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Thread: Budget Office Rebuts Democratic Claims on Medicare

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    Budget Office Rebuts Democratic Claims on Medicare

    Budget Office Rebuts Democratic Claims on Medicare (Update1) - Bloomberg.com

    The Congressional Budget Office challenged claims by health-care overhaul proponents that Medicare savings in Senate legislation would help finance expanded coverage and postpone the bankruptcy of the medical program for the elderly.

    The nonpartisan agency said the $246 billion it projected the legislation would save Medicare can’t both finance new programs and help pay future expenses for elderly covered under the federal program.

    Nor could those savings be used to extend the solvency of Medicare, set to run out of money in 2017, the budget office said in a letter to Senate Republicans.

    The estimated Medicare savings in the legislation overstate “the improvement in the government’s fiscal position,” the CBO said in the letter.

    “The true increase in the ability to pay for future Medicare benefits or other programs would be a good deal smaller,” the budget office said.

    The budget office said that whenever the Medicare trust fund runs a surplus, the savings are turned over to the U.S. Treasury, which issues bonds to borrow for the future needs of participants in the health-care program for the elderly. The trust fund is currently running annual deficits.

    North Dakota Democrat Kent Conrad, chairman of the Senate Budget Committee, has said that the Senate legislation would postpone the Medicare trust fund’s projected 2017 insolvency by several years.

    To credit such projected savings as helping to extend Medicare’s solvency “ignores the burden that would be faced by the rest of the government later in redeeming the bonds held by the trust fund” to pay for future Medicare expenses, the budget office said.

    Arguments that the Medicare savings would both extend Medicare’s solvency and help finance “new spending outside of Medicare would essentially double count a large share of those savings,” the CBO said.
    The Prof

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    Re: Budget Office Rebuts Democratic Claims on Medicare

    Some observations:

    1. Wow!

    2. Double counting.

    3. Trying to use "Medicare savings" in waste, fraud and abuse, which Saint Teddy was apparently just too stupid to find, twice.

    4. To "finance spending."

    5. And to "extend Medicare's solvency."

    6. Gosh, that's an attempt to account the same QUARTER TRILLION twofold!

    7. That's not honest.

    8. So says CBO, not your savvy correspondent.

    9. How cynical can senate accountancy be?

    10. Ten years of taxes vs 6 years of benefits?

    11. Massive cuts to Medicare and Medicaid while enormously expanding both already bankrupt boondoggles?

    12. Deficit neutrality dependent on chimerical cuts that are never going to be enacted?

    13. With a QUARTER TRIL doc fix on top?

    14. No wonder Reid didn't want anyone to see it.

    15. The CBO, another cynic, slyly covers his actuarial ass.

    16. Reid's claim to extend Medicare out a few years is exposed.

    The Prof
    Last edited by The Prof; 12-24-09 at 04:14 PM.

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    Re: Budget Office Rebuts Democratic Claims on Medicare

    The budget office said that whenever the Medicare trust fund runs a surplus, the savings are turned over to the U.S. Treasury, which issues bonds to borrow for the future needs of participants in the health-care program for the elderly. The trust fund is currently running annual deficits.

    this is the part i like.

    steal from the future to pay for the present.

    mtm1963

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    Re: Budget Office Rebuts Democratic Claims on Medicare

    It's fairly obvious that expanding services doesn't result in a net decrease in costs. Why do we need a thread for this?

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    Re: Budget Office Rebuts Democratic Claims on Medicare

    Quote Originally Posted by Areopagitican View Post
    It's fairly obvious that expanding services doesn't result in a net decrease in costs. Why do we need a thread for this?
    Apparently, it's not as clear as one would think. The president of the united states and the combined leadership of the house and senate don't seem to know this.
    He has all the virtues I dislike and none of the vices I admire. ~ Winston Churchill

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    Re: Budget Office Rebuts Democratic Claims on Medicare

    I think Boo Radley needs to see this article.
    "The problem in defense is how far you can go without destroying from within what you are trying to defend from without."

