thefiscaltimes--2020-01-28--The Case for Scrapping the Estate Tax — and Replacing It With an Inheritance Tax

Americans will inherit more than $ 764 billion this year and pay an average of 2.1 % in taxes on that income , according to a paper published Tuesday as part of the Brookings Institution ’ s examination of the tax code .
The paper , by New York University law professor Lily Batchelder , notes that wealth transfer taxes accounted for 2.1 % of federal revenues in 1973 .
This year , they are projected to account for 0.5 % .
The share of estates subject to the estate tax fell from 6.5 % to a projected 0.1 % @ @ @ @ @ @ @ a former adviser to President Obama , proposes to replace the current estate tax with an “ inheritance tax.
” It would treat inherited money above a certain level as ordinary income , requiring heirs to pay both income and payroll taxes on it .
The Urban-Brookings Tax Policy Center estimates that the proposal would raise $ 340 billion over the next decade if the lifetime exemption were set at $ 2.5 million , meaning it would hit just the top 0.02 % of heirs .
If the exemption was set at $ @ @ @ @ @ @ @ $ 917 billion , and if it was set at $ 500,000 — affecting just the top 0.18 % of heirs — the proposal would raise about $ 1.4 trillion .
Batchelder says her proposal would reduce inequality and “ take a large step toward leveling the playing field between income from inherited wealth and income from work.
” She also argues that her plan would more successfully build public support for taxing inherited income compared to the current estate tax .
“ [ T ] he structure of an estate tax makes @ @ @ @ @ @ @ as a double tax on frugal , generous entrepreneurs who just want to take care of their families—even though nothing could be farther from the truth , ” she writes .
“ Instead , the estate tax is the only tax that ensures wealthy heirs pay at least some tax on large amounts of inherited income , even if at much lower average rates than apply to income from good , old hard work .
Nevertheless , inheritance taxes are more self-evidently ‘ silver spoon taxes ’ and , as a result , @ @ @ @ @ @ @ ”

Americans will inherit more than $764 billion this year and pay an average of 2.1% in taxes on that income, according to a paper published Tuesday as part of the Brookings Institution’s examination of the tax code. The paper, by New York University law professor Lily Batchelder, notes that wealth transfer taxes accounted for 2.1% of federal revenues in 1973. This year, they are projected to account for 0.5%. The share of estates subject to the estate tax fell from 6.5% to a projected 0.1% over that same period.
Batchelder, a former adviser to President Obama, proposes to replace the current estate tax with an “inheritance tax.” It would treat inherited money above a certain level as ordinary income, requiring heirs to pay both income and payroll taxes on it.
The Urban-Brookings Tax Policy Center estimates that the proposal would raise $340 billion over the next decade if the lifetime exemption were set at $2.5 million, meaning it would hit just the top 0.02% of heirs. If the exemption was set at $1 million, the proposal would raise $917 billion, and if it was set at $500,000 — affecting just the top 0.18% of heirs — the proposal would raise about $1.4 trillion.
Batchelder says her proposal would reduce inequality and “take a large step toward leveling the playing field between income from inherited wealth and income from work.”
She also argues that her plan would more successfully build public support for taxing inherited income compared to the current estate tax.
“[T]he structure of an estate tax makes it easier for opponents to characterize it as a double tax on frugal, generous entrepreneurs who just want to take care of their families—even though nothing could be farther from the truth,” she writes. “Instead, the estate tax is the only tax that ensures wealthy heirs pay at least some tax on large amounts of inherited income, even if at much lower average rates than apply to income from good, old hard work. Nevertheless, inheritance taxes are more self-evidently ‘silver spoon taxes’ and, as a result, appear to be more politically resilient.”


thefiscaltimes--2020-01-28--The Next Big Fiscal Question: How to Raise More Revenue?

An all-star roster of fiscal experts gathered at the Brookings Institution Tuesday to debate the future of American tax policy .
The initial discussion featured former U.S. Treasury secretaries Timothy Geithner , Robert Rubin and Lawrence Summers , all of whom agreed on one overarching point : Given the size and scope of its obligations for health care , retirement and national defense in the coming years , the federal government needs to raise a lot more revenue .
How to go about raising that revenue — and what to do with it as it comes in — was a @ @ @ @ @ @ @ and Rubin said they worried about negative effects on growth from increased taxes , and spoke about the need to establish a fiscal framework that defines the constraints facing policymakers — most notably , what are the limits on deficits and the national debt ?
Summers spoke forcefully against that approach , arguing that policymakers should ignore the deficit and focus instead on creating a fairer society and increasing economic growth ; once steps were taken toward those primary goals , the deficit could be brought under control more easily in a stronger @ @ @ @ @ @ @ specific policy changes he recommended to make the tax system fairer , reduce inequality and boost the economy : • Improve tax compliance to capture a significant proportion of the hundreds of billions in taxes that go unpaid every year .
Sanders said better IRS enforcement could produce more than $ 1 trillion in revenue over 10 years .
• Crack down on international businesses that are evading billions in corporate taxes by moving profits overseas .
• Reform capital gains taxation by eliminating the step-up in cost basis at death , taxing @ @ @ @ @ @ @ , and eliminating the carried interest tax break .
Once those policy changes are in place , raising the capital gains tax rate to income tax levels would raise billions in new revenue , Summers argued , without weighing on growth .
But the full set of policy changes are necessary , Summers said , in order to close off as many avenues for tax avoidance as possible .
All told , Summers estimated that his proposals could raise more than $ 4 trillion over 10 years — without imposing a politically contentious @ @ @ @ @ @ @ menu of policy options : Other participants in the conference discussed a variety of options for raising revenues , many of which are spelled out in greater detail in the book accompanying the conference , “ Tackling the Tax Code : Efficient and Equitable Ways to Raise Revenue.
” Some highlights : • VAT : William Gale of the Urban-Brookings Tax Policy Center proposed a value-added tax similar to that in most other developed countries .
A 10 % VAT would raise roughly $ 10 trillion over 10 years , Gale said .
@ @ @ @ @ @ @ , a financier and senior fellow at the Harvard Kennedy School , said a tax of 10 basis points on trading in stocks , bonds and derivatives would raise $ 60 billion a year without hindering market efficiency .
• Corporate tax reform : Jason Furman , who led the Council of Economic Advisers in the Obama administration , recommended a variety of tweaks to the tax code , including raising the corporate tax rate from 21 % to 28 % .
He said the proposals would raise more than $ 1 trillion @ @ @ @ @ @ @ about 1 % .
• Taxing inheritances : Lily Batchelder of New York University Law School proposed more stringent inheritance taxes that would raise $ 340 billion or more over 10 years ( more on that below ) .
The elephant in the room : While the conference provided plenty of ideas for improving the federal government ’ s fiscal situation , much less was said about how to enact the proposals in such a politically divided country .
With one of the two major parties rejecting the very idea of using taxes @ @ @ @ @ @ @ to shore up Social Security and Medicare will likely be quite difficult .
“ We ’ re the sound of one hand clapping , ” Geithner said , adding that he didn ’ t see a political coalition dedicated to fiscal reform coming together anytime soon .

An all-star roster of fiscal experts gathered at the Brookings Institution Tuesday to debate the future of American tax policy. The initial discussion featured former U.S. Treasury secretaries Timothy Geithner, Robert Rubin and Lawrence Summers, all of whom agreed on one overarching point: Given the size and scope of its obligations for health care, retirement and national defense in the coming years, the federal government needs to raise a lot more revenue.
How to go about raising that revenue — and what to do with it as it comes in — was a slightly more contentious issue. Both Geithner and Rubin said they worried about negative effects on growth from increased taxes, and spoke about the need to establish a fiscal framework that defines the constraints facing policymakers — most notably, what are the limits on deficits and the national debt? Summers spoke forcefully against that approach, arguing that policymakers should ignore the deficit and focus instead on creating a fairer society and increasing economic growth; once steps were taken toward those primary goals, the deficit could be brought under control more easily in a stronger economy.
Summers provided a list of specific policy changes he recommended to make the tax system fairer, reduce inequality and boost the economy:
Improve tax compliance to capture a significant proportion of the hundreds of billions in taxes that go unpaid every year. Sanders said better IRS enforcement could produce more than $1 trillion in revenue over 10 years.
to capture a significant proportion of the hundreds of billions in taxes that go unpaid every year. Sanders said better IRS enforcement could produce more than $1 trillion in revenue over 10 years. Crack down on international businesses that are evading billions in corporate taxes by moving profits overseas.
that are evading billions in corporate taxes by moving profits overseas. Reform capital gains taxation by eliminating the step-up in cost basis at death, taxing gifts to charity and real estate transfers, and eliminating the carried interest tax break.
Once those policy changes are in place, raising the capital gains tax rate to income tax levels would raise billions in new revenue, Summers argued, without weighing on growth. But the full set of policy changes are necessary, Summers said, in order to close off as many avenues for tax avoidance as possible.
All told, Summers estimated that his proposals could raise more than $4 trillion over 10 years — without imposing a politically contentious and economically uncertain wealth tax.
A menu of policy options: Other participants in the conference discussed a variety of options for raising revenues, many of which are spelled out in greater detail in the book accompanying the conference, “Tackling the Tax Code: Efficient and Equitable Ways to Raise Revenue.” Some highlights:
VAT: William Gale of the Urban-Brookings Tax Policy Center proposed a value-added tax similar to that in most other developed countries. A 10% VAT would raise roughly $10 trillion over 10 years, Gale said.
William Gale of the Urban-Brookings Tax Policy Center proposed a value-added tax similar to that in most other developed countries. A 10% VAT would raise roughly $10 trillion over 10 years, Gale said. Financial transaction tax: Antonio Weiss, a financier and senior fellow at the Harvard Kennedy School, said a tax of 10 basis points on trading in stocks, bonds and derivatives would raise $60 billion a year without hindering market efficiency.
Antonio Weiss, a financier and senior fellow at the Harvard Kennedy School, said a tax of 10 basis points on trading in stocks, bonds and derivatives would raise $60 billion a year without hindering market efficiency. Corporate tax reform: Jason Furman, who led the Council of Economic Advisers in the Obama administration, recommended a variety of tweaks to the tax code, including raising the corporate tax rate from 21% to 28%. He said the proposals would raise more than $1 trillion over 10 years and boost GDP by about 1%.
Jason Furman, who led the Council of Economic Advisers in the Obama administration, recommended a variety of tweaks to the tax code, including raising the corporate tax rate from 21% to 28%. He said the proposals would raise more than $1 trillion over 10 years and boost GDP by about 1%. Taxing inheritances: Lily Batchelder of New York University Law School proposed more stringent inheritance taxes that would raise $340 billion or more over 10 years.
The elephant in the room: While the conference provided plenty of ideas for improving the federal government’s fiscal situation, much less was said about how to enact the proposals in such a politically divided country. With one of the two major parties rejecting the very idea of using taxes to increase revenues, reaching a compromise to shore up Social Security and Medicare will likely be quite difficult. “We’re the sound of one hand clapping,” Geithner said, adding that he didn’t see a political coalition dedicated to fiscal reform coming together anytime soon.


