End of Life Counseling - The Last Word?

Here’s the bottom line on the end of life counseling controversy. (If you haven’t kept up with it, you can read an interesting summary and viewpoint by Thomas Sowell here about the underhanded way such counseling has been approved for Medicare reimbursement after being omitted from the reform bill.) It may be reasonable for Medicare to play some role in policies (but not individual decisions) about expensive transplants, diagnostics, and therapies, but it is none of their business what our doctors discuss with us in the privacy of the examining or hospital room. What an insult to physicians for government regulators to say to them, “We want to make sure you aren’t talking weather or sports, but if you want to discuss end of life care issues, here is a code you can use to claim reimbursement. We pay $25 per instance.” OK, the $25 is just made up. It’s probably too high.

I can’t imagine a good doctor who would not discuss such issues with his or her patient when appropriate, whether reimbursed or not. Nor do I see any way to interpret the Medicare policy change than as a way to reduce spending on end of life care. Let me hasten to say that reducing such spending may well be a good and reasonable thing depending on the patient and his or her age and condition. The fact that government has been given the power to influence such in any way whatsoever is truly regrettable.

And of course with doctors being manipulated and squeezed by Medicare, I expect the new code will be used extensively and will result in a news article in three or four years about the soaring cost of end-of-life counseling and the need to reduce the reimbursement rate for it.

Poverty And (Or of) Education

In a December 26, 2010, Op Ed in The State Newspaper, Furman University associate professor of education, Dr. Paul Thomas, presents a well reasoned debunking of several claims being made about education issues in the United States. His positions are that teacher quality is not the critical factor, that charter schools do not actually outperform public schools, that there is no use looking to Finland or Denmark for solutions, that there is no correlation between school test data and national economic success, and that teachers’ unions are not the problem. His conclusion: “The complicated and disturbing truth about our schools is nested in a lie by omission: The failure to mention poverty.”

Well, we certainly haven’t ignored the poverty problem. It has been forty five years since President Lyndon Baines Johnson declared “war on poverty,” and no truce has been declared. That year, 1965, 4.7% of GDP went to government social spending. The poverty rate at the time was ~15%, and unemployment was 4.6%. By 2009, government social spending tripled to 15.0% of GDP, the poverty rate was still ~14%, and the unemployment rate was ~10%. We have, perhaps innocently but perhaps in the name of political power, systematically disrespected and enslaved to unaffordable entitlements, millions of United States citizens.

What is it going to take to conquer poverty? If every poor household in America were to be suddenly granted an income from the federal government of $5,000 a month, would that do it? Would books suddenly appear in such homes and would the children immediately be properly fed and read to and taken to school on time and would the sense of personal responsibility necessary for good citizenship begin to be instilled in their children? I fear the effect would be just the opposite. The only certain change would be rising prices, and the poverty rate within five years would once again be 15%. And millions more would be lining up for that guaranteed income.

So, we are back to the fundamental problem: Education

And the solution requires education in the broadest sense including discipline, personal responsibility, history, civics, geography, law, ethics, economics, etiquette, speaking, reading, writing, and arithmetic, with science for the scientists, art for the artists, and skills for the skillful thrown in just to enable everyone to make a contribution and earn a living.

To make room for all these in the curriculum may require elimination of education in test taking and political correctness. It may require de-emphasis of sports and other extracurricular activities. It may require year-round schooling with longer days. And it may sometimes require starting at age zero in some place other than the home or with considerable outside assistance.

I know those things are not on anybody’s radar screen, but just wanted to make some positive suggestions lest I be accused of excessive negativity.

Any Old Excuse (Secession or Reformation) For a Party

The South Carolina secession celebration ball held December 20 in Charleston, SC, with 400 attendees at $100 each, might have given a little boost to the local economy and might have been a lot of fun for the attendees and it might have fed the news beast for a few hours, but I don’t see any value in it beyond that. Events leading up to a war that took the lives of 600,000 should be remembered and studied but not celebrated.

