Sen. Jeff Sessions (R-AL), the ranking member of the Senate Budget Committee, said on the Senate floor Tuesday that he has discovered double counting accounting tactics were used in the budget deal House Budget Committee chairman Rep. Paul Ryan (R-WI) cut with Senate Budget Committee chairwoman Sen. Patty Murray (D-WA).
The little-noticed detail first surfaced in a section-by-section analysis of the Ryan-Murray deal that the Senate Budget Committee Republican staff published Monday:
Sec. 101 also continues the sequestration of certain mandatory accounts required under the BCA [Budget Control Act] for an additional two years (2022 and 2023) to reduce deficits by $28 billion. Approximately $22 billion of that amount comes from extending the 2% Medicare sequester. This is a cut to health care providers–in other words, not a true reform–and it sunsets in 2023. A large part of the Medicare savings accrues to the Hospital Insurance (HI) Trust Fund for Part A, so the proposal uses trust fund savings to increase discretionary spending.
The key line in that wonky quote is the last part of the last sentence, “the proposal uses trust fund savings to increase discretionary spending.”
On the Senate floor Tuesday, Sessions expanded on that point. He walked through several of the details of the plan and the financial accounting of it before noting that this Ryan-Murray deal uses Medicare money to pay for more spending.
“One of the things that’s happened in the bill that’s before us today is there has been an extension of the 10-year BCA [Budget Control Act] plan which was enacted two years ago, only eight years left, an extension of a 2 percent reduction in payments to providers–hospitals, doctors, to Medicare–who provide services for Medicare, treat patients and get paid by the United States government,” Sessions said.
So they were reduced 2 percent. And this is scored as a savings for the country and, in effect, and that savings, as was done in this legislation, involved the last two years, years nine and ten of the 10-year window from today. And it creates some money, they say, because we have reduced Medicare costs and that we can spend that money today and this year and next year on non-defense and defense discretionary spending, and we’re going to promise to use the money we save in years nine and ten, outside the promise of the BCA 10-year window, which is already moving along.
Sessions said that unfunded liabilities to programs like Medicare and Social Security and various pension and retirement funds are potentially as high as $100 trillion and that “it’s growing considerably.” Sessions added that such debts are a “long-term threat to America” but that the country can correct these problems. However, he said, it is not possible to use Medicare or Social Security trust fund money to pay for things like Obamacare, Department of Defense spending, or non-Defense discretionary spending.
“It needs to be something where everybody participates in tightening the belt, and we could get the country on a sound path,” Sessions said. “But I want to register again and I’m going to continue to talk about this because I think it leads to a false impression; it leads to the impression we have more money than we really have, and you can’t use Social Security’s money, Medicare’s money, to fund Obamacare, the Defense Department, or non-defense discretionary spending. It’s not possible to use that money twice.”
These double counting tactics have appeared in recent years before in other pieces of major legislation, most notably Obamacare, in which various spending constraints and tax hikes were used to pay for new entitlements while at the same time to bolster Medicare’s finances.
GOP presidential nominee Mitt Romney used a line about Obamacare’s double counting frequently during the 2012 election cycle. “Under the president’s plan, he cuts Medicare by $716 billion, takes that money out of the Medicare trust fund and uses it to pay for Obamacare,” Romney said in an interview during the campaign with Tampa Bay’s WTSP 10 News, for instance. “I think this is something that people are just now focused on; and [they] find it very, very difficult to understand why he would cut Medicare for our current seniors.”
In February 2010, when Ryan led House Republicans in their takedown of Obamacare at the White House health summit, he focused in on the double counting practices. “[Obamacare] takes $52 billion in higher Social Security tax revenues and counts them as offsets, but that’s really reserved for Social Security,” Ryan addressed the president directly at that health summit. “So either we’re double-counting them or we don’t intend on paying those Social Security benefits. It takes $72 billion and claims money from the CLASS Act — that’s the long-term care insurance program. It takes the money from premiums that are designed for that benefit and instead counts them as offsets. The Senate Budget Committee chairman said that this is a Ponzi scheme that would make Bernie Madoff proud.”
Ryan said at the time Obamacare “treats Medicare like a piggy bank.”
It raids a half a trillion dollars out of Medicare, not to shore up Medicare’s solvency, but to spend on this new government program. Now, when you take a look at what this does, it is — according to the chief actuary of Medicare, he’s saying as much of 20 percent of Medicare’s providers will either go out of business or will have to stop seeing Medicare beneficiaries. Millions of seniors who are on — who have chosen — Medicare Advantage will lose the coverage that they now enjoy. You can’t say that you’re using this money to either extend Medicare solvency and also offset the cost of this new program. That’s double counting.
Ryan frequently has attacked Obamacare’s double counting on many other occasions as well.
On the Senate floor on Tuesday, Sen. Sessions compared Ryan’s double counting in his budget deal with Murray to the double counting employed by the Democrats in Obamacare:
The entitlement programs that went into Obamacare, the Affordable Care Act, $500 billion of that money that supposedly was used to fund it was based on reductions in Medicare and some Social Security and other fund expenditures. They have trustees. And when they ran surplus, as they have done for many, many decades but not now, when they were running a surplus, the money was loaned to the federal treasury and then spent it, but the federal treasury owes it back to them, and now that both of those programs are heading into steep fiscal decline, they’re calling the notes. They’re calling back the money that they loaned, the trustees of those organizations know who they represent. They help Social Security recipients. They represent Medicare beneficiaries. And they are demanding their money, and they’re going to get it and we’re going to honor it. So what I’m saying is you can’t count that money twice and that’s what Mr. Elmendorf, the director of the CBO, told us on Dec. 23, the night before the bill was passed on the floor of the Senate, the Obamacare bill was passed in 2009. He said you can’t count the money twice, and to suggest you are strengthening Medicare and simultaneously providing a source of money to spend on the new Obamacare program is double counting. He used the word ‘double counting.’ How simple is this?