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  • March 29, 2017
    Trump's Litmus Test for GOP Tax Plan? It Must "Cost Me a Fortune"

    With the Republican drive to repeal and replace Obamacare halted (at least, for now), President Trump and GOP leaders are moving on to their next quest: tax reform. On this issue, press secretary Sean Spicer declared, Trump will be "driving the train" because "this is a huge priority for him, something that he feels very passionately about."

    Trump has never been shy about what that passion means for any tax plan he's going to sign into law. It must be a "phenomenal" bill that calls for "lowering the overall tax burden of American businesses, big league." Any Republican tax code overhaul must "growth that will be tremendous" because "we are looking at a 3% but we think it could be 5 [percent] or even 6 [percent]." Just as important, Trump and his Treasury Secretary Steven Mnuchin declared, "The rich will pay their fair share" because "there will be no absolute tax cut for the upper class." And on that last point, he made clear during the campaign, his litmus test will be Donald Trump himself:

    "It reduces or eliminates most of the deductions and loopholes available to special interests and to the very rich. In other words, it's going to cost me a fortune -- which is actually true -- while preserving charitable giving and mortgage interest deductions, very importantly." [Emphasis mine.]

    Now, there are only a couple of problems with Donald Trump's pledge. For starters, as we'll see below, it's virtually impossible that Trump's tax plan will increase his payments to the U.S. Treasury. Instead, the President and his family will almost certainly be the beneficiaries of a massive windfall. Regardless, to prove his case, Trump would have to do something else: release his tax returns.

    After all, Donald Trump has yet to demonstrate that he currently pays Uncle Sam anything at all. While his leaked 2005 return revealed that he paid $38 million to Uncle Sam on $150 million in income, almost all of that assessment was the result of his paying the Alternative Minimum Tax (AMT), a provision he has promised to eliminate. And as the New York Times discovered in October, thanks to tax code advantages for real estate investors like himself Trump may have owed no federal taxes for almost two decades:

    The 1995 tax records, never before disclosed, reveal the extraordinary tax benefits that Mr. Trump, the Republican presidential nominee, derived from the financial wreckage he left behind in the early 1990s through mismanagement of three Atlantic City casinos, his ill-fated foray into the airline business and his ill-timed purchase of the Plaza Hotel in Manhattan.

    Tax experts hired by The Times to analyze Mr. Trump's 1995 records said that tax rules especially advantageous to wealthy filers would have allowed Mr. Trump to use his $916 million loss to cancel out an equivalent amount of taxable income over an 18-year period.

    As Matthew Yglesias explained in Vox, "You don't need 'genius' to pull off Trump's tax avoidance -- you just need to be rich."

    Rich, that is, and in the real estate business. The key, as tax expert David Cay Johnston documented, is the manipulation of "net operating losses" on top of the "already liberal tax breaks Congress gives big real-estate owners."

    Trump dumped the real costs of all this on investors who saw gold in his brand name, but who lost everything even as he was paid tens of millions of tax-free dollars...

    NOLs are incredibly valuable. These tax losses can be used to offset salaries, business profits, and income from, say, a television show or making neckties in China. Thanks to his $916 million of NOLs, Trump could earn much over 18 years in salaries, profits, and interest, but pay no income taxes.

    Without Donald Trump's tax returns, there is still much we do not know about the shell game that enabled the reality TV star to stiff Uncle Sam. Still, the most grotesque aspect of Trump's schemes may be that most of them are probably perfectly legal. (Most, but not all. Trump's use of the unlicensed charitable Trump Foundation to pay off legal costs generated by his for-profit businesses almost certainly violate laws on "self-dealing." And Trump apparently used his Foundation to skirt taxes on his appearance and speaker fees by having payments made directly to his "charity.")

    But the self-proclaimed "blue-collar billionaire" supposedly devoted to "the forgotten Americans" isn't content to rest with the gains--ill-gotten and otherwise--he has withheld from the IRS. Donald Trump has promised that as President, he would implement a new set of windfalls for himself and his children.

    Over the past year, Trump has released not one, but three tax plans. In each, the top income tax rate is lowered. (In its current incarnation, that top marginal rate would drop from 39.8 to 33 percent.) But even bigger winnings for the Trump Organization will come from his proposed reduction in business taxes. As he summed it up during his disastrous debate against Hillary Clinton:

    Under my plan, I'll be reducing taxes tremendously, from 35 percent to 15 percent for companies, small and big businesses.

