The GOP has fallen and it can’t get up

From Politico:

As he entered McConnell’s office on Thursday morning, Corker confirmed the party is leaning toward maintaining Obamacare’s tax on wealthy individuals’ investments. The GOP would then reallocate that money to help more people from low-income households pay for insurance, although Thune said some Republicans want to use those funds for deficit-reduction purposes instead.

No final decision has been made, Republicans said, but the party is leaning strongly toward at least partly reshaping the bill to be less of a tax cut for the wealthy and more to supply health insurance options to the working poor.

“We are going to figure out a way, I believe, before Friday comes, to greatly enhance the ability of lower-income Americans to buy health insurance on the exchanges that actually covers them. And my sense is the [investment tax] is going to go away,” Corker said. “It’s not an acceptable proposition to have a bill that increases the burden on lower-income citizens and lessens the burden on wealthy citizens.”

Killing or delaying the tax cuts will give the party significantly more money to play with and potentially change the optics of a bill portrayed by Democrats and some GOP critics as a tax cut for the rich at the expense of curtailing benefits for the poor.

So all of this effort is just going to lead us back to ObamaCare?  I expect by Labor Day the GOP will be advocating single payer. Wouldn’t want to look “mean”.

Maybe they could save face by calling it “RomneyCare”.

If you want something more substantive, I have a new monetary post at Econlog.

PS.  My previous three flights were 4, 4 1/2 and 2 1/2 hours late.  This one will be at least 5 hours late.  I’m stuck in Salt Lake City in brew pub with a menu that announces that they card everyone.  Does that apply to Queen Elizabeth II, if she stops by for a beer?




23 Responses to “The GOP has fallen and it can’t get up”

  1. Gravatar of Benjamin Cole Benjamin Cole
    30. June 2017 at 01:48

    Just for laughs?

    The largest healthcare program in the United States…is operated on federal property. Includes no co-payments. Is totally funded by the federal taxpayers. Is staffed by federal doctors, nurses and administrators for the benefit of former federal employees. A lifetime free benefit, no cap.

    It is the VA.

    Obamacare is mostly provided by private providers, with some co-pay.

    Guess which needs reform?

    Side note:

    Japan’s active job openings-to-applicants ratio was 1.49 in May on seasonally adjusted terms, according to data released by the Ministry of Health, Labor and Welfare on Friday.

    That’s right–in Japan more job opening that job-hunters, at the highest ratio in 43 years.

    Still near deflation, though budging up slightly.

    The US Fed recently declared there are too many people working in America. There are shortages of employees!

    The ratio here is about 1.2 job hunters for every job opening. Yes, the reverse of Japan.

  2. Gravatar of JMCSF JMCSF
    30. June 2017 at 02:38

    When I moved from Salt Lake City to San Francisco the only thing cheaper in California was alcohol. The food in Utah is not as good either.

  3. Gravatar of Saturos Saturos
    30. June 2017 at 04:21

    What do you think they could (realistically) do here, again?

  4. Gravatar of Scott Freelander Scott Freelander
    30. June 2017 at 05:31


    I’m curious as to whether you could support total free market healthcare, with a generous wage subsidy, for example.

    I mean, eliminate government’s role entirely, from tax incentives for employer-provider coverage, to the FDA, licensing and residency requirements for medical personnel, limits on immigrant labor competition, etc.

    Would you support that in lieu of current approaches or simple single payer? Would you support it over a Singapore-style system?

  5. Gravatar of Brian Donohue Brian Donohue
    30. June 2017 at 06:03

    Sounds like politics to me. You’re trying hard, but I don’t think you’re particularly suited to the role of all-purpose curmudgeon.

  6. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    30. June 2017 at 07:42

    James Buchanan has the last laugh.

    At the expense of these dopes;

    Buchanan argues that any action by a political movement is coercive because they’re often attacks on the property rights of (extremely wealthy) individuals. And yet, individuals and corporations are never seen as being coercive, even as they accumulate massive amounts of power.

    This worldview does not recognize that private, economic power has a capacity to coerce. They trace back to [antebellum slavery advocate and Vice President] John C. Calhoun. These libertarians, particularly Murray Rothbard, said that Calhoun gave them their fundamental core concepts. These concepts included that it’s government that creates exploitation, and that it’s the government that creates coercion, whereas private economics is about freedom and free exchange. All you have to know is that Calhoun was a slaveholder—a man making his wealth from keeping other people in shackles. This is where their notions of wealth as non-coercive comes from.

