"Orthogonal to reality"

Jared Bernstein summarizes the 2016 House Republican budget about as pithily as possible.

Here's a look at President Obama's proposal.
The New York Times compares the GOP and Obama budgets. Note that they accept the assumptions implicit in both documents. For how strong those assumptions are, see Bernstein's comments -- the GOP budget is full of magical thinking and assumptions about how their tax cuts will magically transform into lower deficits.

And finally, here's an outline of the Congressional Progressive Caucus' "People's budget", which won't go anywhere because it's not Very Serious or something.

Medicaid expansion rejection silver linings playbook: Deficit reduction

One of the biggest shortcomings of the Affordable Care Act (the post-Supreme-Court-decision-haircut version) is that it makes the state Medicaid expansions optional for states. As of this writing, 25 states have not signed on to the expansion, leaving millions of Americans below the poverty line without the ability to afford health insurance.

One piece of good news is the woodwork effect is real. Streamlining of the Medicaid enrollment process across all states will help many people who are currently eligible for Medicaid but never figured out how to apply will enroll, even in states refusing the expansion.

But there might be another silver lining to states refusing to expand Medicaid: deficit reduction.

First, a disclaimer:  My first-choice policy preference is to expand Medicaid. Actually, that's my second and third choices as well. And when it comes to prioritizing deficit reduction during times of high unemployment and recession, I side with the great Charlie Pierce:

Now I have only one opinion on economics — Fk The Deficit. People Got No Jobs. People Got No Money —

However, all else equal, I would rather to see a lower deficit than a higher deficit and a lower public debt than a higher one. (If nothing else, it gives the Fix the Debt crowd less leverage when they argue for gutting the welfare state.) And I was thinking that since the Congressional Budget Office projects that the Affordable Care Act will slightly cut the deficit over time, what happens if a significant number of states reject the Medicaid expansion, which makes up about half of the spending for the ACA?

To answer this question, I looked up projected state-by-state Medicaid spending figures from this 2012 Kaiser Foundation study. Using a spreadsheet, I added up the federal fund the 25 states that haven't indicated they will be accepting the expansion don't accept it over the next nine years.

 

That number comes out to $437 billion ($78 billion from Texas alone). That's a lot of money.

 

In fact, nominally, it's about of $48.5 billion a year, which is roughly 7.5 percent of the 2013 deficit. That overstates the impact a bit, because the numbers aren't strictly comparable, because A.) they are nominal, not year-of expenditure dollars (i.e. this doesn't adjust for inflation) and B.) Medicaid expenditures will be larger in later years as health costs grow -- though the federal share of spending will drop back to 90 percent by 2018.

Again, I deplore cutting the deficit on the backs of the poor. But until state governors start wising up, at least we're not blowing that Medicaid money on tax cuts for hedge fund managers. In fact, we're taxing hedge fund managers -- about 25 percent of the revenue for the ACA comes from increasing payroll taxes on wealthy incomes -- including investment income.

So keep pushing to expand Medicaid in states that haven't yet. Political pressure from combined with financial realities likely will push many of the recalcitrant states into the fold over the next few years. However, in every state we don't succeed, take a bit of solace in the fact that we raised taxes on the rich to cut the deficit. 

That's almost as French as universal access to health care.

Voter guides and voting info, Texas-style

So who's on Row A?

We've got a lot of low-intensity, yet rather important local elections and state-wide amendments on the ballot.  To help disentangle the issues, here's a list of voting guides.

The folks at Burnt Orange Report check in with their votes on proposed constitutional amendments here.

Progress Texas has their own (slightly different) recommendations here

(Note, all these places giving endorsements come from a general left stance, which mirrors many of this blog's views)

For interviews with literally every (and not in the Joe Biden sense) candidate for local Houston or Harris County office, check out Charles Kuffner's site. Kuff has been doing great work on local politics for years and he also has coverage of important local bond issues like the prison bond and the Astrodome project, as well as local issues like Pasadena's proposed redistricting.

Also, here's a handy guide for what you'll need to vote in this state.

Please vote, and vote in an educated way on Tuesday.

Texas needs an income tax

So Republican candidate for Governor Greg Abbott recently accused Democratic candidate Wendy Davis of wanting to raise Texans' taxes by $35 billion.

Ho hum.

Politifact then suggested that Abbott was full of it.

What else is new?

What Davis suggested that she wanted to do was put together a board of state officials to examine exemptions from current state taxes to see if they were still warranted, most notably the gas tax and the sales tax.  She said she she didn't want to raise current tax rates, but wanted to especially examine the $36 billion in sales tax exemptions.

