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More Health Care Questions

Exactly how do candidates like Senator Clinton plan on paying for their health care plans? The usual nonsense is to repeal some of the Bush tax cuts.

To help pay for the plan, Clinton would also eliminate the Bush tax cuts for those making over $250,000 and limit the amount employers can exclude from taxes for health care benefits paid for those making over $250,000.

Great, but the Bush tax cuts are going to be expiring soon. When you surf on over to the Congressional Budget Office and look at the various reports such as the Budget and Economic Outlook Update it notes that the Economic Growth and Tax Relief Reconciliation Act of 2001 will expire on January 1 of 2011. So where is all of this money going to come from?

In fact, current CBO publications take the expiration of the Bush tax cuts into consideration and that is one reason why the budget goes from deficits to surpluses in the not too distant future. If Senator Clinton is going to be spending a portion of that money on health care, what about all this nonsense about the budget deficit we’ve heard all these years?

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About Steve Verdon
Steve has a B.A. in Economics from the University of California, Los Angeles and attended graduate school at The George Washington University, leaving school shortly before staring work on his dissertation when his first child was born. He works in the energy industry and prior to that worked at the Bureau of Labor Statistics in the Division of Price Index and Number Research.

Comments

  1. Christopher says:

    Why are liberals like you so blind, Steve?

    The CBO also predicted that the Bush tax cuts would cost the treasury money. Did that happen? NO! Record amounts of revenue poured into the govt.’s coffers because of the tax cuts. (liberals like you still trying to figure that out) Now you turn around and repeat the liberal mantra that a tax INCREASE will actually INCREASE revenues, yet we know from past experience what will really happen: the economy under the democrats with increased taxes will slide into a recession and revenues will fall.

    How many times, Steve? How many times will we have to go over this again and again and again for you liberals to get it? It’s like you guys long for the US to be the new USSR.

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  2. Dave Schuler says:

    My goodness, Christopher, have you got a wrong number.

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  3. Tano says:

    So Steve (the liberal !! he he),

    Could you proovide some actual numbers? Like, for instance, how much additional revenue will the tax cut expiration generate, how big will the surpluses be, how much of that (if not more) would HillaryCare use up?

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  4. More Health Care Questions …

    You’ve been kicked (a good thing) – Trackback from ConservativeKicks.com…

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  5. Steve Verdon says:

    Tano,

    Given your propensity to wallow in ignorance; the CBO estimates that the expiration of the EGTRRA and the JGTRRA will boost tax receipts by at about 1.2% of GDP on average from the end of 2010 to 2017. For 2012, to pick a year, it is estimated that receipts will increase for this reason alone by $52 billion or about 0.3% of GDP. The projected surplus (by no means a certainty) is $62 billion.

    As for the costs of Clinton’s plan it is projected to cost around $100 billion each year (although I’ve seen numbers indicating the costs is $110 billion each year). In any event in 2012, Clinton’s plan would put the country back into the red. And would do so for the foreseeable future.

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  6. Tano says:

    Well Steve, you are quite the gentleman, eh?

    I am not quite sure I follow the logic here though. Given my propensity to wallow in ignorance, you provide me with your assessment of the numbers ?

    Does that mean that with your numbers I can continue that propensity to wallow in ignorance?

    Does that mean I should look elsewhere for numbers that might better inform?

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  7. Steve Verdon says:

    Well gee whiz Tano, after all your nasty comments you now think I’m being un-genetlemanly? Go f*ck yourself, please.

    I believe I have provided you with the numbers you have requested. The bottom line here is that Senator Clinton’s plan will worsen our deficit/fiscal situation, not make it better. If you happen to have some other numbers indicating the contrary, please let me know.

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  8. Tano says:

    Yes Steve, I do think you are very ungentlemanly, as many others have noted. And it severely impacts your persuasive effect, for it gives the impression that your hold on rational understanding is so tenuous that the slightest challange (or, in this case, a simple question) causes you to lose your equilibrium. Maybe some day you will figure that out.

    I dont have an alternative set of numbers, which is why I asked the question.

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  9. Christopher says:

    How do I have a wrong number, Dave? Republicans cut taxes, which results in MORE tax revenues. Liberals RAISE taxes and that results in less revenues and recessions. Clinton received the benefit of Reagan deafeating the Soviets, and cut the military drastically for his budget “surplus”. Bush W lowered taxes which raised revenues. How you liberals still like to argue this is beyond me and all reason.

    I will tell you one thing: a Clinton national health plan will raise taxes and raise deficits and increase the size of govt. and it will keep going up and Up and UPPPPPP.

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  10. Tano says:

    Christopher,

    You have the wrong number because you launched your rant at a guy, Steve, who is not in any sense a liberal. Not by a very long shot. That is what I think Dave was referring to.

