| December 9, 2013
GM Bailout Produced a Windfall for U.S. Taxpayers
On Monday, the federal government announced it had sold off the remaining shares from its $49.5 billion bailout of General Motors in 2009. But the $10.5 billion loss on paper obscures the massive total return on investment for the U.S. economy overall and American taxpayers in particular. As a new analysis from the Center for Automotive Research found, had GM and Chrysler failed altogether, the result could have been 4.1 million jobs lost across the U.S. economy in 2009 and 2010, with federal transfer payments and $105 billion in lost income and payroll tax revenue for the U.S. Treasury.
In its report, CAR examined two scenarios that showed Uncle Sam reaped a return on investment ranging between 334 to 768 percent. In the worst case, the failure of the Bush and Obama administrations to rescue GM and Chrysler led to complete collapse of the American auto industry and the death of its supplier network. In the "GM only" case, CAR's only assumption was that other automakers could not replace GM capacity and employment until 2011. As the full report explained, the payoff to American taxpayers for the $13.7 billion lost in the sale of shares of companies has been immense:
Our results show the U.S. government saved or avoided the loss of $105.3 billion in transfer payments and the loss of personal and social insurance tax collections--or 768 percent of the net investment. Additionally, 2.6 million jobs were saved in the U.S. economy in 2009 alone and $284.4 billion in personal income saved over 2009-2010.
Even more impressive are the results of the GM scenario which did not even require the assumption of shutting down the supplier sector or other automaker employment. The only assumption was that other automakers could not replace GM capacity and employment until 2011. In this case, the U.S. government avoided the loss of $39.4 billion in increased transfer payments and lost taxes in just two years: 2009-2010. This is 334 percent of the projected $11.8 billion of Treasury funds not recovered on the public's investment in GM. We should add once again that in this scenario, the U.S. economy avoided the loss of 1.2 million jobs in 2009 and the loss of $129.2 billion in personal income in 2009-2010.
The Center's assessment may actually understate the impact of deciding to "Let Detroit Go Bankrupt." (That is, the future Mitt Romney proposed not for the city but for the American auto industry.) Had President Obama refused to provide a lifeline to the GM and Chrysler in early 2009, the broader U.S. economy may have experienced an "Industrial Lehman Brothers Effect" that could have devastated the American manufacturing sector for decades to come. Older centers of the industry in Michigan, Ohio, Indiana and Illinois would have been gutted. Just as important:
Almost 600,000 existing GM and Chrysler retirees would have certainly seen their company pensions delayed and reduced (as was the case for Delphi salaried workers) and their retiree health benefits cancelled. The Pension Benefit Guarantee Corporation (PBGC) would have been overwhelmed.
But thanks to the Bush and Obama administrations, the Upper Midwest did not enter an economic death spiral leading to a permanent depression.
The $10.5 billion the Treasury ultimately lost on its GM shares, along with the $1.9 billion not recouped from Chrysler may well be the best investment Uncle Sam ever made.
Iran Sanctions Foe Dick Cheney Slams Obama on Nuclear Deal
If any American public figure has completely disqualified himself from weighing in on President Obama's nuclear deal with Iran, it is former Vice President Dick Cheney. After all, as a quick look back at his statements about the Iraq war shows ("Simply stated, there is no doubt that Saddam Hussein now has weapons of mass destruction" in 2002, "My belief is we will, in fact be greeted as liberators" in 2003, "[Iraq is] the geographic base of the terrorists who have had us under assault now for many years, but most especially on 9/11" that same year and 2005's classic, "I think they're in the last throes, if you will, of the insurgency"), Cheney was tragically wrong at every turn. But his reign of error hardly ends there. As it turns out, Halliburton CEO Dick Cheney was opposed to the Iran sanctions regime that brought Tehran to the table in the first place.
While Vice President, Cheney in 2002 denounced Iran as "the world's leading exporter of terror." But during his tenure as Halliburton chief in the 1990's, Cheney strenuously argued against Clinton's sanctions regime and expanded Halliburton's business with Tehran. In 1998, he complained that U.S. firms were "cut out of the action." And back in 1996, Cheney railed against the Clinton prohibitions on Iranian trade and financial activity for American firms:
"We seem to be sanction-happy as a government. The problem is that the good Lord didn't see fit to always put oil and gas resources where there are democratic governments."
