Politics – Page 10 – Donald Marron

Should Campaign Contributions Be Anonymous?

Although it addressed only direct spending by corporations and unions, the Supreme Court’s recent Citizens United ruling has rekindled broader concerns about the power of money in politics. Over at the Washington Post, Marc Geffroy and R.R. Reno argue that our traditional approach to these concerns –in particular the requirement that campaigns disclose their contributors — might be exactly backwards. Instead, they suggest that we should move in the other direction:

There is a way to break the iron grip on access that campaign contributions provide. The United States should establish an anonymous campaign finance system. We need a federally chartered clearinghouse for campaign donations that matches donors to designated, registered candidates and political action committees. Under such a system, politicians would not know who supports their careers, er, causes.

It’s a simple but powerful concept. The identity of the campaign donor would be kept secret, which would break the wink-and-nod link between money and the legislative process

Imagine the confusion on Capitol Hill. Members of Congress wouldn’t know exactly whom to reward with special carve-outs. Union leaders might say they’re big supporters of certain candidates, but who could know for sure?

The proposal raises some obvious practical questions about designing a truly anonymous system (many of which are addressed in Voting with Dollars by Bruce Ackerman and Ian Ayres). But leave those aside for a moment and ponder how this approach might (or might not) address whatever concerns you have about the role of money in politics. Disclosure is a double-edged sword: we can see who is giving how much to whom, but so can the whom.

Marc and R.R. finish their argument with an analogy to the secret ballot:

If you think requiring anonymity for political donations wouldn’t work or is impractical, ask yourself: Does the secret ballot work? Imagine politicians paying you if you promise to vote for them. You can’t — for good reason. The secrecy of the voting booth prevents anyone from knowing whether you are true to your promise. The same would hold for an anonymous campaign finance system.

On this point, I think they identify one benefit of the secret ballot, but overlook at least two others. First, the secret ballot protects voters from politicians that would retaliate against them if they cast the “wrong” vote. That’s the flip side of the paying-for-a-vote argument. Second, the secret ballot protects voters from anyone else punishing them for their vote.

Which leads to what I think may be the most interesting question about their anonymous contribution proposal: How many people out there don’t make campaign contributions because they don’t want relatives / neighbors / friends / employers / activists to know which candidates and causes they are supporting? And would it be a better world if they felt free to make their contributions anonymously?

Update: R.R. Reno suggests a related question: how many people and businesses feel they have to make contributions in order to avoid reprisals from elected leaders? In other words, to what extent are contributions defense rather than offense?

Instant Runoff Voting Awards the Oscar

As even the most casual film buff knows by now, the Academy of Motion Picture Arts and Sciences expanded the field of nominees for Best Picture. This year ten films have been nominated for the Oscar, up from five in recent years. Nominees include Avatar, The Hurt Locker, Up in the Air, the Blind Side, and Up.

What I didn’t realize until today is that to accommodate this expansion, the Academy also changed its voting process. Under the old system, members of the Academy voted for their favorite film, just like Americans vote for President (well, if you ignore that whole Electoral College thing). Each member got one vote, and the flick with the most votes won. Simple, but, if you think about it, problematic. In principle, a film that 21% of the members love and 79% despise could bring home the golden statuette. And with the expansion to 10 films, that minority could be as little as 11%.

As Hendrik Hertzberg describes in this week’s New Yorker, the new, improved system is instant run-off voting:

Members—there are around fifty-eight hundred of them—are being asked to rank their choices from one to ten. In the unlikely event that a picture gets an outright majority of first-choice votes, the counting’s over. If not, the last-place finisher is dropped and its voters’ second choices are distributed among the movies still in the running. If there’s still no majority, the second-to-last-place finisher gets eliminated, and its voters’ second (or third) choices are counted. And so on, until one of the nominees goes over fifty per cent.

This scheme, known as preference voting or instant-runoff voting, doesn’t necessarily get you the movie (or the candidate) with the most committed supporters, but it does get you a winner that a majority can at least countenance. It favors consensus.

I’ve long been a fan of instant runoff voting (IRV) in elections to public office. Why? Because it eliminates the downside of voting for a third-party candidate. In a race between D and R, you may worry that voting for third-party candidate I is “throwing your vote away.” That worry disappears with IRV. You can give I your number one vote and either D or R your number 2 vote. If I loses in the first round, you’ll be disappointed. But you won’t have wasted your vote since your second-place vote now becomes operative.