    The idea that wealth cannot be coercive is also the basis of their case for freeing corporations to spend unlimited amounts in politics and harangue their workers. They argue it is merely an exercise of free speech. It’s interesting that they are also pushing these measures that make it more possible for employers to essentially have what’s referred to in union terms as captive audience meetings, where they push out their political views to their employees and try to sway their vote. That, and these huge infusions of dark money, are being represented as a First Amendment freedom, as if it doesn’t skew the outcome. But it all connects back in a perverse way to the notion that only government is coercive and that wealth is all about freedom, and enabling the free exchange between economic actors who are totally free.

  7. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    30. June 2017 at 07:55

    Jeff Miron weighs in;

    Standard economics says that high marginal tax rates reduce economic activity by reducing the incentive to save and work. And the ACA taxes on investment savings and high incomes are exactly backwards from this perspective; they raise the tax burden on savings and working for high income taxpayers, the ones most likely to alter their behavior in response to such taxes, thereby slowing economic growth which affects everyone.

    There is considerable evidence that cutting taxes of this kind is a plus — such cuts boost the economy in the short term, and perhaps to a modest degree over the longer haul.

    Thus repeal of the ACA investment and income taxes makes sense, whatever the fate of Obamacare more broadly.

    Eliminating these taxes does imply higher deficits, even though the cuts will stimulate economic activity. The lost revenue is estimated by the Congressional Budget Office at around $30-35 billion per year.

    Cadillac tax

    How should Congress make up for the lost revenue? By raising taxes that improve rather than harm economic efficiency. The obvious example is the so-called Cadillac tax on high-cost health insurance policies.

    This tax is an imperfect antidote to the current tax exemption for employer-paid health insurance premiums. By waiving taxes on the premiums, the current law subsidizes health insurance for those who obtain coverage through their employer, so it encourages purchase of overly generous provisions like low deductibles.

    The public hates high deductible plans, but they do exactly what insurance is supposed to do — protect the insured from large, unpredictable expenses, not reimburse people for routine or moderate health spending. This subsidy incentivizes care for which the costs exceed the health benefits, and this increased demand puts upward pressure on prices and therefore spurs health cost inflation.

    The best fix of this feature of the tax code would be repeal of the tax exemption. According to the Office of Management and Budget, that would generate more than $200 billion per year in additional revenue, while making the tax and health care systems more efficient.

    Repeal of the full exemption, alas, faces stiff opposition. Not surprisingly, therefore, the ACA did not schedule implementation of the Cadillac tax, which goes only part of the way toward fixing this problem, until 2018, four years after the ACA took effect. Congress later pushed this to 2020. The House and Senate Republican repeal bills postpone implementation until 2025 and 2026, respectively.

    Other changes to the tax code, unrelated to health care, would generate more revenue while improving economic efficiency — elimination of the home mortgage interest deduction is a major example.

    Calm discussion of the House and Republican health bills, therefore, suggests that individual features — such as repeal of highly distorting taxes — make sense as good economics; they are not merely giveaways to the rich.

  8. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    30. June 2017 at 08:01

    But the game isn’t over ’til the fat lady sings’;

    Two key senators in the Republican effort to pass a health-care bill Friday morning called for the White House to intervene with a more aggressive strategy if Senate Majority Leader Mitch McConnell hasn’t locked in 50 votes by the time lawmakers return from the July 4 recess—and President Donald Trump seemed to embrace the idea.
    Sen. Ben Sasse of Nebraska said congressional leaders’ prospects of overturning parts of the 2010 Affordable Care Act and enact their own provisions in its place were dimming. He said the party’s best hope for passing a health-care bill now could be to wipe out the law in its entirety, then work on a deal to fill the void.

    “On the current path it looks like Republicans will either fail to pass any meaningful bill at all, or will instead pass a bill that looks to prop up many of the crumbling Obama care structures,” he said in a letter he announced he was sending to the White House.

    “We must keep our word. Therefore, if on July 10 we don’t have agreement on a combined repeal and replace plan, we should immediately vote again on… the December 2015 Obamacare repeal legislation that the Congress passed but President Obama vetoed.”

  9. Gravatar of Plucky Plucky
    30. June 2017 at 08:37

    “Card everyone” is a policy whose purpose is avoiding creating awkward situations with people who are touchy/sensitive about how old they appear. It’s silly, but to be more accurate it’s a rational response to some people who are very, very silly

  10. Gravatar of Matt Matt
    30. June 2017 at 09:35

    Most airline delays are, at root, safety related: bad weather, maintenance, crew is up against schedule regulations that protect against fatigue, and the U.S. hasn’t had a fatal airline accident in nearly a decade. Do you think this equilibrium is inefficient?

  11. Gravatar of David R. Henderson David R. Henderson
    30. June 2017 at 10:35

    We might have the basis of a bet. I’ll bet you even odds that by Labor Day the GOP will not be advocating single payer. $40. Deal?

