“Secret Deficit Lovers”: The GOP Deficit Scolds Are Having A Hard Time Letting Go
What if they balanced the budget and nobody knew or cared?
O.K., the federal budget hasn’t actually been balanced. But the Congressional Budget Office has tallied up the totals for fiscal 2014, which ran through the end of September, and reports that the deficit plunge of the past several years continues. You still hear politicians ranting about “trillion dollar deficits,” but last year’s deficit was less than half-a-trillion dollars — or, a more meaningful number, just 2.8 percent of G.D.P. — and it’s still falling.
So where are the ticker-tape parades? For that matter, where are the front-page news reports? After all, talk about the evils of deficits and the grave fiscal danger facing America dominated Washington for years. Shouldn’t we be making a big deal of the fact that the alleged crisis is over?
Well, we aren’t, and once you understand why, you also understand what fiscal hysteria was really about.
First, ordinary Americans aren’t celebrating the deficit’s decline because they don’t know about it.
That’s not mere speculation on my part. Earlier this year, YouGov polled Americans on fiscal issues, asking among other things whether the deficit had increased or declined since President Obama took office. (In case you’re wondering, the pollsters carefully explained the difference between annual deficits and the level of accumulated debt.) More than half of those polled said it had gone up, while only 19 percent correctly said that it had gone down.
Why doesn’t the public know better? Probably because of the way much of the news media report this and other issues, with bad news played up and good news downplayed if it’s reported at all.
This has been glaringly obvious in the case of health reform, where every problem with the Affordable Care Act has been the subject of headlines, while in right-wing media — and to some extent in mainstream news sources — favorable developments go unremarked. As a result, many people — even, in my experience, liberals — have the impression that the rollout of Obamacare has been a disaster, and have no idea that enrollment is above expectations, costs are lower than expected, and the number of Americans without insurance has dropped sharply. Surely something similar has happened on the budget deficit.
But what about people who pay a lot of attention to the budget, the self-proclaimed deficit hawks? (Some of us prefer to call them deficit scolds.) They’ve spent the past few years telling us that budget shortfalls are the most important issue facing the nation, that terrible things will happen unless we act to stem the flow of red ink. Are they expressing satisfaction over the fading of that threat?
Not a chance. Far from celebrating the deficit’s decline, the usual suspects — fiscal-scold think tanks, inside-the-Beltway pundits — seem annoyed by the news. It’s a “false victory,” they declare. “Trillion dollar deficits are coming back,” they warn. And they’re furious with President Obama for saying that it’s time to get past “mindless austerity” and “manufactured crises.” He’s declaring mission accomplished, they say, when he should be making another push for entitlement reform.
All of which demonstrates a truth that has been apparent for a while, if you have been paying close attention: Deficit scolds actually love big budget deficits, and hate it when those deficits get smaller. Why? Because fears of a fiscal crisis — fears that they feed assiduously — are their best hope of getting what they really want: big cuts in social programs. A few years ago they almost managed to bully the nation into cutting Social Security and/or raising the Medicare eligibility age; they even had hopes of turning Medicare into an underfinanced voucher program. Now that window of opportunity is closing fast.
But isn’t the falling deficit just a short-term blip, with the long-run outlook as dire as ever? Actually, no. Falling deficits right now have a lot to do with a strengthening economy plus some of that “mindless austerity” the president condemned. But there has also been a dramatic slowdown in the growth of health spending — and if that continues, the long-run fiscal outlook is much better than anyone thought possible not long ago. Yes, current projections still show a rising ratio of debt to G.D.P. starting some years from now, and uncomfortable levels of debt a generation from now. But given all the clear and present dangers we face, it’s hard to see why dealing with that distant and uncertain prospect should be any kind of policy priority.
So let’s say goodbye to fiscal hysteria. I know that the deficit scolds are having a hard time letting go; they’re still trying to bring back the days when Bowles and Simpson bestrode the Beltway like colossi. But those days aren’t coming back, and we should be glad.
