HEALTH CARE AND PAYGO. I'm not totally sure I understand Garance's concerns below. Under a PAYGO regime, a health plan that required new funds would...require new funds. PAYGO doesn't bar all spending increases, they just need to be offset by revenue increases. You may need a VAT, or an employer tax, or a rollback of certain tax cuts, or a hike in marginal rates, or a variety of new funding sources cobbled together into a sufficient whole. Maybe I'm missing something here, but it's long been understood in the health policy community that their plans will have to be funded. Meanwhile, I'd suggest as well that the Democratic Congress is going to see the next opportunity to pass universal health care as a preeminent priority and, if the type of PAYGO enacted is too committee-specific to allow a favored plan, that form of PAYGO will fall right quick. It's certainly true, as Garance's source told her, that this largely eliminates the chances of sweeping universal health reform in the next two years, but the dynamic there has everything to do with the President. Blaming that on PAYGO is like blaming the lack of turquoise trees on the Anti-Turquoise Tree Legislation of 47. The question is 2008 and beyond, and I'd bet money on a Democratic President and Congress making health care, not budgetary rules, the priority. --Ezra Klein
