Budget Wrap Up
Several quick hits coming out of yesterday’s budget release:
More Details on Obamacare Funding: A glance through the HHS Budget in Brief provides some additional context into where and how the Administration seeks funding to implement the health care law. Specific new discretionary appropriation requests related to the law include:
- $37 million for Medicaid and SCHIP implementation (page 82);
- $38 million for “a one-stop shopping website” for consumers – even though the private sector has maintained similar sites for years (pages 82-83);
- $28 million to enforce the insurance mandates in the bill (page 83);
- $236 million for health insurance Exchanges (page 83); and
- $120 million to implement the CLASS Act Ponzi scheme (page 101).
Of course, the universe of health law implementation spending is far from limited to these requests that the Administration specifically included in its budget. As CMS Administrator Berwick admitted yesterday, “all of the agencies have features of the [law] that impact their budgets,” – meaning money is fungible, and increases in funding will almost by definition be used to support implementation of Democrats’ unpopular 2700-page health care law.
On a related note, the HHS budget justification to appropriators indicates how the billion-dollar mandatory implementation “slush fund” created in the reconciliation measure last year is being spent. Page 253 of the document notes that “in FY 2010, $128 million of this funding was obligated by agencies within HHS and by the Department of Treasury. HHS estimates that $790 million will be obligated by agencies within HHS, the Department of Treasury, and the Office of Personnel Management in 2011. The remaining $82 million will be obligated in 2012.” This additional mandatory spending means that the HHS implementation budget will swell far more than the “modest” increases included in the discretionary requests outlined above.
Missing the Plot on True Entitlement Reform: The Associated Press has an interesting summary of the President’s health care proposals. The lead paragraph however says it all: “President Barack Obama’s budget fixes a looming cut to doctors that could devastate Medicare, but it offers no cure for the underlying problem of rising health care costs that threatens to break the bank. It’s like stabilizing a patient in the emergency room and sending him home until the next crisis.”
“Doc Fix” Pay-for Gimmicks? Two interesting quotes about the pay-fors used to finance the Administration’s two year “doc fix.” A Wall Street Journal article pointed out the Administration’s budget estimate of nearly $8.8 billion in savings from “pay-for-delay” legislation is more than triple the $2.7 billion in savings estimated by CBO – raising questions about the scorekeeping methods used to calculate the supposed savings. And the same article points out that “pay-for-delay” legislation failed to advance in a Democrat-dominated Congress last year – so why does the White House think it has any chance of passage this Congress? In a similar vein, Kaiser Health News noted that the “doc fix” proposals “would get little traction on Capitol Hill.”
Administration’s “Repeal and Replace” for Onerous 1099 Paperwork Mandate: A correction from my missive last night, when I implied that the Treasury proposed a full repeal of the new 1099 paperwork mandate on small businesses. A review of the Treasury Green Book finds the key paragraph on page 97:
The proposal would repeal the additional information reporting requirements imposed by the Affordable Care Act. Further, the proposal would require businesses to file an information return for payments for services or for determinable gains aggregating to $600 or more in a calendar year to a corporation (except a tax-exempt corporation).
As phrased above, the Treasury proposal would REPEAL the new 1099 mandate (which applies to goods and services transactions over $600 in a given year), and REPLACE that mandate with a different 1099 requirement applying just to services. In other words, a business’ transaction with a gas station wouldn’t warrant a 1099 form, but transactions with a lawyer, plumber, or accountant would. (The last would of course prove especially ironic – businesses will need to give their accountant a 1099, due to all the money he’s charging them to prepare their other 1099s.) This “repeal and replace” (or, if you like, “bait and switch”) strategy explains why the Treasury’s 1099 proposal only results in a revenue loss of $9.2 billion, compared to the $19 billion cost of full 1099 repeal.