By: Paul Krugman, Op-Ed Columnist, The New York Times, October 9, 2014
“Sorry, Obamacare Denialists, You’re Insane”: Don’t Want To Be Called Ridiculous And Nutty, Stop Saying Ridiculous, Nutty Things
Conservative writer Philip Klein, who seems very nice, complains that liberals are being far too mean about the latest conservative attempt to gut Obamacare. “Liberal critics of this legal theory have portrayed it as absurd, ridiculous, nutty, stupid, and even criminal,” he writes. “Recently, I’ve been likened to the health policy equivalent of a World Trade Center attack conspiracy theorist merely for sympathetically reporting the legal case of the challengers.”
Not exactly. Klein is conflating two different things here. First, there’s the Halbig lawsuit, which hinges upon a strained, somewhat-exotic reading of the law to argue that the Affordable Care Act fails to create tax credits for people who buy their insurance through a federal exchange. The basis of this lawsuit is that the most explicit reference in the law mentions only state exchanges, and therefore courts ought to ignore all the other, less explicit parts of the law implying the opposite.
This is the case conservatives made for several years — Congress hastily failed to write a clear law, so conservative legal activists can take advantage of the screwup to interpret what (they argue, tendentiously but not insanely) is its literal reading. As the right-wing Investor’s Business Daily, an early booster of this once-long-shot legal challenge, gleefully put it in 2011, “Oops! No Obamacare Tax Credit for You!” I’m sorry, the card says “Moops.” I find this argument highly, highly unpersuasive. It’s been laughed out of court by Democratic-appointed judges, and rejected by at least one Republican judge. I will say this for it — it is at least tenuously connected to reality.
But now conservatives are making a different argument. They’re no longer saying that the lawsuit is exploiting a drafting error. They’re claiming it interprets the law correctly, and that the law actually (or possibly) intended to deny tax credits to people in federal exchanges. They have gone from smugly saying the card says “Moops” to insisting that the people who invaded Spain in the eighth century were actually called “the Moops.”
And yes, that is completely insane. There is a massive trove of evidence here regarding the intent of the law’s drafters. Dylan Scott has the latest chunk today — a deep excavation of the role of the Congressional Budget Office, which was a kind of legislative super-body regarded as authoritative by Congress. The CBO, like everybody involved in the law’s passage, believed the federal exchanges were designed to give health insurance to people in states that did not build their own. They were not designed as a deliberately unworkable punishment.
Yes, some smart people, speaking extemporaneously, were sometimes confused about just how the law worked. (Conservatives have made a great deal about off-the-cuff comments made by Jonathan Cohn before the law was actually finalized.) That doesn’t change the fact that the federal exchanges were obviously designed to give people affordable insurance. It may be mean to point out that those who argue otherwise are completely, manifestly ahistorical, but that’s just reality. If you don’t want to be called ridiculous and nutty, stop saying ridiculous, nutty things.
By: Jonathan Chait, Daily Intelligencer, New York Magazine, August 1, 2014
“The Larger Answers Must Come From Within”: The VA Reform Legislation Is A “Trojan Horse” For Privatization
In the aftermath of the Veterans Affairs scandal, Democrats and Republicans are moving swiftly to pass legislation to fix the problems at the department. In their haste, though, policymakers have crafted a bill that would do more harm than good—and it comes with a hefty price tag.
On Tuesday and Wednesday respectively, the House and Senate each passed a bill to reform the VA. The bills, would both create a two-year pilot program to allow veterans who do not live within 40 miles of a VA facility, or face a long wait time, to seek care at a non-VA facility. The Senate bill also includes funding for the VA to lease 26 new facilities and hire more medical staff. Now, the two houses will head to conference over the bills to try to agree on a final version.
The bills have not received much attention this week, but that could change: the Congressional Budget Office reported that allowing certain veterans to seek care at non-VA facilities would cost $35 billion over the two-year program, as The New Republic’s Brian Beutler predicted. If made permanent, CBO estimates it could cost $50 billion a year. For comparison, the VA currently spends $44 billion a year on its health care system. CBO notes that its estimate is preliminary, but it still is much higher than the expected cost. And this is only for the partial privatization part of the bill.
While the potential for a new $50 billion a year program is worrisome, the bill would not even address the underlying problems at the VA.
The fundamental problem with the VA scandal is not about long wait times or a shortage of physicians. Those problems exist in the private sector as well. Often, they are even worse there. It’s also not about quality of care either. Veterans routinely rate their VA experience above average. That advantage may have diminished in recent years, but it still exists. At its heart, the scandal revolves around poor financial incentives and fraudulent behavior by VA employees. These problems are systemic and reforms are needed. But many of the problems veterans face are not isolated to VA hospitals. They are larger problems of the American health care system.
