Clarification on Max, Tax, Wealth, and Health (by Dr. Seuss)

When you look at funding (0.00 / 0)

mechanisms and levels, Orzsag's testimony at the finance committee yesterday had this to say:

"The President's Budget sets aside a reserve fund of more than $630 billion over ten years dedicated to financing reforms to the American health care system that will lower costs, put us on a clear path to cover all Americans and improve quality. The reserve fund is financed roughly 50-50 between a combination of re-balancing the tax code so that the wealthiest pay more and specific health care savings in three areas: promoting efficiency and accountability, aligning incentives toward quality, and encouraging shared responsibility."

At least Obama is being specific in the need to cover half of the reserve fund's $630b through taxes. But I don't see how Baucus' approach on just taxing health benefits of the wealthy can raise anywhere near enough money to meet Obama's goal.

Hence, when I hear words like "prefer to try" "probably won't be affected" etc, I hear the word "loophole" big enough to drive a Mac truck through.

If Max doesn't want to follow through on Obama's proposal, then he's going to either have to: 1) find way more savings in health care savings (and that won't be easy); 2) lower the cap on exempt benefits or 3) institute other taxes, hopefully on those with incomes +$250k.

Otherwise, he's going to have to whittle down Obama's budget figures, and that doesn't bode well for the bigger picture of health care reform. Something would have to go out of the picture. Universality? Tax credits?  And we'll get what I fear most: a half-assed approach that doesn't do what needs to be done to control costs, raise revenues, and provide true universality. The system will just get uglier. And it will be full of inequity and people without adequate coverage or access to health care.

Obama and Baucus et al. need to start getting specific about their goals, funding mechanisms, and reforms or smarmy language like that coming out of the Finance Committee is going to generate a lot of criticism. Jay was right when he said Baucus jumped the gun by throwing out his ideas before they were fully formed and vetted. And so he's going to have to put up with incessant analysis and criticism until he gets the details out. Then he'll just be left with the criticism.  

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by: JC @ Wed Mar 11, 2009 at 20:49:32 PM UTC

These are all fair questions (0.00 / 0)

But we should start with the proposal as stands.

I don't think Baucus jumped the gun. Frankly, I'd rather have this process, where ideas are floated and open for discussion before the fact. It works provided we don't love or hate 'em in the first five minutes.

Anyways, I was just reminded -- confirming my suspicion -- that this provision is even in the Baucus white paper. This isn't a new revelation. It is, frankly, old news being brought up again. Just goes to show how strange media coverage can be.

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by: Matt Singer @ Wed Mar 11, 2009 at 21:49:18 PM UTC

[ Parent ]

confusing... (0.00 / 0)

...it's all a bit confusing, tho'. Every article I've read on this subject implies that all benefits will be taxed. The squishy quote from tax & finance staffers was the only one that I saw that tried to put numbers on it, but seems to contradict Max' statements.

If it's only for $250K+ earners then obviously it isn't all that regressive. But I'd be curious to see the numbers, how much revenue they could generate that way.

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by: Jay Stevens @ Wed Mar 11, 2009 at 21:49:55 PM UTC

Regardless of how (0.00 / 0)

this is funded, I fail to see how either plan...Baucus's or Obama's...will actually lower the cost of health care...

When a doctor I know tells me that the $150 dollar cholesterol test I just had costs him $15 (what the lab charges him if he sends the blood in)I know we have a major, major scam going on...this will be the next "bubble" to burst...it can't be sustained at current costs.

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by: big sage @ Wed Mar 11, 2009 at 23:52:13 PM UTC