Ezra Klein

WHY WE MAY NEED TAX REFORM.

The Politico reports that "Senate Budget Committee Chairman Kent Conrad predicted that the budget pressures will force action on a major overhaul of the current tax system by 2010 or 2011." You don't often hear that, so it's worth unpacking for a second. Len Burman, Director of the Tax Policy Center, recently released a report that laid this thinking out well. There are, he argued, a handful of "action-forcing" events that are going to focus the political mind on the inane way we fund our government. The most important of these is the Alternative Minimum Tax. The AMT is a sort of parallel tax track that ensures the rich pay at least some taxes. It wipes out deductions and closes shelters. If you qualify, and it's more than your tax burden under the normal system, you pay it instead. The problem is that it's not indexed to inflation. Every year, more and more taxpayers are exposed to it. And every year, Congress passes a temporary fix to extinguish the potential outcry. But if they...

THE CASE FOR (ANTIVIRAL) WASTE.

Just ran across an interesting study. In it, Ruby Siddiqui argues that it's cost effective to treat all symptomatic patients with antiviral medications, even given the fact that you'll inevitably waste some courses on patients who aren't infected. What isn't cost-effective is to try and test each case and then administer antivirals. it's one of those cases where it's less expensive to permit some waste of the resource than it is to tightly identify the affected population. Abstract here : Many countries are stockpiling antiviral (AV) drugs in preparation for a possible influenza pandemic. This study investigated the cost-effectiveness of such a strategy and the role of near-patient testing in conserving AV stocks, using a decision-analytical model. Under base-case assumptions (which included a fixed stockpile size that was smaller than the clinical attack rate) treating all symptomatic patients ('Treat Only') would be considered cost-effective (approximately £1,900-£13,800 per QALY...

WORTH QUOTING: OBAMA ON WHY CUTTING HEALTH CARE SPENDING IS SO HARD.

From his interview with David Leonhardt: I just recently went through this. I mean, I’ve told this story, maybe not publicly, but when my grandmother got very ill during the campaign, she got cancer; it was determined to be terminal. And about two or three weeks after her diagnosis she fell, broke her hip. It was determined that she might have had a mild stroke, which is what had precipitated the fall. So now she’s in the hospital, and the doctor says, Look, you’ve got about — maybe you have three months, maybe you have six months, maybe you have nine months to live. Because of the weakness of your heart, if you have an operation on your hip there are certain risks that — you know, your heart can’t take it. On the other hand, if you just sit there with your hip like this, you’re just going to waste away and your quality of life will be terrible. And she elected to get the hip replacement and was fine for about two weeks after the hip replacement, and then suddenly just — you know,...

STUFF WHITE PEOPLE SAY.

Not really sure what to say about this. It did make me realize that one of my favorite things in life is hearing people painfully enunciate slang. Saying the word "swagga" is not the same as saying the corrupted version of the word "swagger."

THE CASE FOR OVERREACTING TO THE FLU.

There's a bit of a "we have nothing to fear but fear itself" approach to the swine flu occurring in some corners of the blogosphere. I don't think that's quite accurate. Rather, we have nothing to fear but a lethal mutation of a pandemic influenza. It's true that the flu is, as of now, not especially deadly. Survival rates are quite high. That's a very good thing. And there's some evidence that this flu will prove mild. Possibly even more mild than a bad flu season. But it's not the end of the story. Influenzas mutate. The question is whether it mutates out of existence or towards lethality. "Towards lethality" becomes more likely if more people catch the flu and thus more mutations emerge. So being aggressive in stopping the spread of the largely non-lethal variant is important if we want to avert the development of a more lethal strain. It's not about stopping this flu. It's about stopping what this flu can become. But if the flu isn't currently very lethal, it does appear to be...

WORTH QUOTING: OBAMA ON THE DECISION MAKERS IN HEALTH CARE.

From his interview with David Leonhardt: I have always said, though, that we should not overstate the degree to which consumers rather than doctors are going to be driving treatment, because, I just speak from my own experience, I’m a pretty-well-educated layperson when it comes to medical care; I know how to ask good questions of my doctor. But ultimately, he’s the guy with the medical degree. So, if he tells me, You know what, you’ve got such-and-such and you need to take such-and-such, I don’t go around arguing with him or go online to see if I can find a better opinion than his. And so, in that sense, there’s always going to be an asymmetry of information between patient and provider. And part of what I think government can do effectively is to be an honest broker in assessing and evaluating treatment options. And certainly that’s true when it comes to Medicare and Medicaid, where the taxpayers are footing the bill and we have an obligation to get those costs under control.

ARE SODA TAXES...POPULAR?

Till now, I've been of the opinion that arguing in favor of raising revenue by taxing unwanted behaviors is little more than a quixotic argument. Good for a blog post, maybe, but nothing beyond that. Then I heard that the prospect of sin taxes was actually emerging in the administration's internal discussions. No decisions have been made, but I was surprised to learn that a soda tax had even been considered . If this NPR/Kaiser poll is correct, however, then the public is significantly more open to these approaches than I'd assumed: Problematically, the poll question lumps a lot of different policies together. Paying for health care by taxing cigarettes is actually a common strategy. It's how we funded S-CHIP, for one. Taxing soda is rather further from the center of the consensus. But there's no evidence, in this poll at least, that the public instinctually recoils from the idea. Which is not to say that it'll happen soon. But given that it's already been proposed in New York and...

WORTH QUOTING: OBAMA ON A SMALLER FINANCIAL SECTOR.