Hertzberg speculates that the switch to IRV may affect the Oscar race:

[H]ere’s why it may also favor “The Hurt Locker.” A lot of people like “Avatar,” obviously, but a lot don’t—too cold, too formulaic, too computerized, too derivative. (Remember “Dances with Wolves”? “Jurassic Park”? Everything by Hayao Miyazaki?) “Avatar” is polarizing. So is James Cameron. He may have fattened the bank accounts of a sizable bloc of Academy members—some three thousand people drew “Avatar” paychecks—but that doesn’t mean that they all long to recrown him king of the world. (As he has admitted, his people skills aren’t the best.) These factors could push “Avatar” toward the bottom of many a ranked-choice ballot.

On the other hand, few people who have seen “The Hurt Locker”—a real Iraq War story, not a sci-fi allegory—actively dislike it, and many profoundly admire it. Its underlying ethos is that war is hell, but it does not demonize the soldiers it portrays, whose job is to defuse bombs, not drop them. Even Republicans (and there are a few in Hollywood) think it’s good. It will likely be the second or third preference of voters whose first choice is one of the other “small” films that have been nominated.

For a nice graphic illustrating how IRV may work in the Oscars, see this USA Today piece.

For a summary of recent IRV advances, see this Huffington Post piece.

Crisis and Aftermath: The Economy and the Budget

Most of official Washington was closed today in the wake of Snowmageddon. But not the Senate Budget Committee, which went ahead as planned with its hearing “Crisis and Aftermath: The Economic Outlook and Risks for the Federal Budget and Debt.”

The three witnesses were Carmen Reinhart of the University of Maryland (famous for her work with Ken Rogoff on the history of financial crises), Simon Johnson of MIT (famous for his blog, The Baseline Scenario), and yours truly.

You can find my written testimony here. You can watch the hearing from a link on the website.

The gist of my message was:

Our nation is on an unsustainable fiscal path. If current policies continue, we will run trillion-dollar deficits in the years ahead—even after the economy recovers—and the public debt will rise faster than our ability to pay it. Persistent deficits and rising debt will undermine American prosperity, threaten beneficial social programs, and weaken our position in the world.

Those threats deserve immediate attention but our economy remains fragile. Payroll employment has fallen by 8.4 million jobs since the start of the recession, and long-term unemployment is at record levels. Recent data have provided some glimmers of hope—strong GDP in the fourth quarter and a decline in the unemployment rate in January—but our economy has a very long way to go.

Policymakers thus face a difficult challenge of balancing concern about current economic conditions with a meaningful response to our looming fiscal crisis. In thinking about that balance, they should keep five points in mind:

1. Don’t expect a rapid recovery. The recession does appear to be behind us, but the economy has much healing ahead of it.

2. Uncertainty has been holding the economy back. Uncertainty discourages investment and hiring and therefore undermines growth. The good news is that economic uncertainty has declined sharply over the past year, creating an environment more conducive to growth. The bad news, however, is that policy uncertainties are enormous. From expiring tax provisions, to uncertainty about the rules-of-the-road in the financial sector, to major policy initiatives on health insurance, climate change, etc., businesses and families are uncertain about the future policy environment. That discourages investment and hiring. Some of these uncertainties are unavoidable as Congress deals with important issues. But lawmakers should look for opportunities to reduce unnecessary policy uncertainty.

3. Persistent deficits and rising debts pose a serious risk to long-term economic growth. Concerns about the near-term economic outlook should not deter Congress from taking steps to strengthen our fiscal position over the next decade. Although major steps toward fiscal consolidation should not take effect in 2010 and 2011, Congress should begin to plan now for deficit reduction and debt stabilization in later years. That plan should include clear goals (e.g., a target trajectory for the debt-to-GDP ratio) and credible means for achieving them. President Obama outlined some steps in this direction in his budget, but I believe they fall far short of what is required. Under his official budget the debt would grow faster than the economy in every single year. That’s unacceptable.

The President has proposed that a fiscal commission be tasked with stabilizing the debt-to-GDP in 2015 and beyond. That proposal is worth serious consideration. However, I believe any commission should have a more ambitious goal–e.g., reducing the debt-to-GDP ratio to 60% by the end of the budget window. In addition, I wonder whether a commission created by executive order will have sufficient political legitimacy and power to have much effect.