    As Trump spokesman Steven Cheung confirmed, that same 15 percent rate will also apply to so-called "pass-through" businesses which pay taxes on revenue as personal income. Businesses, that is, like Donald Trump's.

    That one change to the tax code wouldn't just drain an estimated $1.5 trillion from federal coffers over the next decade. That pass-through payday for plutocrats would also redirect millions of dollars from Uncle Sam to Donald J. Trump and family--every year. As Trump's tax attorneys explained in his campaign's March 2016 required financial disclosure:

    "You hold interests as the sole or principal owner in approximately 500 separate entities. These entities are referred to and do business as The Trump Organization. ... Because you operate these businesses almost exclusively through sole proprietorships and/or closely held partnerships, your personal federal income tax returns are inordinately large and complex for an individual."

    And that would mean really YUGE savings for The Donald.

    As the Center on Budget and Policy Priorities (CBPP) recently explained, "Pass-through income is claimed by business entities that aren't subject to the corporate income tax, which currently has a top statutory rate of 35 percent (though most corporations pay an effective tax rate considerably lower than 35 percent). Pass-through income is business income that "passes through" the business and is instead reported on the individual tax returns of the business owners and taxed at the owners' tax rates."

    But as CBPP also documented, "'pass-throughs' are not synonymous with 'small businesses' and "pass-through income is highly concentrated at the top:"

    Mr. Trump, who has proposed a 15 percent corporate tax rate, proposes a pass-through rate of 15 percent as well. The Trump pass-through proposal would be an expensive tax cut that would flow primarily to the wealthiest Americans. That's because more than two-thirds of pass-through business income flows to the highest-income 1 percent of tax filers.

    Many businesses, such as law firms, and groups of wealthy investors choose to be taxed as pass-through entities instead of as corporations and often do so to lower the overall taxes they owe. In recent decades, many businesses and their owners have reaped sizable tax savings by doing so. A special 15 percent tax rate on pass-through income such as the Trump tax plan proposes would offer them another large tax cut.

    As the Washington Post reported, "Trump would tax pass-through income at a rate of 15 percent, compared to the 40 percent personal income tax rate a wealthy business owner would pay today." And as the Post's Jim Tankersley explained, one of those wealthy business owners is Donald Trump himself:

    A little-noticed provision in Donald Trump's tax reform plan has the potential to deliver a large tax cut to companies in the Republican presidential nominee's vast business empire, experts say.

    Trump's plan would dramatically reduce taxes on what is known in tax circles as "pass-through" entities, which do not pay corporate income taxes, but whose owners are taxed at individual rates on their share of profits. Those entities are the most common structure for small businesses and increasingly popular for larger ones as well. They are also a cornerstone of the Trump Organization. On his 2015 presidential financial disclosure report, Trump listed holdings of more than 200 limited liability corporations, which is a form of pass-through.

    It's no wonder Roberton Williams, a senior fellow at the nonpartisan Tax Policy Center, said "It's a really nice deal" for Trump and pass-through owners like him. It was with good reason Hillary Clinton called it "the Trump Loophole."

    But it's not the only one The Donald is proposing for himself, Ivanka, Eric, Donald Junior and his other offspring.

    As you might recall, his campaign finance disclosures claim he has a net worth of $10 billion and earned $557 million between January 2015 and May 2016. While his income sources are no doubt diverse, President Trump would surely reap millions from candidate Trump's income tax and capital gains tax rate reductions alone. And if he is telling the truth about his net worth, The Donald's heirs could pocket over $7 billion from his promise to do away with the estate tax now paid by only the richest 0.2 percent of family fortunes.

    Now, that $270 billion in lost revenue over the next decade from the estate tax repeal will have to be made up somehow. But the plans currently in discussion by the Trump administration and House Republicans led by Paul Ryan would make that hemorrhage of red ink far, far larger. As I noted in November:

    The man who apparently hasn't paid Uncle Sam a penny in 20 years has proposed a tax cut scheme that will enrich him, his businesses and his children for years to come. Whether based on The Donald's own outline or House Speaker Paul Ryan's "Better Way" budget blueprint, the Trump Tax Cuts of 2017 will drain roughly $6 trillion from the United States Treasury over the next 10 years. Unfortunately for those forgotten men and women who supported him, decades of evidence show that Trump's massive supply-side windfall for the wealthy won't make him "the greatest jobs president that God ever created." What the 45th President and his Republican allies will accomplish, however, is the greatest expansion in income inequality since Ronald Reagan ambled into the White House.

