Paul Ryan Unveils Risky 2013 GOP Budget; Medicare Targeted, Major Revisions To U.S. Tax Code.

Congressman Paul Ryan's Risky 2013 Budget Blueprint Targets Medicare, Medicaid, Welfare Reform, Social Security, the U.S. Tax Code & Defunds Pres. Obama's Health Care Law i.e., Repeals it.





House G.O.P. Lays Down Marker With New Budget Plan

House Republicans, believing that worries over the deficit will trump affection for Medicare and other popular programs, unveiled a federal budget blueprint Tuesday morning that would cut deeply into domestic spending, transform the tax code and balance the budget by 2040.

Because tax revenues would remain unchanged, the deficit under the plan would be almost as deep as the red ink under President Obama’s feet in the fiscal year that begins in October. But by mid-decade it would drop precipitously, and over decades, significant changes to Medicaid and Medicare, the federal health care plans for the poor and the elderly, would help bring the budget into balance.

“We are here to offer Americans the chance to choose which future they want,” Representative Paul D. Ryan of Wisconsin, the chairman of the House Budget Committee, said, positing a choice between “a path to renew prosperity” and “the president’s path of debt and decline.”

Ultimately, the House budget is a political document, since the Senate has no intention of passing a budget of its own.

The plan amounts to a political bet, with high stakes wagered by both parties.

“This isn’t just matter of the House battling with the Senate or arm-wrestling with the president,” said J. D. Foster, a fiscal policy expert at the conservative Heritage Foundation. “For better or for worse, what they produce is going to be the standard for conservatives and Republicans going into this election season.”

Republicans believe voters will reward them for what one what member of the House Budget Committee, Jason Chaffetz of Utah, called a “bold and realistic” effort to transform and shrink government. Democrats are equally certain that because the plan fundamentally changes Medicare without raising taxes on the rich, they can pummel vulnerable Republicans.

On Monday, the Democratic Congressional Campaign Committee began a “Millionaires over Medicare” campaign against 41 House Republicans who Democratic officials believe are vulnerable to the line of attack. “Under the leadership of Budget Committee Chairman Paul Ryan and Speaker John Boehner, House Republicans are again proposing a budget that ends the Medicare guarantee while protecting millionaires,” a memo from the group said. “It’s not only bad politics, it’s very bad policy.”

The budget plan embraces a Medicare plan similar to the one put forward by Mr. Ryan and Senator Ron Wyden, Democrat of Oregon, which would change the health plan from a guaranteed, fee-for-service government insurance program to a menu of private insurance plans subsidized by the government. Older Americans would be able to buy into the existing fee-for-service program, although annual expenditures would be capped.

The other flashpoint will be total spending on programs under Congress’s annual discretion. The budget will cap that spending at $1.028 trillion, the same level set by last year’s budget but $19 billion below the cap set in July after protracted negotiations to raise the nation’s statutory borrowing limit.

Democrats argue that the level in the new budget amounts to a broken promise that will lead to more strife as the House and Senate forge 12 spending bills this summer that will add up to two different totals. The House will aim for the $1.028 trillion cap in the new House budget while the Senate will aim for $1.047 trillion, the summer Budget Control Act cap.

“Ignoring the B.C.A. represents a breach of faith that will make it more difficult to negotiate future agreements,” two senior Democratic senators said Monday in a letter to Mr. Boehner and Representative Eric Cantor of Virginia, the House majority leader.

“Rather than trying to tear down the B.C.A., we should be holding it up as an example of what can be accomplished if we are willing to set aside our differences and work hard to find bipartisan solutions to our nation’s challenges,” said the letter from Kent Conrad of North Dakota, chairman of the Senate Budget Committee, and Daniel K. Inouye of Hawaii, chairman of the Senate Appropriations Committee.

House Republicans argue that additional cuts to both discretionary and entitlement spending are needed now to head off an automatic $110 billion in across-the-board cuts to defense and domestic programs in 2013. Even with the lower total, the House would still be above the $950 billion that domestic programs would reach if the across-the-board cuts take effect.

Under the House plan, the current $1.18 trillion deficit would fall to $797 billion in the coming fiscal year, compared with $977 billion under Mr. Obama’s plan. By 2016, the deficit would fall to $241 billion by Republican estimates. The Congressional Budget Office estimated last week that Mr. Obama’s budget would still have a $529 billion deficit in 2016.

