JONATHAN COHN MAY 4, 2011
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It’s becoming pretty clear how Republicans plan to defend their budget. They’re going to lie about it.
I’m referring specifically to the way they and their supporters describe the budget’s treatment of Medicare and Medicaid – and how those proposals compare to the changes enacted via the Affordable Care Act. I wrote about these last week, when self-proclaimed (and almost universally discredited) health care expert Elizabeth McCaughey* made these arguments in the Wall Street Journal. But versions of them have been popping up ever since--most vividly on Sunday, when Florida Republican Senator Marco Rubio appeared on the “Meet the Press.”
Here’s what Rubio said:
The Ryan plan doesn't cut Medicare. Actually, it increases funding in it. And the only people in this town that have voted to cut Medicare are the people that supported Obamacare, that cut half a trillion dollars over the next 10 years out of Medicare and is using it to fund a healthcare experiment somewhere outside of Medicare. The only people in this town that have voted to cut Medicare spending are the people who voted in favor of Obamacare. That's a fact. And so the truth is the people.
Sigh. This is pretty much the opposite of the truth. Yes, the Affordable Care Act reduces spending on Medicare. But it does so gradually, by establishing a long-term goal of allowing the program to grow at the same rate of gross domestic product plus one additional percentage points--that is, GDP+1. And it’s a goal in the truest sense of the word. If the program’s starts growing at a faster pace, there are mechanisms to slow it down but not necessarily to get it all the way back to GDP+1.
The Republican budget, by contrast, would hold the cost growth of Medicare to the consumer price index, or CPI. CPI grows considerably slower than GDP, let alone GDP+1, so that's no small thing. The Republican budget would also enforce this target rigidly, by handing seniors vouchers whose value is set by a fixed, pre-determined formula. At the same time, the Republican budget would dramatically reduce the federal investment in Medicaid, on which so many of the elderly rely for supplemental coverage and/or long-term care, particularly nursing homes.
Overall, according to the Congressional Budget Office, the difference between the two plans goes from about 1 percentage point of GDP in 2022 to between 7 and 9 percentage points of GDP by 2050.
That’s quite a difference. And it's not the only one. The cuts in the Affordable Care Act hit the providers and producers of health care more than the consumers, at least directly, and include changes to the delivery of medical care that will, with any luck, make it possible for people to get better, more efficient health care even as it costs less. The Republican budget actually includes most of these same cuts for the first ten years, but then puts almost the entire onus for cost-cutting on individual beneficiaries via the vouchers.
Do Rubio and his colleagues care that they are completely distorting reality? Do they even realize it? Your guess is as good as mine. And quite possibly theirs.
*Speaking of McCaughey, The Hill's Julian Pecquet had the good sense to call Michael Chernew, one of the researchers McCaughey has been citing in her defense. Chernew gave a detailed explanation of the ways in which McCaughey was misinterpreting their research.
When asked by Pecquet to respond, McCaughey said "I suggest that you read his study rather than getting his take on it. He may be embarrassed that he wrote something that now doesn't support the president. ... I've read his study, I've read it carefully and … I believe that I'm on very firm ground."
Chernew, a Harvard economist, is one of the nation's most respected researchers on Medicare. I'll leave it to readers to decide who has more credibility when it comes to describing his own work.
23 comments
Thank you for frankly calling out this pack of lies for what it is. While definitely a sideshow to the main event of elected official lying, McCaughey is stunning in her presumption. Saying that a study is to be trusted, but its author isn't? There are times when someone can't be believed when speaking on their work (Romney on Romneycare, for instance), but it's pretty rare, and requires a hell of a high bar to be believable. What I'm really surprised by is that she's still on the sidelines; with this kind of unmitigated gall, why hasn't one of the Republican hopefuls hired her to handle anti-Obamacare PR for their campaign?
- janus
May 4, 2011 at 10:51am
For starters, I don't think Marco Rubio knows what GDP and CPI are, much less the difference between them.
- wildboy
May 4, 2011 at 11:14am
It is a tautology to use the words Republican and lie in the same headline.
- Nusholtz
May 4, 2011 at 11:29am
It's called truthiness. As for Rubio, don't underestimate him. His existence is attributable entirely to politics; indeed, he's had no career beyond politics. Sure, he has been groomed by the party. But he is shrewd. He ascended to Speaker of the House in Florida, a position reached solely by political favors and force of will. And be forewarned, he comes from the take no prisoners form of politics practiced in south Florida.
