Reflex: November 17, 2011

Bowles and Simpson tell students slim chance for a deal, writes Jim Morrill. The chairs of the President’s deficit reduction commission took questions from UNC-Charlotte students on Wednesday about the work of the Super Committee. Don’s comment: I think President Obama made a mistake in not embracing the recommendations of this commission, and not including them in his budget.Particularly on taxes, even though the deal put forth by the commission was seen as too conservative (too many benefit cuts to tax increases) by many progressives last winter, all of the plans discussed in actual negotiations since have had fewer tax increases, and more cuts. Taxes received as a percent of GDP will have to rise substantially over current levels to ever have a sustainable budget.

Rising health insurance premiums in the news. On one hand, Igor Volsky cites a Modern Healthcare piece that reports a slower rise in employee health benefits: “[T]his year’s increase is lower than 2010′s and will continue to slow in 2012, according to survey results from Mercer.” On the other hand, a new Jenny Gold reports on a Commonwealth Fund study that illustrates ballooning employee health care costs over a longer period. “[A]nnual cost to employees increased by 63 percent [from 2003-2010], as businesses required workers to pick up a greater share of health insurance costs.  Per-person deductibles increased an average of 98 percent.” Austin’s comment: Though we know the general factors that influence health care costs and premiums, the specific reasons why one year’s increase is above or below another varies and is often unknowable by researchers who lack full commercial market data to study such things in depth. 

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