Critical Condition

(Doc) Fixing the Books

The New Republic’s Jonathan Chait writes that “right-wing icon Paul Ryan” and I have both made a claim about Obamacare’s financing that is “categorically false,” “not a legitimate complaint,” and “100% phony” — and that Representative Ryan has been performing a “stunt” to fuel a “crusade.”

It seems strange that, in the era of Obama, anyone on the left would derisively characterize an opponent as an “icon.” We have yet to see totalitarian-style propaganda posters depicting Congressman Ryan in red and blue, staring off into space, above one-word slogans such as “SOLVENCY.” In truth, Congressman Ryan isn’t an icon, but a uniquely articulate champion of limited government, fiscal responsibility, and liberty, and thus is completely in step with the mounting concerns of the vast majority of American voters — conservatives, libertarians, and independents (and even some liberals) alike.

Ryan, the ranking Republican on the House Budget Committee, has forcefully argued that Obamacare’s financing relies on “gimmicks” and “double-counting.” He has said that probably the “most cynical gimmick” relates to the “doc fix.” This is the source of Chait’s attack, both on Ryan and on me.

Chait writes, “Of all the conservative complaints about health care reform, the one I find most baffling is the notion that the financing is phony because it fails to account for physician pay increases.” He continues, “I have yet to see anybody explain why the Democrats have some obligation to cover the cost of a government policy that would occur whether or not reform becomes law.”

As I argue in more detail in today’s Investors Business Daily, there has been great confusion on this point. Indeed, Obamacare shouldn’t be held responsible for providing a “doc fix” that’s going to have to be financed with or without Obamacare. But it also shouldn’t be credited with “savings” from a cut in doctors’ pay that (A) also has nothing to do with Obamacare and (B) is never going to happen — “savings” that it’s plainly getting credit for in the Congressional Budget Office’s scoring. Obamacare doesn’t get to have it both ways, which has been Representative Ryan’s point all along.

Chait adamantly denies that Obamacare is being credited for this “savings”: “The imaginary future savings of cutting physician reimbursement is not one of the cost offsets for health care reform. . . . The purported cut in physician pay is not part of those savings.”

The CBO begs to differ: “The provisions that would result in the largest budget savings include these: permanent reductions in the annual updates to Medicare’s payment rates for most services in the fee-for-service sector . . . yielding budgetary savings of $186 billion over 10 years.” That’s the physician pay cut.

As I write in IBD, “In other words, as the CBO makes plain, it’s scoring Obamacare from a starting point at which doctors’ pay hasn‘t yet been cut. It’s then crediting Obamacare for the cut, but not charging it for the fix.”

This is shameless house-of-cards financing, and the Obama administration’s messaging on it has been not only shameless but outright deceitful — and Representative Ryan has been doing a service in highlighting it. (I think Chait does not mean to deceive but is merely mistaken.) The truth is, without taking credit for hundreds of billions in “savings” from a cut in doctors’ pay that will never happen, Obamacare will raise deficits by 12-digits — by over $100,000,000,000 — from 2015 to 2019 alone, according to the CBO.

Of course, none of these deficits will ever occur if Obamacare never goes into effect. And Obamacare can’t really go into effect unless the American people send President Obama and the Democratic Congress back to Washington to complete their project of ignoring the people’s will. Don’t bet on it.

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