This past week was a very big one for some very big promises from Republicans in Washington. It didn’t go well for them.
Three weeks after House Republicans voted to pass a new version of their “American Health Care Act,” the nonpartisan Congressional Budget Office (CBO) weighed in on high-profile pledges from President Donald Trump and House Speaker Paul Ryan. While Trump guaranteed “insurance for everybody” that is “much less expensive and much better,” Ryan insisted the revised AHCA “protects people with pre-existing conditions.” Not content to rest there, HHS Secretary Tom Price boasted that Trumpcare’s $880 billion in cuts to Medicaid will "absolutely not" result in millions losing coverage.
Meanwhile, the Trump administration also unveiled its fiscal year 2018 budget proposal. With its draconian spending cuts to the social safety net programs, the White House blueprint was proclaimed “dead on arrival” even by some Republicans. But more embarrassing to Donald Trump was its double-counting of $2 trillion in revenue for Uncle Sam magically generated by “sustained, 3 percent economic growth.” As Treasury Secretary Steven Mnuchin declared a month ago, “the plan will pay for itself with growth.”
Unfortunately for the White House and GOP leaders on Capitol Hill, the CBO demolished all of those Republican myths. Again. That’s because whether the issue is health care, taxes, job numbers, or the impact of the President Obama’s 2009 economic stimulus, the acronym “CBO” doesn’t just stand for “Congressional Budget Office.” It’s also shorthand for “Conservative Bulls**t Obliterator.”
As it turns out, in recent years that’s been true even when Republicans have their hand-picked choice running the agency.
Consider, for starters, the decades-old GOP myth that “tax cuts pay for themselves.” In January 2015, the new Republican majorities in the Senate and House selected former Bureau of Labor Statistics chief Keith Hall to lead CBO. But by that August, Hall had some bad news for the Red team:
"No, the evidence is that tax cuts do not pay for themselves. And our models that we're doing, our macroeconomic effects, show that."
Of course, it’s not just a question of economics models, but more than 40 years of economic history. Almost from the moment that Arthur Laffer first sketched his now-famous curve on a napkin in 1974, right-wing pundits, politicians, and propagandists have declared as an article of faith the belief that tax cuts incentivize so much economic growth that revenues to Uncle Sam will be at least as high as they would have been without the reduction in rates. Unfortunately for the American people, four decades of supply-side snake oil have produced only mushrooming national debt and record-high income inequality. Far from paying for themselves, the Reagan and Bush tax cuts delivered a windfall only for the wealthy while unleashing oceans of red ink from the United States Treasury. It’s no wonder why every economist surveyed by the University of Chicago Booth School of Business in 2012 and again in 2017 disagreed with the claim that “a cut in federal income tax rates in the US right now would raise taxable income enough so that the annual total tax revenue would be higher within five years than without the tax cut.” As former Obama administration economist Austan Goolsbee put it:
Moon landing was real. Evolution exists. Tax cuts lose revenue. The research has shown this a thousand times. Enough already.
But the CBO is hardly finished in debunking the rubbish being shoveled by Messrs. Trump, Mnuchin, and Mulvaney. Candidate Trump didn’t just promise average annual economic growth of 4 percent during the campaign. The White House web site currently pledges “to get the economy back on track, President Trump has outlined a bold plan to create 25 million new American jobs in the next decade and return to 4 percent annual economic growth.” No President since JFK and LBJ ever achieved that target. When Mulvaney and Mnuchin promised 3 percent GDP growth over the next decade, their rosy scenario represented a 1.1-point gap over CBO’s forecast of 1.9 percent.
GDP growth has averaged only 1.8 annually since 2001.
The Trump budget’s growth assumptions are dangerous fantasies.
Since 2001, U.S. economic growth has averaged only 1.8 percent a year. The slowdown is due in part to an aging labor force that is not expanding as quickly as in previous decades and by a marked drop-off in productivity gains over the past decade. Trump’s forecast is half again higher than the economists’ consensus. And if he’s wrong, Uncle Sam’s tax haul with fall far short. It’s with good reason the Washington Post’s Matt O’Brien mocked “Donald Trump’s $10 trillion magic asterisk.”
