Motley Moose – Archive

Since 2008 – Progress Through Politics

Obama and Simpson-Bowles: A Conspiracy Theory

While reading about the Incredible Shrinking Deficit, I ran across something that got me thinking about Pres. Obama and Simpson-Bowles aka The Catfood Commission.

My theory is that the President created the Commission in order to buy time until the deficit declined due to facts already on the ground. The biggest key was in bending the cost curve of healthcare via the ACA along with trends already under way (such as ‘Seismic Shift’ below).

On the revenue side:

1. The Bush Tax Cuts expiring (eventually)

2. Recovery of revenues as the Great Recession gave way to economic recovery and (coming soon) expansion

On the outlays side:

1. Declining stimulatory expenditures

2. Declining UE expenditures

3. Good news on healthcare projections as they bend the cost curve

4. David Cutler (see below Lower health care costs may last)

The latest CBO Projections:

Updated Budget Projections: Fiscal Years 2013 to 2023

If the current laws that govern federal taxes and spending do not change, the budget deficit will shrink this year to $642 billion, CBO estimates, the smallest shortfall since 2008. Relative to the size of the economy, the deficit this year-at 4.0 percent of gross domestic product (GDP)-will be less than half as large as the shortfall in 2009, which was 10.1 percent of GDP.

With the largest revision in outlays in healthcare:

Medicare and Medicaid spending projection cut by $900 billion

The CBO cut its deficit projection for the next decade by $200 billion, with this year’s deficit shrinking to $642 billion, the smallest shortfall since 2008. A relatively huge chunk of that decrease-$900 billion-is in Medicare and Medicaid spending

Here’s an example of ongoing savings trends:

In ‘seismic shift,’ primary care physicians creating revenue for hospitals

Here’s another shift in health care to go along with shrinking rate of growth in health care spending over the last few years: For the first time, primary care doctors are driving more revenue on a per/physician basis for hospitals than specialists.

From the source document:

“Seismic shift” lifts primary care’s impact on hospital revenues

   For 2013, the median revenue per primary care physician ascribed by about 3,000 hospital chief financial officers is nearly $1.6 million, and it is a little more than $1.4 million for specialists. In 2010, the last time Merritt Hawkins did such a survey, primary care was at more than $1.4 million, and specialties were at nearly $1.6 million. Specialists have outpaced primary care in Merritt Hawkins’ survey, which began in 2002, continued in 2004 and has been conducted every three years since. The survey includes both inpatient and outpatient revenue generated for hospitals, and it does not give an aggregate total of the revenue generated by primary care and specialty physicians. […]

   “A seismic shift is taking place in medicine, away from specialists and toward primary care physicians,” said Mark Smith, president of Merritt Hawkins, in a statement. “Primary care physicians are increasingly employed by hospitals and in new delivery models, such as accountable care organizations. They are taking a greater role in driving both the delivery of care and the flow of health care dollars.”

And here’s the smoking gun:

Lower health care costs may last

In a paper published in the May issue of Health Affairs, David Cutler, the Otto Eckstein Professor of Applied Economics, and co-author Nikhil Sahni, a senior researcher in Harvard’s Economics Department, point to several factors, including a decline in the development of new drugs and technologies and increased efficiency in the health care system, to explain the recent slowdown.

“Historically, as far back as 1960, medical care has increased at about one and a half to 2 percent faster than the economy,” said Cutler, who served as a health care adviser to the 2008 Obama campaign. “In the last decade, however, medical care has not really grown as a share of the GDP. If you forecast that forward, it translates into a lot of money.”

Bold for emphasis.

So there it is. David Cutler, as Obama healthcare advisor (with others of course) and Obama initiate the ACA and successfully bend the cost curve. Deficit goodness becomes apparent in 2013, just before any Simpson-Bowles cutbacks are legislated.

More Joan McCarter

CAP’s Michael Linden has a fun comparison: Today’s CBO estimate puts the deficit at 2.1 percent of GDP by 2015. Simpson-Bowles called for reducing the deficit to 2.3 percent of GDP by 2015. So we got beyond their recommendation without punishing any old people or cutting taxes even more for the wealthy and corporations.

I’ll leave it to the reader to judge whether all the outrage of the emoprogs towards the Catfood Commission and Pres. Obama was a complete fucking waste of time. Or not.


  1. Yet Another Piece Of Evidence That Obamacare Is Already Positively Impacting The Health Sector

    It’s expected that this result is not a fluke, but a reflection of the growing emphasis on primary care by hospitals and the health care system in general.

    In 3 years, when the ACA is fully implemented and the glitches worked out, it will prove to be wildly popular. And another nail in the coffin of the Republicans because they will have a third social program to add to their list of Things They Want To Repeal:

    – Social Security

    – Medicare

    – Obamacare

    Good luck with that platform, shrinking Republican Party.

  2. When some don’t get what they want, they start making stuff up that fits their view of the world. It’s all very simple. Reality hurts.

  3. fogiv

    what is a ‘complete fucking waste of time?’ for 1,000, Alex.

    The outrage of the emoprogs towards the Catfood Commission and Pres. Obama

    but hey, a blogathon would be the bee’s knees.


  4. wordsinthewind

    PBO is the smartest person I’ve ever known to be interested in politics. He plays masterfully too. When I wake up to find both the herbal and regular tea partiers wailing I know the President has once again solidified support among the vast middle of this country. I know the regular tea partiers have done a lot more damage but the herbal variety is especially annoying to me. Their sanctimony is revolting and as a long time Democratic activist who has held several Party offices I really hate that they give fuel to my opposition and make me even more centrist to distance myself. Those chumps never worked for a damn thing but they have expended considerable effort to make my work much harder than it needed to be.  

Comments are closed.