4. A credible plan to reduce future deficits would help keep long-term interest rates low, thus strengthening the current recovery.

5. In the long-term, bringing our deficits under control will require both spending restraint and increased revenues. Spending restraint should receive greater emphasis both because spending is the primary driver of our long-run budget imbalances and because higher government spending may slow economic growth. Given the government’s existing commitments, however, it is unlikely that spending restraint alone can put our nation on a sustainable fiscal trajectory. As policymakers consider how to finance a larger government, they should therefore give special attention to making our tax system more efficient. That means thinking about ways to tax consumption rather than income, ways to broaden the tax base rather than increase rates, and, ways to tax undesirable things like pollution rather than desirable things like working, saving, and investing.

Initial Thoughts on the President’s Budget

1. Big deficits. Under the President’s specific proposals, deficits will total $10 trillion from 2010-2020. Oh, and if existing policies (as defined by the administration) run their course, those deficits would actually be $12 trillion. Those are gigantic numbers. Under either scenario, our debt would grow faster than the economy every single year. That’s simply not sustainable.

2. The Fiscal Commission warning label. Budget-watchers know Table S-1 as the place to go for budget totals. In today’s budget, however, Table S-1 had a new feature: a box describing the President’s Fiscal Commission:

The Administration supports the creation of a Fiscal Commission. The Fiscal Commission is charged with identifying policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run. Specifically, the Commission is charged with balancing the budget excluding interest payments on the debt by 2015. The result is projected to stabilize the debt-to-GDP ratio at an acceptable level once the economy recovers. The magnitude and timing of the policy measures necessary to achieve this goal are subject to considerable uncertainty and will depend on the evolution of the economy. In addition, the Commission will examine policies to meaningfully improve the long-run fiscal outlook, including changes to address the growth of entitlement spending and the gap between the projected revenues and expenditures of the Federal Government.

I think of this as a warning label because it’s trying to warn readers that the official deficit forecasts are too pessimistic if, and some would say this is a big if, the commission has an impact.

I think the commission is a step in the right direction, and I welcome the President’s willingness to set an intermediate fiscal goal, even as I might quibble about some details. In addition, I wish he had gone further and specified a target for reducing the debt-to-GDP ratio by, say, 2020.

3. The freeze on non-security discretionary spending. When this was announced last week, I was stunned by heat it generated in the blogosphere. Folks on the left decried it as harmful budget cutting in the face of a weak economy, and folks on the right decried is a sham that would have no effect. I spent about an hour trying to figure it out and decided I couldn’t find enough information to have an informed view one way or the other.

Now that the budget is out, I feel vindicated in that view. To fully understand the trajectory of non-security discretionary spending, you need to consider such obscure bits of budget arcana as the obligation limitations used for transportation funding (ob lims, to the initiated), the proposed conversion of Pell grants from discretionary to mandatory spending, the reassignment of bioshield from security to non-security spending, and the fact that Census spending is particularly high in fiscal 2010 because of the decennial census. I haven’t actually crunched the numbers, but that’s not my point tonight. Instead, my point is simply how hard it can sometimes be to match budget reality to budget communications.

More tomorrow.

Will Illinois Go Bankrupt Because of Scott Brown?

A sharp reader offers the following hypothesis (which I have edited):

Illinois is fundamentally bankrupt. It has less than $1 million in cash, pays vendors net 90, and owes its state university $450 million that it cannot pay. Oh, and it also has $60 billion in unfunded pension liabilities.

Now that the Republicans have 41 votes in the Senate, Illinois can’t count on any federal aid. The President’s home state will thus become insolvent.

(For some background on Illinois’s budget woes, see this link.)

My reader expresses similar concerns about California (where Governor Schwarzenegger’s budget assumes $6.9 billion in federal aid) and New York.

All of which raises a question for policymakers and municipal bond investors. Does the election of Scott Brown mean that the Senate will be unwilling to give federal aid to the states? The $862 billion stimulus bill last year (formerly known as the $787 billion stimulus bill) included substantial state aid, and it squeaked through the Senate with exactly 60 votes. Now the Democrats (and the Independents who caucus with them) account for only 59 votes.

Does that bode ill for struggling states and the investors who own their debt? Only time will tell. But I wouldn’t count the states out just yet.

