StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



What Is David Broder Thinking?

22 Nov 2009
Posted by Stan Collender

David Broder has a column in today's The Washington Post that I find close to incomprehensible. 

First he says that the Congressional Budget Office's substantive, detailed analysis shows that the bill proposed by Senate Majority Leader Harry Reid (D-NV) will reduce the deficit. 

(Note to David: CBO does not give its "blessing" to legislation; all it does is score the bill.)

Second, he says that the CBO scoring that shows the bill reducing the deficit compared to existing law is not as valuable as polls that show that Americans don't believe it.  And he says that the polls are somehow more correct than CBO even though one group actually analyzed the bill while the other got its almost certainly less-than-complete-and accurate information from someone else.

Third, Broder says "every expert I have talked to says that the public has it right. These bills, as they stand, are budget-busters." 

(Question: David...Did you talk to the current director of the Congressional Budget Office who actually did the analysis rather than a former CBO director who didn't?)

Ezra Klein, who also writes for The Washington Post, also takes Broder to task for making other similarly inconsistent claims.  You also have to like Ezra's take on the strange view of deficit hawks towards health care:

I'm confused by the budget hawks who that take the line: "This bill needs to cut the deficit, and I don't believe Democrats will cut the deficit, but since the actual provisions of the bill unambiguously cut the deficit, then I guess Congress won't stick to it."

 

 

Come on, Stan. You know what

Come on, Stan. You know what the key distinction is. CBO scores the bill assuming that the current and future Congresses and administrations implement everything -- including the sacrifices -- per the bill (i.e., CBO doesn't even consider the possibility that some provisions won't be fully implemented, because that's not CBO's role), and the public, most experts, and Broder are saying that this assumption is extremely dubious, and it is unlikely that anything close to the level of budgetary sacrifices in the bill will actually be implemented. You get that, right?


Deficit hawks

Why the confusion? Did not the House of Representatives _already_ vote to eliminate at least one large spending cut assumed under their legislation?


I don't understand why

I don't understand why competent executives haven't been brought in and given lucrative performance based incentives to identify and eliminate the "fraud, waste and abuse" that the President and Congess says is so prevalent in Medicare. If they had done that, and demonstrated some level of success, then we might have some level of comfort that Congress can achieve the goal of eliminating hundreds of billions in Medicare fraud to help pay for this healtchare bill. Even if the bill fails, if they could point to actual fraud and waste having been eliminated, it would endear them to the public and maybe Congress' approval ratings would jump to at least the high 20% area.

But they haven't done that. Instead, they tell us there is massive fraud, but they do nothing about it. So the fallacy seems to be they will achieve anywhere near several hundred billion of savings from Medicare. And just the threat of cutting Medicare got the 65 year old white haired and bald radicals to storm the town halls over the summer in protest. What was Obama's response?

He folded like a lawn chair. No political will. He proposed buying their vote with a $250 payment, justifying it by noting they won't get a social security cost of living adjustment next year, adding $13 billion to the debt.

Those are some of the reasons why the public doesn't believe the projections coming from the CBO.


That's funny. Should we

That's funny. Should we bring in the same "competent executives" who are paying themselves lavish bonuses for destroying the financial system? Or the same ones who deny health care to the sick even after they've paid their insurance premiums for decades? Which ones would you like in charge of your health care?


Broder vs Real Structural Dynamics of HC

I'll probably regret this but let me take a shot. Broder is representative of a lot of folks (pundits, pontificators and et.al.) who have a wide appreciation of the talk and a shallow grasp of the analysis. Pros and cons included. Perhaps I'm not all that different. HC is a very complex system of major sub-components all of which march to the beat of perverse drummers. In all this mess and complexity the centrist middle-of-the-road commentators have still missed what's going on. While the sturm und drang has been around either the public health option and/or the Republican just say no in actual fact there are two components that will really bend the cost curve. One is exchanges which start to introduce a major structural element of feedback into the systems. Remember one of the fundamental problems overall is fee for service instead of fee for performance. The other element (which Orzag has emphasized and nobody has paid attention to) is the notion of setting evidence based standards on reimbursement payments based on measured performance. In other words the mechanisms for a fundamental shift in payments and therefore incentives are being snuck into place without anyone noticing. To top it off the CBO doesn't and can't score all this because it's outside it's charter.

