The House of Representatives passed Thursday a major piece of Medicare legislation with strong support from the leadership and rank and file of both parties. Yes, you read that right: The House voted on a package that permanently eliminates the expensive annual budgetary charade known as the “doc fix,” while enacting tens of billions of dollars worth of structural reforms to the massive program for seniors — and providing a two-year, $5.6 billion dollop of funding to an important children’s health care program to boot. For their labors in moving this bill to passage, we’d pat House Speaker John A. Boehner, R-Ohio, and Democratic leader Nancy Pelosi, Calif., on the back — if they weren’t already doing so themselves.
There’s also this quibble: According to the Congressional Budget Office, the bill will add roughly $141 billion to the federal deficit over the next 10 years. Its total cost is $214 billion, of which only $73 billion is paid for, mostly through the aforementioned structural reforms. To be sure, the spending increase is a bit notional, because Congress was never likely to enforce the scheduled payment cuts to Medicare doctors the bill eliminates; that’s the lesson of more than a decade of annual, last-minute doc fixes. Moreover, the reforms are not trivial: One would increase, permanently, the amounts that high-income seniors are expected to pay for their Medicare coverage; another would limit first-dollar supplemental (“Medigap”) insurance coverage, a major source of cost inflation, for future retirees. Arguably, ending the doc fix helps pave the way for more reforms because of all the legislative time and attention that will no longer be wasted on that exercise.
Still, there’s no getting around the fact that Congress failed to pay for this bill, even halfway, though there is no shortage of additional reforms available. Annoying as it was, the annual doc-fix hassle did at least force lawmakers to enact offsetting spending curbs; now that fiscally disciplined precedent has been broken. Proponents of the bill assert that the real impact of its reforms won’t be felt until the second decade after enactment, when the savings begin to snowball. This is certainly plausible; yet it also calls attention to the fact that the bill’s savings, unlike its spending, are backloaded. They don’t even start to take effect until 2018. We all just have to hope that future Congresses don’t undo them before that.
Purists on both sides of the partisan divide oppose the bill. On the right, Heritage Action says the bill doesn’t fully offset its spending with savings; on the left, Senate liberals object that the children’s health program should be funded for all four years it is authorized, not just two. Both have a point. Neither, however, has a sufficiently firm grasp on the political reality of Washington, circa 2015, which is that there’s a limit to how much dysfunction can be overcome in a single bout of legislative activity. In that context, this bill is what passes for a victory on Capitol Hill these days.