Every Time Congress Promises Future Savings, Its Nose Grows a Little Longer

Last week, I noted that Senate Democrats are now intent on rushing through a budget-busting "fix"  to Medicare doctor reimbursements. The fix would cost about $240 billion, but wouldn't be paid for. By passing this as a separate bill, apart from broader health-care reform legislation, Senate Democrats get to maintain the fiction that health-care reform will be deficit neutral.

As legislative scams go, it's pretty obvious — pass a bill on the promise of future savings, then "fix" those savings later when they prove unpopular. But given the clout doctors have with Congress, there's a good chance it will work. Indeed, as John Dickerson explains, similar forms of promised-savings scams, in which Congress swears it will save money and then reneges at the last minute, are depressingly common in health-care policy:

When the Congressional Budget Office determined that the Senate finance committee's health care legislation would not add to the deficit, reform supporters heralded the news. Further, said the CBO, the bill would meet another important Obama priority: It would start to chip away at long-term health care costs. Budget watchdogs were skeptical, though. Former CBO director Douglass Holtz-Eakin was even more so. "What they're saying is: 'Your fantasies add up. I could say to CBO: 'Hi, I'd like to make 5 million a year and live in a 125-room mansion. Does it work?' And CBO says 'yes,' but that isn't going to happen."

The former policy director for the McCain campaign, now with the Manhattan Institute, wasn't quibbling with the CBO's math. He just didn't think future politicians would keep the promises the bill was holding them to. According to one proposal, for example, if health care savings don't materialize in the coming years, automatic cuts in health care funding will kick in. Holtz-Eakin, not unreasonably, sees this as unlikely. Budget experts also worry that Congress will not reduce payments to providers as scheduled or follow through with planned Medicare cuts.

Basically, the problem is that, when scoring bills, the CBO can't throw legislation back at Congress and say "bullshit" — even when everyone knows that that's all that Congress' proposed savings are.

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  • hmm||

    That's not it's nose.

    And yes Congress is happy to see you.

  • ||

    Well, in fairness to CBO, they did add caveats about politically unpopular decisions having to be made in order to guarantee the savings. Of course, those caveats aren't mentioned by politicians pushing health care reform.

    Their job is not to handicap political activity but to do the math on the bill they're given, so criticizing them is foolish. As we've already seen by their comparison to the White House OMB, the CBO is one of the few organs of our federal govt that is actually honest and fairly immune to political manipulation, so let's not be to harsh on them.

  • ||

    The article doesn't strike me as being harsh on the CBO. It's just pointing out the reality that the politicians waving CBO assessments around are taking advantage of the limitations that the CBO must work under.

  • ||

    Medicare reimbursements to doctors, dentists etc. are laughably low, which is why very few of them accept the plans. If the goal here of the democrats is to raise the availability of doctors to Medicare patients they can either raise the rates offered to more closely match market rates or they can force doctors to accept state plans. What is the more libertarian option there?

    The "real" libertarian option-eliminating the program- is of course not on the table for senate democrats. Between the two given options I am going to go with "raise the rates".

  • Peter Suderman||

    Ronald,
    I have no particular opinion on how much doctors should or shouldn't be paid. But I do think that Congress shouldn't cheat its way through the legislative scoring process by promising spending cuts that are unlikely to ever happen.

  • ||

    Congress wants to impose price controls.

    What could go wrong?

  • Johnny Longtorso||

    Liberals only lie to us because we, in our lack of moral and intellectual Progress, make them. Shame on us.

  • @||

    The difference now is that their accomplices, the so-called mainstream media, are openly and unabashedly carrying the "liberals'" water, and lying about it without reservation.

  • ||

    Your statement assumes the highest form of arrogance and the greatest problem in government: you think the liberals know better than anyone else what is best for them.

    Shame on you.

  • ||

    Sorry, should have previewed myself.

    First, it should have been more clear that I was responding to "shame on us."

    Second, I should have written "...what is best for us." (Liberals should indeed be allowed to determine what is best for them.)

  • Rich||

    Basically, the problem is that, when scoring bills, the CBO can't throw legislation back at Congress and say "bullshit"

    Why is that problem not immediately fixable? Is CBO bound by the etiquette rules?

