Will Obamacare Increase The Deficit? Ctd

Andrew Sullivan —  Apr 11 2012 @ 3:03pm

 by Patrick Appel

Ezra Klein thinks Charles Blahous's cost estimate is laughable:

The graph above compares Blahous’s baseline to the “current law” baseline. That’s already stacking the deck: The current law baseline assumes the expiration of all the Bush tax cuts, it assumes the spending sequester will take effect, it assumes huge Medicare cuts that Congress will never permit, and much more. If we follow current law, we don’t really have a deficit problem. No one believes we will follow current law. If they did, they wouldn’t worry about deficits.

Blahous defends his calculations:

The historical evidence is overwhelming that Congressional behavior is heavily influenced by Social Security and Medicare solvency determinations. Specifically, Congress is much less likely to enact cost-containment measures in either program when projected insolvency is more distant. Supporters of the ACA have elsewhere made clear that they agree the ACA will extend the Medicare Trust Fund’s solvency, protect its spending authority, lessen the risk of near-term benefit reductions, and mitigate the urgency of further Medicare reforms. 

Blahous has a point here, even if his overall calculations are flawed. On the whole, I agree with Howard Gleckman that the eventual cost of Obamacare is highly uncertain. The CBO estimate may be better than Blahous's, but one look at the CBO's cost-projection track-record and its self-professed uncertainty should humble pundits of all stripes.

(Chart from the CRFB)