Ezra Klein “Misses the Boat” with CBO Report

In a recent post, The Washington Post’s Ezra Klein says Conn Carroll of The Washington Examiner erred in declaring a new Congressional Budget Office (CBO) report showed the costs of the Patient Protection and Affordable Care Act (PPACA) has nearly doubled. According to Klein, Carroll and other cheerleaders of the CBO report are comparing apples and oranges:

The first CBO estimates he quotes run from 2010 to 2019. The second set run from 2012 to 2022. That is to say, the first set of estimates spans 10 years and includes four years where the bill is being implemented (2010-2013) and six in which it’s fully operational (2014-2019). The second set spans 11 years and includes only two years in which it’s being implemented (2012, 2013) and nine years in which it is fully operation (2014-2022).

Technically, Klein is correct with this and other points – different years will show different numbers. However, he is missing the proverbial boat with this analysis in at least the following three ways:

1. Looking with a cynical eye at the political climate under which the PPACA was passed – through reconciliation, under close cost scrutiny and combined with an unrelated student loan bill that was responsible for $19 billion of the deficit reduction claims of Democrats – one could easily envision Congress having delayed the full implementation because it would make the costs appear better. Klein does not address this, instead claiming that of course the costs are greater as implementation begins. While some legislation is delayed to allow adjustment periods for industries (such as a number of Environmental Protection Agency regulations that are both costly and take time to implement), I tend to think the implementation went slowly so as to market the reforms better (as Secretary Sebelius has done many times since the PPACA was signed into law) and to make the numbers look better for initial passage.
2. Carroll points out that the CBO is now expecting more people to be on government health programs, and that is “paid for” through greater taxes coming down the pike. Klein seems to accept this math as fiscally responsible. Last time I checked (Krauthammer nailed this brilliantly in January 2011) raising taxes to account for increased spending was fiscally irresponsible, since the programs involved clearly can’t pay for themselves.
3. Klein says the CBO analysis does not include the $575 billion in expected Medicare cuts enacted in the PPACA through 2019, and thus insinuates the CBO’s analysis is limited in value because the cuts will make the PPACA more fiscally responsible. However, given how legislators have pushed off cuts in Medicare since 2002 via the “Doc Fix,” enacted numerous “patches” to the Alternative Minimum Tax so it won’t hit as many middle-income Americans, and have already started to reverse last August’s Budget Control Act cuts…I find Klein’s optimism that cuts will actually happen to be misplaced.

Klein is a respected (if young) voice for the left, and he has done well in generally being intellectually consistent. However, his analysis of the PPACA has been almost cheerleader-like since before it was passed, and this does a disservice to the obvious mathematical inconsistencies in the legislation.