Fox Promotes Ryan's Claim That Repealing Health Care Law Will Balance Budget

Jim Angle: Ryan Aims To Balance Budget, “And One Way To Get There, He Says, Is To Repeal Obamacare.” In his report on Ryan's budget on Happening Now, Fox News chief national correspondent Jim Angle said, “Paul Ryan presents a new plan Tuesday that aims to balance the budget in 2023, and one way to get there, he says, is to repeal Obamacare.” [Fox News, Happening Now, 3/11/13]

In Fact, CBO Found That Repealing Health Care Law Increases The Deficit

CBO: Repealing Health Care Law “Would Increase Federal Budget Deficits By $109 Billion Over The 2013-2022 Period.” In July 2012, the nonpartisan Congressional Budget Office and the Joint Committee on Taxation released a report finding that repealing the health care law would increase the deficit by $109 billion from 2013 to 2022:

On net, CBO and JCT estimate, repealing the [health care law] would increase federal budget deficits by $109 billion over the 2013-2022 period. Repealing the coverage provisions discussed in this report would save $1,171 billion over that period, but repealing the rest of the act would increase direct spending and reduce revenues by a total of $1,280 billion. [Congressional Budget Office, 7/24/12]

GAO Says Federal Deficit Will Decline If Health Care Law Is Fully Implemented

GAO Found A “Notable Improvement” In Budget Outlook If Health Care Law Is Enacted Fully. According to a January 2013 Government Accountability Office report, "[T]here was notable improvement in the longer-term outlook after the enactment of [the health care law] under GAO's Fall 2010 Baseline Extended simulation, which assumes both the expansion of health care coverage and the full implementation and effectiveness of the cost-containment provisions over the entire 75-year simulation period." [Government Accountability Office, January 2013]

The Hill: Deficit “Will Decline” If The Health Care Law Remains Fully Implemented. The Hill reported that the health care law “could increase or decrease the deficit over the next 75 years depending on whether its cost-saving provisions survive” and that it would increase the deficit by $6.2 trillion over 75 years assuming a scenario “in which the law's cost-containment measures end.” From The Hill:

In a new report, the nonpartisan Government Accountability Office (GAO) found that President Obama's signature law could increase or decrease the deficit over the next 75 years depending on whether its cost-saving provisions survive.

[...]

Assuming the law is enforced as-is, the U.S. deficit will decline 1.5 percent as a share of the economy over the next 75 years, according to the GAO. Auditors attributed 1.2 percent of this improvement to the Affordable Care Act.

Under a different set of assumptions, the law has the opposite effect over time, the GAO said -- the deficit will increase by 0.7 percent of gross domestic product (GDP) if the law's cost-containment measures are phased out.

The report attributed this potential increase in part to the law's most expensive features -- the Medicaid expansion and the provision of insurance subsidies.

The report was requested by Sen. Jeff Sessions (Ala.), the top Republican on the Senate Budget Committee. On Tuesday, he and his office jumped on the figures to say that the healthcare law will increase the deficit by $6.2 trillion over 75 years.

To arrive at this figure, Sessions's office assumed the second scenario, in which the law's cost-containment measures end, and added up 75 year's [sic] worth of deficits using GDP projections from the Centers for Medicare and Medicaid Services. [The Hill, 2/26/13]

Fox Also Pushed Claim Of “Double-Counting” Of Medicare Savings

Angle Advanced Claim That Health Care Reform Double Counted Medicare Savings. In his report, Angle said, “President Obama made cuts to Medicare to make Obamacare appear to be budget neutral. Non-partisan deficit hawks agree that the president's action left Medicare and the federal budget in even worse shape because you can't spend the same dollars twice.” Fox then played a clip of Maya MacGuineas, the president of the Committee for a Responsible Federal Budget, saying, “So it didn't actually bring down the costs of Medicare, which means there is still a lot more savings that has to be done. And we've already used those savings to offset the costs of some new federal health care spending.” [Fox News, Happening Now, 3/11/13]

Experts Dismiss “Double-Counting” Canard As “Old, Discredited Argument”

New York Magazine: Blahous' Study “Does Not Meet The Standards Of Your Typical University Economics Paper.” In a post titled, “The Bogus Obamacare-Deficit Study,” New York magazine columnist Jonathan Chait argued that Blahous' paper is “not even remotely legit” as it “was published by the Mercatus Center, a Koch-funded organization that produces some quality work as well as a fair amount of schlock that does not meet the standards of your typical university economics paper. This paper is an example of the latter.” Chait continued:

Blahous is the Republican trustee for Medicare, so that title offers the hook for a paper he writes that, by adopting some mighty odd hypothetical scenarios, says that Obamacare will boost the deficit. Blahous's government position gives the claim enough juice that it can be pitched as a “study” by a government official, as opposed to just another Republican-authored polemic, which would never receive such prominent or relatively credulous coverage. The next step is for conservatives to adopt Blahous's figure as the “true” figure -- but of course never to apply his strange assumptions to the GOP budget or to any other proposal -- and browbeat the media into citing that alongside the CBO figure, for “balance.” [New York, 4/10/12]

Democratic Medicare Trustee: Blahous' Charge “Remains As Misleading Today As It Did Earlier.” New York's Chait reported that Democratic Medicare Trustee Robert Reischauer said of his colleague's study:

Under accepted CBO and OMB scoring practices, legislated reductions in Medicare HI [hospital insurance] spending both reduce the deficit and strengthen the HI trust fund. That has been the case under both D and R Congresses and administrations. Chuck's “revelation” is not a new charge. Some argued this point when the ACA was enacted. It remains as misleading today as it did earlier. [New York, 4/10/12]

CBPP Economist: Blahous Study Presents “Old, Discredited Arguments About The Budgetary Effects Of Health Reform.” Center on Budget and Policy Priorities senior fellow Paul Van de Water wrote in a blog post that Blahous “guss[ied] up old, discredited arguments about the budgetary effects of health reform. But his paper adds nothing new to the debate.” Van de Water continued:

Blahous claims the Congressional Budget Office's cost estimate for the health reform law “double-counts” a considerable portion of the law's Medicare savings. By subtracting these savings, Blahous asserts that -- contrary to CBO -- health reform increases the deficit.