The Ryan plan would accumulate $3.1 trillion in additional debt through 2022. The president’s would add $6.4 trillion, more than twice that total. The Republican budget cuts spending by $5 trillion more than the president’s plan, mandates the repeal of Mr. Obama’s health care law and assumes the elimination of the government-backed mortgage giants Fannie Mae and Freddie Mac.

The tax code would be simplified to just two tax rates, 10 percent and 25 percent, with the closure of tax credits and deductions. The 35 percent corporate income tax would be lowered to 25 percent and the existing, worldwide system of taxing corporate profits would be changed to a territorial system in which only domestic profits were subject to United States corporate taxation. But the budget assumes revenues would stay consistent with revenues under the current individual and corporate tax codes.

Medicare would be turned into something like Mr. Obama’s health care plan for the uninsured, a subsidized set of private insurance plans, while Medicaid would be converted to fixed block grants to the states.

Bipartisan talks continue over a so-called grand bargain on deficit reduction that would combine tax increases, spending cuts and changes to entitlement programs such as Medicare and Social Security. But hopes are dimming as both parties frame the election around their vision of deficit reduction.

“The idea of a grand bargain in 2012 is very hard to find credible,” Mr. Foster said. “To a large extent this election is about deciding what the grand bargain is supposed to look like.”


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Sources: CBS News, Fox News, NY Times, Google Maps

Killing Medicare Costs Taxpayers: Decision 2012

Medicare Saves Money


Every once in a while a politician comes up with an idea that’s so bad, so wrongheaded, that you’re almost grateful. For really bad ideas can help illustrate the extent to which policy discourse has gone off the rails.

And so it was with Senator Joseph Lieberman’s proposal, released last week, to raise the age for Medicare eligibility from 65 to 67.

Like Republicans who want to end Medicare as we know it and replace it with (grossly inadequate) insurance vouchers, Mr. Lieberman describes his proposal as a way to save Medicare. It wouldn’t actually do that. But more to the point, our goal shouldn’t be to “save Medicare,” whatever that means. It should be to ensure that Americans get the health care they need, at a cost the nation can afford.

And here’s what you need to know: Medicare actually saves money — a lot of money — compared with relying on private insurance companies. And this in turn means that pushing people out of Medicare, in addition to depriving many Americans of needed care, would almost surely end up increasing total health care costs.

The idea of Medicare as a money-saving program may seem hard to grasp. After all, hasn’t Medicare spending risen dramatically over time? Yes, it has: adjusting for overall inflation, Medicare spending per beneficiary rose more than 400 percent from 1969 to 2009.

But inflation-adjusted premiums on private health insurance rose more than 700 percent over the same period. So while it’s true that Medicare has done an inadequate job of controlling costs, the private sector has done much worse. And if we deny Medicare to 65- and 66-year-olds, we’ll be forcing them to get private insurance — if they can — that will cost much more than it would have cost to provide the same coverage through Medicare.

By the way, we have direct evidence about the higher costs of private insurance via the Medicare Advantage program, which allows Medicare beneficiaries to get their coverage through the private sector. This was supposed to save money; in fact, the program costs taxpayers substantially more per beneficiary than traditional Medicare.

And then there’s the international evidence. The United States has the most privatized health care system in the advanced world; it also has, by far, the most expensive care, without gaining any clear advantage in quality for all that spending. Health is one area in which the public sector consistently does a better job than the private sector at controlling costs.

Indeed, as the economist (and former Reagan adviser) Bruce Bartlett points out, high U.S. private spending on health care, compared with spending in other advanced countries, just about wipes out any benefit we might receive from our relatively low tax burden. So where’s the gain from pushing seniors out of an admittedly expensive system, Medicare, into even more expensive private health insurance?

Wait, it gets worse. Not every 65- or 66-year-old denied Medicare would be able to get private coverage — in fact, many would find themselves uninsured. So what would these seniors do?

Well, as the health economists Austin Frakt and Aaron Carroll document, right now Americans in their early 60s without health insurance routinely delay needed care, only to become very expensive Medicare recipients once they reach 65. This pattern would be even stronger and more destructive if Medicare eligibility were delayed. As a result, Mr. Frakt and Mr. Carroll suggest, Medicare spending might actually go up, not down, under Mr. Lieberman’s proposal.

