Shocker: CBO Double-Counted Deficit Savings From Medicare Cuts
Via the Chamber of Commerce comes this just-released memo from the CBO pointing out that savings from Medicare cuts in the Senate health care bill have essentially been double counted:
The key point is that the savings to the HI trust fund under the PPACA would be received by the government only once, so 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. Trust fund accounting shows the magnitude of the savings within the trust fund, and those savings indeed improve the solvency of that fund; however, that accounting ignores the burden that would be faced by the rest of the government later in redeeming the bonds held by the trust fund. Unified budget accounting shows that the majority of the HI trust fund savings would be used to pay for other spending under the PPACA and would not enhance the ability of the government to redeem the bonds credited to the trust fund to pay for future Medicare benefits. 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 and thus overstate the improvement in the government’s fiscal position.
And not only did the double-count the savings from the Medicare cut, the expect us to believe that cutting funding for a program that’s already teetering on the edge of bankruptcy is going to result in deficit reduction.
Of course, I don’t think they were ever really serious about making these cuts anyway. Once this bill is passed and their foot is in the door with the health care bill they’ll skip the cuts and start ringing up the deficits and debt.
Update: A Republican press conference on the double-counting:
There was once a young man who, in his youth, professed his desire to become a great writer.
When asked to define “great” he said, “I want to write stuff that the whole world will read, stuff that people will react to on a truly emotional level, stuff that will make them scream, cry, howl in pain and anger!”
He now works for Microsoft, writing error messages.
Thanks
Schmeltzer
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dog strollers
I went back and reread the documents posted as well. Your assessment is correct. It seems that the poster of this didn’t read any of the documents and simply posted what the Chamber said it said.
It seems the writer of the post didn’t do any reasonable research and just posted the conclusions of a third party.
It doesn’t appear that there was double counting since the CBO already considered this issue in its scoring of the bills since others didn’t and they are just explaining that fact in their report.
So there was no double counting nor is there a scandal here.
Spending money isn’t the way to save money. It’s just common sense.
Obama lied. Again.
The inflation that will come from the deficit spending this albatross will become will hurt working families trying to make ends meet in the next decade.
Kent sure put the Con in Conrad talking this piece of deceit.
The amount of lies in this new legislation, will over time and when fully revealed stagger the imagination at the level of pure evil therein. This is a document that is based on and liberally flavored with deception and there is not a person in America, except the ruling elite that will not suffer real harm and that harm will extend to our children grandchildren and great grandchildren at least, if America even survives this assault on its economy and Constitution that long.
Its Keynsian math don’t you know. Ignore the debt incurred in the future, only the short term perception matters. Reality Based doesn’t really mean based in Reality, it means “in a perfect world”.
But but but 2012 is right around the corner. If the Myans and the Movie are right we won’t ever have to care about this thing kicking off.
Maybe this should be “The Lie of the Year”.
Thank God Harry is toast when next up for reelection.
It’s going to be a double dip recession and possibly a depression.
I read the memo again and realized that you made an egregious error in your reading of what the memo actually said that I had missed before.
“Specifically, CBO has been asked whether the reductions in projected Part A outlays and increases in projected HI revenues under the legislation can provide additional resources to pay future Medicare benefits while simultaneously providing resources to pay for new programs outside of Medicare. Our answer is basically no.”
That paragraph in the beginning of the memo in question is the real key to understanding the conclusion:
“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 and thus overstate the improvement in the government’s fiscal position.”
Essentially the CBO was answering a specific question. They were asked whether the savings would lead to be able to pay for both future medicare spending and spending on nonmedicare projects, to which the CBO was replying that to say that the savings would lead to spending in both future medicare and nonmedicare projects would be to double count the savings.
Exactly Rob – this is a classic bait and switch move by the dems. They know that if they actually cut Medicare they are in effect cutting their own throats. it’s a crime that Medicare was ever created, but after paying into the lie for their entire working lives people expect the government to make good on their promises – unfortunately I think that many people will end up totally screwed in the end as this program along with all the other New Deal/Great Society social programs end up bankrupting the country.
So essentially you’re going to fundamentally base your criticism on your assumption that once the bill is passed everything about the bill intended to generate positive results, though perhaps not as positive as some may have claimed (haven’t seen where the claim was made, exactly or by who, but let’s assume it was), will intentionally be disregarded. Just so you can ignore the part about that memo that says there will be a reduction in deficit spending over current law, and increase the balance in the HI trust fund and come up with a reason to make it look bad. Nice work.