As it turned out, Halliburton side-stepped the U.S. restrictions on doing business in Iran in place since the 1990's by using a Cayman Islands subsidiary. And what should have come as a surprise to no one, CEO Dick Cheney opposed those very sanctions until, of course, he became George W. Bush's Vice President.
In 2004, the CBS newsmagazine 60 Minutes detailed the Iranian business dealings of Cheney's former company, Halliburton. Despite the prohibitions signed into law by President Clinton with his 1995 executive order and the Iran and Libya Sanctions Act of 1996, Halliburton continued to reap the profits of business with Iran through its non-U.S. subsidiaries. While U.S. law bans virtually all commerce with the rogue nations, Halliburton was able to jump through its major loophole: the rules do not apply to any foreign or offshore subsidiary so long as it is run by non-Americans. As CBS documented:
That subsidiary, Halliburton Products and Services, Ltd., is wholly owned by the U.S.-based Halliburton and is registered in a building in the capital of the Cayman Islands -- a building owned by the local Calidonian Bank. Halliburton and other companies set up in this Caribbean Island, because of tax and secrecy laws that are corporate friendly.
Halliburton is the company that Vice President Dick Cheney used to run. He was CEO from 1995 to 2000, during which time Halliburton Products and Services set up shop in Iran. Today, it sells about $40 million a year worth of oil field services to the Iranian government.
In the wake of the January 2004 60 Minutes piece, the company moved quickly to declare that "Halliburton's business in Iran is clearly permissible under applicable laws and regulations" and cited its October 2003 disclosures to the New York City police and fire pension funds. Despite those assurances, Dick Cheney's old firm was subpoenaed by a U.S grand jury in June 2004. In early 2005, Halliburton announced that it would end its business activities there when after fulfilling its ongoing contracts, including a $35 million gas drilling project it had just won the previous month. Halliburton's exit was completed in 2007.
Nevertheless, Halliburton paid no price for its Iran sanctions-busting. In fact, the company continued to profit handsomely from the U.S. government and American taxpayers. As the New York Times explained in March 2010, even as the Obama administration was seeking tougher UN sanctions to press Tehran into curbing its nuclear program, "of the 74 companies The Times identified as doing business with both the United States government and Iran, 49 continue to do business there with no announced plans to leave."
The federal government has awarded more than $107 billion in contract payments, grants and other benefits over the past decade to foreign and multinational American companies while they were doing business in Iran, despite Washington's efforts to discourage investment there, records show.
That includes nearly $15 billion paid to companies that defied American sanctions law by making large investments that helped Iran develop its vast oil and gas reserves.
Among the U.S. contractors also profiting from Iran was Halliburton, which pocketed $27.1 billion from American taxpayers between 2000 and 2009:
Halliburton, former Vice President Cheney's old company, provided oil and gas drilling services to Iran through foreign subsidies. After a political furor erupted over the work, the company announced it would do no new business in Iran, and it exited the country altogether in 2007. While still operating in Iran, Halliburton won huge contacts from the federal government, including a no-bid contract to restore Iraq's oil sector, as did its subsidiary at the time, Kellogg Brown & Root.
Though he did not benefit directly from the Iran contracts of Halliburton's foreign-based subsidiaries, Cheney continued to have financial ties to his former firm. Despite Cheney's assurances that "I've severed all my ties with the company, gotten rid of all my financial interest," a 2003 report by the Congressional Research Service found that the Vice President retained 433,000 shares of Halliburton. In addition, Cheney received $162,392 and $205,298 in deferred payments in 2001 and 2002, respectively.
To paraphrase Dick Cheney's statement Monday, the same guy who decided he could keep his ill-gotten gains from Iran if he liked them is now telling you to oppose the deal in Iran with respect to their nuclear program.
Don't believe it.
Republicans Chicken Out on Tax Reform
For three years, "tax reform" has been the centerpiece of the Republican Party's program for the American economy. Ever since taking control of the House, GOP leaders have promised that "lowering rates" while "broadening the base" would produce "revenue-neutral" tax reform. In 2011, 2012 and again in 2013, 95 percent of Congressional Republicans voted for the Paul Ryan House GOP budget establishing just two tax brackets at 10 and 25 percent, while promising to recoup hundreds of billions of dollars in lost revenue annually by closing some of the tax breaks that now cost Uncle Sam about $1.2 trillion a year. "We won't duck the tough issues," Mitt Romney's newly anointed running mate Paul Ryan told voters in August 2012, "We will lead."
