Uncertainty for me, but not for thee
There's uncertainty around cost projections for any bill, and that's even more true for a big piece of legislation with many moving parts like the Affordable Care Act. But whenever I read conservatives talking about the uncertainty involved in these bills, they seem to think it goes in only one direction: Down.
The health-care legislation might save less money than CBO projects. But it also might save more. People like Harvard's David Cutler and CAP's Judy Feder, people who have spent their lives studying health-care policy, think the CBO is far too conservative when it looks at the delivery-system reforms. They may be wrong, but there's certainly as good a case that they're right as there is that employers, in contravention to what CBO expects and what has actually happened in Massachusetts, will start yanking health-care coverage away from employees by the millions. (And, so far, the bill seems to be increasing the number of small businesses offering their workers coverage.)
Or take expert testimony. Megan McArdle gives a lot of weight to the testimony of former CBO director Doug Holtz-Eakin (who now runs the American Action Forum, which is not exactly a home for high-quality, peer-reviewed research), but doesn't mention that former CBO director Robert Reischauer, best known for his unwillingness to bend to the White House during the Clinton reform effort, supports the legislation as a crucial first step in long-term cost containment, and so too does former CBO director Alice Rivlin. Now, Holtz-Eakin might be right and Reischauer and Rivlin might be wrong, but he's certainly not more credible than they are. Since moving to the American Action Network, in fact, he's quite a bit less credible.
And, to get a bit more empirical about it, there are multiple recent examples of the CBO overestimating the costs, or underestimating the savings, of various health-care bills -- including one Republicans should remember well, the Medicare Prescription Drug Benefit.
So is there uncertainty in these things? Yes. But the CBO works to be in the middle of that uncertainty. The final results could match the more optimistic projections of liberals or the more pessimistic predictions of conservatives. In the end, that doesn't worry me too much: As Reischauer put it to me when he explained why he'd vote for the bill, the legislation creates "a platform over which more significant and far-reaching cost containment can be enacted." If parts of it don't work, we can change them. If parts of it work even better than we're expecting, we can double down on them. The real concern is not that the reality won't accord perfectly with the CBO's predictions, but that the political system won't be able to respond to reality.
Correction: In the third paragraph, I say McArdle mentions Doug Holtz-Eakin's testimony in her post. She doesn't. She mentions a different Doug -- Doug Elmendorf, the current director of the Congressional Budget Office. My points in that paragraph are, obviously, retracted, at least as applies to that post. My apologies.
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