thefiscaltimes--2020-02-04--Fiscal Policy Still Boosting the Economy, but Not For Long

Tax and spending policies at the local , state and federal level boosted economic growth in the fourth quarter of @ @ @ @ @ newly updated Hutchins Center Fiscal Impact Measure from the Brookings Institution .
Fiscal policy added @ @ @ @ @ in the last three months of the year , relative to its long-run potential , @ @ @ @ @ about 0.5 points to GDP in the first quarter of 2020 .
“ Fiscal policy @ @ @ @ @ modestly for several quarters , and the FIM [ Fiscal Impact Measure ] is now @ @ @ @ @ 2010 , when the American Reinvestment and Recovery Act was supporting the economy , ” @ @ @ @ @ .
Starting in the second quarter of 2020 , however , fiscal policy is expected @ @ @ @ @ drag : “ Looking forward , tax and spending policies at all levels of government @ @ @ @ @ contractionary in 2020 and 2021.
” One reason for the negative fiscal impact is that @ @ @ @ @ rise as a share of GDP in 2020 , Brookings says .

Tax and spending policies at the local, state and federal level boosted economic growth in the fourth quarter of 2019, according to the newly updated Hutchins Center Fiscal Impact Measure from the Brookings Institution.
Fiscal policy added 0.7 percentage points to GDP in the last three months of the year, relative to its long-run potential, and is projected to add about 0.5 points to GDP in the first quarter of 2020.
“Fiscal policy has been boosting economic growth modestly for several quarters, and the FIM [Fiscal Impact Measure] is now near its highest values since 2010, when the American Reinvestment and Recovery Act was supporting the economy,” the new Brookings report says.
Starting in the second quarter of 2020, however, fiscal policy is expected to start acting as a drag: “Looking forward, tax and spending policies at all levels of government are expected to be slightly contractionary in 2020 and 2021.” One reason for the negative fiscal impact is that tax payments are expected to rise as a share of GDP in 2020, Brookings says.


thefiscaltimes--2020-02-03--Where the Democratic Candidates Stand on Medicare for All

As Iowa Democrats prepare to pick their party ’ s first winner in the presidential primary , the candidates ’ approach to health care remains one of the most substantial and potentially divisive issues voters will have to face .
Here ’ s a brief review of where the candidates stand on Medicare for All , the proposed sweeping overhaul of the U.S. health-care system that has served as a point of contention during the campaign : Bernie Sanders : The Vermont senator is the most vocal supporter of Medicare for All , which he says would end up saving @ @ @ @ @ @ @ its enormous price tag .
Sanders wants to ban private insurance and eliminate out-of-pocket spending for patients , while covering a wider array of services than the current Medicare system .
“ The ambitious proposal would cost more than $ 30 trillion over 10 years , according to independent analyses , ” Reuters ’ Joseph Ax writes .
Elizabeth Warren : The Massachusetts senator also supports Medicare for All and has released a detailed plan for financing it .
Facing pushback on her proposal , Warren released a transition plan for moving to @ @ @ @ @ @ @ years .
“ That proposal drew some criticism from the left , with Sanders supporters claiming she had backed down from her Medicare for All stance , ” Ax says .
“ Warren has said she remains committed to Medicare for All and that her plan would provide more coverage to more Americans in a shorter time frame.
” Joe Biden : The former vice president says he wants to expand the Affordable Care Act by offering a public option for insurance .
“ His healthcare plan , estimated to cost $ 750 @ @ @ @ @ @ @ partly by higher taxes on the wealthy , would let people enroll in a paid government healthcare plan as an alternative to private insurance , ” Ax writes .
Michael Bloomberg : The former mayor of New York City says Medicare for All is unaffordable and proposes to offer a public option for insurance that exists alongside the current employment-based system .
His plan would cost $ 1 trillion over 10 years .
Pete Buttigieg : The former mayor of South Bend , Indiana , has proposed a public option he describes as @ @ @ @ @ @ @ ” Buttigieg says that over time , that option would result in a single-payer system as more Americans sign up for cheaper and more efficient Medicare .
His plan would cost $ 1.5 trillion over 10 years .
Amy Klobuchar : The centrist Minnesota senator says that Medicare for All is a “ pipe dream , ” and would instead offer a public option through either Medicare or Medicaid , paid for in part by raising taxes on the wealthy .
Andrew Yang : The tech entrepreneur says he supports the “ spirit @ @ @ @ @ @ @ to provide a public option to give people the freedom to leave their jobs .
However , he does not want to ban private insurers .
Tom Steyer : The finance billionaire has proposed a public option that would cost $ 1.5 trillion over 10 years .

As Iowa Democrats prepare to pick their party’s first winner in the presidential primary, the candidates’ approach to health care remains one of the most substantial and potentially divisive issues voters will have to face. Here’s a brief review of where the candidates stand on Medicare for All, the proposed sweeping overhaul of the U.S. health-care system that has served as a point of contention during the campaign:
Bernie Sanders: The Vermont senator is the most vocal supporter of Medicare for All, which he says would end up saving money for the country overall, despite its enormous price tag. Sanders wants to ban private insurance and eliminate out-of-pocket spending for patients, while covering a wider array of services than the current Medicare system. “The ambitious proposal would cost more than $30 trillion over 10 years, according to independent analyses,” Reuters’ Joseph Ax writes.
Elizabeth Warren: The Massachusetts senator also supports Medicare for All and has released a detailed plan for financing it. Facing pushback on her proposal, Warren released a transition plan for moving to a single-payer system more gradually over several years. “That proposal drew some criticism from the left, with Sanders supporters claiming she had backed down from her Medicare for All stance,” Ax says. “Warren has said she remains committed to Medicare for All and that her plan would provide more coverage to more Americans in a shorter time frame.”
Joe Biden: The former vice president says he wants to expand the Affordable Care Act by offering a public option for insurance. “His healthcare plan, estimated to cost $750 billion over 10 years and paid for partly by higher taxes on the wealthy, would let people enroll in a paid government healthcare plan as an alternative to private insurance,” Ax writes.
Michael Bloomberg: The former mayor of New York City says Medicare for All is unaffordable and proposes to offer a public option for insurance that exists alongside the current employment-based system. His plan would cost $1 trillion over 10 years.
Pete Buttigieg: The former mayor of South Bend, Indiana, has proposed a public option he describes as “Medicare for all who want it.” Buttigieg says that over time, that option would result in a single-payer system as more Americans sign up for cheaper and more efficient Medicare. His plan would cost $1.5 trillion over 10 years.
Amy Klobuchar: The centrist Minnesota senator says that Medicare for All is a “pipe dream,” and would instead offer a public option through either Medicare or Medicaid, paid for in part by raising taxes on the wealthy.
Andrew Yang: The tech entrepreneur says he supports the “spirit” of Medicare for All and wants to provide a public option to give people the freedom to leave their jobs. However, he does not want to ban private insurers.
Tom Steyer: The finance billionaire has proposed a public option that would cost $1.5 trillion over 10 years.


thefiscaltimes--2020-02-06--Pentagon Wants to Shift Billions in Funding

The Trump administration is scheduled to release its 2021 fiscal budget request on Monday , and it ’ s expected to propose about $ 740 billion for defense .
That ’ s an increase of just $ 2 billion over current funding levels , and Defense Secretary Mark Esper said Thursday that the Pentagon needs to accept the fact that its budget won ’ t be growing very much .
Speaking at an event in Washington sponsored by the Johns Hopkins School of Advanced International Studies , Esper said “ we have to brace ourselves that at best , defense @ @ @ @ @ @ @ coming years .
In the meantime , Esper is pushing ahead with an effort to shift billions in defense funds from legacy weapons systems and offices to modernization programs that focus on new technologies .
Pentagon officials have identified $ 5.7 billion in cuts they want to make in aging , outdated or redundant programs , and Esper will ask Congress to approve the use of that money for what he says are more pressing projects , including nuclear modernization , missile defense , artificial intelligence and hypersonic weapons .
Esper said the @ @ @ @ @ @ @ need to stay ahead of China and Russia .
“ The Chinese have used at least the last 18 years while we were in Iraq and Afghanistan to make enormous strides with regard to the professionalization of their force , modernizing their doctrine , building new capabilities , going after us asymmetrically , ” Esper said .