As it turns out, ducking the tough issues is exactly what Ryan and his GOP colleagues in Congress have done. After three years of refusing to name a single tax expenditure or deduction they would curb or close, Republicans are chickening out on tax reform altogether.
That's the word from Politico, which reported this week that House Republicans have put the tax reform proposals of House Ways and Means Committee Chairman Dave Camp (R-MI) on ice. Seven months after they threatened to tie any debt ceiling increase to tax reform and five months after Camp promised them 50 years of secrecy for any loopholes they'd suggest for closure, Paul Ryan and his Republican allies have decided discretion is the better part of valor:
House Speaker John Boehner (R-Ohio) and others pulled the plug last month on Camp's long-standing vow to take up a tax overhaul bill this year, putting his three-year quest in limbo. The reversal shows how support for tax reform, even among Republicans, is broad but not deep. They routinely say they want to overhaul the Tax Code, but when the Michigan Republican pushed to take the first big step -- putting out a bill -- party leaders blinked.
They blinked because the math is hard--and the politics even worse.
Here's why. While repealing Obamacare, slashing Medicaid funding by a third and leaving roughly 38 million more people uninsured, the Ryan budget still runs up trillions in new red ink thanks to its massive tax cut windfall for the wealthy. According to the nonpartisan Tax Policy Center, Ryan's plan to reduce the top tax rate from 39.6 to 25 percent, to shift from seven income brackets to two (10 and 25 percent), to cut the corporate tax from 35 to 25 percent and other changes will cost Uncle Sam $5.7 trillion over the next 10 years. In March, the Center on Budget and Policy Priorities (CBPP) forecast that Ryan's payday for the gilded class would slash the average tax bill for millionaires by $330,000 (15.4 percent) a year.
As TPC's Howard Gleckman explained the numbers:
The tax cuts described in Ryan's budget would generate a huge windfall for high-income taxpayers. On average, households would get a cut of $3,000. But those in the top 0.1 percent of income, who make $3.3 million or more, would get a whopping $1.2 million on average-a 20 percent increase in their after-tax income.
To put it another way, each of the Ryan budget budgets backed by House and Senate Republicans over the last three years inevitably will produce both oceans of red ink and a Treasury-draining payday for the rich. Unless, that is, Republicans can identify which tax breaks and loopholes they would limit or end to prevent those two certainties from coming to pass.
And from the beginning, that's precisely what they've been too cowardly to do.
As the Washington Post showed (chart above), the trillion-plus dollars in annual tax expenditures is now larger than Uncle Sam's take from the income tax each year. Much of the estimated $1.3 trillion in annual tax expenditures in 2015 (a figure almost double the size of the last fiscal year's budget deficit) benefits working and middle income Americans. For example, the home mortgage interest deduction was worth $89 billion in 2011. Tax-deferred 401K accounts cost the Treasury $63 billion that same year. The Earned Income Tax Credit had a similar price tag. It's no wonder, as the Post concluded, "ever-increasing tax breaks for U.S. families eclipse benefits for special interests."
So which ones would John Boehner, Paul Ryan, Mitch McConnell and company curb or close? We're still waiting for an answer.
Matthew Yglesias mocked the dodge at the center of Ryan's 2012 budget, the same one he used before and since:
Thirteen pages dedicated to explaining his vision for revenue-neutral tax reform. And even so he manages to not name a single tax deduction that he's planning to eliminate. Home mortgage interest deduction? I dunno. Electric vehicle tax credit? I dunno. Deductibility of state and local income taxes? I dunno.
That same month, Paul Krugman tried to decipher which deductions and tax breaks are actually in the mystery meat that is Paul Ryan's budgetary dog food. As he explained in "Pink Slime Economics":
We're talking about a lot of loophole-closing. As Howard Gleckman of the nonpartisan Tax Policy Center points out, to make his numbers work Mr. Ryan would, by 2022, have to close enough loopholes to yield an extra $700 billion in revenue every year. That's a lot of money, even in an economy as big as ours. So which specific loopholes has Mr. Ryan, who issued a 98-page manifesto on behalf of his budget, said he would close?
