‘We have some strong disagreements on the numbers,” President Obama said after Rep. Paul Ryan (R., Wis.) concluded his devastating critique of the Democrats’ budget claims, “but I don’t want to get too bogged down.” In the ensuing debate, what became clear is that the Democrats just don’t have an answer to Ryan’s arguments. They ducked, dodged, and changed the subject repeatedly, because Ryan’s numbers themselves are unimpeachable.
The Democrats are touting an estimate from the Congressional Budget Office that their health-care bill would reduce the deficit by around $130 billion over the next ten years. What Ryan pointed out — and what no Democrat even attempted to counter — is that this is because the legislation front-loads tax hikes and Medicare cuts and defers costs, forcing the CBO to score ten years of offsets with only six years of spending. Looked at on a level playing field, the true ten-year cost of the bill is $2.3 trillion rather than $950 billion, Ryan said.
Then he brought up another gimmick: The bill is full of double-counting. “Savings” are counted as offsets for new health-care spending and at the same time set aside to pay for future entitlements. For instance, the Democrats claim $52 billion in offsets as a result of increasing Social Security payroll-tax revenues. But these dollars are already claimed for future Social Security beneficiaries. They can’t pay for both. The Democrats take another $72 billion in premiums intended to fund a new long-term-care program and count them as offsets for other spending. Ryan pointed out that Senate Budget Committee chairman Kent Conrad has called this “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of.”
Perhaps most important, Ryan confronted the Democrats with the issue of the “Doc Fix” — a separate bill that would have added $371 billion to the Democrats’ legislation if it hadn’t been stripped out. The Doc Fix would have prevented Medicare reimbursements to doctors from plummeting by 21 percent, a drop that Congress put into the bill to improve its CBO score but never planned to allow, most political observers agree.
Obama responded to Ryan by saying he didn’t want to get “bogged down” in a debate over the numbers; instead, he dared Republicans to defend Medicare Advantage, the program Democrats are planning to cut in order to generate some legitimate savings to pay for their new programs. But the merits of Medicare Advantage are irrelevant to Ryan’s critique, which, put simply, is:
1. Obama said he wouldn’t sign a bill that adds to the deficit;
2. The bill he supports clearly would; even though
3. Democrats have rigged the legislation to produce a deficit-neutral CBO score.
Rep. Xavier Becerra (D., Calif.) was the only Democrat who really attempted to address Ryan’s critique. First, he implied that Ryan was trying to question the integrity of the CBO. But Ryan’s critique calls into question the Democrats’ integrity, not the CBO’s, by pointing out that the CBO’s analysts must by law score what is set in front of them, and that what the Democrats have set in front of them is full of gimmicks designed to hide the cost of the bill.
Second, Becerra attempted to address the argument that by delaying certain spending provisions, the Democrats have hidden the bill’s true cost. He pointed out that the CBO has estimated that the Democrats’ bill would reduce the deficit by 0.5 percent of GDP in the second ten years, when all the spending would be included. But he failed to mention that the CBO’s estimate included the following caveat: “A detailed year-by-year projection for years beyond 2019 . . . would not be meaningful because the uncertainties involved are simply too great.”
Neither Obama nor Becerra — nor any other Democrat — addressed the issue of double-counting. And the only response to Ryan’s point about the Doc Fix was a rather oblique statement by Obama that “if what you’re saying is that we can’t make hard decisions on entitlements, then we’re in big trouble.” In fact, that’s exactly what conservatives have been saying: Not only can’t the political class make hard decisions on entitlements, the Democrats are trying to create a new entitlement and hide its cost. And if they succeed, we are in very big trouble.
— Stephen Spruiell is an NRO staff reporter.