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December 23, 2009

Speaking of Magic Beans and the Doc-Fix...

Kaus links this fine article at Reason.

"The budget," said Will Rodgers, "is like a mythical bean bag. Congress votes mythical beans into it, then reaches in and tries to pull real ones out." And the Congressional Budget Office (CBO), the non-partisan office tasked with generating official price tags for legislation, is the agency responsible for helping Congress count those mythical beans. But as the health care debate has progressed throughout the year, Congressional Democrats have become far more adept at getting the CBO to count the beans just the way they want.

...

[The] Democrats became more skilled at manipulating the CBO's scoring process. Indeed, they have become so skilled at getting what they want out of the CBO that the office has taken to including strongly worded warnings that the various bills' real costs may not actually match their estimates.

In the House, Democrats shifted an expensive, unpaid-for "fix" to doctor's Medicare reimbursement rates over to a separate bill. And in the Senate, they backloaded the spending so that its full effects would not be felt in the 10-year window that CBO scores. In the latest Senate bill, 99 percent of the spending would occur in the last six years of the budget window.

Nor do the scores count the cost of state level Medicaid expansions—$25 billion in the Senate's bill—or of the private sector mandates it imposes, which, according to Michael Cannon, a health policy analyst at the Cato Institute, could add an additional $1.5 trillion to the total.

The bigger issue is that in budgeting, there are multiple realities available: The various scores put forth by the CBO are based on what might be called "legislative reality"—a fictional world in which there are no changes to current law except the bill under consideration, and new legislation is executed to the letter. That means CBO scores are not permitted to reflect political reality—the understanding that what a law says Congress will do in the future is not necessarily what Congress will actually do.

Knowing this, Democrats have concocted legislation that ignores the relevant facts of political reality and instead skews legislative reality, which is based not on honest expectations but on the promises made in legislation, in their favor.

Read the whole thing. The only thing the CBO can do about this is issue strong warnings that if the supposed legislation they're scoring is not followed strictly to the letter, and if Congress does not restrain itself from passing related spending packages in a supposedly "different" bill, the real-world costs will far exceed their "estimates."

Which is what they keep doing, actually -- the know the Democrats are playing games with the rules and compelling them to report lies as honest numbers.

Not that the media tells you this, of course. They just keep reporting "$132 billion in savings over ten years!" They keep forgetting to report the CBO's increasingly stern warnings that their scorings have less and less relationship to fiscal, or even physical, reality.


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posted by Ace at 03:09 PM

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