How Bad is the Deficit?

Are we simply at the precipice before it all is so much easier?

There has been a lot of worry about the deficit, and this is a problem because it adds to the National Debt. The interest on the National Debt is one of the largest items in recent Federal budgets. Just as this is a problem when it's true in a family budget, it's true at the National level. This is something we must deal with or soon it will be the only thing in the budget....

But, there have been some really frightening estimates and proclamations of the catastrophic results of current spending. We wish to allay those fears based on data analyzed by the Congressional Budget Office.

The deficit is dependent on the government's income. This is dependent on taxes. When millions of people are falling off the tax roles and onto the unemployment compensation roles, it makes the deficit bigger and bigger every day. This is not because spending is increasing every day, but because the income is decreasing. This is not the current administration's fault but because the economy exploded in 2008.

It is, however, something this administration must live with, and we have done this before. When Bush took office, the deficit was a surplus of $431 billion each of the prior 3 years before W. This was achieved because Clinton had to live with a pay-as-you-go law passed by Congress. In the past, administrations assumed that this was the way to run a government, but that had been forgotten in the 1980's. This Congress has remembered, in part, because things got so our of control in the last 8 years after the law had lapsed.

According to the Congressional Budget Office, Bush's deficit in 2008 was $459 billion. Now, since this is a budget deficit, and the wars were never in the budget, doesn't that mean that his deficit was even greater?

From the AP

"The deficit will hit $482 billion in the 2009 budget year that will be inherited by Democrat Barack Obama or Republican John McCain, the White House estimated Monday. That figure is sure to rise after adding the tens of billions of dollars in additional Iraq war funding it doesn't include, and the total could be higher yet if the economy ..."

Obama put the wars in the budget. And, when that was written by the AP, they didn't know that the economy would take such a serious and debilitating dive. However, in spite of all this, there is hope in our future.

From the CBO

"CBO estimates that, as the economy recovers, if current
laws and policies remained in place, the deficit would
shrink but remain above $500 billion per year, or more
than 3 percent of GDP....As the economy improves and spending related to the financial rescue and the economic stimulus package tails off, the deficit is projected to gradually diminish; by 2013, it would amount to 3.2 percent of GDP (about the same level as in 2008), under the assumption that various tax provisions expire as scheduled and that discretionary spending rises at the rate of inflation. Between 2013 and 2019, deficits are projected to range from 3.1 percent to 3.4 percent of GDP, well above the 2.4 percent of GDP that they have averaged over the past 40 years."

CBO Summary of Budget 2009, page 6.

According to CBO estimates above, in 4 years, the deficit is going to be at about the same as it was in 2008, 3% of the GDP. Isn't that what even Republicans said was good?

I don't think that is good enough, and neither does Obama, which is why this Democratic Congress passed the pay-as-you-go bill in April. As the economy recovers, this will put us in a position to begin to pay down the National Debt.

We can keep the pressure on our representatives. There is no reason that the Public Option, if a buy in to Medicare, can't support the costs of the seniors even better than private for-profit insurance supports those members who are using their health benefits with those who don't need to use theirs but are continuing to pay premiums.

This could be a win-win!

Action Needed: Public Option Might be Off the Table

This afternoon, Jane Hamsher reports that Rahm Emanuel has privately told Democratic Senators that the public option might be dropped if necessary for bipartisan support! This is wrong and will put all the control back where it is now, in the hands of the millionaires running the insurance industry.

We have to be clear about this. If you want a health plan that will control costs we have to include a public option. Any other plan will put control back in the hands of the insurance industry. They control medical costs (by denying you medications and procedures) but they have no interest in controlling insurance costs because their rewards come from profits, not from your health.

Jane Hamsher at Fire Dog Lake has put together a tool for fighting the Health Insurance Industry. They don't want us to have a public option, and are putting millions of dollars into the fight. All we have is public opinion, and to use this we have to let our Congress people know what we want.

It only takes 40 "no" votes to squash any watered down version without a public option! If we let the most progressive congress people know that is what we want, we might be able to beat the insurance industry.

Remember -- we're asking them to support a public plan that is

1. nationwide,
2. available from day one and
3. answerable to the voters and Congress.

We're asking them to commit to vote against anything that does not have these three features.