None. Not one. He has, however, categorically ruled out any move to close the major loophole that benefits the rich, namely the ultra-low tax rates on income from capital. (That's the loophole that lets Mitt Romney pay only 14 percent of his income in taxes, a lower tax rate than that faced by many middle-class families.)
Appearing on MSNBC's "Morning Joe" on March 20th, 2012 Congressman Ryan declared he would "get rid of the special interest loopholes, special deductions, lower everybody's tax rates, bring in at least as much revenue to the government but grow the economy and create jobs, and get spending under control so we can pay off this debt." But when host Joe Scarborough asked "Which one of those [loopholes] do you eliminate," Ryan decided to duck and cover:
"We want to do this in the light of day and in front of everybody. So the Ways and Means Committee, which is in charge of the tax system, sent us the plan here, which is a 10 and 25 percent bracket for individuals and small businesses, and then they want to have hearings and, in light of day, show how they would go about doing this."
Appearing on CBS Face the Nation just days later, Ryan again claimed that "We're proposing to keep revenues where they are, but to clear up all the special interest loopholes, which are uniquely enjoyed by higher income earners, in exchange for lower rates for everyone." But he once again pleaded the Fifth when asked which "special interest loopholes" he would do away with:
"That's what the Ways & Means Committee is supposed to do. That's not the job of the Budget Committee," Ryan said on Fox News Sunday. "What we're saying is, we want to do this in the light of day, not in some backroom deal. We want to have hearings in the Ways & Means Committee that Chairman Dave Camp has already started that work, to say what tax benefits should go."
Almost two years later, Camp won't publicly say what tax benefits would go, either. As McClatchy reported in June on the progress he and Senate Finance Committee Chairman Max Baucus (D-MT) had made:
Both chairmen refused to say what they supported or what tax loopholes they'd propose closing. Camp focused instead on areas of agreement.
"There are so many good (tax) simplification policies that we agree on," he said.
Asked whether they'll propose limiting the mortgage-interest deduction that homeowners now enjoy, Camp acknowledged that two-thirds of Americans don't itemize their federal taxes and said that perhaps a complete rethink was in order.
A complete rethink, indeed. During the 2012 campaign, Paul Ryan's running mate Mitt Romney similarly called for closing tax loopholes to offset his huge tax cuts for the wealthy. For months, Mitt Romney had performing the same trick as Ryan, promising only that the "1 percent keeps paying the current share they're paying or more." His economic adviser Glenn Hubbard even confirmed Romney's cowardice, explaining "it is not his intention to take on any specific deduction or exclusion and eliminate it."
Unfortunately for the Republican ticket, nonpartisan analysts trying to model Romney's proposals did. And the picture they painted wasn't a pretty one. Even after assuming the closure of tax loopholes and deductions which disproportionately favor the rich, the Tax Policy Center forecast that President Romney would end up cutting taxes for the richest five percent of earners while increasing the tax bill for the other 95 percent of Americans. It's no wonder Ezra Klein concluded that "'broadening the base and lowering the rates' is anti-family tax reform," adding:
"The size of the tax cut he's proposing for the rich is larger than all of the tax expenditures that go to the rich put together. As such, it is mathematically impossible for him to keep his promise to make sure the top one percent keeps paying the same or more."
Romney stuck to his line, assuring voters those gains for the gilded class weren't true because no one could predict what his plan would do. During an appearance on CNBC, he went for the full ostrich:
"So I haven't laid out all of the details about how we're going to deal with each deduction, so I think it's kind of interesting for the groups to try and score it, because frankly it can't be scored, because those kinds of details will have to be worked out with Congress, and we have a wide array of options."
In response, the Post's Klein could only shake his head:
"Let's be clear on this: A tax plan that can't be scored because it doesn't include sufficient details is not a plan. It's a gesture towards a plan, or a statement of intended direction, or perhaps an unusually wonky daydream. But it's not a plan."
It's certainly not plan, but instead a fraud. Yet just days after Barack Obama vanquished his Republican opponent, Missouri Republican Senator Roy Blunt suggested the President make the Republican scam his own. "Look at ways to increase revenue by one growing the economy" he said on Fox News, "and two, maybe look at the tax code, just like Governor Romney suggested, you look at the tax code and increase revenue without increasing taxes." House Majority Leader Eric Cantor agreed:
"What would be best is a fundamental reform of the tax code that lowers rates, broadens the base, makes America's business competitive again, and reduces the burden imposed by taxes on work and investment."
