Why Republicans Aren’t Serious About the Deficit - TheFiscalTimes.com

Why Republicans Aren’t Serious About the Deficit - TheFiscalTimes.com

Good essay by Bruce Bartlett. It is an interesting irony that the CBO chief that let Part D slide in is now the chief GOP scold on the budget. He knows where the bodies are buried, since he buried them.

I suspect that the reason the GOP is not serious about debt reduction is because they see the national debt as a benefit program for the wealthy, who are paid interest for holding it. This has been their default position since Alexander Hamilton and forms the basis for an aristocracy of wealth in this nation.

There is not way to shame them into responsiblity and no need to in the immediate term. The fiscal crisis which will cause action will come soon enough - when pre-existing condition reforms kick in and the private insurance market collapses.

There are three possible fixes for this - although they could occur sooner than later should the Republicans collectively grow a brain or hire competent brains to advise them this time. The three fixes are:

Single-payer catastrophic insurance for all, including those on Medicare and Medicaid, with the Health Savings Account portion paid by the employer or the Government and a Flexible Spending component paid by the beneficiary out of their salary or benefit checks. If HSAs are not accessed and remain at full balance, the funding for them would result in higher salaries or benefit checks for the individual.

The second option is straight up single payer insurance - which will occur if the Democrats or Greens take control of Congress and the White House due to Republican dithering.

The third option is the repeal of pre-existing condition reforms in exchange for the creation of a strong public option (either with a catastrophic/HSA component or as a comprehensive policy). This must be done before private insurance collapses. Of course, under this option, most sick people will eventually be on the public option, which will lead to popular pressure to ban private insurance.

The public components of each option will require expanded revenues - at which point the Medicare and Medicaid underfunding problems will be addressed. The Democrats will want to soak the rich, which is not appropriate. Since benefits are broad based, the revenue source must be as well - indeed probably more broad based than the payroll tax. Then the question becomes whether the levy should be on consumers through a VAT or through a slightly more hidden expanded business income tax. The strengths of the latter are that private insurance can be preserved as an offset - which can be offerred to just employees or to retirees and former employees as well (with an exchange market to "trade liability" for former employee coverage so that only the last employer writes the check but is not stuck with the entire cost - I want a Nobel for that idea) - and that the more hidden the tax, the more likely it can be set at a high enough rate to be adequate. A VAT, especially one that mimics a sales tax, risks underfunding health care.

In the end, unless people are willing to put up with the kind of hard to get health care most often associated with the Medicaid program, the answer cannot be cutting either doctor's fees (which will cause doctors to not accept Medicare patients) or repealing Medicare Part D. It must come from adequate funding, which means the GOP cannot be counted on to do it.