Alterthefuturenow: Being Right or Making Money

During the holiday season, as in years past, The Ticket is republishing some of our favorite items from the previous political year. This story was originally published on July 15, 2010:

You may have noticed signs like these in your community.

Since his impossible schedule prohibits Vice President Joe Biden from making it around to every stimulus spending project across the country, the government has come up with the idea of posting project signs to show your $787 billion of hard-earned future tax money at work.

Even if you no longer are at work because the national unemployment rate that was supposed to be capped at 8% by the spending is now 9.5% (higher west of the Mississippi).

The signs are an idea used widely across the country but perfected in Chicago Democratic politics, where everything good carries the name of the current mayor (but none near the unemployment offices or where traffic jams might occur).

Not that any of the bright orange signs are intended to remind potential voters which elected public officials should be remembered as taking care of things come election time.

ABC News got a clever idea and started checking on how much was being spent on signs advertising money being spent to stimulate the economy. ABC's Gregory Simmons and Jonathan Karl found about $20 million -- as in, $20,000,000 -- has gone so far for signs advertising spending.

Illinois alone has spent $650,000 on stationary stimulus signs; Pennsylvania, another state with a fellow Democrat as chief executive like President Obama, spent $157,000. Virginia, which has a Republican governor, allows no such signage.

The reporters found one sign outside Washington on the road to Dulles International Airport that cost $10,000 to make and erect. It advertises a runway improvement that created all of 17 temporary construction jobs.

California Rep. Darrell Issa wants an investigation into "overtly political guidance on stimulus advertising," including one regulation ordering "Barack Obama, President" on some signs involving Native American programs.

Another Republican, Rep. Aaron Schock of Illinois, launched an equally hopeless legislative bid to ban stimulus spending on stimulus signs. "I think," he said, "it's a bit of an oxymoron to spend tens of millions of dollars of taxpayer money, borrowed money, on a bunch of signs to tell them how we are spending their taxpayer money."

Although, wait one minute. With federal spending and deficits right up there with terrorism among top voter concerns these days, this autumn might not be the best time to be a politician out there posting signs to brag about how much dough you've helped shovel out the door for debatable economic benefits.

-- Andrew Malcolm

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Photos: Associated Press

If you're looking for a description of the Ryan/Rivlin Medicare reforms that have gained so many admirers on the right, Matt Yglesias has a good write-up of the idea. But I'd add another way of explaining the proposal: The Ryan-Rivlin plan basically turns Medicare into Obamacare. And in that context, Republicans love the idea behind ObamaCare and think it'll save lots of money.

Under the Ryan-Rivlin plan, the current Medicare program is completely dissolved and replaced by a new Medicare program that "would provide a payment – based on what the average annual per-capita expenditure is in 2021 – to purchase health insurance." You'd get the health insurance from a "Medicare Exchange", and "health plans which choose to participate in the Medicare Exchange must agree to offer insurance to all Medicare beneficiaries, thereby preventing cherry picking and ensuring that Medicare’s sickest and highest cost beneficiaries receive coverage."

Sound familiar?

As Matt says, this doesn't save money. In theory, it actually costs money, as private insurance is more expensive for Medicare -- and that's true both in the private market, and in the quasi-private Medicare Advantage market. What saves money is capping the amount paid to seniors, so they either have to pay more for their care or get less.

But that's not how it's being explained. Matt calls the privatization strategy here "an ideological tic" and says it's unrelated to the cost control, but I'd say it's more of a sleight of hand that's necessary for the cost control. The question seniors will have about this plan is "won't it mean lower benefits?" The privatization idea, by virtue of being a disruptive reform, allows you to say, "no, competition in the private market will make Medicare so much more efficient that it'll be able to deliver more for less!" Or, as Rivlin's original plan (pdf) says, "The expectation is that increased competition among plans fostered by the Medicare Exchange...will keep costs from rising."

I don't know that accusations of hypocrisy are really worth making in American politics, but consider the way this policy and its rationale interacts with the case against ObamaCare. Right now, Medicare is much cheaper than private insurance. If you think that moving Medicare to a model of private insurance sold on exchanges will make it even cheaper, what you're saying is that an ObamaCare model will not only be cheaper than the current private-insurance system, but cheaper than the even-cheaper Medicare system.

If you believe this logic, the Affordable Care Act is a great bill that will save much more money than CBO currently assumes. And yet this is the reform package that's gaining adherents among the group of people who want to repeal the Affordable Care Act and think it a monstrous and unconstitutional piece of legislation with no redeeming features worth mentioning.

Photo credit: Melina Mara/The Washington Post.

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Thursday, December 23, 2010

Being Right or Making Money

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