    I, on the other hand, think you are completely out to lunch on the facts. After the Bush tax cuts, federal income tax receipts did, in fact, go DOWN in 2002, even further in 2003, and didnt start rising again till ’04, and didnt reach their ’00 level till ’06.

    Same happened back in the 80s. Recepts were down in 82 and 83, and only went back up in 84.

    When Clinton raised taxes, receipts went UP significantly, each and every year.

    Spend just a little time with the data (try the IRS), and you will quickly see what a fool you have made of yourself here.

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  11. Grewgills says:

    the CBO estimates that the expiration of the EGTRRA and the JGTRRA will boost tax receipts by at about 1.2% of GDP on average from the end of 2010 to 2017. For 2012, to pick a year, it is estimated that receipts will increase for this reason alone by $52 billion or about 0.3% of GDP.

    If on average it will increase tax receipts by 1.2% why pick a year when the increase is only 0.3%?
    Using the figures you found 1.2% would be 156 bill for 2012, more than paying for increased costs.
    Yes I know that the actual number for 2012 would be a loss, but that should be made up for by the correspondingly higher increases in tax receipts in later years.

    I have to echo Tano’s sentiment that the ad hominems and rude or snide comments only hurt the persuasiveness of any argument you are trying to make.

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  12. sam says:

    Well gee whiz Tano, after all your nasty comments you now think I’m being un-genetlemanly? Go f*ck yourself, please.

    Never thought I’d see something like this on JJs blog.

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  13. Christopher says:

    First of all, Tano, you cannot disavow Steve as a lib just because he isn’t a koolaid drinker like you.

    Secondly, Reagan and Bush each inherited recessions from their democratic predecessors, and Bush had 9/11 and the expectant recession that followed. You can’t blame the economic downturn on Bush! Anyway, after a recession OMG of course receipts are going to be down! The only question is what do you do to bring them up! Tax cuts. NOT tax increases. (still just too confusing for you libs, isn’t it?) (and Clinton tax increase paled in comparison to the Clinton billions in defense spending cuts as a result of Reagan defeating the Soviets).

    Finally, I am not a fool, tano. YOU are. Not because you disagree with the facts, but because you IGNORE the facts!

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  14. Andy says:

    Relax everyone. Christopher is a right wing christianist spoof, so you don’t have to take him at all seriously.

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  15. Tano says:

    Christopher,

    You claimed that the Bush tax cuts did not cost the Treasury money. And you were insistent on the point and you were wrong.

    You claimed that the Clinton tax increase led, as tax increases inevitably do, to a recession and falling revenues. Which, of course, is the opposite of what really happened.

    And you claim that Clinton’s defense cuts somehow offset the tax increases, which makes no sense. The issue is not defense spending, it would be spending overall. And overall spending went up in every year of the Clinton administration, as did reciepts (even more so – thus leading to shrinking deficits).

    Sorry bud, but the facts are there for you to see, if you so choose. Ranting about others ignoring data while shouting out totally false claims is pretty wierd.

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  16. Tano says:

    Oh, and since you seem intent on getting every single point wrong, lets not forget this gem:

    “Bush had 9/11 and the expectant recession that followed.”

    There was no recession following 9/11.

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  17. Christopher says:

    Tano,

    Placing words in my mouth doesn’t make you right.

    Plus, recession started while Clinton was in office didn’t end till after 9/11.

    How is it so hard for you liberals to accept facts? Why don’t you guys just move to N. Korea, the communist mecca? Why do you want to destroy America by making it an even bigger welfare state? And if you think we need to raise taxes so bad, why don’t any of you send in extra money each year to the US treas? Hmmm…good question. If all libs did that just think of all the presumed good it would do!

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  18. Tano says:

    “Plus, recession started while Clinton was in office didn’t end till after 9/11.”

    Which is not what you originally wrote. How can you claim that I put words in your mouth? Direct quote from your comment – “Bush had 9/11 and the expectant recession that followed.” Another direct and ridiculous quote from your comments above – “Now you turn around and repeat the liberal mantra that a tax INCREASE will actually INCREASE revenues, yet we know from past experience what will really happen:”

    Yes Christopher, we do know what really happened and at some point you will just have to face reality.

    “How is it so hard for you liberals to accept facts?”

    We have discussed a number of facts by now, and your claims have been shown wrong in every single case. You offer no facts to support your claim (since there are none), nor do you refute my counter-claims (since you can’t). All you do is repeat your bizarre claim that it is others, liberals, who are ignoring facts.

    You certainly are not fooling anyone, but it is an interesting question why you seem so compelled to fool yourself.

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  19. Christopher says:

    Um, you want facts? How about the money pouring into the treasury? That is one hard fact to get around!

