Paying for Health Care: Did Obama Have the Answer?
Whenever I talk to anyone at the White House about the difficulties they are having on Capitol Hill figuring out a way to pay for health reform, they remind me that the President Obama still has an idea on the table--one that has never been taken very seriously at the other end of Pennsylvania Avenue. His proposal is to put a 28% limit on the tax break for itemized deductions claimed by those making over $250,000. That's about 20% less than they are allowed to claim now. It would have raised an estimated $318 billion over the next 10 years. But the opposition is formidable. Charities, for one, worry that this would dampen giving at a time when they need it most.
Alas, lawmakers aren't having much luck coming up with something they like any better. Senator Max Baucus had hoped to raise roughly the same amount by taxing the most generous employer-provided health benefit plans--those costing $17,000 a year or more for a family--but that idea is running up against a lot of opposition from his fellow Democrats. However, that proposal polls badly, and would impose new taxes on a lot of middle-class people--firefighters, police, teachers, and others who have won generous health benefits as a result of collective bargaining. So Baucus has been sent back to the drawing board by Majority Leader Harry Reid.
Obama's initial proposal had been pretty much left for dead by the legislative roadside, but all of a sudden, it's back in the mix of options being mentioned as a way of making up the funding gap. And it was also endorsed this morning by the Oracle of Omaha (you can hear Warren Buffett talk about it late into the video).
Is this where things end up? I still wouldn't bet on it. But it is looking more and more likely that the answer to funding the overhaul of health care will include some additional taxes aimed at the wealthy. In the House, for instance, the Ways and Means Committee is looking at an income tax surcharge. And one thing is clear: If legislators don't figure out a way to make the math work in coming days, the whole question is likely to get kicked off until after the August recess.
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1
Fear of taxation strikes me as being the number one disease facing our political landscape. For years Republicans have sold tax cuts as a panacea and Democrats have sold all the wonderful things that the Federal government can accomplish that Private enterprise cannot.
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But no one seems willing to admit that it all has to be paid for. Under our current electoral system, the only rational choices we have are precluded by political infeasability.And don't me started about our inability to even think about the defense budget!
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1.1
I agree, fear of taxes has spiraled out of control. California is a stellar example of this. I've been under the impression that taxes are even lower now than they were under Regan. And even Regan raised taxes when he needed to! What always gets me the most is when middle class Republicans get all up in arms over raising taxes on the rich end of the spectrum, like it's even more un-American than taxes in general.
Everybody agrees that taxes suck. I just wish people would agree that you gotta do what you gotta do, and sometimes you gotta pay for stuff you need. Like health care.
And don't get me started on the defense budget either!
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1.2
I have always viewed passive taxation to be the price I pay for Government Services that would have to be purchased from private industry if the Government didn't provide them. In that event, I prefer to pay the Government because when I have a complaint I have a live body I can complain to, not a voice at the other end of the phone line who - more and more - actually lives and works in India.
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2
Sorry for asking (I don't know), but re: those Bush tax cuts set to expire soon, have they been "baked into" the numbers already? Or must everyone budget without them?
If not, I'd support small, fair tax hikes across the board - all pay - but maybe the social conservatives would insist on taxing behaviors more, such as monty python 'tax on thingy'. If THAT gets adopted, I'm moving to Argentina.
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2.1
they are baked in.
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3
Wouldn't we need less charity, at least in health and human services, if we had better programs like universal heath care? It seems that bypassing the possibility of real health care reform in lieu of nonprofits garnering greater donations (or donors garnering greater tax breaks) is just another way of putting the well being of the less fortunate in the hands of the top 1%.
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3.1
If only these philanthropists gave their billions to soup kitchens, food banks, free community health centers, and the like, instead of their own personal foundations (which can employ their children and friends in sinecures) and alma maters (which are already rolling in cash from all the legacy admissions) or, at best, a new wing or dorm or something else vaguely worthy that their names can be attached to.
And now I'm remembering Ricky Santorum stopping at fast-food joints on his way home and charging his eats to his foundation.
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4
Charities, for one, worry that this would dampen giving at a time when they need it most.
I hereby declare bollocks. At least until such time as it is illustrated to me exactly how crucial philanthropy is, that we dare not endager it.
And if it is that crucial, why are we depending on free money from rich people in the first place?
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4.1
Yes, it would be a shame if rich people couldn't selflessly give away their money without receiving a cash reward for their charity.
