Ezra Klein: Ryan's critique scores some clean points and also deploys a couple of dirty tricks, but it doesn't damage the bill's claim to reduce deficits and doesn't even engage whether the bill controls costs.
Ryan says that "the true 10-year cost of this bill in 10 years" is $2.3 trillion. On this, Ryan is right, but misleading. Point for Ryan.
Ryan gets the $2.3 trillion by looking at what health-care reform will spend in 2019 and extrapolating that number out across the next 10 years ... The problem is that Ryan uses the classic “This Is A Big Number" technique to imply that the bill is financially irresponsible, when putting the number in context would show just the opposite.
According to the CBO, the bill cuts the deficit far faster in the second decade than in the first. That's because the revenues and savings grow much faster than the spending. The bill might cost $2.3 trillion, but it either raises or saves $2.95 trillion, for a net deficit impact of negative $650 billion. So although Ryan uses the price tag to imply that the bill's spending is somehow worse in the second decade than in the first decade, he omits the information that's actually relevant for his presentation on cost control and deficit reduction.
I imagine the congressman would respond ... saying that he doesn't buy the CBO's estimates ... or what's called "double-counting." If a new policy saves Social Security $50, and the government then doesn't have to borrow $50, that improves the deficit outlook by $50. But let's say that the government then takes that $50 from the trust fund and sends it over to an education program ... this is the same as a parent giving his son $50. The parent may be $50 poorer, but the family's finances are unchanged. That trust fund, however, has to eventually be paid back ... Otherwise, you're double-counting the cash, because you're assuming that it lowered potential borrowing for Social Security (count one) and for the education program (count two). According to Ryan, there's about $124 billion in double-counted money in the bill ... that's a fair critique. What isn't fair is to suggest that this is about the health-care bill. This is how the government does its accounting. Wherever you fall on double-counting, $124 billion isn't much money in the scheme of this thing.
Ryan gets his big money a few paragraphs later, when he makes a much more dishonest argument: He attaches the cost of fixing the Medicare Sustainable Growth Rate to the health-care reform bill. In 1997, Republicans passed the Medicare Sustainable Growth Rate into law. The provision created a simple equation meant to hold down Medicare costs and cut doctor payments when they rose. But the provision was passed when Medicare's costs were uncommonly low. Suddenly, SGR was forcing huge cuts rather than the modest adjustments that had been intended. So legislators began voting to delay implementation ... The first delay was passed in 2003, under Republicans. Then again in 2005, 2006, under Republicans. Then in 2007 and 2008, under Democrats ... this is a policy in a Republican bill that Republicans delayed three times and Democrats delayed twice. The SGR problem predates health-care reform and exists irrespective of health-care reform's fate. Attempts to lash the two together are nonsensical.
Ryan says that the chief actuary of Medicare says the administration is bending the cost curve up. That's not quite what he showed. Rather, health-care reform initially increases spending to cover the uninsured. That raises the level of spending, but not the curve. The curve actually flattens. If you extend the trend out to the second decade -- which is what Ryan does in other parts of his presentation, including for the $2.3 trillion figure the curve goes down. Concluding that "a decade after the reforms kick in, we'd be providing health care to at least 30 million more people and spending no more than we would if we did nothing," which is to say, the curve-bending elements of the plan would've saved enough money to cancel out the new coverage expenses.
To sum up, then, Ryan makes some good points about the true cost of the bill and realities of the federal budget. But he purposefully omits any mention of the bill's expected savings, disingenuously attaches the price tag of a broken Republican policy onto the health-care reform bill, and selectively stops extrapolating trends when they don't fit his points.
But don't listen to me. Robert Reischauer is the head of the Urban Institute. He's also one of the CBO's most revered former directors, in no small part because his relentlessly honest cost estimates helped doom Bill Clinton's bill in 1994. I reached him earlier today and asked whether he thought this bill made fiscal sense. "Were I in Congress and asked to vote on this," he replied, "I'd vote in favor." The bill isn't perfect, he continued, "but it at least has the prospect for creating a platform over which more significant and far-reaching cost containment can be enacted." The same cannot be said for the status quo.
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