The Bogus Obamacare-Deficit Study
By Jonathan Chait
Little did Obama know there is no Medicare crisis.
The Washington Post has an apparent blockbuster story today. It reports that a new study finds that Obamacare will increase the budget deficit, not decrease it, as the Congressional Budget Office has found:
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.
That sounds pretty legit, right?
Actually, no. It’s not even remotely legit.
The first thing to understand here is that this is not a study by a government agency. It’s a paper by Charles Blahous. Who is Charles Blahous? He’s a Republican policy guy. By tradition, the president appoints a member of each party to serve as a trustee of Medicare and Social Security. Blahous, who served under George W. Bush and was active in his attempt to introduce private accounts into Social Security, is the Republican trustee. But the other trustee, Robert Reischauer, has zero to do with his paper. 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.
The Affordable Care Act spends a bunch of money to cover people who are too poor or sick to afford their own health care. To pay for that, it raises some taxes and cuts a bunch of spending from Medicare. The new revenue and the spending cuts outweigh the cost of the new spending, which is why the Congressional Budget Office projected it to reduce the deficit. Projections always have a margin for error attached, but the CBO’s two year update actually bumped up the savings projections a bit.
continues…
http://nymag.com/daily/intel/2012/04/bogus-obamacare-deficit-study.html
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