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FYI:
"WASHINGTON (AP) — The drive to remake the nation's health care system suffered yet another setback in Congress on Thursday when a pivotal group of House Democrats demanded numerous changes in legislation the leadership was drafting on a fast track.
The emerging bill "lacks a number of elements essential to preserving what works and fixing what is broken," 40 members of the Blue Dog Coalition of moderate to conservative Democrats wrote in a letter to party leaders. To win their support, they said, any legislation would need to be much more aggressive in reining in the growth of health care."
http://www.google.com/hostednews/ap/article/ALeqM5jlMpJGn28kqCcgU-aGcYE_ZHW-ywD99B8EVO0
August recess? No looking so good.
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6
That's supposed to be Not looking so good...
I guess No works too. -
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"Fear of taxation strikes me as being the number one disease facing our political landscape."
It's the real third-rail of American politics ("conservatives" have been bashing and lying about Social Security like, forever).
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8
It's why I'm hoping to see California (at least) make draconian cuts in services - closing parks, recreation, social services, emergency services, etc. etc. It's appears to be the only way to shake people out of their "conservative" indoctrinated delusion that they can have good government without paying for it.
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9
Karen...
You mention the Blue Dogs -- how many of them voted for funding the war in Iraq? Why don't you mention this kind of gross hypocrisy from elected officials who have no problem busting the budget by spending trillions on overseas wars, but suddenly become fiscal conservatives when health care for American citizens is the issue?-
9.1
Actually, pluk, i did not mention the Blue Dogs, but go right ahead and segue into how I'm shilling for the insurance companies.
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9.2
Owie. Looks like a good day not to cross KT.
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10
What everyone else has said re: the kabuki act that is congress. Dems have the better ideas but dare not speak of the means necessary to achieve those ends. CA is the ultimate cautionary tale for the US writ large. Though prop 13 makes their "leaders" impotent to do much of anything to escape the tailspin, since when has congress (under either party's stewardship betrayed leadership or honesty?) Not to mention the 3$ trillion (Link!) elephant in the budget.
I agree w/Shep, perhaps we need to witness things getting much worse before we can have an honest debate about the future. Though I don't live there, when I visited in April, I was convinced of one thing, it ain't the Great Depression... yet. Sadly, the costs to millions of Californians will be extreme. How a land of such plenty can fail so epically should make people go hmmm (sane people mind you).
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11
Expect the wingnut liars and their pet media hacks to distill this down to "Obama's going to raise your taxes."
Actually, by their lights it's true because they only talk to the small elite that would be minimally affected. It's just that they make no effort to correct the false impression left when, you know, "others" overhear.
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12
Now, if only Obama would get his hands dirty and start pushing on this, I'll forgive him for letting DADT fall by the wayside.
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13
[...] Daily life, Democrats, Government, Healthcare, Obama administration at 3:03 pm by LeisureGuy Karen Tumulty writes at TIME’s Swampland blog: Whenever I talk to anyone at the White House about the difficulties they are having on Capitol [...]
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14
Two words that explain the American fiscal train wreck more than any others: Ronald Reagan
The Economic Recovery Tax Act of 1981 saw the rates top earners pay drop from 70% to 50%
The Tax Reform Act of 1986 dropped them further, from 50% to 28%. The lowest tier saw their rates rise from 11% to 15%. Wiki: "This would be the only time in the history of the U.S. income tax (which dates back to the passage of the Revenue Act of 1862) that the top rate was reduced and the bottom rate increased concomitantly"
See here for the Federal Individual Income Tax Rates History:
http://www.taxfoundation.org/files/federalindividualratehistory-200901021.pdf
See here for a comparison of tax rates around the world (i.e. the irrelevant world). Coinkydink that most of the nations with higher personal rates have affordable health care. Or that these nations don't drop trillion $ stones into the abyss of war?
http://en.wikipedia.org/wiki/File:Income_Taxes_By_Country.svg
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15
"Two words that explain the American fiscal train wreck more than any others: Ronald Reagan"
He had practice. He wrecked California - capping individual income tax, etc., before going on to destroy the nation. And of course, he began the very movement that deluded the country into thinking: 1) "government is the problem", 2) lowering taxes on the ultra-rich would benefit others and cost nothing and 3) regulating industry is a bad thing, thereby destroying small-government conservatism (and, eventually the Republican Party) and replacing it with military-industrial, war-mongering, big-government, corporate-whore "neconservatism". Morning in America my @ss.
http://digbysblog.blogspot.com/2009/06/man-who-destroyed-california-by-digby.html
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16
Is it just me, or does the modern GOP have more in common with Gordon Gekko than anyone else?
