Monday, February 14, 2011


Since the Obama administration released its budget that has no chance whatsoever of being passed in congress and is therefore just an exercise in messaging, everyone is talking deficits and debt today. Megan McArdle predictably thinks it's time to panic. Andrew Sullivan seems already to have panicked. Republicans are predictably trashing the budget proposal. I guess it doesn't contain enough cuts to public health programs for the poor.

In the meantime, Jonathan Bernstein wrote a fantastic post on the vague and misleading language used by deficit hawks:

Long-term projections of the federal budget are very clear. It's all about health care.
Medical costs. Medical costs are going up much faster than inflation. Therefore, Medicare and Medicaid, and any other government programs affected by medical costs, will, long term, get far more expensive than any realistic level of taxation can handle.
So when budget hawks talk about "entitlements," as Andrew Sullivan did today, they're using language that in my view obscures, rather than illuminates, the situation.

The very next thing I read was a piece of reporting by TPM's Brian Beutler (emphasis mine):

"Yes, we will include entitlement reform provisions in our budget," Cantor told reporters at his weekly press availability. "Again, unlike the President, unlike Harry Reid who doesn't even admit there needs to be any reform of Social Security."

See that? Cantor is willing to admit that "entitlements" are the problem. But when he gets specific, he starts talking about Social Security, which is a minor, solvable problem, and not health care costs, which are the true driver of long-term deficits:

I guess since his party just won a huge election landslide while campaigning against a Democratic effort to reign in health care spending, he can't go after Medicare. But health care costs are overwhelmingly the cause of long-term structural deficits. Anyone claiming to be a deficit hawk while only looking hard at that 12% of the budget that is "non-security discretionary spending" is a liar and a charlatan. Focusing on Social Security is only marginally better, but it is still a dodge. If you're not looking at health care costs, you're not being serious about deficits. It is that simple.


  1. against a Democratic effort to reign in health care spending
    Some of us remain skeptical that you could expand an entitlement program and cut costs. Medicare's Chief Actuary Richard Foster has said that claims that the ACA would hold down health care costs are "false more than true."

  2. Regardless of the "bend the cost curve" efforts, there were $500bn in concrete cuts to Medicare, particularly Medicare Advantage plans. You can say they won't stick because future congresses will reverse them, I hear that a lot. but that can be said about any legislation. If that's the argument, give up now, we're fucked.

    And no shit, health care costs will still go up. You can abolish Medicare and Medicaid entirely and that will still be a major problem. We won't have bad deficits, but people will still see their wages get eaten up by health care costs. In that case, though, there will also be ~100m people without insurance, hooray! The ACA included the first whacks at controlling costs. There will need to be more. But cutting funding for family planning for poor folks and killing the corporation for public broadcasting isn't going to reign in deficits. The favored "entitlement reform" of most "serious people", raising the retirement age is highly regressive and STILL WON'T SOLVE THE PROBLEM.

    If the GOP has a serious plan out there to get costs under control, let's hear it. But I haven't heard it.

    There's someone making an effort here, but it is not the Republican Party. Say what you will about the results, but one party isn't even at the table.

  3. I don't think you're going to make any headway toward controlling costs unless you get people to accept that the government will not/cannot pay for everything. Some treatments are going to be too expensive, especially the end of life stuff. If you are super rich and can afford to pay $100,000/month to keep yourself going for another 6 months, hurray for you. With everyone else, the government has to say, "Sorry, we can't pay for that. We *can* offer palliative care so that you aren't suffering."

    As for the Medicare payment cuts, it seems fairly unrealistic to me to claim that you're going to improve poor people's health care by making it so that hospitals are less likely to take on more Medicare patients. . . .

  4. Most of the cuts in question were for Medicare Advantage plans, which helped the well-off far more than the poor.

    And as we've discussed before, "death panels" are a good idea, but politically untouchable by either party.