Weekly Audit: Republicans' Budget Declares War on Medicare

By Lindsay Beyerstein, Media Consortium blogger

The Republicans are poised to unveil a model budget on Tuesday that would effectively end Medicare by privatizing it, Steve Benen reports in the Washington Monthly. House Budget Committee Chair Paul Ryan (R-WI) is touting the budget as a strategy to reduce the national debt.

Ryan’s plan would turn Medicare from a single-payer system to a “premium support” system. “Premium support” is a euphemism for the government giving up to $15,000 per person, per year, to insurance companies to defray the cost of a health insurance policy.

As Benen points out, privatizing Medicare does nothing to contain health care costs. On the contrary, as insurance customers weary of double-digit premium increases can attest, private insurers have a miserable track record of containing costs. They excel at denying care and coverage, but that’s not the same thing.

The only way the government would save money under Ryan’s proposal is by paying a flat rate in vouchers. Medicare covers the full cost of medical treatments, but private insurers are typically much less generous. So, after paying into Medicare all their working lives, Americans currently 55 and younger would get vouchers for part of their health insurance and still have to pay out-of-pocket to approach the level of benefits that Medicare currently provides.

Taking aim at Medicaid

The poor are easy targets for Republican budget-slashing, Jamelle Bouie writes on TAPPED. Ryan’s proposal would also cut $1 trillion over the next 10 years from Medicaid, the joint federal-state health insurance program for the poor, by eliminating federal matching and providing all state funding through block grants. Most of this money would come from repealing the Affordable Care Act’s Medicaid expansion, which is slated to add 15 million people to Medicaid.

Block grants are cuts in disguise. Currently, Medicaid is an entitlement program, which means that states have to enroll everyone who is eligible, regardless of the state’s ability to pay. In return, the states get federal matching funds for each person in the program. Ryan and the Republicans want to change Medicaid into a block grant program where the federal government simply gives each state a lump sum to spend on Medicaid. The states want to use this new found “flexibility” to cut benefits, narrow eligibility criteria, and generally gut the program.

This is incredibly short-sighted. The current structure of Medicaid ensures extra federal funding for every new patient. So when unemployment rises and large numbers of new patients become eligible for Medicaid, the states get extra federal money for each of them. But with a block grant, the states would just have to stretch the existing block grants or find money from somewhere else in their budgets. Medicaid rolls surge during bad economic times, so a block grant system could make state budget crises even worse.

Ryan’s proposal has no chance of becoming law as long as Democrats control the Senate. The main purpose of the document is to lay out a platform for the 2012 elections.

Fake debt crisis

In The Nation, sociologist and activist Frances Fox Piven argues that the Republicans are hyping the debt threat to justify cuts to social programs:

Corporate America’s unprovoked assault on working people has been carried out by manufacturing a need for fiscal austerity. We are told that there is no more money for essential human services, for the care of children, or better public schools, or to help lower the cost of a college education. The fact is that big banks and large corporations are hoarding trillions in cash and using tax loopholes to bankrupt our communities.

She notes that Republican-backed tax cuts for the wealthy are a major contributor to the debt.

Jesus was a non-union carpenter?

Josh Harkinson of Mother Jones reports on the religious right’s crusade against unions. He notes that James Dobson of the socially conservative Family Research Council tweeted: “Pro-family voters should celebrate WI victory b/c public & private sector union bosses have marched lock-step w/liberal social agenda.”

Harkinson reports that the Family Research Council is backing the Republican incumbent, David Prosser, in today’s Wisconsin Supreme Court election–a battle that has become a proxy fight over Gov. Scott Walker’s anti-collective bargaining bill:

The FRC’s new political action committee, the Faith, Family, Freedom Fund, is airing ads on 34 Wisconsin radio stations in an effort to influence the April 5 judicial election that could ultimately decide the fate of the law. The ads target Wisconsin Assistant Attorney General JoAnne Kloppenburg, who’s running against a conservative incumbent, David Prosser, for a seat on the state Supreme Court. If elected, Kloppenburg wouldalter the balance on the court in favor of Democrats, giving them the ability to invalidate the recently enacted ban on public-employee collective bargaining. “Liberals see her as their best hope to advance their political agenda and strike down laws passed by a legislature and governor elected by the people,” say the ads. “A vote for Prosser is a vote to keep politics out of the Supreme Court.”