But by September, Cantor didn't even include tax reform in his list of priorities for House Republicans. As for Paul Ryan, next week he has a compromise budget proposal to work on with Democratic Senator Patty Murray, a task he must complete to avoid another embarrassing government shutdown for the GOP. And after that, he has a 2016 presidential campaign to contemplate. All of which means the Republicans' three-year tax reform scheme is, at best, on the backburner. As Politico concluded, Camp and House Budget Committee Chairman Paul Ryan did not make it any easier on themselves:
Lawmakers had no idea how they'd make the math work. It would be a mammoth task, forcing them to dig into big, popular middle-class tax breaks.
Or, to put it another way, tax reform is dead. Long live tax reform.
(This piece first appeared at Dailykos.)
| December 8, 2013
Judge Blocks UnitedHealthcare from Dropping Thousands of Doctors
For weeks, Medicare Advantage insurer UnitedHealthcare has been a poster child for conservative grievances against the Affordable Care Act. The company, which covers 2.9 million of the 14 million elderly or disabled American enrolled in the private insurance program, announced it was dropping over 10,000 physicians from its network nationwide due to "substantial funding pressure from the federal government." But last Thursday, a federal judge said no to UnitedHealthcare's termination--without warning or cause-- of 2,200 doctors in Connecticut.
As Kaiser Health News reported, U.S. District Court Judge Stefan Underhill temporarily blocked the nation's leading Medicare Advantage insurers from cutting ties over 2,000 doctors in Connecticut. Ruling in favor of the motion brought by the Fairfield County Medical Association and the Hartford County Medical Association, Underhill concluded:
United's argument that it has a unilateral right to terminate participating physicians from participation in the Medicare Advantage plan by amendment of that plan is not supported by the language of the contract or the parties' experience under it.
That decision came as welcome news to medical associations in other states, including Ohio and Florida, where UnitedHealthcare announced it was cutting out hundreds of doctors, and New York, where another 2,100 are on the chopping block. While the Ohio State Medical Association is reviewing Judge Underhill's decision, Dr. Sam L. Unterricht, president of the Medical Society of the State of New York responded:
"This is very good news from Connecticut. We will definitely seriously consider filing a suit in New York as well."
As the Wall Street Journal reported in November, the New Yorkers could have a lot of company:
Several state attorneys general are investigating. Congressional delegations have complained about the company's timing and tactics to Medicare administrator Marilyn Tavenner, as did 43 national medical associations and 40 state medical societies in a joint letter on Nov. 6.
A spokeswoman for the Centers for Medicare and Medicaid Services said CMS is reviewing UnitedHealth's and other provider's networks "to ensure that beneficiaries have full, transparent and timely information and access to needed care."
Doctors, patients and their elected representatives have good reason to view UnitedHealthcare's claim that its sudden terminations are due mainly to government cuts to payments for Medicare Advantage services. After all, thus far none of the other major Medicare Advantage providers, including Humana, Aetna and Wellpoint, have gutted their physician networks as has UHC. Even more suspicious, UnitedHealthcare has unveiled its termination program after two years in which its parent company acquired its own physician practices in Florida, California and others states.
As Kaiser documented in April 2012 ("Conflicts Arise As Health Insurers Diversify"), UnitedHealthcare has been at the forefront of insurance carriers buying out not just entire physician practices, but billing resolution firms doctors and hospitals use to make they get paid by insurers--like UnitedHealthcare. In 2012, UHC moved to strengthen its presence in Florida, where 10 percent of all Medicare beneficiaries live:
UnitedHealthcare, the giant nationwide insurer, is making a major move in South Florida by announcing Tuesday it has agreed to purchase two Miami-Dade based Medicare and Medicaid insurance plans that have more than 100,000 members and eight clinics.
The acquisitions of Medica and Preferred Care Providers in Florida followed UnitedHealthcare's purchase of California-based Monarch Health Care in the fall of 2011. By February 2012, Blue Shield of California brought suit for $10.5 million in damages against the newly acquired 2,300 physician network which had been folded into UnitedHealth's Optum health services unit. As the Wall Street Journal reported:
Among the allegations: that Monarch sought to steer Blue Shield members away from Blue Shield and toward competing health plans, and that its doctors started declining to see some Blue Shield members. The complaint says these moves violated Blue Shield's contract with Monarch, which the insurer has previously said will end on May 1.
