More on the Medicare Doctor “Fix”

 On Sunday, I expressed concern about Congress enacting a permanent Medicare doctor “fix” without paying for it. Yesterday, the Washington Post chimed in with similar concerns.

I have now written a longer version of my argument, which has been published by e21, a new think thank based in New York and Washington. My bottom line remains the same:

Thus, even as Congress struggles to enact one roughly $900 billion health bill, it also wants to hustle through a second $245 billion one. Moreover, Congressional leaders want to pass the permanent doctor fix without paying for it. All $245 billion would thus flow straight into our deficits.

For a nation running trillion-dollar deficits, such profligacy should no longer be acceptable.

When I say that e21 is new, I mean really new. e21 (short for Economic Policies for the 21st Century) opened its doors (well, its web site) yesterday. It’s mission statement is:

 We aim to advance free enterprise, fiscal discipline, economic growth, and the rule of law.  Drawing on the expertise of practitioners, policymakers, and academics, we will encourage a spirited debate about the way forward for democratic capitalism.  And we will do so in a manner that is accessible and engaging, in a way that appeals to both experts and non-experts.

I hope to contribute additional pieces to e21 in the future.

3 thoughts on “More on the Medicare Doctor “Fix””

  1. “For a nation running trillion-dollar deficits, such profligacy should no longer be acceptable.”

    No longer.

    Heh.

    Remember when we were arguing about how to spend the surplus? Good times.

    So, um, when DID such profligacy become acceptable, remind me again?

  2. Donald,

    There is a conceptual point (framing) that I think is not made often enough with regard to supposed “offsets” for healthcare “reform”.

    Although I don’t think the fiction of SGR-related cuts are among the “offsets” in health “reform” legislation, it is another example of bookkeeping and scoring shenanigans in general (including exempting the “fix” from PayGo) that highlight that the whole concept of “offsets” to “pay for” a new entitlement is misleading, because even if those particular planned “offsets” (budgetary sacrifices: tax increases and/or cuts in projected spending) occur and occur on schedule (already a dubious assumption), the reality is that budgetary sacrifices of that magnitude — and much more — are inevitable because of our long-term fiscal imbalance. In other words, we should consider that level of tax increases or cuts in projected spending as a given, albeit perhaps later rather than as scheduled when an official “offset”, and thus we should consider the new entitlement spending to be the only truly new element introduced to our fiscal future. In yet other words, a budgetary sacrifice (tax increase or spending cut) that is going to happen anyway is no “offset” to incremental spending at all, and all the budgetary (and deficit) impact roughly equals the amount of incremental spending, period. And the ultimate impact will be that budgetary sacrifices will have to be that much more severe since the “offsets” were “used” to “offset” the incremental spending rather than to reduce our fiscal imbalance.

    Yes, I would absolutely prefer PayGo (when actually applied) to nothing, simply because, if actually implemented, it would mean that the inevitable increments of budgetary sacrifice (in whatever form) would occur sooner rather than later, but it’s folly for anyone to look at any new entitlement spending, even if one believes it will be fully “offset”, as “deficit-neutral” just because spending cuts and/or tax increases that are going to happen anyway are called “offsets” to this incremental spending.

    As for exempting the doc “fix” from PayGo, as I’ve commented elsewhere:
    When it comes to Congress’ concept of PayGo, “www” stands for “What We Wanna pay for as we go”.

    In an ideal world of rational and responsible decision-making, the decision on expansion of coverage would take place in the context of a long-term-oriented, comprehensive “Grand Compromise”, perhaps generated or stimulated by a commission such as the SAFE Commission, with tough safeguards such as a high hurdle for overriding key metrics of the deal. Yes, I realize what a bear that would be to work out, for the very reason why it would be the ultimate in rationality: all trade-offs would be considered, across and within the tax and spending sides.

    I also realize that for however long it took to work out such a comprehensive deal, most of the uninsured would remain uninsured, and I realize that some may consider (in the abstract) universal coverage (or much closer to it) a priority that must be worth whatever sacrifice is needed to offset it, but until we work out some solution to the broader problem of the long-term fiscal imbalance and the trade-offs we face, I’d rather any health insurance “reform” be more modest and less expensive, probably just subsidizing (and mandating) of catastrophic/high deductible coverage.

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