Wednesday, January 12, 2011

Defending the "doc fix" omission?

Jonathan Bernstein is one of a number of liberal pundits writing in defense of the CBO scoring of the PPACA. Bernstein, in fact called out Speaker of the House John Boehner for telling a "whopper" when he citing the omission of the "doc fix" when referring to the scoring of the bill.

Here's how Bernstein describes it over at The New Republic:
The doc fix, as many have explained, wasn’t counted in the CBO score of the health care bill because it has essentially nothing to do with the health care bill.
Good grief.  The 'doc fix' has everything to do with the health care bill because the bill supposedly brings down health care costs.  But the reduction in health care costs is an illusion precisely because the bill (and the CBO as a result) pretends that Congress will not continue to apply the "doc fix."  Boehner's point, which should be obvious and irresistible, is that a cost scoring that ignores reality holds little value.

Bernstein then makes the absurd charge that the "doc fix" should be counted as a cost of a repeal of the PPACA, apparently reasoning that if the CBO supposedly should include it in the scoring of health care reform then it should be included for the repeal of the same bill.

Bernstein misses the point.

The scoring of either the bill or its repeal is made substantially moot by ignoring things that are likely to happen regardless of either bill, such as the "doc fix."  The supposed increase to the deficit found in the CBO's repeal scoring is essentially the reciprocal figure for the projected deficit reduction of the PPACA.  Call that figure A, and the cost of the "doc fix" D.   Bernstein would turn the math on its head by adding the cost of the "doc fix" to A as a cost of repeal (repeal supposedly costs A+D).  But note that his strategy will not work if both projections count the "doc fix."  The figure (A-D) (reform) does not counterbalance -(A+D) (repeal) and the reciprocal relationship of the two CBO scores cannot hold.

The figure D is a reality because the "doc fix" is necessary to keep Medicare providers from abandoning Medicare.  It's a figure that will affect health care costs in reality.  The CBO did project the savings for the PPACA in part by assuming that the "doc fix" would not occur under the bill.  That means that figure A is a sham.  And figure A is a sham regardless of whether it appears as a deficit reduction under the PPACA or as a deficit increase under its repeal.

To be sure, there is a feature of the PPACA that would have an effect on government revenue.  The bill levies tax increases.  A strong economy might bear tax increases and a deficit decrease may result.  With a weaker economy, the tax increase may further hurt commerce and increase the deficit over the long term.

The big lie from Bernstein comes from his truth that the "doc fix" was not part of the reform bill.  Because the "doc fix" could easily have been made part of the bill except for the fact that the bill could never have been made to appear relatively deficit neutral and passed via reconciliation while acknowledging the hard reality of the "doc fix."

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