From his interview with David Leonhardt: THE PRESIDENT: What I think will change, what I think was an aberration, was a situation where corporate profits in the financial sector were such a heavy part of our overall profitability over the last decade. That I think will change. And so part of that has to do with the effects of regulation that will inhibit some of the massive leveraging and the massive risk-taking that had become so common. Now, in some ways, I think it’s important to understand that some of that wealth was illusory in the first place. So we won’t miss it? THE PRESIDENT: We will miss it in the sense that as a consequence of 25-year-olds getting million-dollar bonuses, they were willing to pay $100 for a steak dinner and that waiter was getting the kinds of tips that would make a college professor envious. And so some of the dynamic of the financial sector will have some trickle-down effects, particularly in a place like Manhattan. But I actually think that there was...

IS JOE BIDEN RIGHT ABOUT SWINE FLU?

Unsurprisingly, the United States Travel Association has issued a statement asking unnamed officials to "resist inflammatory comments on Swine Flu." Comments like this one, from the Vice President, mayhaps? I would tell members of my family -- and I have -- I wouldn't go anywhere in confined places now. It's not that you're going to Mexico, it's that when one person sneezes it goes all the way through the aircraft. I would not be, at this point, if they had another way of transportation, suggesting they ride the subway. If you're out in the middle of a field and someone sneezes, that's one thing. If you're in a closed aircraft or a closed container, a closed car, a closed classroom, it's a different thing. His office quickly released a clarification. Biden, they said , did not say what he said, and if you heard him say the thing he didn't say, then that was incorrect. In related news, Biden and bank-run enthusiast Richard Burr will be having an old fashioned scare-the-hell-out-of-...

IF YOU READ ONLY ONE LONG TRANSCRIPT FROM THE PRESIDENT TODAY, READ THIS ONE.

I don't think press conferences are terribly useful mediums. The assembled reporters haven't settled on a theory of what they're trying to accomplish. Some, like Ed Henry with his question on abortion, are looking to elicit a moment of spontaneous embarrassment or a flash of unexpected controversy. Some, like Andre Showell and his question on unemployment in black communities, try to air issues that don't normally command presidential attention. Some, like Jeff Zeleny and his request for Obama to recall a moment of "enchantment," want the flash of humanity that leavens the processions of policy details. Some, to paraphrase Armageddon Now, don't exhibit any method at all. But it's all happening at once. Reporters choose from a dozen theories of questioning and a nearly infinite number of topics. You get the occasional moment of insight, but it's generally an accidental thing, akin to pulling a book from a wall and finding you've opened the Bat Cave. So though the transcript to the...

OBAMA ON BIPARTISANSHIP.

Obama's digression into the meaning of bipartisanship last night was important for two reasons. The first was obvious: It's important to understand how the president defines the concept. And he was pretty clear. "I can't sort of define bipartisanship as simply being willing to accept certain theories of theirs that we tried for eight years and didn't work and the American people voted to change," he said. Rather, bipartisanship is "if I'm taking some of your ideas and giving you credit for good ideas." In other words, it's a process, not an outcome. The second is that Obama had a specific example in mind. "I've said this to people like Mitch McConnell," he recalled. "I said, look, on health care reform, you may not agree with me that we should have a public plan. That may be philosophically just too much for you to swallow. On the other hand, there are some areas like reducing the costs of medical malpractice insurance where you do agree with me. If I'm taking some of your ideas and...

ARLEN SPECTER ON HEALTH REFORM.

When Arlen Specter originally switched parties, I didn't think it meant much for health reform. So far as Republicans went, Specter was a likely get. His switch to the Democratic side made him yet likelier. But it was hard to say anything more definitive than that. Since then, Barack Obama and Arlen Specter have both dropped hints that their conversations are considerably advanced on one issue in particular: Health care. At last night's press conference, Obama was asked about Specter's defection. He spent a couple minutes echoing Arlen on Arlen: He's not a rubber stamp, long and distinguished record, streak of independence, etc. But then Obama said something telling: I do think that having Arlen Specter in the Dem Caucus will liberate him to cooperate on critical issues like health care, like infrastructure and job creation, areas where his inclination was to work with us but he was feeling pressure not to. That doesn't read like a speculative comment. It reads like Specter told Obama...

TAB DUMP.

• Questions and answers on EFCA. • A gross tomato that doesn't leak. • Should we force health providers to work amidst a pandemic flu? • Cost-effectiveness of anti-retroviral stockpiles and near-patient testing for pandemic influenza. • David Leonhardt interviews Barack Obama.

BREAD AND BEHAVIORAL ECONOMICS.

I'm with Ben Miller and Frank Bruni : Restaurants should charge for bread. As Bruni argues, there's no such thing as "free bread." Rather, there's such a thing as "slightly more expensive entrees." And that's the thing people are getting when they think they're getting free bread. That might all be fine if the amount of bread people were receiving corresponded to the amount of people who would actually pay the marginal cost of a baguette and some butter. But that's almost certainly not the case. Things that are considered "free" are not treated rationally. A nice experimental demonstration of this was relayed in Dan Ariely's book Predictably Irrational: The Hidden Forces That Shape Our Decisions . A few years ago, Amazon introduced "Free!" Super Saver Shipping. The deal was simple: By $25 worth of merchandise, save $3.99 in shipping. Sales shot up worldwide as consumers bought a bit more merchandise to qualify for free shipping. Except in France. When Amazon investigated the anomaly,...

HEALTH POLICY OPTIONS.

The Finance Committee is going to be releasing a series of three documents on health policy options. One will deal with delivery system reform, another will cover financing, and the third will detail mechanisms for coverage expansion. Yesterday, the Committee released the delivery reform options, and put them up for download here . This is the piece of the puzzle that attracts the least attention, but in some ways, might be the most important. Delivery system reform is where you can really save money through things like comparative effectiveness data or changing the payment structure. It's where you can really improve the quality of the care that the insured get, as opposed to just increasing subsidies for the uninsured. Which is all to say, it's worth a read.

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