The difference between outrage and silence: $1.5 Trillion
March 15, 2012 4 Comments
Shhh…you hear that? Listen…
It’s the silent void from the members of Outrage, Inc. over the announcement that two years in, the 2012-2021 version of Obamacare will already cost nearly twice the originally touted $900 billion of the 2009-2018 version. With the sunset of the Democratic Congress’s accounting gimmicks set to arrive in just two years, this ten-year rolling cost will only continue to rise. While a feminist abortion activist (errr… “law student”) launched a weeklong firestorm against the evil advertisers of the Kingpin himself, we took Nancy Pelosi’s advice and found more bad things we don’t like in the “Affordable” Care Act. Bad things such as: the 2012-2021 cost projection is $1.496 Trillion. But as the liberal punditocracy will tell us, no sweat! Didn’t you hear? You’re getting a deal!
When the report became public, leftist footsoldiers staggered in confusion while waiting for their marching orders from the punditocracy, but they’ve now regained their footing and found their argument. The line is now: we KNEW this was coming, and is in fact $50 billion more in deficit reduction. As Ezra Klein of the Washington Posts headlines:
CBO: Health reform to cut deficit by $50 billion more than we thought
As its own set of words it sounds like a winning argument, but in context, it’s akin to BP saying, “We didn’t spill as much oil as we thought.”
It’s also disingenuous in that it seeks to counter the talking point that Obamacare is rapidly hitting the ten-year windows where it will be permanently in the red by dancing around this sticky subject and creating an entirely new argument:
You’ll notice something about the above list: It appears to add up to a net reduction in the cost of the health-care law. And, sure enough, here’s CBO: “the insurance coverage provisions of the ACA will have a net cost of just under $1.1 trillion over the 2012–2021 period—about $50 billion less than the agencies’ March 2011 estimate.”
This is a fully accurate statement, but doesn’t refute much less address the relevant point, which is that costs are rising as expected now that we’re accounting for over eight years of costs rather than six years. Was all this in the original bill? Of course it was, and in that sense it’s not new information. But this disregards the con job used by both President Obama and Congressional Democrats in selling the bill to the American public. That selling point, repeated by the media, was that the bill would cost $900 billion. The initial years of no cost outlays are coming to an end, and this fiscal fig leaf is crumbling away.
Now lest you think you’re smart enough to understand what’s actually going on here, Klein assuaged his minions that only the serially insipid could be alarmed by this report:
The problem for Ransom and others is that they didn’t read this analysis closely, or, if they did, they didn’t understand it.
But whereas we have a reasonable revision of what we end up paying, we’re asked to take on faith the phony assumption (through no fault of the CBO as they spit out estimates based on what they’re given) that the political will exists to keep in place the Medicare spending cuts or the Cadillac Tax on premium insurance plans.
Ransom quotes CBO saying “those provisions will increase deficits by $1,083 billion,” but he either didn’t notice or didn’t choose to include the CBO’s warning that this analysis does “not encompass all of the budgetary impacts of the ACA because that legislation has many other provisions, including some that will cause significant reductions in Medicare spending and others that will generate added tax revenues.”
Pressure on Congressmen of both parties to maintain the ‘Doc Fix’ will be immense as each year a larger chunk of the Baby Boomer voting bloc is added to Medicare, and Democrats will be under pressure from unions once the stay of execution on their gold-plated health packages is lifted and the taxes on their premium plans dig into their ability to donate to Democrat candidates.
Klein then takes on, by seat-of-the-pants math and hunches, the task that the CBO thought would require more than this few minutes of fuzzy math performed by Klein to get a useful analysis:
But those other parts of the bill aren’t a secret. They’re mentioned right there in the analysis. Quoting again: “CBO and JCT have previously estimated that the ACA will, on net, reduce budget deficits over the 2012–2021 period; that estimate of the overall budgetary impact of the ACA has not been updated.”
It’s easy to do at least some of the update ourselves. This analysis shows the net cost of the coverage provisions will be about $50 billion less than previously estimated. That implies the law will cut more, not less, from the deficit than previous estimates suggested. In other words, this estimate says the bill is more, not less, fiscally responsible than was previously reported.
If one subtracts $50 billion from the original ten-year estimate for this period and restates an unprovable assertion on the original, hopeful revenue assumptions, in this fuzzy math one must inevitably conclude that deficit reduction will go up. As for this second assumption, that original revenue projections will hold even though we’ve already seen that the cost side of the equation is a fungible number that can vary from year to year (these are estimates after all), wrapping assumptions and hopes in the rhetoric of the reasonable doesn’t make the argument, or the premises it’s based on, accurate.
But in the end, this is all a shell game, as the CBO factors economic projections into its calculations, projections that no economist is capable of accurately making. After all, how many economists in 2005 predicted the Great Recession, which would have fallen within a ten year budget window such as this. Even more startling, the CBO predicted a balanced budget by 2012 as recently as January of 2008, mere months before the collapse of Lehman.
The best argument of the liberal punditocracy should be that we have nothing to complain about since we brought this on ourselves when we voted in a radically liberal President and radically liberal supermajority in Congress. Indeed. May we remember that lesson this fall.