I’m just off a conference call where OMB Director Peter Orszag was going over the highlights of President Obama’s 10 year budget projections. I’m well known to be a fan of Dr. Orszag’s work: he is tough, honest, sharp, and conscientious. He dramatically improved CBO while he was there, and with OMB he has delivered the first honest budget that DC has seen in almost a decade. There are no magic wedges, where there is uncertainty, it is labeled, dollars are spent only once, and positive effects are estimated at values in line with mid-line projects. There are no massive economic upturns predicted to improve revenue projections. One can argue with the philosophy of this budget project, or with its priorities, but it is, at least, a document that does not insult the intelligence of people reading it, and is internally coherent on its own terms.
The headline steps included rolling almost everything back into the budget – putting an end to the fiction that Iraq and Afghanistan are not part of the budget – higher taxes on the wealthy, both by limiting deductions, and by allowing Bush changes to expire – and the introduction of a carbon regime. Also included are decreases in farm subsidies on those earning more than $500,000, ending the ability of sheltering foreign income, and a "economic substance" doctrine to address tax shelters.
The less heralded—but, to Dr. Orszag, equally important—goal is to streamline. "Make things easier," was a phrase that he repeated several times. Some examples he listed was a payroll deduction 401k for virtually all workers as an opt out, rather than opt in, and reducing the complexity of the Pell Grant system.
Orszag pointed to health care as the single largest driver of fiscal problems. He found "credible" Dartmouth’s study that showed as much as 30% of all health care delivery in the US does not improve outcomes. He believes that there will be other rounds of health care change, with the short term being deficit neutral, and in the long term being a significant savings. He believes that Congress will have to do the legislative work, with the President "putting money on the table to get the discussion started." He believes that the budget is in a "more dire" situation than it was even a few months ago. Rather than scaling back plans, Dr. Orszag believes that the plans have become more aggressive since the campaign.
The other headlines are in what is not touched: military spending is largely sacrosanct, other than war funding, which is expected to decrease. For this reason, it projects very large deficits for the remainder of President Obama’s term in office. It is an outline that, however, wrings the smoke and mirrors out of the budget process, and forces any political debate to proceed from the actual revenues, outlays, and expectations facing the government.
Update: OMB has just relaunched their website. . . change you can believe in click on.
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Emily Litella: But what’s this I hear about Prsesident Obama wanting to tax the effluent to pay for health care?
If anyone is watching the Homeland Security hearing on Cspan 3 check out the guy sitting behind Janet Napolitano (to her left as you face the screen). The guy looks like Sadam Hussein. It’s creepy.
Good post, great title which accurately summarizes. My post: http://getenergysmartnow.com/2…..ogosphere/
Stop this train. The rethugs want to eliminate taxes and cut back services.
I had treatment this year that likely did not improve outcome:
I had tendinitis in my right wrist (De Quervain’s tendinitis). received 2 shots of cortisone, wore a splint for 2 months. Tendinitis was gone after 3 month, but that’s a likely outcome for this condition even without treatment. Cortisone was very short term in effect, I had minimal increase in flexibility and decrease in pain for about 2 days after the injection. I could have had surgery to alleviate the problem, from what I’ve read and talking with the Orthopedic surgeon that would have meant immediate reduction in symptoms. Instead I had low to moderate chronic pain and decreased mobility for about 5 months.
So what was the right treatment for me? I was a somewhat lower profit center for my insurance carrier because I had those injections and wore a splint. My outcome was equal to a no treatment outcome. I could have opted for a higher cost (surgical) treatment and the good outcome would have happened sooner.
personally I feel my treatment was worthwhile – I had 3 consults with an orthopedic specialist, the injections are low cost and I now have some idea of personal efficacy of cortisone. The consults allowed me to understand my condition better.
Yeah, one of the (many) downsides with trying to use accounting gimmicks and smoke and mirrors on a budget is trying to keep track of all the lies used.
The K.I.S.S. principle is just easier all the way around.
