September 1, 2014

Subscribe to this feed Subscribe to this feed

 

Tuesday, April 8, 2014 - 9:39 PM

Yesterday, the Centers for Medicare and Medicaid Services (CMS) released the 2015 government payment levels for the Medicare Advantage private insurance plans that are offered to seniors as an alternative to traditional Fee-for-Service (FFS) Medicare. In a bit of a surprise, CMS projects that total payments will increase by about 0.4 percent despite earlier CMS guidance suggesting payments would be cut by 1.9 percent.

The change follows months of lobbying by the private insurance industry -- fearful of lost profits -- along with members of Congress from both parties who are fearful of being attacked for cutting benefits to seniors.

Medicare Advantage plans have seen annual cuts to their payments from the government through a process set in motion by the Affordable Care Act (ACA), and cuts are scheduled to continue (despite the slight increase for next year). The payment reductions were intended to fix a fundamental financing disparity between FFS Medicare and the Medicare Advantage program; insurers are paid more per beneficiary than it would cost the government if the beneficiaries remained in FFS. 

The negative reaction from politicians and interest groups to these continual cuts...

Tuesday, April 8, 2014 - 12:28 PM

About a hundred people in Colorado’s 1st Congressional District tried their hands Saturday at federal deficit reduction through The Concord Coalition’s Principles and Priorities exercise.

Most eventually succeeded in slicing deficits over the next decade by several trillion dollars. It wasn’t easy, but their efforts highlighted the benefits of open discussion and a willingness to compromise. U.S. Rep. Diana DeGette hosted the event.

The participants gathered Saturday morning at Columbine High School in Littleton. They included people from across the political spectrum: Democrats, Republicans, conservatives, liberals and libertarians.

Divided into a dozen groups of five to nine people, they took on the role of members of Congress in considering dozens of budget options as scored by the Congressional Budget Office. The options fell into four categories: general government spending; military and homeland security; health care and Social Security; and revenue.

After a welcome by Rep. DeGette and a PowerPoint briefing on the federal budget’s history and trends, the participants dove into their assignment....

Wednesday, March 26, 2014 - 10:34 AM

The growth in health care spending has slowed in recent years but could speed up again as the economy strengthens and the population ages. Even with slower growth rates, however, federal and state governments need to pursue reforms and innovations to keep public health programs sustainable.

Massachusetts and Maryland are at the forefront of such efforts. Officials in other states and the nation’s capital should watch how the experiments in these two states turn out and consider what lessons they may hold.

Maryland regulators recently received approval from the Center for Medicare and Medicaid Services (CMS) to limit the growth in hospital spending for each of the next five years to 3.58 percent. That is the state’s average annual rate of per capita economic growth since 2002.

Maryland already has successful experience restraining growth in health care spending relative to other states because of a unique commission that...

Tuesday, March 25, 2014 - 9:49 AM

Last Thursday, Congressman Reid Ribble invited The Concord Coalition to host a panel of experts on Capitol Hill to talk with congressional staffers gearing up for the annual budget process. Despite the ideological differences on the panel, there was a strong consensus that the process is broken and on ways in which it could be improved.

Gridlock has repeatedly brought our nation to the brink of crisis in the past few years. In October, Congress even temporarily shut down the government and brought the country within days of defaulting on at least some of its financial obligations. According to the GAO, a previous standoff over the debt ceiling cost the Treasury $1.3 billion in FY 2011 alone.

“The political process is the problem,” said Ed Lorenzen, a former aide to Democratic leader Rep. Steny Hoyer and now a senior advisor at the Committee for a Responsible Federal Budget. Lorenzen added that lawmakers “are not willing to make tough choices” that are necessary to resolve the country's long-term fiscal challenges.

Gordon Gray, director of fiscal policy at the American Action Forum and a former aide to Republican Sen. Rob Portman, agreed. He said that while some of the talk about the broken process is an attempt by politicians to absolve themselves of...

Monday, March 17, 2014 - 12:46 PM

House Ways and Means Chair Dave Camp (R-Mich.) remarked recently that there are some similar ideas in the tax reform proposals that he and President Obama have suggested. Normally overlap between Republican and Democrat ideas is a welcome occurrence.

But at least one feature in the Camp and Obama tax reform plans is an exception: Their plans to shore up the Highway Trust Fund by using one-time revenue from changes to the corporate tax system.

Unless lawmakers do something, later this year the largest part of the Highway Trust Fund -- the Highway Account -- will be unable to meet all of its obligations. The Congressional Budget Office recently projected that the entire trust fund will become insolvent in 2015.

