Posted by Nolan Miller on Jan 25, 2011
Filed Under (Health Care, U.S. Fiscal Policy)
Of course, we all knew this. But, the Washington Post had a couple of interesting op-ed pieces last week that really drove home the point. The fun part was that the two pieces, written by Charles Krauthammer and Eugene Robinson, appeared next to each other on my computer screen and exposed the disingenuousness of both the Democratic and Republican positions on the financial aspects of the Patient Protection and Affordable Care Act, aka “ObamaCare,” or, more neutrally, PPACA.
Let’s begin with Robinson, who takes aim at the Republican’s self-serving and somewhat hypocritical approach to the numbers in promoting their repeal of PPACA through the ominously-named “Repealing the Job-Killing Health Care Law Act.” Now, the Republicans painted themselves into a bit of a corner on this one from the get-go. Swept into the House majority on a promise to decrease the deficit, they were faced with the fact that PPACA, at least on paper, lowers the deficit over the next 10 years. The fist bit of Republican tap dancing around this point came earlier this month when the new majority enacted new rules in the House specifying that every new law had to explain how any new spending it proposed would be offset by an equivalent cost reduction. Deficits, after all, are bad. This “cut-as-you-go” rule, however, specifically exempted PPACA repeal from this requirement. So, I guess deficits aren’t all that bad after all.
According to Mr. Robinson, the Republicans, faced with the CBO’s projection that repealing PPACA would increase the deficit by $143 Billion over the next decade, took the position that the CBO “score” for the bill was disconnected from reality. According to House Budget Committee Chairman Paul Ryan, “CBO scores what is put in front of them – and what Democrats put in front of them last year was legislation packed with smoke and mirrors to hide the impact of trillions of dollars in new spending.” On the other hand, Republicans are putting a lot of faith in the CBO when they declare PPACA to be “job-killing,” saying it would eliminate 650,000 jobs. But, according to Robinson:
“One problem, though: The CBO analysis contains no such figure. It’s an extrapolation of a rough estimate of an anticipated effect that no reasonable person would describe as “job-killing.” What the budget office actually said is that there are people who would like to withdraw from the workforce – sometimes because of a chronic medical condition – but who feel compelled to continue working so they can keep their health insurance. Once the reforms take effect, these individuals will have new options. That’s where the “lost” jobs supposedly come from.”
So, Republicans are not above picking and choosing which numbers to ignore and which to exaggerate to make their point. On to the Democrats.
Krauthammer takes on the Democrats’ cooking the numbers in the original PPACA bill in order to make it look like it reduced the deficit when it will actually add to the deficit (i.e., new expenditures will be greater than new revenues in the long run). Now, cooking the CBO’s score is a time-honored practice in Washington. The key is this. The CBO is the most gullible body in the government. By law, they are required to take whatever Congress puts into a bill and score it as if it is actually going to happen. So, if Congress tells them that they are going to spend $50 billion on a bridge to Hawaii and pay for it by taking all of Bill Gates’ money, CBO will come back and say “awesome. That will reduce the deficit by $4 billion.” As I said, this is nothing new. Remember how the Bush Tax Cuts were scheduled to expire at the end of last year? Same deal.
So, to cook the books on PPACA, the Democrats did the following. The new taxes and revenue sources for health care were scheduled to start coming online almost immediately, while the new expenditures were scheduled to start much later. So, according to Mr. Krauthammer, “the entitlement [PPACA] creates – government-subsidized health insurance for 32 million Americans – doesn’t kick in until 2014. That was deliberately designed so any projection for this decade would cover only six years of expenditures – while that same 10-year projection would capture 10 years of revenue. With 10 years of money inflow vs. six years of outflow, the result is a positive – i.e., deficit-reducing – number. Surprise.” And, Krauthammer argues, PPACA does the same with its new long-term care insurance program, where it starts collecting premiums immediately but doesn’t pay anything out for 10 years, resulting in a surplus, at least on paper, according to the rules.
Krauthammer also makes the additional point that although PPACA is supposed to decrease the budget by $230 billion (the numbers differ between the two articles), the way it does it is through offsetting $540 billion in new spending by $770 billion in new taxes. This “radical increase in spending, topped by an even more radical increase in taxes” is probably not what most people had in mind when they heard that the bill reduced the deficit by $230 billion, and certainly much different than simply cutting $230 billion in government spending. But, that’s perhaps a topic for a different day.
So, both sides are twisting the numbers and sloganeering. Am I shocked like Claude Rains in Casablanca? Well, I guess I am, which is to say, not shocked at all. Am I frustrated? Definitely, because there are real problems in health care that have to be addressed. Even if you are a fan of PPACA, you have to admit that it was at most a first step toward reforming health care in this country. Real progress is going to require cooperation on coming up with solutions. As long as both sides are deliberately twisting the facts to score political points, we aren’t going to make progress.
Despite the Republican’s grandstanding on the issue of repealing PPACA, it’s not going to happen. There is a glimmer of hope. Along with the political theater, Republican leaders in the House are instructing committees to get to work on legislation to replace PPACA. Without Democratic support, such legislation will never become law. But, maybe, just maybe, if the two work together, they can come up with something that actually improves on PPACA and begins to work on the excessive growth rate of health care costs in this country, which is what I and many others have said is the real ticking fiscal time bomb facing this country.