HHS Budget FY 2024

Finance: The President’s Fiscal Year 2024 Health and Human Services Budget, March 22, 2023

WM: Hearing on President Biden’s Fiscal Year 2024 Budget Request with Health and Human Services Secretary Becerra, March 28, 2023 

I have put previous comments on orphan drugs, examining lessons learned from the pandemic that need to be noted, mental health hospitalization, getting to single-payer and establishing a Medicare Part E for Senior Medicaid and other long term care in the attachments. 

These comments will restate my upcoming testimony the the Labor, HHS and Education Appropriations Subcommittee and the House Budget Committee. I have not pulled any punches,

From LHHSE:

Developing the Public Option needs to be funded in this budget. Particularly, it should explore the impacts on coverage and cost of automatically enrolling individuals who are denied coverage under pre-existing condition rules. Such rules must be revoked as the price of passing the bill. Such a trade-off is necessary for enactment of such a proposal on a bipartisan basis. Healthcare reform should only be done in this way. Among our other proposals is to fund healthcare spending through an employer paid subtraction value added tax. This would allow for the repeal of the ACA-SM surtax on higher income individuals enacted as part of the Affordable Care Act.

From the Budget Committee Comments (PB proposals are in boldface):

Extend ACA premium support permanently, extend low cost care in states that have not expanded Medicaid

ACA subsidies are too low and are funded by taxing the wrong people (investors). Families in the Silver Plan still have problems meeting copays and paying premiums. The funding is also unfortunate. Rather than expanding Medicaid, replace it for the non-elderly with the  Public Option proposed in 2009.  The public option should also be extended to individuals who are denied coverage under pre-existing condition rules. Such rules must be revoked as the price of passing the bill. Such a trade-off is necessary for enactment of such a proposal on a bipartisan basis. 

Extends Medicare Solvency: Strengthen Medicare by increasing NIIT (ACA-SM) and limiting pass through income reforms

As above, taxes to support Medicare should be broad based, funded either by an employer paid subtraction VAT or a border adjustable goods and services tax (credit invoice VAT). This would allow for the repeal of the ACA-SM surtax on higher income individuals enacted as part of the Affordable Care Act. Tax increases on higher income individuals should be dedicated toward fully funding net interest, eventually reducing the national debt, funding veterans healthcare and overseas military and ocean deployments. 

State governments were under financial pressure as a result of the pandemic, especially in the area of healthcare costs, most especially for seniors in nursing homes who are “dual eligibles.” The heart of President Reagan’s Federalism Proposal was the transfer of state Medicaid expenses to the federal government, largely to fund baby boomers who would become dual eligible with time. Time is now up, or will be shortly. 

Welfare has been reformed, allowing state and federal governments to save money - which was part of the New Federalism bargain that was not accepted at the time. We will address this part shortly, but the irony is that federal money was reduced without the second part of the trade-off. Finish the process and create Medicare Part E for low income disabled and retirees.

The way to fully fund healthcare is through an employer-paid subtraction value added tax.

From Tax Reform Attachment: Subtraction Value Added Taxes

Subtraction Value-Added Tax (S-VAT). Corporate income taxes and collection of business and farm income taxes will be replaced by this tax, which is an employer paid Net Business Receipts Tax. S-VAT is a vehicle for tax benefits, including

• Health insurance or direct care, including veterans' health care for non-battlefield injuries and long term care. 
• Employer paid educational costs in lieu of taxes are provided as either employee-directed contributions to the public or private unionized school of their choice or direct tuition payments for employee children or for workers (including ESL and remedial skills). Wages will be paid to students to meet opportunity costs.  
• Most importantly, a refundable child tax credit at median income levels (with inflation adjustments)  distributed with pay. 

Subsistence level benefits force the poor into servile labor. Wages and benefits must be high enough to provide justice and human dignity. This allows the ending of state administered subsidy programs and discourages abortions, and as such enactment must be scored as a must pass in voting rankings by pro-life organizations (and feminist organizations as well). To assure child subsidies are distributed, S-VAT will not be border adjustable.

As above, S-VAT surtaxes are collected on all income distributed over $75,000, with a beginning rate of 6.25%. replace income tax levies collected on the first surtaxes in the same range. Some will use corporations to avoid these taxes, but that corporation would then pay all invoice and subtraction VAT payments (which would distribute tax benefits). Distributions from such corporations will be considered salary, not dividends.

The President has punted on reforming Social Security. This is a mistake - although Chairman Smith and the Majority will not like this proposal - probably because it would work and take the topic off of the table.

Individual payroll taxes. A floor of $20,000 would be instituted for paying these taxes, with a ceiling of $75,000. This lower ceiling reduces the amount of benefits received in retirement for higher income individuals. The logic of the $20,000 floor reflects full time work at a $10 per hour minimum wage offered by the Republican caucus in response to proposals for a $15 wage. Any increase to the minimum wage must fully cover tipped workers. The White House/Senate Majority/House Minority needs to take the deal. Doing so in relation to a floor on contributions makes adopting the minimum wage germane in the Senate for purposes of Reconciliation. The rate would be set at 6.25%.

Employer payroll taxes. Unless taxes are diverted to a personal retirement account holding voting and preferred stock in the employer, the employer levy would be replaced by a goods and receipts tax of 6.25%. Every worker who meets a minimum hour threshold would be credited for having paid into the system, regardless of wage level. All employees would be credited on an equal dollar basis, rather than as a match to their individual payroll tax. The tax rate would be adjusted to assure adequacy of benefits for all program beneficiaries.

Appropriations Subcommittees

Labor, Education, Housing and Related Agencies

Add Housing and Urban Development and Veterans Affairs Housing functions to reinforce synergies between housing, education and workforce development.  

Transfer out Health and Human Services to decrease the size of the LHHSE Appropriation package.

Health and Human Services and Veterans Affairs

Create synergies between human services and veterans health and other DVA functions.

Closing

We have serious concerns with the way President Biden is paying for the future of Medicare and extending Obamacare. Please share these with the Secretary and request a response.

Attachment: HHS Budget FY 2023 Video

Attachment: HHS Budget, F Y 2022 Video