Romney and Obama are Both Medicare Double-Counters
By Josh Barro Aug 24, 2012 9:00 AM CT
One of the Obama administration's talking points in favor of the Patient Protection and Affordable Care Act has been that the law extends the solvency of the Medicare
trust fund. By slowing the growth of Medicare spending, the law postpones the date when the Medicare Trust Fund
will be exhausted to 2024 from 2016.
Conservatives have typically responded that this claim involves double counting. The law cuts Medicare spending in order to make funds available to finance and expansion of Medicaid and subsidies for middle-income people to buy private health insurance. If the money is being spent on a new benefit, it can't also be used to shore up Medicare.
The president's double count is actually in line with the silly law that governs the Medicare Trust Fund -- more on that later -- but as a matter of measuring fiscal sustainability, the conservative critics are right: You can't spend money and say it's being set aside to cover debts due in the future.
But now,
Mitt Romney is doing a Medicare double-count of his own which is in line with neither the law nor any reasonable yardstick for fiscal sustainability. Campaign spokeswoman Andrea Saul
says Romney's plan will "repeal Obamacare and replace it with patient-centered reforms that control cost throughout the health care system and extend the solvency of Medicare."
It's hard to see how that can be the case. Romney would repeal the Medicaid and insurance subsidy provisions in Affordable Care Act, theoretically freeing up those funds to shore up Medicare. But he has also pledged to restore the law''s $716 billion in scheduled Medicare cuts over the next decade -- that is, Romney will take the money he saves on Medicaid and spend it on Medicare. If he says these savings will also shore up the Medicare trust fund, he is double counting, too.
The main reason that politicians are able to so abuse the Medicare trust fund in their discussions of it is that the trust fund makes little sense as a fiscal concept. Like the Social Security Trust Fund, it is an accounting fiction. There is no pool of investments in the fund, just Treasury bonds that list the federal government as both creditor and debtor.