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: