What's the Deal With Baucus's $80 Bn Surplus?

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THE STASH OCTOBER 8, 2009

What's the Deal With Baucus's $80 Bn Surplus?

Richard Rubin of CQ has an interesting piece (subscription required) about what can be done with the $81 billion surplus CBO projects under the Baucus health care bill. Short version: Not much.

Senate Finance Chairman Max Baucus touted the $81 billion surplus in his health care bill Wednesday, but the intricacies of Senate rules mean he probably won’t be able to use it to provide additional subsidies or reduce tax increases in the bill.

All of the surplus is “off-budget,” meaning it is derived from Social Security revenue and very difficult to touch.

The bill would increase Social Security revenue because of the way that congressional scorekeepers anticipate employers would respond to an excise tax on high-cost insurance plans that is also part of the legislation. Many businesses, they contend, would avoid the tax by reducing the value of the health care benefits they provide to employees and plowing money into higher wages, thus generating bigger Social Security payroll tax revenue. ...

If Baucus, D-Mont., tried to use any of the off-budget surplus to increase spending in the bill or provide further tax cuts, the change would be subject to a budget point of order that could only be waived by 60 votes in the Senate, said James Horney, a former deputy Democratic staff director on the Senate Budget Committee.

It’s doubtful those votes could be mustered. Even if Democrats manage to get the 60 votes needed to move the overall bill forward in the face of what is expected to be strong GOP opposition, even some Democratic senators may be reluctant to waive the budget rules.

Which is to say, don't count on that money for rounding up a couple votes when the bill comes to the Senate floor.

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posted in: the stash, health care, business, health, labor, law, social issues, person career, chairman finance, max baucus, richard rubin, senate

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