  • ||

    Pinocchio's credibility took a disastrous hit after he crushed and snorted his shipment of Extenze.

  • Johnny Longtorso||

  • Russ 2000||

    The only place I can find an acceptable alternate spelling of renege as "renig" is Wikitionary, which is as lame a source as there is.

  • Spartacus||

    That's the racist spelling.

  • @||

    It's almost niggardly.

  • ||

    How dare you cheapen this thread with your inherent racist miserliness?

  • Peter Suderman||

    Rich: CBO is required to score as if legislation will be enacted as written. They can't assume bad behavior, lies, etc. Doing so would open them to easy politicization (Can you imagine if they had to decide when Congress was lying? The fight over staffing would be spectacular, as each side would jockey to get their people in.)

  • ||

    Peter,

    Right. That's also the reason why the CBO doesn't really do dynamic scoring. Even though the basic idea that people respond to incentives is agreed upon by all economists, there can be a tremendous difference in how it plays out in practice for any one effect. (Will a higher tax rate cause people to work less, and how much? What are all the elasticities?)

    The CBO settles for known inaccuracy rather than fighting over different plausible interpretations.

  • Johnny Longtorso||

    Can you imagine if they had to decide when Congress was lying?

    Do you mean to imply that there are instances where they aren't?

  • ||

    You guys really hate health care. And you really hate free markets cuz free markets haven never solved health care.

  • ||

    Personally, I hate simpletons who equate government regulation with "health care".

    If your definition of "health care" relates to the amount of control the government exercises, then of course the market doesn't "fix" it.

    If you could pull your head out of your ass for 5 seconds you might realize that, while imperfect, the market produces much better medical care for people than a government "5 Year Plan"

  • ||

    Personally, I hate simpletons who equate government regulation with "health care".

    He's just a troll, Gilly. One of the rotating Edward personae. He'll die face down in a pool of vomited-up cum, just like the rest of his incarnations.

  • Wicks Cherrycoke||

    No-o-o..the market has never provided health care. After all, American life expectancies have declined since the Revolution, we never innovate new drugs or treatments, we have never cured or prevented any diseases ever, cholera, diptheria and polio are as common as ever...

    Hey, wait a minute....

  • Big Govt Liberal||

    Wicks,

    Haven't you paid attention in public school? The market never achieved anything on its own. Left to its own devices, the market would crush the weak, starve the poor, and tie young women to railroad tracks while twirling its black mustachios. It's only by the constant intervention of government into the markets that any good result ever manifests. That's because the people in government are better people who care more about others than business people.

    Now get back on the Hopey McChange bandwagon.

  • oaktownadam||

    Now get back on the Hopey McChange bandwagon. Or else.

    Fixed that for you.

  • Xeones||

    He'll die face down in a pool of vomited-up cum, just like the rest of his incarnations.

    SASQUATCH CUM, IF STEVE SMITH GET HIS WAY.

  • ||

    STEVE ALWAYS RAPES WITH CONDOM. STEVE SMITH LAST LONGER THAN 30 SECONDS THAT WAY!

  • Xeones||

    STEVE SMITH LAST LONGER THAN 30 SECONDS

    You lie.

  • Maureen Dowd||

    You meant to add "boy" to the end of that, right?

  • ||

    Medicare already pays MDs less than the costs of running their practice. Reduce it further and large numbers of doctors will retire early, quit, or just refuse to see Medicare patients.

  • ||

    Until we pass the inevitable law requiring doctors to treat anyone the government says.

    How long after that will it take for the nationalization of doctors to occur.

  • ||

    I honestly believe not to long Saccharin Man. It's not just Medicare/Caid reimburements that are getting smaller: 3rd party insurance payouts are getting lower as well. I am seriously considering leaving medicine soon. With Malpractice insurance, overhead, and slow paying 3rd party payers, I am finding it is not worth the headache anymore.

    I am smart enough to go into a different line of work, one that I might derive more joy and satisfaction.

    I'll surrender my license before I would be nationalized.

  • ||

    You could be my personal physician. My wizened husk will require your fullest attentions in the dark decades to come.