The other 70% makes outcomes worse.
“The other half of the money for expanding health care _ $316 billion _ would come from curtailing payments to hospitals and insurance companies under Medicare and drug payments under Medicaid.”
http://www.huffingtonpost.com/…..70162.html
When you curtail payments, won’t the hospitals and insurance companies refuse service to people with Medicare?
Well, it’s a start.
I just watched the tape of Obama introducing the budget and took extreme pleasure in the number of times he emphasized how, for the first time in a long time, the budget was giving an honest assessment of expenditures. At least once, he actually used the word “dishonest” with reference to the way the Bush budgets hid the costs of the Iraq and Afghanistan wars.
That’s the closest I’ve yet heard him come to expressly calling his predecessor a liar. And ooh did it feel good to hear.
As a severe sufferer of Obama Whiplash Syndrome, I must take this moment out from decrying Obama’s insufficient progressivism to say that I am both perplexed and profoundly grateful that our crippled political system could have somehow managed to elevate so brilliant a natural leader to the Presidency.
Thanks for the laugh. With a mustache, she’d resemble SH a bit herself.
Why does Orszag hate social security?
And how much did your medical education cost? And would there have been a lower cost way for you to learn, like google?
Your snark is showing strongly today.
Hey Republicans and the Uber Wealthy! SUCK IT UP PUNKS! Your days of thievery are O-V-A! YeeeeeeeeHaw!
The new third rail, replacing SS. Thanks to Orszag.
Just listened to an hour long program interviewing the author of a book on torture. It influences the psyche.
There was a study from Isreal, conducted during a doctor’s strike, that showed the death rate dropped when the doctors were on strike.
Doctor’s bury their mistakes.
I don’t have a medical education, I’m a mathematician and software engineer. I went for consults because I believe that a professional diagnosis for new debilitating pain is a good idea. I did google prior to diagnosis, I did follow up visits because both google and the initial consult suggested a second cortisone shot might be indicated, the final followup visit was to get a professional assessment of treatment outcome. I should probably email the orthopedic surgeon and let her know when symptoms stopped, although I think that the statistics on my condition are pretty well established and I don’t believe she’s particularly interested in amassing more data.
I can estimate total cost of 3 orthopedic surgeon visits, 1 X-ray, 2 cortisone shots and a splint was about $1,000 ($80 out of my pocket, $920 out of insurance carriers profit).
I can just see a shot of this guy on Bill Maher or John Stewart joking about Saddam listening in @ the Homeland Security hearing. He looks remarkably like Hussein. I actually did a double take when I first saw him.
OT: Some good and funny news on the facebook front, where the Jindal is Kenneth the Page page has far eclipsed the Malkin, Santelli, Wurzelbacher Teabagger revolution page, approx 11,000 to 3,000, and the Kenneth page in much newer too! Repubs are losing their grip on so many fronts.
The Kenneth page has their sights set now on Jindal’s official page, so help the worthy cause by joining here:
http://www.facebook.com/group.php?gid=53556541031
I think Stirling isn’t here, but if so, I have a serious Q. You say
Yesterday I heard some fantastic number in terms of dollars saved by drawing down the wars, line $2 trillion. As I recall, those “savings” are from a baseline. So my Qs are, what is the savings (i.e., I can’t believe what I heard is accurate), and what is the baseline assumption (i.e., is it that both wars will continue at current pace forever)?
There are sticks involved in that. The question is how much they eat, and how much they pass on to other customers.
Never mind.
Worse than that, because continuing the wars will mean shorter life spans for military hardware, higher costs for veterans care, and so on. Basically, these wars a vast holes in the sand into which we are pouring our future.
you know how you get a piece of toilet paper stuck on your shoe and you shake it and shake it but it just won’t come off. . .
Thanks. So you’re saying that you got a lot more info from the doctor than you learned online, at a cost of about $1000.
