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Simpson, Bowles, and Obama Ignore Largest Budget Buster

Both the revised Simpson-Bowles deficit reduction plan, which includes slashing health care as well as $1.2 trillion in other cuts, and Obama's proposal to avert the dreaded sequester, ignore the largest and most easily controlled budget buster

 
PRLog - Feb. 20, 2013 - WASHINGTON, D.C. -- WASHINGTON, D.C. (February 20, 2013): Both the newly revised Simpson-Bowles deficit reduction plan, which includes slashing federal health care spending by some $600 billion as well as $1.2 trillion in other cuts, and President Obama's proposal to avert the dreaded sequester, completely ignore the largest and most easily controlled budget buster, claims public interest law professor John Banzhaf.

        While Simpson-Bowles is proposing cuts in many social services to save only about $1.2 trillion over ten years, and the President and Congress appear ready to risk a recovery-busting sequester to save about the same amount of money, smoking will be costing the American public two and a half times as much [about $3.0 trillion over the same 10 year period] –  most of which nonsmokers are now forced to pay in the form of much higher taxes for smoking related expenses under Medicare, Medicaid, etc., and in grossly inflated health insurance premiums.

        One simple but completely overlooked way to attack the budget deficit and reduce the national debt would be to increase the federal tax on cigarettes from $1.01 to $2.00 a pack; a rate far lower than in many developed countries in the world.  A similar but smaller increase in April 2009, from 39 cents to $1.01 a pack, has already boosted federal revenue by more than $30 billion.

        Over a ten year period, a 99 cents a pack increase would by itself make a very sizable dent in the budget deficit, says Banzhaf, who has been called  "Mr. Anti-Smoking," and "One of the Most Vocal and Effective Anti-Tobacco Attorneys."

        Rather than precipitating a public health crisis, as many predict the $600 billion slashed from Medicaid and Medicare will cause, a modest increase in the federal cigarette tax would be a public health bonanza, saving additional hundreds of billions of dollars as smokers are persuaded to quit.  Indeed, notes Banzhaf, the more modest 2009 increase slashed the number of smokers by some 3 million, resulting in historic lows for tobacco use, especially among young people.

        Declines in smoking result in an almost immediate financial payoff for taxpayers, says Banzhaf, simply in terms of the enormous sums now expended in the added medical care costs for premature and low-weight babies caused by maternal smoking.  Even larger savings kick in shortly thereafter, with reductions in the number of smoking-triggered heart attacks and strokes, and in the long run the decline in lung- and other forms of cancer will produce even more savings.

        "Since smoking costs the American economy about $300 billion a year, reducing it by 40% would equal all the savings from the Simpson-Bowles economies without any of the dire consequences many anticipate, and an even a more realistic reduction of 20% would reduce the adverse consequences by half," argues Banzhaf.

        Requiring smokers to bear personal responsibility for their choices is not only fairer to the great majority of Americans who wisely choose not to smoke; it also makes much more economic sense.

JOHN F. BANZHAF III, B.S.E.E., J.D., Sc.D.
Professor of Public Interest Law
George Washington University Law School,
FAMRI Dr. William Cahan Distinguished Professor,
Fellow, World Technology Network,
Founder, Action on Smoking and Health (ASH)
2000 H Street, NW
Washington, DC 20052, USA
(202) 994-7229 // (703) 527-8418
http://banzhaf.net/ @profbanzhaf

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Source:Professor John Banzhaf, GWU Law School
Phone:(202) 994-7229
Zip:20052
City/Town:Washington - District of Columbia - United States
Industry:Government, Health
Tags:Simpson Bowles, sequester, obama, smoking, cigarette tax
Shortcut:prlog.org/12083609
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