No president has averaged 4 percent GDP growth since JFK and LBJ.
But President Trump and Speaker Ryan deserve even more mockery for their jaw-droppingly dangerous lies about the American Health Care Act. As it has since what became the Obamacare (a.k.a. Affordable Care Act) was first debated in 2009, CBO told Republicans exactly what they didn’t want to hear. The promises of “insurance for everybody” (Trump), no impact for those with pre-existing conditions (Ryan), and no one losing Medicaid coverage (Price) were eviscerated by Director Hall’s CBO.
The GOP’s American Health Care Act would cost 23 million people their insurance.
The CBO numbers are scary for Republicans and horrifying for the American people. Version 3.0 of the AHCA would leave 23 million people uninsured by 2027, and 14 million dropped from the Medicaid rolls. AHCA 3.0 would save only $119 billion, compared to $337 billion forecast during the House’s first go-around in mid-March. And with its MacArthur amendment allowing states to obtain waivers to avoid Obamacare’s mandatory dozen “essential health benefits” (EHB’s), the American Health Care Act would jeopardize insurance coverage for those with pre-existing conditions.
Faced with the difficult task of guessing which states would and would not take advantage of those EHB waivers, CBO assumed one-half would not, about one-third would end some of those patient protections, and one-sixth would waive them altogether. With its aged-based tax credits that rise only using an inflation formula (and not increases in premiums as Obamacare does), the AHCA would hurt older, sicker Americans. While premiums rise at first, they would decline starting in 2020 as those over age 50 are increasingly priced out of the market altogether. And they would not be alone:
Community-rated premiums [for those of same age group and geography] would rise over time, and people who are less healthy (including those with preexisting or newly acquired medical conditions) would ultimately be unable to purchase comprehensive nongroup health insurance at premiums comparable to those under current law, if they could purchase it at all—despite the additional funding that would be available under H.R. 1628 to help reduce premiums.
But while premiums on average might go down, CBO and the Joint Committee on Taxation (JCT) “expect that some people would use the tax credits authorized by the act to purchase policies that would not cover major medical risks and that are not counted as insurance in this cost estimate.” Either way, out-of-pocket health care costs are certain to go up, especially for women:
In states that chose to narrow the scope of EHBs, some people enrolled in nongroup insurance would experience substantial increases in what they would spend on health care. People living in states modifying the EHBs who used services or benefits no longer included in the EHBs would experience substantial increases in out-of-pocket spending on health care or would choose to forgo the services. Services or benefits likely to be excluded from the EHBs in some states include maternity care, mental health and substance abuse benefits, rehabilitative and habilitative services, and pediatric dental benefits. In particular, out-of-pocket spending on maternity care and mental health and substance abuse services could increase by thousands of dollars in a given year for the nongroup enrollees who would use those services. Moreover, the ACA’s ban on annual and lifetime limits on covered benefits would no longer apply to health benefits not defined as essential in a state. As a result, for some benefits that might be removed from a state’s definition of EHBs but that might not be excluded from insurance coverage altogether, some enrollees could see large increases in out-of-pocket spending because annual or lifetime limits would be allowed. That could happen, for example, to some people who use expensive prescription drugs. Out-of-pocket payments for people who have relatively high health care spending would increase most in the states that obtained waivers from the requirements for both the EHBs and community rating. [Emphasis mine.]
Importantly, insurance markets under Obamacare are currently forecast by CBO to be stable in most areas of the country. To the degree that insurers face challenges under today’s Affordable Care Act, CBO warned, the biggest risk comes from the Trump administration:
Several factors could lead insurers to withdraw from the market—including lack of profitability and substantial uncertainty about enforcement of the individual mandate and about future payments of the cost-sharing subsidies to reduce out-of-pocket payments for people who enroll in nongroup coverage through the marketplaces established by the ACA.
