CBS News ran a segment last night on Romney’s claim that Obama cut $716B from Medicare, pointing out that while these cuts are true, they really aren’t bad cuts. Also Paul Ryan’s House budget included the same cuts that all but 4 GOP members voted for:
I watch something like this and my initial thought is “where to start?” because there’s so much misinformation in one news segment. Fortunately, Yuval Levin wrote a great piece for NRO debunking the very claims that CBS News included in their segment, before it even aired. In fact his article was really quite prescient which means correcting CBS News will be easy.
Let’s start with this claim that Yuval Levin calls the “Obamacare Medicare cuts aren’t very serious” defense. He explains:
The second Democratic defense, the “it’s not so bad” defense, suggests the Democrats don’t grasp just how the fee-for-service design of Medicare that they’re eager to retain forever actually works. The basic argument the Democrats are trying to make is that because the cuts consist mostly of reductions in provider payments, they’re not actually cuts to benefits that seniors get but only to money given to the people who provide them with coverage or care.
He’s right. CBS News made this very argument: “According to the Congressional Budget Office, it’s not the patients who would lose money. It’s the providers.”
But in a fee-for-service system, cuts to fees are cuts to services, especially because administrative price controls create supply shortages, which means seniors will have fewer options and less access. …
Health-care providers have to make a profit to survive, they’re not just cows to be milked by Medicare. And blunt reductions in payment rates within a very inefficient fee-for-service system that stands in the way of real productivity improvements mean that these providers just won’t be able to keep treating Medicare patients. The actuaries of the Medicare program itself (who work for Barack Obama) have made it clear that they think taking $710 billion out of Medicare to pay for Obamacare is likely to create serious problems for current seniors, writing shortly after the law was enacted that:providers for whom Medicare constitutes a substantive portion of their business could find it difficult to remain profitable and, absent legislative intervention, might end their participation in the program (possibly jeopardizing access to care for beneficiaries). Simulations by the Office of the Actuary suggest that roughly 15 percent of Part A providers would become unprofitable within the 10-year projection period as a result of the productivity adjustments.
So even Obama’s own Medicare actuaries say that his massive Medicare cuts would hurt current seniors. Wow! That’s interesting because at the end of the segment, CBS News argues that the cuts are actually good for Medicare by making it more efficient and extending the life of the program. But how can cutting hospital reimbursements make Medicare a better program when their current reimbursements are already too low? How stupid do they think we are?
OK, on to the second claim that Yuval Levin calls the “Ryan did it too” defense, which is exactly what CBS News claimed in their segment: “In fact, vice presidential nominee Paul Ryan’s proposed budget contains these same reductions“.
Well, not exactly. Levin writes:
The “Ryan did it too” defense is perhaps the most amusing of the three, as it succeeds in being simultaneously untrue, irrelevant, and an admission of the basic charge against the Democrats. Even as they call Paul Ryan a cruel and merciless budget cutter who cares not for the weather service and would gladly see children exposed to E. coli, the Democrats justify their taking $710 billion out of Medicare and spending it on Obamacare over the next decade by pointing out that Paul Ryan didn’t put that money back into Medicare in his budget. So if he had, would that have made their cuts unjustifiable? Well it so happens that he did. By repealing all of Obamacare’s spending, the Republican budget does not spend the money Obamacare took out of Medicare and thus those funds are used to extend the Medicare trust fund.
So basically, Obamacare takes the $716B out of Medicare and spends it on something completely different. The money is gone. But Ryan’s budget would repeal Obamacare and thus would take the cuts made by Obamacare and put them right back into Medicare instead of spending them on a new entitlement. It’s really the same thing as not making the cuts at all.
So to say Paul Ryan’s former budget is making the same cuts as Obama is just not accurate. And it’s also irrelevant because Romney isn’t running on Ryan’s budget. He’s running on his own budget that would ensure those massive cuts never happen in the first place.
And lastly, they claim that Obama’s massive Medicare cuts don’t come out of the Medicare trust funds. How can that be? There are two Medicare trust funds that contain taxpayer money that pays for the entire program. If Obamacare is taking $716B out of Medicare and it’s not coming out of the very trust funds that pay for Medicare, where in the heck is it coming from? Pixie dust?
I think they are trying to hide the fact that it’s coming out of the trust fund by calling it “savings” or a reduction in growth or some other nuanced terminology. But the bottom line is you can’t rob Peter to pay Paul without sticking your hand in Peter’s pocket.
The way the segment ends you’d think Obama has won the argument. But that’s only due to inept reporting by CBS News which unfortunately will mislead many into thinking Romney is lying.
And they wonder why we say they are biased.
The funny thing is Krauthammer addressed much of this in his segment on special report last night: