About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

21 IRET Congressional Advisory 1 (1993)

handle is hein.taxfoundation/iretcgadv0020 and id is 1 raw text is: IRET June 11, 1993 No. 21 THE BREAUX BUDGET PROPOSAL: A SMALLER DOSE OF POISON Senator John Breaux has proposed an alternative to the deficit reduction proposals in the Clinton budget plan. Senator Breaux would replace the Btu energy tax ($71.4 billion over wo redupo 5 years) with a more narrowly- .the ranspe based tax on transportation wou reduce fuels ($40.2 billion over 5 a u9t25 billi years), and make up the revenue difference by cost roughly trimming federal outlays on Jobs Medicare ($31.6 billion over 5 years). He would charge upper income Medicare subscribers higher premiums for Part B coverage, collect a 10% copayment on home health services, and reduce annual inflation increases in payments to hospitals. The higher premiums and copayments, though entailing higher payments to the government or providers by the affected citizens, would be classified as a spending reduction because they would reduce the general revenue outlays to health care providers that constitute a subsidy of the health care costs of the elderly. In that narrow sense, the Breaux proposal may be described as consisting of smaller tax increases and more spending cuts than the Clinton plan. In the sense that it is better to be shot four times in the foot than five times, the Breaux proposal is a marginal improvement. The Medicare proposals At present, just over 75% of Part B of Medicare (doctors fees and outpatient services) is paid for by the federal government. Just under 25% is paid for through monthly premiums collected from enrollees. (The basic premium is currently $36.60 per month, more for those who enrolled after age 65.) Thus, the government is paying for almost 75% of the cost of the coverage. Senator Breaux would limit the federal payment to 50% (and double the premium to 50% of costs) for single enrollees $75,000 per year payment would be tripled to 75% of 'rtation fuels tax annual GNP by on to $26 billion in 1993 dollars) and ?00,000 to 225,000 of costs) for singl with adjusted gross incomes of $100,000 for couples. The cut to 25% (and the premium costs) for single enrollees with adjusted gross incomes of $100,000 per year, $125,000 for couples. The payment would be cut to 10% (premium raised to 90% of costs) for single enrollees with adjusted gross incomes of $125,000 per year, $150,000 for couples. There would be no federal payment (premium would be quadrupled to 100% e enrollees with adjusted gross incomes of $150,000 per year, $175,000 for couples. It is perfectly proper for the government to give welfare assistance to the poor, either in cash, food stamps, or free medical care, as in the Medicaid program. It makes no sense, however, for the government to subsidize the consumption of health care for people merely because they have reached the age of 65. Ideally, they should pay for their own insurance from private issuers. The government has in place a program - Medicaid - to pay health insurance costs for the poor; people aged 65 or over who are poor should be covered by that program. Institute for Research on the Economics of Taxation IRET is a non-profit, tax exempt 501(c)(3) economic policy research and educational organization devoted to informing the public about policies that will promote economic growth and efficient operation of the free market economy. 1730 K Street, N., Suite 910, Washington, D.C. 20006 Voice 202-463-1400 * Fax 202-463-6199 0 Internet www.iret.org

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most