Fact Check: Double Counting

The President claimed that Obamacare’s $716 billion in Medicare spending reductions strengthened the Medicare program.  That’s not what the Congressional Budget Office said.  The non-partisan CBO said that the Medicare reductions in Obamacare “will not enhance the ability of the government to pay for future Medicare benefits” – because those savings will be used to fund other unsustainable entitlements.  If the President wants to use the Medicare savings provisions to extend the life of the Medicare trust fund – and not to fund the new entitlements created by the law – the Congressional Budget Office previously estimated what the fiscal impact would be:  “A net increase in federal deficits of $260 billion” through 2019.

Even President Obama himself admitted this irrefutable logic in a 2010 interview, when he stated that “You can’t say that you are saving on Medicare and then spending the money twice.”

Fact Check: Paying in to Entitlements

The President just talked about seniors “paying in” to Social Security and Medicare.  The problem is, that claim is half true.  While individuals obviously do pay in to the Social Security and Medicare programs, most beneficiaries receive more in benefits than they paid in in taxes.  An Urban Institute study about the entitlement benefits and taxes recipients will receive (and pay) over their lifetimes found that a senior with average wages retiring this year will have paid $58,000 in Medicare taxes – but will receive over $167,000 in Medicare benefits.  The Associated Press ran a story on this issue in December 2010, and its headline was clear: “What You Pay for Medicare Won’t Cover Your Costs.”

Our nation’s entitlement programs are in dire need of reform, to become more sustainable.  Perpetuating myths about their long-term viability, which the President’s comments imply by saying individuals fully-fund their benefits when paying into the system, only makes generating the political consensus necessary for true entitlement reform more difficult.

Fact Check on IPAB: “You’re Going to Get Less Health Care”

The President claims that IPAB will help reduce costs in a pain-free fashion.  But that’s not what he said in 2009.  In an interview with the Washington Post that January, he said this about capping Medicare spending (audio excerpt here):

What I think is probably the wrong approach is to think, well, the way to solve this is Medicare is spending X, and we’re just going to cap it at Y, and whatever that means in terms of people being thrown off the rolls or cutting benefits, you know, then so be it.  Because that doesn’t solve the underlying problem which is health care costs themselves are still escalating at a 6 or 7 or 8 percent rate.  All we’re doing is we’re just saying to people, you know what, you’re going to get less health care.

But that’s exactly what Obamacare does – it caps Medicare spending at pre-defined labels.  And according to Barack Obama circa 2009, that method – which he dubbed the “wrong approach” – means seniors are “going to get less health care.”

Fact Check on IPAB: Where Are the Appointees?

The President is claiming that IPAB is an innocuous board of “experts” designed to help improve health care. Well, if that’s the case, why hasn’t he appointed anyone to the board? As we pointed out on Monday, the President was supposed to nominate people to the IPAB by September 30 – but has instead ignored the law, and hasn’t appointed anyone, ostensibly because he’s afraid of nominating his controversial appointees before the election. That doesn’t sound like an innocuous board to me…

Obama’s Medicare Fantasies

Ahead of this evening’s first presidential debate, it’s worth examining what may happen on entitlement reform in a post-election environment.  Politico had a piece last Friday examining what the President isn’t saying about Medicare:

[During debt ceiling negotiations in mid-2011,] Obama and his top aides made clear that they were willing to swallow serious changes to Medicare in exchange for deficit reduction….Obama, in an interview with [Bob] Woodward, acknowledged he was open to nudging reluctant liberals on Medicare and Social Security if Republicans were willing to deal on taxes.  “’I am willing to move on entitlement reform — even if my own party is resisting, and I will bring them along — as long as we have significant revenues so that people feel like there’s a fairly shared burden when it comes to deficit reduction.’”

