Last month we voiced some skepticism over the idea that higher government spending just shy of a trillion dollars for a redo on healthcare would reduce the budget deficit. A month later, this particular strain of our apprehension remains alive and well.
The devil, of course, is always in the details when it comes to complex pieces of new legislation of a certain magnitude and there's no reason this evening to think that Mephistopheles has changed his stripes when it comes to the latest round of economic logic in the healthcare debate.
In particular, James Pethokoukis at Reuters is reporting that the problem of double counting Medicare tax hikes is painting a misleading picture of how much healthcare "reform" will reduce red ink in Washington. The Congressional Budget Office has been dragged into the argument over who's spending what and how often.
To quote the CBO's analysis published yesterday evening (via Republican Senator Jeff Session's web site):
To describe the full amount of [hospital insurance] 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.
Apparently the pols in the capitol are playing fast and loose with the budgetary projections. Shocking, shocking.
Yes, Virginia, there may be savings when all the healthcare reform dust clears, but you can continue to count us as skeptical.