    ~Dwight D. Eisenhower

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    Re: Budget Office Rebuts Democratic Claims on Medicare

    Quote Originally Posted by Strucky View Post
    I think Boo Radley needs to see this article.
    Why?

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    Re: Budget Office Rebuts Democratic Claims on Medicare

    From the letter:

    The improvement in Medicare’s finances would not be matched by a corresponding improvement in the federal government’s overall finances. CBO and JCT estimated that the PPACA as originally proposed would add more than $300 billion ($246 billion + $69 billion + interest) to the balance of the HI trust fund by 2019, while reducing federal budget deficits by a total of $130 billion by 2019. Thus, the trust fund would be recording additional saving of more than $300 billion during the next 10 years, but the government as a whole would be doing much less additional saving.


    CBO has not undertaken a comparable quantitative analysis for the PPACA incorporating the manager’s amendment, but the results would be qualitatively similar. The reductions in projected Part A outlays and increases in projected HI revenues would significantly raise balances in the HI trust fund and create the appearance that significant additional resources had been set aside to pay for future Medicare benefits. However, the additional savings by the government as a whole—which represent the true increase in the ability to pay for future Medicare benefits or other programs—would be a good deal smaller.


    The key point is that the savings to the HI trust fund under the PPACA would be received by the government only once, so they cannot be set aside to pay for future Medicare spending and, at the same time, pay for current spending on other parts of the legislation or on other programs. Trust fund accounting shows the magnitude of the savings within the trust fund, and those savings indeed improve the solvency of that fund; however, that accounting ignores the burden that would be faced by the rest of the government later in redeeming the bonds held by the trust fund. Unified budget accounting shows that the majority of the HI trust fund savings would be used to pay for other spending under the PPACA and would not enhance the ability of the government to redeem the bonds credited to the trust fund to pay for future Medicare benefits. To describe the full amount of HI trust fund savings as both improving the government’s ability to pay future Medicare benefits and financing new spending outside of Medicare would essentially double-count a large share of those savings and thus overstate the improvement in the government’s fiscal position.

    http://sessions.senate.gov/public/in...a-6152f826c869

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    Re: Budget Office Rebuts Democratic Claims on Medicare

    Quote Originally Posted by Boo Radley View Post
    Why?
    Because this was the same tactic used by Clinton-

    " however, that accounting ignores the burden that would be faced by the rest of the government later in redeeming the bonds held by the trust fund. Unified budget accounting shows that the majority of the HI trust fund savings would be used to pay for other spending under the PPACA and would not enhance the ability of the government to redeem the bonds credited to the trust fund to pay for future Medicare benefits. To describe the full amount of HI trust fund savings as both improving the government’s ability to pay future Medicare benefits and financing new spending outside of Medicare would essentially double-count a large share of those savings and thus overstate the improvement in the government’s fiscal position."
    "The problem in defense is how far you can go without destroying from within what you are trying to defend from without."

    ~Dwight D. Eisenhower

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    Re: Budget Office Rebuts Democratic Claims on Medicare

    Quote Originally Posted by Strucky View Post
    Because this was the same tactic used by Clinton-

    " however, that accounting ignores the burden that would be faced by the rest of the government later in redeeming the bonds held by the trust fund. Unified budget accounting shows that the majority of the HI trust fund savings would be used to pay for other spending under the PPACA and would not enhance the ability of the government to redeem the bonds credited to the trust fund to pay for future Medicare benefits. To describe the full amount of HI trust fund savings as both improving the government’s ability to pay future Medicare benefits and financing new spending outside of Medicare would essentially double-count a large share of those savings and thus overstate the improvement in the government’s fiscal position."
    I'm not sure this matters. Remember, this is what we got when everything that would have helped was whittled away. I believe that the CBO maintains not enough has been done. I've read a few of their statements through this.

    But, I've said nothing in favor of Clinton, or that I think this present bill will do the job. In fact, I was asked and spelled out why I think it won;t do the job. But in short summary, it doesn't go far enough. It is too sparse and will need to be revisited in the near future.

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