Reported White House Memo Reveals Obama Signing Off on ObamaCare Fiscal Gimmickry, Giving Up on "Honest Budgeting"


On March 5, 2010, with ObamaCare on the verge of passing, Nancy-Anne DeParle, then the White House's point person on the health care reform law, and Peter Orszag, the administration's top budgeting official, wrote an op-ed for The Washington Post making the case for the law's fiscal responsibility and highlighting its supposed budgetary savings.

A few days later, in a post on the White House blog titled "No Gimmick," Orszag pushed back against critics who said that the law's much-touted deficit-reduction projections were based on gimmickry.

In fact, the administration did use gimmicks to hide the law's costs. And both the president and his advisers were perfectly aware of it months before either the op-ed or the blog post were written.

According to a reported internal White House memo dated December 20, 2009, White House advisers had explicitly recommended to President Obama that he give up on "honest budgeting"—in particular, that he "fiddle" with the health law's costs in order to hide its costs. The president approved the move.

That's just one of the details from Ryan Lizza's fascinating, impressively reported New Yorker feature on how administration memos reveal the Obama presidency:

In the December 20th memo, they resorted to gimmickry. In his first budget, Obama had prided himself on "honest budgeting," declining to employ the fanciful assumptions that the previous Administration had used to hide the costs of government. On disaster relief, for example, he had estimated that the government would need twenty billion dollars a year, a figure based on the statistical likelihood of major disasters requiring federal aid. Now Obama's aides reminded him that Congress had ignored his " 'honest budgeting' approach," and perhaps they should, too. They proposed "$5 billion per year for disaster costs." Obama drew another check mark. The White House could also save billions by fiddling with the way it presented savings from Obama's health-care-reform bill. Check. [bold added]

The memo in question isn't public, so it's impossible to say which of the law's many budgeting gimmicks this refers to, or how much of the law's alleged savings this accounts for. My guess is that the administration would defend itself by saying that even without the gimmicks in question, the law would still produce savings. But in this case, the specific budgeting tricks and the dollar figures they represent are less important than the clear admission that as the ObamaCare fight was happening, the White House was knowingly fudging the savings numbers on its health care law (not to mention other aspects of the budget) behind the scenes —and then publicly insisting that the law was a sound and responsible fiscal move not built on gimmicks. 

Read my piece on the lie of ObamaCare's fiscal responsibility here. And read my look back at Orszag's legacy of budget trickery here. The Orszag-DeParle Post op-ed also argues that some of the law's savings will come from delivery system reforms that bundle payments and encourage health providers coordinate care; the failure of a number of Medicare's pilot programs designed to test those mechanisms suggests those savings may never materialize.