JONATHAN CHAIT MARCH 21, 2011
Glenn Kessler, who has been doing a bang-up job writing the fact-checker column for the Washington Post, has a piece today rapping the knuckles of some House Democrats for using some tenuous projections to tout the success of the Affordable Care Act. it's a useful corrective. But then he flays Nancy Pelosi for citing the long-term savings:
Pelosi claims more than $1 trillion in deficit reduction by using a 20-year figure that is particularly absurd.
As we wrote in January: “There are too many uncertainties to be precise, and the CBO itself merely offered a tentative guess of a "broad range of around one-half percent of GDP," with significant caveats. Democrats simply took that percentage, multiplied it against the predicted size of the GDP 20 years from now (itself a pretty fuzzy figure) and, presto, they had a number. But it's a fairly meaningless one.”
"Absurd"? Really? It's certainly true that the farther into the future you go, the less certain a cost estimate is. But long-term incentives do matter. The Affordable Care Act slowly reduces the value of the employer-sponsored tax deduction, which health care experts on the right and left have both blamed for encouraging the growth of health care spending. It's a fairly powerful debt reduction tool.
But if the Post's policy is really to deem any plan to reduce the deficit beyond ten years "absurd," what are we to make of Paul Ryan's Roadmap? According to the Post, Ryan is kindest, bravest, warmest, most wonderful budget wonk the paper has ever known in its life, and his Roadmap dares to tell brave, uncomfortable, politically-risky truths about the debt.
Yet Ryan's plan consists entirely of savings outside the ten-year window. Basically, Ryan imposes a massive freeze on domestic discretionary spending, which allows him to reap large budget savings without naming any programs he wants to cut. He blows those savings on a huge tax cut for the rich. And then, in the long run, he ratchets back Social Security and Medicare spending. Because he doesn't touch benefits for current retirees, or even anybody within a decade of retirement, his savings take decades to have any real effect.
So if the projected budget savings for the Affordable Care Act in 2020 are "absurd," what do we call the savings in 2068 in the Roadmap?