- rayward
May 4, 2011 at 12:07pm
I don't think there is a snowballs chance in hell of Ryan's plan passing, Ryan is fighting that his budget bill not be voted on in the Senate. Because it will never come to be Republicans are free to say "we will give more to seniors, we will save tax payers money, we will provide tax cuts, and we will have budget surpluses" and old people believe it. I think they are only interested in tax cuts and bankrupting America. The only thing they don't understand is that when the bill comes due there are a hell of a lot more poor and middle class than their are rich and being that the rich will be the only ones having money it will be taken out of their hides. Maybe they believe Jeebus will come before then.
- blackton
May 4, 2011 at 12:51pm
I have to second janus in thanking you for calling it a lie and calling Rubio on the carpet. People need to understand that Republicans have wholly transcended the hyperbole and wishy-washy-ness they've come to expect; they can fly the elephant flag in their hearts until the day they die, and hate democrats all they want, but they need to see the facts and accept that they're being misled through flagrant deception.
I think, on the positive side, people in many states who went gaga for Republicans in 2010 are now well aware of having been misled thus far, and I think there's a good chance of things righting themselves, or at least a drastic backlash in favor of Democrats, in 2012.
- GSpinks
May 4, 2011 at 1:11pm
First of all, it is not a lie for Rubio to say that Ryan's plan increases medicare spending. It may be a minimal increase, at cpi+, but this kind of truthiness is the politicians milieu, both left and right. And as JC states, it is technically true that medicare spending is "cut" through the ACA. Lies? JC: "Overall, according to the Congressional Budget Office, the difference between the two plans goes from about 1 percentage point of GDP in 2022 to between 7 and 9 percentage points of GDP by 2050." CBO clearly sees this difference as a budget buster. Their baseline has total revs/expenses reaching 26% and 30%, respectively, by 2050. This from a historical 19% rev / 21% expense. CBO "alternative" (what they think more realistic given the politics) has revs at 19% and expenses at 45% by 2050. 2050 is a long time, so might be written off, but these are their projections. Both the baseline and alternative scenarios are irresponsible. Ryan's method is the most effective for the FEDERAL budget, and seems a typical low bid negotiation starter, structurally easy to tweak for both higher revs and spending, but conceptually consistent.
- ds111
May 4, 2011 at 4:08pm
ACA sets a goal of keeping rising health care costs at or near GDP +1 by tweaking spending and finding ways to contain the rise of health care costs. Ryancare sets the voucher amounts in stone and prays the free market finds a way to provide affordable health care for the sick and elderly.
To put it another way, ACA establishes a long-term plan to drive down the costs of health care for everyone, as well as address issues particular to medicare and medicaid (like figuring out how to avoid unnecessary diagnostic procedures which can get very costly), whereas Ryan throws the sick and elderly under the free-market bus and prays they aren't hit by the tires.
And one more time...Establishing payments to medicare recipients that are below the projected growth rate of health care costs is cutting medicare and is what Ryan proposes. Bending the curve on health care costs to contain the amount being spent on Medicare is saving money, and is what the ACA proposes.
Rubio is lying. Any questions?
- GSpinks
May 4, 2011 at 5:49pm
I don't see how anyone can look at what Rubio said and not see the patent dishonesty in it. What is more is Ryan's structure is horrendous for health care for seniors. Even if you only wanted to spend Medicare on the CPI. What he does is create another level of middle men who will be taking a stream of revenue and getting a cut to maintain overhead and profits. It would be far better to simply say CPI and then use the huge power of the Federal Government to seriously set prices and ration in a technocratic sense. Ryan's plan does not get any bang for the buck, but I don't think he cares. He sees that stream of revenue going to John Galts in the insurance industry, who deserve it.
- MikeB.
May 4, 2011 at 6:15pm
MikeB, What you are suggesting would I suspect be perfectly acceptable to Ryan. I see his point as constraining the federal cost of Medicare, and Medicaid, for that matter, so as not to break the federal fisc. I doubt he gives a hoot about insurance companies - I don't. I'd even argue that the block grant would encourage states to set up their own internal systems, which would include state-level single payor, as Vermont is attempting to do. The need is to limit the federal component of health care spending to a % that won't break the bank, as CBO expects it will under ACA. GDP +1 will ratchet up the cost very quickly with compounding. GSpinks. Sure, and it's bipartisan. So what's new?
