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April 23, 2021

...And Don't Forget Health Care

Biden moves health care improvements out of infrastructure package

 

First Lady Jill Biden at a health care facility in Albuquerque, NM.
Health care subsidies in the last COVID relief bill expire in 2022.
(Mandel Ngan/Pool via AP)

The Chief

**** Parts of the American Families Plan, the second half of Biden
infrastructure package, are trickling out. The idea was that the
American Jobs Plan was about the physical infrastructure of the country
and the American Families Plan was about the infrastructure people need
undergirding their lives to make them succeed. It doesn't completely
scan that way, because the AJP has $400 billion for elder care
.
But that's the general idea.

Because this is America and Wall Street runs the world, so far the AFP,
which will be announced at Biden's joint address to Congress next
week, is getting attention mostly for the revenue offsets, namely the
near-doubling of the capital gains tax

for people making over $1 million (about 1/3 of 1 percent of the
population). Added to a surtax on investment from the Affordable Care
Act, the top rate for capital gains would be 43.4 percent. This was
always one of Biden's campaign promises; here's an analysis of the
plan from July
2019. But it certainly revved up investors, who tanked stocks
and warned
darkly of hurting "competitiveness
."
We don't really have a competitive economy for reasons wholly
unrelated to capital gains, and stocks aren't really how companies
gain the money to invest anyway. Biden wisely understands that you must
attack capital rents

if you're going to deal with inequality.

I don't know that Biden will get capital gains equal to ordinary
income for the rich (among other things this would wipe out the carried
interest loophole), and yes you do need to actually be able to prevent
the wealthy responding by holding their assets forever. (Ending step up
in basis

or a mark to market annual tax would help, and the former is in the
plan.) But exactly what will be done with this money? I'm well aware
fiscal policy doesn't work this way, but for the purposes of
maintaining the "pay-for" fiction, it looks like this will be the main
offset to a Families plan that subsidizes child care costs, creates
universal pre-kindergarten, makes community college free, and
establishes national paid leave.

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**** It's also likely that the child tax credit, expanded and made
a monthly advance credit in the American Rescue Plan, will be extended
in this legislation, but only through 2025

rather than permanently. There's a school of thought that you extend
this long enough and it becomes permanent by default because nobody
wants to kill it, but that's a huge risk to take with the lives of
poor families. And it's the price tag that's choking the
administration, not a good sign for the gang that allegedly rejected
deficit hysteria now and forever. (Really they don't think Senate
Democrats will go for it.)

The bigger problem, I think, is the absence of another support for
families: help with their health care costs. "And don't forget health
care" was the final piece of the "It's the economy stupid" slogan that
powered Bill Clinton to victory in 1992. It came from James Carville,
who ran Harris Wofford's surprise win in a Senate special election in
Pennsylvania in 1991 after the death of John Heinz. The Democratic Party
has pretty much never stopped running on health care ever since, from
expanding children's health insurance to fighting for better
prescription drug coverage in the Bush years to the Affordable Care Act
to preventing its repeal. It won the 2018 midterms for Democrats.

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It was part of Biden's campaign too, where he promised first a public
insurance option and then expanded subsidies for exchange coverage. The
letter did get into the American Rescue Plan but only on a temporary
basis for two years. White House officials have reportedly decided to
defer health care changes out of this package and into a later bill; as
it's difficult (not impossible) to pass anything in an election year,
and the makeup of the next Congress is unknown, that risks allowing the
affordability protections in place to expire.

Drug pricing, meanwhile, has been something with bipartisan interest for
years, and a bunch of the bills Democrats thought they could get done in
the last Congress were reintroduced this week. All of these save money
to the government, and offer a way out of all the tax-raising. But if
there's going to be one big infrastructure bill, with all the pain and
wrangling that comprises, splitting it in three (AJP, AFP, and now this
American Health Care Plan I guess) just makes it more likely that
whatever's second or third never happens. The Republican counter-offer

that only deals with the first part, in an underweighted way, makes that
more likely.

"And don't forget health care" is good advice.

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What Else About Health Care To Not Forget

Of course, the president has a health care agenda: it's called
vaccinating the country. That has experienced turbulence, with a clear
bend point

in the per-day average over the past week. The lack of Johnson & Johnson
shots after the pause could be a factor, and that's likely to end
today
,
as the vaccine will be restored with a warning label. The bigger issue
is that Emergent, the factory where some J&J vaccines are being
produced, is fatally flawed
,
with risks of cross-contamination beyond the 15 million doses already
tossed out. Emergent is a big-time government contractor and an example
of how contracting oversight really matters

and private-sector partnerships don't always work. But it really sets
back J&J, which administration officials are now writing off
.

The bigger problem is that the country is running out of willing
participants in vaccination. Hesitancy (which some claim is due to the
J&J pause, though I'd argue that was a no-win situation) is the main
challenge on the road to normalcy, and any effort to improve public
health must find a way to get reluctant people interested in the shot. A
tax credit for companies

who give workers time off for vaccination just doesn't seem like a
killer app to me. Donald Trump loudly endorsing vaccination

helps a bit more.

But there's more to life and even more to COVID than vaccination. I
want to know what the government is prepared to do with all these
long-haulers, who not only experience COVID-related symptoms for months
or possibly years but are at risk for other chronic medical conditions,
according to a new study in Nature
. These increases in
needs for outpatient care and long-term, even lifelong, medical problems
is going to have to be dealt with somewhere in our fragmented medical
system.

We need a Zadroga program for COVID, what I called last June Medicare
for Coronavirus
,
to deal with lung and heart and liver damage from people who have
contracted this disease. Insurance companies will offload these costs
through higher premiums; it will be much cheaper for everyone to have a
public program take care of these people. I haven't seen a single
proposal along these lines; it's beyond time to do it.

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What Day of Biden's Presidency Is It?

Day 94.

We Can't Do This Without You

Today I Learned

* I was on the Lauren Steiner show discussing Biden's first 100 days.
Watch here . (YouTube)

* "The Supreme Court ruled in favor of scam artists
"
by reinterpreting the Federal Trade Commission Act; Congress can clarify
interpretation or the FTC can use other authorities. (Politico)

* Has Biden stated administration policy on the SAFE Banking Act, which
got a veto-proof majority
in
the House this week? Fourth time the House has passed this, the first
with the Senate under Democratic control. (Yahoo News)

* Analyzing Biden's emissions goal
,
which relies heavily on passing this infrastructure plan. (Grist)

* But the Biden team needs to use international leverage through trade
policy and financial diplomacy to make a difference, Kate Aronoff writes
.
(NYT Opinion)

* Anti-Asian hate crimes bill seems poised to become law
.
(CNN)

* HUD reverses Trump policy

on transgender discrimination in homeless shelters. (HuffPost)

* Unions threatening money cut-off

to any Democrat not supporting the PRO Act. (Politico)

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