"It seems crazy to be contracted with someone who's a direct competitor, and share everything you design with them," said Juan Davila, senior vice president for network management at Blue Shield, which has 3.3 million members. Blue Shield felt its "worry was proved true" by Monarch's alleged actions, he said.
According to the web site Modern Healthcare, Blue Shield also alleged that "Monarch physicians were refusing to make appointments with Blue Shield members and that Monarch is urging Blue Shield members to switch health plans via recorded phone calls."
Patients, doctors, hospitals other insurers and state regulators are right to be worried by insurers like UnitedHealthcare gobbling up physician practices, only to then limit policyholders to their own proprietary networks. As Bridget Maehr, senior financial analyst at A.M. Best Co. put it:
"It isn't so much about them getting into the business of care delivery as it is creating access for their members."
Or, better yet, lack of access to any doctors but their own.
So, when health insurance companies complain that they must "narrow" their networks of doctors and hospitals in order to remain profitable under the Affordable Care Act, Americans should extremely skeptical. As for the right-wingers who charge that Obamacare is forcing Medicare Advantage insurers like UnitedHealthcare to drop thousands of doctors, scorn is the better response. After all, 95 percent of Republicans in Congress voted three years in a row for precisely the same Medicare cuts they decry now.
| December 6, 2013
Conservatives Likening Obama to a Slave Owner Decry Being Likened to a Slave Owner
Over the past couple of days, Jonathan Chait's "12 Years a Slave and the Obama Era" seems to have struck a nerve among the conservative commentariat. In it, Chait responded to the Obama caricature of the National Review's Quin HIllyer depicting the President with "chin jutting out, countenance haughty, voice dripping with disdain for conservatives... [a man with] no shame, no self-doubt, not a shred of humility, no sense that anybody else has legitimate reason to question him or hold any other point of view." Chait lamented:
You can accept the most benign account of his thought process - and I do - while still being struck by the simple fact that Hillyer finds nothing uncomfortable at all about wrapping himself in a racist trope. He is either unaware of the freighted connotation of calling a black man uppity, or he doesn't care. In the absence of a racial slur or an explicitly bigoted attack, no racial alarm bells sound in his brain...
Conservatives can transport themselves for two hours into the hellish antebellum world of 12 Years a Slave and experience the same horror and grief that liberals feel. What they cannot do, almost uniformly, is walk out of the theater and detect the still-extant residue of that world all around them.
That was more than the Washington Examiner's Tim Carney could take:
If you want someone to listen to you on race, you don't start by likening him to a slaveowner.
As it turns out, that is an odd--and unfortunate--argument for any Republican water carrier to make. After all, today's Party of Lincoln routinely compares the national debt, abortion, gun control, Obamacare--and most every other symbol and policy of President Obama--to slavery.
Take, for example, Sarah Palin's speech last month to the Faith and Freedom Coalition in Iowa. With federal budget deficits plummeting and the U.S. national debt stable as a percentage of the American economy stable over the rest of the decade, Palin chose an odd moment to do her Frederick Douglas impersonation:
"Our free stuff today is being paid for by taking money from our children and borrowing from China. When that money comes due - and this isn't racist, but it'll be like slavery when that note is due. We are going to beholden to the foreign master."
According to Texas Republican Congressman Louie Gohmert, that debt burden would rank among the three most immoral things ever perpetrated against the American people by their government:
"Slavery and abortion are the two most horrendous things this country has done but when you think about the immorality of wild, lavish spending on our generation and forcing future generations to do without essentials just so we can live lavishly now, it's pretty immoral."
To be sure, for Republicans the private decisions women make about their reproductive choices are no different than hundreds of thousands of Americans owning millions of other Americans. In fact, Arizona Rep. Trent Franks argued in 2010, for African-Americans it's even worse:
"In this country, we had slavery for God knows how long. And now we look back on it and we say 'How brave were they? What was the matter with them? You know, I can't believe, you know, four million slaves. This is incredible.' And we're right, we're right. We should look back on that with criticism. It is a crushing mark on America's soul. And yet today, half of all black children are aborted. Half of all black children are aborted. Far more of the African-American community is being devastated by the policies of today than were being devastated by policies of slavery."
