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Charles Blahous’ Absurd ‘New Math’ In A Chart

By Jeff Spross on April 11, 2012 at 3:00 pm

"Charles Blahous’ Absurd ‘New Math’ In A Chart"

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Yesterday, former George W. Bush official Charles Blahous published a study claiming the Affordable Care Act would add at least $340 billion to the federal deficit over the next decade. This contrasted with the Congressional Budget Office’s score, which found the ACA to be a modest deficit reducer in its first decade, and a much larger deficit reducer thereafter . Conservatives promptly heralded the study as proof that Democrats and the Obama administration had gamed CBO’s scoring with a gimmick called “double-counting.”

Blahous’ accounting assumed Medicare spending would simply cease once the Medicare trust fund runs out. This would render the ACA’s spending cuts to Medicare moot, while its spending in other areas would remain — and thus severely worsen the ACA’s effect on the deficit. But Medicare isn’t the only government program with a trust fund that may soon run out. If Blahous’ logic is applied consistently to the entire federal budget, it radically changes the country’s overall debt path, as the Committee for a Responsible Federal Budget discovered when it ran the numbers:

By Blahous’ accounting, debt as a percentage of GDP would drop to almost zero by 2050. That’s essentially equivalent to the drop predicted by Paul Ryan’s latest “Path to Prosperity” budget. If Blahous’ accounting framework is accurate, there is no long-term debt problem and thus no need for the GOP’s 2013 budget proposal.

This, of course, is nonsense . And nothing demonstrates this point better than the fact that Rep. Paul Ryan (R-WI) and the Republicans didn’t use this baseline in measuring the cuts to the deficit in their own budget. They relied on the CBO’s method: Once the trust funds run out, Congress will continue the spending that keeps the relevant programs going because our society has a demonstrated commitment to maintaining the social safety net for retirement, health care, and so forth. This is largely what creates the future debts everyone is so concerned with in the first place. That much more realistic baseline is the one against which the CBO measured the ACA, and found that it does lower the deficit.

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