dollars -- and Eric Cantor knows it
By Ezra Klein
House Republicans are in a pickle: One of their new rules says that
new legislation must be paid for. But the health-care bill reduces the
federal deficit by more than $100 billion over the next 10 years.
Luckily, they've figured out an answer to their problem: They've
decided to simply exempt the repeal bill from the rules. That means
they're beginning the 112th Congress by lifting their own rules in
order to take a vote that will increase the deficit. Change we can
believe in, and all that.
Republicans are aware that this looks, well, horrible. So they're
trying to explain why their decision to lift the rule requiring fiscal
responsibility is actually fiscally responsible. Majority Leader Eric
Cantor got asked about this, and he returned the reporter's serve with
a volley of nonsense. "About the budget implications, I think most
people understand that the CBO did the job it was asked to do by the
then-Democrat majority, and it was really comparing apples to
oranges," Cantor said. "It talked about 10 years' worth of tax hikes
and six years' worth of benefits. Everyone knows beyond the 10-year
window, this bill has the potential to bankrupt this federal
government as well as the states."
That's all well and good -- but it's not true. Take Cantor's core
point: The health-care reform bill includes "10 years' worth of tax
hikes and six years' worth of benefits." There's nothing philosophical
about this statement. It can be checked with a simple look at the
spending tables the Congressional Budget Office published in their
analysis of the bill. And when you look at those tables, Cantor's
statement falls apart:
Roughly speaking, new spending is what counts as "benefits." Those are
the lines shooting up. New taxes are the lighter blue part of bars
pointing down. In years one, two, and three, new benefits are larger
than or matched with new taxes. In year four, that's not true, but the
difference is fairly small. And in the six years after that, even
Cantor admits the benefits match or overwhelm the taxes.
So as an empirical matter, what Cantor is saying just isn't true. But
just for the record, it's also wrong as a theoretical matter:
Comparing 10 years of saving and working with six years of spending is
not comparing apples to oranges. Parents will routinely work harder
(revenue increases) and save more (spending cuts) for decades in order
to help their children pay for college. That's 18 years of raising
revenues and cutting costs in return for four years of spending on
benefits. An accountant wouldn't look at that and say he couldn't
assess the wisdom of the decision because it's apples-to-oranges. An
accountant would happily note that that's how you pay for things when
you're being responsible. Cantor's party might be out of practice on
that, given the way they paid -- or, to be more specific, didn't pay
-- for the Medicare Prescription Drug Benefit, but it doesn't make it
any less true.
As for the period "beyond the 10-year window," the Congressional
Budget Office -- which is now comparing "apples to apples," as the law
is delivering full benefits for all 10 of the next 10 years -- says
the law saves vastly more money in its second decade: "The legislation
will reduce federal deficits during the decade beyond the 10-year
budget window relative to those projected under current law—with a
total effect in a broad range around one-half percent of GDP." That's
in the neighborhood of a trillion dollars.
What's important about Cantor's argument is not that he's wrong. It's
why he's saying something he knows to be wrong. There are plenty of
reasons to oppose the health-care reform bill. You might not want to
spend that money insuring people, or you might not think the
legislation goes far enough in reforming the system. But as a matter
of arithmetic, using the math that Congress always uses, the bill
saves money. It cuts enough spending and raises enough taxes to more
than pay for itself, both in the first 10 years and in the second 10
years. In fact, Democrats added that second metric, which is not
typically a hoop that legislation has to jump through, in order to
specifically allay concerns that the legislation would backload its
costs. Instead, as CBO said, it ramps up its savings.
But Cantor and the GOP know full well that the bill is unpopular
largely because people think it increases the deficit. Polls have
shown that only 15 percent of Americans know that CBO said it will
reduce the deficit. If, in the repeal fight, it becomes widely
understood that the bill reduces the deficit, it will become more
popular. So it's crucial, as the repeal effort goes forward, for
Republicans to become much more brazen in falsely asserting that the
bill doesn't really reduce the deficit, and that even if the CBO does
say it reduces the deficit, that they're saying that because they've
been tricked somehow. But CBO wasn't tricked. If it were, Cantor, who
has a staff dedicated to figuring these things out, would have a
better argument than the one he's offering
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