It makes me think of the upcoming 500th anniversary of the Protestant Reformation. It was in 1517 that Father Martin Luther posted his 95 Theses to the church door in Wittenberg, Germany, and catalyzed the rebellion against certain practices of, and departure of many from, the Catholic Church. You can be sure we will be hearing a lot about that as 2017 approaches. I know it is still six years away, but 500th anniversary celebrations take a lot of planning. Luther is probably given too much credit, or blame, for changes that were sure to come with the advent of the printing press, expansion of literacy, and replacement of feudalism with a hint of free enterprise, but, once his theses were noticed and brought to the attention of the authorities, he certainly took center stage for a while.

Of course secession didn’t have to cause a war. Lincoln could have said, “Good Riddance.” And today we would be living with an uneasy truce and ongoing negotiation between two countries, much like North and South Korea. And the end of legally sanctioned slavery was as certain, given world socioeconomic trends, as the eventual ceding of temporal power by the Roman Catholic Church. So, South Carolina was wrong in leaving the Union and Lincoln was right in seeing the value of the Union and in fighting to preserve it. Luther was right in protesting the exploitation of the people by the Church’s sale of indulgences, but Pope Leo X was wrong in throwing Luther out of the Church. He should have appointed him leader of a task force to clean up the problems. Maybe such an expression of wisdom could have avoided The Thirty Years War with Lutherans, Protestants, and Catholics robbing, exiling, and killing each other.

So, in the 21st century we have a united United States of America, still the envy of the world, refuge for many, and bastion of freedom. And we have a divided Christian church with hundreds of denominations and theologies to choose from. Some may argue that theological diversity is good news, but I am no more likely to celebrate the Protestant Reformation than I was to celebrate the secession of South Carolina.

And, lest you think I am just a total Grinch, Christmas, Easter, and the American Declaration of Independence are still on my celebration list.

Home Works of America 2010 Columbia Christmas Break

Mrs. G is 87 years old and lives by herself in a house with no central heat and no insulation.  She has broken windows and a poorly secured front door.  She has difficulty getting around, and has to navigate  steps to go outside to check the mail.  Housekeeping is a big challenge for Mrs. G, and she needs help.

Hopefully, after four days of work next week by volunteers from a church in her neighborhood, she will be warm and comfortable for the rest of this winter, her house will be clean, and there will be a new ramp to make it easier for her to go out and get the mail.  All this is thanks to Home Works of America, organizer and coordinator of repairs and improvements to Mrs. G’s home and six others Dec 27-30.  What a great way to spend some Christmas vacation time!

More volunteers are not needed for this particular week, but additional funding is always needed and there will be additional work sessions in 2011.  Check the calendar here for dates of future sessions and look here for ways to give to support this work.

Home Works also has a Facebook Group:

Home Works of America, Inc.

Imagining a Better Healthcare System

It may well be that Federal Judge Henry E. Hudson of Virginia is correct in his ruling that it is unconstitutional for the federal government to mandate that citizens buy anything, health insurance included, in the public marketplace.  I guess it is too late for a challenge to the constitutionality of the federal government taxing the citizens and buying for them, things they could just as well have bought for themselves such as Medicare.  Fifty years of precedent would be hard to overcome. If Judge Hudson’s ruling is upheld, I imagine the imaginations of those favoring universal health care will be satisfied through expansion of Medicare to cover everyone.  It wouldn’t happen all at once.  It would begin with lowering the age of eligibility to 60 and then to 55, etc. That strategy would eventually result in a duplication of Britain’s National Health System with its universal coverage and myriad problems.  Even that would be better than the convoluted system established by the Patient Protection and Affordable Care Act (PPACA).

