Home > Deficit Commission, Obamacare > The Tax Holiday, Obamacare, and the “Doctor Fix”

The Tax Holiday, Obamacare, and the “Doctor Fix”

During the rancorous debate on the merits of Obamacare, Democrats claimed that they would help to “pay” for Obamacare by not extending the Medicare “doctor fix.” The Medicare system was scheduled to cut payments to doctors by over twenty five percent in 2012 and these “savings” were to be applied to the cost of Obamacare to help pay for it. This was one element of the bill that Democrats used to claim that the deficit would not increase because of Obamacare. I have written previously that the deficit calculation used by the Democrats was quite inaccurate.  For example, the deficit calculation did not include the cost of the employees that the federal government would need to hire to administer the Obamacare program.

To his credit, John McCain pointed out during the Obamacare debate that, to paraphrase his comments to television media, “everyone” knows that the “doctor fix” will be done because no politician would be willing to take the heat if physicians refused to treat Medicare patients as a result of the scheduled payment cuts. For this and other reasons, he argued that Obamacare would exacerbate the deficit problems facing the country.

As reported by the New York Times, the tax holiday bill extending payroll tax cuts for two months contained a provision to prevent payment cuts to physicians.  So just as John McCain predicted, the “doctor fix” was made. I have seen no reference in the media pointing out the hypocrisy evident in the actions of politicians who knew full well that claims about not making the “doctor fix” were disingenuous.

It is hardly surprising that the public has such a low opinion of politicians in this country. The claims about the payments to physicians are just another example of willful deception by the political class in this country. Sadly, the politicians making these false statements still get reelected by their constituents and are thus are never held accountable for their unprincipled behavior.

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Economics One

A blog by John B. Taylor

The Grumpy Economist

One economist's views on economic policy.

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