The stimulus bill could have had 62 votes, but Senator Kennedy didn’t vote and Senator Franken hadn’t yet been seated. If the Senate majority can coordinate the same coalition–including Republican Senators Snowe and Collins of Maine–they will have one vote to spare for any new jobs bill (formerly known as a stimulus bill). In addition, with his paean to tax cuts in the State of the Union, the President was signaling that he wants to find enough common ground with congressional Republicans to get a jobs bill passed.

In the short run, then, I wouldn’t be surprised if substantial state aid finds its way into the jobs bill. That may buy Illinois and other struggling states some time.

In the long run, however, the reader is probably right that fiscally-strapped states will find the Senate less welcoming.

Legalistic answer to the title question: No. States can’t seek protection in bankruptcy court, so Illinois can’t technically go bankrupt.

The Debt Limit is a Tax on the Majority

Today the Senate voted 60-39 to increase the federal debt limit from $12.4 trillion to $14.3 trillion. No one is happy that we need to borrow another $1.9 trillion in the next year or two, but the alternative–default–is unthinkable. So let’s hope that the House follows suit when it votes next week.

As expected, today’s vote was entirely party line: 60 Democrats (including the two Independents who caucus with them) voted yea, while 39 Republicans voted nay; one R didn’t vote.

You might be tempted to look at these results and try to read into them some larger ideas about fiscal politics. Perhaps Democrats all voted to increase the debt limit because they are big spenders? Perhaps Republicans will recklessly risk default in their anti-government zeal?

I will leave to you, dear reader, to decide whether such claims have any merit. But please understand that the debt limit vote tells us absolutely nothing about them.

With rare exceptions, votes to increase the debt limit do not involve any real substance. Defaulting remains unthinkable, so the debt limit has to go up. The horse-trading before the final vote may have plenty of substance–this round included a welcome amendment bringing back statutory PAYGO rules as well as an almost-successful effort to create a budget commission–but the final vote is pure politics. The Senate has to deliver a debt limit increase. And that means that the Senate majority has to deliver the votes.

As a matter of politics, then, debt limit votes are a tax on the majority. The majority has to take the hit for increasing the limit, while the minority gets a free ride.

To test this view, I looked at Senate votes on the last five stand-alone increases in the debt limit (three other increases were part of the housing, TARP, and stimulus bills that passed in 2008 and 2009). The chart above shows the fraction of senators in each party who voted to increase the limit.

The results are striking: Back in 2004 and 2006, the Republicans (in red, but do I really need to say that?) controlled the Senate and thus bore the political tax of increasing the debt limit. In those two votes, the Rs accounted for 102 of 104 yeas. In 2009 and 2010, the situation was reversed, as the majority Democrats (yes, in blue) bore the political burden. In those two votes, the Ds (including the Is) accounted for 119 of 120 yeas.

And then there’s 2007, when the two parties shared the burden of boosting the debt ceiling. What explains that rare outburst of bipartisanship? Divided government. In 2007, President Bush had to work with a Democratic Congress to get the debt limit passed. With divided government, the pain had to be shared. In the other four years, however, the President was the same party as the Senate majority.

Bottom line: Sometimes it hurts to be in charge.

For a good summary of past debt limit increases, see this CRS report. For information on Senate votes, start here.

Wondering who the three aisle-crossers were? In 2004, Democrats John Breaux and Zell Miller voted yea. In 2009, Republican George Voinovich voted yea.

The Coming Budget Battle over TARP and Jobs

The House and Senate appear to be on a collision course about how to pay for a new jobs bill (aka a stimulus bill). The issue? Whether Congress can pay for new jobs programs by cutting back on TARP.

The House embraced that approach in the bill it passed before Christmas. That bill–H.R. 2847, the Jobs for Main Street Act–would cut TARP authority by $150 billion. For reasons I’ve discussed before, the Congressional Budget Office scores that cut as generating $75 billion in net budget “savings.” The House bill then uses those “savings” to offset $75 billion in new spending on transportation infrastructure, support to state and local governments, and other measures.

I put “savings” in quotes because no one believes that the TARP reduction would help taxpayers by anything close to $75 billion. Back in December, Treasury Secretary Geithner estimated that TARP would use at most $550 billion of its $699 billion in existing authority. As a result, Congress can cut at least $149 billion from TARP without having any effect whatsoever on the budget. In other words, the House’s TARP rescission would reduce TARP activities by at most $1 billion (and, in practice, probably by $0). So there aren’t any real budget savings here.

