May 20, 2013

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The Tabulation is The Concord's Coalition's blog featuring posts from Concord's policy staff, grassroots field directors, and special guest bloggers. For more about the blog click here.

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Health Care Reform Consensus and Increasing "Skin in the Game" -- Post Two of Three
Tuesday, May 14, 2013 - 9:48 AM

This is post two of a three-part series on the developing consensus for the next steps on health care reform. Part One is here. 

In my last blog post, I introduced the developing consensus among fiscal and health care policy experts about the steps policymakers need to take to move the nation towards a less costly, more effective and more patient-centered system. 

Recent plans by the Bipartisan Policy Center, Simpson and Bowles, the Engleberg Center at Brookings, and the National Coalition on Health Care, anticipate that by using the federal government’s market power through Medicare and the tax code, changes will filter through to the private sector, transforming the health care system as a whole....

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There Is Consensus On Health Care Reform Next Steps -- Post One of Three
Tuesday, May 7, 2013 - 7:57 AM

This is post one of a three-part series on the developing consensus for the next steps on health care reform. Part 2 is here.

Recently, I discussed how the new health care reform plan from the Bipartisan Policy Center’s (BPC) Health Care Cost Initiative mirrors the core values of nearly every major deficit reduction plan -- a reduction in spending on the federal budget’s health care programs and an increase in revenues from limiting tax expenditures. I argued that if the absence of political will to pursue a “grand bargain” among a majority of members of Congress continues, perhaps the BPC plan could become an alternative “smaller bargain” that would go a long way towards attacking the nation’s long-term fiscal challenge.

In a series of three blog posts, I will look more closely at how the BPC report, along with a few other high-profile, bipartisan health care reform plans released recently, demonstrates that there is a developing consensus among fiscal and health care...

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Driven to Distraction -- and Creative Accounting
Monday, April 29, 2013 - 9:32 AM

Although Congress has plenty of serious budget work to do, lawmakers in both parties can’t seem to resist frittering away time and confusing the public with various proposals that serve no useful purpose. Last week offered a couple good examples.

House Republicans distracted themselves with a bill that would set priorities for payments on federal obligations if the debt limit were reached. There’s understandable confusion and disagreement over what exactly the bill would do, but the general idea seems to be that the federal government could somehow limit the damage of a default by presenting itself to the world as only a partial deadbeat.

As approved by a party-line vote Wednesday in the House Ways and Means Committee, the legislation would tell the Treasury to continue making payments on principal and interest on U.S. debt obligations – and keep Social Security checks going out, of course.

Becoming a partial deadbeat apparently requires some special accounting rules, and so those were tacked onto the legislation. Alas, the nation’s creditors and global financial markets are under no obligation to embrace lawmakers’ unconventional notions about what might constitute a government default.

In any case, there is really...

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Might Health Care Reform Be the 'Grand Bargain'?
Wednesday, April 24, 2013 - 1:52 PM

Last Thursday, the Bipartisan Policy Center’s (BPC) Health Care Cost Containment Initiative released a comprehensive plan to increase efficiency and reduce costs while reorienting the nation’s health care system to become more patient-centered. That combination would ideally lead not only to a more sustainable fiscal future but to better health care as well.

The plan targets the largest health care levers that federal policymakers have: Medicare and the tax code -- specifically the exclusion of employer-provided health care from taxation. The plan, as scored by health policy experts, would reduce budget deficits over the next 10 years and then continue to lower the trajectory of the federal debt.

Medicare would be transformed into a system that rewards value and coordination instead of the quantity of services, and the tax code would no longer encourage overspending on health care. Furthermore, these changes at the federal level are meant to encourage and incent a more rational private health care system.

These lofty goals were heralded by BPC’s health care leaders: former Senators Tom Daschle, Bill Frist and Pete Domenici, along with Dr. Alice Rivlin. Their agreement after a year of...

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New Simpson-Bowles Plan Could Play Vital Role in Moving Towards Compromise
Tuesday, April 23, 2013 - 2:49 PM

The new budget plan released last week by Alan Simpson and Erskine Bowles once again demonstrates that it is possible to bring the deficit under control using a mix of spending cuts and revenue increases without harming the near-term economy.

It is not a plan for partisan purists, and that is why it could play a vital role in the coming months as Democrats and Republicans struggle to find a way forward on a budget compromise.

Unlike the original Simpson-Bowles plan, which was presented when the two men co-chaired the bipartisan National Commission on Fiscal Responsibility and Reform, this plan picks up where negotiations broke off last December between President Obama and House Speaker John Boehner.

“The plan we have put forward here is not our ideal plan, it is not the perfect plan, and it is certainly not the only plan,” they wrote. “It is an effort to show both sides that a deal is possible; a deal where neither side compromises their principles but instead relies on principled compromise. Such a deal would invigorate our economy and demonstrate to the public that Washington can solve problems, and leave a better future for our grandchildren.”

Simpson and Bowles acknowledge that...

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Surpluses as Far as the Eye Can See? It All Comes Down to Assumptions
Tuesday, April 16, 2013 - 12:09 PM

Is the federal budget heading for unsustainable deficits or unsustainable surpluses?

It all depends on the long-term assumptions. 