Regardless, Trumpcare would make matters much worse:
However, the agencies estimate that about one-sixth of the population resides in areas in which the nongroup market would start to become unstable beginning in 2020. That instability would result from market responses to decisions by some states to waive two provisions of federal law, as would be permitted under H.R. 1628. One type of waiver would allow states to modify the requirements governing essential health benefits (EHBs), which set minimum standards for the benefits that insurance in the nongroup and small-group markets must cover. A second type of waiver would allow insurers to set premiums on the basis of an individual’s health status if the person had not demonstrated continuous coverage; that is, the waiver would eliminate the requirement for what is termed community rating for premiums charged to such people.
While Paul Ryan put on a happy face in declaring the CBO’s devastating findings “another positive step toward keeping our promise to repeal and replace Obamacare,” other Republican leaders responded by attacking Congress’ own scorekeeper. Tom MacArthur, the New Jersey congressman who authored the state waiver process for essential health benefits complained, “I think what they don’t properly account for is the fact that as premiums come down all these people they say would choose not to have insurance … I don’t think so.” Health and Human Services Secretary Tom Price was blunter still:
“The CBO was wrong when they analyzed Obamacare’s effect on cost and coverage, and they are wrong again.”
If this sounds familiar, it should. After all, every CBO analysis since 2009 showed that Obamacare would enable over 20 million Americans to obtain health insurance while reducing the national debt. Every Congressional Budget Office forecast of the impact of a full Obamacare repeal (including its savings from Medicare Advantage insurers and providers) showed Uncle Sam’s red ink would increase.
“Repeal without replace,” CBO warned in January, would be an even worse disaster than AHCA.
Those unshakeable findings drove then-House Majority Leader Eric Cantor to charge CBO engaged in “budget gimmickry.” In 2011, New Gingrich insisted, “If you are serious about real health reform, you must abolish the Congressional Budget Office because it lies.” Their real problem, as Sarah Kliff of Vox summed it up, “No matter how CBO scores it, Obamacare reduces the deficit."
Fully repealing Obamacare would increase the nattional debt.
In early March, Kliff offered Republicans some advice about their American Health Care Act then in the works: “Republicans' problem isn't CBO. It's their bill.”
The coverage numbers aren't likely to be good — at least according to independent analyses from outside experts. And if the CBO analysis finds that the Republican plan will cover fewer people than Obamacare, Republicans are preparing to argue that the problem lies with CBO.
Which is exactly what they did. Louisiana Rep. Steve Scalise, the House Majority Whip, said “we’re not going to wait” to vote because the CBO’s "unelected bureaucrats in Washington" will slow down the Republican promise to repeal and replace Obamacare while Rep. Michael Burgess of Texas scoffed that the CBO “is hardly the final word on the issue.” Trump press secretary Sean Spicer sneered, “If you're looking at the CBO for accuracy, you're looking at the wrong place.”
Spicer and Team Trump felt the same way about the government’s official numbers on jobs and un employment, too.
Boasting about February’s strong jobs report, Trump Press Secretary Sean Spicer joked, “They may have been phony in the past, but it's very real now.” As then-Treasury nominee Steve Mnuchin declared on Jan. 19, the past ended only on Inauguration Day. “The unemployment rate is not real," Mnuchin told the Senate Finance Committee. "I've traveled for the last year. I've seen this. And the president-elect understands that very clearly.” And despite acknowledging that the Bureau of Labor Statistics (BLS) had done nothing to change its methodology since Donald Trump took the oath of office, Office of Management and Budget (OMB) chief Mick Mulvaney nevertheless announced yesterday:
"We've thought for a long time, I did, that the Obama administration was manipulating the numbers in terms of the number of people in the workforce to make the unemployment rate, that percentage rate, look smaller than it actually was.”
The future CBO boss Keith Hall begged to differ. When Jack Welch and other Republican mouthpieces first tried to cast doubt on the integrity of the jobs and unemployment numbers during the 2012 presidential campaign, the former BLS Commissioner was having none of it. Hall, a Bush nominee who ran the BLS from 2008 to 2012, told the Wall Street Journal that it is simply “impossible” to alter the jobs numbers for political advantage.
