Obamacare costs more than advertised, double-counting edition
I’ve written many times about the budgeting/accounting/scoring gimmicks that allowed Democrats to claim Obamacare would reduce federal deficits when the opposite is true. The latest piece of evidence came from Charles Blahous, an economist and trustee of the Social Security and Medicare programs who recently reported Obamacare’s “double counting” of spending cuts and tax increases means the law will actually increase deficits by $340 billion over 10 years (or about seven Buffett Rules).
Blahous, writing with former federal budget official James Capretta in today’s Wall Street Journal, explains double counting by making an analogy to Social Security:
If we generate $1 in savings within that program, then that’s $1 that Social Security can spend later. If we also claimed this same $1 to finance a new spending program, we would clearly be adding to the total federal deficit. There has long been bipartisan understanding of this aspect of Social Security, which is why Congress’s paygo rules prohibit using Social Security savings as an offset to pay for unrelated federal spending.
No such prohibition exists in the budget process against committing Medicare savings simultaneously to Medicare and to pay for a new federal program. It’s this budget loophole, unique to Medicare, that gives the health law’s spending constraints and payroll tax hikes the appearance of reducing federal deficits. But it is appearance, not reality. If you have only $1 of income and are obliged to pay a dollar each to two different recipients, then you will have to borrow another $1. This is effectively what the health law does. It authorizes far more in spending than it creates in savings.
So, perversely, the “pay-as-you-go” rules that President Obama and congressional Democrats touted as a measure of their fiscal responsibility back in 2009 are precisely what allowed them to engage in this duplicity. Blahous and Capretta explain further:
When Congress considers legislation that alters taxes or spending related to Medicare’s Hospital Insurance Trust Fund, the changes are recorded not just on the Hospital Insurance Trust Fund’s books, but also on Congress’s “pay-as-you-go” scorecard.
The “paygo” requirement is supposed to force lawmakers to find “offsets” for new tax cuts or entitlement spending, and thus protect against adding to future federal budget deficits. Putting the Medicare payroll tax hikes and spending constraints on the “pay-as-you-go” ledger was instrumental in getting the health law through Congress, because doing so fostered a widespread misperception that the law would reduce future deficits.
But the same provisions add to the Hospital Insurance Trust Fund’s reserves, which expands Medicare’s spending authority. Medicare can only pay full benefits so long as its trust fund has sufficient reserves to meet these obligations. If the trust fund has insufficient resources, then spending must be cut automatically to ensure the fund does not go into deficit. The health law’s Medicare provisions prevent these spending cuts from taking place for several more years.
It’s another reason why “paygo” rules (or lack thereof) don’t necessarily make Congress fiscally responsible (or irresponsible). What makes Congress responsible, or not, is its willingness to spend no more than it takes in.
And when Obama and Congress pass a law to take in $1, count that $1 twice, and then claim the ability to spend $2, there’s no way to spin it as fiscally responsible.
– By Kyle Wingfield
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313 comments Add your comment
Not Part of Romney's Flock
May 2nd, 2012
4:53 pm
“I voted against both of them.
Try again, Einsteen…”
Too many sheeple who blindly follow either the Republican or Democrat Party, can’t fathom that people actually vote for candidates that are neither one………
As soon as you say something about one or the other, they attack with well you voted for this D or this R….. blah, blah, blah
Mindless rot for those not wishing to think very hard or think at all for that matter
Jefferson
May 2nd, 2012
4:54 pm
Those that work to improve the law will be rewarded, those that don’t will be punished. Why not make it better, its going to be around for the next 2000 years.
The Fresh Prince of Bill Ayers
May 2nd, 2012
4:57 pm
Speaking of which, do the Japanese public school teachers instruct their students in global cooling and Intelligent Design like you Rick Perry Republicans would just love to have here?
A completely speculative subject that you flaming libdouches claim as fact.
And once again, you neocons stand completely alone again the rest of the educated world on these matters.
And you just conceded that the rest of the world is educated, not what your average liberal arts major, er educator, can wrap their minds around and disseminate to our young pupils whom they are paid to enlighten.
