Ruth Marcus becomes the latest in a long line of commentators to disparage the health reform bill’s deficit-reduction possibilities because they’re about the future:
And here is the accompanying tablespoon of salt: The CBO is required to assume that Congress will do what it promises. So, for example, Congress promises in the measure to cut several hundred billion dollars in Medicare spending. Sometimes such promises have come to pass. Other times, as in the current difficulty with scheduled cuts in Medicare reimbursements for doctors, they are put off because of a public — or politically connected — outcry.
Look, I’d certainly say that forecasts of the future legislative environment should be taken with a grain of salt. But Marcus adds up several grains worth of doubts and then says the CBO’s assumption that Congress will do what it promises deserves a full tablespoon of salt. It’s of course true that this is how the CBO works, but disparaging its scores on these grounds is a universal solvent that would destroy any effort at policy analysis. The long-term fiscal deficit, after all, is itself a prediction about future events so the only thing Congress can possibly do to change it is to make repealable promises about what future policy will be.
I think you could coherently say that the 111th Congress just shouldn’t worry about the deficit beyond 2011 at all. You could say it’s silly to even talk about events in 2012 or 2013 and absurd to talk about events in 2027 since those deficits will be determined by future congresses. But if you don’t care about future deficits, then there’s no reason to carp that the deficit reduction isn’t strong enough. And if the 111th Congress is going to care at all about long-term fiscal problems, that caring will necessarily take the form of promises about the future course of policy that will be subject to repeal by future congresses.
It’s also worth noting that default rules matter. George W Bush pushed his tax plans with, among other things, phoney baloney deficit numbers based on the expiration of tax cuts that he never intended to let expire. But notwithstanding his subjective desire to see those cuts never expire, many of them will in fact expire and the fact that current law schedules them to expire makes it much easier for proponents of higher taxes to achieve their policy objective.