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Paul Ryan's Hokum

At last week's health care summit, Paul Ryan launched a broad attack on the fiscal soundness of President Obama's health care reform. rather than interjecting with a reply, Obama allowed the next speaker in line to make his point. It's possible that Obama, who had otherwise displayed tremendous command of the details of the issue, simply didn't know how to respond. I tend to suspect he knew he couldn't keep correcting every GOP misstatement, lest he receive even more disapproving press commentary for acting like a condescending professor (see, for example, Mark Halperin and Dana Milbank.)

In any case, Obama's passing up another opportunity to rebut Republican misinformation elevated Ryan into a party hero. Finally, a party stalwart made a factual attack that was not immediately disproven by Obama! Matthew Continetti of the Weekly Standard gushed:

Obama didn't even bother questioning Ryan's presentation. He changed the subject to Medicare Advantage. The expression on the president's face as Ryan made his case was absolutely priceless. Simply put, he looked like someone who realizes he's met his match.

Former Karl Rove aide Peter Wehner added:

It’s a nice model of how to shred bad arguments and untrue claims. And it underscores why Ryan is a rising star in the GOP.

And Investor's Business Daily devoted an entire editorial to challenging Obama to rebut Ryan's claims. I've been meaning to get to this task, but Ezra Klein beat me to it. Basically, Ryan has a few tiny arguable points, and the vast majority of his claim is pure hokum. The niggling, almost-true part is that the Democrats would cut money from Medicare, use that money to pay for expanded health coverage, but also count the savings toward extending Medicare's solvency. This is arguably a form of double-counting, but it's the same method both parties have used for years now.

As for the hokum: Ryan claims that the plan is phony because it ignores the fact that Congress is going to have to increase reimbursements for doctors who treat Medicare patients. The problem is, that reimbursement fix is going to happen anyway, regardless of whether reform occurs. So to count that cost as a hidden cost of health care reform is simply incorrect.

The broader point is that Ryan misleadingly portrayed the health care plan as hiding its costs, by phasing in benefits more slowly than costs. As I wrote on the day of the summit:

Ryan objected that the Senate health care bill does not really reduce the deficit, because it raises taxes and reduces spending over ten years, but pays out benefits over just six. If that was true, it would be a sharp rebuttal to Obama's claim of reducing the deficit. And you could certainly design a bill like that. By spreading out the savings over a long time and delaying the benefits, you'd have a bill that technically saves money over a ten year window, but starts to lose money by year ten, and to bleed more red ink after that.
But it's not true. The benefits do phase in slowly, but so do the savings. The CBO finds that the Senate bill reduces the deficit in year ten. It would reduce the deficit by more than a trillion dollars in the next ten years.

Ryan's argument holds a lot of superficial appeal to people who are looking for reasons to oppose the health care plan but lack a firm grasp of the details. On close examination it falls apart.