    To help offset the dramatic increase in national debt their tax cut windfalls for the wealthy would inevitably produce, President Trump and Speaker Ryan are turning to three tactics. Each is now touting a 20 percent "border adjustment tax" optimistically forecast to raise $1.2 trillion over the next decade. (This de facto tax on importers (and consumers) faces a lot of pushback from Senate Republicans.) In addition, previous proposals from Trump and Ryan have called for draconian cuts in spending, nearly 70 percent of which would come from programs for low and modest income Americans. And then there is the perennial Republican promise to "close loopholes" and "end tax breaks" which now cost the United States Treasury almost $1.5 trillion a year.

    Unfortunately, neither Donald Trump nor Paul Ryan have ever provided much detail on just which loopholes they'd be willing to close. But what Ryan and Trump Treasury Secretary Steven Mnuchin have both done is to lie about who will bear the burden. As Ryan comically put it in 2012, "We're proposing to keep revenues where they are, but to clear up all the special interest loopholes, which are uniquely enjoyed by higher income earners, in exchange for lower rates for everyone." For his part, Mnuchin promised during his confirmation hearings that "I think we want to make sure that tax reform doesn't increase the size of the deficit." But that's not all he promised:

    "Any tax cuts for the upper class will be offset by less deductions that pay for it."

    But as James Kwak documented in "The Deduction Fairy," Mnuchin's December pledge simply isn't mathematically possible. "When it comes to the truly rich, however, there just aren't enough deductions out there to eliminate." This is precisely the trap Mitt Romney fell into during the 2012 election, when he guaranteed that "for high-income folks, we are going to cut back on that, so we make sure that the top 1 percent keeps paying the current share they're paying or more." As Ezra Klein documented that August, the nonpartisan Tax Policy Center tried their best to make Romney's promise work:

    They even tested the plan under a model developed, in part, by Greg Mankiw, one of Romney's economic advisers, that promises "implausibly large growth effects" from tax cuts. The fact that they couldn't make Romney's numbers work even when they stacked all these scenarios on top of one another shows just how impossible Romney's promises are...

    The reason Romney's plan doesn't work is very simple. The size of the tax cut he's proposing for the rich is larger than all of the tax expenditures that go to the rich put together. As such, it is mathematically impossible for him to keep his promise to make sure the top one percent keeps paying the same or more.

    Fast forward to 2017. Now, President Donald Trump isn't, as he boasted, the exception to the rule. He is the rule. If he pays any federal taxes at all, his check to Uncle Sam will only get smaller under his own plan. After all, he calls for cutting the top income tax rate from 39.6 to 33 percent and limiting the capital gains tax rate to 20 percent from 23.8 percent now. Paul Ryan would go even further by dropping the top rate on investment income to 16.5 percent. And in his biggest win of all, President Trump will slash the business tax rate from 35 percent to 15 percent for all companies, including pass-through businesses like the Trump Organization.

    All of which means that Donald Trump's tax plan is not "going to cost me a fortune." If Senate Majority Leader Mitch McConnell (R-KY) and House Speaker Paul Ryan (R-WI) can deliver a Republican tax cut bill to Trump's desk, it will almost certainly provide, well, golden showers for the President and his children. Like him, you can take that to the bank.

    Perrspective 12:10 PM | Permalink | Comments (0) | Share

    March 27, 2017
    Trumpcare in Red and Blue

    ive days after the presidential election, I wrote a concession message to Trump voters congratulating them for what they had won. To those Trump promised would get "sick of winning," I predicted, "You've won his 'big and beautiful' Obamacare replacement plan that will take away health insurance from 22 million Americans." If the president-elect and his GOP allies in Congress got their way, I suggested, "millions of people across America will have the opportunity for financial ruin and even needless death, and maybe both." And thanks to President Trump, "you could be one of them, especially if you live in a red state like Arkansas or Kentucky where Obamacare had the biggest impact in dramatically reducing the ranks of the uninsured."

    Now that Congressional Republicans are facing a growing backlash as they struggle to pass their ever-changing American Health Care Act, I won't say I told you so. Instead, I will simply state that events have transpired exactly as I foretold.