The Trump administration is scheduled to release its 2021 fiscal budget request on Monday, and it’s expected to propose about $740 billion for defense.
That’s an increase of just $2 billion over current funding levels, and Defense Secretary Mark Esper said Thursday that the Pentagon needs to accept the fact that its budget won’t be growing very much. Speaking at an event in Washington sponsored by the Johns Hopkins School of Advanced International Studies, Esper said “we have to brace ourselves that at best, defense spending will be level” in the coming years.
In the meantime, Esper is pushing ahead with an effort to shift billions in defense funds from legacy weapons systems and offices to modernization programs that focus on new technologies. Pentagon officials have identified $5.7 billion in cuts they want to make in aging, outdated or redundant programs, and Esper will ask Congress to approve the use of that money for what he says are more pressing projects, including nuclear modernization, missile defense, artificial intelligence and hypersonic weapons.
Esper said the effort is driven in part by the need to stay ahead of China and Russia. “The Chinese have used at least the last 18 years while we were in Iraq and Afghanistan to make enormous strides with regard to the professionalization of their force, modernizing their doctrine, building new capabilities, going after us asymmetrically,” Esper said.


thefiscaltimes--2020-02-05--On Drug Pricing, President Trump’s Numbers Are Still Off

During the 2020 State of the Union address , President Donald Trump zeroed in on prescription drug prices , arguing that his administration is “ taking on the big pharmaceutical companies.
” Among the evidence for that claim : a talking point the administration has been using since last April .
“ I was pleased to announce last year that , for the first time in 51 years , the cost of prescription drugs actually went down , ” Trump said .
We ’ ve examined this claim twice before , rating it Mostly False .
But prescription drug prices @ @ @ @ @ @ @ we wanted to take another look , in case things had changed .
Experts told us the data remains essentially unchanged .
Drug prices are still not going down .
Last spring , Trump ’ s team pulled this claim from two sources : a 2018 report from the president ’ s Council of Economic Advisers and data comparing the January 2019 Consumer Price Index for drugs to that of January 2018 .
The CPI data suggested a decline in drug prices .
But when we spoke to experts , they quickly debunked @ @ @ @ @ @ @ CPI data is imperfect — it shows list prices , rather than what consumers pay at the pharmacy counter .
For another , it covers only drugs sold through retail , which accounts for about three-quarters of all prescriptions .
That misses high-priced specialty drugs that are sold only through the mail .
Plus , other metrics showed that drug prices had , in fact , gone up , although by very little .
Last April , for instance , the same CPI data indicated an increase — between April 2018 and April @ @ @ @ @ @ @ 0.3 % .
Data from the Kaiser Family Foundation also suggested an increase in total spending on drug prices that year , even if growth had slowed .
( KHN is an editorially independent program of the foundation . )
Today , prices aren ’ t going up as fast as they were before , said Stacie Dusetzina , an associate professor at Vanderbilt University who studies drug pricing .
But they ’ re still going up .
“ That probably doesn ’ t provide the average person with much relief , ” @ @ @ @ @ @ @ s the question of individual list price increases .
( List prices are defined as what ’ s charged before rebates — an amount few people pay but that dictates negotiations . )
The CPI data paints with a broad brush , drug pricing analysts said , obscuring just how many drugs have seen and continue to see their prices go up .
In 2019 , 4,311 prescription drugs experienced a price hike , with the average increase hovering around 21 % , according to data compiled by Rx Savings Solutions , a @ @ @ @ @ @ @ had price dips .
And already in 2020 , 2,519 drugs have increased prices .
The average hike so far this year is 6.9 % .
Meanwhile , the prices of 70 drugs have dropped .
Typically , branded drugs increase their prices early in the year , and generics do so later , said Michael Rea , the CEO of Rx Savings Solutions .
When generics post their price increases , the 2020 average price hike will likely go up .
“ As a broad brushstroke , the story remains the same @ @ @ @ @ @ @ not down , ” Rea said .
President Trump said that in 2018 , “ for the first time in 51 years , the cost of prescription drugs went down.
” Nothing has changed since our previous rulings on this statement .
And the continued drug pricing trend suggests that prices may be stabilizing , but they are not coming down .
And consumers are not experiencing that relief .
We rate this claim Mostly False .

During the 2020 State of the Union address, President Donald Trump zeroed in on prescription drug prices, arguing that his administration is “taking on the big pharmaceutical companies.”
Among the evidence for that claim: a talking point the administration has been using since last April.
“I was pleased to announce last year that, for the first time in 51 years, the cost of prescription drugs actually went down,” Trump said.
We’ve examined this claim twice before, rating it Mostly False. But prescription drug prices are a major voter concern. So we wanted to take another look, in case things had changed.
Experts told us the data remains essentially unchanged. Drug prices are still not going down.
The Old Talking Point
Last spring, Trump’s team pulled this claim from two sources: a 2018 report from the president’s Council of Economic Advisers and data comparing the January 2019 Consumer Price Index for drugs to that of January 2018. The CPI data suggested a decline in drug prices.
But when we spoke to experts, they quickly debunked this position. For one thing, CPI data is imperfect — it shows list prices, rather than what consumers pay at the pharmacy counter. For another, it covers only drugs sold through retail, which accounts for about three-quarters of all prescriptions. That misses high-priced specialty drugs that are sold only through the mail.
Plus, other metrics showed that drug prices had, in fact, gone up, although by very little. Last April, for instance, the same CPI data indicated an increase — between April 2018 and April 2019, drug prices had increased by 0.3%. Data from the Kaiser Family Foundation also suggested an increase in total spending on drug prices that year, even if growth had slowed. (KHN is an editorially independent program of the foundation.)
What’s Changed?
Today, prices aren’t going up as fast as they were before, said Stacie Dusetzina, an associate professor at Vanderbilt University who studies drug pricing. But they’re still going up.
“That probably doesn’t provide the average person with much relief,” she said.
Meanwhile, there’s the question of individual list price increases. (List prices are defined as what’s charged before rebates — an amount few people pay but that dictates negotiations.) The CPI data paints with a broad brush, drug pricing analysts said, obscuring just how many drugs have seen and continue to see their prices go up.
In 2019, 4,311 prescription drugs experienced a price hike, with the average increase hovering around 21%, according to data compiled by Rx Savings Solutions, a consulting group. Meanwhile, 619 drugs had price dips.
And already in 2020, 2,519 drugs have increased prices. The average hike so far this year is 6.9%. Meanwhile, the prices of 70 drugs have dropped. Typically, branded drugs increase their prices early in the year, and generics do so later, said Michael Rea, the CEO of Rx Savings Solutions. When generics post their price increases, the 2020 average price hike will likely go up.
“As a broad brushstroke, the story remains the same. Drug prices are going up, not down,” Rea said.
Our Ruling
President Trump said that in 2018, “for the first time in 51 years, the cost of prescription drugs went down.”
Nothing has changed since our previous rulings on this statement. And the continued drug pricing trend suggests that prices may be stabilizing, but they are not coming down. And consumers are not experiencing that relief.
We rate this claim Mostly False.


thefiscaltimes--2020-02-04--Medicare Could Save Billions on Insulin If It Were Allowed to Negotiate Prices: Report

Medicare spent nearly $ 8 billion on insulin in 2017 , but it could have cut that bill by more than half if it had been allowed to negotiate with drugmakers in the same way the U.S. Department of Veterans Affairs does , according to a new research report published Monday in JAMA Internal Medicine .
The researchers calculated that Medicare Part D spent $ 7.8 billion ( after rebates ) on 31 different types of insulin , and then compared the prices paid to the prices negotiated by the VA .
If Medicare used the same prices as the @ @ @ @ @ @ @ 2.9 billion .
If Medicare used the same prices and a national formulary – a list of approved drugs , which typically cuts down on the number of options while increasing price competition among those that remain on the list – it would have saved $ 4.4 billion , the researchers said .
More broadly , the researchers found that Medicare would have saved $ 14.4 billion on the $ 32.5 billion it spent in 2016 on the 50 costliest Medicare Part D oral drugs .
`` Medicare now accounts for a third @ @ @ @ @ @ @ Harvard Medical School ’ s Dr. William Feldman , the study ’ s lead author .
“ Legislation allowing Medicare to negotiate prices and establish a central formulary would help save taxpayers money .
”

