May 5, 2017--Winners & Losers

Though Republicans members of the House of Representatives did not pause to see what the non-partisan Congressional Budget Office would say about the consequences of the healthcare legislation they rushed to approve, the New York Times did an instant analysis of who won and who lost.

What the Times found should be no surprise and suggests why GOP House members were in such a hurray to vote--if any of them took the time to read the legislation (few did) they might have been embarrassed to be made aware of what was in the bill and what they were heartlessly voting for.

It also might have given them pause before, like needy children, they rushed to Big Daddy at the White House to have him praise them for their dastardly deed. And, yes, to have a Bud Lite together before heading back to their home districts for yet another ten day-vacation. They had after all had to work for their $174,000 salary for two whole weeks since their last "recess."

Here are the winners and losers--

Winners:

High-income earners--eliminates taxes for couple earning at least $250,000 a year.

Upper-middle-calss people without pre-existing health conditions.

Young middle-class people without pre-existing health conditions.

People who opt to go without insurance--the bill eliminates the individual Obamacare mandate.

Large employers--eliminates employer Obamacare mandates.

People who want less comprehensive coverage.

Losers:

Poor people.

Older adults in most states.

People with pre-existing health conditions in many states.

State governments because of cuts in Medicaid--including, little noticed, for special education.

Hospitals--because up to 24 million people will lose coverage and thus hospitals will have fewer patients. Millions will again seek care in high-cost emergency rooms.

Planned Parenthood which will not be allowed to receive any government funds for at least one year.

April 20, 2017--Tax Scam

I'm dense so it's taken me awhile to figure out why the Republicans so passionately want to
"repeal and replace" Obamacare. Actually, some of the most conservatives want only to do the repealing.

I got swept into believing some of the rhetoric. Obamacare is deeply flawed. True. It does not allow most people to keep their doctors, true; and it is not containing the rise in the cost of either medical care itself or healthcare insurance. Also true.

But, after a little time passed and the Republican talking points were countered, it became clear that the Paul Ryan American Health Care Act is not about healthcare but about taxes--a critical step toward his plan to cut and reform corporate and income taxes.

Here's the math--

In a March 22nd Forbes Magazine posting (not a socialist publication) it was reported that contained in the final version of the proposed bill, after all the deal making with the House of Representatives Freedom Caucus and White House, the nonpartisan Congressional Budget Office concluded that the plan would result in an $600 billion tax cut over the next decade, with at least $274 billion of the cuts going directly to the richest 2%.

Further, Medicaid would be cut, again over the decade, by $880 billion, making it more difficult for low-income taxpayers to secure insurance.

Though from a healthcare perspective it would be a crisis for low- and middle-income people--the CBO also estimated that these cuts would mean that 24 million would lose their current coverage--from a tax-cut perspective it would be a bounty. Again, with the top 5% benefiting the most from the GOP version of tax reform.

Obamacare does include two tax surcharges for high earners--

For couples filing jointly, if their adjusted gross income is $250,000 or higher there is a 0.9% Medicare surcharge and a 3.8% surcharge on net investment income, with the latter being income from certain types of dividends and capital gains.

The Ryan plan calls for the elimination of these two taxes for very high earners.

If this bill were to pass (and although it was set aside last month it is still a glimmer in Paul Ryan's eye and seems to have the support of the president, who feels the need to get at least something, anything done--even something this harsh and regressive) then Congress and the president could move on to what really interests them--massive tax cuts for the wealthy. Paid for largely, and here's the perversely brilliant part, by repealing the two Obamacare tax surcharges. Doing this would yield $1.48 trillion, which would "pay for" most of the additional tax cuts in a manner so as to make then seem "revenue neutral."

Again, this healthcare shell game is not about healthcare but tax cuts.

The claim, of course, is that cutting taxes for the wealthy is really about helping the middle class, because if you cut "job creators'" taxes they will invest in businesses that generate high-wage jobs.

The only problem with this claim is that it's untrue--the massive Reagan tax cuts and the even larger Bush tax cuts did not boost the economy or create jobs.  What was created were massive increases in the national debt--nearly tripling during Reagan's time and doubling under George W. Bush.

In contrast, the debt after Clinton's eight years increased by just 32% and during Obama's two terms, after inheriting a collapsed economy, it went up by 68%.

I am embarrassed to admit that it has taken me this long to finally figure out what is going on and what all the congressional healthcare machinations are about--tax cuts.

March 14, 2017--Donaldcare's Death Panels

Among the few progressive policies he trumpeted during the campaign was Donald Trump's soft promise that he would make sure everyone in America, after repealing and replacing Obamacare, would have health insurance. That Donaldcare thus would be better.

With yesterday's Congressional Budget Office analysis of the Ryan-Trump replacement plans projecting that over the decade 24 million people currently on Obamacare would lose their insurance, that promise turns out to be another Trump lie.

OK, "alternative fact."

The CBO models are not flawless and Trump and most Republicans have been preemptively trashing the work and findings of this reliable nonpartisan office. But even if the CBO is over-estimating by half, this means that"only" 12 million would lose their coverage.  12 million.

Remember Michele Bachmann who back in 2012, while in the lead for a week in the polls for the Republican nomination, blatantly claimed, without evidence, that the Affordable Care Act called for "death panels" of government bureaucrats who would decide who to treat and who to let die?

