To me the common assertion about health care reform reform and tax reform makes no sense
Various people have argued that Republicans decided to repeal and (very partially) replace Obamacare before moving on to tax reform, because Obamacare repeal (aka the American Health Care Act aka AHCA) would make it easier to permanently cut tax rates. To me this makes less than zero sense. The argument is that, since AHCA includes tax cuts, tax reform would start from a lower base, so it would be easier to write a tax reform bill which doesn’t add to the deficit after 10 years. It is, in fact, necessary that bills not add to the deficit after 10 years for them to be passed using the budget reconciliation process which makes them invulnerable to filibusters.
However, I don’t see how preceding tax cuts make new tax cuts budget neutral. No one has explained how the exact same tax reform bill could be passed using reconciliation if it followed passage of the AHCA but not if it preceded passage of the AHCA. I know of no one who has argued that the CBO score of the effects of tax reform would be markedly different, or even argued that the sign of the change in the score would be favorable.
Rather the argument seems to be that with the AHCA tax cuts and the tax reform tax cuts, rich people will pay lower taxes than with the tax reform tax cuts alone. This is obviously true and has nothing to do with the order in which the bills are signed into law.
Jonathan Chait has been a prominent proponent of the view which makes no sense to me at all.
The next source of money is repealing Obamacare. The connection between the two issues might seem obscure, but it matters technically. The Republican plan to repeal Obamacare would eliminate all the taxes that were raised to help pay for the benefits — about $1.2 trillion over the next decade. This would lower the baseline of tax revenue, meaning that Republicans would need to design a tax code that raises $1.2 trillion less in revenue in order to be “revenue-neutral.” That makes it crucial for them to repeal Obamacare before they cut taxes.
I can cut and paste his argument. I can read it. But I can find no sense in it at all. Yes if taxes have been cut by $1.2 trillion, then a revenue neutral tax reform needs to raise 1.2 trillion less. But nothing whatsoever justifies Chait’s use of the word “before”. I can’t refute his argument, because I can’t detect it.
This matters, because it now turns out that Donald Trump is one of the people who have been convinced (presumably by Paul Ryan not Jon Chait).
This argument too makes no sense (very much less surprising in the case of Trump than of Chait). For the reconciliation process, money can’t be picked up with one bill and spent on another. Each bill taken alone must not increase the deficit after 10 years. Now reactionaries consider the AHCA to include great tax reform, since it includes reductions in taxes on high incomes. But this doesn’t make further reductions easier. The order in which the bills are passed doesn’t matter.
In fact, the AHCA makes tax reform more difficult. The reason is that the AHCA benefit cuts are even larger than the tax cuts. So the maximum allowed fiscal 2027 deficit would be smaller if the AHCA were law. A bill which combined health care reform reform and tax reform could include even larger tax cuts than simple repeal of the ACA tax increases and be passed using reconciliation.
I honestly don’t get it. I’m sure I’m missing something. I am also sure, 100% sure, that, even if passage of the AHCA were to make it easier for the GOP to pass a tax reform bill, this wouldn’t be because the AHCA includes tax cuts or deficit reduction.
update: minds think alike.
Robert, my undrestanding from some post I read (I think it might have been TPM or Kevin Drum) is that reconciliation works in a rather arcane manner. Basically, Congress passes bills for three different parts of the budget, that are then instructions that get rolled into a single budget at some point during the year. So they -can- do the AHCA and then tax reform, and the fact that the two offset each other, can make it possible for each to be done via reconciliation. I’m unclear on the details, b/c …. bad memory. But ISTR something about having to do the AHCA first to free up the $$ for tax reform. The way it was described, it was -quite- arcane. So for instance, part of how they got away with what appear like multiple bites at the apple, si that last year there was no budget. So that “slot” was moved up to this year. All of this could be wrong, but it’s what I remember.
Wish I remembered who wrote it up originally. Sigh.
Lets see if I get this right.
In order to have a spending bill it must be budget neutral in the sense it can not create a deficit over a 10 year period. If it does create a deficit within that 10 year period, it is subject to sunset at 10 years. This is what happened with the 2001/2003 tax breaks which Obama rolled back for the high income bracket (forgot which ones). http://usgovinfo.about.com/od/uscongress/a/reconciliation.htm Parts of the PPACA were passed under Reconciliation. In order to pass a tax cut, there has to be a revenue gain otherwise the tax cut can not be passed. It was important in the repeal of the ACA 2.8% and .9% there was a revenue gain.
