Thursday , August 22 2019
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Can American healthcare get any worse?

Summary:
The GOP campaigned on a promise to repeal Obamacare. The Dems promised to save the program. First the GOP reneged on their promise to repeal Obamacare (even after seizing the House, Senate and Presidency), and now both parties have joined forces to remove the best part of Obamacare, and the only part of the program that was supported by Republican economists: The Cadillac tax is one of the most important tools we have to control health care cost growth in the private sector. Repealing it will drive up health care costs while adding more than .2 trillion to the debt over the next two decades.”The tax has been delayed twice. But the overwhelming vote in the House — 419 to 6, with only three Democrats opposed — increased the likelihood that it never does. Indeed, the

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The GOP campaigned on a promise to repeal Obamacare. The Dems promised to save the program. First the GOP reneged on their promise to repeal Obamacare (even after seizing the House, Senate and Presidency), and now both parties have joined forces to remove the best part of Obamacare, and the only part of the program that was supported by Republican economists:

The Cadillac tax is one of the most important tools we have to control health care cost growth in the private sector. Repealing it will drive up health care costs while adding more than $1.2 trillion to the debt over the next two decades.”

The tax has been delayed twice. But the overwhelming vote in the House — 419 to 6, with only three Democrats opposed — increased the likelihood that it never does. Indeed, the debate on the House floor was striking, with one Democrat after another denouncing the provision as if Democrats had nothing to do with its creation.

It’s hard to overstate just how bad this news is. It suggests that both parties are completely abandoning any interest in sensible economic reforms. It suggests that the SALT caps in the 2017 tax reform may also be repealed at some point in the future. There is no appetite to reform health care, which has been one of the biggest factors limiting real wage growth for average Americans in recent decades.

I hope this can be stopped in the Senate, but given the vote margin I’m not optimistic.

And let’s not hear any more happy talk about GOP “deregulation”. If this goes through (with GOP support), then Republican promises to make America more efficient through deregulation will prove hollow.

PS. This post explains the downside of repealing the Cadillac tax.


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Scott Sumner
Scott B. Sumner is Research Fellow at the Independent Institute, the Director of the Program on Monetary Policy at the Mercatus Center at George Mason University and an economist who teaches at Bentley University in Waltham, Massachusetts. His economics blog, The Money Illusion, popularized the idea of nominal GDP targeting, which says that the Fed should target nominal GDP—i.e., real GDP growth plus the rate of inflation—to better "induce the correct level of business investment".

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