• Willful ignorance

    In the past, I’ve sometimes been hard on Megan McArdle.  I’m about to do it again.  On the topic of the recent CBO estimate on discretionary health care spending, she writes:

    Meanwhile, the CBO just came out and said that the health care reform was slated to cost $115 billion more than they said it would.  Why?  Because they didn’t have time to calculate the effects on discretionary spending such as new administrative capacity, demonstration projects, and continuation of successful short-term initiatives.  As my fiance notes, Olympia Snowe’s demands to slow down the process suddenly seem a lot more reasonable.

    The progressive response on this, as I understand it, is threefold:

    1. We don’t have to fund this stuff
    2. Maybe we’ll cut something else to fund this stuff
    3. C’mon, who cares?

    Predictably, I find none of these convincing.  Some of the stuff we do have to fund, because the agencies are going to have to have staff to deal with the new requirements; and the stuff we don’t have to fund is the demonstration projects that I was assured were going to bend the cost curve.  So if we save this money in the first ten years, we lose the possibility of lower cost growth after the first decade.

    What’s really worrisome, however, is that I’m unaware of any happy surprises where it turns out this thing is going to cost less than expected.  It’s early days, yet, of course–but it’s a little too early to take rapidly mounting cost projections in stride.  We haven’t done anything yet, and we’re somehow already at least $100 billion in the hole.

    McArdle is an economist.  She’s the business and economics expert for the Atlantic.  It says so, right there next to her name on her blog.  You would think she might at least try to see if there might be another explanation.  Perhaps the one offered by the Director of the CBO, himself:

    The potential discretionary costs identified two days ago include many items whose funding would be a continuation of recent funding levels for health-related programs or that were previously authorized and that PPACA would authorize for future years. (For example, those potential costs include $39 billion authorized for Indian health services that already receive appropriations every year.) CBO estimates that the amounts authorized for those items exceed $86 billion over the 10-year period (out of the roughly $105 billion total shown in the table provided yesterday). Thus, CBO’s discretionary baseline, which assumes that 2010 appropriations are extended with adjustments for anticipated inflation, already accounts for much of the potential discretionary spending under PPACA. That is one of the reasons that potential discretionary effects are shown separately from effects on revenues and mandatory spending in CBO’s cost estimates.

    It’s frustrating enough that it’s nearly impossible to counter the misinformation spread by politicians; it’s simply ridiculous that content experts can’t be bothered to check with the source itself to see if they are right or wrong.  Especially, when McArdle is so kind as to claim she knows the only possible explanations, even though many people (including me) offered another one before she published her post.  It takes a special kind of hubris to decide that the other side is wrong without even seeing what their argument is.

    Moreover, the snide comment about Snowe and her slowing things down is maddening.  It’s petty, has nothing to do with the CBO numbers, and should be beneath her.

    I don’t expect to be restarting my Atlantic subscription anytime soon.

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