- ds111
May 4, 2011 at 8:23pm
MikeB, What you are suggesting would I suspect be perfectly acceptable to Ryan. I see his point as constraining the federal cost of Medicare, and Medicaid, for that matter, so as not to break the federal fisc. I doubt he gives a hoot about insurance companies - I don't. I'd even argue that the block grant would encourage states to set up their own internal systems, which would include state-level single payor, as Vermont is attempting to do. The need is to limit the federal component of health care spending to a % that won't break the bank, as CBO expects it will under ACA. GDP +1 will ratchet up the cost very quickly with compounding. GSpinks. Sure, and it's bipartisan. So what's new?
- ds111
May 4, 2011 at 8:33pm
No ds, Ryan's whole point is that the price of health care will go down due to the competition that the vouchers will create among insurers. I don't follow your logic at all. If Ryan really wants to simply restrain the cost of health care to the Federal government, what I underlined above would be the most logical. Why create a whole second level of middle men? We have good data that shows Medicare Advantage is more expensive for less treatment. Ryan simply refused to acknowledge that. His vote for the perscription drug benefit that was structured by the GOP that gave undue advantage to pharma companies is another case of this. Whatever government spending takes place must in Ryan's mind be funnelled through private concerns which take their cut. It is a very inefficent way to run government services. Furthermore, why do you assume Ryan is interested in negotiating in revenue? He doesn't put enough taxes in his plan to get to the revenue specifications he says he wants.
- MikeB.
May 4, 2011 at 8:36pm
MikeB, What you are suggesting would I suspect be perfectly acceptable to Ryan. I see his point as constraining the federal cost of Medicare, and Medicaid, for that matter, so as not to break the federal fisc. I doubt he gives a hoot about insurance companies - I don't. I'd even argue that the block grant would encourage states to set up their own internal systems, which would include state-level single payor, as Vermont is attempting to do. The need is to limit the federal component of health care spending to a % that won't break the bank, as CBO expects it will under ACA. GDP +1 will ratchet up the cost very quickly with compounding. GSpinks. Sure, and it's bipartisan. So what's new?
- ds111
May 4, 2011 at 8:37pm
I suspect my post got lost in your triple posting, but watch the video her ds and see from the horse's mouth that you are wrong about what is acceptable to Ryan: http://www.tnr.com/blog/jonathan-chait/87512/debunking-paul-ryans-latest-spin Any technocratic attempt to rein in health care spending is "government buerocrats" doing something evil. Giving a small voucher to someone and the health insurance compnay refusing is "the family making the decisions."
- MikeB.
May 4, 2011 at 8:58pm
Thank you, Mr. Chait, for finally going ahead and using the "L" word. If someone wants to quibble that the Repugs aren't really lying, but engaging in Harry Frankfurt-esque bullshitting, that could possibly be justified. Otherwise, call it what it is.
- cspencef
May 4, 2011 at 10:21pm
Sorry, Mr. Cohn. My apologies for getting the Jonathans confused. I'm sure that's never happened before.
- cspencef
May 4, 2011 at 10:22pm
Sorry about the triple post. I must have a bum machine. Had another post blown up earlier. Repubs have been disingenuous about "death panels", but so have Dems. Former wants to cut, or not expand, but not admit that it will mean less coverage; latter that pie in the sky can be promised without serious fiscal consequences. CBO says HC (pre and post ACA) will be far too expensive, and that expenses will dramatically outpace revenues. Medicare is the primary culprit. If you want "guaranteed" coverage, the benefits will have to be cut back drastically, or taxes raised - broadly - to levels never collected by the federal government in the past. Medicare has shown it can't say no. Private arguably worse, in that reimbursements are yet higher. I don't see how, short of a universal number - like % GDP - we'll get to solvency on this one. And I don't see how ACA has helped but to institutionalize past recklessness. You may be right on Ryan's preference for private insurance, but I believe his primary interest is in limiting FEDERAL exposure to health care cost growth. Basic public fixed vs GDP, with private options, would seem best, but the public portion can't be open-ended. Hope you needn't see this one three times!
- ds111
May 4, 2011 at 10:38pm
ds111: "I don't see how ACA has helped but to institutionalize past recklessness." The ACA has a Medicare payment board that will have authority (subject to Congressional overrides) to deny certain procedures it deems ineffective when the rate of Medicare expenditures exceeds certain levels. The goal is to cut down on ineffective treatments without diminishing the quality of care. The ACA also has other pilot programs to encourage greater efficiency. So there is the potential for substantial reforms and savings, even if they're somewhat speculative. The Ryan plan relies on the power of the market to create greater efficiencies. But this approach seems to fly in the face of evidence that markets do a poor job of holding down health care costs. Just about all of our peer nations get as good results as we do with their highly regulated systems while spending far less than we do, and they cover everyone. Eventually, all systems ration care. The question is whether one does it more efficiently based on results or less efficiently by wealth. The Ryan plan chooses the latter by throwing people into the private insurance system and vouchers that won't keep up with the cost of care, because the Ryan plan doesn't have any reforms dealing with the costs of care.
