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The Sequester

Yesterday, our lawmakers allowed us the privilege of $85 billion worth of spending cuts. Republicans promise that this will help put the United States back on solid fiscal footing. I don’t see it that way. The sequester looks to me like a lot of pain without much, if any, gain.

what is driving the deficit

From CBPP:

The recession battered the budget, driving down tax revenues and swelling outlays for unemployment insurance, food stamps, and other safety net programs.[3] We calculate that changes in the economic outlook since the summer of 2008 account for over $400 billion of the deficit in both 2009 and 2010 and smaller amounts in later years. We estimate that the downturn has pushed up deficits by $2.5 trillion (including the associated interest costs) over the 2009-2018 period.

More from CBPP:

We have slightly revised our estimates of the automatic budget cuts — known as sequestration — scheduled to begin March 1 under the “fiscal cliff” deal reached at the start of the year. The table below lays out what will happen if sequestration, required by the 2011 Budget Control Act, takes effect as scheduled.

The fiscal cliff deal lowered the 2013 sequestration by $24 billion, from $109.3 billion to $85.3 billion. This shrinks the percentage cuts in full-year funding for most programs subject to the automatic cuts. However, the fiscal cliff deal did not affect the Medicare cut, which remains capped at 2 percent.

We need jobs. We don’t need an economic slow down which is exactly what it going to happen. (more…)

By |2013-03-03T21:20:49-04:00March 2nd, 2013|Economy|Comments Off on The Sequester

Our Problem Is Not Overspending by the Government

Over the past 20 years, Americans have heard that “Washington is spending too much.” Whatever politician was railing against Washington spending would come up with some obscure program that is measuring methane gas as pigs past wind. These are almost always conservative politicians pointing out these “problems.” For some reason, and I don’t understand why, they never mention billions of dollars spent on weapons systems that have never worked or the fact that we are now enjoying the third-generation of stealth fighter/bombers. The third generation. No military in the world has ever been able to detect the first generation or the second generation. Yet, we’re spending more money on the third generation and are currently developing a fourth generation. In spite of these spending atrocities (in this case, an atrocity is in the eye of the beholder) the following chart puts our spending and our revenues into perspective.

click on graph to enlarge

This chart clearly shows that our problem is one of revenue. I wonder if we could fix this revenue problem by ending the wars in Iraq and Afghanistan and reversing the Bush tax cuts?

From CBPP:

Just two policies dating from the Bush Administration — tax cuts and the wars in Iraq and Afghanistan — accounted for over $500 billion of the deficit in 2009 and will account for almost $7 trillion in deficits in 2009 through 2019, including the associated debt-service costs. [6] (The prescription drug benefit enacted in 2003 accounts for further substantial increases in deficits and debt, which we are unable to quantify due to data limitations.) These impacts easily dwarf the stimulus and financial rescues. Furthermore, unlike those temporary costs, these inherited policies (especially the tax cuts and the drug benefit) do not fade away as the economy recovers (see Figure 1).

Without the economic downturn and the fiscal policies of the previous Administration, the budget would be roughly in balance over the next decade. That would have put the nation on a much sounder footing to address the demographic challenges and the cost pressures in health care that darken the long-run fiscal outlook.[7]

By |2011-07-05T08:25:46-04:00July 5th, 2011|Economy|4 Comments

Healthcare Update

I’ll have more to say on the lack of a thoughtful debate a little later.

From Political Animal:

It’s not my first choice for paying for health care reform (this is), but the House is moving forward with a proposal to apply a graduated surcharge, or “surtax,” on the very wealthiest Americans. The indispensable Center on Budget and Policy Priorities released a report yesterday on the proposal and deemed it a “reasonable approach” to paying for reform. (thanks to K.F. for passing this along)

The House surcharge proposal is reasonable and well-targeted. In recent decades, incomes have grown disproportionately for households at the top of the income scale, while their tax burden has fallen substantially. Moreover, despite charges to the contrary, the proposal would have only a small impact on small businesses. The congressional Joint Tax Committee estimates that it would have no impact at all on 96 percent of small business owners — broadly defined as any taxpayer with as little as $1 of business income — and that only half of the 4 percent of small business owners who would be affected derive more than a third of their income from a business. At the same time, the House plan would enhance the ability of small businesses to offer affordable, quality health insurance to their employees.

