ideal starting point. Federal fiscal estimates are generally wrong: comparing original Medicaid estimates to actual costs reveals an underestimate of more than 400% which has compounded itself over the decades.

For the sake of argument, let's assume the fiscally pessimistic position (the conservative position) that the CBO has underestimated the cost of the PPACA and has overestimates its benefit. What's the appropriate course of action?? Does one leave the PPACA in place and "hope"... or, if one wiser to make a mid-course correction, what should it be?

Posted by: rmgregory | January 19, 2011 9:54 AM | Report abuse

True to form political parties like only estimates in their favor.

They use the CBO numbers when they are favorable and some think tanks numbers when the CBO don't agree with them.

Posted by: ddoiron1 | January 19, 2011 9:57 AM | Report abuse

It looks like Ezra Klein is has become what Brad DeLong calls the Ranks of the Shrill.

Posted by: sanjait | January 19, 2011 10:06 AM | Report abuse

Well put. And probably needs to be said. But I don't see how the adds to our knowledge base. Denying facts IS the practical operational mode of the modern Conservative movement. In fact, I think the Right in America today is more properly viewed as Anti-Humanist rather than conservative in any traditional sense. That is, they argue based on their gut feeling and facts hold little weight. Ultimately, this says that human beings cannot know things empirically. Only what was given to them from some Divine Providence. It just so happens that the Divine Providence channels its words through AM radio.

Posted by: willows1 | January 19, 2011 10:07 AM | Report abuse

very simply data going in influences numbers coming out. If you don't like the numbers coming out change your data going in until it works in your favor.

Posted by: visionbrkr | January 19, 2011 10:12 AM | Report abuse

visionbrkr - I believe a quip about Richard Perle is in order.

Posted by: willows1 | January 19, 2011 10:20 AM | Report abuse

Ezra, you are way too smart to be surprised by this.

Posted by: RZ100 | January 19, 2011 10:34 AM | Report abuse

Washington Journal this morning devoted the first 45 min. to open phones re: repeal followed by a newly elected Republican Rep. from NY and then followed by Democrat Rep. Schakowsky So in total almost an hour and a half. I was amazed at how few callers wanted the law repealed and pleasantly surprised by the number of Republicans who do not want it repealed, but merely improved.

I was also amazed at what the Republican Rep. put forth as their "solution" in providing an alternative. She did a terrible job and what was offered would, in no way, offer the coverage or protections the current law does.

Posted by: bpotter110 | January 19, 2011 10:35 AM | Report abuse

Ezra, thanks for pointing out yet another example of the Republications using total fabrications to advance their agenda. That people who once enjoyed the respect of their peers and their country can stoop so low is a sad comment on the state of American politics. That so many of the American people are so easily swayed by these falsehoods is sad and troubling. Conservatives and Fox News have done so much to remove any degree of intelligence from today's discourse that any attempt to bring people together on anything is doomed.

I have a feeling that over time the attempt to repeal HCR will be the Republicans' Waterloo. It's benefits are already a part of peoples' lives and it is gaining in popularity rather quickly. On the other hand, a few new lies over the next couple of days could change all that, I suppose.

Posted by: mikemfr | January 19, 2011 10:41 AM | Report abuse

Isn't it funny how when one politicizes one sixth of an economy, one suddenly finds oneself endlessly tossed back and forth over the sundry political considerations?

Meanwhile, dollars are wasting, innovation is languishing, uncertainty is blooming, and the quality and availability of health care is sliding into the dumpster of political folly.

Posted by: msoja | January 19, 2011 10:44 AM | Report abuse

My recollection was that the CBO process the Democrats used in 2009 wasn't about getting an honest and accurate CBO score, it was about getting the score below 1 trillion dollars for political messaging reasons.

http://www.huffingtonpost.com/2011/01/06/health-care-repeal-gop-cbo_n_805517.html

The original cost estimate of one 1.5 trillion is probably more accurate. More significantly you can't keep all three of these promises at the same time:

1. Cover (almost) everyone
2. Reduce costs
3. Everyone who likes their current insurance gets to keep it.

Posted by: jnc4p | January 19, 2011 10:45 AM | Report abuse

"Agreeing to leave the CBO estimates behind seems like an ideal starting point."