Medicare spent nearly $8 billion on insulin in 2017, but it could have cut that bill by more than half if it had been allowed to negotiate with drugmakers in the same way the U.S. Department of Veterans Affairs does, according to a new research report published Monday in JAMA Internal Medicine.
The researchers calculated that Medicare Part D spent $7.8 billion (after rebates) on 31 different types of insulin, and then compared the prices paid to the prices negotiated by the VA. If Medicare used the same prices as the VA, it would have saved $2.9 billion. If Medicare used the same prices and a national formulary – a list of approved drugs, which typically cuts down on the number of options while increasing price competition among those that remain on the list – it would have saved $4.4 billion, the researchers said.
More broadly, the researchers found that Medicare would have saved $14.4 billion on the $32.5 billion it spent in 2016 on the 50 costliest Medicare Part D oral drugs.
"Medicare now accounts for a third of all drug spending,” said Harvard Medical School’s Dr. William Feldman, the study’s lead author. “Legislation allowing Medicare to negotiate prices and establish a central formulary would help save taxpayers money.”


thefiscaltimes--2020-02-07--Chart of the Day: Discretionary Spending Droops

Are interest rates destined to move higher , increasing the cost of private and public debt ?
While many experts @ @ @ @ @ all but inevitable , historian Paul Schmelzing argues that today ’ s low-interest environment is @ @ @ @ @ stretching back 600 years .
The chart “ shows a clear historical downtrend , with @ @ @ @ @ every 60 years to near zero today , ” says Bloomberg ’ s Aaron Brown @ @ @ @ @ to revert to a mean , but that mean seems to be declining .
”

The Air Force has scrapped a planned upgrade of its B-2 stealth bomber fleet — even after spending $2 billion on the effort — because defense contractor Northrup Grumman didn’t have the necessary software expertise to complete the project on time and on budget, Bloomberg’s Anthony Capaccio reports, citing the Pentagon’s chief weapons buyer.
Ellen Lord, the undersecretary of defense for acquisition and sustainment, told reporters that the nearly $2 billion that had already been spent on the program wasn’t wasted because “we are still going to get upgraded electronic displays.”


thefiscaltimes--2020-02-05--5 Whoppers From Trump’s State of the Union Address

President Trump delivered a polarizing , reality-show tinged State of the Union address Tuesday in which he claimed credit for three years of solid economic growth while making more than 30 “ dubious statements ” about everything from blue-collar employment to American energy independence , according to the fact checkers at The Washington Post .
As Politico ’ s John F. Harris summed it up , “ President Donald Trump likes his superlatives , and you have to give him credit : He definitely earned them this time .
This was the most defiant , most boastful , most ostentatiously @ @ @ @ @ @ @ am-I-hearing-this-right ?
outlandish—the most flamboyantly bizarre—State of the Union Address of All Time.
” With the economy in its 11th year of growth , unemployment at a 50-year low and the stock market at record highs , Trump certainly had plenty of facts at his disposal to tout his record .
But in typical Trumpian fashion he deployed numerous exaggerated or entirely fictional assertions in an effort to back his claim that the economy is “ the best it has ever been ” and is growing at an “ unimaginable ” pace .
@ @ @ @ @ @ @ the “ carnage ” imposed on the U.S. economy by elites in both parties , sought to portray his administration as delivering a decisive break from President Obama ’ s — a dramatic turnaround that revived the country and justifies a second term .
`` If we had not reversed the failed economic policies of the previous administration , ” Trump said , “ the world would not now be witnessing this great economic success . ''
But most economists say that while there is plenty for the president to crow about , @ @ @ @ @ @ @ that was established during the initial recovery from the Great Recession .
As the Post ’ s Tory Newmyer put it , “ many key economic indicators — GDP growth , the unemployment rate , the stock market — show gains in the Trump era have simply continued along their trajectories from the Obama years.
” While Trump ’ s questionable claims were wide-ranging and worthy of extensive review , here are a few that touched on fiscal matters , along with brief fact checks : 1 .
Claiming the biggest tax cuts @ @ @ @ @ @ @ I took office , I moved rapidly to revive the U.S. economy … enacting historic and record-setting tax cuts , ” Trump said Tuesday .
The president has been exaggerating the size of the 2017 tax cuts for years , but the passage of time hasn ’ t made the claim any truer .
Here are The Washington Post ’ s Glenn Kessler , Salvador Rizzo and Sarah Cahlan : “ Trump constantly claims he passed the biggest tax cut in U.S. history , but that ’ s Four-Pinocchios false .
The best @ @ @ @ @ @ @ spending plans ) over time is to measure them as a percentage of the national economy .
The Trump tax cut , according to Treasury Department data , is nearly 0.9 percent of GDP — compared with 2.89 percent of GDP for Ronald Reagan ’ s 1981 tax cut , the actual largest tax cut .
When measured as a share of the U.S. economy , Trump ’ s tax cut is the eighth-largest in the past century.
” 2 .
Claiming to protect people with pre-existing conditions .
“ We will always @ @ @ @ @ @ @ Trump said Tuesday , and not for the first time .
But his administration has taken steps that would do the opposite , including ongoing efforts to repeal the Affordable Care Act , which first established consumer protections for pre-existing conditions during the Obama administration .
Bloomberg ’ s Max Nisen : “ The reality is , [ Trump ] came close to replacing the Affordable Care Act in 2017 with policies that would have gutted consumer safeguards for sick people and cut coverage for millions .
The president continues to support a @ @ @ @ @ @ @ this time without even bothering to say how he 'd replace it.
” 3 .
Claiming unprecedented success for Opportunity Zones .
Trump touted the Opportunity Zones program , which was created as part of the 2017 GOP tax reform and provides tax breaks for investors in about 9,000 low-income areas .
“ This is the first time that these deserving communities have seen anything like this , ” he said .
“ It ’ s all working.
” But The Wall Street Journal ’ s Richard Rubin says it ’ s too @ @ @ @ @ @ @ program : “ Local governments and investors across the country have been excitedly touting opportunity zones and trying to encourage development .
But it ’ s far from clear yet how well the program is working .
There isn ’ t any official data on how much money is being invested or how much would have been invested without the incentive , and the law doesn ’ t require detailed disclosures.
” 4 .
Claiming that drug prices are falling .
Repeating a talking point the White House has been using for months @ @ @ @ @ @ @ pleased to announce last year that , for the first time in 51 years , the cost of prescription drugs actually went down.
” Kaiser Health News ’ Shefali Luthra says the claim is based on data that provide a misleading picture of what ’ s going on with drug prices : “ We ’ ve examined this claim twice before , rating it Mostly False .
But prescription drug prices are a major voter concern .
So we wanted to take another look , in case things had changed .
Experts told @ @ @ @ @ @ @ Drug prices are still not going down.
” 5 .
Claiming to protect Medicare and Social Security .
Trump ran for office in 2016 promising to not cut popular entitlement programs , and he repeated that claim Tuesday : “ We will always protect your Medicare and your Social Security.
” But Trump recently said he would be open to entitlement cuts if he were to win a second term .
Asked if entitlement reform would be on his agenda , Trump said that “ [ a ] t some point they will @ @ @ @ @ @ @ s budget requests have proposed substantial cuts to entitlement programs .
His 2019 budget , for example , outlined $ 554 billion in Medicare cuts and up to $ 250 billion in Medicaid cuts over 10 years .
And his 2020 budget called for more than $ 3 billion in cuts to the Social Security Disability Insurance program over four years .
“ Not only has President Trump failed to strengthen Medicare and Social Security , but the financial outlook for both trusts has not improved or worsened , Linda Qiu says at @ @ @ @ @ @ @ is at least partly the result of Mr. Trump ’ s tax law , which has left the Treasury Department to collect fewer taxes from Americans and , in turn , invest less money into each program .
Last April , the government projected that Medicare funds would be depleted by 2026 , three years earlier than estimated in 2017 .
The report noted that less money will flow into the fund because of low wages and lower taxes .
”