  12. Gravatar of msgkings msgkings
    30. June 2017 at 11:04

    @David H: do you offer to bet your friends every time they make a joke? That would be annoying.

  13. Gravatar of ssumner ssumner
    30. June 2017 at 14:12

    Ben, You said:

    “Guess which needs reform?”

    Is this a joke?

    Regarding Japan, what do you think of their inflation rate? Shall we adopt the same policy?

    Saturos, Given the GOP has no ideas and no principles, I imagine they can’t do much at all.

    Scott, I’d love to see a totally free market system.

    Brian, I’m not surprised to see that Trumpistas don’t care about policy, it’s all about Trump’s persona. As long as Trump keeps acting like an immature 8th grader, his fans are happy, even if he accomplishes nothing.

    Patrick, I agree with Miron.

    Plucky, My preference would be to card nobody. If they look over 16 then let them drink–if not, then don’t.

    David, I was joking.

  14. Gravatar of Benjamin Cole Benjamin Cole
    30. June 2017 at 15:47

    I have been banned from commenting on Econlog so I will comment here. Scott Sumner’s latest post on monetary policy is excellent.

    Sumner concluded that the choice in some regards inflation or socialism. I agree and add the public is saying “tight labor markets or socialism.”

  15. Gravatar of d d
    30. June 2017 at 16:50

    i see many want to go back to the early 1900s when food was not just sort of hazardous, but could kill you, wonder why that is? course the are issues in the VA: wonder what large organization doesnt have one? like the company you work for or own. like say uber? or wells fargo? and from direct observation, it seems to normally do a bang up job (brother in law has had more than a few major surgeries. all done quite well. now you might be one that says maybe we shouldnt pay for it..well why should we pay for yours?)

  16. Gravatar of d d
    30. June 2017 at 16:52

    and never mind the ‘drugs’. which most times were no more than water and coloring plus a few other things. if not some thing that could and did kill. is that what we really want?

  17. Gravatar of Benjamin Cole Benjamin Cole
    30. June 2017 at 18:12

    Re Japan:

    Richard Koo has called Japan a “balance sheet recession.”

    Too much debt, then a recession, then nobody can pay their debt. Austerity measures boomerang.

    So Koo advises big federal deficits.

    I wonder. Would not have helicopter drops worked better?

    And can developed nations only expand their economies by relatively increasing debt loads? Banks lend on property, and that expands money in circulation?

    If so, do we need a fix on that?

    Otherwise Hyman Minsky has his axe raised, around the next bend….

  18. Gravatar of Major.Freedom Major.Freedom
    30. June 2017 at 18:23

    The Democrat party is crashing and burning.

  19. Gravatar of Major.Freedom Major.Freedom
    1. July 2017 at 10:57

    Trump also won Rhode Island

  20. Gravatar of ssumner ssumner
    1. July 2017 at 13:04

    Ben, No, no and no.

  21. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    2. July 2017 at 08:53

    This is a lovely paragraph from Nancy Maclean’s Duke colleague Mike Munger;

    ‘I am, in important ways, handicapped here when it comes to speculating. I actually know a lot about Public Choice as an academic discipline, and I have more than thirty years’ experience in working with James Buchanan’s body of written research. My background sharply restricts the set of plausible, interesting accounts I can give of the subject, because I am constrained by in-depth knowledge of it.’

  22. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    2. July 2017 at 08:58

    So here’s a proposal. Moderates and liberals in blue states should give conservatives what they want: Shut down all of the federal programs that subsidize red states. Blue states could use that money to fund the programs that they want. California could easily fund universal health care for its own. Minnesota and Illinois could fund smaller classrooms, extended maternity leaves and day care subsidies. Some blue states are too small to launch major initiatives on their own. But they could seek mutually beneficial agreements with larger blue states. In sum, blue states should regain control of the money that’s currently flowing to red states for programs that red state citizens say they don’t want (e.g. social insurance programs like food stamps and payments to Planned Parenthood). The blue states would then be free to use those resources to pursue the policies their citizens want.

    What’s in it for the red sates? Right now their citizens feel over-regulated, overtaxed and constantly on the defensive from perceived federal encroachment on the way they want to live. Moving closer to our original federalist roots would help address those concerns.

    Perfect for the 4th of July week-end.

  23. Gravatar of Scott Freelander Scott Freelander
    3. July 2017 at 07:00

    I’d be okay with a total free market healthcare experiment too, but there seems to be almost no constituency for it. My guess is, it’s more likely we’ll get Medicare for all at some point, which could still be an improvement with some reforms to control costs and ending subsidies for private insurance. Whatever we do, we shouldn’t continue to subsidize healthcare expenditures growing as a share of GDP. If anything, it should be falling, and for due to efficiency, not just rationing.

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