Great idea, rmgregory. While we are at it, anytime anyone with intensive knowledge of a subject says something that conflicts with the Republican position, let's leave that behind too. I'm sick of experts muddying the waters.

Posted by: Fishpeddler | January 19, 2011 10:48 AM | Report abuse

Ezra complains about conservatives pointing out "...the $115 billion of discretionary spending that is either already in the budget or won't be appropriated without further action from Congress has been unfairly left out of the bill."

I'll keep harping on the $115 billion that the ACA ignored, since Ezra seems incapable of understanding simple real-world budgeting....he's trapped in government policy-wonk philosophy, and his lack of business education shines through.

Ezra, please turn to page 11 of the CBO report you keep citing as evidence that the ACA will deliver deficit reduction:

"Although no provisions in the legislation specifically authorize such [discretionary] spending, it would be necessary for agencies to carry out the
responsibilities that would be required of them by the bill."

Let me translate that in layman terms....the ACA counted future savings and benefits using assumptions that requires many existing government agencies (like the IRS) to take on additional responsibilities to make sure those benefits are realized. But the ACA made no provision for the cost of these administrative activities.

Example: the ACA assumes the benefits (i.e., tax and fine revenue) of inflows from new taxes and fines on businesses and individuals. But the ACA does not include the spending for the IRS to enforce these provisions (i.e, hire more agents, create more forms to be filed by businesses, create new divisions within the agency for compliance, etc).

Therefore it's absolutely correct to add on this 'future discretionary spending' to be incurred by the IRS to the cost of the ACA, because if Congress decides in their 'discretion' NOT to authorize additional funds for the IRS, one of two things will happen:

1) the projected benefits counted by the CBO toward the ACA's deficit reduction won't be fully realized, since the IRS won't have the resources to fully enforce compliance.

2) the IRS will have to re-deploy existing agents/resources to realize fully all the benefits projected by the ACA. This means the re-deployed resources will be pulled from their current activities, forgoing the benefits we currently realize from their work (Ezra, this is a simple economic concept known as "opportunity cost")

So it's quite fair, Ezra, for the GOP to keep pointing out the $115 billion of administrative costs left out of the ACA spending estimates.

Posted by: dbw1 | January 19, 2011 11:05 AM | Report abuse

Fishpeddler:

Assuming you have a household budget, do you keep using it even after you know that your initial projections for expenses have changed drastically?

The estimated costs for the ACA started changing within a mere matter of weeks after the official "CBO score" was released. So to keep going back to the CBO report as the only authority and ignore all the facts and re-estimates that have surfaced since then is fairly ignorant in the world of budgeting and finance.

But then again, that would put you in good company with Ezra.

Posted by: dbw1 | January 19, 2011 11:16 AM | Report abuse

Ezra said: "After all, if no one cares about the score, why kill yourself chasing it?"

Why the violent speech from Ezra? Is Ezra advocating mass suicide among members of Congress? I'm appalled.

I certainly hope no member of Congress actually commits suicide, or else this column by Ezra will be blamed for sure.

Yours,
The Faux Outrage of liberals over Palin's cross-hairs map and the 'violent rhetoric' of the Right.

Posted by: dbw1 | January 19, 2011 11:28 AM | Report abuse

Here are some questions:

1. Why should we guarantee with tax payer money that private for-profit insurers have plenty of money for lobbying, campaign contributions to 'sympathetic candidates', sitting on "Boards" established to set rates, etc.?

2. In a time when 'the cost of health care is driving deficits', why is the federal government, through this reform, intent on subsidizing a non-value-added private sector - i.e. insurance industry - for shuffling papers, an activity government workers can do at 4% overhead instead of the 20% overhead provided to the private sector with tax payer money?

3. Why should Americans have not no choice but to subsidize private for-profit organizations by either paying premiums for themselves as 'mandated customers' or by paying taxes to subsidize government payments to insurance companies to cover other 'mandated customers' who cant afford to pay?