President Trump delivered a polarizing, reality-show tinged State of the Union address Tuesday in which he claimed credit for three years of solid economic growth while making more than 30 “dubious statements” about everything from blue-collar employment to American energy independence, according to the fact checkers at The Washington Post.
As Politico’s John F. Harris summed it up, “President Donald Trump likes his superlatives, and you have to give him credit: He definitely earned them this time. This was the most defiant, most boastful, most ostentatiously theatrical, most overtly campaign-oriented, most am-I-hearing-this-right? outlandish—the most flamboyantly bizarre—State of the Union Address of All Time.”
With the economy in its 11th year of growth, unemployment at a 50-year low and the stock market at record highs, Trump certainly had plenty of facts at his disposal to tout his record. But in typical Trumpian fashion he deployed numerous exaggerated or entirely fictional assertions in an effort to back his claim that the economy is “the best it has ever been” and is growing at an “unimaginable” pace.
Trump, who came to power decrying the “carnage” imposed on the U.S. economy by elites in both parties, sought to portray his administration as delivering a decisive break from President Obama’s — a dramatic turnaround that revived the country and justifies a second term. "If we had not reversed the failed economic policies of the previous administration,” Trump said, “the world would not now be witnessing this great economic success."
But most economists say that while there is plenty for the president to crow about, the economy is largely following a path that was established during the initial recovery from the Great Recession.
As the Post’s Tory Newmyer put it, “many key economic indicators — GDP growth, the unemployment rate, the stock market — show gains in the Trump era have simply continued along their trajectories from the Obama years.”
While Trump’s questionable claims were wide-ranging and worthy of extensive review, here are a few that touched on fiscal matters, along with brief fact checks:
1. Claiming the biggest tax cuts in history. “From the instant I took office, I moved rapidly to revive the U.S. economy … enacting historic and record-setting tax cuts,” Trump said Tuesday. The president has been exaggerating the size of the 2017 tax cuts for years, but the passage of time hasn’t made the claim any truer.
Here are The Washington Post’s Glenn Kessler, Salvador Rizzo and Sarah Cahlan: “Trump constantly claims he passed the biggest tax cut in U.S. history, but that’s Four-Pinocchios false. The best way to compare tax cuts (or spending plans) over time is to measure them as a percentage of the national economy. The Trump tax cut, according to Treasury Department data, is nearly 0.9 percent of GDP — compared with 2.89 percent of GDP for Ronald Reagan’s 1981 tax cut, the actual largest tax cut. When measured as a share of the U.S. economy, Trump’s tax cut is the eighth-largest in the past century.”
2. Claiming to protect people with pre-existing conditions. “We will always protect patients with pre-existing conditions," Trump said Tuesday, and not for the first time. But his administration has taken steps that would do the opposite, including ongoing efforts to repeal the Affordable Care Act, which first established consumer protections for pre-existing conditions during the Obama administration.
Bloomberg’s Max Nisen: “The reality is, [Trump] came close to replacing the Affordable Care Act in 2017 with policies that would have gutted consumer safeguards for sick people and cut coverage for millions. The president continues to support a lawsuit that could eliminate the ACA, this time without even bothering to say how he'd replace it.”
3. Claiming unprecedented success for Opportunity Zones. Trump touted the Opportunity Zones program, which was created as part of the 2017 GOP tax reform and provides tax breaks for investors in about 9,000 low-income areas. “This is the first time that these deserving communities have seen anything like this,” he said. “It’s all working.”
But The Wall Street Journal’s Richard Rubin says it’s too early to reach any conclusions about the program: “Local governments and investors across the country have been excitedly touting opportunity zones and trying to encourage development. But it’s far from clear yet how well the program is working. There isn’t any official data on how much money is being invested or how much would have been invested without the incentive, and the law doesn’t require detailed disclosures.”
4. Claiming that drug prices are falling. Repeating a talking point the White House has been using for months, Trump said, “I was pleased to announce last year that, for the first time in 51 years, the cost of prescription drugs actually went down.”
Kaiser Health News’ Shefali Luthra says the claim is based on data that provide a misleading picture of what’s going on with drug prices: “We’ve examined this claim twice before, rating it Mostly False. But prescription drug prices are a major voter concern. So we wanted to take another look, in case things had changed. Experts told us the data remains essentially unchanged. Drug prices are still not going down.”
5. Claiming to protect Medicare and Social Security. Trump ran for office in 2016 promising to not cut popular entitlement programs, and he repeated that claim Tuesday: “We will always protect your Medicare and your Social Security.” But Trump recently said he would be open to entitlement cuts if he were to win a second term. Asked if entitlement reform would be on his agenda, Trump said that “[a]t some point they will be.”
More broadly, Trump’s budget requests have proposed substantial cuts to entitlement programs. His 2019 budget, for example, outlined $554 billion in Medicare cuts and up to $250 billion in Medicaid cuts over 10 years. And his 2020 budget called for more than $3 billion in cuts to the Social Security Disability Insurance program over four years.
“Not only has President Trump failed to strengthen Medicare and Social Security, but the financial outlook for both trusts has not improved or worsened, Linda Qiu says at The New York Times. “That is at least partly the result of Mr. Trump’s tax law, which has left the Treasury Department to collect fewer taxes from Americans and, in turn, invest less money into each program. Last April, the government projected that Medicare funds would be depleted by 2026, three years earlier than estimated in 2017. The report noted that less money will flow into the fund because of low wages and lower taxes.”


thefiscaltimes--2020-02-04--3 Takeaways From the Chaotic Iowa Caucuses

Partial results from Monday night ’ s Iowa caucuses , released late Tuesday afternoon , show Pete Buttigieg leading in state delegates and Sen. Bernie Sanders leading in overall votes , with 62 % of precincts reporting .
Sen. Elizabeth Warren was third in delegates and former Vice President Joe Biden , who still leads in national polling , was fourth , well behind the top candidates .
While those results aren ’ t final — and the candidates have already moved on to New Hampshire — the chaotic Iowa caucuses offer a few lessons for those focused on health @ @ @ @ @ @ @ Buttigieg and Sanders .
Before the results were released , The Washington Post ’ s Paige Winfield Cunningham noted that entrance polling indicated that health care was the No .
1 issue for Iowa Democrats — and that Sanders and Buttigieg topped the field with health care voters : “ Forty-two percent of caucus-goers last night said health-care is their top issue , according to entrance polling conducted by The Post and Edison Media Research .
Of those voters , a quarter said they support Sanders while another quarter were Buttigieg fans.
” @ @ @ @ @ @ @ All ?
The entrance polling also found that 57 % of voters support replacing all private health insurance with a single government plan while 38 % oppose the idea .
“ The conservative wing of the Democratic Party has been telling us voters won ’ t swallow Medicare-for-all once they learn they will lose their insurance , ” Matt Bruenig , founder of People ’ s Policy Project , a social Democratic think tank , told the Post ’ s Jeff Stein .
“ But these results show voters are ready for Medicare-for-all @ @ @ @ @ @ @ ?
” Among those who oppose a single-payer plan , Buttigieg was the top candidate , followed by Joe Biden .
3 .
An opening for GOP critics of Democratic health care plans .
The delay in reporting caucus results , and technical and user issues with the app developed to deliver those numbers , led President Trump and others to question Democrats ’ ability to govern .
Trump tweeted that the Democratic caucuses were an “ unmitigated disaster ” and brought up the troubled launch of the Obamacare website .
Trump campaign @ @ @ @ @ @ @ It would be natural for people to doubt the fairness of the process , ” he said .
“ And these are the people who want to run our entire health care system ?
” Conservative Washington Post columnist Marc Thiessen echoed that point : “ If you liked the Iowa caucuses , you ’ ll love government-run health care .
The same party that could not manage calculating the votes of about 200,000 Iowa caucus-goers wants you to trust them with managing one-tenth of the U.S. economy .
”

Partial results from Monday night’s Iowa caucuses, released late Tuesday afternoon, show Pete Buttigieg leading in state delegates and Sen. Bernie Sanders leading in overall votes, with 62% of precincts reporting.
Sen. Elizabeth Warren was third in delegates and former Vice President Joe Biden, who still leads in national polling, was fourth, well behind the top candidates.
While those results aren’t final — and the candidates have already moved on to New Hampshire — the chaotic Iowa caucuses offer a few lessons for those focused on health care:
1. A boost for Buttigieg and Sanders. Before the results were released, The Washington Post’s Paige Winfield Cunningham noted that entrance polling indicated that health care was the No. 1 issue for Iowa Democrats — and that Sanders and Buttigieg topped the field with health care voters: “Forty-two percent of caucus-goers last night said health-care is their top issue, according to entrance polling conducted by The Post and Edison Media Research. Of those voters, a quarter said they support Sanders while another quarter were Buttigieg fans.”
2. A win for Medicare for All? The entrance polling also found that 57% of voters support replacing all private health insurance with a single government plan while 38% oppose the idea. “The conservative wing of the Democratic Party has been telling us voters won’t swallow Medicare-for-all once they learn they will lose their insurance,” Matt Bruenig, founder of People’s Policy Project, a social Democratic think tank, told the Post’s Jeff Stein. “But these results show voters are ready for Medicare-for-all. What more is there to say?” Among those who oppose a single-payer plan, Buttigieg was the top candidate, followed by Joe Biden.
3. An opening for GOP critics of Democratic health care plans. The delay in reporting caucus results, and technical and user issues with the app developed to deliver those numbers, led President Trump and others to question Democrats’ ability to govern. Trump tweeted that the Democratic caucuses were an “unmitigated disaster” and brought up the troubled launch of the Obamacare website. Trump campaign manager Brad Parscale piled on. “It would be natural for people to doubt the fairness of the process,” he said. “And these are the people who want to run our entire health care system?” Conservative Washington Post columnist Marc Thiessen echoed that point: “If you liked the Iowa caucuses, you’ll love government-run health care. The same party that could not manage calculating the votes of about 200,000 Iowa caucus-goers wants you to trust them with managing one-tenth of the U.S. economy.”


thefiscaltimes--2020-02-03--Bloomberg Proposes $5 Trillion in Taxes on the Rich, Corporations

Michael Bloomberg released a tax plan Saturday that aims to raise $ 5 trillion from high-income households and corporations over 10 years to pay for new spending on education , infrastructure and climate change .
• The top income tax rate for individuals would return to 39.6 % , up from the 37 % imposed by the 2017 Republican tax cuts .
• Incomes over $ 5 million would face a 5 % surtax , raising the top rate to 44.6 % .
The Bloomberg campaign says this would affect less than 0.1 % of taxpayers .
• High-income earners @ @ @ @ @ @ @ higher rates imposed on ordinary income .
• The stepped-up basis for inheritances would be eliminated , with capital gains taxed at death .
• The 20 % pass-through deduction would be eliminated , as would the carried-interest loophole .
• The corporate tax rate would increase to 28 % , up from the 21 % imposed in 2017 .
• The IRS would receive increased funding to focus on unpaid taxes .
As The New York Times ’ Jim Tankersley and Alexander Burns note , Bloomberg ’ s plan “ would almost @ @ @ @ @ @ @ In a statement , Bloomberg addressed that point , saying , “ I will also pay more in taxes to make sure all Americans have the same opportunities I did .
That ’ s only right.
” At the same time , the proposal avoids the wealth taxes that have been proposed by some Democratic candidates .
Bloomberg , worth an estimated $ 60 billion , reportedly believes that a wealth tax would be unconstitutional .
Bloomberg ’ s campaign said that while he sees the current $ 1 trillion annual deficit as @ @ @ @ @ @ @ think it ’ s urgent and wants to use the proposed tax revenues to pay for new programs .
“ Those investments require new revenue - and a fairer , more progressive tax system that asks wealthy Americans like me to pay more , ” Bloomberg said .
The bottom line : The tax proposal shows how far the tax debate has moved in the Democratic party .
“ Bloomberg ’ s proposals are the latest sign that progressives are winning the debate over taxes , inequality and the economy , ” former @ @ @ @ @ @ @ told The Wall Street Journal .

