Better Conservative Ideologues, Please

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JONATHAN CHAIT JUNE 11, 2010

Better Conservative Ideologues, Please

Veronique de Rugy of AEI, National Review, Reason, and pretty much every organ of the conservative movement, produces a chart that she thinks has debunked President Obama's claims about health care reform saving money:

Remember when President Obama told us how the health-care bill would cost $900 billion over ten years  and yet would somehow end up saving taxpayers money? Well, here is the chart that shows it’s not true.

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Using Congressional Budget Office projections, the chart compares the net change in deficits due to changes in insurance coverage (red), net changes in deficits due to other spending on Medicare, Medicaid, and other federal health programs (green), and net changes in deficits due to a $420 billion increase in federal taxes. Importantly, these long-term estimates suppose that spending cuts and tax increases are instituted as legislated.

The purple line shows the year-end change in the deficit due to the final health-care legislation. This change of $143 billion over ten years is paltry when taken in context — this nation has spent an average of $1.8 trillion dollars on health-care during each of the past ten years. To put it another way, the net deficit reduction over the next ten years will be less than 1 percent of this year’s GDP, and less than 4 percent of this year’s federal spending. This deficit reduction does nothing to reduce the substantial pressure of growing health-care costs on the federal budget.

What the hell is she talking about? The chart shows exactly what President Obama said. Indeed, the remarks from Obama she links to don't show him claiming that his bill would reduce total government expenditures. They show him saying saying it would reduce the deficit by "$100 billion over 10 [years]." The chart doesn't show that's not true. It shows that it is true.

Now, you could argue that CBO is wrong, and there are arguments that it's either too optimistic or too pessimistic. But what you can't say is, "here is the chart that shows it’s not true." Obama said the bill reduces the deficit by $100 billion over a decade, and the chart shows that it reduces the deficit by $143 billion over a decade.

de Rugy proceeds to argue that reducing the deficit by $143 billion over a decade isn't enough. That's a different question entirely. The Affordable Care Act has numerous provisions designed to push the medical system toward more efficient practices, but they would take effect over a long time and CBO does not credit them with savings because they're novel and the CBO is very conservative about scoring such savings. You can argue about whether the long-run savings will be enough. But what's beyond dispute is that this chart says exactly what President Obama says. One of the most serious problems this country faces is that one of its two major political parties is run by people who attained their positions on the basis of ideological fidelity and lack very, very basic analytic skills.

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posted in: jonathan chait, medicare, obama, veronique de rugy

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