The Blahous dust up

(cross posted at freeforall)

Jonathan Bernstein with a post decrying the poor job the WaPo Ombudsman did in describing the controversy around the piece put out last week by Charles Blahous that said the ACA will increase the deficit (contro to CBO’s longstanding estimates). I was with my family in a car heading South on I-95 reading about the unfolding controversy on twitter last week, and so I didn’t post on it. However, even now, it is mostly being described as a dust up over double counting (how can something help the deficit and Medicare). Jonathan Chait has a good piece debunking this claim, Kevin Drum has a nice illustration of why this is not a valid claim, and Josh Barro adds a bit more on how this interpretation undermines one of the conservative charges leveled against the President. This is an old argument, rehashed.

The primary issue with the Blahous study is his development of a new baseline against which to compare the ACA. As I tweeted last Tuesday as we sped to vacation wonderland (I wasn’t driving)

(Here are Avik’s posts including Chuck’s guest post response: here and here).

The baseline used by Chuck Blahous essentially says that when tax inflows are no longer large enough to pay for Medicare outlays, then they will be cut to equal tax inflows; this is what is set to happen by law, but then again so are the cuts to Part B payments under the SGR. The baseline he used in this study to estimate the ACA’s impact on the deficit essentially says, Voila! There are no long term financing problem with Medicare after all, we will just fix them when we have to do so, using some sort of secret plan to cut Medicare spending (he seems to have backed off this later, but if so, the ‘stop the presses’ aspect of the paper is gone). As compared to this (very large, hypothetical) cut in Medicare expenditures cooked into the baseline used by Blahous in his study, the ACA would increase the deficit. That is a bit like me saying if I was a faster runner, I could be a professional marathoner. My point is that the main action in this study is comparing the ACA to a baseline that is unrealistic, not double counting.

Now what I would really like to read would be Chuck Blahous’ thoughts on what type of health reform strategies that we should undertake, especially ones that could do away with the long term financing problems faced by the program. I mean that sincerely because he is a great analyst with lots of experience, this just wasn’t his best.

Author: Don Taylor

Don Taylor is an Associate Professor of Public Policy at Duke University, where his teaching and research focuses on health policy, with a focus on Medicare generally, and on hospice and palliative care, specifically. He increasingly works at the intersection of health policy and the federal budget. Past research topics have included health workforce and the economics of smoking. He began blogging in June 2009 and wrote columns on health reform for the Raleigh, (N.C.) News and Observer. He blogged at The Incidental Economist from March 2011 to March 2012. He is the author of a book, Balancing the Budget is a Progressive Priority that will be published by Springer in May 2012.

5 thoughts on “The Blahous dust up”

  1. I am confused about the term “trustee” as used in federal parlance. I thought that the duty of trustees was to safeguard and oversee the proper operations of the entities they were trustees of, not work to dismantle them.

  2. I don’t have any notion of who Chuck Blahous is. But on the other hand your belief that he might redeem himself with an honest analysis anytime soon strikes me as probably misplaced. Cognitive dissonance, denial, the whole range of psychological mechanisms that someone uses to walk down a path like this in the first place, take a long time and a lot of work to untangle. (I think this is something we all know from personal experience.) Once Obamacare is either established or undone, then he’ll be able to move forward. In the meantime, he’s probably stuck.

    1. @H
      He is explicitly the Republican trustee, appointed by President Obama, who by convention names a D and an R to the two public trustee posts (if the D and R public trustee get together on something, that is what tends to carry weight).I am interested in knowing his thoughts and plans for moving ahead on health reform in Medicare and generally for two reasons. First, I assume that it will eventually take some sort of political deal to move ahead on health reform, and Charles Blahous is an important voice for republicans. Second, republicans have been far more clear about what they are opposed to than what they are for, and progressives should be asking for details of what they will do viz. health reform. FWIW he is more focused on Social Security than health historically and has a book length treatment of Social Security.

      1. @Don:

        “republicans have been far more clear about what they are opposed to than what they are for” isn’t, alas, really true, except in a very recent, contingent sense. Republicans were for individual mandates, for example, pretty much up to the day those mandates were incorporated in legislation backed by a democratic president. They’re for full repeal of the ACA, until someone asks polite questions about rescission, pre-existing conditions, twenty-something offspring… Even Blahaus is for automatic cuts in Medicare, until someone asks him what he would cut. Essentially, you’re asking for honesty and commitment from a member of a party that has (recently at least) made duplicity its trademark.

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