Michael Bloomberg released a tax plan Saturday that aims to raise $5 trillion from high-income households and corporations over 10 years to pay for new spending on education, infrastructure and climate change.
Some details:
The top income tax rate for individuals would return to 39.6%, up from the 37% imposed by the 2017 Republican tax cuts.
Incomes over $5 million would face a 5% surtax, raising the top rate to 44.6%. The Bloomberg campaign says this would affect less than 0.1% of taxpayers.
High-income earners would pay capital gains taxes at the higher rates imposed on ordinary income.
The stepped-up basis for inheritances would be eliminated, with capital gains taxed at death.
The 20% pass-through deduction would be eliminated, as would the carried-interest loophole.
The corporate tax rate would increase to 28%, up from the 21% imposed in 2017.
The IRS would receive increased funding to focus on unpaid taxes.
As The New York Times’ Jim Tankersley and Alexander Burns note, Bloomberg’s plan “would almost certainly raise his personal tax bill.” In a statement, Bloomberg addressed that point, saying, “I will also pay more in taxes to make sure all Americans have the same opportunities I did. That’s only right.”
At the same time, the proposal avoids the wealth taxes that have been proposed by some Democratic candidates. Bloomberg, worth an estimated $60 billion, reportedly believes that a wealth tax would be unconstitutional.
Bloomberg’s campaign said that while he sees the current $1 trillion annual deficit as a problem, he doesn’t think it’s urgent and wants to use the proposed tax revenues to pay for new programs. “Those investments require new revenue - and a fairer, more progressive tax system that asks wealthy Americans like me to pay more,” Bloomberg said.
The bottom line: The tax proposal shows how far the tax debate has moved in the Democratic party. “Bloomberg’s proposals are the latest sign that progressives are winning the debate over taxes, inequality and the economy,” former Beto O’Rourke adviser Brendan Duke told The Wall Street Journal.


thefiscaltimes--2020-02-07--What to Look For in Trump’s 2021 Budget: CBPP

President Trump ’ s agenda for a possible second term is still on the drawing board , according to The Wall Street Journal ’ s Andrew Restucci , and aides are reportedly in the early stages of drafting policies addressing a variety of issues , including prescription drug prices , infrastructure , immigration reform , tax cuts and deficit reduction .
We may get some clues about the still-forming agenda when the White House releases its 2021 budget request early next week .
Analysts at the Center on Budget and Policy Priorities on Friday highlighted five key issues that could @ @ @ @ @ @ @ the next fiscal year — and potentially the next five years , should Trump win reelection .
1 .
Some kind of health care plan : The White House is backing a lawsuit that would invalidate the Affordable Care Act , potentially eliminating health coverage for 20 million people and ending protections for pre-existing conditions .
The administration says it has a plan to deal with those issues , and the budget could provide some details , which have been lacking thus far .
2 .
Slashing discretionary spending ?
Trump ’ s @ @ @ @ @ @ @ 10 years and his third budget did so over 15 years , in large part by slashing non-defense discretionary spending .
But Treasury Secretary Steven Mnuchin said this week that the 2021 budget would not reach balance within the 10 year window , though he did say the deficit would be reduced “ significantly.
” Mnuchin also blamed the current $ 1 trillion deficit on excess spending rather than tax cuts , which he once again claimed would pay for themselves .
Next week ’ s release should reveal just how deep the @ @ @ @ @ @ @ be — which could be a tricky issue in an election year .
3 .
Cutting the safety net : Trump ’ s previous budgets have outlined deep cuts for programs that assist low-income households , including , for example , a $ 220 billion reduction in the main food assistance program over 10 years .
The White House has largely failed to enact its cuts through legislation but is pushing through some reductions via executive action .
The budget will likely indicate the administration ’ s level of interest in continuing to @ @ @ @ @ @ @ Rethinking infrastructure : Last year ’ s budget request referred to a $ 1 trillion infrastructure plan , although the details were a bit hazy and it would have cut federal spending on infrastructure in the long run .
The administration may reconsider the issue with an eye on the election .
5 .
Tax cuts and inequality : The 2017 tax cuts overwhelmingly benefited upper-income households , exacerbating income inequality .
The individual tax cuts are set to expire in 2026 , and the budget request will reveal if the administration continues @ @ @ @ @ @ @ date .

President Trump’s agenda for a possible second term is still on the drawing board, according to The Wall Street Journal’s Andrew Restucci, and aides are reportedly in the early stages of drafting policies addressing a variety of issues, including prescription drug prices, infrastructure, immigration reform, tax cuts and deficit reduction.
We may get some clues about the still-forming agenda when the White House releases its 2021 budget request early next week. Analysts at the Center on Budget and Policy Priorities on Friday highlighted five key issues that could signal the administration’s agenda for the next fiscal year — and potentially the next five years, should Trump win reelection.
1. Some kind of health care plan: The White House is backing a lawsuit that would invalidate the Affordable Care Act, potentially eliminating health coverage for 20 million people and ending protections for pre-existing conditions. The administration says it has a plan to deal with those issues, and the budget could provide some details, which have been lacking thus far.
2. Slashing discretionary spending? Trump’s first two budgets eliminated the deficit over 10 years and his third budget did so over 15 years, in large part by slashing non-defense discretionary spending. But Treasury Secretary Steven Mnuchin said this week that the 2021 budget would not reach balance within the 10 year window, though he did say the deficit would be reduced “significantly.” Mnuchin also blamed the current $1 trillion deficit on excess spending rather than tax cuts, which he once again claimed would pay for themselves. Next week’s release should reveal just how deep the proposed cuts to the discretionary budget will be — which could be a tricky issue in an election year.
3. Cutting the safety net: Trump’s previous budgets have outlined deep cuts for programs that assist low-income households, including, for example, a $220 billion reduction in the main food assistance program over 10 years. The White House has largely failed to enact its cuts through legislation but is pushing through some reductions via executive action. The budget will likely indicate the administration’s level of interest in continuing to cut back those programs.
4. Rethinking infrastructure: Last year’s budget request referred to a $1 trillion infrastructure plan, although the details were a bit hazy and it would have cut federal spending on infrastructure in the long run. The administration may reconsider the issue with an eye on the election.
5. Tax cuts and inequality: The 2017 tax cuts overwhelmingly benefited upper-income households, exacerbating income inequality. The individual tax cuts are set to expire in 2026, and the budget request will reveal if the administration continues to support maintaining the cuts past that date.


thefiscaltimes--2020-02-06--Point-Counterpoint: Is the Trump Administration Cutting Medicaid?