The reason that clinics and hospitals—at both VA and non-VA facilities—have such long wait-times is a shortage of primary care doctors. This shortage has happened for a number of reasons: Medical students face financial incentives to choose a specialty field instead of becoming a primary care doctor. State occupational licensing laws prevent nurse practitioners from performing many straightforward medical tasks. Medical schools receive billions in federal funding with little oversight for how may primary care doctors they produce. The bills’ partial privatization scheme does nothing to ease these problems.
It’s a common misconception that the VA does not contract with private sector providers. As recently as 2012 the VA was fending off attacks that they outsourced care too much. And veterans who have been waiting for a long time for care, or those who are dealing with life-threatening situations, certainly deserve the ability to seek care at non-VA facilities. In fact, President Barack Obama has already ordered the VA to do so.
Republicans have long wanted to privatize the VA, but have never had the political power to do so, owing to veterans groups’ opposition. This recent scandal, though, has changed that: Veterans groups support the bills. While the partial privatization is only a two-year pilot program, Republicans will likely push to make it permanent in 2016, potentially undermining the entire VA health care system and leading to the total privatization that Republicans covet.
“You’re already in the situation where we’re having to close really excellent VA hospitals for a lack of patients,” Phillip Longman, a senior editor at the Washington Monthly and author of a book on the VA, said. “And now you’re going to say, ‘OK, anybody who lives 40 miles from a hospital can get free health care wherever they want.’ Now, you’re going to take revenue out of those hospitals and patients out of those hospitals. If they can’t maintain a certain volume, they can’t be safe. You wouldn’t want to be treated by a heart surgeon who only performs three operations a year.
“[The partial privatization plan] really is a Trojan horse,” Longman added. “It’s a really dangerous provision.”
Even if the legislation doesn’t cause VA hospitals to close, it could undermine the quality of care the VA provides. The VA is specifically designed to treat veterans and has vast experience doing so. Since most of its medical visits and procedures happen at its own hospitals and clinics, it coordinates care better than private sector providers do.
“The VA can treat the whole patient as opposed to one body part at a time,” Longman writes at the Washington Monthly. “And due to its near lifelong relationship with its patients, which often extends to long-term nursing home care at the end of life, the VA also has incentives for investing in prevention and patient wellness that are largely absent elsewhere in U.S. medicine.”
Beyond that, the legislation includes very little to address the management issues within the VA. That’s not Congress’s fault, per se, because those fixes must come from within the department. But government officials have the chance to use this renewed focus on the VA to improve the care it provides. By passing a bill that does not address the underlying problems, Congress might waste this opportunity.
“The access issue, which is where everyone has focused, is one important, but ultimately narrow slice of the bigger problem,” Ashish K. Jha, a professor of public health at the Harvard School of Public Health and practicing internist at the VA, said. “What I worry about is because it has gotten all the attention, if we work on fixing this we’re not going to use this opportunity to have the broader conversation is that veterans don’t just want access to care, they want access to good care.”
In an article for the New England Journal of Medicine, Jha writes with Dr. Kenneth W. Kizer, the undersecretary for health during the Clinton administration, that the VA must change its performance management, reassess the VA’s use of technology to provide even better caregiver-patient connectivity, and increase its transparency so the public can evaluate its performance. The VA has already eliminated the 14-day average-wait rule that led to the rampant fraud, acknowledging that the incentive backfired, but much work remains.
What happened at VA facilities across the country was a tragedy. Former VA Secretary Eric Shinseki deserved to be fired. So do other senior VA officials. Policymakers naturally want to pass a big piece of legislation in response to the scandal. But like the American health care system, the VA system has no simple solutions. Congress can help on the margins, but the larger answers must come from within.
By: By: Dany Vinik, The New Republic, June 13, 2014
“Obamacare Won’t Cause Society To Collapse”: Americans Choosing To Work Less Doesn’t Mean They’re Losing Their Jobs
A small war has erupted over the recent Congressional Budget Office report on the employment effects of the Affordable Care Act. Last week, the CBO itself felt compelled to offer a lengthy and detailed rebuttal to the spin that millions of Americans will “lose their jobs” as a result of Obamacare.