4 Anticipating that only the Supreme Court will put the American people out of their misery (by declaring the whole thing unconstitutional), why cant we move to include a public option single-payer now?

5 Not to dwell on the past, by why did the Democrats in the House and the Senate and the Democratic President of the United States not formulate a 'health care reform' that was consistent with what the American people wanted in the first place (The American people wanted a government administered plan like Medicare - for everyone. 72% - CBS/New York Times poll June 2009).

The most costly and wrong-headed feature of the 'reform' - the subsidy to private for-profit insurers - is 'off the table'. The only thing negotiable, it would seem, is health care services for Americans.

Posted by: theworm1 | January 19, 2011 11:40 AM | Report abuse

CBO produced a report that said:

770 billion in NEW TAXES collected over 10 years
540 billion in NEW SPENDING over 6 years

that translated to 230billion dollars of lost tax revenue.

The gimmick is 10 years of taxes, 6 years of payment.
The gimmick is a new 1.2 trillion dollar big govt program does not "save" 230 billion by simply collecting new taxes.

Posted by: docwhocuts | January 19, 2011 11:55 AM | Report abuse

We continually and mistakenly hang in with the fallacy that insurance costs are the lever for controlling medical costs. NOT!!! It doesn't work. Medical costs should be addressed directly. Mechanisms are needed to directly control medical costs, i.e. price controls on the costs of specific tests and medical procedures.

Another item that should be addressed... if a procedure is discounted to Blue Cross, that discount should be the bottom line for everyone.

Posted by: billsecure | January 19, 2011 11:59 AM | Report abuse

The Republicans cannot continue to accept or reject CBO figures according to their agendas. And they also can't continue to mouth off about dire consequences that they can't back up with facts. As usual, they're resorting to lies and fabrications to scare the public. It's a good cover-up for the fact they're only health care plan is to "just die".

Posted by: lddoyle2002 | January 19, 2011 12:02 PM | Report abuse

lddoyle2002:
"[Republicans] can't continue to mouth off about dire consequences that they can't back up with facts."

I've shown plenty of facts countering Democrats claims of 'deficit reduction' from the ACA, both above on this very board and on other columns of Ezra's.

What I find curious is that liberals never try to counter the facts presented...because they can't.

So liberals continue to ignore the facts presented and bluster about Republicans being liars...and voters showed in November what happens when your only response is to name-call.

Posted by: dbw1 | January 19, 2011 12:14 PM | Report abuse

Ezra, in a future article how about you publish all the caveats and fine print word for word from the CBO scoring of Obamacare. You shouldn't cherry pick the data that supports your own personal opinion which is something to bash Republicans about all the time.

Posted by: RobT1 | January 19, 2011 12:31 PM | Report abuse

DBW,

Let's assume you are correct about $115 billion in discretionary administrative costs being left out, even though Ezra and many others have argued that most of that cost is effectively sunk because agencies are already spending it on existing operations (thus not a relevant cost or opportunity cost at all).

Even assuming the bill completely neglects $115 billion, one has to ask, is that the best you've got? That still leaves the bill comfortably budget positive. It's also noticeable that you don't even try to defend the other Republican assertions about supposed accounting misdeeds in the CBO calculation, probably because you know they are fraudulent.

Posted by: sanjait | January 19, 2011 12:36 PM | Report abuse

Does it strike anyone else as ironic that excellently insured congress people whose insurance for themselves and their families will extend into retirement, are in the act of trying to repeal an opportunity for lesser mortals to have health insurance too?

Repeal this bill and we go back to the time of "pre-existing ilnnesses," recission, large numbers of uninsured children including older children who can no longer be kept on family health care policies, and more. We also repeal a plank that requires health insurance companies to spend at least 80% of every health insurance dollar on actual health care, not on overhead, profits, or huge CEO salaries, and another plank that phases out the donut hole for seniors.

The most recent polls show a change. A small minority want complete repeal. The remainder want to see the bill refined, and for many that means made stronger, not weaker.

