Friday, February 26, 2010

Why the Democrats prefer anecdotes to the details of their bills

Just about every Democrat who spoke yesterday trotted out their heart-wrenching anecdotes about people without insurance. The Republicans could have answered with their own heart-wrenching anecdotes from countries where programs very similar to the Democrats' bill have been in place for years. Instead they blinded the Democrats with the details of their own bill and how they're double-counting money. As Stephen Spruiell points out, they had just no answer to the points that Paul Ryan was making.
We have some strong disagreements on the numbers,” President Obama said after Rep. Paul Ryan (R., Wis.) concluded his devastating critique of the Democrats’ budget claims, “but I don’t want to get too bogged down.” In the ensuing debate, what became clear is that the Democrats just don’t have an answer to Ryan’s arguments. They ducked, dodged, and changed the subject repeatedly, because Ryan’s numbers themselves are unimpeachable.

The Democrats are touting an estimate from the Congressional Budget Office that their health-care bill would reduce the deficit by around $130 billion over the next ten years. What Ryan pointed out — and what no Democrat even attempted to counter — is that this is because the legislation front-loads tax hikes and Medicare cuts and defers costs, forcing the CBO to score ten years of offsets with only six years of spending. Looked at on a level playing field, the true ten-year cost of the bill is $2.3 trillion rather than $950 billion, Ryan said.

Then he brought up another gimmick: The bill is full of double-counting. “Savings” are counted as offsets for new health-care spending and at the same time set aside to pay for future entitlements. For instance, the Democrats claim $52 billion in offsets as a result of increasing Social Security payroll-tax revenues. But these dollars are already claimed for future Social Security beneficiaries. They can’t pay for both. The Democrats take another $72 billion in premiums intended to fund a new long-term-care program and count them as offsets for other spending. Ryan pointed out that Senate Budget Committee chairman Kent Conrad has called this “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of.”

Perhaps most important, Ryan confronted the Democrats with the issue of the “Doc Fix” — a separate bill that would have added $371 billion to the Democrats’ legislation if it hadn’t been stripped out. The Doc Fix would have prevented Medicare reimbursements to doctors from plummeting by 21 percent, a drop that Congress put into the bill to improve its CBO score but never planned to allow, most political observers agree.

Obama responded to Ryan by saying he didn’t want to get “bogged down” in a debate over the numbers; instead, he dared Republicans to defend Medicare Advantage, the program Democrats are planning to cut in order to generate some legitimate savings to pay for their new programs. But the merits of Medicare Advantage are irrelevant to Ryan’s critique, which, put simply, is:

1. Obama said he wouldn’t sign a bill that adds to the deficit;
2. The bill he supports clearly would; even though
3. Democrats have rigged the legislation to produce a deficit-neutral CBO score.
Unfortunately, reality doesn't feature rigged results.

Another interesting wrinkle results from their using reconciliation to pass this thing. As I understand it, reconciliation bills have limits on them because they're passed as part of the budget. So if this health care bill gets passed through reconciliation, it would only be for five years. The Democrats have set up the first decade of the bill by having the tax increases and Medicare cuts start now, but the benefits would only kick in after four years in order to get a good rating from the CBO. So just as the benefits were beginning, we'll be bogged down in a massive debate over whether or not to extend this thing. And who knows what the composition of the Congress will be five years from now even if Obama is still in the White House. So if you're planning now to have Obamacare, remember that you have to wait four years and it might only be in place, in this form, for one year before we get the fun of enduring this debate one more year.