Saturday, March 13, 2010

Republicans named to deficit commission

The Republican congressional leaders named their 6 members of the deficit commission to be chaired by Alan Simpson and Erskine Bowles. They are Sens. Crapo, Gregg, Coburn and House members Ryan, Hensarling and Camp. These folks have all supported repealing the tax exclusion of employer paid insurance. There is movement within the Democratic party to realize this is both needed to ever truly slow cost inflation and it is also likely inevitable (certainly moreso among policy types than politicians, but the Republican politician support may be largely becuase they know it can't pass at this time). Even a delayed tax on high cost health insurance in the Senate bill as modified by the proposed reconciliation clean up is the 'camel's nose under the tent' for the $250 Billion per year tax expenditure. Capping the tax exclusion at the national mean (~$13,500 family cover, $5,500 individual) would reduce the deficit over 10 years by between $500 and $600 Billion per CBO. Enacting the Senate bill and limiting (or preferably ending) the tax exclusion via the political cover and broad tax reform solution likely to be proposed by this commission, and we would have the 'we need to do more on cost control' that so many of the brave cost cutters claim to want.

Pass the Senate bill and then turn to capping/ending the tax exclusion, likely as part of an overall tax reform that lessens the political heat on any change to the tax exclusion on its own. We would be in business then per cost control. Don't pass the Senate bill and this Comission must tread much more lightly in health care because of the lack of no coherent means of addressing the uninsured, and the way they now get care influences cost inflation due to cost shifting.

You say there is no way the commission will lead to anything? Maybe. But, if the past is a perfect predictor of the future with regards to fiscal sanity, we are sunk in any event.

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