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.

 

 

Weekly Audit: Massive Protest In Wisconsin Shows Walker’s Overreach

 

By Lindsay Beyerstein, Media Consortium blogger

About 100,000 people gathered in Madison, Wisconsin to protest Gov. Scott Walker’s new anti-collective bargaining law. The state Senate hurriedly past the bill without a quorum last Wednesday. Roger Bybee of Working In These Times reports:

The rally featured 50 farmers on tractors roaring around the Capitol to show their support for public workers and union representatives from across the nation, stressing the importance of the Wisconsin struggle. Protesters were addressed by a lineup of fiery speakers including fillmaker Michael Moore, the Texas populist radio broadcaster Jim Hightower, TV host Laura Flanders, the Rev. Jesse Jackson, U.S. Rep. Dennis Kucinich, U.S. Rep. Tammy Baldwin, and The Progressive editor Matt Rothschild, among others.

The bill is law, but the fight is far from over. The Wisconsin Democratic Party says it already has 45% of the signatures it needs to recall 8 Republican state senators. So far, canvassers have collected 56,000 signatures, up from 14,000 last weekend. The surge in signature gathering is another sign that the Walker government’s abrupt push to pass the bill has energized the opposition.

Polling bolsters the impression that Walker overreached by forcing the bill through with a dubious procedural trick. Simeon Talley of Campus Progress notes that, according to a recent New York Times/CBS News poll, Americans oppose efforts to limit the collective bargaining rights of public employees.

Jamelle Bouie of TAPPED notes that the enthusiasm gap that helped elect Scott Walker last year has disappeared. In June 2o10, 58% of Democrats said they were certain to vote compared to 67% of Republicans. In March 2011, 86% of Democrats and 85% of Republicans surveyed said they would certainly vote.

Firefighters shut down bank

Wisconsin firefighters found a way to get back at one of Scott Walker’s most generous donors, Madison’s M&I Bank, Julianne Escobedo Shepherd reports in AlterNet. Firefighters Local 311 President Joe Conway put a call out to his members who banked with M&I to “Move Your Money.” Firefighters withdrew hundreds of thousands of dollars of savings in cashiers checks. The beleaguered bank closed its doors at 3pm on March 10.

John Nichols of the Nation reports that other unions got in on the act. He quotes a pamphlet distributed by Sheet Metal Workers International Association Local 565:

“M&I execs gave more money than even the Koch Brothers to Governor Walker and the Wisconsin GOP,” the message goes. “M&I got a $1.7 billion bailout while its CEO gets an $18 million golden parachute. Tell M&I Bank: Back Politicians Who Take Away Our Rights (and) We Take Away Your Business.”

Nichols explains that the next big step in the fight to overturn the bill will be the Wisconsin Supreme Court election, set for April 5. Assistant Attorney General JoAnne Kloppenburg is challenging conservative state Supreme Court Justice David Prosser. Legal analysts have raised serious questions about the bill and the process by which it was passed. A court challenge to Walker’s law might stand a better chance if a liberal justice replaces the conservative pro-corporate Prosser.

Guess what? We’re not broke

Steve Benen of the Washington Monthly takes on a GOP talking point, the myth that the United States is broke. It’s a convenient claim for those who wish to make massive cuts to popular programs without having to justify taking them away. If we don’t have the money, we don’t have the money. If it’s a choice between cuts and bankruptcy, cuts suddenly seem not only acceptable, but inevitable.

But the United States has a $15 trillion economy, immense natural resources, a highly educated workforce, and countless other economic advantages. The problem isn’t a lack of resources, it’s extreme inequality of distribution. Over the last 20 years, 56% of income growth has been funneled to the top 1% of the population, with fully one third of that money going to the richest one-tenth of one percent.

Benen notes that the Republicans didn’t think we were broke when they were advocating for a $538 billion tax-cut package, which wasn’t offset by a dime of cuts.

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.

 

Weekly Audit: What Will The GOP Cut?

By Lindsay Beyerstein, Media Consortium blogger

The Republicans won control of the House and picked up seats in the Senate in the midterm election on nebulous promises to slash spending and reduce the size of the federal government.  House Speaker John Boehner has pledged to reduce spending to 2008 levels, as per the GOP’s campaign manifesto, known as the “Pledge to America.”

But as Andy Kroll reports in Mother Jones, while the Pledge calls for a 21.7% reduction in spending on non-security discretionary programs, it doesn’t commit to any specific cuts. Medicare and Social Security are safe from this round of cuts because they are not discretionary.