I have a side interest in medical knowledge, since I think it is the knowledge gap between buyer (patient) and seller (doc) that gives the medical industry their economic power. If you care to think about it, as a sample of one, do you think it would be possible to design an online medical info system that would have provided everything you learned from the doc? I almost never go to doctor, so have used internet a few rare time to try to find out something medical, and I find it very poor for the task. Hard to find the info source that answers the questions I have, and lots of extraneous information.
America does not kill messengers! *g* I reckon you’re pissed and rightly so.
…and then…and then…*g*
this is Pay-Go.
And I think the reason SS keeps coming up is about the Trust funds – that money has to be paid out of general tax revenues, and it is needed starting in 2017 according the the SS actuaries.
We owe SSA that money. And it means higher taxes, higher borrowing or lower expenditures will be needed in 2017.
Higher taxes on high income people, lift income cap for FICA. Cut defense. Cut health costs via overall reform which moves the US to a single payer system. Increase OASI benefits to low income earners.
OK, so the baseline assumption is that the wars continue forever. But that’s a ridiculous assumption, in part because of the feedback loop of the cost. So the “savings” are vastly exaggerated because the assumption is faulty.
Oh, gawd, I’m scared. I think I understand this.
I think a personal relationship with a good MD that KNOWS you is very valuable. I’ve suffered many injuries including a broken back (t-6) and a shattered left leg. I’m almost 60, swim a mile a day and am in fair shape. I’ve been lucky for sure but good western medicine has done me right.
It’s creepy how much you learn if you hang out here long enough.
Per HuffPost, WSJ says Citigroup nationalization could happen today.
But…military spending IS targeted. The F-22, new destroyers, any new aircraft carriers, the next gen wired soldier doo-da, are all looking to get the axe. Gates is really pushing on that. From what I read, the only thing about military spending not on the block is the actual money for personnel.
Is anyone but me enraged that DeMint pushed through an amendment to the DC Voting Rights bill that Denies the FCC the right to reinstate the Fairness Doctrine – and all the Democrats voted for it?
I’m not saying that better medical info can replace docs in all situations. Just probing the extent to which such replacements might be possible. The test case is that wmd1961 stated was that the outcome of treatment was the same as no treatment, but that wmd1961 gained knowledge that wasn’t available on the internet. So it’s a perfect instance for investigating how the knowledge gap might be narrowed without involving doc appointsments.
A lifelong relationship with a good doc who knows you is surely one of the best uses of professional help. In these days of HMOs, I wonder how many people have that advantage.
There are people here who won’t be happy until we disband the entire military. And then they’ll find something else.
I know! It’s why I mostly lurk and occasionally ask stoopid questions. Okay, and make inane comments. It’s heady stuff, sitting at the grown-ups’ table. *g*
I got confirmation from the doctor, and expertise with a controlled substance (cortisone). The X-ray was not necessary, I believe it was done entirely as a liability avoiding measure – if it hadn’t been done and a fracture diagnosis was missed as a result then there would be a potential for a malpractice judgment against the physician.
I use google and web MD. I do see a physician because I think that human expertise still beats good internet research.
I put out a personal anecdote to give personal context to that 30% figure. I think illustrative stories make the statistical data easier to comprehend, and my anecdote seems to illuminate that statistic pretty well.
gotcha,
not many I spose
The Dems HATE being in the majority. They actually have to produce results rather than simply whine and complain. Hence, they don’t want the slightest chance of the Fairness Doctrine coming back to help solidify a majority of human beings in Congress (REAL Democrats). Thus they wish to sabotage themselves well before they 2010.
That’s gonna make Geithner cry.
Not sure what’s to get upset about. He’s “banning” something that wasn’t going to happen anyway.
The only people who have been talking seriously about the “Fairness Doctrine” have been the wing-nuts anyway.
My primary complaint is it could have been used as an opportunity to say, “You get a ban of the Fairness Doctrine and we get Net Neutrality enshrined in law and everyone wins.”
Any rumours about the JSF – F-35?
