Paul Ryan must not have majored
in history in college
On MSNBC’s “Morning Joe” this morning, Rep. Paul Ryan claimed that health insurance reform would create huge deficits and said that “history tells us we underestimate how much these things cost and underestimate how much we save to pay for the bills.” While Ryan appears to be well versed in the history of the “Party of No,” considering he has repeatedly offered up debunked Republican talking points about health insurance reform, such as claiming that the bill would increase the deficit when the CBO has said it would actually reduce it, his knowledge of legislative history appears to be lacking. As history reminds us, at least three major health care bills passed since the 1980s have actually overestimated expected costs and underestiamted actual savings.
RHETORIC: Ryan Said That Health Insurance Reform Would Create Huge Deficits And That History Tells Us That We Underestimate How Much These Things Cost And Underestimate How Much We Save To Pay For These Bills. Rep. Paul Ryan: “They have two weeks to do that. Not to mention the fact that this still creates a huge deficit because this new entitlement program will create a $1 trillion to $2 trillion liability. What history tells us we underestimate how much these things cost and underestimate how much we save to pay for the bills.” [MSNBC, “Morning Joe,” 10/23/09]
REALITY: THE BAUCUS HEALTH CARE PLAN WILL REDUCE THE DEFICIT AND BEND THE COST CURVE IN THE LONG RUN
CBO: Baucus Plan Would Reduce The Deficit Over 10 Years And Bend The Cost Curve In The Long Run. According to CBO and JCT’s assessment, enacting the Chairman’s mark, as amended, would result in a net reduction in federal budget deficits of $81 billion over the 2010–2019 period. … in view of the projected net savings during the decade following the 10-year budget window, CBO anticipates that the proposal would probably continue to reduce budget deficits relative to those under current law in subsequent decades” [CBO, 10/7/09]
Fmr Bush Medicare/Medicaid Director Mark McClellan: “It Does Bend The [Cost] Curve In The Long Term.” “Mark McClellan, director of the Brookings Institution’s Engelberg Center for Health Care Reform, and the former Medicare and Medicaid director under President Bush, was similarly impressed. … He said the plan substantially tracked the recommendations of a widely-praised bipartisan report that he recently released outlining strategies to slow long-term spending growth. ‘It does bend the [cost] curve in the long term,’ McClellan said. ‘They clearly are working hard to make fiscally responsible decisions about health care reform.'” [Ron Brownstein, The Atlantic, 9/18/09]
Sen. Snowe Convinced That Baucus Bill Reflects, “Our Position And Views That It Should Be Budget Neutral…[Will Bend The Cost Curve] In The First 10 Years.” In an interview with Sen. Olympia Snowe, John Harwood asked: “MR. HARWOOD: Are you satisfied that the cost control, cost containment in the bill is adequate? SEN. SNOWE: I do. And you know, we were adamant in our, you know, our positions and views that it should be budget neutral and, if anything, should bend the cost curve and bend the overall cost of, you know, the escalation, you know, of inflation within health care. And it does begin that trend in the first 10 years.” [CNBC, 9/17/09]
REALITY: THE BUSH ADMINISTRATION, AIDED BY REPRESENTATIVE PAUL RYAN, ADDED MORE THAN $4 TRILLION TO THE NATIONAL DEBT
Ryan Voted For All 5 Bush Budgets Adding Up To $12.15 Trillion In Spending. Rep. Paul Ryan supported all five of the Bush budgets that the House voted on from 2001 to 2006. Ryan voted for the FY 2002, FY 2004, FY 2005, FY 2006 and FY 2007 budgets. The budgets added up to $12.15 Trillion in spending. [HCR 83, 5/9/01; HCR 95, 4/11/03; SCR 95, 5/19/04; HCR95, 4/28/05; HCR 376, 5/18/06]
• The Bush Administration Added More Than $4 Trillion To The National Debt, Almost Doubling It. “With no fanfare and little notice, the national debt has grown by more than $4 trillion during George W. Bushs presidency. Its the biggest increase under any president in U.S history. On the day President Bush took office, the national debt stood at $5.727 trillion. The latest number from the Treasury Department shows the national debt now stands at more than $9.849 trillion. Thats a 71.9 percent increase on Mr. Bushs watch.” [CBS News, 9/29/08]
