Prediction: Biden’s Answer To The Medicare Trust Fund Insolvency Is Hidden In His Budget Proposal

https://www.forbes.com/sites/ebauer/2021/06/01/prediction-bidens-answer-to-the-medicare-trust-fund-insolvency-is-hidden-in-his-budget-proposal/

Excerpt:

According to the most recent report, from 2020, the Medicare HI (Hospital Insurance, or Part A) Trust Fund is projected to be emptied in the year 2026. That’s well before the Social Security Trust Fund’s projected insolvency in 2034, and when that happens, Medicare will only be able to pay 90% of Part A benefits, dropping down to 80% in 2038.

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When it comes down to it, I’ll suggest to readers that they don’t really believe that it matters. And with the Biden administration’s 2022 budget proposal comes a fairly strong indication that this is their point of view as well, that they expect, when the Trust Fund well comes dry, to simply tap general federal revenues for the necessary funds, in exactly the same manner as is done for Parts B (doctors) and D (drugs).

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This single sentence makes it clear that’s not the case: the only premiums paid by Medicare recipients are partial-cost payments for Parts B and D. For Part B, this is 25% of the cost for most retirees; for those with income above $85,000/$170,000 single/married, premiums are higher, reaching as much as 85% of the total cost for the highest earners. For Part D, the premium is set to cover 25.5% of the standard drug benefit, plus any extra costs charged by particular private providers for enhanced benefit levels, and an extra flat charge for higher earners. The remaining cost, 75% of Part B and 74.5% of Part D, is funded by the federal government through its general revenues.

Author(s): Elizabeth Bauer

Publication Date: 1 June 2021

Publication Site: Forbes

Visualizing Biden’s $1.52 Trillion Budget Proposal for 2022

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Excerpt:

One of the biggest boosts in spending is for education. The proposed $29.8 billion would be a 41% increase from 2021. The extra funds would support students in high-poverty schools, as well as children with disabilities.

Health and human services is also a top priority in Biden’s budget, perhaps unsurprisingly given the global pandemic. But the boost in funds extends beyond disease control. Biden’s budget allocates $1.6 billion towards mental health grants and $10.7 billion to help stop the opioid crisis.

There are increases across all major budget categories, but defense will see the smallest increase from 2021 spending, at 2%. It’s worth noting that defense is also the biggest budget category by far, and with a total of $715 billion allocated, the budget lists deterring threats from China and Russia as a major goal.

Author(s): Carmen Ang

Publication Date: 9 April 2021

Publication Site: Visual Capitalist

Financial Report of the United States Government, 2020

Link: https://www.fiscal.treasury.gov/files/reports-statements/financial-report/2020/fr-03-25-2021-(final).pdf

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Excerpt:

The government deducts tax and other revenues from net cost (with some adjustments) to derive its FY 2020
“bottom line” net operating cost of $3.8 trillion.
o From Chart 4, total government tax and other
revenues decreased slightly by $49.4 billion (1.4
percent) to about $3.6 trillion for FY 2020. This
net decrease was due primarily to a $51.6 billion
decrease in individual tax revenue, compared with
an offsetting decrease and increase in corporate
and other tax revenue, respectively.
o Together, individual income tax and tax
withholdings, and corporate taxes accounted for
about 88.8 percent of total tax and other revenues
in FY 2020. Other revenues include Federal
Reserve earnings, excise taxes, and customs
duties.

Publication Date: March 25, 2021

Publication Site: Treasury Department

$350 Billion Covid “Bailout” To States, Cities, And Counties – Here’s What You Need To Know

Link: https://www.forbes.com/sites/adamandrzejewski/2021/03/03/350-billion-covid-bailout-to-states-cities-and-counties–here-are-the-details/?sh=626de35e661c

Graphic:

Excerpt:

This week, the U.S. House passed, along party lines, the $1.9 trillion American Rescue Plan Act of 2021. A vote in the U.S. Senate is expected soon.