Rising costs are always cited as a driver for change in the healthcare system.  Of course most of the money to be saved is in elimination of options for the elderly who are responsible for most of the cost.  That such is the strategy buried in the PPACA is clear from its establishment of the Independent Payment Advisory Board (See earlier post.) and the authority given to it. I’m not sure if simple restriction of availability through reducing physician reimbursements to drive them out of the system is the same as rationing, but I’m suspicious.

One way that private companies have dealt with the rising cost of health care for retirees is to cap what they pay.  I know personally of one formerly paternalistic company that now offers retirees a fixed number of dollars per year as reimbursement for health insurance or medical expenses.  It is the responsibility of retirees to make their own health care choices and incur their own expenses and submit their bills for reimbursement.  I’m sure many retirees find that documentation process tiresome and wonder why the company doesn’t just send the money since the amount allowed is well below everyone’s cost for insurance and non-covered expenses.  I guess it is because retirees might spend the money on other things and leave the company open to charges of abandoning their implied promise of lifetime health care.

That makes me wonder what would happen if the government just sent folks over 65 $5,000 or $10,000 a year of taxpayer money for the purpose of health care and left it up to them to spend the money appropriately.  I bet a lot of industries other than health care would get those dollars.  Which makes me wonder what all that tax money would have been spent on if it had been left with the people to begin with instead of being routed through Washington, DC, for a haircut.  I can imagine that the health care industry would have busted a gut over the decades competing to get a good share of it, that health care prices would be a fraction of what they are now, that most of the people getting healthcare dollars would be healthcare providers with a lot fewer insurance company and government employees and consultants and lawyers, and that the decision to go to a doctor and cough up money to pay the bill, without benefit of insurance, would be a lot less painful than it currently is.  Isn’t imagination wonderful!

Just Thinking Out Loud…About Healthcare Legislation's IPAB and the IRS

‘‘INDEPENDENTMEDICAREADVISORYBOARD
‘‘SEC. 1899A. (a) ESTABLISHMENT.—There is established an
independent board to be known as the ‘Independent Medicare
Advisory Board’.
‘‘(b) PURPOSE.—It is the purpose of this section to, in accordance
with the following provisions of this section, reduce the per capita
rate of growth in Medicare spending—
‘‘(1) by requiring the Chief Actuary of the Centers for
Medicare & Medicaid Services to determine in each year to
which this section applies (in this section referred to as ‘a
determination year’) the projected per capita growth rate under
Medicare for the second year following the determination year
(in this section referred to as ‘an implementation year’);
‘‘(2) if the projection for the implementation year exceeds
the target growth rate for that year, by requiring the Board
to develop and submit during the first year following the deter-
mination year (in this section referred to as ‘a proposal year’)
a proposal containing recommendations to reduce the Medicare
per capita growth rate to the extent required by this section;
and
‘‘(3) by requiring the Secretary to implement such proposals
unless Congress enacts legislation pursuant to this section.


(b) NAME CHANGE.—Any reference in the provisions of, or
amendments made by, section 3403 to the ‘‘Independent Medicare
Advisory Board’’ shall be deemed to be a reference to the ‘‘Inde-
pendent Payment Advisory Board’’.

Above are a couple of excerpts from the Patient Protection and Affordable Healthcare Bill which was passed earlier this year and is in the process of being implemented, repealed, and declared unconstitutional, all at the same time, depending on whom you talk to.  The first excerpt, SEC 1899A, establishes an independent board that can limit Medicare payments arbitrarily with the limits becoming law unless Congress enacts legislation to overturn them.  And this in spite of the fact that private health insurance companies will no longer be allowed to limit benefits.  I suspect this provision may lead to more Christmas Eve Congressional actions in the coming years, or maybe not.  The second little blurb, (b) NAME CHANGE, just changes the name of the Independent Medicare Advisory Board to Independent Payment Advisory Board.  I think that has been shortened to IPAB.

