In my January 7th post, Correcting the Left’s spin on repealing Obamacare, I covered the gimmicks (the “trickery”) being used by the Democrats to claim the 2010 health care legislation would reduce our national debt over time. The bar graph is worth displaying here again because it shows that Medicare costs of over $500 billion were double-counted by said Democrats:
And lo and behold in her testimony before Congress yesterday, HHS Secretary Kathleen Sebelius admitted exactly that: the administration had/has double-counted Medicare (you can watch the exchange between her and Rep. John Shimkus here). Contacted after the hearing, a spokesman defended the action:
“The scoring of the Affordable Care Act is entirely consistent with how legislation has been scored for the 30 years, under Presidents of both parties, and Congresses of both parties. Savings in programs like Medicare and Social Security are scored as improving the solvency of those programs and reducing the deficit.”
However, the CBO had another opinion of the practice:
“[…] They cannot be set aside to pay for future Medicare spending and, at the same time, pay for current spending on other parts of the legislation or on other programs … To describe the full amount of 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,” said the CBO memo.
Back in March 2010, just after the health care bill was signed into law, Roger Feldman, an expert in health care economics, also stated that double-counting health reform’s Medicare cuts gave impression of “savings” that weren’t really there. He wrote:
The CBO did not make a mistake in its arithmetic. By law, it must estimate the effect of proposed legislation on the federal deficit, and … [not on] other federal programs [that] must be cut.
The president, however, does not have to follow the same rules as the CBO. He could have told us that Medicare spending cuts can be used to fix Medicare or to pay for health insurance expansion, but not both. Instead, he chose to maintain the fiction that Medicare savings can be counted twice.
… Congress should address Medicare reform and health insurance reform separately in future legislation. … However, the CBO should not change its method of scoring proposed legislation. The CBO is not responsible for maintaining the fiscal soundness of Medicare. But another federal agency, the Office of Management and Budget, should publish a budget that shows the future liabilities for all entitlement programs and these should be included in the president’s annual budget.
Until we meet this challenge, we will continue to use bad arithmetic and budgetary tricks to hide the cost of health care reform.
And in “Why the Health Care Law Increases the Gross Federal Debt.” a research fellow at the Hoover Institution named Charles Blahous gave further information about why double-counting can mislead the public. It has to do with two ways of calculating our national debt and how these bump up against our debt ceiling (which as we all know, is subject to being raised by Congress when it is reached). I won’t reproduce the details here, but please read Mr. Blahous’ explanation. His point, with regard to double-counting Medicare though is:
For better or worse, the federal debt now subject to statutory limit is very similar to the gross debt. And the reason that the health care law causes us to reach the debt limit more quickly has to do with the law’s double-counting of Medicare savings.The recently enacted health care law used savings in the Medicare program to finance a new federal health entitlement. But at the same time, the government claimed that the Medicare savings produced an extension of Medicare solvency, in turn reflected in the issuance of more debt to the Medicare Trust Fund. In effect, the savings were double-counted – once as a means of offsetting the costs of the new entitlement, a second time as a means of financing future Medicare benefits.
It’s this double-counting that causes debt subject to limit to rise under the new health care law. New debt will be issued under the law to the Medicare Trust Fund. But the savings from Medicare don’t result in an equivalent reduction in public debt, because most of that savings was used to pay for a new health program. This double-counting means that Trust Fund debt rises more than public debt would fall – and consequently, that the gross debt subject to limit rises.
This issue of double-counting, then, is not new. It has been discussed and roundly criticized in many circles since before this health care bill became law. What is new is that Sec. Sebelius admitted in a public forum that the administration was doing that: double-counting. Fox News amusingly wrote this online headline: Sebelius Cracks! Admits the Obamacare Books were Cooked. But it’s no laughing matter: Obamacare will increase our national debt and our health care costs, not decrease them as the Democrats have claimed.
Of course, the facts won’t stop the claims. Our own 6th District representative often repeats her party’s refrain that the new health care law will save money and that repealing it would increase the national debt. But she — and her colleagues — are wrong. And whatever Congress can do to defund the bill and prevent it from being enacted, it should do. We can’t afford the boondoggle that is Obamacare.