But that’s not the only problem with using TARP as an offset. As I noted in another post, the drafters of TARP tried to prohibit future Congresses from using TARP rescissions to pay for new spending. That prohibition is spelled out in Section 204 of the law:

SEC. 204. EMERGENCY TREATMENT.

All provisions of this Act are designated as an emergency requirement and necessary to meet emergency needs pursuant to section 204(a) of S. Con. Res 21 (110th Congress), the concurrent resolution on the budget for fiscal year 2008 and rescissions of any amounts provided in this Act shall not be counted for purposes of budget enforcement.

The House vs. Senate debate comes down to the interpretation of that section. The House apparently does not believe that Section 204 applies. As a result, it believes that TARP rescissions can be used to “pay for” other spending increases. The Senate, however, disagrees. It believes that Section 204 forbids the use of TARP rescissions to pay for other spending.

That conflict hasn’t flared up in public yet, but it is apparent in a carefully-worded footnote in CBO’s cost estimate of the House bill:

The House Committee on the Budget does not consider the original TARP authority to have been designated as an emergency requirement. Persuant [sic] to Sec. 204 of the Emergency Economic Stabilization Act of 2008 (Division A, P.L. 110‐343), the Senate Committee on the Budget does consider the TARP authority to have been designated as an emergency requirement.

Under congressional budget rules, emergency spending gets special treatment: it doesn’t need to be paid for (a fact that the House bill uses, by the way, since it designates about $79 billion as emergency spending that needn’t be offset). To avoid some obvious abuses, the budget rules therefore specify that rescissions of emergency spending can’t be used to pay for increases in regular spending (or regular tax cuts). Based on Section 204, the Senate believes that TARP is emergency spending and therefore can’t be used to pay for new jobs programs. For reasons I don’t yet understand [readers?], the House disagrees.

Don’t Double Count the Medicare Savings in Health Reform

In order to pay for coverage expansions (and other spending increases), the Senate health bill includes a mix of tax increases and spending reductions. Notable among these are several provisions that would reduce future Medicare spending and increase Medicare revenues.

Some opponents of the bill have argued that the spending reductions would eventually drive providers from the program and thus hurt Medicare beneficiaries. In response, some proponents of the bill have made an interesting argument: that the spending reductions and revenue increases would actually strengthen Medicare by extending the life of its Hospital Insurance (HI) trust fund, which pays for Part A of the program.

That argument is interesting for two reasons. First, it is absolutely correct within the narrow confines of trust fund accounting. The Medicare spending reductions and revenue increases in the Patient Protection and Affordable Care Act (PPACA) would indeed extend the life of the HI trust fund, thereby allowing Part A payments to continue further into the future. Second, that logic implies that many of the budget savings from the Senate health bill will eventually be used to pay for further Medicare benefits. As a result, those savings won’t be available to pay for the coverage expansions and other spending increases in the bill. In short, if you believe that the bill will strengthen Medicare, you shouldn’t believe that the Part A spending reductions and revenue increases are helping to pay for health reform.

The Congressional Budget Office makes exactly this point in a helpful note published today. The note explains the mechanics of trust fund accounting and their relation to usual budget accounting and then delivers the money quote:

The key point is that the savings to the HI trust fund under the PPACA would be received by the government only once, so they cannot be set aside to pay for future Medicare spending and, at the same time, pay for current spending on other parts of the legislation or on other programs.

That conclusion echoes a similar finding by Rick Foster, the Chief Actuary of CMS (the folks who oversee Medicare and Medicaid). Back on December 10, he noted:

In practice, the improved part A financing [resulting from the Senate health bill] cannot be simultaneously used to finance other Federal outlays (such as the coverage expansions under the PPACA) and to extend the trust fund, despite the appearance of this result from the respective accounting conventions.

Bottom line: Don’t double count the Medicare spending reductions and revenue increases in the Senate health bill.

Bending the Federal Health Cost Curve (Maybe)

UPDATE: The Congressional Budget Office discovered an error in its original cost estimate for the revised Senate health bill. CBO originally projected that the Independent Payment Advisory Board (IPAB) created by the bill would lead to substantial reductions in Medicare spending beyond 2019. CBO’s revised estimate shows significantly smaller IPAB savings in future decades. CBO’s new letter does not specifically address the federal commitment to health care (the specific cost measure discussed in this blog post), but it appears that the potential reductions are much smaller than originally reported.

