The fight over pulling the plug on Obamacare presents two lessons. First, government projections – like those of the CBO – are proof that hallucinations don’t have to be artificially induced. Give an agency a crystal ball and they will proclaim the future. Hilariously, the pseudo-visions of agencies like the CBO will be treated as fact in the debate over appropriating trillions of dollars. The tactic has the life of a vampire. Partisans, after sundown, will open up the crypt and let out the rhetorical monster of treating illusory numbers as reality.
Secondly, and more importantly, one part of the House Republicans’ AHCA blueprint is the block-granting and cap on the Medicaid entitlement. Have we unknowingly hit upon the antidote to our runaway spending addiction? The federal budget – surprise, surprise – is being inexorably swamped by cruise-control (entitlement/mandatory) spending. An obvious response might be to tie program spending to a set amount as every working adult does with a paycheck.
The problem with loosely connecting program funding to a kind of social inertia is the near impossibility of accurately predicting year-to-year money levels. These programs are called “entitlements”, and the spending is “mandatory”, with total amounts determined by beneficiaries and not by a predetermined, legislated figure. The formula is simple: legally qualify and a person gets benefits; no qualifier is turned away for lack of money. Spending is on cruise-control … and people in the out-years feign shock as to how wrong the projections were.
The projections were always guesses based on faulty assumptions. The near impossibility of predicting the effects of incentives and disincentives that are unleashed by the programs is a chronic problem. And, of course, “crap happens” to throw the best prognostications awry.
Look at the CBO’s guesswork for the number of enrollees in Obamacare’s exchanges. The exchanges are where individuals, unaffiliated to any employer, get their health insurance. The CBO is all over the place in their numbers.
The upper lines are the predictions in the rosy glow of Obamacare’s initial passage. 20+ millions were expected but then lowered in the 2016 red line. The green line is reality. They over-calculated the positive effects of the subsidies and individual mandate. In the end, Obamacare’s death spiral continues apace.
The CBO, OMB, or any number-crunching bureau can’t produce a firm bottom line for any program while an open checking account exists to cover anyone qualifying for a draw on the public treasury. Those programs deemed “mandatory/entitlement” should be treated as “discretionary”. In fact, all spending should be “discretionary”. The best thing about the proposed AHCA is the chance to move a program from the “mandatory” to the “discretionary” side of the federal ledger. It’s a tactic that should be repeated throughout the federal budget, thus depopulating and eliminating the “mandatory” category.
All federal spending should be “discretionary”. Fixed amounts would be appropriated for everything. If more is needed, Congress would have to approve it. It’s called the power of the purse, and that purse wasn’t meant to be latchless and permanently wide open .
RogerG
Sources:
“Believe It Or Not, CBO’s Score Of House GOP Obamacare Replacement Is Better Than Expected”, Avik Roy, Forbes, 3/14/17, https://www.forbes.com/sites/theapothecary/2017/03/14/believe-it-or-not-cbos-score-of-house-gop-obamacare-replacement-is-better-than-expected/#64304a95951e
“Pie chart of ‘federal spending’ circulating on the Internet is misleading”, Politifact, 8/17/15, http://www.politifact.com/truth-o-meter/statements/2015/aug/17/facebook-posts/pie-chart-federal-spending-circulating-internet-mi/
“Medicaid and the American Health Care Act”, Medicaid and the Law, 3/9/17, http://www.medicaidandthelaw.com/2017/03/09/medicaid-the-american-health-care-act/
“Problems with the CBO Analysis of the American Health Care Act”, Avik Roy, National Review online, 3/14/17, http://www.nationalreview.com/corner/445742/problems-cbos-analysis-house-republicans-obamacare-replacement