Keith Hall, who served as Commissioner of the Bureau of Labor Statistics from 2008 until 2012, said in an interview Friday that there is no way someone at the agency could change any of the data from its two monthly employment surveys. The significant improvement in the unemployment rate may reflect normal statistical errors in the sampling process, he said, but that has nothing to do with manipulation.
“There’s nothing wrong with the numbers,” said Mr. Hall. “The only issue is the interpretation of the numbers. The numbers are what they are.”
Writing in the Washington Post at the time, Dylan Matthews explained the methodology and process behind the jobs numbers. The BLS—an agency created in 1884—Matthews concluded, is “an nonpartisan as it gets.” For his part, Hall agreed, explaining “I feel like I’m a certified economic geek rather than a political person.” Hall, then a researcher at the usually conservative Mercatus Center at George Mason University, summed up the output of the monthly surveys of 50,000 households and 400,000 businesses this way:
"I think it would be impossible to really manipulate the numbers. Certainly, it would be impossible to manipulate the numbers and not be found out."
“The unemployment rate is not real.” — Steven Mnuchin, January 19, 2017.
That has never stopped Republicans from trying to whitewash the federal government’s budget scorekeeper. So it was with the Republican effort to brand President Obama's 2009 stimulus program a "failure" that did "not create a single job." While GOP presidential nominee Mitt Romney was touring the country propagating the "Obama made the economy worse" fraud, CBO director Douglas Elmendorf was calmly bludgeoning the fabulists of the Republican Party.
As the Washington Post reported in June 2012, the House Budget Committee heard testimony from the CBO chief answering a simple question: Did the $787 billion Obama stimulus work? Unfortunately for Republican propagandists, Elmendorf clearly refuted Mitt Romney's claim that the American Recovery and Reinvestment Act (ARRA) was "the largest one-time careless expenditure of government money in American history."
Under questioning from skeptical Republicans, the director of the nonpartisan (and widely respected) Congressional Budget Office was emphatic about the value of the 2009 stimulus. And, he said, the vast majority of economists agree.
In a survey conducted by the University of Chicago Booth School of Business, 80 percent of economic experts agreed that, because of the stimulus, the U.S. unemployment rate was lower at the end of 2010 than it would have been otherwise.
"Only 4 percent disagreed or strongly disagreed," CBO Director Douglas Elmendorf told the House Budget Committee. "That," he added, "is a distinct minority."
Not content with that response, Kansas Republican Rep. Tim Huelskamp tried again. "Where did Washington mess up?" Huelskamp demanded. "Because you're saying most economists think it should've worked. It didn't." As the Post's Lori Montgomery detailed, Elmendorf drove home the point:
Most economists not only think it should have worked; they think it did work, Elmendorf replied. CBO's own analysis found that the package added as many as 3.3 million jobs to the economy during the second quarter of 2010, and may have prevented the nation from lapsing back into recession.
That May, Elmendorf's agency released its latest assessment of the stimulus showing why. At its peak in 2010, the ARRA added up to 3.3 million jobs, cut unemployment by as much as 1.8 percent, and boosted GDP by up to 4.1 percent. It's also worth noting that the CBO once again confirmed that aid to the states and purchases by the federal government delivers the biggest bang for the buck, while upper income tax cuts provide the least.
Of course, as with Obamacare, tax cuts, and job numbers, that was the kind of message no Republican wanted getting out to the public. The need for GOP obfuscation has only increased since. Especially in the Age of Trump, where the current President of the United States can pledge, “One thing I can promise you is this: I will always tell you the truth” and at best, according to Politifact, only succeed about 32 percent of time. It’s no wonder Newt Gingrich in January called for ending the CBO as we know it:
“The Congressional Budget Office (CBO) is simply incompatible with the Trump era.”
Not because it lies, but precisely because the Conservative Bulls**t Obliterator tells the truth.
