Some hopeful news on the health reform negotiations regarding the revenue offset, reported by Ezra Klein:
On a 4:30 p.m. conference call, representatives of the labor movement triumphantly announced the details of their excise tax deal, and I’ll list them in a moment. Before I do, however, here’s the bottom line: The excise tax is virtually unchanged.
The major elements of the excise tax are, first, the threshold at which plans begin getting taxed, and second, how quickly that threshold grows. In the Senate bill, the tax begins on family plans costing $23,000 a year, and that sum grows at the rate of inflation in the Consumer Price Index plus one percentage point (so if inflation that year was 3.3 percent, the threshold would grow by 4.3 percent).
In the excise tax deal announced today, the threshold becomes $24,000, and the growth rate is exactly the same. The basics of the tax are virtually unchanged. The other elements of the deal are that vision and dental coverage aren’t included in the taxable cost of the plan; there are adjustments for the age and gender of the pool (so if your insurance is expensive because everyone in your group is 52, there’s an adjustment for that); and it doesn’t hit union plans until 2018, which gives them time to renegotiate their contracts — – presumably rebalancing their compensation away from expensive insurance plans and towards higher wages, which is exactly what the tax is supposed to.
But also some despair on the deficit reduction front, as CQ reported the AARP’s objections to the little shreds of fiscal discipline we deficit hawks were clinging to:
The powerful AARP lobby on Thursday called on senators to defeat a proposal to create a debt-fighting commission, as well as any plan to put the “pay-as-you-go” budget rules into law.
Both approaches to stemming the tide of red ink will be considered as floor amendments when the Senate begins debate Jan. 20 on legislation to raise the debt ceiling…
The same CQ story explains why “by transitivity” we’re unlikely to get Congress to even agree on a commission, if that commission in turn is expected to recommend proposals that actually reduce the deficit (emphasis added):
[Senators] Conrad and Gregg say such an approach is the only way to get Congress to pass politically dangerous cuts to programs such as Social Security, or equally unpopular tax increases.
AARP is just the latest organization to denounce the idea. Liberal groups have become increasingly vocal in their opposition to the commission, echoing AARP’s warning it would cut Social Security and Medicare benefits. And some conservatives are now opposing the idea on grounds that it would result in tax increases.
The commission amendment will need 60 votes to be adopted, which appears highly unlikely at this point.
When are we going to start letting kids vote and have as much say about their economic future as these people who will be long gone by the time the consequences are realized? All the arguing and so-called “compromising” among the older folks regarding the course of fiscal policy (”No, get your hands off my Medicare”…”Then you get your hands off my tax cuts”) just ends up “cutting the baby in half”–over and over again.