The Center for Budget and Policy Priorities tried to give a glimpse of what the federal government might look like if all eligible agencies took a 21.7% budget cut across the board. As Kroll notes, it’s more likely that some programs will be spared, some trimmed, and some eliminated entirely.

However, the CBPP’s analysis gives a stark picture of the magnitude of the proposed cuts, Kroll writes:

What it found was grim, with middle class Americans set to lose the most.

K-12 education funding, the CBPP found, would drop by $8.7 billion, and food stamps for at-risk pregnant women, infants, and young children would lose $1.6 billion in funding. State- and local-run housing programs would lose $6.9 billion, and children and family social services would lose nearly $2.2 billion.

Already pinched state budgets would take massive hits as well, losing out on $31.6 billion in federal funding.

Cuts to state budgets mean even deeper cuts to education and social services that benefit working families. Starving the states is also a strategy to force state governments to default on their pension obligations to unionized public sector workers.

But the magnitude of these cuts might be giving the GOP cold feet. In January, Speaker Boehner told Brian Williams at NBC that he couldn’t name a single program that he planned to cut.

Inequality is personal

Paul Buchheit points out on AlterNet that if middle- and upper middle-class families had the same share of the economic pie that they did in the 1980s, they would be making $12,500 more per year. In other words, the economy has become vastly more productive over the last 30 years, but the extra wealth has become overwhelmingly concentrated in the hands of the very richest Americans at the expense of working families.

U.S. GDP quintupled since the 1980s, but most of the extra wealth has gone to the top 1% of earners. Nobody begrudges entrepreneurs a healthy return on their capital, but what about the 99% of earners who provided the labor. Where’s the return on their investment?

With looming government spending cuts to domestic programs, the middle- and upper-middle classes will face an even bigger hit to their real standard of living. Local and state governments are cutting back on services while hiking taxes and fees.

The richest 1% won’t feel these cuts as acutely as middle class families. If you have your own private swimming pool, you may not notice that the public pool is closed because the city can’t afford lifeguards. If you send your kids to private universities, you won’t be biting your nails over potential tuition hikes at public universities.

MLK’s legacy

The nation honored the legacy of Dr. Martin Luther King, Jr. on Monday. Roger Bybee of Working In These Times points out that, while King is remembered as a civil rights leader, he was also deeply committed to economic justice for all Americans. The politicians who praised King’s legacy on Monday should remember that Dr. King’s last great crusade was on behalf of sanitation workers in Memphis, public employees struggling for a decent standard of living.

Beck sets sights on 78-year-old CUNY prof

Amy Goodman of Democracy Now! interviews Frances Fox Piven, a 78-year-old distinguished professor of political science at the City University of New York, who may be the first person to inadvertently spark prime time conspiracy theory in the pages of a Media Consortium outlet. Right wing talk host Glenn Beck has identified Piven as the co-author of a violent blueprint to crash capitalism itself.

As Piven explains to Goodman, the bile stems from the suggestion made by her and her co-author Richard Cloward in a 1966 article in The Nation that social activists should help poor people access the benefits they were already legally entitled to. At that time, Piven recalls, the welfare system denied benefits to more than half of its eligible recipients. She and Cloward believed that the poor would become a more politically powerful and visible part of society if society suddenly had to make good on its promises of aid.

In July, Richard Kim of The Nation explained how an obscure 40-year-old article was recast as the “Rosetta Stone” of lefty politics, the blueprint to usher in an economic crisis which the left could exploit to bring about socialism.

Since Beck seized on Piven’s work and labeled her a violent revolutionary, she has been the target of death threats by commenters on Beck’s website. Political operatives posing as students came to her home to interview her. The interview later showed up on Andrew Breitbart’s conservative website.

Piven seems both concerned and bemused that her brief for reforming the welfare system of the 1960s has been labeled as a blueprint for destroying the capitalist system.

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.

 

 

Weekly Audit: Want Economic Justice? Then it's Time to Act

by Zach Carter, Media Consortium blogger

On Thursday, the U.S. Senate passed a financial reform package that includes a handful of important reforms, but it won’t fundamentally change the relationship between banks and society. Wall Street still has a vice grip on our economy, and lawmakers still find it very difficult to stand up to bigwig financiers.

