In a recent post, Jon Walker took aim at the Roosevelt Institute Campus Network’ s Budget for the Millennial America. Zachary Kolodin responds, clarifying the purpose, process and policies behind the plan.

When the President launched his deficit commission in early 2010, Roosevelt Institute Campus Network began to hear rumbling from Millennials across our 8,000-person network, demanding a voice at the national level about the future of the country. Over the course of 2010, we helped convene thousands of students to discuss the challenges facing the country–climate change, inequality, the recession, and the long-term structural deficit—without guiding their thinking. These students collaboratively produced a Blueprint for the Millennial America, published in December 2010—an ambitious document that captures the Millennial Generation’s vision for America. It is, frankly, heartening, that it is a strongly progressive vision.

Our Budget for the Millennial America is based off this vision—a vision that was developed entirely independently of the Peter G. Peterson Foundation. Its contents represent the compromises that our students made in order to produce a coherent proposal. It’s a plan to build the future we want to inherit together; the fact that it reduces debt to 60% by 2035 is secondary.

When the students in our budget working groups discussed how to approach the challenge of health care in America, we found agreement on the goal—providing quality, affordable health care (not just nominal insurance) for all Americans, while curbing medical inflation. However, finding common ground on how to get there was much more difficult. There were some who wanted to immediately implement a single payer system, but there were also many students who wanted to build on the PPACA and forgo a public plan. The budget represents a compromise between these two positions. Roosevelt builds on the PPACA by giving much more power to IPAB, repealing the monopoly exemption for health insurance companies, and implementing bundled payment reforms that will save billions and improve care. We expect these reforms to work, and our CBO score
reflects this. However, if medical inflation continues unabated, we implement one of the most aggressive public option plans proposed in the health care reform debate.

In his recent critique, Jon Walker characterizes our proposal to allow states to pool their health insurance markets as “the official position of the Republican Party.” That’ s just plain wrong. The mainstream conservative proposal is to allow insurance companies to sell insurance across state lines, which would indeed result in a regulatory race to the bottom. But in the Roosevelt proposal, states are permitted to create pooled markets with a common set of regulations negotiated by the states. Insurance companies are not allowed to sell across the boundaries of a pooled market. If insurers in Delaware want to sell to consumers in New York, they have to do so on a playing field that New York voters agree to. A proposal like this, when combined with the repeal of the monopoly exemption, will give more power to consumers in states like New Jersey and Arkansas,
and many others that are currently dominated by monopolistic insurance companies.

In the plan, we replace the employer exclusion for health insurance with a tax subsidy.

Our intention is that the subsidy maintains its full value over time. For scoring purposes, the subsidy was indexed to inflation, but only because our tax scorekeepers would not index it to a dynamic definition of medical inflation. Walker states: “The only way the rebate would save the government large amounts of money is if they aren’ t indexed probably.” That’s true. Our tax subsidy is dramatically more expensive than the employer exclusion. But it also provides far better financial assistance to the people who need it. It matches the subsidy provided by the most generous health insurance plans and provides far more support for middle and lower income people than the employer exclusion currently provides. It could be improved by adding an age rating, but doing so was far too complex for this exercise.

This budget plan manages to cut medical inflation by more than any other. Furthermore, we actually expand health benefits on the whole. The 25.5% reduction in government health care costs is extracted almost entirely from health insurers and providers.

In the Budget for the Millennial America, thousands of young voters from the largest generation in American history—33% of the voting electorate by 2016—collaboratively agreed to implement a massive stimulus, raise more revenue, expand Social Security, beef up the PPACA, end “Too Big to Fail,” and build a 21st century green economy. I’m personally thrilled that the generation that will come to dominate American politics for decades rallied around a proposal this progressive.