Fact Check: That Medicare debate

The $700 billion figure comes from the difference over 10 years (2013-2022) between anticipated Medicare spending (what is known as “the baseline”) and the changes that the law makes to reduce spending. The savings mostly are wrung from health-care providers, not Medicare beneficiaries — who, as a result of the health-care law, ended up with new benefits for preventive care and prescription drugs.

While it is correct that anticipated savings from Medicare were used to help offset some of the anticipated costs of expanding health care for all Americans, it does not affect the Medicare trust fund. Ryan, as House Budget Committee chairman, probably knows he’s playing a rhetorical game here. Federal budget accounting is so complex that it is easy to mislead ordinary Americans — a tactic used by both parties.

Ryan is correct that in the health-care bill, the anticipated savings from Medicare were used to help offset some of the anticipated costs of expanding health care for all Americans. But all government money is fungible.

Under the concept of the unified budget, money that is collected by the federal government for whatever purpose (such as Medicare and Social Security payroll taxes) is spent on whatever bills are coming due at that time. Social Security and Medicare will get a credit for taxes collected that are not immediately spent on Social Security, but those taxes are quickly devoted to other federal spending.

Under the health-care law, spending does not decrease in Medicare year after year; the reduction is from anticipated levels of spending in future years. Moreover, the “cuts” did not come at the expense of seniors. The savings mostly are wrung from health-care providers, not Medicare beneficiaries — who, as a result of the health-care law, ended up with new benefits for preventive care and prescription drugs.

The House Republican budget plan crafted by Ryan retains virtually all of the Medicare “cuts” contained in the health-care law, but diverts them instead to his Medicare overhaul. Republicans argue that that is a more effective use of the savings.

Glenn Kessler has reported on domestic and foreign policy for more than three decades. He would like your help in keeping an eye on public figures. Send him statements to fact check by emailing him, tweeting at him, or sending him a message on Facebook.
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