When he isn't comparing abortion (and the national debt) to the Holocaust, Baptist Minister turned Arkansas Governor turned Fox News host Mike Huckabee also reassures his audience that it is akin to slavery. In July, the Texas Tribune reported, "Huckabee compared abortion to slavery, asking if society could reject slavery and 'come to the conclusion that one person can take the life of another person." The Huffington Post recounted of Huckabee's Transitive Law of Slavery:
"It's the logic of the Civil War," Huckabee said, comparing abortion rights to slavery. "If morality is the point here, and if it's right or wrong, not just a political question, then you can't have 50 different versions of what's right and what's wrong."
Two years later, he told an anti-choice group that he believed the issue of abortion was resolved "150 years ago when the issue of slavery was finally settled in this country, and we decided that it no longer was a political issue, it wasn't an issue of geography, it was an issue of morality." In 2011, he again argued against abortion rights being determined at the state level, saying that "it was wrong to own a slave in Mississippi and Michigan."
Of course, by now "abortion is slavery" is a staple Republican sound bite. Rep. Tim Huelskamp (R-KS) declared that Planned Parenthood is "a racist organization and it continues to target minorities for abortion destruction." Pro-choice Americans, Ohio legislator Matt Huffman are no different than slave owners. And while some Southern Republicans compared health care reform to the "Great War of Yankee Aggression", former Louisiana GOP Rep. Anh "Joseph" Cao ultimately opposed it over abortion coverage he wrongly claimed was provided by the Affordable Care Act:
"For me abortion is such a moral evil, at a par with slavery, that I cannot in good conscience support a bill that seeks to expand it."
Suggesting that women's control over their own bodies is no different than master over a slave's, Personhood Mississippi compared Roe v. Wade to Dred Scott. So, too, did Huckabee, who likened the Supreme Court's recent ruling on the Defense of Marriage Act (DOMA) to both cases. To that list of cases, conservatives including Newt Gingrich and David Rivkin added another which was the equivalent of Chief Justice Roger Taney's 1857 ruling that blacks "had no rights which the white man was bound to respect." The Supreme Court's 2008 decision protecting the habeas corpus rights of terror detainees, they agreed, was "worse than Dred Scott." As Rivkin put it, allowing Gitmo prisoners to appeal their detentions was little different than declaring human beings property and codifying racial segregation:
"But to be honest, and not to be too dramatic, it's one of the worst decisions by the Supreme Court I've ever read, on par with Dred Scott decisions and Plessy v. Ferguson.
The reason for it is not because of its practical implications; they're quite modest. But the sheer ambition, the sheer judicial arrogance that you see here."
And the horrors of slavery and Jim Crow could have been avoided, conservatives insist, if it hadn't been for gun control. As Gun Appreciation Day chairman Larry Ward explained in 2012:
"I think Martin Luther King, Jr. would agree with me if he were alive today that if African Americans had been given the right to keep and bear arms from day one of the country's founding, perhaps slavery might not have been a chapter in our history."
Rush Limbaugh agreed, arguing:
"If a lot of African-Americans back in the '60s had guns and the legal right to use them for self-defense, you think they would have needed Selma? If John Lewis, who says he was beat upside the head, if John Lewis had had a gun, would he have been beat upside the head on the bridge?"
A year before he argued that America needs a white, Republican President, Joe "the Plumber" Wurzelbacher recounted how gun control was responsible for the Armenian genocide and the Holocaust. As his spokesman Phil Christofanelli insisted, "There's nothing offensive" about that claim:
"Well, blacks weren't allowed to own guns in the south, that's a historical fact as well. So, it would seem that the argument would apply there as well."
In Joe the Plumber's defense, he was only parroting a line regurgitated by many of his GOP brethren. After all, GOPers from Michelle Bachmann to Maine Governor Rick LePage insist, taxes, debt and--worst of all--Obamacare are all like Hitler's Holocaust. And on those occasions when they aren't equating the Affordable Care Act to the Nazi reign of terror, the Republicans' best and brightest come back to slavery.
Just ask George Will. The Washington Post columnist and regular on Fox News and ABC News offered this helpful analogy:
"I hear Democrats say, 'The Affordable Care Act is the law,' as though we're supposed to genuflect at that sunburst of insight and move on. Well, the Fugitive Slave Act was the law, separate but equal was the law, lots of things are the law and then we change them."