The Trump administration last week announced major changes to Medicaid , the federal-state health care plan for the poor .
The new guidance invites states to opt-in to block grants that provide capped federal payments for a subset of beneficiaries in exchange for increased state flexibility to make changes to their Medicaid programs , including eligibility standards and benefits .
“ It ’ s the administration ’ s latest move to reconfigure Medicaid to discourage enrollment by able-bodied adults and prioritize care for the most vulnerable , ” The Washington Post ’ s Paige Winfield Cunningham wrote last week .
@ @ @ @ @ @ @ “ Healthy Adult Opportunity ” ( HAO ) , has come under heavy criticism from opponents who charge that it ’ s just another example of Trump officials seeking to curtail Obamacare expansion and reduce health care coverage .
So is the Trump administration slashing Medicaid ?
In two new Washington Post op-eds , the administration 's top Medicaid official and a leading health care expert provide very different answers : No , the administration is not cutting Medicaid .
“ Let me be clear : Fearmongering notwithstanding , HAO does not cut @ @ @ @ @ @ @ the administrator of the Centers for Medicare and Medicaid Services , writes .
“ This optional demonstration continues federal funding to states based on their historical spending with a reasonable growth rate.
” Verma argues that Medicaid , as the largest or second-largest budget item for states , crowds out spending on other priorities , from public safety to infrastructure to education .
And with the cost of long-term care projected to rise dramatically over the coming decades , the viability of Medicaid faces a threat .
“ We shouldn ’ t have @ @ @ @ @ @ @ get on a wait list for services because we ’ re diverting precious resources to cover someone who potentially doesn ’ t qualify , ” Verma says .
“ HAO can help states prioritize these finite dollars for those who need them most.
” The administration ’ s policy will give states the ability to design solutions that meet their needs , Verma argues , while still making them accountable for adhering to federal standards .
On top of that , given that the new policy is optional and potentially affects only a @ @ @ @ @ @ @ adults who aren ’ t disabled — those critics “ railing against the Trump administration ’ s ‘ cuts ’ to the Medicaid program are railing against a policy that doesn ’ t exist.
” Yes , the Trump administration is trying to gut Medicaid .
“ There ’ s no mistaking that the Trump administration is moving to transform Medicaid from an entitlement program covering all the poor into a selective welfare program funded by fixed and limited block grants — a shift that , over time , could starve the program @ @ @ @ @ @ @ , a professor of law at the University of Michigan and supporter of the Affordable Care Act .
The structure of the Trump program incentivizes states to be stingy with their Medicaid programs so that they can keep more federal dollars and channel them to other health programs .
“ Pruning the Medicaid rolls will thus yield a financial windfall for them , ” Bagley says .
He adds : “ The agenda here isn ’ t subtle .
Republicans see ‘ block granting ’ Medicaid — turning it into a fixed yearly @ @ @ @ @ @ @ to meet needs — as a way to limit the federal government ’ s obligations to the poor .
There ’ s a clear parallel to 1990s-era welfare reform .
In 1996 , President Bill Clinton cut a deal with Republicans to transform cash assistance to the indigent into block grants to states .
… The size of those block grants hasn ’ t budged in more than two decades .
In real terms , they ’ re worth about one-third less than they initially were , even as the U.S. population has @ @ @ @ @ @ @ ’ s op-ed here and Bagley ’ s here .
And you can find a new Kaiser Family Foundation report on the implications of the Trump policy here .

The Trump administration last week announced major changes to Medicaid, the federal-state health care plan for the poor. The new guidance invites states to opt-in to block grants that provide capped federal payments for a subset of beneficiaries in exchange for increased state flexibility to make changes to their Medicaid programs, including eligibility standards and benefits.
“It’s the administration’s latest move to reconfigure Medicaid to discourage enrollment by able-bodied adults and prioritize care for the most vulnerable,” The Washington Post’s Paige Winfield Cunningham wrote last week.
The plan, which the administration calls “Healthy Adult Opportunity” (HAO), has come under heavy criticism from opponents who charge that it’s just another example of Trump officials seeking to curtail Obamacare expansion and reduce health care coverage.
So is the Trump administration slashing Medicaid? In two new Washington Post op-eds, the administration's top Medicaid official and a leading health care expert provide very different answers:
No, the administration is not cutting Medicaid. “Let me be clear: Fearmongering notwithstanding, HAO does not cut Medicaid funding,” Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, writes. “This optional demonstration continues federal funding to states based on their historical spending with a reasonable growth rate.”
Verma argues that Medicaid, as the largest or second-largest budget item for states, crowds out spending on other priorities, from public safety to infrastructure to education. And with the cost of long-term care projected to rise dramatically over the coming decades, the viability of Medicaid faces a threat. “We shouldn’t have to tell someone with a disability to get on a wait list for services because we’re diverting precious resources to cover someone who potentially doesn’t qualify,” Verma says. “HAO can help states prioritize these finite dollars for those who need them most.”
The administration’s policy will give states the ability to design solutions that meet their needs, Verma argues, while still making them accountable for adhering to federal standards. On top of that, given that the new policy is optional and potentially affects only a portion of the Medicaid population — working-age adults who aren’t disabled — those critics “railing against the Trump administration’s ‘cuts’ to the Medicaid program are railing against a policy that doesn’t exist.”
Yes, the Trump administration is trying to gut Medicaid. “There’s no mistaking that the Trump administration is moving to transform Medicaid from an entitlement program covering all the poor into a selective welfare program funded by fixed and limited block grants — a shift that, over time, could starve the program of funding,” writes Nicholas Bagley, a professor of law at the University of Michigan and supporter of the Affordable Care Act.
The structure of the Trump program incentivizes states to be stingy with their Medicaid programs so that they can keep more federal dollars and channel them to other health programs. “Pruning the Medicaid rolls will thus yield a financial windfall for them,” Bagley says. He adds:
“The agenda here isn’t subtle. Republicans see ‘block granting’ Medicaid — turning it into a fixed yearly payment rather than one that automatically rises to meet needs — as a way to limit the federal government’s obligations to the poor. There’s a clear parallel to 1990s-era welfare reform. In 1996, President Bill Clinton cut a deal with Republicans to transform cash assistance to the indigent into block grants to states. … The size of those block grants hasn’t budged in more than two decades. In real terms, they’re worth about one-third less than they initially were, even as the U.S. population has swelled by 60 million.”
Read Verma’s op-ed here and Bagley’s here. And you can find a new Kaiser Family Foundation report on the implications of the Trump policy here.


thefiscaltimes--2020-02-10--Cut Red Tape to Help Rein in Federal Deficits

The Budget and Economic Outlook report published late last month by the Congressional Budget Office ( CBO ) should set off alarm bells , as it predicts trillion-dollar annual deficits for the foreseeable future and a level of federal public debt set to hit 180 percent of GDP in 2050 .
The U.S. fiscal situation appears to be rapidly deteriorating , too .
CBO estimates that the deficit for the coming decade will be $ 160 billion more than the agency had predicted just last August .
To rein in budget deficits , lawmakers traditionally argue for higher tax rates @ @ @ @ @ @ @ .
However , economists have long noted how broad-based tax increases and ad-hoc spending cuts can dampen economic growth .
Even more problematic is that these policies are deeply unpopular , meaning both options appear off the table for the foreseeable future .
Fortunately , there remains another , often-overlooked option : Regulatory reform is a useful supplement to the more traditional ways of closing a budget gap .
Red tape impacts the government ’ s finances both directly and indirectly .
Burdensome regulations require costly administrators to write and enforce .
This @ @ @ @ @ @ @ eat into the profits of businesses and by extension into the wages of the employees who work for them .
That drives down tax collections .
Regulation also indirectly impacts productivity , by making it harder , more expensive and sometimes even impossible to produce the products that consumers want .
This lowers economic growth and worsens the government ’ s fiscal position .
A 2016 study for the Mercatus Center , the free-market research center where we work , estimated that federal regulations cost the economy $ 4 trillion in the year @ @ @ @ @ @ @ potential of the U.S. economy , productivity-enhancing economic growth can reduce fiscal deficits through several channels .
First , robust economic growth increases tax revenues by driving up the incomes of workers and pushing some taxpayers into higher tax brackets .
Second , the use of programs such as unemployment insurance and food stamps decreases when the economy is expanding , so federal spending falls .
The difference between high productivity growth ( roughly what the United States experienced from 1996-2004 ) versus low productivity growth ( like the 1975-1990 economy ) is @ @ @ @ @ @ @ achieves high productivity growth for the next decade , per-person national income will be more than $ 9,000 higher in 2029 compared to a low productivity economy .
That equates to a $ 3.1 trillion difference in the national debt over the decade .
There are several regulatory reforms that could begin to improve the fiscal trajectory of the United States .
First , the budgetary effects of regulation should be tracked and scored by an entity like the CBO , and any obvious red tape that has a significant impact on government @ @ @ @ @ @ @ a clear and compelling reason to keep it .
Second , applying regulatory caps and setting reduction targets for the overall level of regulation will reduce regulatory burdens .
With this option , however , the magnitude of reductions will have to be substantial to have a discernable impact on the U.S. fiscal condition .
For example , Rhode Island recently trimmed its regulatory code by 31 % after setting an expiration date for all of its regulations .
The Canadian province of British Columbia cut its regulatory requirements roughly in half over @ @ @ @ @ @ @ from an economic laggard to one of Canada ’ s fastest growing provinces , all without sacrificing public health or the environment .
These are proven examples of jurisdictions that have successfully cut red tape , and Washington should follow their lead .
To date , President Trump has made some modest regulatory reductions , but cuts will have to be far more aggressive to have a long-term impact on the budget .
Other governments are also making progress .
Just last month , Governor Brad Little of Idaho set in motion a @ @ @ @ @ @ @ few years , regulators will have to repeal all rule chapters under their purview .
Any chapters they want to keep must be refiled as new regulations , justified with economic analysis .
Governor DeSantis of Florida recently directed agency heads to build sunset provisions into new regulations , thereby facilitating the removal of regulatory clutter down the road .
The recent CBO report reminds us that the U.S. fiscal outlook continues its downward spiral .
Lawmakers will inevitably return to the perpetual and important debate over raising taxes versus cutting spending .
@ @ @ @ @ @ @ the budget a little easier by also looking at regulatory reforms that increase growth through channels other than fiscal policy ?
James Broughel is a senior research fellow and Jack Salmon is a research assistant , both with the Mercatus Center at George Mason University .
They are coauthors of new Mercatus Center research on “ Cutting Red Tape to Cut the Deficit : An Innovative Approach to Balancing the Budget .
”

