No GOP Candidate Is Closing the Revenue Gap
Today the Committee for a Responsible Federal Budget released its scorecard of the Republican presidential candidates' long-term budget priorities. It turns out none of the candidates have budgets that can solve the long-term budget shortfall.
At the panel discussion about the report hosted by the New America Foundation, former Congressman Vic Fazio had troubling thoughts about the responsibility of the GOP's candidates' proposals:
"We have a historically low rate of taxation at 15% of GDP. Spending is at 23% of GDP. We have to move to close that gap. All of these proposals would widen it."
To be clear, Romney's plan seeks to reduce spending to 20% of GDP, and a growing economy could significantly expand tax revenues now slumping during the downturn. But the Governor's proposed tax cuts would cancel out some of these projected gains. The GOP's Norquistism remains the greatest sticking point to garnering good scores from impartial, non-partisan arbiters like this.
Committee member Alice Rivlin, former head of OMB and CBO, was especially gloomy:
"They all fail on the need to get more revenue."
How Romneycare Saves $
Freed Bauer draws attention to a new study which suggests—contrary to what the critics say—that Romneycare slowed the growth of health insurance premiums in Massachusetts:
In 2010, John F. Cogan, R. Glenn Hubbard, and Daniel P. Kessler published in Forum for Health Economics & Policy a report (“The Effect of Massachusetts’ Health Reform on Employer-Sponsored Insurance Premiums”) on the effects of Governor Mitt Romney's 2006 health-care reform in Massachusetts. This report suggested that, up until 2008, these reforms (hereafter referred to as "Romneycare") led to a relative increase in health-insurance premiums. This report was cited numerous times by opponents of Romney and helped fuel the belief that Romneycare caused health-insurance premiums to skyrocket in Massachusetts (even though Cogan et al. did not make this claim).
However, new data has now come out (covering through 2010), and this data tells a rather different story. It instead suggests that Massachusetts's health-insurance premium growth declined relative to the nation as a whole in the years since Romneycare has been enacted. From 2006 to 2010, employer-sponsored health-care premiums for a family rose about 19% in Massachusetts, while they rose about 22% in the US as a whole. Compare that to the period between 2002 and 2006, when Bay State family premiums increased 40% and US family premiums rose only 34.5%. Family premiums have seen the greatest reduction in growth since Romneycare; individual premiums have also slowed their rate of growth, though by not as much. For both family and individual premiums, the rate of growth fell below the national average in the period between 2008 and 2010.