If you'd like a fuller discussion with flowchart graphics of the current vicious feedback cycle driving costs up exponentially vs. the sneaky new virtuous cycle that opens up a whole new ecology try this:
http://llinlithgow.com/PtW/2009/09/a_taughttauttaunt_moment_healt.html
And for a complementary discussion of the puts and takes of interest groups and partisan posturings try this:
http://llinlithgow.com/PtW/2009/09/paths_toward_healthcare_compro.html
Forgive me for making a painfully complex subject worse but...somebody's got to take a shot.


Object

"What is David Broder Thinking?"

Is David Broder thinking?


I am shocked at the American public. And the experts. Shocked.

The American public doesn't believe that this bill will be paid for 40% by cuts to Medicare to be named later, when Congress promises it will? (Even as Congress has cut Medicare payments by 21% under its promises in current law.)

And it doesn't believe that raiding the Social Security trust fund to finance this plan by running up debt -- but accounting for it only after the scoring period -- is paying for it?

And it doesn't think that gaming the scoring period by collecting taxes years before benefits start being paid, so that more years of taxes against fewer years of benefits in the scoring period equals "balance", is exactly on the up and up?

My gosh, when did the American people, and all the "experts" Broder talked to, become so cynical?

Question: David...Did you talk to the current director of the Congressional Budget Office

Well, here's what Elmendorf and his crew wrote (.pdf) in scoring the Reid plan...

~~quote~~
Key Considerations. These longer-term calculations assume that the provisions are enacted and remain unchanged throughout the next two decades, which is often not the case for major legislation.

For example, the sustainable growth rate (SGR) mechanism governing Medicare’s payments to physicians has frequently been modified (either through legislation or administrative action) to avoid reductions. Legislation to do so again is currently under consideration in the Congress.

The legislation would put into effect a number of procedures that might be difficult to maintain over a long period of time. Although it would increase payment rates for physicians’ services for 2010 relative to those in effect for 2009, those rates would be reduced by about 23 percent for 2011 and then remain at current-law levels (that is, as specified under the SGR) for subsequent years.

At the same time, the legislation includes a number of provisions that would constrain payment rates for other providers of Medicare services.

In particular, increases in payment rates for many providers would be held below the rate of inflation (in expectation of ongoing productivity improvements in the delivery of health care).

The projected longer-term savings for the legislation also assume that the Independent Medicare Advisory Board is fairly effective in reducing costs — beyond the reductions that would be achieved by other aspects of the bill — to meet the targets specified in the legislation...

Whether such a reduction in the growth rate could be achieved through greater efficiencies in the delivery of health care or would reduce access to care or diminish the quality of care is unclear.

The long-term budgetary impact could be quite different if key provisions of the bill were ultimately changed or not fully implemented.
~~~~~

Which might plausibly be translated into plain English as:

"Warning. The scoring of this bill as 'not budget busting' is based largely upon assuming...

"* Congress will keep the very same sort of cost-cutting promises that it has repeatedly overtly renegged upon in the past (the 20+% cuts to Medicare)

"*Congress will take other steps that it has repeatedly been unable to follow through upon in the past (that new Advisory board is going to a lot more effective than the old SGR Advisory board, eh? among other things), and

"*Asssuming future trends in health care costs and productivity that contradict all experience (cost rising below the rate of inflation with no reduction in quality of care).

"Caveat emptor."

How could any "expert" read that and have any qualms to share with Broder?

Personally, for those who can't imagine that those who are drafting this bill would disingenuously play any games with its financing, I offer this mental exercise:

Think of the drafters of this bill as being politicians, you know, just like Republicans.


Not only that

But the bill is scored over 10 years. The tax revenue starts well before the spending is fully ramped up. So when you measure over a ten year period, the resulting plan looks much better because you have 10 years of revenue but only 7-8 years of spending. In future decades, the fiscal outlook won't be nearly as rosy.




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