The Fresh Prince of Bill Ayers
May 2nd, 2012
5:00 pm
But you national security rubes along with the new Chickenhawk in Chief want no part of that.
I’ll take a chicken hawk over a pit bull eater any day of the week.
AmVet
May 2nd, 2012
5:03 pm
I advocate the dismantling of both major political parties.
They are a dual dictatorship that allow NO other voices to be heard.
Seven out of ten Americans think that they have failed them. I am shocked that three out of ten don’t.
We are a very competitive people, yet we are not allowed by the Tweedledee and Tweedledum Parties to have a competitive democracy.
They have perverted this greatest of all nations into the Hatfields and McCoys, who each religiously repeat the following mantra:
Party First. Party Last. Party Always.
And the kicker is that there are much better candidates out there without an R or D after their names.
AmVet
May 2nd, 2012
5:05 pm
Prtince, that you kiss BHO’s habeus corpus hostage taking ass is interesting but not useful.
The Fresh Prince of Bill Ayers
May 2nd, 2012
5:05 pm
DamVet, I thought you were a lib…
MarkV
May 2nd, 2012
5:05 pm
The Fresh Prince of Bill Ayers @ 4:52 pm
Funny, yes- what you have written. But no substance.
AmVet
May 2nd, 2012
5:09 pm
Prince, I thought you were educated. (grin)
You seem to be having enormous difficulties comprehending standard written English.
Obama is a train wreck. Obamacare is proof. I have given him a grade of C- and that is probably being a tad lenient. I will vote against him again this November.
But the real tragedy in this country?
This hijacked, fake conservative GOP is magnitudes of degree worse.
Not Part of Romney's Flock
May 2nd, 2012
5:11 pm
“DamVet, I thought you were a lib…”
As soon as you say something about one or the other, they attack with well you voted for this D or this R….. blah, blah, blah
case in point……… never takes too long
The Fresh Prince of Bill Ayers
May 2nd, 2012
5:13 pm
AmVet, I check in infrequently and you are usually bashing neo-cons.
The Fresh Prince of Bill Ayers
May 2nd, 2012
5:15 pm
This country will implode unless lobbyist access gets removed and term limits are imposed. Neither will happen with these self serving d-bags on both sides suckling up to the highest bidder. It’s so far gone, the only thing that will stop it is fear for their actions.
gm
May 2nd, 2012
5:25 pm
People like Kyle and others should have no insurance for 1 day and walk around with pre conditions, and experience the hell people go thru who have lost their jobs and homes and have to get help.
These are the same people after 911 who claim they were Americans, and voted to send billions to Iraq, but dont want other Americans to get help, makes you think, are our inside terrorist worst then the outside who tried to destroy Americans?
Fair and Balanced
May 2nd, 2012
5:25 pm
See the following cite:
http://nymag.com/daily/intel/2012/04/bogus-obamacare-deficit-study.html
Mr. Blahous is just a partisan hack with some weird theories .
AmVet
May 2nd, 2012
5:30 pm
Prince, I am more conservative than most of the so-called conservatives who post here and at Bookman’s.
I am pro nuclear power.
I am pro second Amendment.
I am much more tough on crime than they are. Because I advocate for severe punishment for both street AND th ven more insidious and destructive white collar crime. They turn a blind eye to the latter and in some cases actually seem to idolize it. Inexplicably to their own family’s and community’s suffering.
I own my own business and am a big time capitalist. But not in the throw away definition that these guys use. Not one of them can even tell you the Three laws of Capitalism.
They have no earthly concept of what socialism and Marxism are, yet they trot those words out constantly. And when pressed to explain their bizarre accusations that this or that or the other person is a Communist, they cannot make any kind of intelligent, convincing response. But then neither can the disgraced, run out of the Army, Allan West.
And across the board, on a wide variety of topics, it is almost impossible to find someone that can intelligently describe in detail with specific examples what conservatism even is.
Seriously.
Sure, they can cough up all of the slogans and sound bites. And after years of observation, it appears to me that the ultimate definition of a conservative – according to them – is to hate liberals.
That is it.
But beyond that?
