Saturday, November 15, 2014

Jonathan Gruber’s ‘Stupid’ Budget Tricks

Jonathan Gruber’s ‘Stupid’ Budget Tricks. WSJ Editorial
His ObamaCare candor shows how Congress routinely cons taxpayers.Wall Street Journal, Nov. 14, 2014 6:51 p.m. ET

As a rule, Americans don’t like to be called “stupid,” as Jonathan Gruber is discovering. Whatever his academic contempt for voters, the ObamaCare architect and Massachusetts Institute of Technology economist deserves the Presidential Medal of Freedom for his candor about the corruption of the federal budget process.

In his now-infamous talk at the University of Pennsylvania last year, Professor Gruber argued that the Affordable Care Act “would not have passed” had Democrats been honest about the income-redistribution policies embedded in its insurance regulations. But the more instructive moment is his admission that “this bill was written in a tortured way to make sure CBO did not score the mandate as taxes. If CBO scored the mandate as taxes, the bill dies.”

Mr. Gruber means the Congressional Budget Office, the institution responsible for putting “scores” or official price tags on legislation. He’s right that to pass ObamaCare Democrats perpetrated the rawest, most cynical abuse of the CBO since its creation in 1974.

In another clip from Mr. Gruber’s seemingly infinite video library, he discusses how he and Democrats wrote the law to game the CBO’s fiscal conventions and achieve goals that would otherwise be “politically impossible.” In still another, he explains that these ruses are “a sad statement about budget politics in the U.S., but there you have it.”

Yes you do. Such admissions aren’t revelations, since the truth has long been obvious to anyone curious enough to look. We and other critics wrote about ObamaCare’s budget gimmicks during the debate, and Rep. Paul Ryan exposed them at the 2010 “health summit.” President Obama changed the subject.

But rarely are liberal intellectuals as full frontal as Mr. Gruber about the accounting fraud ingrained in ObamaCare. Also notable are his do-what-you-gotta-do apologetics: “I’d rather have this law than not,” he says.

Recall five years ago. The White House wanted to pretend that the open-ended new entitlement would spend less than $1 trillion over 10 years and reduce the deficit too. Congress requires the budget gnomes to score bills as written, no matter how unrealistic the assumption or fake the promise. Democrats with the help of Mr. Gruber carefully designed the bill to exploit this built-in gullibility.

So they used a decade of taxes to fund merely six years of insurance subsidies. They made-believe that Medicare payments to hospitals will some day fall below Medicaid rates. A since-repealed program for long-term care front-loaded taxes but back-loaded spending, meant to gradually go broke by design. Remember the spectacle of Democrats waiting for the white smoke to come up from CBO and deliver the holy scripture verdict?

On the tape, Mr. Gruber also identifies a special liberal manipulation: CBO’s policy reversal to not count the individual mandate to buy insurance as an explicit component of the federal budget. In 1994, then CBO chief Robert Reischauer reasonably determined that if the government forces people to buy a product by law, then those transactions no longer belong to the private economy but to the U.S. balance sheet. The CBO’s face-melting cost estimate helped to kill HillaryCare.

The CBO director responsible for this switcheroo that moved much of ObamaCare’s real spending off the books was Peter Orszag, who went on to become Mr. Obama’s budget director. Mr. Orszag nonetheless assailed CBO during the debate for not giving him enough credit for the law’s phantom “savings.”

Then again, Mr. Gruber told a Holy Cross audience in 2010 that although ObamaCare “is 90% health insurance coverage and 10% about cost control, all you ever hear people talk about is cost control. How it’s going to lower the cost of health care, that’s all they talk about. Why? Because that’s what people want to hear about because a majority of Americans care about health-care costs.”


Both political parties for some reason treat the CBO with the same reverence the ancient Greeks reserved for the Delphic oracle, but Mr. Gruber’s honesty is another warning that the budget rules are rigged to expand government and hide the true cost of entitlements. CBO scores aren’t unambiguous facts but are guesses about the future, biased by the Keynesian assumptions and models its political masters in Congress instruct it to use.

Republicans who now run Congress can help taxpayers by appointing a new CBO director, as is their right as the majority. Current head Doug Elmendorf is a respected economist, and he often has a dry wit as he reminds Congressfolk that if they feed him garbage, he must give them garbage back. But if the GOP won’t abolish the institution, then they can find a replacement who is as candid as Mr. Gruber about the flaws and limitations of the CBO status quo. The Tax Foundation’s Steve Entin would be an inspired pick.

Democrats are now pretending they’ve never heard of Mr. Gruber, though they used to appeal to his authority when he still had some. His commentaries are no less valuable because he is now a political liability for Democrats.