While lawmakers need to come up with a solution, using short-term revenues from tax changes on unrelated corporate profits earned abroad is not a good approach and would only delay...

Friday, February 28, 2014 - 4:41 PM

Ways and Means Committee Chairman Dave Camp (R-Mich.) released a detailed discussion draft on comprehensive tax reform Wednesday that eliminates inefficiencies in the tax code and makes it simpler. The Concord Coalition commends Chairman Camp for his efforts. The shame is that it looks like the rest of Congress and the President are desperate to avoid discussing how to improve upon it and then enact a reform plan.

Camp’s proposal effectively leaves the tax code with three tax brackets: One at 10 percent, one at 25 percent, and an additional 10 percent surtax for high earners. To achieve this consolidation and lowering of rates without adding to the deficit, Camp’s plan limits, discards or merges many of the code’s tax expenditures -- special provisions that favor certain behaviors, individuals and businesses. The proposal significantly alters “sacred cow” provisions like the home...

Monday, February 24, 2014 - 3:52 PM

As we await the full release of the President’s Fiscal Year 2015 Budget, some important specifics have been slowly made public. It looks like this budget, as is usually the case, will contain a mixture of sensible reforms and politically expedient omissions.

The first bit of news is that this year’s budget will not contain a proposal -- included last year -- to switch the government-wide formula for measuring inflation to a more accurate index called the “Chained CPI.” 

Switching would save money in numerous spending programs, including Social Security, that provide cost-of-living increases. That’s because the government’s current formula, according to most economists, overstates inflation. The Chained CPI addresses this problem while ensuring that the value of federal benefits still keep up with citizens’ purchasing power.

Because tax brackets are indexed to inflation, switching to the Chained CPI would also increase revenue.

The President’s budget does not have the force of law and does not normally form the basis for the congressional budget resolution. It is a stylized world in which the administration proffers a multi-faceted policy course and projects where that would lead the nation fiscally.

In that world last year, the administration rightly identified that the country has a...

Friday, February 14, 2014 - 11:46 AM

The House Budget Committee last week approved a bill on a bipartisan 22-10 vote that would switch the annual congressional budget process to a biennial (two-year) cycle.

The legislation, introduced by Rep. Reid Ribble (R-Wisc.), a committee member, has attracted 100 co-sponsors, roughly a third of whom are Democrats. The Concord Coalition has commended Rep. Ribble for pursuing this option.

The difficult struggle each year to pass appropriation bills has made it harder for lawmakers and federal agencies to focus on structural problems in the budget and develop more responsible long-term fiscal policies.

Ideally, biennial budgeting would help Congress improve its allocation and oversight of discretionary spending, which makes up one-third of the budget.

During the first year of a 2-year cycle, lawmakers would set funding levels for federal agencies. Congress would then use the second year to concentrate on oversight, examining how federal agencies administer various programs, how effective the programs are and whether...

Thursday, February 6, 2014 - 4:07 PM

State lawmakers across the country are debating how to spend large surpluses after the economic recovery helped produce higher-than-expected tax collections for the second year in a row.

State legislatures and governors have welcomed this change after years of enacting painful spending cuts to balance their budgets. But they are waging battles both within and between their political parties about how to spend the extra money.

In a year when up to three dozen governors could run for re-election, as well as countless more state legislators who could be on the ballot, many of the proposals have unfortunately focused on short-term measures.

State officials should consider how to use at least part of their surpluses to improve the long-term health of their budgets instead of just haggling over whether to use the surpluses to finance short-term tax cuts or spending increases. A recent Concord blog post highlighted a report by the State Budget Crisis Task Force that said states have done little to address the long-term structural problems in their...

Monday, February 3, 2014 - 10:46 AM

Like Frankenstein’s monster, the statutory debt limit will soon come back to life. It has been in a state of suspended animation since the October 2013 budget deal that ended the government shutdown.

The terms of that deal allowed the government to borrow without limit through this Friday, when the suspension period ends and the current debt level of about $17.3 trillion instantly becomes the new limit.

The Treasury will still be able to use  “extraordinary measures” for a while to keep its borrowing under the limit. However, as Treasury Secretary Jacob Lew explained in a recent letter to Congress, those measures will probably last for only a few weeks.

So despite hopes that the budget deal would break the chaotic cycle of fiscal crises, we’ll soon be facing another showdown unless swift action is taken.

That might not be as easy as many on Capitol Hill are assuming. Republicans generally favor adding yet-to-be determined conditions to any debt limit increase while Democrats insist that there can be no strings attached.

It might get resolved without a crisis this time, but the risk is still there and will return whenever the debt limit needs to be raised...