Blow-Hard Republicans and Federal Budget Facts


It's quite a treat to watch Republicans (sorry, Tea Party-ers) this year. The first big win of course came last year when the Democrat-controlled Congress voted to extend all tax cuts from 2001, including approx. $700 billion for tax brackets above $250K.

Low and behold, here come the deficit numbers for 2011, and estimated $1.4 trillion! How did this happen? Had Democrats stood there ground and only extended the tax cuts for middle and lower incomes, one could presume the deficit would only be about $700 billion. Better yet, let all the tax cuts expire (with the exception of a few credits) and voila virtually no deficit.

Blame it on health care reform and Social Security...


Because people have an attention span of about 43 seconds, Republicans are able to convince a large number of people that the health care reform passed last year is an overbearing burden on the federal budget. In fact, as reported by every news outlet, over 10 years the health care reform legislation actually lowers the deficit. I don't really care for how it does it, but it does (barring any changes that will most likely come).

And what is with all the Social Security defecit crap. Social Security is a completely separate budget item. It currently runs a modest surplus and is not counted in general deficit numbers. As such, Social Security reform would not change the deficit projections for this year or any year. Is reform necessary? Sure, but using the current budget deficit as a catalyst is deceptive.

Now for the truth...


Medicare and Defense spending...

Together, Medicare and Defense eat up approximately 42% of the budget. Medicare more or less pays for itself although it does run deficits. Defense spending while necessary, should not be this large. Veterans affairs is a separate budget item in case you were curious.

Defense contracts for Cold War technology is probably the dumbest thing we could spend money on. Our current military conflicts are close contact, ground operations that need specialized field equipment, not long-range bombers. Spend money on homegrown forces and not Xe (AKA Blackwater) mercenaries.

Tax Increases...

Nobody wants to say it, but working people in this country don't pay enough taxes. For industrial western democracies, citizens of the United States has an inordinately low tax burden. Partly because of tradition, but mostly because of political flaccidity. Federal expenses (not all good mind you) have consistently gone up from year to year, but actual tax rates have decreased. Not that we haven't had a few tax hikes in the last 30 years, but not enough to offset. Real tax reform should minimally include more/higher tax brackets, elimination of corporate taxes, increase in dividend taxes, and removal of the Social Security cap. It's a painful pill to swallow, but it's been coming for years.

Drug War...

It's not a huge budget item, but the cost of the "War on Drugs" is more than just outlays for DEA agents. There is a human cost that we cannot possibly put a price on, not to mention the burden on state and local governments.

Summary...

The Federal Budget is out of control... actually it's out of balance. We need to sort out our priorities and raise revenues to meet our needs. The Tea Party notion of lower taxation and more minimal government is a noble one, but really impractical when taken line by line. We need common sense and reasonable discord, two things we won't see from the current Congress.

Health Care Addendum:

Let me speak to my idea (although I can't claim credit) of a "triple-payer" health care system.

First of all, the term "triple-payer" is a direct restructuring of the term "single-payer." Neither single nor triple-payer systems are adequately described by those terms.

Here's the basics...See what you think.

1. The federal government would not provide health insurance coverage, simply create the nations largest health care group with very specific coverage. Many states and localities already do this to keep down costs.

2. Private and "public" health insurance providers would send blind bids (along with "capacity statements"*) to a central Health Care office for review.

3. The third lowest "per capita" bid (could be neither the highest or lowest bid) from across the nation would be chosen. An offer to buy coverage up to the capacity limit set forth by the individual health insurance providers would be sent by the federal government. Companies would then accept or reject participation in the program. Providers, whether or not they participate, could still sell insurance as a supplement privately.

4. Individuals would then "buy" insurance from the provider of their choice (certain regions would have limited options). Premiums would be based on income, payable to the federal government, and there would be a maximum contribution. Coverage would be mandatory (for those of you keeping track, I've changed my position here).

5. Ideally, the plan would be free from deductibles although a co-insurance of 10-20% would be reasonable for all procedures. Every person would receive one free physical and three urgent care visits per year. Insurance would be individual and portable. No pre-existing conditions.

Pros: Obviously, a health care plan based on income makes this truly Universal and affordable. There would not be an inordinate amount of increased taxation. Employers could still cover workers by paying the "premium tax" on behalf of the employee as part of a salary package. Private insurance companies would not be shut down or made illegal, thereby salvaging a major portion of the economy from collapse. A co-insurance policy allows doctors and hospitals some leeway in the amount of charges. No more Medicare.#

Cons: It's not a "free" system based on a progressive tax model like other countries offer. It is possible that insurers could learn to work together and "game" the system during bidding, driving up overall costs to the government. Regions lacking in accepted bids would likely be "farmed out" to providers in other regions (technology makes this less of an issue, however). Oh yeah, no more Medicare.#

Overall, I think it's a good plan. It takes what is best about the American health care system and tries to incorporate a level of price control and cooperative buying to save the taxpayer trillions of dollars. Like all health care plans, it has faults, but I hope members of Congress and the President seriously consider something like it.

* A "capacity statement" simply estimates the number of people a provider can reasonably cover. It should also include business statistics like workforce and years in service.
# Medicare is a beautiful idea but a horribly inefficient bureaucracy. This new plan takes over the job with few real changes to the individual. No income = No premium.

The Best Ideas NOBODY Talks About

Do you ever sit in front of the TV when the news is on and see a panel of "experts" talking about their solutions to every problem imaginable? Then, do you often say, "Hey, why not just..." and ramble on about how YOU would fix the problem? I know I do. Here's my TOP 5 list of the best solutions nobody talks about, in no particular order.

1. Flex Fuel Hybrids: Everybody keeps raving about Hybrid Gas/Electric vehicles all the time. If it works with straight gasoline, why not with E85 (15% gas/85% ethanol). The milage numbers wouldn't be as impressive, but it would help solve the problem with ethanol not having as much energy as gasoline, wouldn't it? Just a thought.

2. Triple-Payer Universal Health Care: Now this used to be talked about, but nobody liked it, so they've stopped mentioning it. Basically, the government would cover every American with a Federally-subsidized, privately-managed health care insurance plan with income-sensitive premiums paid by individuals and/or businesses. It would be voluntary, portable, and absolutely American. Liberals hate it because it smacks of privatizing Medicare (which it would). Conservatives hate it because it would cost a few dollars. That must mean it's a good idea!

3. Tax-Free Retirement Accounts: This one's almost stupid. Combine the better aspects of Roth and Traditional IRA to produce a totally tax-free retirement account. Contributions could be limited on an annual and/or lifetime basis.

4. Fair Taxation: Everybody has their own view of what tax fairness is. Taxes are by their very nature unfair. But in my estimation, some taxation is necessary for the government to provide essential services (e.g. roads, military, etc.). "Fair Taxation" to me is not taxing people on what they don't have. If it costs more to live than you make, you should not pay taxes. Even payroll taxes and premiums on that health care plan I mentioned earlier should be partially refundable based on your ability to pay.

5. Open, Secure Borders: This might sound like a contradiction to alot of people, but let me explain. I would like to see northern and southern border security tightened like a screw. I would also like to see more people coming across the borders...legally. Fully fund immigration control and get private interests involved to secure the border and simplify the naturalization process. Then we could pursue the REAL threats to our national security instead of felonizing tomato farm workers in the hopes of stopping Al Qaeda.

That'll give everybody something to chew on at dinner. Leave me your own TOP 5 list in the comments.