Roger Bybee of Working In These Times argues that recalling Republican state senators in Wisconsin is not enough to defend workers’ rights from Gov. Scott Walker’s anti-union onslaught.

This post features links to the best independent, progressive reporting about the economy bymembers of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The MulchThe Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

 

 

Assessing Republican Seriousness on the National Debt

A bit ago Representative Paul Ryan of Wisconsin made the Republican response to President Barack Obama’s State of the Union address.

Mr. Ryan’s speech focused heavily on the national debt, which he declared as a one of his “greatest concerns as a parent.” The representative used the example of his three children to emphasize the grave importance of the issue, which was the main theme of his speech.

Mr. Ryan’s call to reduce the national debt, while necessary and useful, was also somewhat lacking in specifics – because many of the specific actions required to reduce the debt either are unpopular, or go against the priorities of the Republican Party.

Take, for instance, the extension of the Bush tax cuts. A true deficit hawk would be horrified at extending these tax cuts; doing so adds an estimated 4 trillion dollars to the debt over the next decade. Indeed, Mr. Obama’s former budget director stated that, “If we actually ended the Bush-era tax cuts, that would pretty much do it [balance the budget],”

Despite Mr. Ryan’s purported concern over the national debt, he and almost the entire Republican Party supported extending these tax cuts.

Now, there is absolutely nothing wrong with doing this; most Americans, the president himself, and this blogger were with Mr. Ryan on extending the Bush tax cuts. There are legitimate reasons to do so. One may believe in the value of tax cuts, or in the value of stimulating the economy.

But to support adding 4 trillion dollars to the debt over the next decade, and then to make a speech calling the national debt the greatest threat to the country’s future, is a tad hypocritical.

There is another way to test Republican seriousness on the national debt.

Many Republicans like to call for cutting spending and reducing the size of government as a way to reduce the national debt.

This is quite reasonable. In fact, let’s talk about the most wasteful part of America’s government. Today the United States lavishes hundreds of billions of dollars on this bloated organization – an organization which is very often ineffective at doing what it is supposed to do, yet constantly screams for more money and is given that money by politicians on both sides of the aisle.

I am talking, of course, about the military.

America spends six times more on the military than any other nation on Earth. Of the top ten military budgets in the world, the U.S. and its allies (France, the United Kingdom, Japan, Germany, and Italy) compose 79.8% of the money spent on the military.

There is quite a bit of waste in this spending, too. Take the infamous F-22, a $65 billion program which was finally ended in 2009. The F-22 was originally envisioned to fight high-level Soviet planes two decades ago. Each plane cost approximately $44,000 to fly for one hour. Despite spending $65 billion on the F-22, the plane was never been used once in combat – not a single time.

This is the very definition of wasteful government spending that Republicans like to complain about.

If one is serious about reducing the debt, a great way to start is by cutting military spending. Military spending, for instance, is ten times what the federal government spends on education every year.

Unsurprisingly, however, Republicans have no plans anytime soon to reduce military spending.

If one adds just these two items together – extending the Bush tax cuts, and refusing to cut military spending – one gets ten trillion dollars over ten years, which the Republicans have declared off-limits in their attempt to reduce the debt. That’s a lot of money that can be saved, but which Republicans refuse to due to their ideological priorities.

In Mr. Ryan’s rebuttal to the president, he said the following words:

Our debt is out of control. What was a fiscal challenge is now a fiscal crisis.

We cannot deny it; instead we must, as Americans, confront it responsibly.

And that is exactly what Republicans pledge to do.

So much for that.

