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October 13, 2009

Artificial Stupidity: How the Democrats Decieved the CBO to Get Their "Reduces the Deficit" Claim

The CBO has very strict rules about how they "score" a bill. Most importantly, they have to score a bill -- or "conceptual language" in a non-bill, as we have here -- according to what is written therein, even if it's jackass.

In other words, if a bill claims that certain things are going to happen that the CBO knows with 95% confidence will never happen -- like Medicare payments being cut -- the CBO still has to pretend those cuts will happen, even though they know, as we all know, they almost certainly won't.

Their scoring methodology resembles a computer's "thinking" -- a computer doesn't think. It follows the rules it's been programmed to follow, no matter how stupid those rules might be. It has no common sense or judgment. The analysts at the CBO might have common sense and judgment, but they're stripped of that -- prevented from using that -- by the "code" of the program they follow, hard-wired into the system by law.

That means that it's not very hard to trick the CBO's "programming," just as it's no difficult feat to crash a computer. Garbage in, garbage out. And the Baucus bill is specifically designed to produce garbage, to get a "salable number" for the deficit.

And that number, while salable, is 100% false, by design.

Among the tricks used to generate that false number:

1. Increased revenues through increased taxes begin in 2010, but new payments and outflows begin in 2013. Meaning the ten-year window the CBO is required to score contains ten years of higher taxes and higher revenues, but only seven years of higher expenses. This is obviously an apples-to-oranges comparison -- and if the CBO looked at 2013 through 2023, with ten years of higher revenue matched against ten years of higher expenses, they'd find a growing deficit, not a faked-up "deficit reduction" of $81 billion.

But the Baucus bill deliberately takes advantage of the artificial stupidity of the CBO's code to compare seven years of spending to ten years of taxes to get a "deficit reduction."

Sure it's jackass to do that. But that's the way the CBO is supposed to do it -- even if it makes no sense -- and the Baucus bill "conceptual language" deliberately exploits that in order to deceive the public.

2. A large amount of the expense for federal health care spending is simply pushed off to the states, taking it off the fed's books -- supposedly. But the states are all operating at deficits now -- they only reason they're not bankrupt is that the federal government periodically votes them huge grants (supposedly as "stimulus") to help close the gap between revenue and spending.

If this health care bill passes, the states will be in even worse shape fiscally. They will avoid bankruptcy through two means: They will raise taxes -- many of these hitting those who make under $200,000 per year (sales taxes, cigarette taxes, other sin taxes) and thus breaking Obama's pledge of no new taxes for such people. He's just mandating that the states do his dirty work for him.

And they will seek, and receive, more aid from the federal government, this aid granted to pay down the huge new unfunded mandates the government has imposed on them.

The CBO's rules are deliberately subverted here -- because technically, the states are supposed to come up with this revenue themselves. In reality -- which the CBO isn't allowed to consider -- the federal government will simply grant them more aid.

The trick is that this aid-to-the-states, inevitable as death, isn't counted as a cost of the Baucus plan. After all, it's not specifically labeled "Federal Subsidies to the States to Fund Federal Health Care Mandates." It's not labeled at all, and so the CBO can't count it as a cost of the federal health care plan. (Actually, since this inevitable aid isn't written into law -- yet -- they have to pretend it's not going to happen at all, and not count what they know will ultimately be passed.)

In reality, it should be so counted. If the federal government has to start granting the states $40 billion a year to pay for the new mandates, that is a federal expense deriving from the Baucus bill. But it won't be labeled as such, and the CBO therefore won't score it as such.

Schwarzenegger, quoted widely by the Leftwing Media in "support" of ObamaCare, specifically objected to this shell-game, stating that if a program is too expensive for the federal government, it's damnsure too expensive for the rickety finances of the states. (Oddly enough, the Leftwing Media wasn't particularly interested in this part of his remarks.)

3. Part of the revenue is supposed to come from increased taxes on high-end insurance plans. Trouble is, health care costs rise every year, and in some states, the health care costs are high enough that it won't take too many years before many plans are deemed "Cadillac plans" and get higher taxes imposed on them -- according to the bill as it is written.

Because the CBO isn't supposed to take into account that Congress will escalate the level at which those increased taxes start kicking in. Garbage in, garbage out.

Congress will almost certainly adjust the numbers in the future to keep too many middle class families from paying big new taxes on their health care policies. And so the deficit will be increased, because a big chunk of the Baucus bill's "conceptual language's" revenues assume that all those voters will be ponying up more in taxes in the future. Again, the "conceptual language" is written in such a way to induce the CBO to pretend that the sky is pink and therefore give them their absurd "deficit reduction" claim.

4. A lot of "savings" come from cutting Medicare and Medicaid... supposedly. But year after year Congress blocks any proposed cuts; this is the third rail in American politics. But the CBO is obligated to pretend they don't know this, simply because the Baucus "conceptual language" claims it will happen.

In all the above examples, the Baucus bill "conceptual language" is written not as a bona fide plan of legislation, but as a "hack" designed for no other purpose than to exploit the strict rules the CBO works under and produce a false number for public consumption. A more straightforward and honest bit of "conceptual language" was scored by the CBO as producing a big new deficit. That conceptual language has not been changed in any meaningful way -- it's simply been reworded to abuse the CBO's methodology and produce a false result.

"Hello," they lied.

And wait 'til they get past their introductions.

Oh, and 5.

5. It's nearly an absolute rule that a politician can't vote to cut Medicare or Medicaid -- not without putting his career at risk. Health care coverage is income like any other -- if your employer gives you a $5000 insurance policy, that's $5000 in income. Same if the federal government gives you that policy -- that is income to you, courtesy of the government other taxpayers.

Medicare and Medicaid are key factors blowing up the US budget in ten years or less. But no one can do anything to bring those costs under control, because -- well, there are millions of seniors who vote. And when they vote, they are being asked, basically, if they'd like to cut their salaries.

Or if they'd like to keep their salaries.

Or if they'd like to increase their salaries.

Guess which is the most attractive option, which is the next most attractive option, and which is the least attractive option of all?

The Baucus/Obama plan will put millions of Americans in the exact same position as the nation's seniors -- where the most important factor (or one of the top three, at least) is whether a politician promises to increase their salary, keep it at the same rate, or... make less income.

Yay, less income!

But the CBO is not supposed to take into consideration what happens when millions of Americans are newly socialized and their primary choice every election cycle is whether to give themselves a raise.

I don't believe they're going to forgo raises very often, and I know for a fact they're never going to vote to cut their salaries.

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posted by Ace at 02:26 PM

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