As reported in Huffington Post 11/4/11

 

WASHINGTON — House Speaker John Boehner said Thursday that any bipartisan agreement reached by the congressional deficit-reduction supercommittee will need to include some new tax revenue.

Most Congressional Republicans have signed a “taxpayer protection pledge” — devised by the Grover Norquist-led group Americans for Tax Reform — vowing not to raise taxes. When asked about Norquist on Thursday, Boehner dismissed him as “some random person in America” but later revised his comments to say that “Norquist, like millions of Americans, believes that raising taxes is not good for our economy.”

According to CBS News, Boehner insisted that Republicans would only compromise on tax revenue if Democrats were willing to take significant steps to shore up entitlement programs.

“Without real reform on the entitlement side, I’m not even going to put any new revenue on the table,” Boehner said. Entitlement programs include Social Security, Medicare and Medicaid.

Any new tax revenue would not come from raising rates, he said, but from overhauling the tax code, sweeping out loopholes and deductions in order to reduce individual and corporate rates.

“I do think that our efforts to have a flatter, fairer tax system, with our targets being 25 percent top rates for corporations, 25 percent top rates for individuals, is achievable,” Boehner said. “That means you clean out all the garbage. I think it’s very important that it get done.”

Boehner says he remains committed to helping the deficit panel succeed and that Congress should approve its recommendations if it produces a plan to curb the government’s gush of red ink. He expressed confidence on Thursday that the group would meet its goal.

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“I didn’t agree to set this thing up with any idea that it wouldn’t succeed,” Boehner said. “I’d love to exceed the goal, but we have to meet the goal, and I’m going to put every ounce of effort in to make sure that we do.”

Shortly after meeting with reporters, Boehner met again with supercommittee Republicans.

The panel has three weeks to come up with recommendations that would be given an automatic vote by both House and Senate.

The deficit panel appears deadlocked over demands by Democrats that it raise substantial new revenue. Republicans are united against the idea, though a GOP proposal last week counted new Medicare premiums and larger contributions from federal workers to their retirement as revenue. Republicans also assumed about $200 billion in revenue would come from the economic growth associated with reforming the loophole-cluttered tax code.

In a surprise development, the three GOP senators in the so-called Gang of Six group that forged a bipartisan deficit proposal including about $2 trillion in new revenues signed on to a letter drafted by conservative stalwart Jim DeMint, R-S.C., that called on the supercommittee to propose a solution with “no net tax increase.”

Boehner discussed a potential deficit deal with President Barack Obama this summer that would have allowed up to $800 billion in new revenues as part of a comprehensive tax overhaul bill that would have eliminated many tax breaks and used the savings to lower income tax rates.

However, the Boehner-Obama talks fell apart.

Boehner said Thursday that “all kinds of discussions” are going on now.

“I think there’s room for revenue but there’s clearly a limit to the revenues that may be available,” Boehner said.

As reported by ReimagineAmerica

Congratulations to the FBI for their “take-down” of a $100M Medicare fraud ring on October 13,2010.  According to the NY Times October 14 morning addition, the “band of Armenian-American gangsters” billed Medicare for more than “$100M by inventing 118 bogus health clinics in 25 states”.  According to the paper, the gangsters made off with $35M in cash that cannot be recovered.  You will find a link to the NY Times news story at the end of this blog.

How did this happen?  It happened because Medicare is a wholly automated payment system that is notoriously porous.  If the SSN number of both patient and doctor are validated electronically, and the treatment code is separately validated electronically, an electronic payment is generated.  Only after the payment is any audit performed.   Often, but not always, the audit happens only when a recipient reviewing their own Medicare statement reports activity they know to be fraudulent, according to the CBS 60 Minutes exposé filmed in Florida, earlier this year,   I suppose that Medicare subscriber doctors, also,  report fraud when the IRS accuses them of under reporting their income?

The 2010 Health Care Reform legislation did include funding for Medicare fraud detection.  But focusing on investigation after the fraud occurs and on TV warnings to Medicare recipients urging them to “guard the card” will not solve a problem estimated to be at least $50B – billion with a B – dollars a year!  In fact, the legislation expects these efforts to save only $2B a year – 4% of the estimated reduction in benefit payments mandated by the Act.   Wow we need to do 96% better or cut seniors’ benefits, according to Congressional Budget Office estimates!

Last week Fox Business News reported, and an IBM spokesman confirmed,  that Sam Palmisano, CEO of IBM,  told Barack Obama that IBM had carefully studied the Medicare fraud issue and estimated the actual 10 year problem to be closer to $900B – that’s billion with a B — over ten years.  Mr. Palmisano believes so strongly in both IBM’s numbers and IBM’s potential solution that he offered to “build” the  solution for “free”.  Fox reported that Barack Obama turned down this offer.   Can you imagine, an American CEO of an American corporation offers a solution that could, potentially, save 90% of the projected health care reform deficit and the President of the United States turned down the offer?

I was astounded – so astounded that I knew I needed to verify the story before I gave full vent to my frustration.  So I Googled “IBM Medicare fraud”.    Turns out that it’s true!  IBM confirmed it. 

There is no mystery here.  Health care is a great business opportunity for IBM.  IBM Health Care Practice works with partners every day in both the United States and Europe to improve the use of technology to simultaneously reduce the cost of delivering health care and improve health care outcomes.  

It is important to examine my Palmisano’s language carefully.   He offered to “build” the solution for free to “prove” it worked.  He never said, IBM didn’t want to be paid if it worked.  He was willing to “share the risk”.    That has been a standard practice in business for years!  Time that we adopted these money saving practices in the government as well. 

Why would the President turned down such an offer?  Certainly he knows that all major technology initiatives in federal government are done by private contract vendors?   So what’s up?

  1. Most benignly, he does not want to appear to promote one federal vendor over others?  That can easily be dealt with in the contracting process – requiring IBM to partner with other major software and hardware vendors to develop an “open source” solution. 
  2. Can it be the President, who has no business experience,  does not understand the concept “investing in a new business opportunity”?    Mr. Palmisano is not an altruist.  Successfully ending Medicare fraud would further strengthen IBM’s “qualifications” as a global health care solutions provider.  This would be worth billions in new profits to IBM and its partners.
  3. Can it be possible that the President really has such a deep-seated distrust of business and business executives that he cannot imagine a CEO can be a patriot at the same time that he is responsible for producing share holder value? 
  4. Could the President fear that accepting this offer might be seen as a public rebuke of the team at Medicare, who are all SEIU or AFGE members?  Could he be concerned that such a perception would have political ramifications as he looks to government union support in his 2012 Presidential election?

Based on CBS and the New York Times reporting, I can think of a half dozen “quick hit” changes to the existing Medicare payment process that would produce billions in potential Medicare fraud savings.   So,  its easy for me to believe that the full force of IBM, IBM partners,  the Medicare staff, and the FBI could eliminate $900B in Medicare fraud over the next decade.

Personally, I believe that Mr. Palmisano is acting both as a patriot and a good CEO.   Mr. Obama, what do you have to lose?