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Politico’s Jonathan Allen Finds Magic Way to Eliminate Deficit

I don’t know why no one thought of this before, but Politico’s Jonathan Allen reports on an extremely clever idea for eliminating the federal deficit.  In How the SCOTUS could help Congress save billions, Allen shows all that’s needed is for the Supreme Court to declare the federal government to be unconstitutional.

Allen doesn’t quite say it that way.  Instead, he writes a lengthy article noting that some of the GOP deficit hysterics are salivating at the prospects that the U.S. Supreme Court will selectively strike down the cost portions of the Affordable Care Act while leaving intact the revenue/tax provisions. The result will be hundreds of billions in “savings” to the federal government over the next decade or so.

That money could be freed up just in time for a battle over whether automatic cuts to the Pentagon and social programs will kick in, and some members of Congress are already dreaming about the possibilities.

“We’re thinking [about] different options, but there are so many variations of what could happen from the court decision, it’s hard to make any hard plans,” said House Appropriations Committee Chairman Hal Rogers (R-Ky.). But, he added, a windfall “would be a factor” in discussions about whether to keep in place pending Pentagon cuts.

The math is complicated, but the premise is simple. If the court kills just the parts of the law that cost money, while leaving in place new taxes and spending cuts, that would leave more cash on the government’s books. If the whole law is struck down, the deficit would actually go up a bit. And if it’s upheld, there’s no change at all to the budget.

There’s only one little thing missing from Allen’s lengthy article, and I clicked through all three pages looking for it.  It ain’t there.   He neglects to mention the fact that these “savings” assume that if these cost provisions are struck down, nothing takes their place.  So about 30 million Americans would lose health insurance and thus be even less likely to receive health care.

The ACA will extend Medicaid coverage to over 20 million people who are currently uninsured, while the exchange subsidies will, so the proponents claim, allow millions more to purchase private insurance they would not otherwise afford.  No one is proposing anything to replace this coverage for the 30 million otherwise uninsured Americans.

But suppose you assume that without the ACA’s expanded Medicaid and subsidies, these 30 million Americans will still be able to obtain essential health care, and it would somehow be paid for by them or someone else.  What the Allen approach means is that several hundred billions in costs would be shifted from the federal budget to those least able to afford it, but under conditions even less likely to lower the costs of providing equivalent care.  In other words, people would be even further impoverished or die or be sicker from less care and/or the nation would be economically worse off because its total health care costs are higher.

So once again, we have a mindless, one-sided discussion of how to reduce the federal deficit that is completely disconnected from the consequences of that reduction on the health and welfare of the American people or even the broader economy.

And what exactly is the principle involved?  One might as well argue that Congress could eliminate the deficit by eliminating Social Security, the VA and Medicare, and never mind what happens to people who depend on those programs.  Better yet, we could eliminate any possibility of future deficits if we simply shut down vast portions of the U.S. Government, with the Supreme Court ruling, 5-4, that any federal government program the conservatives oppose violates the 10th Amendment, and that’s that.

Let’s see, if we did that, we could save, oh, about $1 trillion or so a year, but if we keep revenues in place, there would be budget surpluses forever!  Brilliant.

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John has been writing for Firedoglake since 2006 or so, on whatever interests him. He has a law degree, worked as legal counsel and energy policy adviser for a state energy agency for 20 years and then as a consultant on electricity systems and markets. He's now retired, living in Massachusetts.

You can follow John on twitter: @JohnChandley