The Obama camp’s statements mislead on multiple fronts.  First, President Obama is currently claiming on the campaign trail that his proposals “will save Medicare money by getting rid of wasteful spending in the health care system.  Reforms that will not touch your Medicare benefits.”  What President Obama is claiming – before the election – is that he fully intends to break his own campaign promise “not [to] touch your Medicare benefits” after the election – so long as Republicans agree to break their own campaign pledge and raise taxes on the American people.  To say that is a cynical move – the antithesis of hope and change – is putting it mildly.

The second problem is that the President’s claim itself doesn’t withstand serious scrutiny, given his past track record.  Take, for instance, his pledge to Congress in September 2009 that his health plan would “cost around $900 billion over ten years.”  Here’s how that turned out:

  1. The final health care legislation as enacted spent $938 billion on insurance subsidies – more than the President’s $900 billion figure;
  2. The legislation also included a total of $144.2 billion in additional mandatory spending on programs other than insurance subsidies (e.g., closing the Medicare “doughnut hole,” prevention “slush fund,” etc.) – taking the measure’s mandatory spending to well above $1 trillion;
  3. The legislation included more than $100 billion in authorizations for domestic discretionary spending – figures revealed only after the legislation was signed into law; and
  4. Even the $1.2 trillion in combined mandatory and discretionary spending was an under-estimate of the law’s true 10-year fiscal impact, as the insurance expansions were delayed until 2014 in an attempt to make the bill seem less expensive than it really was.  The Congressional Budget Office concluded in July that the $938 billion in insurance subsidy spending has nearly doubled, to $1.68 trillion, now that more years of subsidy spending are present in the 10-year budget window.

So when all is said and done, and the gimmicks exposed, the plan President Obama claimed in 2009 would cost “only” $900 billion will in reality spend much more than that – a liberal, and recklessly irresponsible, record that would make many question Obama’s ability, and desire, to take on America’s unsustainable entitlements.

Even if the above fears are unfounded, and President Obama will finally put aside his liberal tendencies, the man who claims that “even if my own party is resisting” entitlement reform, “I will bring them along” appears to be vastly over-estimating his ability to influence the “professional left.”  According to Bob Woodward, Speaker Nancy Pelosi hit the mute button on President Obama during negotiations on the “stimulus” in 2009.  That might be a nice way to avoid listening to someone who has described himself as “long-winded” – but it doesn’t speak well to the President’s ability to influence his own party.

To sum up: President Obama wants Republicans to break their campaign promises after the election – which his advisers already claim he fully plans on doing himself – so that they can negotiate with someone whose health care bill cost twice what he promised, and whose own party’s leaders have tuned him out.  Somewhere, P.T. Barnum must be smiling.

Commonwealth Fund Gives Obamacare an Epic Fail

The liberal Commonwealth Fund is out with a supposedly non-partisan comparison of the campaign health care plans offered by President Obama and Governor Romney.  There are many charts, graphs, and statistics in the 50-plus page report, but you really only need to read one phrase in the introduction to get the gist: “growth in health care costs and premiums exceeds that of family incomes…”

That of course is far from what candidate Obama promised.  Four years ago, Barack Obama repeatedly promised that he would cut premiums – not slow the rate of growth, but CUT them in absolute terms – by $2,500 per family.  Jason Furman – then a campaign advisor, and now a senior Administration official – went even further, telling the New York Times that “we think we could get to $2,500 in savings by the end of the first term, or be very close to it.”  But while candidate Obama promised premiums would fall by $2,500 on average, premiums have risen by $3,065 since Barack Obama was elected President.  (A visual representation of this broken promise is below.)

The Commonwealth study does its best to compensate for this broken promise, by using the best possible assumptions about the rest of Obamacare.  For instance, to obtain better insurance coverage numbers for Obamacare, the report assumes that every state will implement the law’s Medicaid expansion – even though several states have already pledged not to do so, and the Congressional Budget Office agrees that many states will not.  But no matter how you slice it, even a liberal think-tank like Commonwealth has to admit that – on the metric struggling families care about most – Obamacare has been a massive failure.