Buried deep in CBO’s cost estimate of the new Senate health bill is a striking conclusion: CBO believes that the health bill would eventually reduce the federal commitment to health care. In short, the bill would eventually bend (or, at least, lower) the federal health cost curve (including both spending and tax subsidies).

That conclusion comes with two crucial caveats: CBO’s estimates into future decades are subject to great uncertainty and assume that the legislation executes exactly as written. As CBO itself points out, that latter assumption is shaky — Congress will undoubtedly revisit health care repeatedly in coming years and may well decide to soften the spending reductions and tax increases specified in the bill.

Still it is striking that the bill, as written, might reduce the federal commitment to health beyond the first decade. That certainly distinguishes it from the previous version of the Senate bill.

CBO writes (my emphasis added):

In subsequent years [i.e., after 2019], the effects of the proposal that would tend to decrease the federal budgetary commitment to health care would grow faster than those that would increase it. As a result, CBO expects that the proposal would generate a reduction in the federal budgetary commitment to health care during the decade following the 10-year budget window. By comparison, CBO expected that the legislation as originally proposed would have no significant effect on that commitment during the 2020-2029 period; most of the difference in CBO’s assessment arises because the manager’s amendment would lower the threshold for Medicare spending growth that would trigger recommendations for spending reductions by the Independent Payment Advisory Board. The range of uncertainty surrounding these assessments is quite wide.

The change in the IPAB is a bit arcane, but potentially a big deal if future Presidents and Congresses let it do its thing. Under the original Senate bill, the IPAB recommendations would be relevant only to the extent that Medicare spending per beneficiary was projected to grow faster than overall per capita health spending. In the new bill, the threshold is set much lower, reflecting inflation in overall consumer prices and consumer medical inflation. That change gives the IPAB more teeth and, in later years, more bite.

Key Budget Changes in the Senate Health Bill

Majority Leader Harry Reid released his revised health care bill today; the Congressional Budget Office followed shortly thereafter with its cost estimate.

Leader Reid has made many changes to his original bill. The one you will hear the most about, just because it is amusing, is that the tax on cosmetic surgery (the “bo-tax”) has been replaced with a tax on indoor tanning services. (I’m not sure of the politics here, but I presume this tax will be justified by pointing out that indoor tanning is the equivalent of cigarette smoking for your skin.)

From a budget perspective, CBO identifies the following as among the most important changes:

• The tax credit for small businesses would be made available to firms paying somewhat higher average wages, and it would first take effect in 2010 rather than 2011.

• The penalty for not having insurance would be the greater of a flat dollar amount per person or a percentage of the individual’s income, which would increase the amount of penalties collected.

• The provision establishing a public plan that would be run by HHS was replaced with a provision for multi-state plans that would be offered under contract with OPM.

• Certain workers would have the option of obtaining tax-free vouchers from their employers equal in value to the contributions their employers would make to their health insurance plans. The value of vouchers would be adjusted for age, and the vouchers would be used in the exchanges to purchase coverage that would otherwise be unsubsidized. (CBO and JCT estimate that about 100,000 workers would take advantage of that option.)

• Several provisions regulating insurers were added, including a requirement for an insurer to provide rebates if its share of premiums going to administrative costs exceeds specified levels and a general prohibition on imposing annual limits on the amount of benefits that would be covered.

• Additional federal funding for CHIP would be provided to states in 2014 and 2015.

• A provision that would increase Medicare’s payment rates for physicians’ services by 0.5 percent for 2010 was eliminated. Instead, the 21 percent reduction in those payment rates that is scheduled to occur in 2010 under current law would take effect. [In other words, the previous bill had a one-year doctor fix; the new bill has none.]

• The measure of Medicare spending that would be used to set savings targets for the Independent Payment Advisory Board was modified. [As I will discuss in a later post, this is a big deal.]

• The increment to the Hospital Insurance portion of the payroll tax rate for individuals with income above $200,000 and for families with income above $250,000 was raised from 0.5 percent to 0.9 percent.

• The 5 percent excise tax on cosmetic surgery was eliminated, and a 10 percent excise tax on indoor tanning services was added.

• Community health centers and the National Health Service Corps would receive an additional $10 billion in mandatory funding.

• Revisions to and extensions of the Indian Health Care Improvement Act were added.