President Obama's policies: big savings and smart spending

[ProSense]

Reposting this:

The biggest argument against the sequester is that cutting the deficit doesn't mean destroying social programs. In fact, smart cuts and spending is key to reducing the deficit and debt.

First, these are relevant:

CHART: Remember When Poor People Saw Their Incomes Grow Faster Than Rich People?
http://www.democraticunderground.com/10022417514

Capital Gains Tax Cuts ‘By Far’ The Biggest Contributor To Growth In Income Inequality, Study Finds
http://www.democraticunderground.com/10022407211

President Obama actually did something to address the inequality, raising taxes on the top one percent (higher than the Clinton rate with the health care tax included) and increasing capital gains to its highest level since the mid 90s. The total effect is significant.

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Perhaps the best prism through which to see the Democrats’ gains is inequality. In the 2008 campaign, Mr. Obama said that his top priority as president would be to “create bottom-up economic growth” and reduce inequality...In the 2009 stimulus, he insisted on making tax credits “fully refundable,” so that even people who did not make enough to pay much federal tax would benefit. The 2010 health care law overhaul was probably the biggest attack on inequality since it began rising in the 1970s, increasing taxes on businesses and the rich to pay for health insurance largely for the middle class.

http://www.nytimes.com/2013/01/03/us/politics/for-obama-fiscal-deal-is-a-victory-that-also-holds-risks.html

The biggest progressive gripe about the legislation is that Mr. Obama extracted less revenue from the affluent than expected — about $600 billion versus $800 billion over the next decade. In perspective, however, this isn’t that big a deal. Put it this way: A reasonable estimate is that gross domestic product over the next 10 years will be around $200 trillion. So if the revenue take had matched expectations, it would still have amounted to only 0.4 percent of G.D.P.; as it turned out, this was reduced to 0.3 percent. Either way, it wouldn’t make much difference in the fights over revenue versus spending still to come.

http://www.nytimes.com/2013/01/04/opinion/kurgman-battles-of-the-budget.html

That also doesn't take the additional health care tax into account.

Krugman: Obama and Redistribution
http://www.democraticunderground.com/10022224304

Obama's Deal From a poor Person's Perspective
http://www.democraticunderground.com/10022111266

The deal was a coup because it extended benefits and aid to low-income and unemployed Americans with no spending cuts, and it neutered Republicans.

Not With A Bang But With A Whimper
http://www.democraticunderground.com/10022215606

Still, remember that while Republicans are whining, the President has already cut $2.5 trillion over the next decade.

The Mostly Solved Deficit Problem

The Center on Budget and Policy Priorities has a graph:



The vertical axis measures the projected ratio of federal debt to GDP. The blue line at the top represents the projected path of that ratio as of early 2011 — that is, before recent agreements on spending cuts and tax increases. This projection showed a rising path for debt as far as the eye could see.

And just about all budget discussion in Washington and the news media is laid out as if that were still the case. But a lot has happened since then. The orange line shows the effects of those spending cuts and tax hikes: As long as the economy recovers, which is an assumption built into all these projections, the debt ratio will more or less stabilize soon.

CBPP goes on to advocate another $1.4 trillion in revenue and/or spending cuts, which would bring the debt ratio at the end of the decade back down to around its current level. But the larger message here is surely that for the next decade, the debt outlook actually doesn’t look all that bad.

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So you heard it here first: while you weren’t looking, and the deficit scolds were doing their scolding, the deficit problem (such as it was) was being mostly solved. Can we now start talking about unemployment?

http://krugman.blogs.nytimes.com/2013/01/10/the-mostly-solved-deficit-problem/

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For the record, last year, over President Obama's first four years, the deficit shrunk by about $300 billion. This year, the deficit is projected to be about $600 billion smaller than when the president took office. We are, in reality, currently seeing the fastest deficit reduction in several generations.

http://maddowblog.msnbc.com/_news/2013/02/22/17056939-a-well-kept-fiscal-secret

Then there are the health care savings.

Medicare’s Projected Spending Has Dropped $500 Billion Without Lawmakers Cutting A Dime

By Jeff Spross

Medicare will spend $511 billion less between now and 2020 than was predicted two and a half years ago, according to the latest number crunching by the Center On Budget and Policy Priorities. More importantly, this drop occurred completely separate from any changes in government policy — rather, it resulted from an overall slowdown in the growth of health care costs.

