What Everybody Gets Wrong About the Romney and Obama Medicare Cuts

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.

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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 Ryan's Roadmap repealed everything in Obamacare, except for the $700 billion in Medicare cuts.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."

Presented by

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

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