Here is an article that compares the price for commonly used drugs and medical procedures in the United States to that of other developed nations:
http://viableopposition.blogspot.ca/2017/04/the-high-cost-of-health-care-in-america.html
There is one main reason why Washington never deals with this issue.
It is all accounting fiction. It is impossible for any change in the tax code to be truly revenue-neutral, as people change their behavior in response to changes in the tax code, and the CBO is incapable of modeling those changes. So they make it up as they go along.
It may be the opposite. If they do tax changes, they will be unable to re-attempt partial repeal of ACA.
They should just repeal the ACA, and not bother with trying to replace it.
Warren,
Yeah, wtf is the big deal of thousands of americans dying due to lack of healthcare? WTF is the big deal of millions being forced into bankruptcy? WTF is the big deal of millions of seniors suddenly finding themselves unable (again) to afford their prescriptions.
Nice string of humanity you got there, pal. You should try to get a couple more strings together.
“Do you want to live forever?” -Valeria
well, once again
they’ve got you arguing over a “technical” issue to keep you from thinking about the real issue.
health care in America is twice as expensive as in the civilized world.
whether you pay for that by taxing the rich… one way or the other… or by letting those who can’t pay for it do without it, you still haven’t solved the real problem.
the real solution is to make it possible for “the poor” to pay for their own health insurance by a medicare-like tax (flat up to a cap) over their whole lifetime in order to accumulate the money (credits) for their more expensive health care when they get older… and have less money.
even this won’t work without a government oversight and determined effort to control costs. and that will depend on “good government” which of course everything else depends on and which we have not got. and will not get as long as we put up with the two parties pretending to argue with each other while writing laws that benefit those who already got rich from exploiting the poor.
sorry, warren, in some ways i’d like to agree with you, but you completely fail to understand the “the markets” are not free. and even if they were “poor and not smart” we always have with us, and we… who think we are smart because we are rich(er)… cannot afford to ignore them
You’re right, Coberly, the market is not free. So perhaps we should look at why that is, rather than making it even less free.
Warren
the market is not free because those who whether by actual added value or by simple fraud become wealthy enough to employ the levers of power to see that they maintain their advantage.
i’m sorry but “truly free markets” are no more an adequate answer to the problem of serious poverty than is “the government,” or even “god.”
if you are anywhere near intelligent you will be able to see this, if you can shake your tendency to fundamentalist religious belief… in your case the religion of “free markets.”
for the record i prefer free markets to government coercion, but i have seen enough of the way the world works to know that neither one in isolation is the answer.
So your solution is to make those levers of power even more powerful?
It is not the job of the U.S. government to provide the people with any of the necessities of life — not food, not housing, not clothing, and not healthcare.
The US federal government was designed to and is empowered to tax and spend in the interests of the general welfare of the United States, and therefore of it’s people.
All or nearly all states and the federal government have long acted as the protectors of specific categories of people (children, those who have severe mental illness, those who by virtue of criminal activity are hazards to the community, former members of the military with minimum service levels), and provide food, housing, education, clothing, and healthcare for them. States also have long had reimbursement funds by which those who cannot afford healthcare are provided it and the providers are reimbursed to some degree, at specified institutions.
There is no reason to say that the federal government doesn’t have the power or the moral responsibility to exercise that power to provide for the general welfare of the country by taking steps to provide for basic necessities of life as defined (minimally) by the UN UDHR, including articles 22, 23, 25, and 26, to which the United States is a signatory.
So the U.S. government can also tax and spend to pay for individuals’ personal defense, and to pay off their personal debts?
Warren
this is why a person wants to call you names. i am beginning to see how your brain is organized: first you get an impression of whether a proposition (formal logic definition) agrees with your fundamental belief (markets uber alles), and if it does not you throw the kitchen sink full of random free associations at it.
i don’t know whether or under what circumstances the representatives of the people (congress) such as we have would vote to provide for individuals personal defense or personal debts, though of course they do vote for our common defense and out common debts (those incurred under law to pay for our common welfare), but so far as i know it (they) haven’t done so yet.
don’t go all Krasting on me. learn to make fine distinctions… like between a horse and an iron horse. and try to learn to look at at least more than one factor that affects a problem.
You know with going to deep into all the technicalities of this post let me say that IMO what Coberly has been saying about SS and not raising the CAP but allowing working class people to pay for it because if you tax the rich to pay for SS or in this case Obamacare/ACA they will declare war on it and it will lead to the death of SS and now Obamacare has been proven true. Obamacare taxes on people making high income and the Medicare/FICA surcharge on the wealthy is why the Republicans waged a 7 year war on Obamacare not because they were truly against a Heritage Foundation Republican Healthcare bill.