Plus another $250 Billion for Wall Street
http://online.wsj.com/article/…..83257.html
Altman’s on cnbc pimping public-private partnerships for toxic assests. Same thing he said in testimony today. He hates nationalization (which he defines as 100% ownership.) I’ll keep the channel on to see if there’s anything about citi.
(((raises hand))) And you know why? Because he’s a solo practitoner a la Marcus Welby (as noted here somewhere yesterday). And he’s losing his shirt financially. But he has this weird hangup about something to do with Hippocrates swearing.
Cutting waste like the F-22, etc, is a fine and obvious first step. A very solid follow-on would be to shut down at least 50% of the 750+ military bases garrisoning the entire planet at great expense to We the People.
A nice military budget in line with that of Russia and China would save us billions a year.
Yes it did. Thanks.
Well, he and Boehner can weep together.
They are closing the Navy Supply school around the corner. . .I’ll miss the bugle.
Blessings on him.
Hope they don’t hug, else it might arouse George Will.
can`t have that.
I didn’t see that one mentioned though it immediately came to mind as soon as I read of the desire to cut the F-22.
Ridiculous wastes of money.
I’m a B-52 guy. Cheap (relatively, on a BIG scale) and reliable. Then there’s the opposite – the ultra-expensive B-2. The B-2 has to be kept in special shelters all the time because dust and rain to seriously damage the skin of the plane.
THIS IS A FREAKIN’ WAR PLANE and it can’t handle dust. No doubt the F-22 isn’t a whole lot better…and think of the abject fear the military would have of ever losing one due to enemy fire. The F-35 is even more expensive and under-performing. It really needs to be shitcanned too.
Or is it $750 Billion?
I wish I had a long term relationship with a single doctor. I used clinics through about age 34 (mostly at University). Subsequently either I’ve moved or my physician has moved within about 2 years of initial intake.
Part of the reason I’m 6 months late on an annual physical is that my physician for the previous 2 years got married and moved away. This happened with the previous 3 GPs at that practice and I think it’s time to go elsewhere for that reason and also to be closer to home – I moved about 25 miles further away. I want to be confident that the next GP I see is going to remain in local practice for 10 years.
It’s time for me to repeat my anecdote about the U.S. base in Poland. When travelling there in June 01 (i.e. before 9/11), we passed by a 6′ masonry walled compound. My cousin said: The Russians moved out and the U.S. moved in. I found out in 07 that it is one of the secret rendition sites.
2X china’s budget would save us over $400B a year.
Since all the rest of us are supposed to “do more with less” it is only proper that the Pentagon do the same. LOTS less.
It’s harder to push for invasions and permanent occupations when the money simply isn’t there to support it.
We moved out of Cam Rahn Bay and the russkies moved in.
Very funny concept . . .
Turnabout is fair play.
Goose Gander.
That applies to EVERYTHING we do (torture, illegal detentions, illegal invasions, violations of treaties, etc).
Good point. Since neocons don’t seem able to abhor torture on moral grounds, surely there’s a price tag attached to it. Equipment, personnel, rendition expenses. And those would be line items . . . ???
Makes you want to get off the running wheel, doesn’t it.
I noticed that the Social Security surplus was not highlighted. This reduces the off-budget deficit (the number most commonly used by the media and politicians to describe the budget deficit) by about $200 billion. Why is that?
As for Orszag, I am deeply skeptical of his plans for Social Security and his promotion of high levels of defense spending.
I should also point out that if you look at the non-defense and non-entitlements part of the budget, i.e. discretionary spending minus defense, the federal government is actually pretty small.
Barney frank and Tweety smacking Issa but good today. “born again deficit haters” ahahaha
Surely the single biggest driver of the US budget is the military. Not just the DoD, but the many other agency budgets it passes on its costs to, like pensions, veterans health care, procurement. That’s true without two foreign wars. If Dr. Orszag’s a straight shooter, I expect to hear an acknowledgment of that.
