The CBO and Partisan Hypocrisy – A Response
As long as there has been a Congressional Budget Office, there has been a lot of crying from one side or the other of the partisan divide about their latest estimates. So when a conservative such as myself says I don’t believe this health care boondoggle will reduce the deficit, the immediate accusation is one of hypocrisy: you trumpet the CBO’s numbers when they support your argument, and condemn them when they don’t.
Well, sorry, for this blogger at least, that doesn’t wash. I have no problem with the CBO – I believe that it is nonpartisan, as it claims to be, and I believe it has scored this bill properly. The problem is the CBO can only score the bill it is presented, and if the bill as presented doesn’t tell the whole story, then neither can the CBO’s score.
Here’s Robert Samuelson in the WaPo today:
…[T]he CBO estimate is misleading, because it must embody the law’s many unrealistic assumptions and gimmicks. Benefits are phased in “so that the first 10 years of [higher] revenue would be used to pay for only six years of spending” increases, a former CBO director, Douglas Holtz-Eakin, wrote in the New York Times on March 20. Holtz-Eakin also noted the $70 billion of premiums for a new program of long-term care that reduce present deficits but will be paid out in benefits later. Then there’s the “doc fix” — higher Medicare reimbursements under separate legislation that would cost about $200 billion over a decade.
Proposals to control health spending face restrictions that virtually ensure failure. Consider the “Independent Payment Advisory Board” aimed at Medicare. “The Board is prohibited from submitting proposals that would ration care, increase revenues or change benefits, eligibility or Medicare beneficiary cost sharing,” says a summary by the Henry J. Kaiser Family Foundation. What’s left? Similarly, findings from “comparative effectiveness research” — intended to identify ineffective care — “may not be construed as mandates, guidelines or recommendations for payment, coverage or treatment.” What’s the point then?
I don’t want anyone to miss the import of Samuelson’s argument, so let’s put a finer point on it: the legislation is front-loaded. Benefits are phased in, but revenues are collected from the beginning. The result is that six years of benefits are paid for by ten years of revenue enhancements (i.e., money from your wallet).
So what? Well, think about it – you can only front load once. Every further year is going to roughly 40% more expensive (1-1 benefits/revenue ratio compared to .6/1). In other words, after the inital ten years (and the expiration of the CBO estimate, I might add), you’re going to need to come up with 40% more revenue for each year, or add even further to the out-of-control deficit.
Only it’s more than 40%, because Democrats are already promising to pass seperate legislation, at a cost of $200 billion, to reimburse doctors for Medicare treatment at a higher rate than called for in the bill. The CBO can’t score that, because it’s in a seperate bill, you see…but, if passed, it raises the cost of the package by a whopping 20% over the first decade.
Here’s the real kicker, though – we raise all this new revenue, and we don’t pay down the deficit, we spend it. Imagine if you, in debt up to your eyeballs, suddenly conceive a plan to raise enough money over a decade to pay down a substantial fraction of your debt (and that’s how big the debt is now – the trillion dollars would only pay down about 7% of our debt) - and then blow virtually every penny of it on new spending. Samuelson again:
Suppose the CBO estimate is correct. So? The $143 billion saving is about 1 percent of the projected $12.7 trillion deficit from 2009 to 2020. If the administration has $1 trillion or so of spending cuts and tax increases over a decade, all these monies should first cover existing deficits — not finance new spending. Obama’s behavior resembles a highly indebted family’s taking an expensive round-the-world trip because it claims to have found ways to pay for it. It’s self-indulgent and reckless.
Let’s get this straight, folks – spilled milk is spilled milk. You can argue until the cows come home that it was George W. Bush who caused the deficit and not Barack Obama. It doesn’t even matter if you are right. How petty and how beside the point! The point is this: Barack Obama passed this legislation – he even said his presidency depended on it. He (and congressional Democrats) bear 100% of the responsibility for spending this money instead of reducing the deficit, and he bears 100% of the responsibility if the legislation proves to actually increase the deficit, as it almost certainly will.
The point is not what happened in the past – that only matters for throwing partisan bricks. The point is what we do today, given the set of circumstances that faces us. President Obama staked his presidency on a policy that is going to bankrupt this nation…so much for sacrifice and hard choices…