O.K., the obvious question: If Medicare is so much better than private insurance, why didn’t the Affordable Care Act simply extend Medicare to cover everyone? The answer, of course, was interest-group politics: realistically, given the insurance industry’s power, Medicare for all wasn’t going to pass, so advocates of universal coverage, myself included, were willing to settle for half a loaf. But the fact that it seemed politically necessary to accept a second-best solution for younger Americans is no reason to start dismantling the superior system we already have for those 65 and over.

Now, none of what I have said should be taken as a reason to be complacent about rising health care costs. Both Medicare and private insurance will be unsustainable unless there are major cost-control efforts — the kinds of efforts that are actually in the Affordable Care Act, and which Republicans demagogued with cries of “death panels.”

The point, however, is that privatizing health insurance for seniors, which is what Mr. Lieberman is in effect proposing — and which is the essence of the G.O.P. plan — hurts rather than helps the cause of cost control. If we really want to hold down costs, we should be seeking to offer Medicare-type programs to as many Americans as possible.


Sources: Agenda Project, Guardian.co.uk, MSNBC, NY Times, Young Turks, Youtube, Google Maps

Pharmaceutical Industry Agrees To Invest $80 Billion In Reduced Medicare Drug Benefits For Seniors

MSNBC----

WASHINGTON - The pharmaceutical industry agreed Saturday to spend $80 billion over the next decade improving drug benefits for seniors on Medicare and defraying the cost of President Barack Obama's health care legislation, capping secretive negotiations involving key lawmakers and the White House.

"This new coverage means affordable prices on prescription drugs when Medicare benefits don't cover the cost of prescriptions," Sen. Max Baucus, chairman of the Senate Finance Committee, said in a statement announcing the accord.

The deal marked a major triumph for Baucus as well as the administration. Obama praised the deal.

"The agreement by pharmaceutical companies to contribute to the health reform effort comes on the heels of the landmark pledge many health industry leaders made to me last month, when they offered to do their part to reduce health spending $2 trillion over the next decade," Obama said. "We are at a turning point in America's journey toward health care reform."

Baucus, a Montana Democrat, has been negotiating with numerous industry groups for weeks as he tries to draft legislation that meets Obama's goal of vastly expanding health coverage, has bipartisan support and does not add to the deficit.

Baucus' announcement said drug companies would pay half of the cost of brand-name drugs for seniors in the so-called doughnut hole — a gap in coverage that is a feature of many of the plans providing prescription coverage under Medicare. Other officials said wealthier Medicare beneficiaries would not receive the same break, but there was no mention of that in the statement.

In addition, the entire cost of the drug would count toward a patient's out-of-pocket costs, meaning their insurance coverage would cover more of their expenses than otherwise.

Billy Tauzin, president and CEO of the Pharmaceutical Research and Manufacturers of America, said that "millions of uninsured and financially struggling Americans are depending on us to accomplish comprehensive health care reform this year. Today, America's pharmaceutical research and biotechnology companies are signaling their strong support for these critically important efforts."

Higher rebates to fund some insurance?

While none of the changes in the prescription drug program would directly lower government costs, several officials also said the industry agreed to measures that would give the Treasury more money under federal health programs.

In particular, officials said drug companies would likely wind up paying pay higher rebates for certain drugs under Medicaid, the program that provides health care for the poor.

Those funds would be used to help pay for legislation expanding health insurance for millions who now lack it.

One official said the deal was agreed to late Friday night when Tauzin called Baucus. The senator's statement said the White House was involved in the agreement.

The disclosure of negotiations came near the end of an up-and-down week for the administration and its allies on health care.

Earlier setbacks:

Congressional Budget Office estimates showed early versions of two major Senate bills were either too costly or failed to make a large enough dent in the ranks of the uninsured. Republicans seized on the reports as evidence that Democrats were losing traction.

They leapt again when it was disclosed that House Democrats were considering a wide array of tax increases to finance their legislation, including an income tax surcharge, a tax on employers based on the size of their payroll and a value-added tax, a form of a national sales tax.

House Democrats on Friday unveiled draft legislation they said would cover virtually all of the nation's nearly 50 million uninsured but it came without a price tag or an indication of how it would be paid for.

Major provisions of the 850-page measure would impose new responsibilities on individuals to obtain coverage and on employers to provided it. It also would end insurance company practices that deny coverage to the sick and create a new government-sponsored plan to compete with private companies.

Speaker Nancy Pelosi has said she hopes the legislation can clear the House before lawmakers leave for their annual August vacation.


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Sources: MSNBC, ABC.net, Whitehouse.gov, Flickr, Google Maps