Press Release

Paying for Afghanistan Should Move Beyond Playing Politics

CHAIRMAN
Bill Frenzel
Tim Penny
Charlie Stenholm

 
PRESIDENT
Maya MacGuineas
­­­
 
DIRECTORS
Barry Anderson
Roy Ash
Charles Bowsher
Steve Coll
Dan Crippen
Vic Fazio
Willis Gradison
William Gray, III
William Hoagland
Douglas Holtz-Eakin
Jim Jones
Lou Kerr
Jim Kolbe
James Lynn
James McIntrye, Jr.
David Minge
Jim Nussle
Marne Obernauer, Jr.
June O'Neill
Rudolph Penner
Peter Peterson
Robert Reischauer
Alice Rivlin
Martin Sabo
Gene Steuerle
David Stockman
Paul Volcker
Carol Cox Wait
David M. Walker
Joseph Wright, Jr.
 

SENIOR ADVISORS
Elmer Staats
Robert Strauss
 



Paying for Afghanistan Should Move
Beyond Playing Politics
December 2, 2009

Last night, President Obama announced a plan to increase troop levels in Afghanistan by 30,000 - a change which would cost tens of billions of dollars per year. A number of Democrats opposed to this troop build up have called for a surtax to fund those operations. While politics, as opposed to fiscal responsibility, may be the impetus for the proposal, the idea of paying for the plan should not be dismissed.
 
"Asking policymakers to actually pay for their policy actions should not be such a radical concept," said Maya MacGuineas, President of the Committee for a Responsible Federal Budget. "An essential aspect of budgeting is deciding how to pay for things."
 
The 2010 budget deficit is expected to top $1 trillion. Meanwhile, $944 billion has already been appropriated for military operations in Iraq and Afghanistan, and other war-related activities, including $154 billion in FY2009. The troop increase is likely to cost around $30 billion this year.
 
Deficit financing the wars thus far has not only broken practice with past wars, which have been paid for in part with new taxes, it has added tremendously to the national debt - now over $12 trillion. Responsible leadership requires offsetting the new costs through spending cuts, tax increases, or a combination of the two.
 
"Deeming a particular initiative as vital to the national interest should not exempt it from being paid for," said MacGuineas. "The purpose of having a federal budget is to induce the President and Congress to make difficult choices and prioritize their objectives. That discipline has been lost in recent years and must be regained. Perhaps requiring the Afghanistan troop build up to be paid for will encourage leaders to find excesses elsewhere in the budget that can be curbed or eliminated."

For press inquiries, please contact Kate Brown at (202) 596-3365 or brown@newamerica.net.

 

Senate Health Bill Needs Stronger Focus on Cost Control

 

Senate Health Bill Needs Stronger Focus on Cost Control

 November 19, 2009

Late yesterday, Senate Majority Leader Harry Reid introduced the Patient Protection and Affordable Care Act. The $848 billion bill would reduce the deficit by $130 billion over the next decade, although $72 billion comes from the CLASS Act, which most experts do not consider an authentic offset. In the next decade, the bill would reduce the deficit by around one quarter of one percent of GDP.

Although this deficit reduction represents an important step in controlling the debt, this bill does not go far enough in controlling long-term health care costs or bringing Medicare and Medicaid under control.

"The original Senate Finance bill was projected to save half a percent of GDP in the second decade, the next version a quarter to a half, and this version only a quarter,” said Maya MacGuineas, President of the Committee for a Responsible Federal Budget. “Considering the dismal state of our budget, we need to do better.”

The Senate bill includes two important offsets which that are not in the House bill, which are likely to slow health care cost growth: a tax on high cost health insurance plans and a commission to reform and reduce Medicare payments. Unfortunately, the scope of both provisions has been narrowed in this bill. It reduces the strength of the commission by increasing the cost threshold the commission has before it can cut costs, and it amends the tax to apply to plans of $8,500 ($23,000 for families), as opposed to $8,000 ($21,000 for families). Replacing these pay-fors is an increase in the Medicare payroll tax for high earners. Additionally, some of the deficit reduction to meet the $900 billion threshold comes from timing delays that push back the start date for most of the coverage provisions.

“While this bill does a better job than the House version at reducing the deficit and controlling costs, it still doesn’t do enough,” MacGuineas concluded. “Given the political system’s aversion to tax increases and spending cuts, I worry about what the final bill will look like; politicians need to refocus their energy on the critical priority of controlling costs.”

In the coming days and weeks, the Senate will debate the current bill, and if it is passed, will need to reconcile it with the House bill. CRFB has put together several charts comparing these two bills.

 

Comparison of Senate Bill to Finance and HELP Committee Bills Comparison of House and Senate Health Reform Bills

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Click here for a PDF version of this release. 

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