Well, this is worse. Much.

This is a death panel policy on steroids.

If "just" one percent of those who would lose their care were to die because of that, that's 120,000 people who would die.

Less euphemistically, be killed.

Even less euphemistically, murdered, with the definition of murder "intent to kill," which this is.

The New York Times reports that the CBO's estimate that over the same decade $337 billion of government money would be saved is convincing fiscally conservative Republicans who didn't believe Donaldcare would "save" money are already softening their opposition to the Ryan-Trump plan.

Saving money--a good thing.

Saving lives--not so much.

Michele Bachmann

September 8, 2014--Two Cheers for Obamacare

I've been wondering why we've been hearing relatively little recently from Republicans about Obamacare. It had been thought that in the run up to the November midterm elections the GOP would be all over it, savaging it as an assault on both our freedom and the federal budget. It was to be their political trump card. The route to majority control of both houses.

Could it be that there is now relative silence because Obamacare is actually . . . working.

Many millions have signed up, and with the exception of some anecdotal horror stories the vast majority with health care coverage for the first time are happy with it; and, perhaps most surprising, in spite of all the scary stories about how the Affordable Care Act would bust the budget, it has in fact not only been cost effective but has already been contributing to deep cuts in the federal deficit.

Just as Obama said it would.

So then two cheers for Obamacare. It is too soon to offer three because, though the nonpartisan Congressional Budget Office's projections show significant downward trends in overall Medicare costs (the result in part of aspects of the ACA law) and thus dramatic deficit reductions over the decade, we still do not know how many more will sign up, how much subsidy they will require, and the nature of the care these new enrollees will require.

The CBO, adjusting for inflation, recently reported that the average amount spent annually per Medicare recipient declined from $12,000 each in 2011 to $11,200 this year and will be reduced further to $11,000 per Medicare enrollee by 2017. Technically, this is called "negative excess cost growth."

All told, the CBO is projecting that, as a result, over the next ten years the federal deficit will be reduced by $715 billion. Nearly three-quarters of a trillion dollars.

To be fair, this good news is not fully the result of the ACA. This downward trend is also a consequence of "young" Baby Boomers becoming eligible for Medicare for the first time and the apparent, not entirely understood, reduction in costly tests, treatments, and drug use. All good things as our health care system has grown bloated with over-testing and the over-selling of unneeded treatments and medications.

This $714 billion in savings dwarfs all deficit reduction plans being discussed, including Paul Ryan's draconian budget.

Wouldn't it be good if we could stop playing demagogic games with the budget and health care and get on to the real problems we face--how to create more jobs, improve the treatment of veterans, fix our crumbling infrastructure, improve public education, and tackle the inequality crisis.

Why am I not optimistic?

February 28, 2014--Afghanistan 2006

Kevin O'Leary was a guest last week on CNBC's Squawk Box. He is the chairman of the $1.5 billion O'Leary Fund and a co-host of Shark Tank, a TV reality show that has budding entrepreneurs pitching their business ideas to self-made millionaire investors.

During his Squawk appearance he and the hosts got into a discussion about corporate tax rates. Currently, the U.S. federal rate is 35% and is in the news as Republicans in Congress are once more pressing to have it lowered to 25%, claiming that having a 35% rate puts us at a competitive disadvantage with corporations in other countries, even socialist ones such as France where the rate tops out at  33.33%. (And while they're at it, they want to cut individual top rates from 39.6% also to 25%.)

In the UK, the GOP points out, the top rate is only 23%, in Germany 29.55%, in Denmark 25%, Norway has a top rate of 28%, and in uber-socialist Sweden it is just 22%.

Taking even right-of-center hosts Joe Kernen and Becky Quick by surprise, O'Leary said he advocated a zero tax rate for corporate profits. The same rate that prevailed in Afghanistan in 2006.

To his astonished hosts who demurred, he argued that this would allow corporations to take their resulting increased profits and invest them in corporate expansion or investment in job-creating enterprises.

Becky Quick in particular went uncharacteristically ballistic. She is usually stone faced. It's her signature persona. Being inscrutable and unflappable. But O'Leary's proposal was even too much for her and she let him have it, lecturing him that people like her and him who are among the top 1% of earners should be willing to pay their fair share in taxes, at least as much as at present.

Rhetoric aside--and what she said was rhetoric infused--what she and other co-host Andrew Ross Sorkin failed to do was cite the overwhelming, widely-available evidence about the actual rate companies pay in taxes. Not the rate that's on the books.

If on average corporations pay, say, 25-30%, maybe there is a case to be made to lower the official rate to help make them globally competitive. If there is evidence that companies that have figured out strategies to pay less in taxes and as a result have been actual job creators, again, there may be a  case to be made to significantly lower taxes for all corporations.

But the evidence readily at hand was never presented. O'Leary was never confronted with the fact that on average, large corporations' effective rate is just 12.6% in federal taxes. Even taking into consideration what they pay in state and foreign taxes, their actual (as opposed to on-the-books) rate is 16.9%.

And there is no evidence that shows a positive correlation between effective tax rates and job creation.

I'm not sure how O'Leary would have responded, but at least the discussion would have been fact-, not opionion-based.

If I know these numbers from Congressional Budget Office studies, I do not understand why Quick and Sorkin, who do this for a very nice living, wouldn't as well.