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 used many of our ideas to deregulate the health care system – often by executive order. And we have developed a unique set of policy ideas for three groups of people who are critical in elections: 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 Trump 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 was 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 used Goodman Institute numbers in defending tax reform; former Ways and Means Committee Chairman Kevin Brady sponsored a Capitol Hill Briefing on our results.
As the year 2020 drew to a close, we focused on the states.
Because of lower taxes and higher wages, the average Georgia household will enjoy more than $39,000 in economic benefits over their lifetime thanks to the 2017 federal tax cuts.
That’s the conclusion of Goodman Institute study by Laurence Kotlikoff. An earlier study by Kotlikoff and economists at the Federal Reserve Bank of Atlanta, also partly funded by the Goodman Institute, estimated the gain at $22,676 because of personal income tax cuts. The new study adds the impact of lower corporate taxes.
Going forward, we can expect the opponents to try to roll back tax reform. They will be less successful if they and others understand the benefits.
Health Policy: For well over a decade, health economists associated with the Goodman Institute have advocated broad use of telemedicine – in studies, backgrounders, editorials and in other forums. No other think tank seems to have paid much attention. In 2020, deregulation came swiftly. Millions of patients are experiencing virtual consultations with their doctors – including, by mid-April 2020, one-fifth of all seniors over 70 years of age.
The Goodman Institute also was the only think tank in the modern era arguing that employers should be able to purchase individually owned insurance for their employees—insurance that people can take with them from job to job and in and out of the labor market. Thanks to a Trump executive order, that opportunity became a reality on January 1, 2020.
John Goodman was one of the early advocates of a third Trump administration reform. Access to a physician at nights and on weekends by means of phone, email and other means used to be a privilege only the rich could afford. But new models of direct primary care (DPC) have made this type of service affordable for almost everybody. A Trump executive order for the first time allows employers to put money into an account from which employees can contract with a DPC doctor of their choice.
Goodman and Heritage Foundation Vice President Marie Fishpaw summarized these and other Trump health care deregulation reforms in a publication that got considerable attention – in the media and on Capitol Hill.
Before Donald Trump was even elected, many of the core Trump reforms were included in legislation proposed in 2018 by House Rules Committee Chairman Pete Sessions and Sen. Bill Cassidy, with the help of John Goodman.
In a September 2020 editorial, the editors of the Wall Street Journal wrote that Obamacare is not protecting patients with pre-existing conditions – noting that:
As health experts John Goodman and Devon Herrick have noted, Houston’s MD Anderson Cancer Center doesn’t accept “a single private health insurance plan sold on the individual market in Texas.” Having an insurance card is no comfort to cancer patients shut out from top hospitals and doctors.
Right before the election, National Review editor Rich Lowry predicted Donald Trump’s failure to offer a new health care plan could be why he loses the election. Lowry pointed to the plan proposed by Goodman and Fishpaw as the path Trump should follow.
After the election, the Wall Street Journal’s editors echoed Lowry’s thinking. They said Republicans should look to John Goodman for guidance on health care and they linked to the Goodman/Fishpaw publication.
They go on to commend the Health Care Choices blueprint, a document put together by Goodman, Fishpaw and representatives of more than 70 think tanks and public policy organizations.
Many of the reforms we now enjoy were accomplished by executive order. In principle they can be countermanded by Biden administration executive orders. Also, where Congress has been involved the deregulation is only temporary. When Covid goes away, the ability to talk to your doctor by Zoom or Facebook will also go away.
So the first order of business for the Goodman Institute is to make sure that all members of Congress understand the value of making these changes permanent.
Our next goal is to achieve bipartisan interest in rational health reform – including reform of Obamacare. (See below.)
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 $165 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.
Early retirees on Social Security lose benefits if they earn even a modest amount of wage income. Before Covid forced a temporary change, Medicare was 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 citizens’ 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.
These public policy mistakes need to change.
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 is “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 Pre-existing Conditions. Our solution builds on a House Resolution we helped Pete Sessions and Mark Meadows prepare in 2018. 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 their 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.
New Book. Many of the problems discussed above are examined in greater detail in John Goodman’s new book: New Way to Care: Protections that Put Families First. The Thesis: SafetyNet institutions designed in the last century are inadequate for the challenges of the modern age. Taking on Social Security, Medicare, Medicaid, disability insurance, workers compensation, unemployment insurance and more, Goodman shows that we pay too much for the protection we get in return. The inadequate response to the Covid-19 crisis made many of the defects of these institutions apparent to millions of beneficiaries.
During 2021, the Goodman Instituted will promote the book and its message to a national audience.
Bipartisan Reform. No one seriously believes that important public policy reforms can happen over the next four years without bipartisan effort. Yet opportunities are there, especially in the areas of Obamacare reform, Medicare reform, and tax reforms affecting seniors and working women.
We are already involved.
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.