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links for 2010-05-15

Megan McCardle Says _____. But That's Really Not Right...

is, as Nylund says, "as close to a universal truth as one can get."

Here's Ezra Klein

Ezra Klein - Discretionary spending is not the same as 'new spending': 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...

He continues:

[I]t's certainly true that the CBO's estimate suggesting $115 billion in discretionary costs confused a lot of people. But let me just quote CBO Director Doug Elmendorf, who's doing his best to clear up the confusion.

The potential discretionary costs identified two days ago include many items whose funding would be a continuation of recent funding levels for health-related programs... $39 billion authorized for Indian health services that already receive appropriations... the amounts authorized for those items exceed $86 billion over the 10-year period (out of the roughly $105 billion total shown in the table provided yesterday).... CBO’s discretionary baseline... already accounts for much of the potential discretionary spending under PPACA...

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.