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Jonathan Chait’s Hokum

Jonathan Chait continues his tireless attempt to defend the indefensible: ObamaCare. In his latest iteration, titled “Paul Ryan’s Hokum,” he criticizes Ryan and those who have praised him, including Matthew Continetti of the Weekly Standard, Investor’s Business Daily, and me.

According to Chait, “Ryan’s argument holds a lot of superficial appeal to people who are looking for reasons to oppose the health care plan but lack a firm grasp of the details. On close examination it falls apart.”

Actually, the arguments that are superficial and misleading, and which fall of their own weight, are Chait’s.

Mr. Chait argues two things. First,

Ryan claims that the [Obama] plan is phony because it ignores the fact that Congress is going to have to increase reimbursements for doctors who treat Medicare patients. The problem is, that reimbursement fix is going to happen anyway, regardless of whether reform occurs. So to count that cost as a hidden cost of health care reform is simply incorrect.

Second, Chait insists that “Ryan misleadingly portrayed the health care plan as hiding its costs, by phasing in benefits more slowly than costs.” Chait proceeds to quote himself from an earlier posting:

Ryan objected that the Senate health care bill does not really reduce the deficit, because it raises taxes and reduces spending over ten years, but pays out benefits over just six. If that was true, it would be a sharp rebuttal to Obama’s claim of reducing the deficit. And you could certainly design a bill like that. By spreading out the savings over a long time and delaying the benefits, you’d have a bill that technically saves money over a ten year window, but starts to lose money by year ten, and to bleed more red ink after that.

But it’s not true. The benefits do phase in slowly, but so do the savings. The CBO finds that the Senate bill reduces the deficit in year ten. It would reduce the deficit by more than a trillion dollars in the next ten years.

Let’s deal with these arguments in order. The so-called “doc fix” — which would restore reimbursements for doctors who treat Medicare patients — is most certainly a hidden cost. It was originally in the House bill but was stripped out in the summer and treated as a separate bill precisely because keeping it in the original health-care legislation would (rightly) balloon the total cost. By stripping the “doc fix” provision out, it allowed ObamaCare to be scored at a much lower figure. The more honest way to proceed would have been to add the cost of “doc fix” to ObamaCare, since the costs will be paid by the federal government. So Ryan is correct; what we’re dealing with is, in fact, a hidden cost. That was the whole purpose behind the Democrats’ strategy.

Second, no one with any knowledge of this situation — not even Jonathan Chait — believes that future Congresses will effect over half a trillion dollars of in cuts to Medicare. Yet the Democrats’ health-care bill relies for its claim of cutting the deficit beyond 2020 on — you guessed it — those huge Medicare cuts. Think of it as a giant “magic asterisk.” Baking fictional cuts into the cake is why the Congressional Budget Office says the bill will save more money in the long term. They are forced to score plans based on the premises they are given, including fictional ones. Ryan’s point is that the cuts won’t happen, so the savings won’t, either.

A final point: “doc fix” is itself a good example of why Medicare cuts on the scale we are talking about will never happen. “Doc fix” refers to a provision of the 1997 Balanced Budget Act. It called on cuts in reimbursements to physicians treating Medicare patients. The reality, though, is that those cuts have been rescinded year after year after year. The supposed cost savings haven’t materialized — and neither will massive cuts in Medicare. But defenders of ObamaCare need to pretend they will, in order to argue that their plan will reduce the deficit.

In sum: Ryan is right and Chait wrong. This may be because Chait lacks a firm grasp of the details. But there are other possibilities, too.

If this is the best Chait and his allies can do in defending Obama and criticizing Ryan, the GOP is in better shape than even I imagined.



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