    As it turned out, Paul Ryan's hand-picked director of the nonpartisan Congressional Budget Office (CBO) didn't merely reject the GOP myth that Obamacare was in a "death spiral." Much to the chagrin of President Trump, House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell, the CBO forecast 24 million Americans would lose health insurance under the GOP plan over the next decade. Premiums would rise for both older and lower-income people. Under the AHCA, deductibles and out-of-pocket costs would invariably jump for all beneficiaries as increasingly inadequate tax credits force the older and sicker out of the market altogether. Adding insult to injury, Trumpcare's massive cuts to Medicaid spending will be used to fund an $880 billion tax cut windfall for the wealthy. The ultimate irony of the GOP's supposed replacement for the Affordable Care Act is that Trump voters will disproportionately lose their health coverage while blue state millionaires cash their checks from the United States Treasury.

    Of course, that perverse outcome was known long before Republicans first began chanting "repeal and replace" seven years ago this week. That's because now, as it has been since what became Obamacare was first debated, the defining irony of GOP opposition to it has been this:

    Health care is worst where Republicans poll best.

    A trip back to 2009 shows why.

    Continue reading at Daily Kos.

    Perrspective 12:00 PM | Permalink | Comments (0) | Share

    March 23, 2017
    CBO: GOP Health Care "Plans" May Not Count as "Insurance"

    There is total chaos in the House of Representatives today as Speaker Paul Ryan rushes to jam through a version--any version--of his so-called American Health Care Act. The timing and the ever-changing content of the bill have little to do with health care for the American people and everything to do with political spite. Ryan wants to pass a bill by midnight Thursday in order to humiliate President Obama on the 7th anniversary of his signing of the Affordable Care Act.

    But in their mad scramble to take health insurance away from 24 million people over the next decade (at last count), Speaker Ryan, President Trump and their GOP allies may have made yet another mistake. By gutting Obamacare's list of "essential health benefits" to win over the extremists of the House Freedom Caucus, Ryan's GOP health care "plans" may no longer meet the nonpartisan Congressional Budget Office definition of "insurance."

    As Vox and The Hill among others have reported, Republicans are trying to reduce premiums by eliminating the ACA's list of 10 mandated benefits insurers must provide. These provisions regarding prescription drug coverage, hospitalization, out-patient treatment, mental health care, pregnancy and maternity care and much more not only set a baseline for insurance offerings under Obamacare, but also help spread the risk for insurers across a much larger pool of policyholders. And that, CBO warned Obamacare repealers in December, is a big problem as far as the agency is concerned:

    CBO and the staff of the Joint Committee on Taxation (JCT) anticipate that insurers would respond to such legislation by offering new types of insurance products in the nongroup market, which are likely to differ from existing products in their depth and extent of health insurance benefits. If there were no clear definition of what type of insurance product people could use their tax credit to purchase, some of those insurance products would probably not provide enough financial protection against high medical costs to meet the broad definition of coverage that CBO and JCT have typically used in the past--that is, a comprehensive major medical policy that, at a minimum, covers high-cost medical events and various services, including those provided by physicians and hospitals...

    If there were no clear definition of what type of insurance product people could use their tax credit to purchase, everyone who received the tax credit would have access to some limited set of health care services, at a minimum, but not everyone would have insurance coverage that offered financial protection against a high-cost or catastrophic medical event; CBO and JCT would not count those people with limited health benefits as having coverage.

    For their part, CBO and the Joint Committee on Taxation (JCT) warned of the challenges they "would face in estimating the number of people who would purchase coverage in the nongroup market, and the scope of that coverage, under such proposals." Larry Leavitt of the Kaiser Family Foundation helped explain why. Under the new GOP rules, insurers would doubtless create new plans under which premiums would come down.

    But on the flip side, he wrote, insurance plans could become very skimpy, because insurers would be wary of offering generous plans and attracting only sick, costly people who were willing to pay more for them.

    "With no benefit requirements, insurance policies could get quite skimpy. No insurer wants to be the one most attractive to sick people," he wrote.

    "With no required benefits, some (like mental health or maternity) would be very expensive because only people who need them would buy them," he added.

    To predict the results, you only need to go back to the future.

    Jeanne Lambrew, one of the White House architects of ObamaCare, earlier this year pointed to a Department of Health and Human Services report from 2011 that showed how plans have changed.

    In 2011, the report showed that 62 percent of individual market plans did not cover maternity care, 34 percent did not cover substance abuse services, 18 percent did not cover mental health coverage and 9 percent did not cover prescription drugs.