When the authors of the Constitution wanted to say PEOPLE, they said PEOPLE. The first part of Article I, Section 8, says, “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States.”
The States did not give the Congress the power to collect taxes, etc., to pay the personal debts or provide for the personal defense or personal Welfare of the PEOPLE of the United States. (The States, of course, are not prohibited from doing those things for their people.)
Somewhere every dead former SC justice is looking down(well Alito is looking up) and banging their copies of the Constitution into their foreheads after reading Warren’s thoughts on that document.
Imagine someone(even a knowledgeable person) cherry picking the Constitution.
EMichael
but as we know slaves are not people, they are property. and it is unconstitutional for the people in free states to refuse to return “property” to it’s owner in a slave state.
you see, the “state’s rights” mentality does not mind the federal government trampling the rights of the people in the free states to treat the people within their borders as free if someone from a slave state claims that those people are their property.
even, i am afraid, the sacred constitution can be twisted to support any idea, however evil its consequences, that any half wit can put into grammatical language. and, sadly, some of those half wits have sat on the supreme court,
so forgive our friend Warren, who will go to his grave thinking the South won the Civil War, or should have, and only right-thinking upholders of the sacred rights of property uber alles, can save the Nation (White Aryan Property owners) from the evils of Lefist radicals and abolitionists.
Cob,
All of that and one more thing. If you continue to read Section 8, it says:
“To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.”
Warren does not like that part so he ignores it. Just like he has done in every one of his “interpretations” of the Constitution.
Only two choices here:
He only wants certain parts to mean anything
He has a reading comprehension problem
EMichael
yes to all of the above. but to keep our own sanity we need to try to remember that everybody does it. words are ambiguous enough that everyone can put their own interpretation on them and feel like he is speaking God’s Truth.
and of course some people are damned liars, but they usually have to careful that their lies look enough like the truth that their victims think they know that they (the liars) will be believed.
Warren would take exception to what the “foregoing powers” mean.
Of course he would take exception to what the “foregoing powers” mean. Just like he stopped a paragraph or two earlier in his interpretation, he would stop reading after the comma…….
“the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States “
Show me where “the Foregoing Powers” includes taking responsibility for the health care of every individual in the United States.
Umm, you said it yourself. You really have a problem with the written word and memory, huh?
Warren
April 14, 2017 10:29 pm
When the authors of the Constitution wanted to say PEOPLE, they said PEOPLE. The first part of Article I, Section 8, says, “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States.”
EMichael
thanks. i was going to mention the “general welfare” clause but I couldn’t remember if it was in the Preamble or the Constitution itself.
But like God, if it hadn’t been there, we’d have had to invent it.
No nation that neglects the welfare of its people can expect to survive very long.
Except maybe Egypt. Warren would have loved Egypt.
That the general welfare of the United States, just as it is the “pay the debts of” and “provide for the common defense of.” The States did not give it the power to provide for individuals’ welfare any more than they gave it the power to pay an individual’s debts or to provide for his personal defense.
Warren
fortunately the Supreme Court does not agree with you. And the Civil War settled the question of whether the “property” of a slave owner continued to be his sacred right if his “property” was locate in a state that did not allow slavery.
No nation can long survive if great numbers of its people live and die in abject poverty. And if the best way to prevent that is to provide for individual welfare, that suits the requirement of “the general welfare”
Moreover, the people can decide that it is their interest to provide for the poor before poverty becomes so widespread that it threatens the security of the state. Again, whether that power of the people is limited to each state for itself or can by enforced by the nation as a whole seems to be settled law. your cries in the wilderness notwithstanding.
you no doubt speak the truth according to God, but you can’t expect the rest of us to take you seriously. and i would suggest that the only people who take you seriously are those who planted the lie in your head and expect to gain politically by encouraging an extremely short sighted worship of personal greed.
Coberly, have you actually READ those decisions, and seen low ludicrous and tortured the “reasoning” is?
We do not have “abject poverty” in the United States. Go to Haiti, Sri Lanka, or South Sudan if you want to know what “abject poverty” looks like.
Warren
in fact i have. and i agree with you, but probably not about which ones.
i have seen abject poverty in the United States. but i was talking about the abject poverty that will come if Social Security is broken.
a runaway-cost health care system might accomplish the same thing.
Yeah — kids might actually have to take care of their parents. Horrible.