There ain’t much…
The Fresh Prince of Bill Ayers
May 2nd, 2012
5:35 pm
Time for a tangible 3rd party, but since Perot i think these d-bags got scared and figured out how to protect themselves. Politicians are like weathermen, they blow the forecast yet we check in the next morning to see what’s next….major change and accountability has to come soon or we’re screwed.
@@
May 2nd, 2012
5:40 pm
Since 1961 Japan has provided universal health coverage, which allows virtually all access to preventive, curative and rehabilitative services at an affordable cost.
Health care in Japan
Not all smiles
Japan’s health-care system is the envy of the world. It is also in crisis
“The system’s inefficiencies could be tolerated in a period of high growth, but not in today’s climate of economic stagnation.”
You’re welcome, AmVet.
@@
May 2nd, 2012
5:44 pm
AmVet’s a Nader Wader.
schnirt
Kyle - flip flopper like Mitt
May 2nd, 2012
5:44 pm
Lil’ Barry Bailout (Revised Downward)
May 2nd, 2012
12:20 pm
Anything more and you’re just the typical libtard hypocrite.
Kyle – Good to see you are keeping your word on monitoring the comments. Unless of course you think libtard, tard, or retard is OK.
Lil' Barry Bailout (Revised Downward)
May 2nd, 2012
5:45 pm
independent thinker
4:05 pm
————————
Did I claim that Medicare D was an affordable, paid-for program? I did not. In fact, I opposed it at the time it was passed.
What I asked, and you so far as I have seen have avoided this question, is…since it was such a horrible, expensive program, what has your Failed Messiah done to reduce its costs?
Obozo has surely complained about it.
And of course he has blamed Bush for it.
He just hasn’t done anything about it.
Obozo: A Failed Messiah.
Lil' Barry Bailout (Revised Downward)
May 2nd, 2012
5:49 pm
gm: People like Kyle and others should have no insurance for 1 day
——————-
Why? That wouldn’t be very responsible.
AmVet
May 2nd, 2012
5:49 pm
@@’s a leghumper. (And a banned one at that.)
Schnort
Tealiban Party
May 2nd, 2012
5:49 pm
Still waiting for Kyle to cover this story:
Plaintiff challenging healthcare law went bankrupt – with unpaid medical bills
http://articles.latimes.com/2012/mar/08/nation/la-na-healthcare-plaintiff-20120309
Lead plaintiff in the healthcare lawsuit doesn’t think she needs healthcare insurance, but wants the public to pay for her unpaid healthcare bills due to bankruptcy. Is this the Republican idea of responsibility?
@@
May 2nd, 2012
5:51 pm
Kyle Flop:
I was in a hurry but I’m fairly certain AmVet called me stupid this morning.
Don’t see me whining, do ‘ya?
@@
May 2nd, 2012
5:53 pm
AmVet/Gimp:
@@’s a leghumper.
And about the article at “The Economist”….did you bother to read it?
Obviously not.
I’ll pull up some excerpts for ‘ya. Gimme a minute.
Lil' Barry Bailout (Revised Downward)
May 2nd, 2012
5:54 pm
Plaintiff challenging healthcare law went bankrupt – with unpaid medical bills
Obama administration lawyers say her case is an example of why an insurance mandate is needed to prevent ‘uncompensated care that will ultimately be paid by others.’
————————
And how are bankrupt people supposed to purchase health insurance as required by Obozocare?
Oh, right, by getting taxpayers to cover the cost for them.
Ain’t no free lunch, libtards.
@@
May 2nd, 2012
5:55 pm
1st installment:
By 2035 health care’s share of GDP will roughly double, according to McKinsey, a consultancy. The burden falls on the state, which foots two-thirds of the bills. Politicians are unwilling to raise taxes, so they squeeze suppliers instead: more than three-quarters of public hospitals operate at a loss.
AmVet
May 2nd, 2012
5:55 pm
You’re whining now.
You always start the crap slinging and then act like you’re pure as the driven snow.
@@
May 2nd, 2012
6:52 am
OH GAWD!!!!
AmVet:
Please go to the nearest powder room and freshen up.
schnirt
Grow up.
