The GOP’s ‘new math’ on ‘Obamacare’

Posted by AzBlueMeanie:

I happened to catch this AP report in the Arizona Republic Study: Obama's health-care law would raise deficit

[A] leading conservative economist estimates in a study to be released Tuesday that the overhaul will add at least $340 billion to the deficit, not reduce it.

Charles Blahous, who serves as public trustee overseeing Medicare and Social Security finances, also suggested that federal accounting practices have obscured the true fiscal impact of the controversial legislation, the fate of which is now in the hands of the Supreme Court.

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Blahous, in his 52-page analysis released by George Mason University's Mercatus Center, said, "Taken as a whole, the enactment of the (health-care law) has substantially worsened a dire federal fiscal outlook.

The AP disclosed that "Blahous served in the George W. Bush White House from 2001-2009, rising to deputy director of the National Economic Council. He currently is a senior research fellow at the Mercatus Center."

The Mercatus Center just happens to be one of the billionaire bastard Koch brother's think tanks. Koch-Funded GOP Economist Uses New Math To Find That Health Reform Increases The Deficit | ThinkProgress:

George W. Bush’s Social Security privatization guru Charles Blahous — who now works for the Koch-funded Mercatus Center — is out with a new report alleging that the Affordable Care Act adds $340 billion to the deficit. The new math relies on the old “double counting” meme — an argument advanced by Republicans in Congress in the final days of the health care reform debate alleging that the Congressional Budget Office (CBO) appropriated the same revenue for extending the solvency of the Medicare trust fund as it did for paying out benefits.

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What Blahous calls “double counting” is actually the “unified budget process,” an accounting method that considers the spending and revenues of the entire federal budget over a 10 year period and the way Congress keeps track of its dollars. It’s the same math that the Congressional Budget Office (CBO) relied on to conclude in 2010 that the law “would produce a net reduction in federal deficits of $143 billion over the 2010–2019 period as result of changes in direct spending and revenues.” Earlier this week, the CBO updated its estimate, reporting that the Affordable Care Act is expected to cost $50 billion less than they anticipated and Medicare actuaries reported that as a result of the savings in the law, the life of Medicare’s Hospital Insurance (HI) Fund is extended to 2024, instead of in 2016.

The federal government has in fact used this kind of system from time immemorial — including in the GOP’s latest budget proposed by Rep. Paul Ryan (R-WI) — and Republicans have long argued that they would use Medicare savings for deficit reduction AND strengthening the program.

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Conservatives are now asking the federal government to embrace a different standard of trust fund accounting rules, which look at changes over a much longer period of time. But this argument is fundamentally disingenuous and it changes the rules in the middle of the game. Every member of Congress knows that the CBO’s scores are “God” and that members of both parties rely on the budget office’s numbers and models to move legislation.

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Republicans are demanding that the law meet the standards of new math that they themselves don’t abide by. It’s not surprising to see a partisan economist put forward these new numbers who, like his greatest supporter Mitch McConnell, is more interested in defeating Obama than working with him to solve the nation’s health care problems.

Ezra Klein is equally dismissive of this "new math" and says conservatives pushing this study do not even believe it. The bizarre baseline games you need to play to make Obamacare increase the deficit:

The study is written by Charles Blahous. Part of the interest in it comes because Blahous is, technically, an Obama appointee. But the position he’s appointed to — the trusteeship for Medicare and Social Security — is unusual. By tradition, it’s evenly split between Republicans and Democrats. And Blahous is in one of the Republican seats. Previously, he was an economic policy adviser in George W. Bush’s White House, and before that, policy director to Sen. Judd Gregg. None of that undermines the quality of his work or the force of his conclusions. But it’s not the case that someone from Obama’s “team” has turned on the Affordable Care Act.

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The implication of Blahous’s baseline is that we don’t have a deficit problem. Anywhere. Medicare won’t contribute to deficits because it can’t spend beyond the trust fund. Social Security, similarly, can’t contribute to deficits because it can’t spend beyond its trust fund. As Jonathan Chait puts it:

If Blahous’s assumptions are right, then we don’t really have an entitlement problem at all. Medicare can’t exceed its trust fund, so problem solved! You know how Paul Ryan has been stalking the halls of Congress with disaster-movie music in the backdrop, warning that we’re about to become Greece? He should relax! (Also, Blahous’s methodology would show that Ryan’s budget looks way worse, too.)

Anyway, that’s the trick. Assume the Medicare savings don’t count because Medicare would have reduced its payments anyway, and boom — Obamacare now increases the deficit.

In a sense, there’s nothing new here: This is the “double counting” argument we heard during health-care reform. But the Congressional Budget Office, which doesn’t muck around with trust funds, doesn’t double count. Their calculation that the law saves and taxes more than it spends remains the same. Blahous hasn’t discovered some heretofore unknown fact about the Affordable Care Act. He’s just showing that if you change the budgetary rules to specifically disadvantage Obamacare, you can make the law look worse.

But to get that answer, you have to abandon the idea that the right way to score a bill is to see if more money is coming in then going out. That’s what Blahous has done here. But no one is interested in actually moving to that kind of a baseline.

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That baseline would mean the “Obama deficits” are quite small. That baseline would mean Paul Ryan’s budget is “double counting.”

Lots of the Affordable Care Act’s skeptics are trumpeting the Blahous study. But none of them actually use that baseline. Nor do they plan to switch over to it. And that means they don’t really believe the study.

The White house dismissed the study in a statement late Monday. Presidential assistant Jeanne Lambrew called the study "new math (that) fits the old pattern of mischaracterizations" about the health-care law.