The real fight for our economy will involve future legislative battles with bankers. Winning those battles will require sweeping action by engaged citizens. The good news is, critical progressive mobilization is already happening. Public outcry helped fuel the fire for Senate reform. Rep. Barney Frank (D-MA), has said that the Wall Street reform bill he pushed through the House last year would have been much stronger in today’s atmosphere of outspoken economic unrest.

Focus on the Fed

So what’s good about the bill the Senate just passed? As Annie Lowrey explains for The Washington Independent, the Federal Reserve’s emergency lending programs will finally be subjected to public scrutiny.

The Fed served as the U.S. government’s chief bailout engine during the crisis. It injected trillions of dollars into the banking system without any oversight. We still don’t know who got the vast majority of that money, or what collateral the Fed accepted in return. There are all sorts of potential scandals, ranging from sweetheart deals the Fed cut with hedge funds to the trillions of dollars in loans to megabanks with no strings attached.

Of particular interest are the “Maiden Lane vehicles”—programs the Fed devised to purchase or guarantee assets from Bear Stearns and AIG. These were explicit bailouts for individual firms. We know almost nothing about the Bear Stearns bailout, and what little we do know about the AIG bailout is unsavory to say the least— big bonuses for AIG’s employees, with little or no effort to limit the impact on taxpayers.

Reconciliation

There are still a handful of important fights as the House and Senate iron out the differences between their respective versions of the bill. As I emphasize for AlterNet, a host of major issues are still on the table, including consumer protection rules and fixing the derivatives casino. These changes could be gutted entirely or dramatically strengthened during negotiations between the House and Senate.

The final bill will not dramatically alter Wall Street. As Roger Bybee explains for In These Times, the Democratic leadership has been trying to both establish meaningful reforms and simultaneously maintain its campaign finance relationship with megabanks. Republicans have almost universally attempted to block any reform altogether.

Regulators will get a handful of important new tools, including the authority to shut down complex banks on the verge of collapse, the ability to monitor derivatives and a have new set of powers to protect consumers. That’s all good, but we’ll still be living with too-big-to-fail behemoth banks that engage in reckless trading and exploit consumers.

Engaging activists

That means that the real business of fixing the financial system is still to come. And, as Christopher Hayes emphasizes for The Nation, that business is not going to be accomplished without serious, organized progressive activists putting pressure on political leaders to act in the public interest, rather than the interests of the corporate class.

When the country suffered a trauma that massively discredited the establishment rulers, the Democratic Party became the establishment. And progressive groups in DC, under stern White House orders not to cause trouble (don’t show up at his door! he’s a donor! we might nominate him for something!), descended into what one organizer calls “grotesque transactionalism” . . . . If we’re going to get reform on the scale we need, bank lobbyists and members of Congress alike have to be confronted with the terrifying thought that the system from which they profit might just be run over—that 700 angry protesters might show up on their lawn.

As Hayes details, Bank of America lobbyist Gregory Baer woke up last Sunday with exactly that– 700 protesters in his front yard. That kind of pressure gets results. It took Franklin Delano Roosevelt seven years to enact his New Deal financial reforms. Earlier in the 20th Century, it took more than a decade for public opinion to align itself with the corporate crackdowns pushed by Republican President Theodore Roosevelt. It’s reasonable to expect the fight for fair finance to take more than two years, and important to fight hard for it.

The minimum reforms are already clear. Essentially, we need to bring banking back to the model that persisted from the 1930s into the 1980s—an era with no serious financial crises or bailouts. Our current financial woes stem from the systematic dismantling and deregulation of this system over the past 30 years.

State-run banks?

But we also need to learn from more recent economic experiments. As Ellen Brown notes for Yes! Magazine, the state of North Dakota has been largely insulated from much of the fallout from the financial crisis of 2008. Part of the reason for the state’s relative stability lies in the fact that it operates its own bank.

North Dakota’s direct supervision of one institution among the hundreds of banks that operate in the state has helped insulate it from the credit storm on Wall Street. The state has its own engine of credit, and can keep funds flowing to businesses that need it, even in the middle of a crisis.

The prospect of state-run banking may seem radical, but it isn’t. It’s a practical proposal based on the established, real-life success of the Bank of North Dakota. As Brown notes, five other states have legislation pending that would create their very own banks—Massachusetts, Virginia, Washington, Illinois and Michigan, while Hawaii recently approved a study to determine the usefulness of a bank run by that state.

The financial reform bill the Senate just passed was a good start, but we’ve got a long way to go. We’re not going to get there without a committed community of progressive activists who demand that the economy serve society, not only entrenched corporate interests.

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.

 

 

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