Posted by: tinyjab40 | January 19, 2011 12:43 PM | Report abuse

Look, clearly the fairest thing is to toss out the CBO projections and just have NewsMax and the Tea Party Express run the numbers.

Who could argue with that? Probably some weasely, pointy headed liberal "intellectuals". That's who.

Put your calculators down, nerds.

Posted by: vvf2 | January 19, 2011 12:46 PM | Report abuse

There are a lot of commenters here and in general who seem to argue that since both parties are lying politicians, we shouldn't believe either of their estimates.

To this I say: please, please do not fall into the false equivalence trap.

First, regarding PPACA, notice that it isn't the Dems vs the Repubs estimates were talking about here. It's the R's vs the non-partisan CBO. I wouldn't argue as Ezra seems to that the CBO score should be regarded as "fact", but if you are basing your assessment of the situation on a simple categorical assumption about the credibility of the sources, then notice that the CBO's budget estimations should by default carry more credibility than a political party's. That is the point Ezra is trying to make I think.

But the second thing to notice, and the more important one IMO, is that by falling into the false equivalence trap, you are creating incentives for bad political behavior. By assuming that everyone is equally honest or dishonest, as the press and many people are inclined to do, you give politicians no reason to be honest! There is no reward for telling the truth, and politicians know they can move the debate simply by lying.

That is what you are seeing here in this PPACA debate. The Republicans believe that you won't bother to weight the credibility of their estimates vs the Democrat/CBO estimates, so they are using some outlandishly bad accounting gimmicks of their own to pretend that it isn't budget positive. They are lying right to your face, and counting on the fact that you won't notice because the accounting here is a little difficult to understand. Instead, you will LAZILY assume that both parties lie so the correct answer must be somewhere in the middle. Do you really want to reward those who lie to you?

Posted by: sanjait | January 19, 2011 12:48 PM | Report abuse

Maybe "real debate" isn't something the republicans think they can win on? Maybe improving our nations awfull HC system isn't something republicans are interested in?
do you think?

Posted by: michael5 | January 19, 2011 12:57 PM | Report abuse

"The estimated costs for the ACA started changing within a mere matter of weeks after the official "CBO score" was released. So to keep going back to the CBO report as the only authority and ignore all the facts and re-estimates that have surfaced since then is fairly ignorant in the world of budgeting and finance."

DBW, I don't know if you are being deliberately misleading or simply careless in your comment, but I see nothing in Ezra's remarks or my own to justify your implication that we advocate using only the old CBO score to evaluate PPACA. Our main point is that Republicans, who seem happy to reference the old score, should not so grossly misrepresent its methodology and conclusions.

Posted by: Fishpeddler | January 19, 2011 12:57 PM | Report abuse

tinyjab40, this turn of events may be ironic but more importantly it shows the rank hypocrisy practiced by the Republican Party. Cite to CBO when it suits you and reject it when CBO conclusions are inconvenient.

The Republicans operate in a fact-free environment. This is the logical continuation of the Republican party's decade long denial of objectively verifiable facts:

WMD in Iraq, false
climate change is caused by humanity, true
stem cell research works, true.

The media has let the right in this country get away with making fact-free claims and accusations for the last 11 years. It was perfected under the last administration and it's being utilized by the Republican leadership today. They will continue to do this as long as they get away with it, which it looks like they will for the foreseeable future.

Posted by: Observer001 | January 19, 2011 1:04 PM | Report abuse

I think the Republicans now and before always engage in hypocrisy and falsehoods. The new health care reform bill is modeled heavily after one proposed by Mitch Romney. Oh, did anyone forget the Mr. Romney is a Republican and he might be running for President in 2012.

It is also clear that Republicans will do anything to destroy government pretending that times were better in 1776. They sort of want a confederation forgetting that this governing arrangement was tried and failed.

So, we have some political theater today. Repeal is likely to pass in the House and definitely fail in the Senate. No matter, the President will veto any repeal.

The unfortunate consequence is the Republicans have minimized or even lost their opportunity make fixes that might serve all of well.