In Defense of J.D. Kleinke

On Sunday the New York Times published an op-ed by American Enterprise Institute fellow J.D. Kleinke, entitled “The Conservative Case for Obamacare.”  In recent days, the piece has drawn a great deal of pushback from right-leaning commentators.

Some of the criticism is justified, for the article itself is internally inconsistent.  Even as it claims the law is market-based, the article talks about Obamacare’s “forcibl[e] repatriat[ion]” of individuals who choose not to purchase health coverage – and any “market” that relies upon coercion isn’t really a market at all.  It attempts to equate Obamacare with association health plans, when the former is the antithesis of the latter – association health plans were designed to allow small business to opt-out of onerous state benefit mandates, whereas Obamacare imposes a whole new cohort of benefit mandates at the federal level.

Kleinke’s article is also misleading and factually inaccurate on critical points.  He claims that “Republicans conveniently forgot that [an individual mandate] was something many of them had supported for years.”  The only problem with that claim is that Kleinke conveniently forgot that an individual mandate was something many Republicans had opposed for decades:

  • Conservatives made the claim in 1993 that an individual mandate was unconstitutional, claims which quickly gained resonance.
  • In “The System” – the seminal account of the Clintoncare debate – Haynes Johnson and David Broder note that by the time Senate Republicans gathered in Annapolis in mid-1994, the individual mandate was an area of much controversy within the Conference (page 363).
  • Senator Don Nickles – who introduced a bill that included an individual mandate in the fall of 1993 – introduced an entirely new version of the same bill seven months later – one which excluded the mandate.  In comments in the Congressional Record back in June 1994, Nickles noted that “as we received input from the states, it is my belief that this individual mandate should be dropped from the legislation.” (Record, June 16, 1994, page S7085).
  • Two dozen Senate co-sponsors – more than half the Republican Conference at the time – agreed with Nickles’ view, and dropped the mandate from the bill.

So there is ample evidence that an individual mandate was not conservative orthodoxy back in 1993-94, let alone 2008.  Senator Nickles pointed all this out in a letter to the editor published in the Times earlier this year – meaning the facts were, and are, readily available for all those who wish to search for them.  Sadly, however, Kleinke, like Ezra Klein and others, failed to do so, perhaps because the “Republicans switched positions on the mandate to defeat Obama” meme is too politically valuable to abandon.  One would have hoped that an AEI scholar would have been slightly more thorough in his research than a liberal “JournoList.”  Unfortunately, that does not appear to have been the case.

On the other hand, it’s worth examining the behavior of liberal analysts over the past several months:

Given this behavior from the left’s purported “scholars,” Kleinke benefits himself from the soft bigotry of low expectations.  Yes, his piece is factually incorrect, and logically and philosophically inconsistent.  But hey – at least he’s not being two-faced about his position.

There He Goes Again: Biden Creates Another “Bidenism”

Over the weekend, Joe Biden did what Joe Biden does best – tied his tongue in knots – this time, over claims that Obamacare will actually lower costs for American families.  Politico quoted the Vice President as telling one visitor at a deli that Obamacare “will help you dramatically,” because individuals will “be able to get better health care than you had before at a lower cost.”  The only problem is that no one believes the claim is true – not fact-checkers, and not the families that have seen premiums go up by over $3,000 since Barack Obama was first elected.

President Obama also keeps trying to peddle the false claim that Obamacare will lower insurance premiums.  Writing in the New England Journal of Medicine last week, the President claimed that “economists believe family premiums will be about $2,000 less” in 2019 under the law.  (Assuming of course that businesses are even offering health insurance at all by that point.)  The op-ed (conveniently) doesn’t cite a source on this claim, but the Administration has previously invoked a report published by the Business Roundtable in November 2009 (i.e., before Obamacare was even enacted) to make this assertion.  However, the Roundtable’s study only presumes a reduction in the increase of premiums.  Don’t take my word for it: Look at Exhibit 1 of the study (depicted below), which study illustrates that under the maximum achievable “savings,” large employer premiums in 2019 will be $23,151 per family – or $12,408 higher than they were in 2009.