But, I was just thinking, why not let the IRS operate this way?  Just let the IRS set the tax rates at whatever is needed to bring in the required revenue and let that be the law unless Congress passes legislation to overturn them!  Oh, you don’t think the Executive Branch should have that kind of power?  Well, neither do I.  

Class Warfare and Why A Million Dollars Is Not What It Used To Be

“They (Republicans) want to borrow another $700B and use it to give tax cuts to millionaires and billionaires.”  - President Barack Obama

There’s a lot of misleading language around Washington these days about middle and upper classes and high incomes and millionaires and billionaires.  I never hear the words “lower class,” but, if there are middle and upper classes, there must be a lower class as well.  I guess it’s just not politically correct to mention it.  In any case, there are a few points that need to be clarified if we are to have an honest discussion and try to avoid nonsensical statements such as the president’s quote above given as a reason for raising taxes on families earning more than $300,000 a year.

Income and wealth don’t necessarily have a lot to do with each other.  Many who earn $1M in a year are far from being millionaires, at least partly because at least 40% of such an income already goes immediately to various taxes including income taxes, and because such persons often spend more than they earn or make risky investments.  Their incomes often fluctuate wildly depending on stock market performance or timing of stock options.  Sometimes they die broke.

On the other hand, families or individuals with moderate or even low incomes for many years often become millionaires through frugality, wise investing, and maybe a little good luck.  And those who have exercised such personal responsibility are not necessarily affluent because, in today’s interest rate environment, many millionaires have very low incomes, pay little or no income tax, and are forced to spend their principle for living expenses which is good because it means the rest of us don't have to pay their bills.  The safer investments such as short-term bond funds and money market funds are paying zero to 1.5% a year, so an investment of a million dollars will generate, at most, $15,000 a year in safe income.  In other words, a million dollars is not what it was in the days of John Baresfoot Tipton.  It is not the right of government to judge any such individuals, rich or poor, based on their wealth or income, or to take from one and give to another as a matter of "fairness" as President Obama has frequently advocated.

Many families earning in the neighborhood of a half million dollars a year consist of two college educated professionals with solid careers, several years of experience, an expensive home with a big mortgage payment, two to four children in private schools, little or no savings, and high sales and real estate and state income tax bills, who are probably still paying a third of their income in federal income taxes.  They have little or no job security and lots of obligations, admittedly of their own making.  I don’t expect to generate any sympathy for such folks, but we need to remember that they also build homes, buy a lot of stuff, eat at a lot of restaurants, give to charity, go to theaters and sports events, use valet parking, buy cars and groceries and furniture and art and electronics, etc., and basically do a heck of a lot to keep the economy going.  And the reason they usually end up at the head of the line when there are income tax cuts is because they pay most of the income taxes.  The argument that they can afford to pay more is no justification for raising their taxes to support out-of-control federal spending in the interest of “fairness.”

Many of those upper class earners are business owners and operators and are responsible for lots of jobs.  Even if they show up on some list as “wealthy,” there is a good chance that most or all of their wealth is tied up in their business and at the mercy of the economy, the competition, government regulation, and various market forces beyond their control. 

Millionaire and billionaire are two entirely different categories.  A millionaire at age 65 can easily spend all his or her resources in the retirement years on health care, nursing home care, family problems, liabilities, and other unavoidable expenses and die broke.  A billionaire, on the other hand, can spend 10 million dollars a year for a hundred years before running out of money…even assuming no interest.  Billionaires, like long term senators and representatives, are often persons out of touch with economic realities to whom money has become essentially meaningless and inconsequential and who therefore see no reason not to increase taxes.  Billionaires are often generous with their money and sometimes waste it in ego driven, job creating, political campaigns or risk it in big business endeavors that, if successful, create thousands of jobs.  Many are anxious to sign pledges to give away most of their money.  That’s no big deal. If I had a billion dollars, I’d be more than happy to spend $950M (95%) of it to promote things I believe in and help those I feel sympathy for. 