But there's no double-counting involved in recognizing that Medicare savings improve the status of both the federal budget and the Medicare trust funds. The outlooks for the budget and for the Medicare trust funds are two different things; some changes in law may affect one and not the other, but other changes affect both.

CBO estimates that health reform will modestly reduce the federal budget deficit. The Medicare actuary says that health reform will extend the solvency of the Hospital Insurance trust fund by eight years.

That's no different than when a baseball player hits a home run: it adds to his team's score and also improves his batting average. Neither situation involves double-counting.

CBO has accounted for deficit reduction in exactly the same way in previous Congresses, under both political parties. Until opponents of health reform latched onto the notion, no one accused CBO of faulty accounting. [Center on Budget and Policy Priorities, Off The Charts, 4/10/12]

Former CMS Director: Blahous Is “Simply Arbitrarily Abandoning A Standard That The Non-Partisan CBO Uses And Has Used For Years.” Former Centers for Medicare and Medicaid Services administrator Donald Berwick criticized Blahous' study, saying: “The economist who's coming up with this new standard, he's simply arbitrarily abandoning a standard that the non-partisan CBO uses and has used for years.” [Talking Points Memo, 4/11/12]

Economist Dean Baker: “There Is No Double-Counting In This Story.” In response to charges of “double-counting” in 2009, economist Dean Baker wrote in The American Prospect at the time:

The reality is that the government faces multiple budget constraints. Savings in the Medicare program allow it to meet two of them.

[...]

The targeted savings would reduce spending in the program. According to Medicare's chief actuary, these savings would give HI enough money to pay its bills through 2026 rather than the 2016 date when the program is now scheduled to face a shortfall.

Since Medicare is included in the overall budget, savings in the Medicare program also reduce the budget deficit. If there is a concern that we can only finance health care insofar as we are able to keep the budget deficit within certain limits, then the savings in Medicare will relax this constraint also.

There is no double-counting in this story. The government's budget is structured so this multiple constraints must be met. Savings in the Medicare program will allow for this. [The American Prospect, Beat The Press, 12/29/09]

Wash. Post's Glenn Kessler: “It's Simply A Case Of Looking At The Same Money At Different Ways.” In a Washington Post Fact Checker column on claims of “double-counting” of Medicare savings, Kessler wrote:

You may have $1,000 on deposit at a bank. Those are certainly your assets, but the bank looks at that money differently: money to make more loans. It's the same $1,000 but it is counted differently on your books and the bank's books.

A similar thing is going on here. The health care law reduced predicted expenditures for Medicare by nearly $500 billion, resulting in budgetary savings that the law uses to help pay for the health care changes. That's the money in the bank; it means the U.S. government will not need to set aside as many Treasury securities to fund Medicare.

Meanwhile, because Medicare spending has been reduced, the solvency of Medicare has been extended. That's the other side of the ledger -- the bank's view, so to speak. The accounting for Medicare solvency is a different matter than the current spending in the budget, though it has implications for the long-term budget health. [The Washington Post, 3/14/11]

“Double-Counting” Claim Is Based On Report From Conservative Koch-Funded Organization

Study Author Blahous: Conventional Health Care Analyses Involve “Double Counting” Of Proposed Medicare Savings. From The Washington Post:

President Obama's landmark health-care initiative, long touted as a means to control costs, will actually add more than $340 billion to the nation's budget woes over the next decade, according to a new study by a Republican member of the board that oversees Medicare financing.

The study is set to be released Tuesday by Charles Blahous, a conservative policy analyst whom Obama approved in 2010 as the GOP trustee for Medicare and Social Security.

[...]

“Does the health-care act worsen the deficit? The answer, I think, is clearly that it does,” Blahous, a senior research fellow at George Mason University's Mercatus Center, said in an interview. “If one asserts that this law extends the solvency of Medicare, then one is affirming that this law adds to the deficit. Because the expansion of the Medicare trust fund and the creation of the new subsidies together create more spending than existed under prior law.”

[...]

Blahous acknowledged that his analysis departs from budget conventions, which, he said, make sense for the most part. He said that in this case, however, those rules do not fully illuminate the financial impact of the health-care law, since they permit what conservative critics have dubbed a “double counting” of proposed Medicare savings. [The Washington Post, 4/9/12]

Koch Foundation: Mercatus Center Has Been A Charles Koch Foundation Grant Recipient “For More Than 25 Years.” From the Koch Family Foundations website:

For more than 25 years, the Mercatus Center at George Mason University, a Charles Koch Foundation grant recipient, has sought to bridge the gap that often exists between economic understanding and real-world decision-making. Mercatus applies scholarly research to problems facing policy makers. Bringing together a global network of scholars and experts, Mercatus provides policy makers with the economic tools to make sense of today's most pressing issues. [Koch Family Foundation, accessed 3/11/13, via Think Progress]