Last week, the Government Accountability Office (GAO) issued an update of its long-term fiscal outlook for the federal government. As in prior reports,  GAO found that an extension of current law (the Baseline Extended simulation) leads to rising and eventually unsustainable debt “driven by a fundamental imbalance between revenue and spending, which, on the spending side, is driven by the aging of the population and rising health care costs.”

On the other hand, the President's Office of Management and Budget (OMB) released a new estimate last week showing that an extension of President Obama's budget policies would not just be sustainable but would lead to growing surpluses that would eventually pay off the national debt.

Not that OMB thinks this will actually happen. In fact, OMB calls the end result “unrealistic and undesirable.”

As explained by OMB in the Analytical Perspectives of the 2014 Budget, “These projections are not intended to be a prediction of future legislative action, nor are they intended to reflect explicit policy proposals for the years beyond 2023; rather, they are a mechanical extrapolation of the Budget policies.”

But in...

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Moving On From the Budget Fantasy League
Monday, April 8, 2013 - 11:25 AM

Opening Day for the baseball season has come and gone in Washington but for the budget season it comes on Wednesday, when the President officially unveils his Fiscal Year 2014 proposals. Will he get a hit or be sent back to the bench?

Early indications are that he will at least put the ball in play, and that’s a promising start.

Some Republican leaders in Congress have already declared, in effect, that the President’s budget is a whiff or a foul ball at best. Even among Democrats, there are those who seem to regard the forthcoming budget as a sacrifice bunt because of its apparent concessions to Republicans on entitlement cuts.

Clearly, there will be a vigorous debate. However, there is reason to be optimistic that the President’s budget may help move budget discussions in the right direction.

If preliminary reports are correct, the budget will include a mix of spending cuts and revenue increases that would bring the deficit down to 1.7 percent of GDP by 2023. That’s higher, but more realistic, than the House Republicans’ balanced budget goal and more ambitious than the Senate Democrats’ goal of bringing the deficit down to 2.2 percent of GDP.

 In other words, it aims for a compromise, albeit one closer to the Senate Democrats’ goal, which is hardly surprising.

The key, of...

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Left Behind in Wealth Accumulation, Younger Americans Face Difficult Financial Challenges
Tuesday, March 26, 2013 - 11:22 AM

Most plans to put the federal budget on a more sustainable path make a crucial assumption: That today’s younger workers will pay more of their own retirement costs than previous generations have.

By setting aside more money for retirement, the thinking goes, these younger workers can enable the federal government to reduce the high projected growth of Social Security and Medicare. They should theoretically be able to do this because they have more time to save large amounts of money and to let those savings compound.

As The Concord Coalition has often noted, however, Washington already favors older generations in many ways. And younger Americans face a number of financial hurdles and future challenges that must be kept in mind.

Many of them have been hit hard by the last recession, struggling with a poor job market and – thanks to skyrocketing tuition costs -- large amounts of student debt. With companies cutting back on retirement and health care programs, many younger people who have jobs  do not receive the compensation or employee benefits that their parents did.

The large and growing federal debt, meanwhile, means that younger Americans can expect higher taxes and less assistance from the federal government...

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The Peace Process – For Washington
Monday, March 25, 2013 - 11:52 AM

President Obama is back home after a diplomatic mission to the Middle East in which he exhorted the Israeli people, particularly young Israelis, to ignore the competing claims of extremists and take the push for peace into their own hands. His speech on this topic at the Jerusalem International Convention Center seems to have hit a responsive chord.

It got me thinking that the President should repackage some of the same themes for a national address as Washington enters a crucial phase in negotiations over a budget deal between Democrats and Republicans. While the policy choices in each situation are not directly comparable, some of the points he made in the Jerusalem speech could resonate in this country as well.

Obama could begin by addressing America’s youth with the same message he had for Israelis.

“Part of the reason I like talking to young people,” he said, “is because no matter how great the challenges are, their idealism, their energy, their ambition always gives me hope. ... I believe that you will shape our future.”

Next, he could remind Americans that even deep differences can be bridged if the ultimate...

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With Budget Plans on the Table, Time for Serious Negotiations
Thursday, March 14, 2013 - 5:03 PM

Today the Senate Budget Committee considered the budget resolution that Chairman Patty Murray released yesterday. The blueprint calls for a mix of spending cuts and tax increases to reduce the deficit and lower the debt-to-GDP ratio. Under Murray’s plan, the deficit would fall to $566 billion (2.2 percent of GDP) by 2023. Debt held by the public would slowly but steadily fall from 78.5 percent in 2014 to 70.4 percent by 2023.

These are important goals, but whether the favorable trend shown on paper would continue beyond the 10-year window depends on the specific policies adopted by the relevant congressional committees in implementing the plan. As with any budget resolution, policy details are omitted. Yet the details that are available suggest that the plan avoids the type of reforms that would allow debt levels to continue to decline beyond the budget window -- the time period most crucial when looking at the nation’s real fiscal challenges.

For example, the proposed cuts in discretionary spending outweigh the health care savings by $100 billion. Moreover, total mandatory outlays show no reduction at all over the 10-year period relative to the CBO baseline despite the fact that mandatory programs represent a much larger fiscal challenge than discretionary programs. Murray’s budget thus continues the recent...

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