What Everybody Gets Wrong About the Romney and Obama Medicare Cuts

More

Soledad O'Brien's "beatdown" of Romney ally John Sununu was hailed as a breakthrough moment for wonky TV journalism. In fact, it obscured more than illuminated our bizarre debate about Medicare.

615_Romney_College_Reuters.jpg

When I woke up this morning, this link was everywhere -- on Twitter, on Facebook, and even in emails from friends: CNN's Soledad O'Brien being praised for her "smiling, document-heavy, wonky beatdown" of John Sununu, a Mitt Romney ally. The Huffington Post's Andy Ostroy called it "the best example of truly awesome journalism I've seen [in four years]" and NYU journalism professor Jay Rosen agreed, calling it the future of CNN.

There's just one problem. John Sununu is basically right. Here's the clip.

Things are about to get very wonky below, but I have an upshot for time-pressed readers who want to skip to the next asterisks. Obama's health care plan cuts Medicare's rate of growth by about $700 billion mostly by reducing payments to hospitals and private sector insurance plans. Romney's budget does not do this. We don't yet know how those cuts will affect services for people on Medicare this decade.

Okay, onto the blow-by-blow:

***

It all starts when Soledad O'Brien asks John Sununu whether Romney agrees with his running mate's proposal for Medicare. Sununu correctly points out a key difference.

"It's very different," Sununu says of Romney's plan. "For example, when Obama gutted Medicare by taking $717 billion out of it, the Romney plan does not do that. The Ryan plan mimicked part of the Obama package there, the Romney plan does not. That's a big difference."

That's basically right. Ryan's Roadmap repealed everything in Obamacare, except for the $700 billion in Medicare cuts. Romney wants to repeal everything in Obamacare, including the $700 billion in Medicare cuts.

But O'Brien replies: "I understand that this is a Republican talking point because I've heard it repeated over and over again. These numbers have been debunked, as you know, by the Congressional Budget Office ..."

Sununu interjects: "I have the CBO report right here dated July 24 from [CBO director] Doug Elmendorf. Go read page 13 and 14. It outlines the reduced revenues. " Sununu is holding the Congressional Budget Office's analysis of the spending effects of the House bill to repeal Obama's health care plan.  Let's go read page 13 and 14. Here's the key paragraph:

Many of the other provisions that would be repealed by enacting H.R. 6079 affect spending for Medicare, Medicaid, and other federal programs. The ACA made numerous changes to payment rates and payment rules in those programs, established a voluntary federal program for long-term care insurance through the Community Living Assistance Services and Supports (CLASS) provisions, and made certain other changes to federal health programs. In total, CBO estimates that repealing those provisions would increase net federal spending by $711 billion over the 2013-2022 period. (Those budgetary effects are summarized in Table 1.)

Again, Sununu is basically right. If repealing health care reform raises federal spending by $711 billion, he infers that health care reform cuts Medicare by the same amount.

Now we have a debate about the what the word "cuts" means. O'Brien says "(Obama's Medicare plan) cuts a reduction in the expected rate of growth, which you know, [is] not cutting budgets to the elderly."

O'Brien claims there's a key difference between "cutting" and "reducing the rate of expected growth." There is little difference, as far as I'm concerned. If we froze Social Security spending at 2009 levels forever, by 2020, it wouldn't technically be a "cut" because the level is the same. But seniors would feel poorer, the checks would fall way behind inflation, and nobody would disagree that the program was significantly smaller than we projected it to be by 2020. Cutting projected spending is the same as cutting spending.

Now Sununu gets to the most controversial point and the political crux of the matter: Will Obama's cuts hurt seniors? Sununu says yes. O'Brien says no. And back-and-forth they go. Who's right? I asked Mark McClellan, director of the Engelberg Center for Health Care Reform at the Brookings Institution. His answer: Both are sort of right, and neither is totally wrong.

"The Democrats are technically correct that [Obamacare] doesn't cut benefits," he said. "You have the same preventative benefits and the same co-pays." But Republicans aren't wrong to suggest that benefits might be cut, he said. "As payments get lower by 2019, there may be fewer providers taking patients and quality of service might decline. It certainly is going to affect the way care is delivered." We want doctors and hospitals to find cheaper ways to treat people, McClellan agreed. That could mean no longer reimbursing services -- i.e.: cutting benefits -- that are deemed gratuitous.

Final score: Sununu is right that Obama's plan cuts Medicare and Romney's doesn't. He's right that cutting spending is the same as cutting the rate of spending growth. And he's right that spending cuts could have an impact on beneficiaries. There is a lot of hyperbole in his quotes -- "gutted" and "stolen" and so on -- and a bit of brashness about how much the cuts would change benefits, but I was struck by how many journalists praised a "beatdown" that frankly wasn't.

***

Here are two better ways to inquire about the Romney-Ryan Medicare position. First is the having-it-both-ways problem. Paul Ryan is most famous for his daring thinking about Medicare. He says it's broken. Many people agree. But his ticket claims we shouldn't try to reform the "broken" program for another ten years -- i.e.: two years after Romney's second term would end! That's a weird way to try to address a problem you consider to be critical and imminent.

Second is the budget problem. I'd rather O'Brien ask Sununu: Okay, if you want to cut the deficit by as much as Paul Ryan, but you're not going to raise taxes, and you're not going to touch Medicare, and you're not going to touch defense, and you have no plan for fixing Social Security, what exactly are you going to cut, considering most of the rest of the budget is Medicaid, income security programs, benefits for veterans and federal employees, and classic government services like road-building, science-investing, education-spending, and health-inspecting?

Jump to comments
Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

Get Today's Top Stories in Your Inbox (preview)

Saving Central: One High School's Struggle After Resegregation

Meet the students and staff at Tuscaloosa’s all-black Central High School in a short documentary film by Maisie Crow. 


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

Where Time Comes From

The clocks that coordinate your cellphone, GPS, and more

Video

Computer Vision Syndrome and You

Save your eyes. Take breaks.

Video

What Happens in 60 Seconds

Quantifying human activity around the world

Writers

Up
Down

More in Business

Just In