The New Spending Bill Is A Disaster

Let’s start with the minor stuff:

1.   There’s lots of pork barrel spending for areas with influential senators, such as Kentucky and Alabama.

2. Congress agreed to waste an extra $1.4 billion on a border wall in exchange for an extra $27 billion in domestic spending.

3.  There’s lots more spending on wasteful military programs such as the F-35 fighter jet.

4.  More corporate welfare, including a seven-year extension of the Ex-Im Bank.

5.  The smoking age rises from 18 to 21 (Congress should instead cut the drinking age from 21 to 18, as in normal countries.)

This is my view:

“These spending bills are a fiscal dumpster fire,” said Sen. Mike Lee, R-Utah. “This is embarrassing.”

And yet while all of these changes are unfortunate, they don’t even come close to constituting a “disaster”. So why do I use such hyperbolic language?

It turns out that the bill contains one specific provision that truly is a disaster. The Obamacare bill was funded with a set of new taxes. In 2017, Congress refused to repeal Obamacare, something the GOP had promised to do if they won the election. The new plan is to keep all the spending in Obamacare and repeal the taxes that would pay for it. Over the next decade, these changes will add another $400 billion to the already historically unprecedented budget deficit. (Unprecedented for a period of peace and prosperity.)

While a bigger budget deficit is a serious mistake, it’s hardly a disaster. So once again, why do I use such hyperbolic language?

The disaster is the repeal of the so-called “Cadillac tax” on expensive health care plans. To understand why this is such a tragic mistake, you first need to understand the nature of American health care. Almost half of the US healthcare system is directly financed via government programs such as Medicare, Medicaid, and the Veteran’s Administration. A large share of private sector health care provision is funded by private insurance. Because this insurance is often provided by employers, it is tax deductible.

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Gary Anderson 3 weeks ago Contributor's comment

Costs for health care, forced purchasing of health care, as businesses opted out, were excessive for both rich and poor. Democrats never figured this out. Trump, unfortunately did. He retains voters who otherwise would not vote for the disgusting fellow.