Outside the Beltway

Apples and Oranges

James Joyner
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lamar-alexander-officialIn a helpful post titled “Facts and Figures,” Ezra Klein observes:

This morning, Lamar Alexander said that reconciliation has never been used for anything as big as health-care reform. Health-care reform has a 10-year cost of about $950 billion. The Bush tax cuts, which passed through reconciliation, had a 10-year cost of about $1.8 trillion. Lamar Alexander voted for them.

Lacking a transcript of the discussion, I can only speculate as to what Alexander meant by “big” here.  But one could reasonably argue that a major overhaul in how the country runs its health care system is “bigger” than an accounting move to let people keep more of their owned damned money, irrespective of the fiscal impact of the two measures.

I’m insufficiently informed on the history of the reconciliation process to otherwise evaluate Alexander’s claim.

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26 responses to “Apples and Oranges”

  1. Bernard Finel Avatar
    Bernard Finel

    “a major overhaul in how the country runs its health care system”

    How would the bill change your health care? It would not change mine at all. Not sure how this represents a major overhaul for most people.

  2. Triumph Avatar
    Triumph

    Ezra Klein is a dingbat.

    The Democrat party is a minority party and anything they do unilaterally is against the fundamental precepts of democracy.

  3. James Joyner Avatar
    James Joyner

    Much more government regulation, higher premiums, and higher taxes for sure. Otherwise, hard to say.

  4. Bernard Finel Avatar
    Bernard Finel

    Much more government regulation, higher premiums, and higher taxes for sure. Otherwise, hard to say.

    That is just fear mongering. Higher taxes, yes, if you either have a gold-plated plan or make a lot. Gotcha. But that does not affect your health care. It is a tax increase that bothers you, not the whole “restructing” stuff.

    About regulation. There are no death panels. There is no mechanism that gets between you and your doctor. You will not be affected at all by the new regulation.

    About premiums… how so? First, everyone agrees that community pools are one of the best ways to try to hold down premiums. Second, Obama is proposing to regulate premiums which is also likely to hold them down. Third, more insured people eases pressure on the rest of us because we don’t have to cover as much of the cost of providing for the uninsured. Indeed, there is no serious analysis suggesting that premiums under these plans would increase faster than they would otherwise. They will likely increase slower — not much slower, but slower.

  5. PD Shaw Avatar
    PD Shaw

    If the bill doesn’t pass hundreds of thousands of uninsured people will die. Bernard may not care about these changes, someone’s paying for his healthcare insurance. Nor may he care that some people will be forced to drop their insurance if the reform bill is past, and some of them will die too.

  6. Stan Avatar
    Stan

    “Much more government regulation, higher premiums, and higher taxes for sure. Otherwise, hard to say.”

    Even if it’s true, and I note that you’ve stopped providing supporting evidence, we get in return many fewer medically uninsured Americans, much more preventive care, and an end to denial of coverage based on pre-existing conditions.

  7. DL Avatar
    DL

    Tax cuts aren’t entitlements as they well know
    but deception is the foodstuff of the ruling class -guilt and embarassment are beyond their capability -at least in this world.

  8. sam Avatar
    sam

    On reconciliation:

    What is the precedent for using reconciliation to enact major policy changes? Much more extensive than the architects of the Congressional Budget and Impoundment Control Act of 1974 had in mind-or than Senate Republicans are willing to admit these days. Reconciliation was designed as a narrow procedure to bring revenue and direct spending under existing laws into conformity with the levels set in the annual budget resolution. It was used initially to cut the budget deficit by increasing revenues or decreasing spending but in more recent years its primary purpose has been to reduce taxes. Twenty-two reconciliation bills were passed between 1980 and 2008, although three (written by Republican majorities in Congress) were vetoed by President Clinton and never became law.

    Whether reducing or increasing deficits, many of the reconciliation bills made major changes in policy. Health insurance portability (COBRA), nursing home standards, expanded Medicaid eligibility, increases in the earned income tax credit, welfare reform, the state Children’s Health Insurance Program, major tax cuts and student aid reform were all enacted under reconciliation procedures. Health reform 2009 style would be the most ambitious use of reconciliation but it fits a pattern used over three decades by both parties to avoid the strictures of Senate filibusters. [Brookings: Truth and Reconciliation: Sidestepping the Filibuster]

  9. Rick DeMent Avatar
    Rick DeMent

    Tax cuts aren’t entitlements as they well know

    They are when your just borrowing money and redistributing it though the tax code which describes every tax cut in the last 25 years.

