In last night’s U.S. Senate debate in New Hampshire between incumbent Jeanne Shaheen (D.) and challenger Scott Brown (R.), Shaheen uttered a flat-out, bald-faced lie: that Obamacare doesn’t cut Medicare spending to pay for its expansion of coverage to the uninsured. It’s a talking point that a number of Democratic Senate candidates—and their enablers in the lefty blogosphere—have been clinging to. And it’s embarrassingly dishonest.
“I want to go back to Scott Brown’s suggestion that we’ve taken three-quarters of a trillion dollars out of Medicare. That’s been shown to be false,” claimed Shaheen. “The fact is that our passage of the Affordable Care Act has actually lengthened the life of Medicare by 13 years.”
Obamacare cuts Medicare by $853 billion from 2014–23
Wrong. The nonpartisan Congressional Budget Office, Washington’s official scorekeeper of the fiscal impacts of legislation, has repeatedly described Obamacare as reducing Medicare spending by hundreds of billions of dollars. The most recent official estimate comes from July 24, 2012, when the CBO projected that repealing Obamacare’s Medicare cuts would increase “spending for Medicare…by an estimated $716 billion over that 2013–2022 period.” Another way to say the same thing: Obamacare cuts Medicare by $716 billion over that period relative to prior law.
This an open-and-shut case.
Democrats started road-testing this talking point in the 2012 Presidential campaign between Mitt Romney and President Obama. The Congressional Budget Office estimated that, between 2012 and 2021, Obamacare cut spending on Medicare by $716 billion. If you want the details on those Medicare cuts, I wrote about them here. Below you’ll find a graphic that spells it out.
To simplify, if you look at the decade between 2013 and 2022, the CBO calculates that Obamacare spends about $1.8 trillion subsidizing coverage for the uninsured. It pays for this by increasing taxes by $1.3 trillion, and cutting Medicare spending by $716 trillion, over the same time frame. Partisan Democrats—masquerading in some cases as "fact-checkers"—have claimed that these cuts aren't really cuts. I debunk this claim here and here.
The numbers get bigger over time. If you move the projections forward 12 months, to the years 2014 to 2023, the scale of Obamacare’s Medicare cuts increases to approximately $853 billion. That's because the cuts go into effect in the 2014 fiscal year.
If Obamacare’s Medicare cuts fund the uninsured, they don’t extend the life of Medicare
Shaheen also tries to have her cake and eat it too, by claiming that Obamacare “extends the life” of the Medicare program. It only does that if you take the Medicare cuts and use them to shore up the program, instead of reducing the deficit.
There’s basically only two legitimate ways to look at Obamacare’s Medicare cuts. One, the cuts are being used to “extend the life” of Medicare, in which case Obamacare increases the deficit by $853 billion. Two, the cuts are being used to pay for Obamacare’s spending binge, in which case Obamacare doesn’t extend the life of Medicare by one day. Shaheen can pick one of these, but not both.
Medicare’s slow growth has little to do with Obamacare
Shaheen told another whopper, when she claimed that Obamacare has “stabilized the cost of health care.” It has done no such thing. Growth in health spending has slowed in nearly every advanced country, due to the effects of the Great Recession.
In Medicare specifically, a new analysis by Loren Adler and Adam Rosenberg of the non-partisan Committee for a Responsible Budget, using CBO numbers, finds that George W. Bush’s Medicare drug benefit is responsible for “over 60 percent of the slowdown in Medicare benefits since 2011.” And Obamacare slightly increased spending on the drug benefit.
And the Congressional Budget Office predicts that once Obamacare gets going, spending on health care is set to speed up once again. “In succeeding years,” the CBO writes in its 2014 Long Term Budget Outlook, “deficits would become notably larger under current law. The pressures stemming from an aging population, rising health care costs, and an expansion of federal subsidies for health insurance”—i.e., Obamacare—“would cause spending for some of the largest federal programs to increase relative to GDP” (emphasis added).
Debate moderators need to call attention to dishonesty
It’s a shame that Chuck Tood, the moderator of the New Hampshire debate, didn’t pursue Shaheen on this topic. He was focused on asking the candidates about Social Security reform, and didn’t want to get distracted by Medicare. But on one of the most important fiscal issues facing the country, Shaheen told a whopper, and she wasn’t asked to explain why.
Now, I should be clear—it’s perfectly defensible, as a matter of policy, to strive to reduce federal spending on Medicare in order to expand coverage to the uninsured. Medicare spends trillions of taxpayer dollars subsidizing health care for the wealthy, instead of focusing our scarce resources on the people who need them. But Shaheen couldn't make that principled case, because Obamacare cuts Medicare for everyone. So instead, she chose to be untruthful.
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READ AVIK’S NEW HEALTH-REFORM PLAN, Transcending Obamacare: A Patient-Centered Plan for Near-Universal Coverage and Permanent Fiscal Solvency. Follow @Avik on Twitter, Google+, and YouTube, and The Apothecary on Facebook. Or, sign up to receive a weekly e-mail digest of articles from The Apothecary.