  • ||

    I'm not licensed in KY. Not to mention you have a wicked case of IDDM-I. Or is it II? Not to mention you have all sorts of "proclivities" (I have perused your slashfic site) that would make you a very "unique and challenging" case.

  • ||

    And payment would be rendered in nubile and eager undergrads women, along with room, board and protection from Episarch and Warty when they drop by.

  • ||

    I'm both. I produce no insulin and I'm resistant to the insulin I take. It's awesome. And by "awesome" I mean shitty.

  • ||

    THAT. SUCKS. Yeah, I caught the sardonic awesome. Are you resistant even to Lantus? Or do you take multiple BSR's and use shorter acting insulins, that is of you can tolerate mixed insulins?

  • ||

    Lantus and Novolog held me for a long time. They are currently having me try out 70/30 with a hit of Novolog at lunch. BSL is better, but I'm at the max dosage of metformin and Advania. And I'm taking an enormous amount of 70/30.

    And my campus is riddled with swine flu.

  • ||

    I'm not jazzed about Avandia, but it is not time or meal dependent. Glucopahage is effective as well, but tough on the liver.

    I take it sulfonylureas do not work well for you?

    Lantus is expensive, but tends to stave off resistance.

    How many IU's of 70/30?

    Wear a mask if immuno-compromised (i'm sure you do). And the Gimp doesn't count zipper boy.

  • ||

    Hey Ray,
    There hasn't been a free market in health care in a long long time.
    The government sets the prices, hence too many market distortions to count.
    A deregulated free market that reduces/eliminates Washington's role as a middle man is the only way that we "solve" health care.

    And also, read the first chapter of Mankiw's Economics. Health care reform ignores basic truths of decision making. People respond to incentives, we face trade-offs, people make decisions at the margins, etc.

  • T||

    People respond to incentives, we face trade-offs, people make decisions at the margins, etc.

    That was the old economic thinking. Through the power of hope, we've changed that.

  • ||

    That "supply curve" thingie- that's just a bunch of lines on a piece of paper!

    Fairness is the new paradigm.

  • anonymous||

    Fairness is the old paradigm. When you get past the math and psychology, markets are a distributed justice system. Doesn't mean they're perfect, although they tend to work better than the criminal justice system in most cases.

    Only problem is that some people have unworkable and/or self-serving philosophies of "fairness". But that's a problem with all justice systems.

  • Rich||

    [Peter:] CBO is required to score as if legislation will be enacted as written. They can't assume bad behavior, lies, etc.

    [John:] The CBO settles for known inaccuracy rather than fighting over different plausible interpretations.

    Sorry, guys. I accept your points, but still don't understand why the CBO can't throw legislation back at Congress and say "bullshit".

  • ||

    The CBO is the Congressional Budget Office.

    Suppose that the CBO did violate the law that Congress directs it to work under. Then the CBO head would be fired, and a more compliant one hired.

  • Rich||

    So, it's the Law, and part of the game. Congress reads (or not) the inaccurate score and ignores the implicit assessment. That about it?

  • ||

    Right. The CBO is very trustworthy under the conditions that Congress sets. Congress generally only messes with the rules that the CBO must follow, not with the actual estimates.

    So the estimates are quite accurate, but often estimate the wrong things.

  • ||

    Sorry, guys. I accept your points, but still don't understand why the CBO can't throw legislation back at Congress and say "bullshit".

    Okay; now ask yourself why David Walker is no longer Comptroller of the Currency.

  • Bill Peschel||

    It's the same way with Social Security. The cost of living index projects no inflation, hence no increase in payments.

    Surprise! Here's $250 for y'all.

    Crank up those printing presses!

  • ||

    Let me write the next health care reform bill. It'll be the usual fiscal train wreck, but I'll short-circuit the CBO by putting a clause at the end saying, "And then, space aliens come down and pay for it all!!"

    I mean, what could they do but score it as deficit-neutral?

  • ||

    Perhaps there needs to be a slightly more independent version of CBO, one able to say "not so!", housed in another branch of the government. I do have an idea where.

  • ||

    Dollar= Pelosi Peso

  • ||

    Dollar= Pelosi Peso

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