I’ll never forget Sen. Phil Gramm, the staunch fiscal hawk and self-proclaimed budget-balancer, telling me how it was just fine for the Reagan administration to enact the nation’s largest peacetime military buildup without raising taxes to pay for it.
Borrowing, he said, was the American way. “You do it for your house, don’t you?”
And so we did, to spend the Soviets under the table in the ’80s, to secure Kuwait militarily in the ’90s and to pulverize and reconstitute Iraq and Afghanistan in the 2000s. And we didn’t find the revenue for trillions of dollars more of what we as a nation decided we needed, or wanted, to do.
So it should be with a sense of relief, and not that same old derision, that readers should behold something they probably didn’t know existed related to the Affordable Care Act.
In policy-maker speak it’s called a revenue device. In reality, it’s a tax.
Wait? Something many of us will pay? The answer is yes, and hooray for that.
Included in the ACA was a tax on health insurers and makers of pharmaceuticals and medical devices. Call it a windfall profits tax. These corporations were, after all, going to be beneficiaries of a massive public-private quest to insure more Americans.
That tax, which takes effect Sept. 30, is projected to raise $116 billion over the next 10 years and help pay for subsidies available through state health exchanges and the expansion of Medicaid. Other key revenue devices have been savings in Medicare reimbursement and taxes on so-called “Cadillac” insurance plans that benefit the wealthy.
Yes, I know. This seems so alien: actually paying for something the nation decides it needs. You would think we would try the same thing with highways, bridges and endless wars.
Not surprisingly, with insurers underwriting the effort, opponents are attempting to revoke the tax.
And it’s not surprising to see breathless reports such as USA Today’s recent headline, “Who’s paying new Obamacare tax? You” It sounds very scandalous.
The report pointed out that states themselves will pay some of the tax, as they contract with managed-care providers for Medicaid, and those providers are on the hook.
That means the headline is true. This is a broad-based tax for which costs will be passed on to me and thee.
Sure, such a tax sounds surreptitious verging on wrong. But let’s face it. This is the way we raise revenue anymore, wrong though it is. What would be right would be using our progressive income tax system to pay for what government does rather than with backdoor means such as excise taxes.
So, call it what you will. A tax. A broad-based tax. Say it with me. Breathe in. Breathe out.
“The tax on health insurers is a small price to pay for helping to extend health coverage to 25 million more Americans without increasing the deficit,” writes Paul Van de Water, an analyst with the Center on Budget and Policy Priorities.
It is scandalous that over the last quarter century the nation has been entranced by a something-for-nothing mentality pitched by so-called fiscal conservatives who were simply postponing days of reckoning.
What we have endured are deficits by design by people who, on the altar of senseless tax cuts and blank checks for the military, would gut the support system for America’s less fortunate.
Well, now we’re helping some of those less fortunate with their health insurance. And, oh, and by the way, last month the federal deficit, at $119 billion, was down 13 percent from last August, the lowest in six years.
Phil Gramm, now retired and comfortable with his federal benefits, would be the first to say, “That’s not how we do things around here.”
Longtime newspaperman John Young lives in Colorado. Email: email@example.com.