Or don’t…
@@
May 2nd, 2012
5:56 pm
2nd installment:
Like other service industries in Japan, there are cumbersome rules, too many small players and few incentives to improve. Doctors are too few—one-third less than the rich-world average, relative to the population—because of state quotas. Shortages of doctors are severe in rural areas and in certain specialities, such as surgery, paediatrics and obstetrics. The latter two shortages are blamed on the country’s low birth rate, but practitioners say that they really arise because income is partly determined by numbers of tests and drugs prescribed, and there are fewer of these for children and pregnant women. Doctors are worked to the bone for relatively low pay (around $125,000 a year at mid-career). One doctor in his 30s says he works more than 100 hours a week. “How can I find time to do research? Write an article? Check back on patients?” he asks.
Not Part of Romney's Flock
May 2nd, 2012
5:56 pm
“what has your Failed Messiah done to reduce its costs?”
Thinker’s God is in the business of reducing costs?
Wow……. what church and ideology does he follow?
Oh shucks more name calling and coping mechanisms from childhood
But I get your point about reducing costs. Republicans didn’t want competition when that bill came out and Obama has done nothing either
Barry: “if you don’t get help at Charter, please get help”
AmVet
May 2nd, 2012
5:58 pm
Don’t waste electrons or what grey matter you have left.
I said Japan’s system was successful, not perfect.
Next.
@@
May 2nd, 2012
5:58 pm
3rd installment:
On the positive side, patients can nearly always see a doctor within a day. But they must often wait hours for a three-minute consultation. Complicated cases get too little attention. The Japanese are only a quarter as likely as the Americans or French to suffer a heart attack, but twice as likely to die if they do.
Some doctors see as many as 100 patients a day. Because their salaries are low, they tend to overprescribe tests and drugs. (Clinics often own their own pharmacies.) They also earn money, hotel-like, by keeping patients in bed. Simple surgery that in the West would involve no overnight stay, such as a hernia operation, entails a five-day hospital stay in Japan.
I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...
May 2nd, 2012
5:58 pm
OBAMA ADMITS FABRICATING GIRLFRIEND IN MEMOIR…
And then he told her about his fake economic experience.
And together they all said eewwww, aren’t you the greatest?
To which obozo said why, yes, I am.
And they all lived happily ever after.
@@
May 2nd, 2012
6:00 pm
4th installment:
Emergency care is often poor. In lesser cities it is not uncommon for ambulances to cruise the streets calling a succession of emergency rooms to find one that can cram in a patient. In a few cases people have died because of this. One reason for a shortage of emergency care is an abundance of small clinics instead of big hospitals. Doctors prefer them because they can work less and earn more.
But I love spending time on you, AmVet.
schnirt
Lil' Barry Bailout (Revised Downward)
May 2nd, 2012
6:00 pm
You forgot the part where Barry gets himself a Kleenex and cleans himself up.
Tealiban Party
May 2nd, 2012
6:02 pm
Lil’ Barry Bailout (Revised Downward)
May 2nd, 2012
5:54 pm
Ain’t no free lunch, libtards.
Woooooooooooosh. That was the sound of the point of the article quickly passing you by. I guess I would expect no less from someone more interested in childish name calling than intelligent discussion.
@@
May 2nd, 2012
6:03 pm
5th installment:
The system is slow to adopt cutting-edge (and therefore costly) treatments. New drugs are approved faster in Indonesia or Turkey, according to the OECD. Few data are collected on how patients respond to treatments. As the Lancet says, prices are heavily regulated but quality is not. This will make it hard for Japan to make medical tourism a pillar of future economic growth, as the government plans.
I’m done.
You may go now, AmVet.
AmVet
May 2nd, 2012
6:06 pm
Nah, I’ll just stay here, enjoy me popcorn and watch you do your patented meltdown…
@@
May 2nd, 2012
6:06 pm
AmVet:
You said VERY successful.
Another example of a very large scale and very successful universal health care system. This one a mere 51 years in existence.
Don’t let the dementia get you down.
schnirt
md
May 2nd, 2012
6:09 pm
“So the next canard is how can we afford it when the pitifully poor don’t pay any federal income tax?”