  10. JKB Avatar
    JKB

    Bernard: You shot yourself in the foot repeating the economically foolish idea that price controls (on premiums) will keep down costs. Here read an expert.

    Maybe President Obama should instead follow in President Ford’s footsteps and start wearing a WHINE button on his lapel, for Whip Healthcare Inflation Now, Egads!

    Although I will grant that premium prices may stay down but supply will be severely limited especially coupled with the idea that there is no cap on payouts and mandated coverage. Let’s see, mandated expenditures by business, no way to limit the maximum expenditure for any individual and artificially low premiums. Yep, that just screams viable ongoing concern.

    Community pools – good places to pick up some nasty infection. But risk wise, once they get large enough, they aren’t risk pools anymore even for catastrophic health care.

    We’ll politely ignore that you cannot pool risk for Comprehensive health care.

    Risk of me, you and everyone else getting old, sick, or old and sick? Near 100%. So there is no appreciable ‘lucky’ cohort to contribute some dough and not need benefits from the plan.

  11. charles austin Avatar
    charles austin

    The Bush tax cuts, which passed through reconciliation, had a 10-year cost of about $1.8 trillion.

    I have trouble getting past the idea that any money not collected as taxes represents a cost to the government. I readily acknowledge the loss of revenue to the government, but fundamentally, is it the citizens’ money a portion of which is taken by the government as taxes or the government’s money that they allow citizens to have anything they don’t take?

    Bernard Finel, you are confusing health care with insurance. Again. Insurance will go up (not down as you imagine) because the insurance companies will be forced to include all higher risk people. A legitimate argument can be had over that being a desireable outcome. But the idea that health care itself will not get noticeably worse or more restricted for most of us once the single payer stalking horse is passed is to be in severe denial.

    Stan, not every post can contain a full recitation with footnotes of the entire argument.

  12. Rick Almeida Avatar
    Rick Almeida

    I have trouble getting past the idea that any money not collected as taxes represents a cost to the government.

    The “cost” centers on the fact that expenditures rose while incoming revenue fell.

    That should not be a difficult concept to work through.

  13. Stan Avatar
    Stan

    charles, the CBO estimated that if the one of the plans (Senate or House, I don’t know which) went through, the average cost of a policy would go up but each policy would provide far more coverage. This makes Alexander’s statement about premiums a little fishy, at best, and I’m convinced Joyner knew this and omitted it in the interest of strengthening his argument. Taxes would indeed be raised, on either individual incomes over $250,000 a year or on employers that provide extremely generous health plans. This makes Joyner’s claim that taxes would be raised an oversimplification. Finally, what does Joyner mean by regulation? Does he mean cracking down on the Texas county that bills Medicare so much? Or what? You and I argue on the basis of our principles, misguided as they may be. Joyner does too, but he pretends he’s citing facts. I regard this type of argumentation as dishonest.

  14. James Joyner Avatar
    James Joyner

    This makes Alexander’s statement about premiums a little fishy, at best, and I’m convinced Joyner knew this and omitted it in the interest of strengthening his argument.

    Alexander didn’t say anything about premiums. What are you talking about?

    Taxes would indeed be raised, on either individual incomes over $250,000 a year or on employers that provide extremely generous health plans. This makes Joyner’s claim that taxes would be raised an oversimplification.

    I was answering a specific question by a commenter on how the bill would impact me personally. The personal impact isn’t my primary reason for opposition, of course, but that was the question.

    Finally, what does Joyner mean by regulation? Does he mean cracking down on the Texas county that bills Medicare so much? Or what?

    In terms of personal impact on me — again, the question asked — the passed on costs of all these regulations. The cost of covering people with preexisting conditions. Etc.

    You and I argue on the basis of our principles, misguided as they may be. Joyner does too, but he pretends he’s citing facts. I regard this type of argumentation as dishonest.

    I just don’t understand what your point is here. I don’t pretend not to be arguing from principle. I was answering a direct question.

  15. Bernard Finel Avatar
    Bernard Finel

    But the idea that health care itself will not get noticeably worse or more restricted for most of us once the single payer stalking horse is passed is to be in severe denial.

    Look, I can’t debate your fears. We can talk about what is in the bill, and what isn’t. Once you start getting into Obama is a socialist and all of this is just a plot for the government to takeover everything, we’re in fantasyland.

    You’re wrong about the premiums issue because not only will insurance companies have to cover the sick, there will also be a mandate for the healthy to enter the pool. That’s the whole reason for the mandates-regulation-susidies connection. I agree that if you simply mandated that companies accept everyone without mandates it would cause premiums to spike. Happily, that is NOT the plan.

