18 January 2011

You're entitled to your own opinions

But you're not entitled to your own facts.

More pushback on the factually challenged criticisms of the health care reform act from the Center on Budget and Policy Priorities:

Claims that the health reform law relies on budgetary gimmicks to reduce deficits are false.

Claim: The law uses a gimmick to make it appear fiscally responsible: its biggest spending increases don’t take effect for four years, so CBO’s cost estimate for the first decade (2010-2019) includes ten years of revenue increases but only six years of significant spending. The unstated implication of this charge is that in subsequent decades, when ten years of revenue increases are accompanied by ten years of spending increases, the law will greatly increase deficits.
Fact: There is no gimmick here, and this charge is groundless. CBO estimates that the law will reduce deficits not only over the 2010-2019 decade, but in the second decade and subsequent decades. In fact, the law will reduce deficits by more in subsequent decades than in the first decade, because its most important cost-saving measures are phased in and produce larger savings over time.

Claim: CBO’s cost estimate double-counts the Medicare savings and additional Social Security payroll tax collections that the law will generate, because these savings and revenues could not both help pay for health reform and improve Medicare’s and Social Security’s finances.

Fact: This, too, is a canard. In estimating the law’s impact on the deficit, CBO counted the Medicare savings and Social Security revenues only once. The financial status of the Medicare or Social Security trust funds is a different matter, distinct from CBO’s estimate of the impact of the legislation on the budget deficit. The skilled CBO experts did not double count, as anyone familiar with budget estimates knows.

Claim: CBO’s cost estimate is misleading because it doesn’t include $115 billion in additional discretionary spending that Congress must provide to implement health reform.

Fact: The health reform law contains authorizations for a variety of grant and other programs, and CBO has estimated that if future Congresses chose to fully fund these authorizations — which Congress is under no requirement to do — the total expenditures involved would amount to $115 billion over ten years. But the large bulk of this amount is neither required nor necessary to implement the health reform law, and much of it doesn’t even reflect new expenditures. As CBO has stated, more than $86 billion is “for activities that were already being carried out under prior law or that were previously authorized.”[3] CBO has noted that the law’s actual implementation costs — that is, the cost that federal agencies will incur to administer the law — will be roughly $10-20 billion over the first decade.

Claim: CBO’s cost estimate inappropriately includes savings from the new CLASS long-term care insurance program.

Fact: Congressional leaders deliberately crafted the health reform bill so that it would be fully paid for without relying on savings from CLASS Act premiums. The CBO estimate clearly shows that if one excludes the net revenues of $70 billion from CLASS Act premiums, health reform still reduces the deficit by $73 billion over the first ten years.

Claim: CBO’s cost estimate for health reform is misleading because it doesn’t include the cost of the “doctor fix,” or fixing the sustainable growth rate (SGR) payment formula for physicians.

Fact: The cost of fixing the SGR formula is entirely unrelated to health reform, as can easily be proved — all of the cost of fixing the SGR formula would remain if health reform were repealed. None of that cost can be attributed to health reform.

There's much more there, and it's worth the full read.
There's a lot to critcize in the PPACA; I've never said it was perfect. But it's simply false to claim that it's not paid for or that it will increase the deficit. When the congressional GOP claims that "it's money we don't have," that's false: the Democrats found the money and the bill is paid for, unlike the republican-authored, deficit-financed Medicare Part D. Even if you permit a rhetorical sleight of hand, interpreting Cantor as meaning the health care reform bill was too expensive, that begs the question of why the GOP so vitriolically opposed the medicare "cuts" and other cost-saving proposals such as the public option as "death panels." It's either incoherent or hypocritical to simultaneously criticize the reform as both too expensive as well as too draconian in cutting costs (or restraining the growth in future costs).


  1. It's tough to make predictions, especially about the future. Yogi Berra.


    To make the health care law work, the law absolutely depends on the taxation/penalization of citizens for just living as citizens (the Minimum Essential Coverage provision). NEVER in USA history has the government levied a tax/penalty on a person simply for living/ being a citizen. THAT is telling, and, ominous.