- dsimon
May 5, 2011 at 12:28pm
This is a good and useful column. But there is a larger sense in which the Republicans have been lying about the budget for decades. It doesn't (usually) boil down to a simple statement such as the kind that Politifact loves to parse; rather, it's an overall narrative that Republicans promote. It runs through Goldwater, Reagan, Gingrich, Palin, Ryan, FauxNews, talk radio, etc., and if formulated in a single sentence it would run like this: "The reason you pay the level of taxes you pay, and the reason we have deficits, is that the government takes your hard-earned money and gives it to lazy people who refuse to work." That is the fundamental, and fundamentalist, belief underlying the Republican Party. It turns up on blogs, on the radio, and in political speeches. It is the TeaPartyRepublicans answer for everything. It's bogus, of course. No informed and sober analysis of the federal budget supports such a reading. But in their world, welfare reform never happened. They just wave their arms and repeat anecdoted illustrating "government waste" (which I abhor), without stopping to calculate what percentage of the budget (or the deficit) could be attributed to "waste". They get upset when their fixed view of the budget is challenged, because then they would have to consider tough choices. We need to focus on, and consistently challenge, the Republicans "big lie" about the budget and deficits.
- bjones
May 5, 2011 at 3:27pm
Um, ds111, I think you missed an important tidbit last week... Ryan's plan is NOT bipartisan. He has consulted with ONE democrat, NONE of their recommendations are in the final version, and they DO NOT APPROVE of the final version. That is not bipartisan by ANY stretch of the imagination.
The point is, as I stated quite clearly in my second paragraph, and dsimon has said repeatedly in other words, Ryan throws the old and sick under the free-market bus and says a prayer for them, Obama has a plan for reducing health care costs both across the board and for medicare recipients. These two plans are not, as you've attempt to allege, equivalent. Ryan cuts spending, Obama saves money. Ryan may save more money, but Obama is going to preserve a minimal acceptable level of service. It's no contest, the Ryan plan is a farce.
- GSpinks
May 5, 2011 at 4:09pm
bjones, by "they" towards the end I presume you mean the electorate? Because I know plenty of libertarian/republican types who still think there is a "welfare queen" problem. The problem is, however, that their worldview gets reinforced every time they see someone beat the system. The welfare queen is long gone, and welfare reform was necessary and effective, but there are still people who manage to scam the system and the Republican/Libertarians seem to resent every last one of them to the point of being nearly self-destructive.
- GSpinks
May 5, 2011 at 4:13pm
Spinks - I was referring to the lying, it being bipartisan, that is. My gripe with ACA is that I see it as institutionalizing our expensive system. Maybe we want it that way. But I would generally prefer fixed federal funding (% GDP) and state level experimentation with how best to apply it, something akin to Wyden-Bennett. Maybe it was impossible with the politics, but isn't it always? CBOs baseline trajectory is not pretty, their alternative (more likely), even worse. Maybe CBO is wrong, and any long term forcast will be wrong, but it is difficult to ignore what they are saying; that we will not raise enough revenue to cover our projected HC costs, and that the costs will likely be much greater than anticipated. The way out of this is to pick a number that we can afford and go from there as to the best way to whack that amount up. I don't see that in ACA.
- ds111
May 5, 2011 at 5:25pm
ds111: "The way out of this is to pick a number that we can afford and go from there as to the best way to whack that amount up. I don't see that in ACA." True, that's not generally the ACA's approach, though as I wrote before it does have a system to cut costs when spending rises above a certain benchmark. And there are many people who think the CBO underestimated the savings produced by the ACA because it didn't score some of its provisions. But the Ryan plan doesn't control health care costs at all. It doesn't create any programs reforming the delivery of health care services. It just continues the present system and shifts the costs to individuals. Yes, it fixes the amount of government spending, but it means that there are a lot of seniors who won't have adequate coverage as costs in what you admit is "our expensive system" continue to increase. I'm not sure their kids will be very happy when they're stuck with a more expensive system that either requires them to either pick up their parents' uncovered health care costs or let them go without treatment.
- dsimon
May 5, 2011 at 7:33pm