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Title: Repealing health-care reform would cost hundreds of billions of dollars -- and Eric Cantor knows it
Source:
Washington Post
URL Source: [None]
Published: Jan 5, 2011
Author: Ezra Klein
Post Date: 2011-01-05 11:21:41 by go65
Keywords: None
Views: 56
Comments: 1
House Republicans are in a pickle: One of their new rules says that new legislation must be paid for. But the health-care bill reduces the federal deficit by more than $100 billion over the next 10 years. Luckily, they've figured out an answer to their problem: They've decided to simply exempt the repeal bill from the rules. That means they're beginning the 112th Congress by lifting their own rules in order to take a vote that will increase the deficit. Change we can believe in, and all that. Republicans are aware that this looks, well, horrible. So they're trying to explain why their decision to lift the rule requiring fiscal responsibility is actually fiscally responsible. Majority Leader Eric Cantor got asked about this, and he returned the reporter's serve with a volley of nonsense. "About the budget implications, I think most people understand that the CBO did the job it was asked to do by the then- Democrat majority, and it was really comparing apples to oranges,” Cantor said. “It talked about 10 years' worth of tax hikes and six years' worth of benefits. Everyone knows beyond the 10-year window, this bill has the potential to bankrupt this federal government as well as the states." That's all well and good -- but it's not true. Take Cantor's core point: The health-care reform bill includes "10 years' worth of tax hikes and six years' worth of benefits." There's nothing philosophical about this statement. It can be checked with a simple look at the spending tables the Congressional Budget Office published in their analysis of the bill. And when you look at those tables, Cantor's statement falls apart: Roughly speaking, new spending is what counts as "benefits." Those are the lines shooting up. New taxes are the lighter blue part of bars pointing down. In years one, two, and three, new benefits are larger than or matched with new taxes. In year four, that's not true, but the difference is fairly small. And in the six years after that, even Cantor admits the benefits match or overwhelm the taxes. So as an empirical matter, what Cantor is saying just isn't true. But just for the record, it's also wrong as a theoretical matter: Comparing 10 years of saving and working with six years of spending is not comparing apples to oranges. Parents will routinely work harder (revenue increases) and save more (spending cuts) for decades in order to help their children pay for college. That's 18 years of raising revenues and cutting costs in return for four years of spending on benefits. An accountant wouldn't look at that and say he couldn't assess the wisdom of the decision because it's apples-to-oranges. An accountant would happily note that that's how you pay for things when you're being responsible. Cantor's party might be out of practice on that, given the way they paid -- or, to be more specific, didn't pay -- for the Medicare Prescription Drug Benefit, but it doesn't make it any less true. As for the period "beyond the 10-year window," the Congressional Budget Office -- which is now comparing "apples to apples," as the law is delivering full benefits for all 10 of the next 10 years -- says the law saves vastly more money in its second decade: "The legislation will reduce federal deficits during the decade beyond the 10-year budget window relative to those projected under current law— with a total effect in a broad range around one-half percent of GDP." That's in the neighborhood of a trillion dollars. What's important about Cantor's argument is not that he's wrong. It's why he's saying something he knows to be wrong. There are plenty of reasons to oppose the health-care reform bill. You might not want to spend that money insuring people, or you might not think the legislation goes far enough in reforming the system. But as a matter of arithmetic, using the math that Congress always uses, the bill saves money. It cuts enough spending and raises enough taxes to more than pay for itself, both in the first 10 years and in the second 10 years. In fact, Democrats added that second metric, which is not typically a hoop that legislation has to jump through, in order to specifically allay concerns that the legislation would backload its costs. Instead, as CBO said, it ramps up its savings. But Cantor and the GOP know full well that the bill is unpopular largely because people think it increases the deficit. Polls have shown that only 15 percent of Americans know that CBO said it will reduce the deficit. If, in the repeal fight, it becomes widely understood that the bill reduces the deficit, it will become more popular. So it's crucial, as the repeal effort goes forward, for Republicans to become much more brazen in falsely asserting that the bill doesn't really reduce the deficit, and that even if the CBO does say it reduces the deficit, that they're saying that because they've been tricked somehow. But CBO wasn't tricked. If it were, Cantor, who has a staff dedicated to figuring these things out, would have a better argument than the one he's offering.
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#1. To: All (#0)
The Republicans care as much about deficits as I care about the Cleveland Browns.
Since January 3, 2011, Republicans have controlled the power of the purse.
They've decided to simply exempt the repeal bill from the rules.
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