    As of this writing, it's unclear whether Paul Ryan's gambit will secure enough votes to pass the House. Even if it does, Senate moderates and Senate rules might still prevent this revised American Health Care Act from reaching President Trump's desk. But if it does, millions of Americans will lose health care coverage. Millions more will end up buying something that may or may not keep them physically, mentally and financially healthy. But however those plans are ultimately defined, the Congressional Budget Office warns, they can't be called "insurance."

    Perrspective 10:00 PM | Permalink | Comments (0) | Share

    March 20, 2017
    When Paul Ryan Gave the Game Away on Health Care Rationing

    House Speaker Paul Ryan has just experienced two weeks from hell.

    On Monday, the nonpartisan Congressional Budget Office (CBO) led by his hand-picked director mauled Ryan's so-called "replacement" for the Affordable Care Act. CBO forecast that over the next decade the "American Health Care Act" will cost 24 million Americans their insurance. The bill, which slashes $880 billion in Medicaid funding even as it delivers a massive tax cut windfall of the same size to the richest Americans, only lowers projected deficits because it continues Obamacare's $1.1 trillion in Medicare savings, something Ryan for years decried as a "raid on Medicare." Even the claim that Ryancare eventually "lowers premiums" is only made possible by forcing the older, sicker and less wealthy from the ranks of the insured altogether. Topping it all off, Congress' budget scorekeeper eviscerated Ryan's go-to talking point that Obamacare is "collapsing."

    But it wasn't just the severe beating administered by the CBO (also known as the "Conservative Bullshit Obliterator") that left Speaker Ryan politically weakened. Ryan's carefully crafted reputation as a "serious thinker" and "policy wonk" was battered, too, by side-splitting statements that ranged from the comically pathetic to the desperately dissembling. After all, the notion that "the people who are healthy pay for the people who are sick" isn't "the fatal conceit of Obamacare," but instead the very basis of health insurance. Withdrawing coverage from tens of millions doesn't give those people "access" to health care, give them "choice" or enhance their "freedom," but only guarantees the exact opposite. And ushering millions to the brink of financial ruin and thousands annually to needless deaths isn't "an act of mercy." If he succeeds, at worst Paul Ryan's will be an act of murder. At best, Ryan is engaged in brutal exercise in cold-hearted rationing of health care.

    As he has been all along. In February 2010, Paul Ryan gave the game away. At a time when over 50 million people lacked coverage, Ryan's fatal conceit then as now was to pretend that private insurers weren't the gatekeepers standing between them and their health care.

    "Rationing happens today! The question is who will do it? The government? Or you, your doctor and your family?"

    You read that right.

    A month before President Obama signed the Affordable Care Act, insurers were discriminating against millions of people with pre-existing conditions, using the vile practice of "rescission" to drop coverage for hundreds of thousands more when they got sick, and bankrupting families with wholly inadequate caps on annual and lifetime benefits. Meanwhile, thanks to the worst U.S. economic calamity since the Great Depression, employers were shedding insurance coverage, raiding deductibles and shifting costs to their workers. Nevertheless, Paul Ryan began pushing the same doomed formula--insufficient and too-slow growing subsidies, underfunded block grants and toothless consumer protections--that led to his beclowning this week.

    The context for Paul Ryan's first major foray into health care policy was his proposal to privatize Medicare, the government insurance system for 60 million American seniors. But as he soon learned, the politics of his voucher scheme were even worse than the math.

    In April 2009, twenty-four months before all but four House Republicans voted for Ryan's plan to ration Medicare, the smaller GOP minority said yea on essentially the same plan. As Steve Benen detailed in the Washington Monthly in the fall of 2009:

    In April, 137 Republicans voted in support of a GOP alternative budget. It didn't generate a lot of attention, but the plan, drafted by the House Budget Committee's Rep. Paul Ryan (R-Wis.) called for "replacing the traditional Medicare program with subsidies to help retirees enroll in private health care plans."

    The AP noted at the time that Republican leaders were "clearly nervous that votes in favor of the GOP alternative have exposed their members to political danger."

    In February 2010, Rep. Ryan unveiled his "Roadmap for America's Future" and its "slash and privatize" agenda for Social Security and Medicare. Because the value of Ryan's vouchers fails to keep up with the out-of-control rise in premiums in the private health insurance market, America's elderly would be forced to pay more out of pocket or accept less coverage. The Washington Post's Ezra Klein described the inexorable Republican rationing of Medicare which would then ensue:

    The proposal would shift risk from the federal government to seniors themselves. The money seniors would get to buy their own policies would grow more slowly than their health-care costs, and more slowly than their expected Medicare benefits, which means that they'd need to either cut back on how comprehensive their insurance is or how much health-care they purchase. Exacerbating the situation -- and this is important -- Medicare currently pays providers less and works more efficiently than private insurers, so seniors trying to purchase a plan equivalent to Medicare would pay more for it on the private market.

