An Outbreak of Scruples on Health Reform Budgeting?

Monday, October 19, 2009

Michael D. Tanner, senior fellowmtanner@cato.org:

The Democratic leadership in Congress may finally have pushed the budgetary dishonesty around health care reform too far for even its own members to swallow.

Principled Democrats like Kent Conrad of North Dakota are refusing to support the leadership's proposal to deficit-finance a nearly $250 billion fix to Medicare reimbursements. Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi want to keep the change to Medicare's "sustainable growth formula" separate from the main health care reform bill in order to pretend that the health care bill is deficit-neutral. But the reaction from more honest, fiscally responsible Democrats only underscores the difficulties that the leadership faces in trying to put together a health care bill that satisfies both liberals' demands for expanded coverage and moderates' demand for fiscal sanity.

Michael F. Cannon, director of health policy studiesmcannon@cato.org:

The Senate leadership has long been a lost cause in terms of budgetary discipline. But at least House Democrats were, until recently, honest enough to include the cost of the nearly $250 billion bump in Medicare physician payments in their health care reform legislation.

Unfortunately, House Democrats have since decided that dishonesty is the better strategy. They, like their Senate counterparts, now plan to strip that additional Medicare spending out of health "reform" and enact it separately. (Democrats are already trying to exempt that spending from pay-as-you-go rules, making it easier for them to expand our record federal deficits.) Why enact it separately? Because excising that spending from the "reform" legislation reduces the cost of health "reform"! That and the other fibs in the Senate's reform bill hide more than half of the measure's true cost—which any serious reading would put at closer to $2 trillion.

The only good news may be this: if the dishonest budget gimmick succeeds, then Congress will have "fixed" Medicare's physician payments. Absent that "must pass" legislation, the Democrats health care takeover would lose momentum, and would have to stand on its own merit. That would be good for the Republic, though not for the legislation.

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