Here’s the main point: Billionaires, millionaires, and families making more than $300,000 a year are in entirely different categories and have nothing to do with each other, economically speaking, and lumping them together and demonizing them as “the rich” and punishing them with arbitrarily higher taxes is nothing more than class warfare, and it’s not helpful to the United States of America or to its economy.

You can hear the president making the statement in quotes above here.


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Federal Spending as Percent of GDP

OK, I know Senator Sanders wasn't talking about federal spending when he asked that, hopefully rhetorical, question.  But it would have been appropriate.

Beltway Back Scratching

This tax bill negotiation going on in Washington reminds me of the old joke about announcing to one’s boss, “I got to work late this morning so I need to leave early to make up for it.”  Far too many of our senators and representatives are apparently saying, “OK, I can go along with not raising taxes, but only if we agree to spend more to make up for it.”

Even Al Gore has conceded that the ethanol subsidies, for example, were a mistake, but they are apparently going to be expanded or extended as part of this tax sausage currently in process.  This AP story offers a glimmer of hope by reporting that Congressman Jim Clyburn was booed when he spoke in favor of the ethanol subsidies.  According to Minnesota Democrat Colin Peterson, "That wouldn't have happened a few years ago."

Peterson favors the ethanol incentives and says, "I know this will help some members in the House; different parts of this will help different members."  So, now we know what its all about!

You can read the whole story including other spending increases here. 

Estate Tax Considerations and Maybe a New Idea

It seems to me that if estates are to be taxed, there should be some consideration for the number of heirs involved. A parent should be able to leave more, after taxes, to five heirs, for example than to just one. And it should always be possible to leave a family business or farm to one’s heirs without them having to sell it to pay inheritance taxes.

An easy solution to the problem would be to eliminate the estate tax completely but make inheritances taxable as income with the provision that such inheritance income can be spread over the life expectancy of the recipient, much as installment sales of property are spread over several years and as IRA or 401K income can be spread over a life expectancy.  The distribution of an estate as taxable income would have to begin immediately as in the case of installment sales but be based on life expectancy as in the case of IRA's.

A wealthy individual with an estate of $10M and five children, for example, could leave each of them $2M that would go into tax deferred accounts that would have annual required minimum distributions, based on life expectancies of the heirs, to be taxed as ordinary income. If the wealthy individual left all the $10M to only one person, the required minimum distribution and resulting taxes, other things being equal, would be much higher. Of course heirs could always take more than the required minimum distribution, but would incur higher taxes by so doing.

To make some inheritance completely tax free, there could be an exclusion of taxes on the first $500K dollars of inherited income received by any one person. That would let the wealthy individual mentioned above leave $500K to each of the five children or a total of $2.5M tax free with $1.5M going into each child’s tax deferred account.

Of course I would prefer elimination of income and estate taxes completely in favor of a consumption tax but I really don't think our representatives are going to give up the taxing power they have now.  It just seems to me that, given the realities of our situation, the idea above is a more reasonable and fairer alternative than the various estate tax options currently under consideration.

Is this a new idea, or am I just reinventing another wheel?

Government Speak on Taxes

The language used to describe the controversy and negotiations over income tax rates is very frustrating to me. To start with, talk of “extending tax cuts” is nonsense. Tax rates can be extended, but tax cuts cannot. Cuts and increases occur at a point in time and result in new rates which are either lower than or higher than the previous rates. Those rates are then in effect or “extended” until another rate change occurs.

Tax rates were reduced in 2001 and 2003 during the Bush administration. Tax rates have remained unchanged, or been extended, from then until now. Those rate cuts included a provision that as of 12/31/2010, rates would go back up to levels from which they had been cut. I think we can all agree that would represent a tax increase from current levels. So the options being faced at this time were:

1. Extend the current income tax rates which have been in effect since the Bush tax cuts of 2001 and 2003 for everybody. This would mean no income tax cuts or increases at this time.
2. Increase income tax rates for all above a certain income level (the rich?) and extend current income tax rates only for the “poor” and “middle class” whoever they are.
3. Increase income tax rates for everybody.