The President repeatedly promised during his campaign that he would “cut” premiums – meaning they would go DOWN, not merely just “go up by less than projected.”  And the skyrocketing premiums Americans are paying for health insurance are a constant reminder of how Obamacare falls short.  Democrats have no answer to the obvious question: How is a $12,400 increase in premiums – as opposed to the $2,500 reduction that candidate Obama repeatedly promised – a change that struggling middle-class families can believe in?  Because, as Joe Biden himself might say, middle-class families paying thousands more in premiums because Obamacare failed to deliver is a really big deal indeed.

Kathleen Sebelius Focuses on Saving One Job: Hers

The Examiner reported on Friday that HHS Secretary Sebelius “will soon be back to doing what she does best – campaigning for President Obama.”  The Secretary was scheduled to appear at several events over the weekend in New Hampshire.  This development shouldn’t surprise most observers, for playing politics has been a major part of Secretary Sebelius’ time in office:

Meanwhile, while the Secretary keeps playing politics, the actual work of governing goes unaddressed:

  • The Secretary admitted in April that the Administration didn’t have a backup plan in place should the Supreme Court strike down Obamacare – even though it would “probably” have been wise for the Department to have one;
  • Perhaps because the Secretary was derelict in her duties to prepare for the consequences of the Court’s decision, the nation’s governors have been waiting months for official guidance from HHS on how to interpret the ruling – to say nothing of the myriad other implementation issues still bogged down within HHS; and
  • As we pointed out last week, HHS has allowed up to $11 billion in abusive and potentially fraudulent increases in Medicare payments to go unquestioned for years.

Given this abysmal track record, some might think Secretary Sebelius should spend less time trying to save her job and more time trying to do it.

“Invisible Obama” Breaks the Law — and His Promise to Seniors

Throughout the last few months, President Obama has claimed that his Medicare plan will help improve the program.  He claimed in August that “I’ve strengthened Medicare….I’ve proposed reforms that will save Medicare money by getting rid of wasteful spending in the health care system.”  In his deficit speech last April, the President outlined those reforms:

We will slow the growth of Medicare costs by strengthening an independent commission of doctors, nurses, medical experts and consumer who will look at all the evidence and recommend the best ways to reduce unnecessary spending while protecting access to the services that seniors need.

The President of course was referring to the Independent Payment Advisory Board, a panel of bureaucrats created in Obamacare to enforce binding caps on Medicare spending – caps which the President’s 2011 deficit submission proposed lowering even further.

There’s only one problem with the President’s claims that he “strengthened Medicare” by creating the IPAB: President Obama has now violated the law by failing to appoint nominees to a board he created.  According to page 426 of the statute, the law appropriates funds for IPAB (originally $15 million, but lowered to $5 million last December) “for fiscal year 2012” – that’s the fiscal year that ended on September 30, i.e., yesterday.

So Obamacare contemplates IPAB being up and running NOW – yet President Obama has failed to nominate any appointees to the board.  If the President wants to save Medicare so badly – and IPAB is so critical to saving Medicare – what’s he waiting for?  Why is he breaking his promise to seniors?  And if IPAB is so innocuous and won’t harm seniors, why is he waiting until AFTER his re-election campaign to announce who he wants to put on the board – is it because the Administration plans on naming more radical appointees like Donald “Rationing with Our Eyes Open” Berwick to administer the IPAB’s new world order?

Clint Eastwood’s “empty chair” speech at the Republican National Convention generated much discussion as to its broader context.  When it comes to health policy, however, that empty chair takes on a clear meaning – the vacancies on the IPAB board, caused by a President who would rather abdicate his statutory duties than reveal the controversial plans he intends to implement after the election.