Paying As You Go

As the GOP takes control of the House, with empty promises of deficit cutting to come, Ezra looks back on one aspect of the health-care debate - its cost.

During the Bush administration, Democrats made a big deal of the Republicans' tendency to pass big initiatives without paying for them. The tax cuts, for instance, went right onto the deficit. So too did the Medicare Prescription Drug Benefit. The Democrats promised that they'd be more responsible. They'd pay for their big projects.
 
When health-care reform came around, they made good. They cut $500 billion from Medicare, handing conservatives a potent attack line. They introduced a tax on high-value health insurance plans, infuriating their union supporters. They didn't just pay for the bill: They overpaid for the bill, packing it with enough spending cuts and revenue increases to cut the deficit by more than $100 billion in the first 10 years, and then used the momentum of the bill to get liberals to sign off on cost controls, like an independent board designed to control Medicare's costs, that they'd have never countenanced in normal times.

So what do the conservatives who style themselves fiscally responsible say about this effort? "Democrats knew that passing the health-care bill would make it harder to balance the budget, because we used up the easiest, most obvious tax increases and spending cuts on expanding health care coverage," writes Megan McArdle. Democrats "spent budget offsets needed to address our long-term spending problem" complains Keith Hennessey. Points for creativity, at least: You need to work hard to make the very act of finding ways to pay for your spending seem like a calculated plan to increase the deficit.

McArdle says Democrats "knew" what they were doing here, but having spoken to a couple of them, I assure her they didn't: They actually thought that doing the fiscally responsible thing and passing more-than-fully offset legislation that also included an array of attempts to cut health-care spending over the long term would be considered, well, fiscally responsible. Fools!