    Go to North Korea. I am sure your communist buddies will welcome you with open arms. Of course, you only are alloted 20 grains of rice a day. Great system you liberals want!

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  20. Steve Verdon says:

    Yes Steve, I do think you are very ungentlemanly, as many others have noted. And it severely impacts your persuasive effect, for it gives the impression that your hold on rational understanding is so tenuous that the slightest challange (or, in this case, a simple question) causes you to lose your equilibrium. Maybe some day you will figure that out.

    The slightest challenge? I’m sorry Tano, my perception of you is somebody who will not change their beliefs when confronted with data that indicates you should do so. So I see no benefit to trying to change your mind, because I don’t see that it can be changed. When it comes to your beliefs you are as dogmatic as Christopher.

    By the way, you’ll note I have actually have helpful exchanges with Grewgills on this topic. With you, you’ve exhausted my stock of politeness.

    Grewgills,

    If on average it will increase tax receipts by 1.2% why pick a year when the increase is only 0.3%?

    The 1.2% is the average over the time span, later years will likely have larger increases. Plus, if Hillary does get elected, and if she does keep her campaign promise and implement this plan it will likely be in 2012 that it will be in full effect.

    Using the figures you found 1.2% would be 156 bill for 2012, more than paying for increased costs.

    Yes, but the estimated increase in revenue for 2012 is only 0.3% of GDP. Hence it wont cover the increase. The projected surplus for 2012 is $62 billion under current law. Hillary’s plan would put us back in the red anywhere from $40 to $50 billion.

    Yes I know that the actual number for 2012 would be a loss, but that should be made up for by the correspondingly higher increases in tax receipts in later years.

    Well, lets see if we go with the CBO’s numbers from 2009 to 2017 the sum of the deficits/surpluses for that time frame is -$189 billion. Now, if Senator Clinton’s plan costs only $50 billion a year then that will add roughly a half trillion to the total deficit for that time frame, or a deficit of around $689 billion.

    Christopher,

    There was no recession following 9/11.

    As much as it pains me to defend Tano, this is actually quite true. The NBER, until lately headed up by Martin Feldstein–no liberal by any means–pegged the end of the recession one month after 9/11, IIRC.

    As for the claim that the recession started under Clinton, while I think there is some evidence supporting that assertion, the current view is that the recession started about a month after Bush took office.

    Um, you want facts? How about the money pouring into the treasury? That is one hard fact to get around!

    It isn’t pouring in fast enough from a sound fiscal stand point. With the fiscal problems posed by Medicare, to a lesser extent Social Security, and now possibly Hillary Care 2.0, it isn’t good.

    Tano,

    You claimed that the Clinton tax increase led, as tax increases inevitably do, to a recession and falling revenues. Which, of course, is the opposite of what really happened.

    No, and yes. No, Clinton’s tax increase did not end any recession. The recession ended in the summer of 1992, again according to the NBER. Yes, tax revenues increased because Clinton’s tax increase was a relatively mild one and took effect right when the economy really started to get going. Fortuitous timing, really.

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  21. Tano says:

    Steve,

    I am in the business of changing my mind when given evidence to do so. In the case here however, I had no evidence either way, and simply asked you a question.

    As to my exchange with Christopher.
    “Clinton’s tax increase did not end any recession”

    I didn’t say that they did. I said they led to the opposite of a recession, an expansion. Contrary to what all the supply-siders predicted.

    “tax revenues increased because Clinton’s tax increase was a relatively mild one ”

    Oh! I thought it was the biggest tax increase in the history of the universe. Damn, I gotta stop listening to Republicans :)

    Gee. Well-timed tax increases at an appropriate scale to lead toward sufficient revenue to balance the federal budget, while being consistent with a robust extended economic expansion. Where can I sign up for that?

    Anyway, just wondering, would you accept that data point as evidence that we were not on the right side of the Laffer curve?

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  22. Grewgills says:

    Well, lets see if we go with the CBO’s numbers from 2009 to 2017 the sum of the deficits/surpluses for that time frame is -$189 billion. Now, if Senator Clinton’s plan costs only $50 billion a year then that will add roughly a half trillion to the total deficit for that time frame, or a deficit of around $689 billion.

    Fair enough in a way, but that wasn’t the original question. The original question was would removing that particular tax cut pay for her health plan.
    I took a quick look through some CBO publications and did not find the year to year breakdown you did (the link would be appreciated). I did find the estimated cost for 2007 ($165 billion) and the projected cost if extended for 10 years (almost 3 trillion). In order for sunsetting this particular tax cut to not pay for any of the health care plans they would have to cost on the order of 3 trillion over 10 years. That does not appear to be the case.

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