Budget Busting

As more than one liberal blogger has noted, there's no particular reason that fixing Medicare's Sustainable Growth Rate--a failed attempt at mandated cost control that congress ritually repeals every year--should be attached to the budget for the health care reform bill.  We will have Medicare whether or not this bill passes, so it doesn't really figure as part of the budget.

On the other hand, it's not quite as crazy as they seem to believe that it has been attached to the bill in peoples' minds.  The House put an SGR fix in their bill for good reason, and not, as many bloggers are implying, because of their committment to budget transparency.  The SGR fix is the price of the support of the American Medical Association.  To the extent that Congressional Democrats are planning to buy this support by separately passing a 10-year fix without paying for it, and nonetheless claiming that the reform bill is deficit neutral, it is a bit of budget flim-flammery, though hardly unique in the history of American political maneuvers, Democratic or Republican. 

Perhaps more importantly, there's very good reason that we should be staring hard at the SGR:  those sorts of automatic provider cuts are one of the major ways that the Democrats are planning to pay for this bill.  If such efforts have historically failed (SPOILER!!!:  They did), then we should be a lot less confident that this bill will actually be affordable.  The CBO has to score these sorts of savings, because they score what's in the law, not what's likely to be in the law in three years.  But even Elmendorf has repeatedly signalled skepticism that the cuts he has scored as reducing the budget deficit will actually take place.

This article available online at:

http://www.theatlantic.com/business/archive/2009/10/budget-busting/28788/