Quick budget note

The President has released his budget which as all Presidential budgets is dead on arrival per se (or dead before arrival as Stan Collender says). However, I think this budget is likely to be more consequential than most, because I think it contains the seeds of a ‘mini grand bargain’ of sorts that is likely to emerge between the White House and the Senate, and which has been emerging based on White House/Senate discussions. As I wrote on Jan 18, 2013 when talking about a return to ‘normal order’ (why it went away)

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.

The chained CPI, increased means testing for Medicare, and a place holder for new revenue via tax reform are ideas around which a yea vote of about 65-70 Senators could take place as part of the debt limit lift coming up for the Summer. Much like the 88 yea votes in favor of the New Year’s Day fiscal cliff deal forced Speaker Boehner to break the Hastert rule (don’t bring up something without the majority of the majority being in favor), I am betting this level of support will lead to the same outcome again, meaning Boehner allows it to be voted on and the Dems have to carry most of the water. A whip operation to behold for sure….

Thinking long term, deficits are already coming down and the debt-to-GDP ratio stabilizes in the short run, but starts back up in the second decade due to health care costs. The key for long run sustainable budgets are the next steps on health reform, building on/modifying the ACA. I don’t believe the needed deal on health reform (reform needs to go back burner politically a bit, so we can implement; its hard enough without every new study or finding being a partisan bicker match) can occur until elected Republicans actually embrace a proposal, mark it up in the Commerce committee in the House, get a CBO score, etc. Conservative public intellectuals have started getting more serious about health reform plans, but as of yet, not elected ones.

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 Quick budget note

  1. Pingback: DSH cut delay surprise in POTUS budget | freeforall

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