Paper Tries to Debunk Claims About ObamaCare's Effect on the Deficit Without Mentioning Arguments About Why ObamaCare Will Increase the Deficit

When attempting to debunk a common argument, I tend to think it's usually helpful to understand what that argument is. The nameless editorial writers at the Tampa Bay Times, on the other hand, don't seem to think that's necessary.

In an unsigned editorial this weekend, the paper claims to "debunk" arguments about ObamaCare's effect on the deficit. Here's how it starts.

One of the chief Republican objections to health care reform is that it will add too much to the deficit and the nation can't afford it. The problem with this claim is that it's wrong. The Congressional Budget Office has consistently maintained that the Affordable Care Act reduces the deficit by tens of billions of dollars even as it extends health coverage to millions of Americans. 

It then goes on to summarize the most recent CBO assessment of the health law's projected coverage and budgetary effects, as if that were all the evidence one needed to declare with absolute confidence that the law will reduce the deficit. 

It's a remarkable exercise in missing the point: ObamaCare's critics contend that the CBO's projections are quite likely to be wrong, and have put forth a number of arguments about why. The TBT editorial doesn't mention, much less attempt to respond to, a single one of those arguments. The closest it comes is a brief mention of Rep. Tom Price's (R-Georgia) statement that the law is projected to require $1.7 trillion in spending over the next decade, which is not really an argument about the budget gap at all but a instead statement of the law's total projected spending without regard to its effect on the budget deficit. Otherwise, it reads as if the editorial's author does not even know that those arguments exist. 

Happily, that can be remedied. The basic problem with the CBO's method of scoring the health law is that it is required to assume two things: that current law will continue precisely in its current form and that no further changes will be made, and that laws will be implemented exactly as called for by the relevant legislative text. It's a useful budgetary exercise, but it's rarely an accurate representation of how legislation works (or doesn't) over time. 

For example, in order for ObamaCare to reduce the deficit, ObamaCare will have to generate substantial savings over the preexisting budget baseline for Medicare. As a matter of convention, CBO scores those Medicare savings as if they will happen exactly as the law's authors envision. But Medicare savings schemes have historically proved difficult to maintain. And ObamaCare's proposed Medicare savings, which hinge in large part on provider productivity improvements, do not seem particularly promising: Medicare's own chief actuary has warned that "there is a strong likelihood" that changes called for by ObamaCare "will not be viable in the long run." 

Even the CBO, the source of the TBT editorial's deficit numbers, seems to agree that, at the very least, this is a possibility worth considering. In its alternative budget baseline following the law's passage, the budget office included the assumption that the Medicare savings called for by the law would not be sustainable after the end of this decade, going out of its way to highlight "the important implications of those health care policies for the federal budget." Hint, hint, wink, wink. 

What if the law's Medicare savings do pay off? Is the budget in the clear? Sorry, but no. The problem here is that long-held budgetary scoring conventions allow the savings to be "spent twice," once on expanded health coverage, and again on shoring up Medicare. It's all part of the way Medicare's trust fund accounting works: A dollar becomes available and it is marked as being present in the "trust fund." In the meantime, that dollar is spent on something else, but it is still recorded as being in the trust fund, despite having already been spent. Which means that eventually the governemnt will need to raise taxes, borrow, or cut some other spending in order to make up for that dollar that's recorded as being present in the trust fund but isn't. 

Again, the CBO agrees with this assessment: In December 2009, director Douglas Elmendorf explained that "to describe the full amount of [Medicare] HI trust fund savings as both improving the government's ability to pay future Medicare benefits and financing new spending outside of Medicare would essentially double-count a large share of those savings and thus overstate the improvement in the government's fiscal position."

That has serious consequences. When Charles Blahous, one of Medicare's public trustees, ran the numbers earlier this year, he found that in every single scenario, even those in which all of the law's savings come to fruition as hoped for, the law still increases the deficit thanks to this double counting. 

You wouldn't know any of this from reading the TBT editorial. Who could possibly believe that there was any remotely plausible alternative to the single, decade-long projection offered by the CBO? I mean, besides the CBO, which warned lawmakers in prepared testimony that although it had put great care into its estimates, "the actual outcomes will surely differ from those estimates" in part because ObamaCare "will put into effect a number of policies that might be difficult to sustain over a long period of time."