So let’s first be clear about what the CBO report concluded: As a result of the ACA, millions of Americans will choose to work less, if at all. That doesn’t mean that they will “lose their jobs.” Rather, it means that many will choose to give up working double-shifts just so they can make enough to afford health insurance or leave jobs they hate but have kept simply because they can’t maintain their coverage otherwise. In virtually all cases, these are decisions people are making for themselves and presumably welcome. As the CBO points out, as opposed to “losing their jobs,” in which case we’d all feel sad for them, friends and neighbors will invariably feel happy for these individuals.
But, of course, not everyone. To conservatives, the CBO report demonstrates what they have said about Obamacare – and about the government dole generally – all along: It creates “perverse incentives” encouraging people not to work.
The conservative argument is based on several underlying assumptions, like a DirecTV ad: When you give things to people, they work less. When they work less, they’re worse off. When they’re worse off, they demand more. When they demand more, liberals give them more. And when liberals give them more, society collapses. Don’t have society collapse: Stop the Affordable Care Act.
Of course, the CBO report did in fact find that providing this health coverage will induce millions of people to work less or not at all. So let’s look a little more closely at this syllogism.
It’s undoubtedly true that if you give things to some people, they’ll work less. But it’s not true in all cases. Unfortunately, this sort of assertion is a staple of anti-government rhetoric: For any government expenditure, it can be shown to have enriched some deadbeat or rip-off artist. But so has the derivatives market. Meanwhile, plenty of people work more when you give them more.
In fact, most conservative policies these days are based on the idea that certain people need to be given more to induce them to work harder and to produce more. Of course, those highly-sensitive individuals are the rich and corporate executives, who, without more money (including from the government) simply wouldn’t keep working and creating. By the same logic, though, we should extend even more benefits to more working people – perhaps even raise wages at the low end – to encourage them to work. But for some reason low-income Americans, unlike the wealthy, are presumed to work best if we take incentives and benefits away from them.
Moreover, as the CBO pointed out, there is indeed a “perverse” work disincentive in Obamacare – but it’s the opposite of what conservatives have taken the report to say. Rather, it’s that, as people’s incomes rise, they get less support – a “tax,” in effect, on work. And, of course, taxes are bad. So we actually should be less stingy about giving even better health care benefits to even more people.
Of course, we’d need to pay for those expanded benefits, which appears to be the real point of the “collapse of our culture” argument – not so much that people won’t work as that people who do work will wind up having to support them. But there’s then an obvious way to pay for these benefits if you want to encourage work: tax unearned income (which accrues, by definition, to nonworkers) at a higher rate than we tax earned income. And if giving people money or benefits for which they didn’t have to work encourages sloth, then we’d best start taxing away all inheritance post-haste, as well.
We don’t, of course, because that would tax primarily the rich. But most parents want to leave something behind for their children, because we know that getting a leg up is usually the way to climb even higher. Few people throw their kids out of the house with no means of support, on the grounds that that will make them more successful. Nevertheless, many argue that helping other people’s children only cripples them as opposed to, well, helping them.
It is incumbent upon liberals to assert not just that children “deserve” health care or that people “shouldn’t have to” work grueling hours and still not make ends meet. Such assertions are, after all, merely subjective. But if investments in human capital actually improve total productivity, then the only argument against is that “the poor you always have with you” actually is a commandment, not a condemnation. And various studies (such as this and this) have shown – not surprisingly – that health care is one of the better bets for boosting productivity and workforce engagement.
And productivity, after all, is really the issue. No one longs for the days when people had to toil every waking moment to scrape out subsistence livings, instead of a modern world where a 40-hour work week can enable one to produce more economic value than the greatest medieval monarchs could even dream of. So do we really think it’s good if more and more Americans feel compelled to work 80 hours a week just to make ends meet? Would it mean our economy, or our morals, were headed downhill if more Americans decided they didn’t need to work two shifts every day but could get by, having all they want, on only one?
In short, it isn’t clear that more work is self-evidently good. Or that society will collapse if people work a little less – let alone if it makes them more productive overall – because they have health care. Just as it didn’t collapse when we moved to a 40-hour workweek and ended child labor. But it’s possible. After all, when I can’t get cable, I do get angry.
By: Eric B. Schnurer, U. S. News and World Report, February 22, 2014
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