With a lot of political pressure and concern about the economy on their minds, the president and congress agreed on Option 1, an extension of current rates for everyone. That is probably a good idea for a couple of reasons. First, to tax something is to discourage it. So, a higher tax on incomes tends to discourage higher incomes. And raising taxes now could further slow the sluggish economic recovery we have underway.

 

The idea of the two year extension is a bad idea however, because it still creates a lot of uncertainty about what the situation will be in 2013. I would have made the current rates permanent on all earnings less than $1M a year and put in a new slightly higher bracket for earnings over $1M per year.

 

The other language problem I have with tax talk is when folks in Washington talk about “spending money” on tax cuts. Tax cuts tend to reduce government spending though the abilities to borrow and print money have dampened the effects. In any case, leaving money in the hands of the folks or companies who earned it is not a case of government spending.

 

The so-called Bush tax cuts have been so demonized that it is interesting to look at federal government revenues and expenditures during the years the current tax rates have been in effect. Below is a chart that shows that information.  While it is true that we had a deficit each quarter from 2003 on, the government revenues were increasing faster than expenditures until the financial crisis of 2008 and the arrival of the Reid-Pelosi leadership team in Congress. 

 

The declining revenue beginning in 2008 is terrible, but it’s not because of tax cuts. It is because of job losses, lower profits, less overtime, fewer work hours, capital losses, and lack of interest income, all of which reduced the taxes individuals and companies owed.

 

One other thing stands out from this chart. Tax revenue may wax and wane but government spending marches on no matter what. It has more than doubled since 2000!

 

Medicare Treatment Options for Prostate Cancer

There is a very informative but frustrating article in today’s Wall Street Journal (12/8/2010) about Medicare reimbursement options for the treatment of prostate cancer, a nagging concern of most men my age. Medicare administrators are setting the prices and paying the bills and thereby determining what treatments are available, encouraged, and discouraged. The frustrating thing is that even the WSJ falls into the trap of talking about the “cost” of the various treatments when we have no idea what they “cost.” All we know from the article is the reimbursement rate established by Medicare for physician practices that provide the various treatments. That artificially established reimbursement rate is the price to the taxpayer but may or may not be an accurate reflection of “cost” which certainly varies significantly between physician practices based on capacity utilization and other factors. Here are the maximum reimbursement rates for the four major options a victim of prostate cancer faces. (It pains me to even think about it!)


     Wait and See                            Reimbursement for doctor visits

     Surgery to remove prostate           $16,000 (Scary procedure!)

     Implant of radioactive seeds          $19,000 (Also scary!)

     Targeted radiation (IMRT)            $40,000 (Scary but less invasive.)

Is it any wonder that urology practices have been trying to figure out how to get in the targeted radiation (IMRT) business and enjoy those large fixed reimbursements per patient? Yes, there is a large capital investment required, $1.5M+ according to the article, and that is the reason for the higher reimbursement rate, but with a flat rate for the procedure and protection from competition, there is clear motivation to make the investment and then treat as many patients as possible. That is exactly what many have been doing so the number of treatments has been increasing rapidly and the total reimbursements have increased from zero in 2001 to more than $1B a year. These increases seem to have shocked Medicare folks who are wondering if the fact that urology practices are buying their own IMRT equipment and referring their own patients to themselves is causing over use of the procedure.

The Medicare folks are wondering about the wrong thing. They need to be wondering how to stop the fixed reimbursements and get competition going among practices that have installed capacity because the tendency of competitors will be to lower the price per treatment to get increased business and higher capacity utilization. They also need to be wondering why they are so foolish as to reimburse at fixed rates regardless of capacity or capacity utilization or skill level or effectiveness or efficiency or results or customer satisfaction or any of the other things that usually determine the success or failure of businesses. Surely they will eventually realize that free market competition will expand availability at lower prices while fixed rate reimbursement will eventually require rationing to keep cost in control if rates are too high or shut down the business if rates are too low.

