If you listened to White House propaganda ministers before the health care bill was passed, you could almost be forgiven for mistakenly believing that the legislation wouldn’t cost anything.
“It’s all paid for,” the White House repeatedly insisted whenever confronted with the nearly trillion dollar ten-year cost of the overhaul, noting that cuts in other areas of the budget and tax increases kept the legislation “budget neutral” and even reduced the deficit.
This was egregious, foul smelling Washington spin on a couple of levels. First of all, it wasn’t true. The pay-fors assume things will happen that won’t happen, including a declining rate of spending increases on Medicare beneficiaries and reductions in payments to doctors who provide Medicare services, which Congress never allows.
It also starts collecting new revenues well before starting up the spending, meaning the ten-year estimate of the cost includes more years for collecting money than doling it out. That’s what’s called dishonest accounting, a standard Washington practice that would get private practitioners thrown in jail and that Obama presumably was supposed to “change.”
Secondly, the “paid for” statement implies a free lunch. The big problem with this is that the methods used to pay for the bill – including cuts of about $450 billion to Medicare, according to CBO – now cannot be used in the future to reduce the deficit. AND WE HAVE TO REDUCE THE DEFICIT. This means that the president and Congress must in the future make other cuts and and tax increases THAT THEY WOULD NOT HAVE HAD TO MAKE IF HEALTH CARE REFORM DIDN’T PASS. So we will pay for it.
This is exactly what just-departed OMB Director Peter Orszag, now an Op-Ed writer for the New York Times and newly able to try to be honest, acknowledged in his first piece for the paper.
The health reform act included substantial savings in Medicare and Medicaid, so there aren’t further big reductions available there in our time frame.
That’s right. And everyone agrees that to reduce the deficit, you really have go after entitlement programs like Medicare. And now, at least in the short term, you can’t.