• CBO: Obama Administration Inherited $1.2 Trillion Budget Deficit From Bush Administration-Largest Ever. For fiscal year 2009, which began on October 1st of 2008, the federal government will run $1.2 trillion in the red, said the Congressional Budget Office (CBO) in a “dire projection” on Jan. 7th 2009. As a percentage of gross domestic product, the 2009 budget deficit is the largest since WWII, but in dollar terms it is the largest ever. [Christian Science Monitor, 1/7/09; Washington Post, 2/26/09; Associated Press, 1/7/09]
REALITY: THE CBO HAS REPEATEDLY OVERESTIMATED THE COST OF HEALTH CARE EXPANSION AND UNDERESTIMATED THE COST OF HEALTH CARE SAVING MEASURES
NOPR Senior Fellow Jon Gabel: The CBO Has “Substantially Overestimate The Cost Of Health Care Reform Three Times Out Of Three.” “The Congressional Budget Office’s integrity is beyond questioning. But the record shows that it has substantially overestimated the cost of health care reform three times out of three.” [Jon Gabel, New York Times op-ed, 8/26/09]
Ø The CBO Underestimated Savings From The Early 1980s Change In The Way Medicare Paid Hospitals. “In the early 1980s, Congress changed the way Medicare paid hospitals so that payments would no longer be based on costs incurred. Instead, hospitals would receive a predetermined amount per admission, based on the patient’s primary medical problem. This encouraged shorter stays, led to fewer diagnostic services and reduced administrative costs. The Congressional Budget Office predicted that, from 1983 to 1986, this change would slow Medicare hospital spending (which had been rising much faster than the rate of inflation) by $10 billion, and that by 1986 total spending would be $60 billion. Actual spending in 1986 was $49 billion. The savings in 1986 alone were as much as three years of estimated savings.” [Jon Gabel, New York Times op-ed, 8/26/09]
Ø The CBO Underestimated Medicare Savings In The Balanced Budget Act Of 1997 By 50 Percent In 1998 And 113 Percent In 1999. “In the 1990s, the biggest change in Medicare came with the Balanced Budget Act of 1997, a compromise between a Republican-controlled Congress and a Democratic administration. At the time, the Congressional Budget Office forecast that, from 1998 to 2002, the act would reduce Medicare spending by $112 billion — a 9.1 percent reduction. Part of that — $36 billion worth — would come from paying skilled nursing facilities and home health care services a set fee per patient. But only a tiny fraction of the savings, about $100 million, would come from better monitoring of fraud and abuse on the part of health care providers, according to budget office projections. The actual savings turned out to be 50 percent greater in 1998 and 113 percent greater in 1999 than the budget office forecast. Overall spending increased just 1.2 percent from 1998 to 2000, rather than 5.6 percent, as was projected.” [Jon Gabel, New York Times op-ed, 8/26/09]
Ø The CBO Overestimated The Cost Of The Medicare Prescription Drug Bill By 40 Percent. “In the current decade, the major legislative change to the system was the Medicare Modernization Act of 2003, which added a prescription drug benefit. In assessing how much this new program would cost, the Congressional Budget Office assumed that prices would rise as patients demanded more drugs, and estimated that spending on the drug benefit would be $206 billion. Actual spending was nearly 40 percent less than that. Spending on drugs declined from fiscal year 2007 to 2008. Seniors proved more willing to buy lower-cost generic drugs than expected, fewer people participated in the program than expected, and competition held premiums down.” [Jon Gabel, New York Times op-ed, 8/26/09]
Former Health Care Financing Administrator Bruce Vladeck: “The CBO’s Track Record In Predicting The Effects Of Health Legislation Is Abysmal. … The CBO Has Routinely Overestimated The Costs Of Expanded Government Health Care Benefits And Underestimated The Savings From Program Changes.” “Put most simply, the CBO’s track record in predicting the effects of health legislation is abysmal. Over the last two decades, the CBO has routinely overestimated the costs of expanded government health care benefits and underestimated the savings from program changes designed to reduce expenditures. Most recently, it overestimated the five-year cost of Medicare Part D — the prescription drug benefit -— by more than 35%. Even more dramatically, the CBO’s estimates of the Medicare savings from the Balanced Budget Act of 1997 underestimated the impact, on average, by a full 100%.” [Bruce Vladeck, Roll Call, 7/28/09]
-30-
