Double-counting?

In a blog post entitled “’Double-Counting’ Canard Quacks Again,” Paul Van de Water, a fellow at the Center on Budget and Policy Priorities, wrote the following, arguing against the criticism that there is double-counting in the dual claims that Obamacare both reduces the federal budget and helps the medicare trust fund:

[Obamacare critic Charles] Blahous claims the Congressional Budget Office’s cost estimate for the health reform law “double-counts” a considerable portion of the law’s Medicare savings.  By subtracting these savings, Blahous asserts that — contrary to CBO — health reform increases the deficit.

But there’s no double-counting involved in recognizing that Medicare savings improve the status of both the federal budget and the Medicare trust funds.  The outlooks for the budget and for the Medicare trust funds are two different things; some changes in law may affect one and not the other, but other changes affect both.

CBO estimates that health reform will modestly reduce the federal budget deficit.  The Medicare actuary says that health reform will extend the solvency of the Hospital Insurance trust fund by eight years.

That’s no different than when a baseball player hits a home run: it adds to his team’s score and also improves his batting average.  Neither situation involves double-counting.

[then Van de Water gets into how the CBO scoring of the Obamacare — which is what led to accusations of double-counting — is consistent with historical CBO scoring. This is an issue that is totally irrelevant to whether there is double-counting, and a hint that Van de Water is trying to deflect attention from his core argument.]

Bad analogy. The batting average improvement and the team’s score increase are distinct benefits, and the total utility from the sum of the 2 benefits is greater than the utility from either one individually. The suggestion that the 2 claims about Obamacare should be regarded as describing separate benefits, and by implication that the total utility is greater than the utility of either one individually, does not seem true at all.

It’s as if I tried to trumpet my decision to start taking the subway rather than a taxi to work every day (except Fridays, when I’ll keep taking taxis) by saying “My decision benefits me in 2 ways! My taxi slush fund will have an extended solvency, and in addition, my personal spending will be reduced!” This is clearly double-counting. Switching a Medicare trust fund for a taxi slush fund, and switching the U.S. government’s budget for mine does not make it any less so.

h/t Ezra Klein

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One Response to Double-counting?

  1. rajiv patel says:

    dude, u need to get out more. say hi to byron for me.

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