All In   |  May 16, 2013

Republicans completely ignore shrinking deficits

The CBO released a report this week that revealed deficits are shrinking at a historic pace. Chris Hayes talks about the CBO's report with Ezra Klein.

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This content comes from Closed Captioning that was broadcast along with this program.

>>> good evening from new york. i'm chris hayes and thank you for joining us this evening. it was a big day today because washington has a case of scandal fever. today president obama showed how he plans to dole out the medicine.

>>> plus, last night our guest told us what we can expect in the fight against sexual assault in the military. today we got more shocking proof that they were right.

>>> and let today be known henceforth as the day bea arthur broke the internet.

>>> we begin with a momentous political event, i mean a really, really big deal . tonight at 6:28 p.m . eastern, did you feel the earth move under your feet, did you feel a seismic change in this nation's politics? what you would have been feeling was the house of representatives voting to repeal obama care -- for the 37th time. by a vote of 229-195 with every single republican voting to repeal, along with two democrats. i have to give it to the house republicans . last week when speaker john boehner announced the vote with this lackluster pitch, i was a little worried their hearts weren't in it this time.

>> we've got 70 new members that have not had the opportunity to vote on the president's health care law . frankly, they've been asking for an opportunity to vote on it and we're going to give it to them.

>> and with that, i thought the vote was going to be some sort of pro forma affair. but they really left it out on the field. some poor staffer in boehner's office had to go down to the government printer and wheel in 300 pounds of health care regulations on a dolly. then the seven-foot stack of job killing legislation was wheeled out. they even put a little hat on it while it started to rain which was nice. this morning michele bachmann , the tea party , held a big press conference about the irs and they also used the opportunity to take shots at obama care.

>> the heat will become so hot that even the president of the united states will be forced to repudiate his signature legislation.

>> eric cantore got into the game today resurrecting the old obama care in three words hash tag to celebrate the affair which prompted this response from the because -- it's the law with a screen soft obama 's signature on the bill. today republicans really pulled out all of the stops but that's not made what happened today on the hill different. what makes this vote today different from the 36 votes that came before it is that this vote came just two days after the congressional budget office put out an incredible and truly explosive report. a report that was almost entirely ignored by a scandal obsessed washington , which said the following -- the budget deficit will shrink this year to $642 billion, the smallest shortfall since 2008 . deficits in cbo 's baseline projections continue to shrink falling to 2.1% of gdp by 2015 . in english, the deficit is shrinking at a near record breaking rate. now, you would think once it came to light that the deficit is shrinking at such a rapid rate that we hit the vaunted goals even set out by our wise masters, simpson and bowles, that people in washington who have endlessly obsessed over the deficit since the take party international is exwou d would take notice.

>> the president and his leaders in the senate are refusing to address this debt crisis.

>> we had had had action to reduce these deficits.

>> spend something out of control.

>> tremendous deficits.

>> debts out of control.

>> does not start paying down our deficit. it is kicking the can down the road and frankly, we are out of road.

>> you would think that those people would all be pushing to take credit for our incredible deficit reduxz celebraction celebrating that there would be press conferences. but no, there was nothing. what makes that nothing this week so very ironic is that not only did republicans essentially ignore the cbo report but they chose to spend the time they should have been out celebrating our lowest predicted deficits since 2008 trying once again to repeal obama care. they voted for the 37th time to repeal obama care despite the fact that there is good reason to believe that obama care is to credit for much of the remarkable deficit reduction projected this week by the cbo . the deficit reduction republicans used to hold up as their entire reason for being. because the biggest driver of our long term deficits is rising health care costs and -- get this -- between 2009 and 2011 , total health spending grew at the lowest annual pace in the last five decades. the argument in passing obama care was to bring down health care costs. health care costs are coming down. so why does no one care? no one cares that health care costs are going down? the reason is because the cardinal rule of washington politics -- and this is really important. it makes everything make sense. when people talk about deficits, they are actually talking about something else. no one actually cares about the deficit. the simple reason why nobody was talking about it today is just because they don't care. and if there is one person in washington -- and this is the grand, tragic, comic irony of this whole situation. if there is one person in washington who genuinely seems to care about deficits, well --

>> here's what you need to know . first, i will not sign a plan that adds one dime to our deficits. either now or in the future. i will not sign it if it adds one dime to the deficit now or in the future. period.

