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Administration Still Making False Claims on Medicare Double-Counting

7:30 AM, Aug 5, 2010 • By MARY KATHARINE HAM
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The Centers for Medicare and Medicaid Services says the Obama administration can't double-count Medicare savings as simultaneously paying for Obamacare and strengthening Medicare's future. The Congressional Budget Office says the administration can't double-count Medicare cuts.

But Kathleen Sebelius is still telling Phil Klein of the American Spectator that that's what they will do. Before cutting him off on a conference call Monday, both Jonathan Blum of the CMS and the Secretary herself refuted the CMS and CBO findings on this subject:

“I think it’s been a consistent budget convention to use Medicare, which as you know is a pay as you go program, that is all paid with a unified budget,” Blum explained. “And when you have few outlays in place of the Medicare trust fund that it both extends the life of the trust fund, because you’re paying less in benefits, but it also produces surplus to the overall federal budget. This is a convention that was used back in 1997, when the Republican Congress passed the balanced budget act…”

At that point, I interjected and quoted a passage, taken directly from an April report by CMS, where Blum works. It read:

“In practice the improved (Medicare hospital insurance) financing cannot be simultaneously used to finance other Federal outlays (such as the coverage expansions) and to extend the trust fund, despite the appearance of this result from the respective accounting conventions.”

And, Sebelius:

“Actually, that is not correct,” she said. “There are two different operating methods of looking at this, and the CMS actuary in the report that you cite differs in his strategic opinion from every accounting methodology that’s used for every other program in the federal budget, that has traditionally used for Medicare. And he has a different interpretation that is not agreed upon by either the Congressional Budget Office or the OMB or traditionally in Congress.”

Megan McArdle refudiates this notion:

[No] one at the CBO thinks that these sorts of word games are appropriate.  Moreover, this "accounting methodology" is not used for every other program in the federal budget; the special off-budget status of the trust funds is very rare.  Indeed, the fact that the trust funds create these kinds of artifacts, which can be used by politicians in misleading ways, is one of the best arguments against this sort of accounting.

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