The docfix issue has been misunderstood. Basically, what those of us who care about SGR are saying is that any new legislation takes place in a wider context. This is why using reconciliation to pass the Bush tax cuts was, in my view, so irresponsible. Budget gimmicks were used to badly distort the tax code and to disguise the actual intentions of the legislation. Similarly, using every plausible revenue-enhancing measure to make a new entitlement appear budget-neutral leaves fewer bullets in the chamber when we try to address SGR and other priorities, including some that congressional Democrats have exempted from PAYGO rules, like the Bush tax cut extensions backed by the president.
One reason the docfix has proved a lightning rod is that the Obama administration originally factored in a docfix to appeal to Medicare providers, as this commentary from my colleagues at Economics 21 observes. This is an example of what Ezra has usefully described as “retconning.”
A few quick observations on Ezra’s very helpful “retconning” argument:
The paradigmatic example of this is Sarah Palin’s allegation that the health-care bill included “death panels.” Palin clarified that she was referring Section 1233 of HR 3200, entitled “Advance Care Planning Consultation.” But that section had nothing to do with death panels. It had to do voluntary visits with a doctor to talk about end-of-life care, and Sen. Johnny Isakson, a conservative Republican, turned out to be an key advocate. Not to worry! Soon enough, Cato’s Michael Cannon explained that Palin was at least partly right, as the death panel “is right there in the legislation now before Congress, and it is called the Independent Medicare Advisory Council.”
But if the “death panels” charge were fundamentally about Sarah Palin, it wouldn’t have been so potent an issue. Many on the left claimed that much of the opposition to health reform was based on the “death panel” argument. The term, lest we forget, comes from a Sarah Palin Facebook post that was identified and highlighted by Talking Points Memo, and then “went viral.” It could be true that Sarah Palin referred to Section 1233 — it is also true that other conservatives who embraced the “death panel” characterization meant something far broader, whether the IMAC (now known as IPAB).
The meaning of certain terms changes in the natural course of a political argument as those who originate the term lose ownership of them. Consider that the ACA will leave roughly 20 million uninsured. This is not exactly “universal health insurance.” Yet the meaning of the term, as a shorthand, has evolved over time, and that’s entirely fair. The plain meaning of the term has come to mean, in political conversation, a coverage expansion effort that includes virtually all people who reside legally in the United States.
This relates also to the use of the term “bailout.”
“Yes, it’s a Bailout Bill,” writes AEI’s Phillip Swagel. The bill gives “the government discretion to bail out creditors,” which “makes the Dodd proposal a permanent bailout authority.” And again: “The Dodd proposal is a bailout bill, plain and simple.”
Before we get to the bill’s treatment of creditors, let’s look back at what McConnell was saying. The word “creditor” never appears in his speech. He talks about “Wall Street banks” and the $50 billion orderly liquidation fund, which would destroy any bank that tapped it. So whatever the validity of this claim, it is not the claim that originally supported the “bailout” charge.
Of course, Swagel never reference Senate Majority Leader Mitch McConnell’s remarks. Rather, he was making an argument based on a broadly held understanding of what the word “bailout” means to the wider public.
Ezra makes a solid argument that the Dodd bill is sufficiently punitive regardless, and I don’t think he’s obviously wrong. My sense is that Swagel was mainly making the case for including a legislative check to provide greater democratic accountability, and that this fairly straightforward, left-right argument has been argued because of the hyperpartisanship of our discourse.