After allowing Democrats for weeks to argue that their Medicare
cuts would both help finance the new health care legislation and
extend the solvency of Medicare, the Congressional Budget Office
explained today that the bill could do one or the other, but not
both at the same time.
The
new memo, released after Democrats have already secured 60
votes, reads:
The key point is that the savings to the HI (Medicare
Hospital Insurance) trust fund under the PPACA (Patient
Protection and Affordable Care Act) would be received by the
government only once, so they cannot be set aside to pay for
future Medicare spending and, at the same time, pay for current
spending on other parts of the legislation or on other
programs. Trust fund accounting shows the magnitude of
the savings within the trust fund, and those savings indeed
improve the solvency of that fund; however, that accounting
ignores the burden that would be faced by the rest of the
government later in redeeming the bonds held by the trust fund.
Unified budget accounting shows that the majority of the HI
trust fund savings would be used to pay for other spending
under the PPACA and would not enhance the ability of the
government to redeem the bonds credited to the trust fund to
pay for future Medicare benefits. To describe the full
amount of HI trust fund savings as both improving the
government’s ability to pay future Medicare benefits and
financing new spending outside of Medicare would essentially
double-count a large share of those savings and thus overstate
the improvement in the government’s fiscal position.
Via
Say Anything.
Sen. Jeff Sessions, after conversing with CBO director Doug
Elmendorf, said that without the revenue from the Medicare cuts,
the bill would actually increase deficts by nearly $300 billion,
FoxNews
reports.
"Either you've weakened the Medicare substantially or you're
going to have no money to spend on the new program that's being
created," Sessions said. "You cannot spend this money twice."
UPDATE: Here are some more thoughts from
David Hogberg and
Megan McArdle.
