The Goodman Institute is doing work not done by any other organization – especially in the areas of tax, health care and entitlement policy. Without our work the nation might not have obtained tax reform. Now we need to defend it. The Trump administration is using many of our ideas to reform Obamacare by executive order. And we have developed a unique set of policy ideas for three groups of people who will be critical in the next election: seniors, women and people with pre-existing conditions.
Tax Policy: The Goodman Institute has become the leading think tank on tax policy – in this country and around the world. We are producing the latest, the best and the most respected analyses found anywhere. Our economists, Laurence Kotlikoff and Alan Auerbach, are the intellectual source of the original Ryan/Brady tax proposal, which eventually morphed into the 2017 tax reform. Here are some specifics:
- Kotlikoff and his colleagues spent three years developing a first-of-its-kind global model of international capital flows.
- The model includes every major economic region in the world; it has 3½ million equations; and a single run takes 6 hours, using several computers.
- Using the model, Kotlikoff estimates that the tax reform will raise the annual wage of the average family by $4,000 – a figure frequently used by the White House.
- Over a lifetime, tax reform for a middle-income 30-year-old household is worth about $65,000.
- Kotlikoff and Auerbach also estimate that the system created by tax reform is just as progressive as the system it replaced.
- Not only is tax reform not a giveaway to the rich, it is also not a budget buster – the ratio of federal debt to GDP will be unchanged ten years from now.
- The White House continues to use Goodman Institute numbers in defending tax reform; former Ways and Means Committee Chairman Kevin Brady sponsored a Capitol Hill Briefing on our results.
Going forward, we can expect the opponents to try to roll back the corporate tax cuts. Our economists are doing a state-by-state analysis of the benefits of tax reform in order to defend it against its critics – especially those who claim that the reform will not benefit middle-class families.
We are discovering that the average household gains economically in every state. Even low-income families are better off. But your gain is larger if you live in a state with low state and local taxes.
Health Policy: Two years ago, Pete Sessions (House Rules Committee chairman), Bill Cassidy (the most knowledgeable person on health policy in the Senate) and I produced a comprehensive bill to repeal and replace Obamacare. The bill was based on 12 bold ideas, which are summarized on this website. It would produce universal coverage without mandates and without additional taxes and spending.
In the face of congressional inaction, the Trump administration has recently announced that it will wholly or partially enact 5 of the 12 bold ideas through executive orders. One of the most important ideas is allowing employers to help their employees obtain individually owned health insurance – which they can take with them from job to job and in and out of the labor market. Another important idea is making it easier for employees to obtain inexpensive concierge care – with 24/7 access to doctors by phone and email.
Going forward, we will explain and defend these reforms – on TV, radio, in print media, on social media and through other online venues.
Two especially difficult issues arose in the 2018 election year.
First, what has Obamacare actually accomplished? Senior Fellow Linda Gorman showed that the percent of the population with private health insurance was lower the day Barack Obama left office than on the day he took office. This is despite spending more than $100 billion a year on subsidies – theoretically enough to insure 20 million people.
Second, can Obamacare be replaced without endangering those with pre-existing conditions? Last fall, members of the House of Representatives introduced a resolution designed by John Goodman. They pledged that in any block grant of funds, states would have to show that people with chronic conditions will get better insurance – lower premiums, lower deductibles and wider provider networks.
Entitlements. We have assembled the best team of economists in the country to tackle the nation’s most pressing economic problem: entitlement spending. Thomas Saving was a Trustee of Social Security and Medicare and served on President George W. Bush’s commission on reforming Social Security. Andrew Rettenmaier, a Texas A&M colleague of Saving, has done cutting-edge research on where our Social Security and Medicare dollars go. Saving, Rettenmaier and John Goodman have produced the only study ever done on how to privatize Medicare – without loss of benefits and without raising taxes
Laurence Kotlikoff has also done cutting-edge work on entitlement programs, estimating that the federal government’s unfunded liability (total promises minus expected tax revenues) is $239 trillion in today’s dollars.
Last year, we published a Brief Analysis showing that because of refundable benefits in the tax code it is impossible to be poor in America if you work full time – even if you earn the minimum wage and regardless of how many children you have. Going forward, we will focus on the need to reform 200 anti-poverty programs.
Agenda for Seniors. Senior citizens are discriminated against by a number of unwise public policies. We are working with key legislators in the House and the Senate on a legislative agenda to change that.
People on Social Security lose benefits if they earn even a modest amount of wage income. Medicare is paying doctors the way it did in the last century – long before the existence of email or iPhones. Seniors are the only people in our society who can’t have a Health Savings Account – from which to pay bills not covered by health insurance.
Double taxation of senior savings is unfair. Forced withdrawal of senior citizen savings makes no economic sense. And millions of seniors lose out on Social Security and Medicare benefits they have worked and paid for because they can’t navigate the complexity of programs that are supposed to have been created for their benefit.
Agenda for Women. The single most important economic and sociological change in our society in modern times has been the entry of women into the labor market. Today, three of every four women of working age are employed — more than double the share a half-century ago.
These changes have had a major impact on family life. Fewer than one out of every four households are “traditional,” with one wage-earner and a stay-at-home spouse. Dual-earner families — with both spouses in the labor market — now constitute about half of all married couples.
Our public policy institutions have not kept pace with these remarkable changes, however. Tax law, labor law and a host of other institutions are still designed from top-to-bottom on the assumption that husbands will be full-time workers, while wives will mainly stay at home. Almost every federal institution is in need of reform.
Some years ago, Wall Street Journal writer Kim Strassel and John Goodman wrote a whole book on these problems. More recently, Goodman Institute board member and former member of Congress Nan Hayworth updated the ideas in a Brief Analysis. We will have more to say on these issues in the coming months.
Agenda for People with Preexisting Conditions. Our solution builds on a House Resolution we helped Pete Sessions and Mark Meadows prepare last year. States will be able to receive their Obamacare money as a block grant and they will have broad authority to reform their individual health insurance markets, provided that:
- People with pre-existing conditions get better insurance, and
- The state has a goal of ensuring that people who leave their employer plans will have access to individual insurance that is similar to group insurance in price, quality and access to care – regardless of health condition.
Better health insurance for people who have existing health conditions means: lower premiums, lower out-of-pocket costs and wider networks than they currently have. Among the things covered by broad authority, states should be able to allow health plans to specialize in the treatment of cancer, diabetes, heart disease, and other conditions and exclude people who do not have these conditions.
Need for funds. The Goodman Institute is having more policy impact than other organizations many times its size. We are proud of what we have accomplished. But there is so much more to be done.