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CRFB Reacts to the State of the Union Address
January 27, 2010 The Committee for a Responsible Federal Budget commends President Obama for his focus on deficit reduction in his State of the Union address, and hopes that he will follow through by pressing Congress to enact medium- and long-term deficit reduction policies over the next year. As the President remarked tonight, we find ourselves in a “massive fiscal hole… a challenge that makes all others that much harder to solve.” And he argued, rightly so, that “if we do not take meaningful steps to rein in our debt, it could damage our markets, increase the cost of borrowing, and jeopardize our recovery.” The President offered three proposals, in particular, which would be promising steps in the right direction: “We are thrilled that President Obama understands the threat of ever-rising debt, and is making some concrete proposals to begin to address it,” said Maya MacGuineas, President of the Committee for a Responsible Budget. “But actions speak louder than words. In the coming weeks and months, we urge the President to bring together members of both parties and begin taking concrete actions to stabilize the debt once the economy recovers.” For press inquiries, please contact Kate Brown at (202) 596-3365 or brown@newamerica.net. |
In Red Ink Rising: A Call to Action to Stem the Mounting Federal Debt, The Peterson-Pew Commission on Budget Reform calls on policy makers to stabilize the national debt through a six-step plan. Crafted over the past year by former heads of the CBO, OMB, GAO, and the congressional budget committees, the plan reflects a bipartisan approach to avoiding the tremendous global risks of America's expanding debt, without destabilizing the economic recovery. Red Ink Rising is the first of two major reports to be released by the commission.
With new legislation recently released and estimated in the Senate, US BudgetWatch has updated the health care comparison charts and graphs. In this version, we compare, on a number of metrics, the bill being considered in the Senate to the legislation which recently passed the House.
Click here to download the previous version of these charts, which compared the (now-passed) plan put forward by the House Democrats to the House Republican plan and the Senate Finance Committee legislation.
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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Building on Comparing Health Care Plans, this paper goes beyond simply describing the Senate HELP bill, the House Tri-Committee bill, and the amended Senate Finance bill to offer detailed analysis on their key costs, deficit impacts, and long-term fiscal implications.