--Inoljt, http://mypolitikal.com/

 

He Doesn’t Feel Our Pain

After listening to the President’s State of the Union address I couldn’t help but to feel a sense of loss. I understand that this was a political speech in a lot of ways and will surely be the kick-off speech to his 2012 run for re-election, but with all of its platitudes and feel good rhetoric there was something missing. Could it have been that unemployment was not mentioned? Or that the poor and the middle-class were conspicuously absent? I don’t know about the state of your union, but in my union these issues are still alive and well. I have yet to hear this President connect to the pain that so many Americans are suffering from, especially black Americans.

One of the troubling aspects of the speech was how the President basically threw American manufacturing under the bus as a consequence of globalization. He stated that the American worker had to raise their game to compete for the future. That’s funny everything I read says that the American worker is one of the most productive workers in the world. Maybe instead of prodding the worker the President should have mentioned how the worker’s boss’ have outsourced all of their jobs overseas as China’s and India’s economies are the fastest growing in the world because they are making the things we used to make. The challenge should not have been that we have to give up manufacturing to these other nations but how American manufacturing can return and compete against these other nations.

This speech is named the state of the union for a reason; instead we got the state of globalization. The President should have been imploring this nation to support and rebuild our manufacturing base and buying our products. I don’t understand how promoting one’s own nation today is now considered un-American. I guess that’s because it is no longer what is good for America it is what is good for America’s multinationals. The truth be told as we found out during the gilded age is that what is good for Standard Oil is not always what’s good for America. I know there are those who will defend this President no matter what he says and does and I understand their fierce loyalty, but this is not about personality it should be about principles.

My fear is that in an attempt to appease the wing-nuts this administration is going to cave in some form on Social Security. We will either raise the retirement age or cut some benefits to show their seriousness in cutting the deficit. What is not being discussed is that Social Security was created by taxes that we all pay throughout our working lives for the benefits we receive. This isn’t some government give away where we take general tax dollars to support the weak, aged, and affirmed. There are less draconian ways to shore up Social Security but none of this is being mentioned or even part of the discussions. The problem with negotiating with folks who want to destroy what you are negotiating is that their aim is not to salvage it but to undermine it. I think Congressman Ryan made that point crystal clear last night.

This is a future in which we will transform our social safety net into a hammock, which lulls able-bodied people into lives of complacency and dependency. - Paul Ryan's remarks

So on the one hand we have the President telling American workers they have to stop whining and on the other hand we have the wing-nuts telling the American workers that they are lazy and complacent. I don’t know about you but my answer to Republicanism is not Republican lite. Just once I would like this President to speak to the pain of those folks on Main Street as eloquently as he spoke to the folks in Tucson. He should give a voice to the voiceless instead of vocalizing the talking points of the opposition. I am not naïve to the process of negotiation and it is important to throw meat to the opposition to appear open to compromise, but what has been missing from this equation is the suffering of the poor and the middle-class and the enunciation of their concerns.

Last night the President spoke to Wall Street and the business communities letting them know loud and clear that this administration is open for business. The problem with this is that they aren’t the ones suffering. The Dow is approaching 12,000, the banks are sitting on boat loads of cash, and businesses are doing likewise. These folks need signals like the millionaires and billionaires need a tax-cut. The message the President should be sending is to Main Street that this administration is serious about creating equal opportunity and securing workers rights. The problem is not the American worker it is the greed of the American corporation.

“What does labor want? We want more schoolhouses and less jails; more books and less arsenals; more learning and less vice; more leisure and less greed; more justice and less revenge; in fact, more of the opportunities to cultivate our better natures,” - Samuel Gompers (1st President of AFL-CIO)

The Disputed Truth

Weekly Audit: We Welcome Our New Plutocratic Overlords

 

By Lindsay Beyerstein, Media Consortium blogger

Meet the new global elite. They’re pretty much the same as the old global elite, only richer and more smug.

Laura Flanders of GritTV interviews business reporter Chrystia Freeland about her cover story in the latest issue of the Atlantic Monthly on the new ruling class. She says that today’s ultra-rich are more likely to have earned their fortunes in Silicon Valley or on Wall Street than previous generations of plutocrats, who were more likely to have inherited money or established companies.

As a result, she argues, today’s global aristocracy believes itself to be the product of a meritocracy. The old sense of noblesse oblige among the ultra-rich is giving way to the attitude that if the ultra-rich could do it, everyone else should pull themselves up by their bootstraps.