Like every budget, there are income problems as well as outgo ones. One shortfall I hope he cures would include uncollected oil & gas revenues from federal lands, and for timber, minerals, water and grazing on federal lands. Another are the pages of subsidies to oil companies and other healthy industries. We can no longer afford them; they’re “socialistic” anyway, non? Corporations are supposed to use the same bootstraps as poor people.
But Dr. Orszag’s message, speaking on behalf of a very different administration, is like opening the windows of a house that’s been closed for too long while crime scene photos were taken and then hidden by some corrupt police chief.
I believe DoD does account for pensions (under their personnel costs) and procurement costs under their budget. VA picks up the health care costs for the wars.
140 billion for Iraq/Afghanistan in I think it was 2010. Then in years to follow Orzag said, 130 billion, then 50 billion and 50 billion. They assume less war the farther out they projected their budget.
There’s going to be a lot of infighting WRT the left over military spending over the next few years. We need clarity on what the $$$ will be spent on.
The military has to be strengthened after BushCo almost succeeded into breaking it completely.
The number of combat ready forces have to increase. This is vital as we move towards nuclear disarmament.
It’s not the actual figures I’m questioning, it’s the baseline, and therefore the calculated “savings.”
Roughly entitlements are about $1.4 trillion.
Defense is $600-700 billion.
Interest on the national debt is $240 billion
And the rest of the government is $300-400 billion.
This is before the various supplementals which Orszag now wants to include in the budget. But it shows that most of what we think of as the federal government is a fairly small piece of the pie.
Right-O! I didn’t catch the figures for Defense (the elephant in the room). Only what he said about projected budget for War. Will have to go to the document for the Defense piece.
Stirling implied that the baseline assumed the wars continued forever, meaning the replacement cost of equipment would soar (not that it isn’t already doing that). I argue that’s a false assumption for many reasons, including the feedback loop from the cost, and therefore the gigantic savings is a crock.
I think that was the premise though that the Bush folks had been using, that the “War On Terrah” was a Forever War, with Iraq and Afghanistan as the “fronts” as far into the future as they could project. With flat funding of $170B for them.
which is part of the dishonest Accounting gimmicks they were using.
I don’t know about that looping feedback stuff. I was just trying to let you know what he stated about War costs. The true costs of war are exponentially greater than spreadsheet numbers or even going and burning the billions of dollars in the front yard. It is sad to learn how completely bloodthirsty our politicians appear to be and many of our good citizens./s
Not sure how I think it should be handled without thinking it through. Here’s my initial thoughts. Put the war drawdown into the budget, both actual and baseline. Therefore there is no savings. OR, make the baseline a “no war” assumption, in which case the wars cost bigtime.
It is dishonest coming and going. When costs were increasing, it was kept off the books to make the budget deficits look smaller. Now if Obama is to be believed we will be drawing down our involvment primarily in Iraq so by including it now in the budget we will start with a high number which will rapidly decrease. It will knock a $150 billion off the deficit.
Some preliminary thoughts about how to handle the “baseline” in 82. Federal budgeting hides a world of sins in the baseline, and I doubt that Obama is any different.
Yep, W admin would have put the wars in the budget at precisely the moment when they were being wound down.
Given that for the last six plus years, the war costs have been kept off-budget as an “emergency” appropriation, I do appreciate the attempt to bring it on budget.
I haven’t done any analysis but would suspect, the figures used bringing it on budget as a “baseline” have a historical basis of “this is what was appropriated on average for FY ‘06, ‘07, and ‘08″.
Or I might be way off the mark.
I don’t understand economics, “baselines”. Would it be alright with you if I leave this job to you? Thanks for trying to help, though.
Practical info first, so you can skip the long anecdote if you want: my De Quervain’s went away after 2 5-minute acupuncture treatments at the Stanford Medical center.
