Yes, it's progressive to cut wasteful goverment spending
Various libertarians say that a taxpayer receipt would lead taxpayers to want to reduce spending. I think the likely effect on taxpayers is that a receipt will change nothing, but I hope I'm wrong on this, and the libertarians are right. In particular, I hope the sums being spent on Medicaid, Medicare and defense will all raise some eyebrows. Which is rather the point. After all, the idea comes from Third Way's deficit-reduction package.
Libertarians shouldn't act so surprised that a center-left think tank is proposing something that might spur people to cut government spending. Both the Obama and Clinton administrations went to enormous trouble to develop health-care proposals that would pay for themselves and cut both the government's and the system's overall rate of spending. We can argue over whether the proposals will (or, in Clinton's case, would've) worked, but there's no doubt that the Obama administration fought for the excise tax on high-value health-care insurance and the Independent Payment Advisory Board because they think the proposals will work. By contrast, the Bush administration added a prescription drug benefit to Medicare and did nothing at all to pay for it.
The reality is that Democrats have spent years trying to cut spending in the health-care sector, and when they think they can get away with it, in the defense sector, too. That's partially because there's an authentic concern about deficits among the sort of center-left economists who staff Democratic presidential administrations, but it's also because people who think the government underinvests in important priorities such as early childhood education realize that's unlikely to change if health-care spending keeps growing as a percentage of the federal budget. I wrote about this back in June 2009:
Researchers have studied the various forces that decide whether a person will die early of disease: They call them "the determinants of health." In a 2002 paper for the journal Health Affairs, Michael McGinnis, Pamela Williams-Russo and James Knickman conclude that the breakdown goes something like this: "genetic predispositions, about 30 percent; social circumstances, 15 percent; environmental exposures, 5 percent; behavioral patterns, 40 percent; and shortfalls in medical care, 10 percent."
If medical care has such a minor impact on a person's longevity, why are we spending so much time and energy reforming the industry? The answer goes back to the money committees. As Office of Management and Budget Director Peter Orszag has said, "Health care is the key to our fiscal future." Without reform, government health spending alone will reach 37 percent of gross domestic product by 2050. When you hear folks fret over the looming entitlement crisis, it is really the health-care spending crisis that is obsessing them. ... The purpose of health reform, in other words, is to pay for health care -- not to improve the health of the population. Paying for care and improving health are, to be sure, both noble goals. The problem is that they have not settled into a peaceful coexistence. Rather, the spending conversation has consumed the health conversation. [...]
In early April, the Robert Wood Johnson Foundation released a 111-page report titled "Beyond Health Care," which concluded that health insurance does not equal health. "College graduates," it notes, "can expect to live at least five years longer than Americans who have not completed high school. Poor Americans are more than three times as likely as Americans with upper-middle-class incomes to suffer physical limitations from a chronic illness. Upper-middle-class Americans can expect to live more than six years longer than poor Americans. People with middle incomes are less healthy and can expect to live shorter lives than those with higher incomes -- even when they are insured."
Our health is not determined by what happens inside a hospital ward or a doctor's office. It is determined, as the Robert Wood Johnson report puts it, by "where people live, learn, work and play." We are making health decisions when we choose whether to walk or drive to work, when we fill our bags at the supermarket, when we enroll our children in early-childhood education programs. None of these is specifically a "health care" moment, but in the aggregate, they add up to the state of being we call "health." Or, increasingly, to the state of being we call "sick." There are ways to spend public dollars such that the scale tips toward "health" and away from "sick." But the ever-increasing portion of the budget we direct toward medical spending is squeezing them out.
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