    THAT aspect of the law has been declared unconstitutional.
    REFERENCE: Cuccinelli vs. Sebelius, Civil Action No. 3:10CV188-HEH, Decision by Judge Henry E. Hudson. Here's one link to that decision: http://media.washingtonpost.com/wp-srv/metro/docs/Hudson_ruling.pdf?hpid=topnews

    IF that verdict stands, and my reading of the Virginia decision indicates an usssailable position, the provision of the health care law mandating compulsory participation, or the payment of a penalty (the Minimum Essential Coverage provision), will be striken. IF/WHEN that happens, by the most informed advocates of & for ACA (aka "Obama Care") becomes insolvent/impossible to sustain otherwise.

    And we know that many people will, opt out of participation -- they already are.

    The absolute need for the Minimum Essential Coverage provision (compulsory taxation/penalization just for being a citizen) is well documented and is not a point for debate.

    Thus, the fiscal self-sufficiency of the health care law is entirely dependent on a pending US Supreme Court decision that WILL be forthcoming (assuming the law as it stands is not revoked).

    All the blather about Republican gloom & doom "lies" vs. Democrat "probaganda" etc. is, ultimatly, irrelevant at this time.

    ITs the blatant imposition of a tax/penalty for merely being a living citizen that has the Republicans/conservatives/libertarians in a furor. They perceive that IF the government can do this and get away with it, there's virtually no limit on how far it can go toward imposing its will upon & exploit its citizens under the pretext of doing so for their own good. Its exactly that sort of thing the drafters of the Constitution & Bill of Rights went to great pains to prevent.

  2. “I wonder that a soothsayer doesn't laugh whenever he sees another soothsayer." Marcus Tullius Cicero; Great Roman Orator, Politician, and Philosopher

    Arguing about government cost projections...this one says savings years/decades away will result therefore the other's estimate is wrong...is, sadly, funny in its way.

    Has the government (any government for that matter) ever operated any long-term program efficiently, much less cost-effectively?

    The US Post-Office & Amtrack, for example, depend on external funds to exist, and many more government programs likewise fail to generate projected results and/or operate cost-efficiently. Notable ongoing failures include education (costs keep going up, results stagnate), the war on poverty/drugs/etc. And those are relatively simple endeavors.

    In the USA Medicare & other medical frauds have been the top-grossing areas for whistle-blowers and these likewise constitute a substantial & ongoing area of FBI focus.

    YET, given the US Government's near-perfect track record for operating inefficiency & inability to maintain cost controls AND provide competent services people are willing to believe cost projections that say that, this time, the US Goverment is going to get this most-complex-program-undertaken-ever (revamped health care) to operate efficiently and in the black.

    That is, in this case, the US Government is going to do something that neither it nor any other government has ever done on a long term basis: operate something efficiently.

    And every single one of you, if you applied the same [il]logic to a prospective personal investment such as a mutual fund, would denounce the dismissal of near-perfect incompetent past performance as reckless & irresponsible.

    But you want to believe, so you believe.

    Considering the state of the states, in unprecedented debt; and foreign governments, also in unprecedented debt (as is the US, with current debt levels only exceeded during WW-II), to believe we must also have believed the prior rosy debt projections that have proven erroneous.

    For me, you can point to any study, government or otherwise, and its all meaningless. Still. Just like before.

    Because everything in the government is basically the same we have every reason to expect the forthcoming outcomes to be the same: more costly and less efficient.

    Lending merry-go-round: http://www.youtube.com/watch?v=5D0VhS8qXT0

    State by state debt: http://www.forbes.com/2010/01/20/states-debt-pensions-interactive-map.html

    NY Times: http://www.nytimes.com/2010/03/30/business/economy/30states.html?_r=1

    Reuters Jan 2011: http://www.reuters.com/article/idUSTRE70J5UA20110120?feedType=RSS QUOTE: “Recently, Wall Street analyst Meredith Whitney, who correctly predicted that the housing crisis would hobble undercapitalized banks, warned that 50 to 100 municipal bond issuers representing "hundreds of billions" of dollars of debt could default or restructure their finances.”

