Ezra Klein on CBO’s updated “spending” for Affordable Care Act

Much ado about no new spending.

Clipped from voices.washingtonpost.com

Megan McArdle has a post up saying that health-care reform is “already at least a hundred billion dollars in the hole.” That’s really not right, though it’s certainly true that the CBO’s estimate suggesting $115 billion in discretionary costs confused a lot of people.

So that knocks out more than $86 billion of the $115 billion. What’s leftover is about $15 billion for administration and $10 billion in possible new discretionary spending. That spending may or may not happen, and if it does, it will need another vote in Congress, and it will have to be offset elsewhere in the budget.

As Elmendorf writes at the bottom of his post, this is why the CBO doesn’t include discretionary spending numbers in their normal estimates. Discretionary spending is not “new spending that the bill has passed into law.” Most of it’s old spending that may or may not continue, and a bit of it is new spending that may or may not happen, but would need another vote and an offset.