    It's hard, given the constraints of our current debate, to call something "rationing" without being accused of slurring it. But this is rationing, and that's not a slur. This is the government capping its payments and moderating their growth in such a way that many seniors will not get the care they need.

    That was certainly the conclusion of the nonpartisan Congressional Budget Office. As the CBO warned in April 2011, Ryan's plan to replace public insurance provided by the government with vouchers for the elderly to buy their own coverage in the private market means getting less care for more money. The CBO analysis concluded that "a typical beneficiary would spend more for health care under the proposal."

    At $6,500 a year, make that, as Director Douglas Elmendorf explained, a lot more.

    Under the proposal, most elderly people who would be entitled to premium support payments would pay more for their health care than they would pay under the current Medicare system. For a typical 65-year-old with average health spending enrolled in a plan with benefits similar to those currently provided by Medicare, CBO estimated the beneficiary's spending on premiums and out-of-pocket expenditures as a share of a benchmark amount: what total health care spending would be if a private insurer covered the beneficiary. By 2030, the beneficiary's share would be 68 percent of that benchmark under the proposal, 25 percent under the extended-baseline scenario, and 30 percent under the alternative fiscal scenario.

    Paul Krugman summed up the problem at the heart of Ryan's gambit. "If Medicare costs had risen as fast as private insurance premiums, it would cost around 40 percent more than it does," Krugman explained, "If private insurers had done as well as Medicare at controlling costs, insurance would be a lot cheaper."

    All of which is why Rep. Ryan went back to the drawing board and came with up with a new version of his Medicare overhaul. This time, Ryan introduced the idea of keeping traditional fee-for-service government Medicare as a "public option" on his new exchanges. Based on a 2010 proposal from Pete Domenici and Alice Rivlin, the New York Times described Ryan v2.0 this way:

    Congress would establish an insurance exchange for Medicare beneficiaries. Private plans would compete with the traditional Medicare program and would have to provide benefits of the same or greater value. The federal contribution in each region would be based on the cost of the second-cheapest option, whether that was a private plan or traditional Medicare.

    In addition, the growth of Medicare would be capped. In general, spending would not be allowed to increase more than the growth of the economy, plus one percentage point -- a slower rate of increase than Medicare has historically experienced.

    Which is why the Congressional Budget Office still found Ryan's revised plan still would shift health care costs to future seniors. Looking at the CBO's March 2012 assessment of the new House GOP budget, ThinkProgress explained why version 2.0 of Ryan's voucher program was little better than the first:

    Beginning in 2023, the guaranteed Medicare benefit would be transformed into a government-financed "premium support" system. Seniors currently under the age of 55 could use their government contribution to purchase insurance from an exchange of private plans or--unlike Ryan's original budget--traditional fee-for-service Medicare... But the budget does not take sufficient precautions to prevent insurers from cherry-picking the healthiest beneficiaries from traditional Medicare and leaving sicker applicants to the government. As a result, traditional Medicare costs could skyrocket, forcing even more seniors out of the government program. The budget also adopts a per capita cost cap of GDP growth plus 0.5 percent, without specifying how it would enforce it. This makes it likely that the cap would limit the government contribution provided to beneficiaries and since the proposed growth rate is much slower than the projected growth in health care costs, CBO estimates that new beneficiaries could pay up to $2,200 more by 2030 and up to $8,000 more by 2050. Finally, the budget would also raise Medicare's age of eligibility to 67.

    But Ryan's plan didn't just embrace a public option for Medicare. As Ezra Klein explained, the privatization of Medicare contained in Ryan's "Path to Prosperity" blueprint and the GOP budget based on it also requires:

    You'd get the health insurance from a "Medicare Exchange", and "health plans which choose to participate in the Medicare Exchange must agree to offer insurance to all Medicare beneficiaries, thereby preventing cherry picking and ensuring that Medicare's sickest and highest cost beneficiaries receive coverage."

    Sound familiar?

