I have three small bones to pick with your analysis that should give us even more pause when viewing the Baucus proposal. First, don’t be drawn into the trap of accepting deficit neutrality over any time horizon as the primary fiscal policy consideration. The primary consideration should be increasing the size of government, not its deficit. On this score, the Baucus proposal is unacceptable.

Second, turning to the deficit effects we have to be careful not to consider as legitimate offsets any cuts to Medicare or Medicaid. Such cuts in general are welcome, because these programs are unsustainable. But until the reforms to Medicare/aid make the programs sustainable, we must not treat such cuts as offsets to other spending increases. Reducing unaffordable spending to increase spending is phony.

Third, we don’t know what the effect of the Baucus proposal would be in the long run. According to CBO’s preliminary analysis, the proposal reduces the deficit in the first 10 years and the 10th year. CBO suggests it reduces the deficit over the next 10 years, but doesn’t provide a year-by-year score. If you recall, the Lewin score of the House bill ramps up spending significantly in these latter years. It’s possible, even likely, that the deficit is significantly increased in the 20th year under the Baucus proposal, and every year thereafter, failing the President’s “in the future” test.