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16.1
Gekko was just a cheap opportunist. The Republican Party is much, much worse. It creates and legitimizes Gordon Gekkos, and much, much worse.
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17
Fortunately for all of us, "military-industrial, war-mongering, big-government, corporate-whore 'neconservatism'" will be invalidated as a rational approach to governance b/c our media is so adept at conveying truth (not false equivalence) to its consumers. And, of course, our beloved dems have the cojones to show the contempt such a bankrupt philosophy merits, unafraid of attack ads ("tax & spend") or questions about their patriotism where war is concerned.
Uh huh.
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18
I'd add Krug (the guy who's always right):
http://www.nytimes.com/2009/07/10/opinion/10krugman.html?_r=1&ref=opinion
And Reich:
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19
Did Obama have an answer on health care? Well, I suppose the real question may be, "Has Obama had the answer on anything?!" I mean, you tell me. America has spent dump truck loads of money...has anything really "changed"? Lots o' promises from the left... extremely little return. Well, except ill-conceived investments in the Demo lifestyle. But hey, it appears that's coming to an end. I bet Barry hopes to ram as much garbage as he can down our throats while his disciples are still on board. Hey, check the numbers. The monkeys are jumping out of the tree faster than we can count 'em!! Eh...nothing personal towards Michelle.
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20
jeepmanjr:
Get the back to 1954...
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21
If it gets pushed back, fine. Do it once and do it right.
Also, let's invest in creating a time machine, specifically for individuals like jeepmanjr, spob et all who just aren't comfortable outside of "real" America!
The only thing is that instead of sending them to 1954, let's just sort of, well, "miss" by about 65,000,000 years.
Hope we can build one that has "live"* video...
*how "live" would a 65,000,000 year old video be?
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22
So, are we poking the trolls or not?Just curious? I prefer to ignore them, but if freeper comes back, I'm all for poking.
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23
What is the goal here? To find a way to pay for this so arcane and indirect that no important constituencies get mad about it? Can't we just admit that health care reform is really, actually going to cost money?
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The polls that say 70-some percent of Americans want a public option have been widely publicized, and I believe it was in here that I saw an allusion a few days ago to a poll of the various proposals to pay for it, which all polled badly.
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Has anyone seen a poll that actually asks which matters more? Having a public option, or not having to pay for it? (Or how much of their income people would be willing to sacrifice for it?) Obviously people want nice things, and obviously they don't want to pay for them. There is nothing inherently contradictory about those two answers when the questions are asked separately. But I don't think I've even seen them asked together:
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Which matters more, improving healthcare, or having more money?
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(And I'm assuming here, based on the fact that Congress can't or won't do it, that "let's do both" is not an option, at least not in the short term. "Make people richer than me pay for it" is also an acceptable option, although it falls under the header of "no, I don't care enough to spend my own money".)-
23.1
Well, considering that a significant majority (that 70+ percent number you mentioned) actually want a public option, I would hope that most if not all of those people would be willing to pay for it. I think a better question might be, will those people pay ENOUGH for a decent public option? Of course, I'm hoping that people actually think before answering questions, which may be a vain hope.
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24
Of course there has to be a public option, if for no other reason, we have to have it for people like me, whose income is such that it will never be subsidized but are victimized by private industry's unfettered ability to charge me whatever they feel like.
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I personally don't like the idea of asking people if the are willing to pay higher taxes for reform because immediately in the respondents mind the question becomes do I want to pay higher taxes to pay for those who are too poor, too unemployed, too irresponsible, too unworthy to have health insurance. For most participants this translates into supporting the poor, minorities, illegal immigrants etc. whomever the latest economic scapegoat happens to be. I am one of the 47 million Americans without healthcare and no one need pay for me, if only I could buy a fair product at a fair price and I am not alone.
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So how do we phrase the questions to really find out what Americans are willing to do, and not allow the debate to get sidetracked by the latest face of the welfare queen instead of remaining focused on how to provide access to an industry that has been market driven, profit centered long past the point of sustainability. -
25
"Lots o' promises from the left... extremely little return."
Yeah, WTF, the black guy's had six whole months already!? We had 30 years of promises from the right and we got a whole lot in return...a whole lotta disaster and rich, white aristocracy to avoid taking responsibility for it.
Yessa, Massa, we be gettin' right on cleanin' up yo big-ass mess. We liberals sure be sorry we be takin' so long ta git to its an cleans yo slop off de flo.
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