The last time the Congress and the President actually altered Medicare policy in order to bring down the program’s spending was when they passed health reform in March of 2010. By comparing the Congressional Budget Office’s projections from August of that year with their projections from earlier this month, and by leaving out the the SGR cuts and the Medicare cuts in sequestration, the CBPP was able to isolate how much Medicare’s spending is anticipated to drop due purely to changes in the health care markets. And the drop is considerably larger than the proactive cuts in Medicare spending the Simpson-Bowles plan was calling for back in December of 2010:



According to the CBO itself, its projections for Medicare and Medicaid spending between now and 2022 dropped 3.5 percent since its previous projection in August of 2012.

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http://thinkprogress.org/health/2013/02/21/1623151/medicare-spending-drops/

This helps:

Medicare Fraud: HHS announces record-breaking $4.2 Billion recovered in FY 2012
http://www.democraticunderground.com/10022354924

The President's policies also prove that savings do not have to come at the expense of appropriate spending and benefits. The health care law not only expanded benefits for seniors, it's reversing the damage done by Bush, and it strengthened Medicare.

Long before this Supreme Court decision, through the Affordable Care Act, seniors began to see positive changes in their prescription drug costs, access to preventive health care, and more. Thanks to the Supreme Court’s decision the following provisions will continue to be provided to seniors:

Medicare Improvements

The ACA contains several important improvements to the Medicare program, many of which are already helping seniors today.

1) Closing the donut hole

a. Medicare Part D covers the cost of medications up to a certain point. Between that point, and a catastrophic coverage threshold, the older adult must pay out of pocket for medication (this gap in coverage is often called the Part D “donut hole”). One in four beneficiaries fall in this gap, and end up paying an average of $3,610 out of pocket on drug expenses.

b. The ACA requires drug manufacturers to reduce prices for Medicare enrollees in the donut hole. Beginning in 2011, brand‐name drug manufacturers must provide a 50% discount on brand‐name and biologic drugs for Part D enrollees in the donut hole. By 2013, Medicare will begin to provide an additional discount on brand‐name and biologic drugs for enrollees in the donut hole. By 2020, Part D enrollees will be responsible for only 25% of donut hole drug costs.

c. This is a benefit seniors are getting now, and will continue to get as a result of this decision.

2) Improving senior’s access to preventive medical services

a. Prior to the ACA, Medicare beneficiaries were required to pay a deductible and 20% copay for many preventive health services.

b. The ACA eliminated cost‐sharing for many preventive services and introduced an annual wellness visit for beneficiaries.

c. The ACA also eliminated cost‐sharing for screening services, like mammograms, Pap smears, bone mass measurements, depression screening, diabetes screening, HIV screening and obesity screenings.

d. This is a benefit seniors are getting now, and will continue to get as a result of this decision.

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http://www.ncpssm.org/Portals/0/pdf/aca-analysis.pdf

MEDICARE’S FINANCIAL CONDITION

Medicare’s financial condition is measured in several ways, including the solvency of the Part A Trust Fund, the annual growth in spending, and growth in spending on a per capita basis. Average annual growth in total Medicare spending is projected to be 6.6% between 2010 and 2019, but 3.5% on a per capita basis (assuming no reduction in physician fees).

The Part A Trust Fund is projected to be depleted in 2024— eight years longer than in the absence of the health reform law—at which point Medicare would not have sufficient funds to pay full benefits, even though revenue flows into the Trust Fund each year. Part A Trust Fund solvency is affected by growth in the economy, which directly affects revenue from payroll tax contributions, and by demographic trends: an increasing number of beneficiaries, especially between 2010 and 2030 when the baby boom generation reaches Medicare eligibility age, and a declining ratio of workers per beneficiary making payroll contributions (Figure 4).

http://www.kff.org/medicare/upload/7305-06.pdf

The law gets better as it nears full implementation in 2014.

New Federal Rule Requires Insurers to Offer Mental Health Coverage
http://www.democraticunderground.com/10022407451

Here’s one way Obamacare changed today
http://www.democraticunderground.com/1251288922

Rules finalized for the good stuff in Obamacare
http://www.democraticunderground.com/10022415967

Kathleen Sebelius: Holding Insurance Companies Accountable for High Premium Increases
http://www.democraticunderground.com/10022417762

The health care law is still the biggest expansion of the safety net since Medicare
http://www.democraticunderground.com/10022159929

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