Flimflammery over 'Obamacare'

By: Michael Kinsley
Politico.com
January 25, 2011

It’s a standard item in the Republican checklist of what’s wrong with Obamacare: that advocates of the program, in computing its costs, compare six years of expenses with 10 years of revenues. Because the most important benefits don’t kick in until 2014, the health reform program has an extra four years (2010-2014) to collect money before it has to start paying out. When the first 10 years is up (government costs and revenues are usually reported over 10-year periods), and every year’s income is compared with every year’s outgo, Obamacare will turn out to cost 60 percent more than projected, Republicans say. According to the official stats of the Congressional Budget Office, Obamacare will actually reduce costs and save the government money over 10 years. Not so, say Republicans (who voted last week in the House to repeal the whole thing). The accounting is phony. The Democrats are giving themselves a four-year head start.

The first time I heard this particular argument, months ago, I thought, “That can’t be right.” The deception, if it exists, is too obvious. Democrats aren’t that stupid. Nor do they think voters are that stupid. Or at least I hoped not. Besides, it makes no sense. Think about it for a second: Virtually all the new revenues from health care reform are inextricably tied in with the costs — penalties for not carrying insurance and so on. If it’s not yet required that everybody carry insurance, there can’t be any penalty for not carrying it, can there?

But then, Republicans are not so stupid, and they don’t think voters are so stupid as to think they could get away with this, are they? Almost any issue involving economic statistics is complicated enough, or can be fudged enough, to create some ambiguity — some argument for your side that isn’t completely wrong. Could this be one of those rare exceptions?

And sure enough, if you go to the Congressional Budget Office documents, you see that the CBO estimates that the revenue from penalties on corporations and individuals for not carrying insurance are exactly $0 for the first four years. Total revenues from all sources for the first four years are $32 billion, out of a total for the first decade of $525 billion.

(More here.)

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