Time To Bring Out The Budget Asterisk
The Washington Post, March 17, 2010
Ordinarily I'm as finicky as the next guy about truth-in-budgeting, but there's a time and a place for statesmanlike fudging, and we've reached that moment on health care.
Washington is waiting with bated breath for the Congressional Budget Office's verdict on the president's health-care bill. Thanks mostly to a regrettable eleventh-hour deal to delay the phase-in of a new tax on high-cost insurance plans, the final version of Obamacare is not yet delivering the deficit reduction the White House wants to claim. Based on the Senate bill, President Obama has been saying health reform will trim $100 billion from projected deficits in its first 10 years and a cool trillion in the decade after. It's an essential part of the president's pitch—the definitive rebuttal to the Overreaching Socialist Takeover claims of his foes. How bankrupting or pinko can the thing be if it reduces the deficit by these big-sounding sums? Now, preliminary CBO numbers (shared privately with Capitol Hill Democrats as part of the routine back-and-forth that accompanies such estimates) show deficits each year in reform's second decade ranging from tens of billions lower (good) to tens of billions higher (uh-oh).
This means that if the White House is to preserve its "fiscally prudent" talking points, it may have to find another few hundred billion in "scorable savings" overnight. But here's the rub. The political molecule that is health reform has been so carefully assembled and the hour is so late that any attempt to revisit deals that interest groups view as settled risks scuttling the entire package. Maybe a last few shekels can be shaken from the pockets of hospitals, health plans, doctors, drug companies and device makers. But that will almost certainly still leave a hefty gap if Obama is to offer Democrats needed fiscal cover for their coming votes.
Enter the "magic asterisk." This symbol of budget villainy dates from the Reagan era, when White House budget director and uber-deficit monster David Stockman sought to mask his reckless debts behind a footnote pledging large "future savings to be identified." Today, the Democrats' version would involve a promise to cut spending by a certain amount if savings don't otherwise materialize between 2020 and 2030. If such an automatic spending cut is written into law (in the Senate reconciliation "sidecar," for those keeping track of the arcane mechanics), the CBO has to score it. Presto: The talking points are preserved, health reform passes, and America continues its endless if unsteady march toward a more perfect union. Republicans will slam the maneuver as the crowning deception in Obama's nefarious plot to destroy the American way, but, as the president says, that's what elections are for.
Whatever your view of this scenario, the question remains: Will Obama's magic asterisk be wrong? Donning my robe as a justice in the Court of Fiscal Morality, I find that this fudge is fine.
Even if health reform had turned out to be bipartisan, I've thought for months that a magic asterisk was inevitable, because the need to increase subsidies for low-income Americans to make any coverage mandate affordable would exceed politicians' readiness to identify specific spending cuts and tax increases to pay for them. (If I had my druthers, in fact, I'd make the subsidies, and thus the asterisk, even bigger). Purists may scoff, but to my mind, a pledge to cut spending when my 13-year-old daughter is between 23 and 33 years old that helps assure ample enough subsidies to make health reform work now is a defensible tradeoff. Tying the "asterisk" cuts to recommendations from the expert Medicare Commission, which the bill sets up to find savings with little congressional meddling, would be best.
In a perfect world, we wouldn't have to resort to such shenanigans, but you may have noticed that Washington isn't a perfect world. So think of Obama's asterisk as a one-off. Something a president can do only when he's already ponied up most of the cost of his bill with Medicare cuts and tax increases that the other party has demagogued shamelessly. Something only permissible after the opposition party has spent a decade going to war, cutting taxes for the best-off and adding prescription drugs to Medicare without paying for a penny of it. Seen in that light, Obama's magic asterisk won't be some Machiavellian budget ploy, but a one-time fix with no precedential value whatsoever. Kind of like the Supreme Court's decision in Bush v. Gore. Justice Scalia knows exactly what I mean.
The Washington Post, March 17, 2010
Ordinarily I'm as finicky as the next guy about truth-in-budgeting, but there's a time and a place for statesmanlike fudging, and we've reached that moment on health care.
Washington is waiting with bated breath for the Congressional Budget Office's verdict on the president's health-care bill. Thanks mostly to a regrettable eleventh-hour deal to delay the phase-in of a new tax on high-cost insurance plans, the final version of Obamacare is not yet delivering the deficit reduction the White House wants to claim. Based on the Senate bill, President Obama has been saying health reform will trim $100 billion from projected deficits in its first 10 years and a cool trillion in the decade after. It's an essential part of the president's pitch—the definitive rebuttal to the Overreaching Socialist Takeover claims of his foes. How bankrupting or pinko can the thing be if it reduces the deficit by these big-sounding sums? Now, preliminary CBO numbers (shared privately with Capitol Hill Democrats as part of the routine back-and-forth that accompanies such estimates) show deficits each year in reform's second decade ranging from tens of billions lower (good) to tens of billions higher (uh-oh).
This means that if the White House is to preserve its "fiscally prudent" talking points, it may have to find another few hundred billion in "scorable savings" overnight. But here's the rub. The political molecule that is health reform has been so carefully assembled and the hour is so late that any attempt to revisit deals that interest groups view as settled risks scuttling the entire package. Maybe a last few shekels can be shaken from the pockets of hospitals, health plans, doctors, drug companies and device makers. But that will almost certainly still leave a hefty gap if Obama is to offer Democrats needed fiscal cover for their coming votes.
Enter the "magic asterisk." This symbol of budget villainy dates from the Reagan era, when White House budget director and uber-deficit monster David Stockman sought to mask his reckless debts behind a footnote pledging large "future savings to be identified." Today, the Democrats' version would involve a promise to cut spending by a certain amount if savings don't otherwise materialize between 2020 and 2030. If such an automatic spending cut is written into law (in the Senate reconciliation "sidecar," for those keeping track of the arcane mechanics), the CBO has to score it. Presto: The talking points are preserved, health reform passes, and America continues its endless if unsteady march toward a more perfect union. Republicans will slam the maneuver as the crowning deception in Obama's nefarious plot to destroy the American way, but, as the president says, that's what elections are for.
Whatever your view of this scenario, the question remains: Will Obama's magic asterisk be wrong? Donning my robe as a justice in the Court of Fiscal Morality, I find that this fudge is fine.
Even if health reform had turned out to be bipartisan, I've thought for months that a magic asterisk was inevitable, because the need to increase subsidies for low-income Americans to make any coverage mandate affordable would exceed politicians' readiness to identify specific spending cuts and tax increases to pay for them. (If I had my druthers, in fact, I'd make the subsidies, and thus the asterisk, even bigger). Purists may scoff, but to my mind, a pledge to cut spending when my 13-year-old daughter is between 23 and 33 years old that helps assure ample enough subsidies to make health reform work now is a defensible tradeoff. Tying the "asterisk" cuts to recommendations from the expert Medicare Commission, which the bill sets up to find savings with little congressional meddling, would be best.
In a perfect world, we wouldn't have to resort to such shenanigans, but you may have noticed that Washington isn't a perfect world. So think of Obama's asterisk as a one-off. Something a president can do only when he's already ponied up most of the cost of his bill with Medicare cuts and tax increases that the other party has demagogued shamelessly. Something only permissible after the opposition party has spent a decade going to war, cutting taxes for the best-off and adding prescription drugs to Medicare without paying for a penny of it. Seen in that light, Obama's magic asterisk won't be some Machiavellian budget ploy, but a one-time fix with no precedential value whatsoever. Kind of like the Supreme Court's decision in Bush v. Gore. Justice Scalia knows exactly what I mean.