Children at play, again, in the House of Representatives.

Posted by: pbarnett52 | January 19, 2011 1:57 PM | Report abuse

The right was against Womens Voting Rights, the right was against the Civil Rights Act, the right was against the Minumum Wage, the right was against Social Security, the right was against Medicare, etc etc.


20 years from now you won't be able to find a Republican who will claim to have opposed Health Care Reform, in fact they'll probably claim credit for it.


If Republicans really believe that this moderate Health Care Reform bill that just passed is so bad they should be forced to give up their own gov't/taxpayer funded gold plated Health Care package that they get just by being a member of congress.


The Republican party hates the hardworking American middle-class and they always have. Every single one of their policies does nothing but make the rich. richer. Heck, they just got done holding the entire congressional agenda hostage in exchange for an EXTRA $700 Billion in unfunded, deficit inflating tax cuts for Billionaires, Big Oil and Mega Corporations.


.

Posted by: DrainYou | January 19, 2011 2:04 PM | Report abuse

Sadly, we've allowed ourselves to be led into a world where there's virtually no distinction between fact and fiction. The inevitable result is that our political debates are much more rooted in what they think we want to hear than what is actually true (as in supported by unbiased and verfiable fact). If we want this to change, WE have to hold our lawmakers accountable to the facts, even if they're hard to take. Good public policy is tough even when the data is solid and the impacts are well understood. If we're encouraging Congress to make laws purely based in political rhetoric and ideology and with complete disregard to fact, reality and the insights of the experts who know most about the issues, then we're going to get exactly what we deserve: junk. As the expression goes, Garbage in, Garbage out.

Posted by: NatinFallsChurch | January 19, 2011 2:20 PM | Report abuse

Well said. I would also note that giving healthcare coverage to 30 million more Americans will increase employment, not the Repubs "job killer" lies.

Let's see, I'm a business, small or large, providing healthcare. Suddenly there are 30 million additional customers out there. Am I going to:
a. Add jobs, or
b. Cut jobs?

You choose Mr. Businessman.

Posted by: chucky-el | January 19, 2011 2:44 PM | Report abuse

Say, Ezra, if the Dems are serious about all these assumptions on new taxes and cuts that HAVE to be made to make Obama work,why don't they pass them NOW and not in 2014 after the 2012 elections are over.

Start with the Doc fix, which you didn't even mention.

Then cut Medicare which you claim will be nearly painless and which will bring down doctor comp below Medicaid.

Today if you're on Medicaid it is nearly impossible to find a specialist who will see you.

Ezra, go back to grad school where the Post found you. A mediocre propagandist.

Posted by: beecheery | January 19, 2011 3:11 PM | Report abuse

/*
a. Add jobs, or
b. Cut jobs?
*/
c. Petition the government for permission to keep some of your profits to invest in expansion.
d. Consult regulators on number of employees estimated to deal with paperwork.
e. Conduct environmental impact statement.
f. Calculate likelihood of future political enactments which could redefine the playing field, reimbursements, etc.

Posted by: msoja | January 19, 2011 3:25 PM | Report abuse

chucky-el,


you're a business that paid $0 towards healthcare for their employees and now you're paying MUCH MORE THAN ZERO. Will you add jobs so that you can be forced to pay more or will you work employees as hard as you can to do the jobs of multiple employees?

Posted by: visionbrkr | January 19, 2011 4:24 PM | Report abuse

sanjait:
"Even assuming the bill completely neglects $115 billion, one has to ask, is that the best you've got? That still leaves the bill comfortably budget positive."

I can't include in each post a rehash of every item I've posted about previously as being out of whack with the official CBO score Ezra continues to reference.

It's not just the $115 billion discretionary spending....I've talked about the Medicare cuts that were assumed in the bill (but everyone knows won't happen)....I've talked about the woeful underestimation of the cost of high-risk pools (an extra $15B-$150B, depending on who you believe)....perhaps my new favorite is the small employer tax credit, which Ezra helped me find today which will cost about $30 billion more just in the first year than what the CBO included in their report....

