Congress is apparently not done cutting taxes, even after passing a $1.5 trillion tax overhaul last year.
The deal struck by Democrats and Republicans on Monday to end a brief government shutdown contains $31 billion in tax cuts, including a temporary delay in implementing three health-care-related taxes.
Those delays, which enjoy varying degrees of bipartisan support, are not offset by any spending cuts or tax increases, and thus will add to a federal budget deficit that is already projected to increase rapidly as last year’s mammoth new tax law takes effect.
. . .
Congressional Republicans are hoping to pass a temporary funding bill that would keep the government open until mid-February, thus allowing negotiations to continue on immigration and other matters. To attract more support for the stop-gap bill, Republican leaders have proposed combining it with other unrelated and more popular provisions, including a two-year delay of the so-called “Cadillac tax.” Delaying the “Cadillac tax” again — it was already pushed back once — is a bad idea. It would set back the cause of market-driven health care rather than advance it.
. . .
U.S. House Ways and Means Committee Chairman Kevin Brady said on Thursday getting rid of the so-called “Cadillac” tax on high-cost employer-provided health insurance could be part of the spending deal now under negotiation in Congress.
“We want to get rid of it,” Brady, a Republican, told reporters outside his office, adding that this could “possibly” be part of an agreement lawmakers are seeking to avoid a government shutdown on Jan. 19.
“Even Democrats who put that awful tax in place, believe it needs to be delayed. If we can find some common ground there that would be terrific,” Brady said.
. . .
Growth in U.S. health spending slowed considerably in 2016, rising by 4.3 percent, after two years of higher spending growth spurred by Obamacare and prescription drugs.
The slowdown in health spending growth was seen broadly across all major forms of private and public insurance, and in medical services, prescription drugs and other goods, according to an official analysis released Wednesday.
But because health spending grew faster, as it has for years, than overall gross domestic product, health spending’s share of the economy increased to 17.9 percent in 2016, up from 17.7 percent of the economy the year before.
. . .
A majority of voters back the idea of tying Medicaid eligibility to employment status as the Trump administration weighs whether to give more states the power to impose work requirements on the government health program.
In an Aug. 10-14 Morning Consult/POLITICO poll, 1,997 registered voters were asked whether they generally support requiring individuals to have a job in order to be eligible for the program. Fifty-one percent of voters said they support that proposal, while 37 percent said they oppose it. The survey has a margin of error of plus or minus 2 percentage points.
. . .
“It is a have-to-get-done that’s really hard to get done,” said one lobbyist.
. . .
The federal share of national health spending grew by about one-eighth between 2008 and 2016 and by the year 2025 is projected to have increased by nearly one-fifth. By 2025, federal, state and local taxpayers will be financing fully two-thirds of American health care . Some might say “not bad for government work.”
Careful readers might also note that the state and local government share of national health spending shrank slightly during the same period–a reflection of President Obama’s vision to give Uncle Sam a bigger role in health care, displacing decisions formerly made by stat and local governments and the private sector in the process.
Business groups were hoping a quick repeal of the Affordable Care Act would give employers more flexibility on health care and create momentum for priorities like a tax overhaul.
Friday’s decision by House GOP leaders and President Donald Trump to abandon a vote on the Republican health plan left them less certain on both fronts.
“This is a dismal failure,” said Juanita Duggan, chief executive of the National Federation of Independent Business, a group representing small businesses. “NFIB is officially unamused, and we’re not going to let them off the hook.”
. . .
The 40% “Cadillac” Tax on expensive employer-sponsored health insurance is on a deathwatch because both parties in Congress dislike it. It would be best if Congress were to replace the Cadillac Tax with a simple and clear limitation on the tax preference for employer-paid premiums, as is called for the House GOP’s “Better Way” health plan. For decades, economists have complained that the open-ended tax break for employer-paid health insurance premiums is a major distortion in the marketplace. This approach is fair and promotes more transparency in the health care marketplace.
. . .
Obamacare is collapsing. Its utter failures become more obvious by the day. We all remember the promises of Obamacare, chief among them that the “Affordable Care Act” would lower health care costs. The opposite has occurred. Despite the offer of subsidies through the exchanges, enrollment in Obamacare has been dismal. Younger, healthier individuals have little interest in paying exorbitant premiums for insurance plans that come with $5,000 deductibles. The result has been an unbalanced insurance pool where insurers must charge ever-increasing premiums to continue offering coverage.
. . .