And while 96% of small business would be unaffected, so too would 98.8% of taxpayers.

(I think that we need a robust public option that covers everyone. WE would save money.)

From Rep. Dennis Kicinich via the DK:

With your support, your phone calls, your emails, we won a major legislative victory today for a state single payer health care option in the House of Representatives in Washington, DC. The House Education and Labor Committee approved the Kucinich Amendment by a vote of 27-19, with 14 Democrats and 13 Republicans voting yes.

The amendment propels the growing single payer health care movement at the state level. There are at least ten states which have active single payer efforts in their legislatures. They are California, Colorado, Illinois, Minnesota, Montana, New Mexico, New York, Ohio, Pennsylvania and Washington. The amendment mandates a single payer state will receive the right to waive the application of the Employee Retirement Income Security Act (ERISA), which has in the past been used to nullify efforts to expand state or local government health care.

Under the Kucinich Amendment a state’s application for a waiver from ERISA is granted automatically if the state has signed into law a single payer plan. With the amendment, for the first time, the state single payer health care option is shielded from an ERISA-based legal attack. Now that the underlying bill has been passed, as amended, by the full committee, we must make sure that Congress knows that we want the provision kept in the bill at final passage!  (more… )

(This is very interesting. I wonder if states will be allowed to pool resources.)

From mcjoan:

It started out on the high note, before the weekend, with the good news that the CBO was going to estimate that “a strong public option–the kind that the House of Representatives is putting in its reform bill–should net somewhere in the neighborhood of $150 billion in savings over ten years.” There was also the good news that a core group of New Dems, along with a few Blue Dogs, were supporting a “robust public option.”

From there, it was a lot of rollercoaster up and down, and we end this week with the deadline of August looking unlikely.

On Tuesday, the House Tri-Committee bill was introduced, with the most controversial provision being Rangel’s surtax on the nation’s wealthiest familes. The good news on this House version of the bill is that it pays for itself:

According to an analysis by the Congressional Budget Office, the legislation would cost $1 trillion over 10 years and cover 94 percent of Americans (97% if you don’t count the undocumented).

As Jonathan Cohn reports, “between savings and a new surtax on the wealthy, the bill pays for itself. In other words, it won’t inflate the deficit.” Five hundred billion comes from savings in Medicare and Medicaid and “the rest comes from a surtax on the richest 1.5 percent.”

Most importantly, the CBO coverage tables undermine the conservative claim that a public option would eliminate private insurance and erode employer-sponsored coverage. The House bill actually increases the number of people who receive coverage through their employer by 2 million and shifts most of the uninsured into private coverage. (more… )

(This is an excellent post by McJoan. She has summarized the week’s events very well.)

From TP a bit of reality from a Republican congressman:

Today on C-Span’s Washington Journal, a caller told a story of how he was forced to see numerous doctors at different hospitals in the area in where he lives, some as far as 100 miles away, to get a diagnosis. The caller then faulted health insurance companies for preventing the practice of having “diagnostic tests done under one roof.” “So in essence,” the caller noted, “the insurance companies are the ones controlling what tests you can get, when you get them, how you get them and if they’re accepted or not.”

In a remarkable moment of candor, C-Span’s guest — Republican Congressman Tim Murphy (PA) — agreed:

MURPHY: Yeah and that brings up the point here that with regard to one of our big frustrations with insurance companies is they control the market place, they control what’s done, a lot of times doctors not making the decisions here. And you recognize the frustration.

By |2009-07-19T09:36:10-04:00July 19th, 2009|Healthcare, Obama administration|Comments Off on Healthcare Update
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