A Chance for Normal Order

Word from the House Republican retreat that they will take up a 3 month debt limit lift vote next week along with a stipulation that both the House and Senate pass a budget (or don’t get paid; 27th Amendment notwithstanding; Issa has already said it is Unconstitutional). This is good news from an ‘avoiding economic calamity standpoint’ and is designed to get the Senate to ‘go first’ in terms of taking the next step in our ongoing discussion of our nations fiscal future.

This presents the Senate–as an Institution–with a great chance to step it up and chart the way forward, in much the same way that they did with the fiscal cliff impasse when they passed the bill that finally resolved the issue 89-8. My guess is that they will get this and get down to business and pass a normal order Budget Resolution with some big policy provisions, which they haven’t done for several years (Kent Conrad would say the Debt limit deal in August 2011 was the 2012 and 2013 FY Budgets). However, it would be good to get back to normal order legislatively. The below is a prediction of sorts, probably colored by what I want to see happen.

  • A budget out of the Senate that does not cut domestic discretionary spending spending any more than the Budget Control Act of 2011 did. This is not where the problems lie.
  • A framework for a full tax reform, individual and corporate (with target amounts of new revenue to be raised via tax reform) with the House Ways and Means Committee to then take up the heavy lifting along with the Senate Finance Committee on the details. In my book Balancing the Budget is a Progressive Priority, I say that we need to collect at least 21% of GDP in tax revenue given any plausible level of spending given the movement of the Baby Boomers into Medicare, Medicaid and Social Security. I think the current tax code we have might raise ~19.0-19.5% of GDP, but don’t know that we know for sure….but it will take more taxes given the Baby Boomers (we often spent more in the 1970s and 1980s when they were paying taxes). If you disagree, show me your health reform plan.
  • The Senate will identify a set of next steps on health reform, some of which are bad policy and some pretty good. However, this is a budget resolution, so the heavy duty work will have to be done later in the House Commerce and Senate HELP committees (and maybe others). I expect they will do more means testing in Medicare for sure, and might raise the Medicare age, do something to the tax treatment of employer sponsored insurance, and link a competitive bidding demonstration in Medicare to state movement on exchanges. The details are important, but the details will not be done in a budget resolution. Anything that gets both parties on board to some degree on health reform is a good step.
  • The outline of a Social Security reform that couples the raising of the OASDI payroll tax cap (the wage amount to which the tax applies) back slowly to the 1983 Greenspan Commission target of the 90th percentile of wages, along with a benefit cut (and tax increase) likely from the chained CPI that was bubbling around the fiscal cliff deal
  • We need to cut Defense spending, but I am not that optimistic about that taking place.

My guess is that they pop something out of the Senate with ~70 votes and then we see what happens in the House and they have a conference committee and the various committees get to work on the policy details. It is a big moment for the Senate, and a chance for them to be the grown ups. We will see if they can take the opportunity.

About Don Taylor
Professor of Public Policy at Duke University (with appointments in Business, Nursing, Community and Family Medicine, and the Duke Clinical Research Institute). I am one of the founding faculty of the Margolis Center for Health Policy, and currently serve as Chair of Duke's University Priorities Committee (UPC). My research focuses on improving care for persons who are dying, and I am co-PI of a CMMI award in Community Based Palliative Care. I teach both undergrads and grad students at Duke. On twitter @donaldhtaylorjr

One Response to A Chance for Normal Order

  1. Pingback: Quick budget note | freeforall

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: