The devil is in the details

McCain has been saying his health care plan is budget neutral, which some people assumed meant the taxation of employer-provided health insurance would cover the cost of the tax credits he'd offer. The numbers didn't seem to add up. Now we begin to learn why:

clipped from online.wsj.com John McCain would pay for his health plan with major reductions to Medicare and Medicaid, a top aide said, in a move that independent analysts estimate could result in cuts of $1.3 trillion over 10 years to the government programs. The Republican presidential nominee has said little about the proposed cuts, but they are needed to keep his health-care plan "budget neutral," as he has promised. The McCain campaign hasn't given a specific figure for the cuts, but didn't dispute the analysts' estimate. In the months since Sen. McCain introduced his health plan, statements made by his campaign have implied that the new tax credits he is proposing to help Americans buy health insurance would be paid for with other tax increases.

Douglas Holz-Eakin, a top McCain economic adviser, argues that improvements in programs and cutting of waste will allow those cuts to be made without a cut in services from Medicare and Medicaid, but did not identify where those improvements and cuts would be made nor how they would have no effect on services.

I'm sure we'll be hearing more about this, if not from the McCain campaign, then certainly from the Obama campaign.