Some more thoughts on the public option (and the deficit)

I was thinking of writing something more about the public option anyway when I ran across this article about the so-called Catfood Commission. The part about medical spending is dead-on, and this is why the public option was so important. The budget projections for it showed it putting some downward pressure on medical expenses.

In fact, it gives some possibility (not assurance, but at least hope) that medical care could be improved for everybody except the insurance companies. How would it help care providers? By simplifying and reducing paperwork.

Why would the paperwork be a big deal? Part of it is that there should be many fewer denials (as I alluded earlier, no profit motive for doing so), but the larger issue is standardization of paperwork (and digitizing medical records, which the insurance companies have been fighting for years because, being easier to search, it increases transparency). If that doesn't sound like a big deal, consider this: a friend of mine's dad is a doctor. He had a small practice, and his wife took care of the paperwork. Dad finally retired, handing the practice over (or selling, I really neither know nor care) to another doctor. My friend's mom worked full-time for more than a year afterwards, just taking care of the paperwork generated by the care my friend's dad did.

To get back to some of the other proposals of the commission, let's think about their suggested increase in Social Security full benefits retirement age. My first thought was that it wasn't too big a deal, given how small the age increases are, and how far away they are. But one thought gives me pause. The people most likely to be relying on Social Security for their retirement are those least likely to live those extra years. So I'm not sure whether it's problematic or not.

Reducing the mortgage deduction? I'm actually ok with this, even though it wouldn't be good for me, personally. In fact, I think it should be reduced slightly more, even, limited not only in dollars, but in number of houses. It doesn't make sense to me to get a deduction for a second home. It just seems to go against the rationale of the deduction.

Eliminating the charitable donation deduction? Given the uproar over having the deduction be a flat 28% rather than scaled to your tax bracket, it seems a non-starter. I don't have a strong opinion on it, though; it depends on how much it would reduce charitable giving.

Eliminating the Alternative Minimum Tax (AMT)? I've got mixed feelings about this. I like the idea of the AMT, but a) it should only be hit by people making a lot more money than currently happens and b) some things shouldn't count as deductions you're comparing the AMT against. For a), I think it should be people with income over $1M, indexed to inflation for the future. And with respect to b), some deductions, particularly state and local taxes, shouldn't really apply.

The thing that really torqued me, though, was hearing that they're talking about reducing the size of the government workforce. In a booming economy, I could actually get behind this idea, but talking about it when unemployment is already above 9% (and many more are already being forced to work part-time instead of full-time) just pisses me off. Did the people on this commission miss that the thing people want most is more jobs? Eliminating 200k jobs just isn't the way to respond to that.