The Budget and Economic Outlook report published late last month by the Congressional Budget Office (CBO) should set off alarm bells, as it predicts trillion-dollar annual deficits for the foreseeable future and a level of federal public debt set to hit 180 percent of GDP in 2050. The U.S. fiscal situation appears to be rapidly deteriorating, too. CBO estimates that the deficit for the coming decade will be $160 billion more than the agency had predicted just last August.
To rein in budget deficits, lawmakers traditionally argue for higher tax rates, broader tax bases and spending cuts. However, economists have long noted how broad-based tax increases and ad-hoc spending cuts can dampen economic growth. Even more problematic is that these policies are deeply unpopular, meaning both options appear off the table for the foreseeable future.
Fortunately, there remains another, often-overlooked option: Regulatory reform is a useful supplement to the more traditional ways of closing a budget gap.
Red tape impacts the government’s finances both directly and indirectly. Burdensome regulations require costly administrators to write and enforce. This drives up government spending. Compliance costs eat into the profits of businesses and by extension into the wages of the employees who work for them. That drives down tax collections.
Regulation also indirectly impacts productivity, by making it harder, more expensive and sometimes even impossible to produce the products that consumers want. This lowers economic growth and worsens the government’s fiscal position. A 2016 study for the Mercatus Center, the free-market research center where we work, estimated that federal regulations cost the economy $4 trillion in the year 2012 alone.
By unshackling the innovative potential of the U.S. economy, productivity-enhancing economic growth can reduce fiscal deficits through several channels. First, robust economic growth increases tax revenues by driving up the incomes of workers and pushing some taxpayers into higher tax brackets. Second, the use of programs such as unemployment insurance and food stamps decreases when the economy is expanding, so federal spending falls.
The difference between high productivity growth (roughly what the United States experienced from 1996-2004) versus low productivity growth (like the 1975-1990 economy) is not insignificant. If the United States achieves high productivity growth for the next decade, per-person national income will be more than $9,000 higher in 2029 compared to a low productivity economy. That equates to a $3.1 trillion difference in the national debt over the decade.
There are several regulatory reforms that could begin to improve the fiscal trajectory of the United States. First, the budgetary effects of regulation should be tracked and scored by an entity like the CBO, and any obvious red tape that has a significant impact on government spending should be scrapped unless there is a clear and compelling reason to keep it.
Second, applying regulatory caps and setting reduction targets for the overall level of regulation will reduce regulatory burdens. With this option, however, the magnitude of reductions will have to be substantial to have a discernable impact on the U.S. fiscal condition.
For example, Rhode Island recently trimmed its regulatory code by 31% after setting an expiration date for all of its regulations. The Canadian province of British Columbia cut its regulatory requirements roughly in half over the last two decades. It went from an economic laggard to one of Canada’s fastest growing provinces, all without sacrificing public health or the environment.
These are proven examples of jurisdictions that have successfully cut red tape, and Washington should follow their lead. To date, President Trump has made some modest regulatory reductions, but cuts will have to be far more aggressive to have a long-term impact on the budget.
Other governments are also making progress. Just last month, Governor Brad Little of Idaho set in motion a policy of “zero-based regulation.” Every few years, regulators will have to repeal all rule chapters under their purview. Any chapters they want to keep must be refiled as new regulations, justified with economic analysis. Governor DeSantis of Florida recently directed agency heads to build sunset provisions into new regulations, thereby facilitating the removal of regulatory clutter down the road.
The recent CBO report reminds us that the U.S. fiscal outlook continues its downward spiral. Lawmakers will inevitably return to the perpetual and important debate over raising taxes versus cutting spending. Why not make the job of balancing the budget a little easier by also looking at regulatory reforms that increase growth through channels other than fiscal policy?
James Broughel is a senior research fellow and Jack Salmon is a research assistant, both with the Mercatus Center at George Mason University. They are coauthors of new Mercatus Center research on “Cutting Red Tape to Cut the Deficit: An Innovative Approach to Balancing the Budget.”


thefiscaltimes--2020-02-07--Bernie May Be Leading, but Don't Bet on Medicare for All, J.P Morgan Says

Sen. Bernie Sanders may have emerged from the muddled Iowa caucuses as the apparent frontrunner in the Democratic presidential primary race , with both FiveThirtyEight.com and prediction markets giving him the best odds of winning the party ’ s nomination .
Even so , analysts at J.P. Morgan say the chances that Sanders ’ major policy proposals , including Medicare for All and a wealth tax , get enacted in the foreseeable future are extremely slim — less than 5 % .
“ [ F ] or Medicare-for-all or a wealth tax to become reality , it would require Democrats @ @ @ @ @ @ @ of Congress , and it would require them to assemble either a large-enough majority to avoid the Senate filibuster or a committed-enough majority to triumph in a bare-knuckled procedural fight .
However , the other Democratic presidential candidates have already shown their ambivalence toward dramatic changes like Medicare-for-All , and more conservative Democratic senators would likely be even more skeptical .
It thus seems unlikely for all of these stars to align at once—a Sanders/Warren nomination , a Democratic presidential and congressional sweep , and an upswell of support around currently-controversial policies .
@ @ @ @ @ @ @ policy changes like this at less than 5 % .
”

Sen. Bernie Sanders may have emerged from the muddled Iowa caucuses as the apparent frontrunner in the Democratic presidential primary race, with both FiveThirtyEight.com and prediction markets giving him the best odds of winning the party’s nomination.
Even so, analysts at J.P. Morgan say the chances that Sanders’ major policy proposals, including Medicare for All and a wealth tax, get enacted in the foreseeable future are extremely slim — less than 5%.
J.P. Morgan economist Jesse Edgerton writes in a note to clients:
“[F]or Medicare-for-all or a wealth tax to become reality, it would require Democrats to sweep the presidency and both houses of Congress, and it would require them to assemble either a large-enough majority to avoid the Senate filibuster or a committed-enough majority to triumph in a bare-knuckled procedural fight. However, the other Democratic presidential candidates have already shown their ambivalence toward dramatic changes like Medicare-for-All, and more conservative Democratic senators would likely be even more skeptical. It thus seems unlikely for all of these stars to align at once—a Sanders/Warren nomination, a Democratic presidential and congressional sweep, and an upswell of support around currently-controversial policies. We thus put the probability of dramatic policy changes like this at less than 5%.”


thefiscaltimes--2020-02-06--Iraq War Has Cost Nearly $2 Trillion So Far: Analysis

The bill for the 16-year war in Iraq comes to about $ 1.92 trillion through the end of 2019 , says Neta C. Crawford , a political scientist who helps run the Cost of Wars project at Brown University .
• $ 838 billion for “ emergency ” and “ overseas contingency operation ” funding in Iraq .
• $ 382 billion in increases related to Iraq in the base budget of the Pentagon ( out of a total $ 800 billion in increases since 9/11 ) .
• $ 59 billion for State Department and USAID efforts in Iraq @ @ @ @ @ @ @ for the care of veterans who served in Iraq .
• $ 444 billion in interest on federal borrowing to pay for the Iraq war effort .
Crawford says that spending in Iraq has fallen off sharply since its peak of roughly $ 140 billion in 2008 , with the Pentagon requesting less than $ 10 billion in 2020 for Operation Inherent Resolve in Iraq and Syria .
However , Crawford notes , “ that budget may already be blown .
Earlier this month , the US sent more troops into a war @ @ @ @ @ @ @ down .
”

The bill for the 16-year war in Iraq comes to about $1.92 trillion through the end of 2019, says Neta C. Crawford, a political scientist who helps run the Cost of Wars project at Brown University.
The cost breakdown:
$838 billion for “emergency” and “overseas contingency operation” funding in Iraq.
$382 billion in increases related to Iraq in the base budget of the Pentagon (out of a total $800 billion in increases since 9/11).
$59 billion for State Department and USAID efforts in Iraq and Syria.
$199 billion for the care of veterans who served in Iraq.
$444 billion in interest on federal borrowing to pay for the Iraq war effort.
Crawford says that spending in Iraq has fallen off sharply since its peak of roughly $140 billion in 2008, with the Pentagon requesting less than $10 billion in 2020 for Operation Inherent Resolve in Iraq and Syria. However, Crawford notes, “that budget may already be blown. Earlier this month, the US sent more troops into a war zone that was supposed to be winding down.”


thefiscaltimes--2020-02-12--More Than 14% of Americans Struggled to Pay Medical Bills in 2018

About one in seven Americans reported belonging to a family that struggled to pay medical bills in 2018 , according @ @ @ @ @ the Centers for Disease Control and Prevention .
The percentage of people in families having @ @ @ @ @ over the past 12 months has dropped by 5.5 percentage points from 2011 to 2018 @ @ @ @ @ to 14.2 % .
`` Significant expenses for one family member may adversely affect the @ @ @ @ @ from the CDC 's National Center for Health Statistics wrote .
`` People who are @ @ @ @ @ medical bills may experience serious financial consequences , such as having problems with paying for @ @ @ @ @ housing , and filing for bankruptcy . ''

About one in seven Americans reported belonging to a family that struggled to pay medical bills in 2018, according to a new report from the Centers for Disease Control and Prevention.
The percentage of people in families having problems paying their medical bills over the past 12 months has dropped by 5.5 percentage points from 2011 to 2018, falling from 19.7% to 14.2%.
"Significant expenses for one family member may adversely affect the whole family," researchers from the CDC's National Center for Health Statistics wrote. "People who are in families with problems paying medical bills may experience serious financial consequences, such as having problems with paying for food, clothing, or housing, and filing for bankruptcy."