>> joining me tonight, columnist at the washington post and an msnbc policy analyst , ezra, it is great to have you here. this combination of the one-two punch of the obama care repeal vote a few days after this cbo report that landed with an absolute thud is so illuminating about washington . but also fl but genuinely i am curious why no one sees that report on either side and ran around all day calling attention to it and taking credit for it?

>> sometimes i really wonder if you believe. we ran around with it. i think two things are going on. one is that the politics of this on the right are not really all that deficit focused. the republicans believe in deficit reduction to the extent that it corresponds and offers a cloak device for other significant republican goals. like cutting spending, for instance, on the part of the budget that they have been cutting spending on.

>> you can't even just say cutting spending. you have to say cutting spending potentially on medicare potentially in the long term and really cutting spending on programs for the poor but they don't want to cut spending on defense if they can help it. their budget doesn't cut spending on social security . and back in the day paul ryan in the bush years voted for policy after policy that added trillions of dollars for deficit. i do think to your point about washington , people talking about the deficit are talking about something else. when republicans talk about the deficit they are typically talking about shrinking social programs. that's really what they are looking to do. do premium support in medicare or block granting medicare or all these other things. they are not looking to raise taxes or cut defense spending which are two ways to cut deficit. on the left for president obama -- in other words, this is too much deficit reduction. they believe that. it is going to 2.1% of gdp after being 10% just a year or two ago. that is too quick. it is bad for the economy. for them to celebrate it would be at odds with our other goals. on the one hand republicans have got in deficit reduction an that is not what they really wanted. democrats have gone in deficit reduction and they didn't want it now.

>> so it sits there on the table with no one claiming credit. i think you and i are on the same side of the austerity --

>> i'm shocked to hear that.

>> no. we're on the same side i think on particularly short-term stimulus and austerity and just the need for the government to be doing much, much more to get people back to work particularly in the short term. but the really interesting thing -- and the place where i'm surprised, particularly today on the day of the obama care repeal vote for the 37th time, is the mounting evidence that obama care really is playing a role in the long-term projections of deficit reduction. here's just an example of this is from the center for budget and policy priorities , projected medicare spending which has fallen $590 billion out in the future since just august 2010 . that's a fairly large amount. if you extrapolate that out into the long term it is even more. that argument that obama care is doing that, why is no one making that argument?

>> two things. one, this extrapolation is super important. whenever you hear about our long-term debt problem, it is all long term health care spending. if you got that under control we're pretty much fine. a lot of that is driven by aging which is harder to get under control. but this problem of how much is due to the affordable health care act, over the past four years people have been trying to run these numbers. we've had a terrible, terrible recession that brings health care spending down. that's accounting for part of the slowdown. the big mystery is why is it happening in medicare ? medicare is typically not really coming out of people's pocket, not the majority of it anyway. are you seeing things in medicare happen that should have nothing to do with people's income. these are retirees, things entirely paid for my medicare . there they're pretty insulated from the recession. this is a pool of people we shouldn't see being rocked by the same forces.

>> so i think what you're seeing in part is a lot of people who can't quite come up with the right mechanism that explains why the affordable care act would have done this this quickly. the mechanism you could put forward is the affordable care act has signaled in a very clear way different ways we'll begin paying for medical care in the coming years. medicare 's already beginning to chop hospital payments if they have too many preventable readmissions, it begins to chop hospital payments if they don't do balance based purchasing. you have a bunch of different signals that are beginning to filter in to the health care system . while a lot of them haven't begun yet, it is totally plausible to say that a significant part of this health care spending slowdown is coming from the health care system preparing for that. they see these signals in the future and they are beginning to respond. really good evidence on that point is that readmissions, the rate at which folks in medicare are getting brought back into the hospital when they shouldn't be, has dropped 2 percentage points in the last year or two. that hasn't happened in the last 240 years. but you are also seeing a circuit of wonkish honesty on folks from the left.

>> you just said -- there is a plausible case to be made. basically the standard or threshold in political advocacy , a plausible case definitely clears that. right? if you can -- i'm serious. if you can make a plausible not totally dishonest argument which i think there is a plausible not totally dishonest argument, then you should make it and i am surprised that outside of the confines of one blog that's not being made.

>> i just think they're not getting covered because there is not much conflict on some level. the repeal vote didn't get much coverage either except to get laughed at.

>> nancy pelosi made exactly that argument sitting here at this table this week. thanks, man.

>>> you're not going to believe this. you really aren't going to believe this but we have news tonight of yet another army officer heading up a sexual assault response program, arrested by the police, this time for stalking his ex-wife and violating an order of protection. details and implications next.