All told I'm up to at least a half trillion over the first decade, give or take, that the CBO score has missed. I do financial forecasting for a living, and I can assure you a miss of this magnitude (even in percentage terms) would never be considered "comfortable" by any company I've ever worked for.

The ACA is not only no longer 'budget-positive', it's negative....quite negative.

Posted by: dbw1 | January 19, 2011 5:35 PM | Report abuse

--*The ACA is not only no longer 'budget-positive', it's negative....quite negative.*--

AND, as I like to note, over the same decade that everyone likes to talk about, almost a trillion additional dollars of real people's money will be sucked out of the private economy. That's money that will no longer be spent on what individuals themselves want or need, but will instead go to pay for someone else's health care.

Posted by: msoja | January 19, 2011 6:22 PM | Report abuse

dbw1,

Two important things to note from your last comment:

One is that you still aren't willing to defend generally the Republican's allegations re the CBO report. I'm not blaming you for their lies, but I am saying it remains notable that you declined again to defend them. I'll take your silence on this point as reluctant affirmation.

The second is that your "half a trillion" estimate contains some enormous and mostly unfounded pessimistic assumptions. It's ironic, because in accusing others of using biased accounting, you're committing the crime yourself.

Start with the $115 billion in admin costs. You quote the CBO and Ezra's blog, but very recently I believe Ezra linked to a post by the CBO director on this very matter, describing how $86b out of $105b (not sure where the other $10b went...) in authorized discretionary spending was already allocated to other programs. In other words, the CBO didn't count it because there is no reason to double count sunk costs.

http://cboblog.cbo.gov/?p=844

Second, I've looked for backing of your $15b - $115b in projected additional high-risk pool spending. It's worth noting that this measure is entirely temporary, so the budget impact in the long-run is trivial. But the important thing to ask is: where the heck did you get it? Why do you ASSUME that there will be cost overruns in a program that was vastly underprescribed relative to expectations as of last month (ironically leading Repub critics to argue HCR wasn't even necessary...).

And who is this "everyone" that says Medicare can't be cut? I for one, and I'm not alone, think eliminating the Medicare Advantage subsidy, allowing negotiation of drug costs and the range of efficiency measures in PPACA are pretty good. They should be fairly easy to defend politically, they bare little resemblance to the dumb bill that led to the needed "doc fix", and they will require an act of congress to overturn.

There are provisions for lower payment rates for Medicare in PPACA. I suppose if one is familiar with the specifics of these, they could coherently argue that they are or aren't plausibly going to be kept (though I'm not familiar with the specifics. Are you?)

But overall, the pattern is clear. Instead of going by the financial forecasting practice of "expected value" calculation, you've opted to select and believe the worst forecast in every circumstance. If you truly are a financial forecaster for a living, you will know why that's the wrong way to do it, which I believe was Ezra's original point...

Posted by: sanjait | January 19, 2011 10:30 PM | Report abuse

hah. Ok, that was more than "two things" to notice, but you get the idea...

Posted by: sanjait | January 19, 2011 10:33 PM | Report abuse

It's the backfire effect. When presented with refuting evidence to their opinions, conservatives will double-down on them. With liberals, refuting evidence does not cause them to believe their opinions more strongly.

That's why Democrats fixed the cost savings in their bill and Republicans continue to make no sense.

The backfire effect was coined by Brendan Nyhan and Jason Reifler.

Posted by: austinmort | January 20, 2011 9:54 AM | Report abuse

Of course this is ridiculous. What is even more ridiculous is that we are paying these Congress people $ 175,000 and rising each year to spend most of their time raising money running for reelection.

Please do a quick calculation on how much the deficit would be helped if Congress people went back to their pay rates in 1970, plus gave up their high priced health care and even more extravagant retirement. That would have to put a dent in the deficit.

This is not a fight about blue states or red states. This is really a class fight. It is 99% of the people against 1% who run the large corporations, and banks.

Posted by: whale_gurl | January 21, 2011 10:51 AM | Report abuse

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