This is good policy, and I'm supportive of the review (particularly of a several odd-looking exemptions, like those surrounding aircraft....)

But when it comes to taxes, I (as a naive carpetbagging Yankee) would like to see Texas adopt a personal income tax; it's currently one of nine states without one. That might be political suicide for Davis right now, so I don't blame her for not bringing it up. Over the long-term, however implementing an income tax will diversify and stabilize state revenues while redistributing the tax burden to the upper class and away from more vulnerable state residents.

Take the jump for more details.....

Obamacare and tax reform: a progressive double play (part IV)

This is the fourth and final in a series of posts about the paying for the Affordable Care Act. The first three posts can be found here, here and here.

So we’ve talked about how tax increases and closing loopholes generated about $440 billion in revenue to fund a shade under half the costs of the Affordable Care Act.  But we all know that jacking up taxes is for wimps and that Real Men ™ prefer budget cuts, preferably big ones.

Obamacare does that too. Better yet, it does so by cutting pricy subsidies to private insurance companies (who we all love to hate) AND providers (aka hospital systems and doctors) who actually drive much of the health cost inflation in this country. I'll go over the three biggest cuts here, though there are other significant changes to Medicare as well.

Per usual, numbers come from the Joint Committee on Taxation and much of detail comes from John McDonough (really, buy his book – this guy deserves every bit of royalties he can get). So take the jump for more details. 

Obamacare and tax reform: A Progressive double play (Part III -- now with bonus Ted Cruz and Koch brothers coverage)

This is the third in a series of posts about paying for the Affordable Care Act. The first two posts can be found here and here.

Let’s talk about your dream tax loophole closings.

Would you like to close a narrow subsidy benefiting the paper industry and have the Koch brothers kick in a few bucks to subsidize your shiny new insurance policy you purchased on the exchanges?

Perhaps you’d like to see Ted Cruz and Goldman Sachs negotiate how to split a $5,000 tax increase that will help expand Medicaid?

If you answered “yes” to either of those questions, you’re in luck – the Affordable Care Act does both.

(Maybe the next round of reforms can get the corporate jet loophole – we’ll keep working on it)

Follow me below the fold for a rundown of some of the major tax loopholes the ACA closes to help fund it. As always, numbers come from the Joint Committee on Taxation and much of the inspiration and analysis comes from John McDonough.

Obamacare and tax reform: a progressive double play (Part II)

This is the second in a series of posts about paying for the Affordable Care Act. The first post, about expanding FICA taxes on wealthy taxpayers, can be found here.

In many of my posts, I've examined the benefits that the Affordable Care Act will provide (see here for examples). These things are (generally) good things, and good progressives should (mostly) applaud them.

But there's another side to the ACA that should really thrill anyone who believes that economic inequality is a problem: how we pay for it.  Not only is Obama care roughly revenue neutral, but the way it pays for expanding health insurance to disadvantaged Americans is by taxing well-off Americans to the tune of about $1 trillion over the health law's first decade.

The biggest single provision is Section 9015, which both raises the Medicare Hospital Tax on wealthy taxpayers and expands it to unearned investment income, which I discussed yesterday. However, there are several other small to medium-sized levies that the ACA imposes that are worthy of note. I discuss four of the largest ones here.  I get estimates for their relative financial impacts from this report by the Joint Committee on Taxation. Much of the inspiration and background for this post comes from John McDonough’s excellent book Inside National Health Reform. (Seriously, buy a copy if you can afford it – this guy deserves the royalties.)

Follow me below the fold for more details for details on fees assessed to insurance companies, drug-makers, medical device manufacturers and ... tanning salons (?!). 

Obamacare and tax reform: a progressive double play (Part I)

This is the first in a series of posts about paying for the Affordable Care Act

You’ve probably never heard of section 9015 of the Affordable Care Act. A Google search turns up few media hits, mostly uncovering links to really boring official government documents and dry consultant reports.

But that unassuming section contains some of the most far-reaching parts of the ACA. It not only is the single largest item of funding to pay for the law, but its passage is the single most progressive piece of tax reform over the last 20 years – and arguably since the institution of the graduated income tax.

In fact, the ACA as a whole is notable not only for the massive benefits that it showers on middle and lower-income Americans, but also for the progressive way it pays for them – by increasing tax rates on wealthy individuals and large companies, eroding corporate welfare, and closing numerous tax loopholes that tend to benefit narrow sets of businesses and wealthy individuals.

Tomorrow, I’ll examine other new taxes in the ACA, while later posts will discuss tax loopholes that Obamacare closes and changes to government subsidies to health care providers.

But for now, follow me below the fold for a description of section 9015.