    Similarly, the example of price controls is misguided, since no one is proposing quite such a step. It is more in line, I think, with what public utilities go through where they would have to justify their rate increase, which in turn would add public pressure to their calculus.

    Lastly, the notion that we can’t get more for less is simply disproven by the experience OF EVERY OTHER INDUSTRIALIZED NATION which pays less and gets at least as good health outcomes. We can get more for less, but the free market, by itself won’t provide it.

  16. PD Shaw Avatar
    PD Shaw

    the CBO estimated that if the one of the plans (Senate or House, I don’t know which) went through, the average cost of a policy would go up but each policy would provide far more coverage.

    That’s true, but that statement needs to be unpacked. The premiums for young adults are going to go up dramatically; you know the kids Obama is pushing off to grad school to run up education loans. The premiums for older adults are likely to drop.

    Also, forcing people currently with high deductible plans to pay more for insurance they don’t want is kind of like forcing people with a Chevy to buy a Cadillac. It’s not a non-issue.

    These two groups are the most likely to begin paying a penalty when the bills come.

  17. PD Shaw Avatar
    PD Shaw

    A third point to unpack, the CBO scorings on the cost of the new plans are based upon comparisons of the cost of the current system six to ten years down the road. The CBO assumes that under the current health care system, premiums are going to rise around 50% in the next six years. That’s not an unfair comparison for a policy that gets implemented in the next 6 to 10 years, but I think people are under the mistaken impression that the CBO numbers are modest increases over current costs.

  18. Stan Avatar
    Stan

    In reply to Dr. Joyner, my point is that oversimplification cheapens the argument. I’m a retired academic, and in my day I wrote a fair number of scientific articles and reviewed a lot of others. The easiest way to insure that your article never sees the light of day or that your contract proposal is turned down by every funding agency in Washington is to present a dumbed-down criticism of somebody else’s research or an overly optimistic assessment of what your own work will accomplish. When you do something like this, the reviewer decides you’re unreliable, and you start out with two strikes against you. I view polemical writing the same way, showing, I suppose, that academia is not the real world.

  19. steve Avatar
    steve

    PD-There are at least seven plans for cutting costs in the Senate version of the bill. As I suspect you know, the CBO doesnt really score these in their estimates. Some of these are intended to start out as pilot programs, and results may take a while to show up. You can argue that you somehow know they will not work, but then we dont know if the magical “increased competition” will work in health care either. For at least some of us who work in the field, these ideas look to have some promise. The Medicare Advisory Board alone looks like one of the better approaches I have seen to control Medicare costs.

    Steve

  20. charles austin Avatar
    charles austin

    Rick Almeida, I run a business. If I charge less for a product or service which results in less revenue for the company when a customer purchases it I don’t call that virtual decrease in revenue a cost any more than I can take credit for the difference as an asset to be offset on the balance sheet by the, ahem, cost. I can only imagine the look I would get from my accountant or banker if I tried this.

    My point is that the language used is indicative of a pernicious mindset that regards any untaxed income as a cost to the government instead of taxes being a cost to the citizens for the services provided.

  21. sam Avatar
    sam

    instead of taxes being a cost to the citizens for the services provided

    Charles, the argument, if I understand it, is that the citizens, because of the lowered taxes, end up having to pay for the services provided with borrowed money–and are thus on the hook for the borrowed money and the interest accruing. It looks like pay me now, or pay me a lot more later.

  22. An Interested Party Avatar
    An Interested Party

    I’m insufficiently informed on the history of the reconciliation process to otherwise evaluate Alexander’s claim.

    Perhaps this will help you…

  23. PD Shaw Avatar
    PD Shaw

    steve, the CBO didn’t score a number of features that had theoretical effects that it couldn’t model or put numbers on. On the flip side, the CBO did score future Medicare cuts that it believes will be very politically difficult for Congress to follow through on, but credit for future courage was awarded to Congress.

  24. Raoul Avatar
    Raoul

    Shorter article: IOKIYAR

  25. charles austin Avatar
    charles austin

    sam, of course you have an unstated assumption that all of those services (most of which are nothing more than income redistribution) have to be maintained at their current levels. This is not a valid assumption.

    But I welcome your application of this theory to the Stimulus bill, the Jobs bill, the Health Care Reform bill, Cap and Trade bill, and every other deficit increasing bill that is being floated by the administration and Congress right now.

    Rereading this, it seems bill is a serendipitously appropriate word for all these legislative spending binges.

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