If Medicare insists on being involved in this issue and spending taxpayer money on it, there needs to be a separation of the fixed and variable costs. Let Medicare finance installations of the IMRT equipment around the country based on a projection of need and then let the physician practices bid for the business on a variable cost basis. Aging guys on Medicare would be better off in the long run under that scenario, and cost to taxpayers would be lower.

Public Schools, Private Schools, and the Voucher Question

There is an excellent pro-public education letter in The State today from Tiffanie Scott Kelly of Cayce.  In it she points out several things beyond education that public schools provide and argues that small private schools that do not provide all those services obviously have a cost advantage.  The non-education benefits offered by the public schools include after school care, free meals, nurses on duty, free transportation, and unrestricted admissions and enrollments regardless of language differences, physical and mental disabilities, or size of school facilities.  She doesn’t even mention the extensive sports and other extra-curricular activities that are major parts of public education but much less prominent in many private schools.

Ms. Kelly is right and provides an excellent explanation of why motivated parents who can afford to support both public and private schools often choose to send their children to the private schools and why US public education is not keeping up with much of the rest of the world.  It is an issue of “mission creep” and the resulting lack of focus on core education issues.  And, by the way, just like the millions of people who don’t even have children, parents who send their children to private schools still have to foot the bills for and should work to improve public education, however it is defined.  Those of us who don't like the programs or the cost, whether we have children in the schools or not, need to work on changing the definition.  You won’t find me supporting any vouchers for K-12 private school payments with taxpayer funds.  We have far too much of that already in post-secondary education.

Of course all those peripheral benefits being offered by US public schools are good things and may be well justified.  But they should not be the jobs or concerns of teachers and principals and should be separated out from the education budget so we get a clearer picture of what the true cost of education is and what is being spent on other welfare benefits. Bus and Breakfast Duty, for example, should be assigned to someone not qualified to teach and should be paid for by some budget other than Education.

For the good of the nation, we could steal the old Ford commercial line and argue that “Education is Job One,” a slogan that addresses both jobs and education. 

Toxicity Reduction Plan for Entitlement Cuts

It seems that the president’s deficit commission led by Erskine Bowles and Alan Simpson is having a hard time reaching agreement among even such a small group on how to reduce our annual deficits and make a timid move toward halting growth of the federal debt. They were supposed to present a proposal today but have delayed it for two more days. What do you think the chances are that any such proposal will be approved by congress on the proposed up-or-down vote? Of course the problem, as I understand it, is that nobody wants to be seen as favoring cuts in Social Security or Medicare, the major drains on the budget.

Here is an idea about how to get broader congressional support. The draft proposal is designed to achieve a reduction of $4T in the deficit over the next ten years. Of course that is not a real reduction. It just means the deficit would be $4T less than what it might otherwise have been. But, here’s the idea, inspired by all the resistance to elimination of earmarking which failed yesterday to pass in the Senate. Let’s take 1% of the $4T and divide it up among the 535 senators and representatives and tell them they can use it for projects in their districts or states or for campaign expenses or vacation homes or whatever they want with no accountability required. If my math is correct that would amount to about $75M for each one of them and, like most individual expenditures pointed out as wasteful, wouldn’t really have any significant impact on the overall goal of $4T in deficit reduction.   I wonder if such an enticement would make entitlement reduction proposals less toxic. It would probably be unethical to offer the money just to those who vote for the deficit reduction, but as long as everybody gets it, there should be no serious problem and probably there would be a great wellspring of support including peer pressure for a new atmosphere of frugality.  It might even encourage some to retire and make room for a more responsible class of leaders.

Here’s a little table that will let you check my math.