Politics & Policy

Media Duped by Phony Savings Estimate

That $1.2 trillion figure never appears in the CBO report.

For Democrats to persuade swing Blue Dogs to vote for one of the largest expansions of government in American history, it was crucial that the media focus on the Congressional Budget Office’s bottom line — and ignore how it got there. Blue Dogs need to be able to tell their conservative constituents that they had voted for a bill that reduces the deficit, and it would help if that bill’s cost came in at under $1 trillion. Fortunately for Speaker Pelosi, the media played along.

Take the case of Rep. Betsy Markey (D., Colo.), who defeated three-term Republican incumbent Marilyn Musgrave in 2008. Musgrave was one of the House’s most outspoken conservatives on social issues; despite her defeat, John McCain won her district by one percentage point. Her constituents are a fairly conservative bunch, and Markey voted no on the health-care bill when it passed the House last November. Yet she announced Thursday that she will switch from no to yes on the new “deem and pass” health-care bill.

In winning Markey’s vote, Pelosi got a helpful assist from the Denver Post, which covered the switch this way: “The announcement by the vulnerable first-term Democrat . . . was seen as a sign that swing lawmakers are being won over by a new Congressional Budget Office analysis showing the bill will slash the deficit over the next two decades by more than $1.2 trillion.” Farther down, the story notes that the CBO analysis “found the bill will cost $940 billion over the next decade, paid for through a combination of costs savings and new taxes.”

But the CBO did not say that the bill would slash the deficit by over $1.2 trillion. The CBO said the bill would reduce the deficit by $138 billion in the first decade. For the second decade, CBO wrote that “CBO does not generally provide cost estimates beyond the 10-year budget projection period,” but that its “rough outlook” put the number “in a broad range between one-quarter percent and one-half percent of gross domestic product (GDP).” CBO also noted that “the imprecision of that calculation reflects the even greater degree of uncertainty that attends to it, compared with CBO’s 10-year budget estimates.” Where did the Democrats get $1.2 trillion? They made it up — and practically every major news outlet in the country reported it as CBO gospel. GDP projections over ten-year windows are fraught with uncertainty, but projections beyond ten years are little better than blind guesses.

Even the $138 billion in deficit reduction and the $940 billion in total spending are misleading, the result of legislative legerdemain that starts taxing now but delays most of the spending. Obamacare will spend $17 billion over the first four years and $923 billion over the last six. But most of the revenue provisions — cuts to Medicare, penalties for not having insurance, and new taxes — kick in right away. As Rep. Paul Ryan (R., Wis.) noted at last month’s health-care summit, the CBO’s ten-year score includes ten years of revenue to pay for six years of spending, and even then the purported deficit reduction amounts to less than 10 percent of this year’s deficit ($1.4 trillion).

Another late-switching Blue Dog was Rep. Suzanne Kosmas (D., Fla.), who got the Orlando Sentinel to parrot the CBO’s numbers without revealing the tricks that yielded them. Kosmas, the Sentinel reported, “cited recent estimates by the Congressional Budget Office that calculated the healthcare package would create $940 billion in new government spending over 10 years but would reduce the federal deficit by $138 billion over the same period.”

The national press was no better. “House unveils $940 billion health accord,” announced the Washington Post, without explaining the cost shift. (The Post also reported the $1.2 trillion figure as a CBO estimate rather than a Democratic-party talking point.)  The New York Times offered hope with the headline, “Fine-tuning led to health bill’s $940 billion price tag.” But the actual piece disappointed: The biggest piece of fine tuning — the delayed implementation of the bill’s spending provisions — was left unexplained. Nor did either piece mention the other tricks Democrats resorted to in order to get the numbers they wanted from CBO, such as moving the “doc fix” (a restoration of $371 billion in Medicare payments to doctors) to a separate piece of legislation, so as not to have to account for its costs.

If Blue Dogs had been worried about facing skepticism from the media over the CBO’s numbers, we might not have seen so many switch their votes from no to yes. But such worries would have been misplaced. In this instance, the press was more than happy to repeat whatever numbers they were given. Whether this is an indictment of the media’s bias or its math skills is unclear.

– Stephen Spruiell is an NRO staff reporter.

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