    Familiar, indeed. Alice Rivlin, the former Clinton OMB chief who worked on Ryan's first version of the voucher, later confirmed to Klein that the idea was almost identical to the Affordable Care Act:

    If Ryan-Rivlin will unleash ferocious innovation that holds costs down, then so too should the Affordable Care Act. So at the end of our conversation, I asked Rivlin, who supported PPACA [Obamacare], if I was missing something. She laughed. "I keep talking to Paul and trying to convince him of that," she said. "But even if he agreed with me, he couldn't say so."

    He still hasn't said so, even though his ever-evolving Medicare scheme resembles Obamacare more and more with each passing year. His "Better Way" for Medicare now features exchanges, navigators, subsidies that grow with medical inflation, a public option, federally-financed "risk corridors" and more--all features of Obamacare and then some. But the supposed "brain" of the Republican Party can never admit he wants for Americans over 65 what he would deny those under it.

    And deny them he would.

    Ryan's rationing starts as it always does with subsidies that are too small. Trumpcare's age-based tax credits start at $2,000 a year for those 18 to 29, and max out at $4,000 for Americans starting at age 60. As the CBO showed, a 64-year old person making $26,500 annually would see their share of his/her insurance premium jump from $1,700 to $14,500 a year. And as the Kaiser Family Foundation showed, the impact of the GOP's American Health Care Act would be staggering for lower income and older policyholders compared to the current subsidies provided by Obamacare.

    But this picture understates the pain inflicted on current Obamacare beneficiaries. Deductibles and out-of-pocket costs would inevitably rise as well, in part because the GOP plan allows insurers to sell plans which pay out a smaller percentage of costs for physician visits, tests, prescription drugs, surgical procedures and hospitals. More damaging still, the Ryan/Trump plan eliminates "cost-sharing reductions" provided the Affordable Care Act that currently enable lower income individuals and families to get discounts on deductibles and out-of-pocket maximums. Worst of all, as Kaiser warned, the AHCA's limits on the growth of its tax credits over time means that gap with the ACA's subsidies will grow with each passing year:

    While ACA tax credits grow as premiums increase over time, the tax credits in the American Health Care Act are indexed to inflation plus 1 percentage point. Based on CBO's projections of ACA tax credit increases and inflation, the disparity between the average credits under the ACA and the two replacement plans would widen over time. The average tax credit current marketplace enrollees would receive under the American Health Care Act would be 41% lower than under the ACA in 2022 and 44% lower in 2027.

    As many have noted, the GOP's plan to "repeal and replace" Obamacare will hit Trump voters hardest. It's no mystery as to why. As the New York Times explained, "The Republican plan offers less assistance to older and lower income Americans, especially in rural areas." Due to the lack of competition for insurers and health care providers, as the Center on Budget and Policy Priorities (CBPP) documented, 12 of the 15 states hardest hit by the AHCA's shriveled tax credits are rural ones. Fourteen of the 15 voted for Donald Trump for President in 2016.

    And as CBPP also explained, Ryancare won't protect people who benefitted from Medicaid expansion, either. The result of slash Medicaid funding and turning over what's left in the form of block grants to the states is knowable: states simply will choose to trim benefits and reduce eligibility, especially during times of economic recession. But the Ryan plan is even worse. As workers' incomes rise and fall, they may lose Medicaid and then become subject to the 30 percent "continuous coverage penalty" they must pay, not to Uncle Sam, but to a private insurer. Worse still, each state's block grant will have a per capita cap that only grows each year by the consumer price index plus one percent. As with the AHCA's insufficient tax subsidies, that simply won't keep up with the usually higher rate of medical inflation. The inevitable outcome, the CBO predicted this week, "in 14 million fewer Medicaid enrollees by 2026."

    But for House Speaker Paul Ryan, that public health disaster is a feature, not a bug. As he enthusiastically boasted to right-wing radio host Hugh Hewitt:

    "This is so much bigger, by orders of magnitude, than welfare reform."

    "We are de-federalizing an entitlement, block granting it back to the states, and capping its growth rate. That's never been done before."

    Of course, "de-federalizing an entitlement" is just another example of Ryanese. In English, it translates as "rationing."

    Perrspective 5:00 PM | Permalink | Comments (0) | Share

    Paul Ryan's "I Have a Dream" Speech

    House Speaker Paul Ryan recently told National Review editor Rich Lowry that the House GOP plan to cap Medicaid and send it back to states represents what "we've been dreaming of this since I've been around -- since you and I were drinking at a keg." So, here's a look back at:

    Paul Ryan's "I Have a Dream" Speech

    Paul Ryan
    University of Miami, Ohio, Class of 1992
    Delivered to the National Convention of Kappa Kappa Grandma
    Washington, DC
    May 29, 1990

    Brother Lowry,

    Thank you so much for the kind introduction. I would also like to thank you and the brothers of Kappa Kappa Grandma for the keg party last night. Nothing says freedom like shot-gunning PBR from a beer bong made here in the USA.

