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Taxes & Budgets |
PROLOGUE
Financial Basics: Taxes And Budgets
Let us assume, without recourse to pollsters or bookmakers, that there is a one-in-three chance that the next president of the United States will make universal health coverage a top-priority issue for the 111th Congress. The corollary would be that there are two chances in three that other priorities will assert themselves—war, deficits, a flagging economy—and that health policy initiatives will have to be scaled back to fit within finite executive and congressional capabilities.
It could be argued that universal coverage should not be attempted before strong steps toward controlling excess health spending have been taken. The lesson of coverage experiments in both Massachusetts and California seems to be that the books have to balance before the deal can be closed. It is tempting to think that it would be easier to rally voter and taxpayer support for prudent spending curbs than for what could easily be painted as a lavish social program. But this logic falls short on political realism. Resistance to economy measures from well-positioned interest groups would be ferocious, and an austerity agenda is unlikely to rouse passion in the electorate.
But without getting into a stew about these choices, we can imagine circumstances in which universal coverage would not be the top priority of the next new Congress and administration. What then? Tax and budget policies that could be considered independently of comprehensive reform are the subject the two papers that lead this volume on election-year health issues. Tax changes have been the centerpiece of the Bush administration’s occasional forays into health policy. But they have not been pursued with much vigor, even though their ostensible goals are probably unobjectionable to many Democrats: equitable treatment for the nongroup insurance market and limits on the regressivity and undesirable incentives of the open-ended exclusion in current law. The Congressional Budget Office has estimated that Bush’s proposal to repeal the employer tax exclusion and create a new standard deduction for health insurance could lower the number of uninsured people while shifting millions from employer-sponsored coverage to the nongroup market. But some of the consequences of reshaping these risk pools could be problematic.
Jason Furman of the Brookings Institution summarizes the potential pros and cons of various tax reform policies in the first of two papers that follow here. In a second paper, Eugene Steuerle and Randall Bovbjerg of the Urban Institute argue that "large-scale federal economizing" on health can begin without waiting for political agreement on comprehensive reform and universal coverage.
Related Articles
- Jason Furman
Health Reform Through Tax Reform: A Primer
Health Affairs, May/June 2008; 27(3): 622-632.
[Abstract] [Full Text] [PDF]
- C. Eugene Steuerle and Randall R. Bovbjerg
Health And Budget Reform As Handmaidens
Health Affairs, May/June 2008; 27(3): 633-644.
[Abstract] [Full Text] [Figures Only] [PDF]
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