David, Catherine Baker, Mitt Romney discussed on Balance of Power
So far. It's good news, David. I mean, I think the the negotiations clearly have dragged on for some time. The fact that you've got a credible group of Republicans and Democrats working together who have some sway with their colleagues suggests that this is a very real possibility to get through the Senate. Obviously, the president's endorsement helps. You know, they're clearly will be some additional sticking points. There obviously, is still some conversation about the sequencing. This notion of a two part deal exactly where the pay fors are going to come from. I think those details Well, you know, given the size of fiscal stimulus we've already seen this seems like a drop in the bucket. Quite frankly, you know, and it's remarkable to be saying that about a trillion dollar plus package. But when you look at the amount of stimulus that's been put into the economy over the last, let's say six months to nine months. It's hard to say whether there's going to be a significant impact here. We've got a lot of pent up Labour in the economy. We've got a lot of possibilities still going forward. It will have an impact. I think it'll be a positive impact. But given the extent of what we've seen so far, I'm not convinced this is going to be as much of a game changer as it would have been. Let's say two years ago at the same time we talked with uh Governor Ned Lamont of Connecticut earlier in this program, and he said, if an infrastructure bill like this could get through, he can improve the roads and bridges in Connecticut enough in the next year or two to, for example, safe. 10 minutes off of a commute from Connecticut into New York. If you add that up across the country, if that's replicable that actually starts to show up in productivity, doesn't it? Yeah, I would think it does. But we have to remember David. Also, the nature of the economy has changed because of Covid and how much commuting we're going to have at home Work versus in the workplace work. I think those are questions in my mind that are still open one. So while I do think we're going to see contributions to productivity in the long run, it's a big open question of me how substantial those inputs will be. But this is good news. Make no mistake about it. These are changes that have to be made. It's not just our roads and bridges. It's also airports and seaports. Some of the coastal issues that Senator Cassidy talked about so there are some substantial changes here. That hopefully will be big net positives for the U. S economy. And what about time horizon? Assuming this all goes through and let's assume even further than it goes through this summer, which is a big ask, I know One would we actually start seeing it in the economy? I think it's going to take some time. Infrastructure takes time projects take time to get online I would have to say probably not going to see impacts for at least a year, if not more, just because again, there's a lot of wind up that has to happen before these projects actually get going and people actually are employed and you see those inputs and you see that impact on on some of the broader economic measures. But you know again, the concept of getting this done quickly is important because you want to be able again to begin to make those plans going forward and begin to see some of those projects come online as we get into 2022 23 Lonnie. I want like a slight turn here because originally we were going to talk to you. And I want to talk to you about some proposals coming out of Biden administration to change our health care system because after the Supreme Court once again refused to overturn the affordable care act. Resident, Biden came out and said, Now it's time to strengthen affordable care act. One of the proposals is actually to reduce the minimum age for Medicare. You've done a study on what that would do financially. Give us a results. Well, we just released the study yesterday when we look at this proposal to lower the eligibility age of Medicare to 60, and we find that there are significant fiscal impacts several hundreds of billions of dollars over the next 10 years. Perhaps more concerning is the impact on the Medicare Hospital Insurance Trust fund, which is the trust fund that pays for inpatient hospitalization through Medicare. The possibility that that trust fund might be exhausted two years earlier, so 2024 Instead of 2026. So you know, we asked some questions. I think policymakers need to address these questions. It's a policy that sounds very enticing. Very easy. The basic point we make in the study is there are impacts, and there are massive questions to be answered about the design of the program. And, more importantly, the impact on seniors who are in Medicare currently So So, Lani, let me ask you. We talked earlier this week with another healthcare policy expert, Catherine Baker from New York to Chicago. And she when I asked her about this said, You know what? We'd be better off just getting subsidies to people so they can buy their own policies rather than lowering the age. Have you looked at that alternative? Does that make more sense for an economics point of view? Yeah. I mean, I think the idea of getting people into the market places that exist already makes a lot of sense. And I think the concept of subsidizing that coverage is also a reasonable one. I think the issue is if you're talking about trying to cover people who are uninsured. Expanding the Medicare eligibility age doesn't really get you a whole lot of the way they are, because you're really only talking about 10% of the population that's eligible for that expansion is actually currently uninsured. So I would like to see a more targeted approach. So I think in that sense the solution that Professor Baker and others have outlined that makes a lot of sense, which is to say, Let's subsidize people and make coverage in the existing marketplaces more affordable, as opposed to creating this massive change in an entitlement program. Frankly, a lot of people already rely on and don't want to see changed anyone more to wrap all this up? In a sense, I mean, you are a policy person. You were in charge of policy for Mitt Romney were in for president. That's what you do out there at the Hoover Institution as well as at Stanford. As we look at what this by administration is doing right now in the economic front. Are we seeing a real redrafting of the economic policies of United States because he is checking out an awful lot of the American economy. Great question. It is a fundamental reordering. As far as I'm concerned, you're seeing obviously, the fiscal stimulus that we've seen already the relief packages. The $6 trillion in relief. We've seen debate now. Some of that came during the Trump administration. But a lot of it came during President Biden administration the way he's talking about changing the economy changing economic And I think we've become a little bit immune to it because we hear numbers like trillions thrown around and, you know, I don't think that's a big deal. This is actually a pretty big deal in terms of what we're doing to the economy and what we're doing going forward as well. We're already seeing those difficulties in terms of what's happening in labor markets. Now, a lot of slack there a lot of opportunities available that people aren't filling. That is a function of economic policy There are always intended and unintended consequences. And we are still yet to see many of these consequences Play out. So yes, it is a very significant change from what we've seen over the last several years. Kehlani Great to have you with us today. And once again, thank you for your patience is staying with us. As Lonnie Cheney's Hoover Institution. Senior fellow Bloomberg's Emily Wilkins is joining us now from Capitol Hill, with more on this infrastructure deal, just announced. From the White House, along with that bipartisan group of senators. So Emily what's the reception likely to be up on Capitol Hill? We just talked with Senator Mike Brown of Indiana. He was generally open to it, but he had some skepticism as well. Emily, can you hear me? Emily Wilkinson, Capitol Hill. Can you hear me? Okay, we'll try to come back to Emily welcomes. In the meantime, let's figure out whether there are some market reactions to this. An announcement of the infrastructure Brexit and for that we're going to go to, of course, Abigail Doolittle. So are the markets reacting at all, Avago, there is a reaction. Now. First of all, we have had a multi day rally into.