Health Costs Continue to Slow, Improving Budget Outlook

March 9, 2015 at 5:16 pm

With health care cost growth continuing to slow, the Congressional Budget Office (CBO) now projects that federal health spending will be nearly $700 billion less over the 2011-2020 period than what CBO projected in January 2010 — even with the subsequent enactment of health reform (see figure).

Lower projected health care spending has markedly improved the budget outlook, with CBO projecting that federal budget deficits through 2025 will be about $400 billion less than it projected in January.

“The largest factor underlying that reduction,” CBO says of its lower deficit projections, “is a downward revision in projected growth in premiums for private health insurance, reflecting the fact that spending by private health insurers on health care and administration rose less in 2013 (the most recent year for which data are available) than in preceding years and by much less than [CBO and the Joint Committee on Taxation (JCT)] had expected for 2013.”

This slowdown in health costs affects the budget outlook in three major ways.… Read more

Few Disability Insurance Beneficiaries Could Support Themselves by Working

March 9, 2015 at 3:33 pm

The Social Security Disability Insurance (DI) program provides modest but vital benefits to workers who can no longer do substantial work due to a severe medical impairment.  Lawmakers will need to replenish DI’s trust fund by 2016 and may be tempted to curtail eligibility on the assumption that those affected could support themselves by working.  But a wide variety of evidence suggests that’s not the case.

DI not only permits but encourages beneficiaries to work.  The average benefit is only $1,165 a month — barely above the poverty line. … Read more

In Case You Missed It…

March 6, 2015 at 3:35 pm

This week on Off the Charts, we focused on health reform, the federal budget and taxes, state budgets and taxes, and jobs.

  • On health reform, Edwin Park described why a plan from three Republican senators to address health reform subsidies would likely make coverage less affordable for marketplace enrollees and he laid out the negative consequences of another plan from three key House Republicans. He also noted that the House plan acknowledges some benefits of the health reform law as it stands. 
Read more

Mapping State Funding Cuts for Higher Education

March 6, 2015 at 12:47 pm

Public colleges and universities have experienced major cuts in state funding since the Great Recession — something state lawmakers should consider as they grapple with tough budget decisions in coming months. Our new fact sheets show that, in almost every state, these funding cuts have led to tuition hikes. In some cases, they’ve also been accompanied by cuts in campus staff and programs that may reduce the quality of education for students.

As our 2014 paper explained, after adjusting for inflation:

  • Forty-eight states — all but Alaska and North Dakota — are spending less per student than they did in fiscal year 2008.
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States Reaping Consequences of Tax Decisions

March 6, 2015 at 11:12 am

In Minnesota, which raised income taxes on wealthy residents two years ago, revenues are surging beyond expectations, according to the state’s latest forecast.  In contrast, Kansas, Wisconsin, and North Carolina — which cut income taxes in recent years — face serious fiscal problems, despite the promises of tax-cut supporters.

Minnesota’s Governor Mark Dayton secured a package of tax measures that included a new, higher income tax bracket for high-income households (over $250,000 for a married couple), with the revenues going to expand access to full-day kindergarten and make preschool and college more affordable. … Read more

Today’s Jobs Report in Pictures

March 6, 2015 at 10:39 am

Today’s solid jobs report shows that private employers have added jobs every month for five straight years. Unemployment has dropped sharply, though it has room to fall further.  To herald a truly healthy labor market, however, labor force participation should be higher – it fell in February as more people stopped looking for work than found jobs – which will mean a larger share of Americans should have a job; fewer people should be working part time because they can’t find full-time work; fewer people should experience long spells of unemployment before finding work; and wages should be rising faster.… Read more

Critics’ Portrayal of Health Reform Doesn’t Match Reality

March 5, 2015 at 5:16 pm

As we explained yesterday, many of the benefits that three key House Republican committee chairs claim their health plan will offer are things that health reform already provides — and, in most cases, much more so than their plan likely would. Here’s another problem with their Wall Street Journal op-ed: its portrayal of health reform simply isn’t true. It portrays people “stuck” in health insurance they can’t afford, and paying for benefits they don’t want, just to avoid the penalty for not having coverage.… Read more

Building Momentum for Vital Tax Credit Provisions

March 5, 2015 at 10:19 am

Democratic lawmakers announced a series of important bills yesterday that would reward work and reduce poverty for low-income workers.

Senators Sherrod Brown (D-OH), a Finance Committee member, and Richard Durbin (D-IL), the Senate Minority Whip, announced the Working Families Tax Relief Act, which expands the Earned Income Tax Credit (EITC) for “childless workers” — adults without children and non-custodial parents — and makes permanent key provisions of the EITC and Child Tax Credit (CTC) that are set to expire at the end of 2017.… Read more

Lee-Rubio Tax Plan: Huge New Windfall at the Top, Lost Child Credits at the Bottom

March 4, 2015 at 5:06 pm

The new tax plan from Senators Mike Lee (R-UT) and Marco Rubio (R-FL) builds on Senator Lee’s 2014 plan and creates something that’s even more tilted — outrageously so — in favor of the country’s highest-income people and likely much more fiscally irresponsible.  And, like last year’s plan, it not only excludes most working-poor families from its new child tax credit but allows much of their existing child credit to disappear after 2017.

Last year’s plan lost $2.4 trillion of revenue over the first decade and gave its largest tax cuts, both in dollars and as a share of after-tax income, to people making more than $1 million a year, the Urban-Brookings Tax Policy Center found.… Read more

Wisconsin Law Would Tilt Playing Field Even More Against Workers

March 4, 2015 at 3:38 pm

My colleague Jared Bernstein recently addressed some of the canards around Wisconsin’s proposed “Right to Work” (RTW) law, which would dilute unions’ bargaining strength by making it harder for them to collect dues from the workers they represent.  The bill, which would make Wisconsin the 25th state with such a law, is part of an ongoing movement to weaken protections for workers attempting to bargain collectively — a movement that’s exacerbating the trend toward growing income inequality and wage stagnation.… Read more

House Republican Op-Ed Admits Benefits of Affordable Care Act

March 4, 2015 at 2:10 pm

What’s striking about the vague health plan that three key House Republicans — Education and Workforce Committee Chairman John Kline, Ways and Means Committee Chairman Paul Ryan, and Energy and Commerce Committee Chairman Fred Upton — outlined yesterday isn’t just the lack of critical details, but their language in describing it.  They imply that their plan will offer certain features that the Affordable Care Act (ACA) doesn’t when, in fact, the ACA already provides these benefits — and, in most cases, much more so than their plan likely would. … Read more

Ruling Against Health Reform Subsidies Would Be Wrong — and Harmful

March 4, 2015 at 5:00 am

As the Supreme Court hears oral arguments in King v. Burwell this morning, it’s critical that the Court recognize that the Affordable Care Act (ACA) provides premium tax credits for consumers in all states, as we’ve explained.  Invalidating the credits for people in states that didn’t create their own exchanges would be wrong from a legal perspective and would harm millions of Americans.

The ACA clearly states that if a state elects not to establish its own exchange, “the Secretary [of Health and Human Services] shall .… Read more