Anecdote, probably of interest only to people who have De Quervain’s: when I mentioned my wrist pain to a manager, she made me fill out a workplace injury form, and then I had to go to the doctor to have it looked at — not my regular doctor, the industrial medicine doctor. I was sent to physical therapy, which went on for a year and had no effect (which means maybe it would have gotten worse without therapy. or not). It went on for a year because each time I went to the doctor for a re-evaluation, it was a different doctor, and each new doctor said he wanted to pursue a conservative approach, so he prescribed physical therapy. Finally, due to some reorganization, I was sent to a doctor at the Medical Center, and he wanted to try a different approach. Two five-minute acupuncture treatments later, no more De Quervain’s (occasionally my wrist feels sore, and I stretch it). It was also near the end of my physical therapy that I finally got the therapist to answer the question that none of the doctors did: I wasn’t in danger of getting Carpal-Tunnel Syndrome.
YMMV, of course. And no, I don’t believe in meridian lines or anything like that. I think the acupuncture disrupted the pain cycle, allowing inflammation to subside.
I went to Stanford medical foundation after initial treatment due to the orthopedic surgeon at my regular practice being on vacation.
I had suggested acupuncture as an alternative to surgery after the second cortisone shot had no lasting effect. Surgery was never pushed as an option – I had to ask about recovery times for surgery. I was told very fast recovery, and that she had seen patients that presented symptoms for 4 years or more that were pretty irritated they didn’t get surgery after 3 or 4 months.
I didn’t follow up on acupuncture as the condition ceased bothering me about 4 weeks after the third doctor visit.
The official DoD budget, already gargantuan, picks up only part of total “defense” costs. According to Chalmers Johnson, here’s a sampling of non-Pentagon budget items that directly support DoD programs:
Treasury – military retirement fund
DoE – nuclear weapons and research)
Homeland Security – various
DOJ – Assistance to DoD, State, et al., including paramilitary activities of the FBI
Transportation Dept.
State – foreign military assistance
Veterans Affairs – longterm health care of ex-service men and women
General Budget – interest on debt-financed defense expenses
NASA – military portion, eg, DoD satellites, launch and recovery costs
Intelligence Agencies – eg, NSA, CIA. I’m not sure which budget the DIA’s costs hit
Add’l Recruitment and Re-enlistment efforts off Pentagon’s books
Black projects not in publicly disclosed budget numbers (est’d 30-40% of acknowledged Pentagon budget)
Wars in Iraq and Afghanistan – supplemental appropriations
I left most personal commentary out of the post, but I will say something blunt:
Fact One: This budget does not go far enough, even by a fraction.
Fact Two: Dr. Orszag knows Fact One.
Is that the ‘universal savings accounts’ Obama mentioned in his big not-the-SOTU speech?
Think of the long-term retirement pay & services which would quickly disappear.
What did it get them?
I guess that kind of Truth is still a little out of their reach. Heh.
Last summer during the oil price debate/discussion when I first heard we were still giving subsidies to the oil industry I couldn’t believe it. It’s absurd.
Sorry about getting back so late to this but:
I assume Treasury is responsible for military retirements in the same way it would be responsible for all federal government retirements.
I tend to not be bothered by DoE being in charge of nuclear research and such. It gives another aspect of civilian control to the nuclear side of things.
DHS, State, DoJ have policing organizations/component. While they may contain some ‘para-military’ aspects, they are most emphatically NOT military.
DIA budget is handled as part of the DoD. It is not part of CIA and falls under the “black” portion of the DoD.
I’d like to see some proof on DoD recruiting efforts kept off budget.
While I decry the impact on the VA of the execrable wars, as a veteran myself, I appreciate the fact that there is a cabinet level group that at least nominally watches out for my interests.
Look, I worked in an Air Force Accounting and Finance office for 5 1/2 years and spent an additional dozen years working in various aspects of DoD procurements, as a direct federal employee and as a contractor scum. DoD has a lot of waste (as do many other parts of the Federal budget). Obama is at least attempting to rein things in and bring SOME transparencies through bringing the wars back into the budget. If you know what the codes are, you can find information about DoD, even within the DoD budget.