American Elephants


How Do You Make Sense of the Claims? by The Elephant's Child

The new House Republican majority will use the three weeks before President Obama’s State of the Union address to repeal the healthcare law, cut spending and scrap federal regulations, according to incoming Majority Leader Eric Cantor (R-Va.)

Cantor said Republicans would be a “cut and grow majority” emphasizing the GOP’s twin goals of reducing government spending while expanding the economy.  First Republicans will vote to repeal ObamaCare — the Democrats healthcare overhaul.  Then they will move to fulfill their commitment to cutting spending to 2008 levels.  The third step will be to target “job-killing” regulations across the federal government.

Their goal is to make a statement before Obama addresses the new Congress in his annual State of the Union speech, expected to take place in the last week of January.

So how do you make sense of all the claims and counterclaims?  You will find everyone citing the pronouncements of the Congressional Budget Office (CBO) often to support opposing claims.  I’ve often cited something from the CBO myself.  The CBO is the servant of Congress, and does, by statute, exactly what Congress asks.  They are a very slick budget office.  They do the hard math for Congress, but they include what they are asked to include, and exclude what they are asked to exclude, so that Congress gets the specific answers they want.

Last week, the CBO examined H.R.2 (The Repealing the Job-Killing Health Care Law Act) and came to the conclusion that “enacting H.R.2 would probably increase federal budget deficits over the 2012-2019 period by a total of roughly $145 billion.”

Democrats are loudly trumpeting that repeal is an act of fiscal hypocrisy by Republicans.

The rules forced the CBO to include a big range of budget gimmicks in their original estimate of the costs of the health care law:  (from Douglas Holtz-Eakin, former CBO Director)

—They left out the $115 billion in discretionary spending needed to implement the bill.
— They counted the $70 billion in premiums for long-term care insurance (CLASS Act), but ignored the unsustainable CLASS Act spending that starts after 10 years.
— Used $50 billion in higher Social Security taxes to offset health spending
— Left out entirely the cost of paying Medicare doctors.
— Pretended that $450 billion in payment cuts to Medicare providers is possible without changing the operation of Medicare.
— Planning to collect a tax on cadillac health plans that the unions have already gutted and will not tolerate.

There was never any reason to believe that ObamaCare reduced the deficit by $140 billion over 10 years.  The CBO didn’t do anything wrong here, you just have to understand the rules by which they work.  If they have to tell you how much a bunch of pixie dust will cost, you just have to know that it is pixie dust that they are budgeting.

Dang.  This stuff is really complicated.




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