I don’t know why no one thought of this before, but Politico’s Jonathan Allen reports on an extremely clever idea for eliminating the federal deficit. In How the SCOTUS could help Congress save billions, Allen shows all that’s needed is for the Supreme Court to declare the federal government to be unconstitutional.
Allen doesn’t quite say it that way. Instead, he writes a lengthy article noting that some of the GOP deficit hysterics are salivating at the prospects that the U.S. Supreme Court will selectively strike down the cost portions of the Affordable Care Act while leaving intact the revenue/tax provisions. The result will be hundreds of billions in “savings” to the federal government over the next decade or so.
That money could be freed up just in time for a battle over whether automatic cuts to the Pentagon and social programs will kick in, and some members of Congress are already dreaming about the possibilities.
“We’re thinking [about] different options, but there are so many variations of what could happen from the court decision, it’s hard to make any hard plans,” said House Appropriations Committee Chairman Hal Rogers (R-Ky.). But, he added, a windfall “would be a factor” in discussions about whether to keep in place pending Pentagon cuts.
The math is complicated, but the premise is simple. If the court kills just the parts of the law that cost money, while leaving in place new taxes and spending cuts, that would leave more cash on the government’s books. If the whole law is struck down, the deficit would actually go up a bit. And if it’s upheld, there’s no change at all to the budget.
There’s only one little thing missing from Allen’s lengthy article, and I clicked through all three pages looking for it. It ain’t there. He neglects to mention the fact that these “savings” assume that if these cost provisions are struck down, nothing takes their place. So about 30 million Americans would lose health insurance and thus be even less likely to receive health care.
The ACA will extend Medicaid coverage to over 20 million people who are currently uninsured, while the exchange subsidies will, so the proponents claim, allow millions more to purchase private insurance they would not otherwise afford. No one is proposing anything to replace this coverage for the 30 million otherwise uninsured Americans.
But suppose you assume that without the ACA’s expanded Medicaid and subsidies, these 30 million Americans will still be able to obtain essential health care, and it would somehow be paid for by them or someone else. What the Allen approach means is that several hundred billions in costs would be shifted from the federal budget to those least able to afford it, but under conditions even less likely to lower the costs of providing equivalent care. In other words, people would be even further impoverished or die or be sicker from less care and/or the nation would be economically worse off because its total health care costs are higher.
So once again, we have a mindless, one-sided discussion of how to reduce the federal deficit that is completely disconnected from the consequences of that reduction on the health and welfare of the American people or even the broader economy.
And what exactly is the principle involved? One might as well argue that Congress could eliminate the deficit by eliminating Social Security, the VA and Medicare, and never mind what happens to people who depend on those programs. Better yet, we could eliminate any possibility of future deficits if we simply shut down vast portions of the U.S. Government, with the Supreme Court ruling, 5-4, that any federal government program the conservatives oppose violates the 10th Amendment, and that’s that.
Let’s see, if we did that, we could save, oh, about $1 trillion or so a year, but if we keep revenues in place, there would be budget surpluses forever! Brilliant.




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Scarecrow, the whole ‘deficit’ rigmarole is nonsense. Given that all currency,bonds,etc. are backed by ‘the full faith and credit the very idea of a ‘debt limit’ is nonsense. AND, in any event, there’s always the PPCS option (which for all those who would demean such an option, answer me this: why would the Congress pass such legislation back in 1996?)
Was Rush cloned or deed he spawn?
Brilliant.
I think I saw that dude at the opera. Or was it the monster truck rally? I always get them two things all mixed up…
Actually this points to the problem with ACA in the first place by equating health insurance with health care, which the proponents of ACA claimed as part of their justification for ACA that the uninsured do receive health care and basically called those people leeches (“free riders”). So you can’t very well say that people are losing health care when the justification for ACA in the first place was that the uninsured are already receiving it. ACA has serious problems both in the legislation itself as well as how it was promoted.
Answer me this: why would the Congress pass such legislation back in 1996?
As best I can figure, Senator D’Amato slipped it in as a favor to a poker buddy who lobbied for coin dealers.
Incidentally PPCS sounds like an insurance company. To unpack that, you’re talking about minting jumbo denomination platinum coins which. thanks to an amendment slipped into an omnibus appropriations bill (see above), the Secretary of the Treasury can mint any denomination in any quantity which can then be sold to the Federal Reserve at face value. The profits from coin sales are called seigniorage and its booked as miscellenous receipts, not debt.
The West Point Mint currently mints 10,000 1 oz coins (face value of $100, the Mint sells to them collectors at a markup over current platinum prices). A note from the Secretary can change that run to 9,998 $100 coins and 2 $1 trillion coins. :o)
Personally, I think the catchiest name for this is the trillion dollar coin. And its absolutely not true that the Jack Black character is based on a young Brad DeLong (“a bumbling assistant Treasury Secretary played by Jack Black accidentally picks up the trillion dollar coin and spends it on a Mountain Dew, sending the entire government into a mad scramble for the coin before the world economy collapses.”) :o)
http://www.tnr.com/blog/jonathan-chait/92867/the-coin-will-save-the-world