  3. Ken,

    You seem confused. You cite one judge's ruling that the PPACA is unconstitutional as "unassailable" while ignoring/unaware that somewhere along the line of half a dozen have ruled the opposite. You cite the Mandate's vulnerability to being struck down as evidence that the PPACA is fiscally unsound, when 99% of the funding for PPACA comes elsewhere. You claim that the government is incapable of running any program efficiently and cite medicare as an example, when in fact medicare runs at 3% overhead, compared to private insurers which run 15-25% overhead.

    Having said that, you did raise some interesting questions and I will address them in a forthcoming post.

  4. shadowfax:

    You're misrepresenting my comments and those of others:

    RE: "unassailable" -- My reading of the Virginia judges decision leads me to this conclusion--which I qualified as "my reading." Sure, while other judges & law experts have a different view, the Virginia legal decision is very detailed with multiple legal precedents cited.

    There is no, zero, zilch, nada, none precedent for the Federal government to intervene when a citizen does NOT engage in an economic activity -- especially such that the citizen is then compelled to engage in another form economic activity.

    None of the legal scholars have parsed the language & precedents to the depth of detail in the Virginia decision. Unsupported consensus, which is what you're referencing, is indistinguishable from wishful thinking.

  5. shadowfax -

    RE: You cite the Mandate's vulnerability to being struck down as evidence that the PPACA is fiscally unsound, when 99% of the funding for PPACA comes elsewhere.

    IF YOU READ THE STATEMENTS MADE BY the Obama Administration's prime endorses (e.g. Sebelius [spelling], etc.) they ALL have gone on record, multiple times, that if the Minimum Essentail Coverage Provision is struck down, the the health care law becomes fically unviable.

    Those aren't my conclusions indicating some 'confusion' -- those are FACTS asserted by the Obama Administration's most informed supporters of the law.

    You might want to argue otherwise, but then you're charting a course that is contrary to the Administration's own, oft-repeated, assertions. I merely repeated the gist of their statements.

    And those statements are referenced in the Virginia judge's determination, by the way.

  6. "There is no, zero, zilch, nada, none precedent for the Federal government to intervene when a citizen does NOT engage in an economic activity -- especially such that the citizen is then compelled to engage in another form economic activity."

    Posted only a few days ago:


    I don't think I need to add any commentary to what the article states. It seems to be completely against what you state here.

  7. RE: Tim's bogus article:

    Lets take a couple of quotes from Judge Hudson's Dec 13, 2010 decision regarding the Minimum Essential Coverage Position of the health care law:

    "...regulatory powers [of Congress] are triggered by some type of self-initiated action. Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market. In doing so, enactment of the Minimum Essential Coverage Provision exceeds teh Commerce Clause powers vesting in Congress under Article I." (page 24 of the decision)

    Footnote #13, page 36 of the decision: "If allowd to stand as a tax, the Minimum Essential Coverage Provision would be the only tax inU.S. history to be levied directly on individuals for their failure to affirmatively engated in activity mandated by the government not specifically delineated in the Constitution."

    The above conclusions hinge on an evaluation of multiple legal precedents, including those that did not extend to, or were limited before extending to, the extent to the compulsory penalty--partly labeled as a "tax" (and a tax, under the circumstances, found to be exerted beyond Congress powers to levy).

    SO, here's the applicable legal doctrines:

    - General Welfare Clause;
    - Necessary & Proper Clause;
    - Commerce Clause;
    - and, the limits on Congress to tax versus penalize an activity--or in this can an inactivity.

    UNLESS one examines ALL the above, and ALL the legal precedents as they are evaluated to be relevent and limited, one cannot appreciate the legal decision.

    So far, this blog (its author & those commenting) haven't even come close to conveying even a simplistic understanding of the elements underlying the decision much less the content of those elements.


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