That's where the power is -- 40 votes against anything else can keep a bad bill from passing. Visit Fire Dog Lake for the Public Option Whip Count Tool.

There are also some Democrats who have spoken out against the Public Plan Option. Please call or write to them. ( Links are at the Bill Press Show.com. ) They are:

Senator Blanche Lincoln (D-AR)

Senator Tom Carper (D-DE)

Senator Maria Cantwell (D-WA)

Senator Ron Wyden (D-OR)

Senator Bill Nelson (D-FL)

Senator Mary Landrieu (D-LA)

Senator Kay Hagan (D-NC)

Senator Kent Conrad (D-ND)

Senator Max Baucus (D-MT)

Links are available at the Bill Press Show.com.

Here is the letter I wrote. You are welcome to borrow from it....

Please, Senator Conrad, we need a plan that is nationwide. Smaller states will not have enough members to make a co-operative insurance plan economically feasible. When they are out priced by larger insurance conglomerates, they will disappear. And then we'll be right back here, which is not a good place.

Nationwide, we have more than enough healthy Americans to make a public option pay for itself. Include a reasonable co-payment and the healthy members will support the costs of those who get sick. This is how insurance would work if the CEO's weren't getting million dollar salaries.

Just among my friends, I know two people who were cut off..........(FIll IN YOUR OWN STORY)
...............................................
What happened to his family was fraudulent, but he didn't have the heart or the pocketbook to sue.

When people need health care, they are faced with a moral dilemma, to get fired and go on Medicaid, to commit a crime and go to prison, or, in some states, to go to the Emergency Room and use that for primary health care, or too often they go into debt and end up in bankruptcy.

Americans should not be faced with such choices. We need a public option that is nationwide, available from day 1, and answerable both to Americans and to Congress.

Please vote "No" on any other plan. It would be better to postpone this reform than to do something that is worse than what we have now.

Thank you,
(your name)

Some people already have a public option.
Sometimes it's paid for by taxes, and sometimes it requires a co-pay. Why, I wonder, can't the rest of us have access to it?

The Senate and Congress members all have a public option, paid for by American taxpayers. They know very well that it works. They use it and their families use it. Employees of Veteran's Hospitals around the country have the President's choice model. They can select from an array of health insurers all part of the government program. This is partially paid for by the employee through a reasonable co-pay. It is unlikely that these insurance companies will use Rescission of Coverage when the pool is so large. This is a tactic commonly used against members from small companies or small pools of clients.

Former Governor Dr. Howard Dean speaks eloquently on the public option, and answers all the tough Republican talking points.

As Dr. Dean emphasizes, the AMA doesn't support any plan where doctors are told what to do with their patients -- and this is what we have now! We need a system where doctors can make decisions with their patients, and where people's policies are not canceled when they or someone in their family gets sick.

Dr. Dean answers how the doctor's rates will not be cut with a public option. And, he explains why Kent Conrad's idea of a "co-op" will not work. There are just not enough numbers in small states to provide a cost effective co-op.



You are armed now with logic and sense. Letters/emails or telephone calls will help.... Please click on the link above (Bill Press Show and Public Option Tool), and let them know what you think.

It is important!

Update on Health Care Reform

Just wanted to update everyone who might not have heard President Obama talk about health care reform this afternoon. Since it's still very much in the works and there is not a finished bill yet in Congress or the Senate, it was the last subject on his agenda.

I took great hope when he said that there would be a public option in the plan for health care reform. But, what was even better, was that he said the private health insurance companies would have to follow certain rules if they wanted to be on the list.

-- They would no longer be able to exclude new patients from access to health insurance because of pre-existing conditions.

This was very exciting to us at Mindbridge, because this makes life so difficult for so many people who either need to change jobs or for those whose company switches providers!

-- We are expecting that Rescission of Coverage from health insurance will no longer be permitted. He said that private health insurance companies would no longer be allowed to serve only the healthy.

This will be important to make the public option affordable. The only way that any insurance works is to spread the risk among many. If the public option were to inherit all the sick people and the private insurance has all the healthy ones, the public option would be way too expensive.

There were questions about the unfairness of the public option. The President scoffed. He said that since the government had been accused of "not being able to do anything right" he found it illogical that the private insurance companies would be complaining that they could not compete.

Yeah for Obama!