Ironically, Freeland points out that many of the new elite got rich from government bailouts of their failed banks. It’s unclear why this counts as earning one’s fortune, or what kind of meritocracy reserves its most lavish rewards for its most spectacular failures.

Class warfare on public sector pensions

In The Nation, Eric Alterman assails the Republican-controlled Congress’s decision to scrap the popular and effective Build America Bonds program as an act of little-noticed class warfare:

These bonds, which make up roughly 20 percent of all new debt sold by states and local governments because of a federal subsidy equivalent to some 35 percent of interest costs, ended on December 31, as Republicans proved unwilling even to consider renewing them. The death of the program could prove devastating to states’ future borrowing.

Alterman notes that the states could face up to $130 billion shortfall next year. States can’t deficit spend like the federal government, which made the Build America Bonds program a lifeline to the states.

According to Alterman, Republicans want the states to run out of money so that they will be unable to pay the pensions of public sector workers. He notes that Reps. Devin Nunes (R-CA), Darrell Issa (R-CA) and Paul Ryan (R-WI) are also co-sponsoring a bill to force state and local governments to “recalculate” their pension obligations to public sector workers.

Divide and conquer

Kari Lydersen of Working In These Times explains how conservatives use misleading statistics to pit private sector workers against their brothers and sisters in the public sector. If the public believes that teachers, firefighters, meter readers and snowplow drivers are parasites, they’ll feel more comfortable yanking their pensions out from under them.

Hence the misleading statistic that public sector workers earn $11.90 more per hour than “comparable” private sector workers. However, when you take education and work experience into account, employees of state and local governments typically earn 11% to 12% less than private sector workers with comparable qualifications.

Public sector workers have better benefits plans, but only for as long as governments can afford to keep their contractual obligations.

Who’s screwing whom?

Former Secretary of Labor Robert Reich is calling for a sense of perspective on public sector wages and benefits. In AlterNet he argues that the people who are really making a killing in this economy are the ultra-rich, not school teachers and garbage collectors:

Public servants are convenient scapegoats. Republicans would rather deflect attention from corporate executive pay that continues to rise as corporate profits soar, even as corporations refuse to hire more workers. They don’t want stories about Wall Street bonuses, now higher than before taxpayers bailed out the Street. And they’d like to avoid a spotlight on the billions raked in by hedge-fund and private-equity managers whose income is treated as capital gains and subject to only a 15 percent tax, due to a loophole in the tax laws designed specifically for them.

Signs of hope?

The economic future looks pretty bleak these days. Yes, the unemployment rate dropped to 9.4% from 9.8% in December, but the economy added only 103,000, a far cry from the 300,000 jobs economists say the economy really needs to add to pull the country out its economic doldrums.

Andy Kroll points out in Mother Jones that it will take 20 years to replace the jobs lost in this recession, if current trends continue.

Worse yet, what looks like job growth could actually be chronic unemployment in disguise. The unemployment rate is calculated based on the number of people who are actively looking for work. Kroll worries that the apparent drop in the unemployment rate could simply reflect more people giving up their job searches.

For an counterweight to the doom and gloom, check out Tim Fernholtz’s new piece in The American Prospect. He argues that the new unemployment numbers are among several hopeful signs for economic recovery in 2011. However, he stresses that his self-proclaimed rosy forecast is contingent upon avoiding several huge pitfalls, including drastic cuts in public spending.

With the GOP in Congress seemingly determined to starve the states for cash, the future might not be so rosy after all.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

 

Earmarks No Good? Tell That to Janesville, Wisc

From today's State Journal: "U.S. Sen. Herb Kohl D-Wis., added $951,000 to the federal Omnibus Appropriations Bill for Black hawk Technical College to provide job training and placement services for former employees of General Motors in Janesville and it supplier companies."

The horror ... because the job training and placement services are an earmark, according to Wisconsin's Sen. Russ Feingold (D-Middleton) and Rep. Paul Ryan (R-Janesville) and of-course the ever-foolish John McCain.

There's more...

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