Please Am……don’t insult us with the pitifully poor card…..you really want to play that card?
You want everyone to believe that 46% of the population is “pitifully poor”?
Really?
Ronnie Raygun
May 2nd, 2012
6:11 pm
What about the “failure” that the ACA was modeled on: Romneycare? Insurance costs must be skyrocketing in Massachusetts.
What?!?!? Insurance prices DROPPED 5% this year? The second year in a row insurance prices have dropped in Massachusetts while they’ve gone up by nearly double digits everywhere else? How can this happen when it’s suppose to bankrupt the country.
The facts must be giving the Conned migraines.
Lil' Barry Bailout (Revised Downward)
May 2nd, 2012
6:12 pm
I’m going to go way out on a limb here and predict that Obozocare’s unpaid-for costs are going to far outstrip Medicare Part D’s unpaid-for costs.
Lil' Barry Bailout (Revised Downward)
May 2nd, 2012
6:16 pm
That’s right, Ronnie, and Massachusetts has now lost its distinction as the state with the HIGHEST health insurance premiums!
Not Part of Romney's Flock
May 2nd, 2012
6:17 pm
“I’m going to go way out on a limb here and predict that Obozocare’s unpaid-for costs are going to far outstrip Medicare Part D’s unpaid-for costs.”
And that justifies what and how?
unpaid is unpaid
More money we will be borrowing from China
AmVet
May 2nd, 2012
6:17 pm
Very successful and 51 years on.
Get a grip, woman.
Here’s your next assignment.
Seventy-one percent of the Earth’s surface is covered by water.
Now scurry off to wiki and find all of the holes in that statement…
Not Part of Romney's Flock
May 2nd, 2012
6:21 pm
Question:
What is the doctor situation in terms of “per capita” in Mass since Romneycare was implemented?
Some have asserted that Obamacare will drive many doctors to leave their practice………. I have no idea.
Is that going on in Mass, whether it is leaving the practice totally or just leaving to practice in another state?
md
May 2nd, 2012
6:21 pm
Funny how an avowed “capitalist” can’t figure out that wages are flat because we’ve contributed to our own demise while the commie-capitalists have kicked our butt’s in production and labor costs.
Me thinks his complicity is too hard to swallow…….50B every single month shipped out of this country, yet we are to believe it has no bearing.
As for wages…..it’s called a market correction…..the global market dictates everybody’s wages. As they are willing to work for fractions (big raises to them), we will continue to stagnate as long as the consumers flock to lower priced goods of which we can not compete…….I think that is called “capitalism”.
Still driving a foreign car and complaining about jobs going overseas??
Uh—huh.
md
May 2nd, 2012
6:28 pm
“The facts must be giving the Conned migraines.”
Facts?
http://www.boston.com/Boston/whitecoatnotes/2011/06/mass-health-care-costs-outpace-nation/DFCgMwvVZtunS7TIAn44BN/index.html
AmVet
May 2nd, 2012
6:32 pm
md,
Fifty percent of the people in this country earn $32,396 or less per year. Many of them have families.
That represents 13% of all the income made in this country and they pay 2% of the taxes.
And yet you 1% asskisssers obsess about them.
But the sickest part of you Republicans is how you NEVER, and I do mean NEVER, speak up about this travesty:
Five million households in this country make somewhere between $50,000 and more than $1 million and pay NOTHING in federal income taxes in any given year.
The vast majority of that group — 4.3 million — make between $50,000 and $100,000 and pay NOTHING in federal income taxes in any given year.
Another 485,000 make between $100,000 and $500,000 and pay NOTHING in federal income taxes in any given year.
And the remaining 18,000 make $500,000 or more and pay NOTHING in federal income taxes in any given year.
Focus on the real injustice and quit promoting the idea that it is a crime to be poor in this country…
AmVet
May 2nd, 2012
6:39 pm
Funny how an avowed “capitalist” can’t figure out that wages are flat because we’ve contributed to our own demise while the commie-capitalists have kicked our butt’s in production and labor costs.
Simplistic tripe.
The reasons are many and lots of them deal with subjects you want to remain ignorant about. Just as you demonstrated a few minutes earlier.