Buried within the 591-page bill is a $350 billion bailout for 50 states, tribal governments, U.S. territories, and more than 30,000 cities and counties.

Our auditors at OpenTheBooks.com finally located the $350 billion allocation, line-by-line, in a supplemental database hidden on the back end of the House Oversight Committee’s website.

Map Link: https://www.openthebooks.com/maps/?Map=90043&MapType=Pin

CBO data: https://www.openthebooks.com/assets/1/6/CD13263501.pdf

Author(s): Adam Andrzejewski

Publication Date: 3 March 2021

Publication Site: Forbes

The good and bad in Biden’s giant relief bill

Link: https://finance.yahoo.com/news/the-good-and-bad-in-bidens-giant-relief-bill-210546323.html

Excerpt:

Aid to states and cities. Cost: $350 billion. This money would offset lost tax revenue and help mayors and governors “mitigate the fiscal effects stemming from the public health emergency,” according to draft legislation. it’s clearly related to the pandemic, so it counts as relief, but it might also be more than states and cities need, since government revenue has held up better than expected during the last 12 months. 

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Pension reliefCost: $74 billion. This money would address longstanding problems at roughly 1,400 underfunded pensions covering 10 million workers and retirees, most of them belonging to unions. A government agency called the PBGC is supposed to backstop pensions that run short of money, but it, too, is drastically underfunded and poised to collapse in coming years. The money in the House bill would bail out the riskiest pensions, but it’s controversial because it’s not paired with needed reforms—and it’s not specifically related to problems caused by the pandemic. This could be one provision that doesn’t survive the Senate.

Author(s): Rick Newman

Publication Date: 22 February 2021

Publication Site: Yahoo Finance

The $1.9 trillion Biden stimulus plan is moving forward — here are the biggest parts of it

Link: https://www.marketwatch.com/story/the-biden-stimulus-plan-moved-forward-today-here-are-the-biggest-parts-of-it-11614032251

Excerpt:

The House Budget Committee approved on Monday a $1.92 trillion bill to carry out President Joe Biden’s coronavirus relief plan, the first step toward likely House passage by the end of the week.

The vote was 19-16. Texas Democrat Rep. Lloyd Doggett voted with Republicans in opposition to the bill but a spokeswoman for him later said he had cast his vote in error and supported the legislation.

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Aid to state, local and tribal governments: This would provide money for states and local governments, as well as tribal governments, to offset tax-collection losses and increased spending resulting from the coronavirus pandemic. Price tag: $350 billion.

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Multiemployer pension plan aid: The Pension Benefit Guaranty Program would be able to give grants to underfunded pension plans guaranteed by the PBGC. The PBGC revolving fund to help pay full benefits when pensions fall short is set to be exhausted in 2027 under current law. Price tag: $81.5 billion.

Author(s): Jonathan Nicholson

Publication Date: 23 February 2021

Publication Site: MarketWatch

A National Disgrace

Link: https://www.city-journal.org/federal-budget-process-disaster-in-waiting

Excerpt:

The Budget Control Act of 1974 is the most misnamed congressional act in American history. Far from “controlling” anything, its passage caused the federal budget process to spin out of control. In the six years preceding the act, with the Vietnam War raging, annual deficits averaged $11.3 billion. In the first six years after the Budget Control Act, with the war over, they averaged $54 billion.

What happened? The Budget Control Act cut the president out of the budget process by removing his political leverage, leaving Congress in near-total control of the budget. Congressmen have a strong incentive to bring home the bacon, both to their voters and, increasingly, to their donors. Logrolling—you vote for my project and I’ll vote for yours—is, all too often, how Congress works.

Before 1920, there was no unified budget process. Executive departments simply submitted their budget requests directly to Congress. What kept spending under control was a strong political consensus across both parties that the budget should be balanced if at all possible. That idea only began to erode in the 1960s, with a misuse of Keynesian theory.

Author(s): John Steele Gordon

Publication Date: 19 February 2021

Publication Site: City Journal