ObamaCare v. Prescription Drugs, Part III

The squabbling continues.  Andrew prints a reader email:

Pace McArdle, health reform is nothing like Medicare Part D. Medicare Part D is available to all beneficiaries regardless of income. The subsidies provided in the reform bills scale with income and are in place to make workable a mandate that will, by itself, lower the average cost of individual care relative to current law. Additionally, health subsidies are fully funded for 10 years according to stingy estimates by the CBO (that don't jive with reform advocates' predictions of how reform will bend the cost curve). On top of that, Obama's now pledged that deficit neutrality will be written into the bill; finding new funding or modifying the program would require Congressional action in the future. There is simply no comparison between Medicare Part D and health reform.

Pace the reader, the overall estimate for HR 3200, issued two weeks after the preliminary score he/she cites, places the Year 10 cost of the coverage provisions at $202 billion, not $140 bb.  It isn't fully funded; it has a rapidly growing deficit of tens of billions of dollars, even with big spending cuts and big taxes--surtaxes on joint incomes above $350,000 that start at 2% of AGI and go up to 5.4% on really big incomes.  If any of the cuts or the taxes fails, the deficit starts bigger, and gets bigger faster.  Meanwhile, Obama has moved forward one of the really expensive bits, covering people who are uninsurable because they have some expensive disease.

How are we paying for this?  Dunno.  It's all too vague.  But to my ears, Obama has so far failed to rule out anything expensive, like generous subsidies, and also failed to outline who he's going to tax or cut benefits to if he's serious about deficit neutrality.  So a mere stated wish to stay deficit neutral just won't do--every president states that sort of wish.  The question is, what will they do to get there?  Obama's coyness on this topic is reaching it's sell by date.  It's time for the president to commit to an actual plan with actual numbers we can check.

It's possible that he will manage to pay for it all, in which case, I salute him--but that still leaves that deficit of 4% of GDP in 2019.  Even George Bush made a stab at getting his future deficits lower than that, and in fact managed to get it down near 1% towards the end of his second term.  Spending your limited ability to raise taxes on new programs, rather than reducing the existing deficits, and hoping that someone else will be forced to fix the problem sometime in the future, is not fiscally responsible.  Fiscally responsible is when you put balancing the budget in front of the other things you want to do.  Neither Bush or Obama has, thus far, evinced any actual willingness to do so.