    Despite having drained those bad boys, let us not wallow in the valley of despair. I say to you today, my friends, even though we face the difficulties of today and tomorrow, I still have a dream. It is a dream deeply rooted in the American dream.

    I have a dream that one day this nation will rise up and live out the true meaning of its creed: "We hold these truths to be self-evident, that all men are created equal." But not all men are endowed by their Creator with equal capabilities and so are not deserving of equal outcomes.

    I have a dream that one day we the People of the United States will form a more perfect union by understanding that the Constitution's admonition to "promote the General Welfare" is only a suggestion while we need secure the Blessings of Liberty only for ourselves (and no one else).

    I have a dream that one day on the red hills of Georgia, the sons of former slaves and the sons of former slave owners will be able to sit down together at the table of brotherhood. I have a dream that those Makers will enlighten those Takers that they are turning the safety net into a hammock.

    I have a dream that one day in the crumbling factories of Detroit and the empty streets of Cleveland we will end this nightmare, this tailspin of culture, in our inner cities in particular, of men not working and just generations of men not even thinking about working or learning the value and the culture of work, and so there is a real culture problem here that has to be dealt with.

    I have a dream that one day even the state of California, a state sweltering with the heat of injustice, sweltering with the heat of oppression, will be transformed into an oasis of freedom and justice. An oasis like Mississippi, where the people are not enslaved by high taxation or Medicaid expansion and so are free to choose not to obtain health care.

    I have a dream that we will de-federalize and entitlement, and that rationing will happen today. Insurers will be free to exercise their God-given right to jack up premiums, hike deductibles, narrow physician and hospital networks only when the question is: Who will do it? The government? Or you, your doctor and your family?

    I have a dream that one day we will acknowledge that health care is a need, not a right, that block granting it back to the states and capping its growth rate will empower millions of Americans with the freedom to choose not to get it.

    I have a dream that our enemies' lips will not drip with words like "interposition" and "nullification," but instead utter--as we do--that ours is an act of mercy.

    I have a dream that one day, down in Alabama, little black boys and black girls will be able to join hands with little white boys and white girls as sisters and brothers. I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character. Unless they attend a Trump rally, in which case I will declare "this party does not prey on people's prejudices."

    I have a dream today!

    This is our hope, and this is the faith that I go back to Janesville with.

    With this faith in free markets, we will be able to hew out of the mountain of entitlement a voucher of hope. With this faith, we will be able to transform the jangling discords of our medical, retirement and old-age health care systems into a beautiful symphony of privatization. With this faith, we will be able to work together, to pray together, to struggle together, to go to jail together, to stand up for freedom together, knowing that we will be free one day--excepting the millions justly immiserated and thousands deservedly left to die.

    And when this happens, and when we allow freedom ring, when we let it ring from every village and every hamlet, from every state and every city, we will be able to speed up that day when all of God's children, black men and white men, Jews and Gentiles, Protestants and Catholics, will be able to join hands and sing in the words of the old Negro spiritual:

    I got ninety nine problems but you ain't one!
    Perrspective 4:15 PM | Permalink | Comments (0) | Share

    March 16, 2017
    CBO Director Slammed Republicans over "Phony Job Numbers" Lies

    It's not often that the nonpartisan Congressional Budget Office (CBO) is a trending topic on Twitter. But with Director Keith Hall's budget scorekeeper about to weigh in on the coverage, cost and deficit impacts of the Republicans' so-called "replacement" of the Affordable Care Act, all eyes are on the CBO. And given its consistent record of forecasting that Obamacare will enable health insurance coverage for millions of Americans while reducing the national debt, it's no wonder Hall's team is being accused by the GOP of producing "lies" and "budget gimmickry" which is "meaningless."

    But there's another reason the Trump administration and its GOP allies should worry about the CBO boss Congressional Republicans themselves selected. As it turns out, Keith Hall long ago debunked their myth-making about the Obama administration cooking up bogus jobs numbers.

    Continue reading at Daily Kos.

    Perrspective 11:20 AM | Permalink | Comments (0) | Share

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