Dr. Ben Carson, the neurosurgeon turned conservative heartthrob, couldn't agree more. As he explained last month at the Family Research Council's Values Voter Summit:
"You know Obamacare is really I think the worst thing that has happened in this nation since slavery. And it is in a way, it is slavery in a way, because it is making all of us subservient to the government, and it was never about health care. It was about control."
It seems that everything these Republicans oppose is as bad or worse than slavery. Except, apparently, slavery itself. After all, many in today's Party of Lincoln support nullification and secession. But in May 2010, the conservatives who set the standards for Texas' schoolbooks insisted on removing the word "slave" from the term "slave trade." That April, Virginia Governor Bob McDonnell omitted any mention of slavery from his declaration of Confederate Heritage Month. Former RNC Chairman and Mississippi Governor Haley Barbour explained why that was no big deal:
"To me it's a sort of feeling that it's just a nit. That it is not significant. It's trying to make a big deal out of something that doesn't matter for diddly."
Hearing that slavery didn't "matter for diddly" probably sounds shocking to most Americans. They could be forgiven for assuming only the most unreconstructed neo-Confederate could utter such appalling words. That's why conservatives who persist in trafficking in such language have no grounds for complaint with the comparisons which naturally ensue.
| December 5, 2013
Red States Face Triple Whammy from GOP Medicaid Rejection
The refusal of Republican-led states to accept the Affordable Care Act's expansion of Medicaid will rank among the greatest self-inflicted wounds in the recent history of American public policy. But in the red states where the GOP calls the shots, that act of pure political spite will produce not one crisis but three.
For starters, millions of their residents will needlessly remain uninsured thanks to the "coverage gap" produced by the denial of Medicaid coverage to those earning less than 138 percent of the federal poverty level. Adding insult to injury, as the Commonwealth Fund documented this week, coffers in Texas, Georgia and over 20 other states will lose out on billions of dollars of funding from Washington, D.C. even as their residents receive no benefits for the Medicaid tax revenues they supply. Making matters worse, red state hospitals will face a severe cash crunch and even closure unless their Republican leaders come up with the money to pay for the uncompensated care of those who could have been insured by Uncle Sam for free.
As McClatchy explained in August, Republicans have left 5.5 million people "in those 21 states to fend for themselves in the 'coverage gap,' a bureaucratic twilight zone where people with poverty-level incomes don't qualify for Medicaid and can't get tax credits to help buy coverage on the new insurance marketplaces."
Here's why. Roughly 260 million Americans (roughly 85 percent) already have health insurance provided by their employers, the government or through individual policies they purchased. In places like Oregon, Colorado, New York, California and other, mostly Democratic states, governors and state legislators accepted the expansion of Medicaid to provide free health insurance for those earning up to 138 percent of the federal poverty (FPL). For those earning between 138 and 400 percent of the FPL, the Affordable Care Act's subsidies will help them purchase insurance in the private market. But in the states where Republicans said "no" to the expansion of Medicaid, the picture is much different. As the AP described the gaping hole in July:
Nearly 2 in 3 uninsured people who would qualify for health coverage under an expansion of Medicaid live in states which won't broaden the program or have not yet decided on expansion.
The resulting Republican body count is shocking. Thanks to the GOP's rejection of Medicaid expansion, 1.3 million people in Texas, 1 million in Florida, 534,000 in Georgia and 267,000 in Missouri will be ensnared in the coverage gap.
Those millions of Americans are not alone. As Bloomberg and CNN recently documented, many of the hospitals, clinics and emergency centers that serve them will be caught in the Republican health care coverage gap, too.
As the New York Times reported, Memorial Hospital in Savannah, Georgia "is now facing the loss of nearly half of its roughly $100 million in annual subsidies known as disproportionate share hospital payments." The Times explained how the Republican temper tantrum after the Supreme Court made Medicaid expansion optional for the states is putting red state hospitals at risk:
Now, in a perverse twist, many of the poor people who rely on safety-net hospitals like Memorial will be doubly unlucky. A government subsidy, little known outside health policy circles but critical to the hospitals' survival, is being sharply reduced under the new health law.
The subsidy, which for years has helped defray the cost of uncompensated and undercompensated care, was cut substantially on the assumption that the hospitals would replace much of the lost income with payments for patients newly covered by Medicaid or private insurance. But now the hospitals in states like Georgia will get neither the new Medicaid patients nor most of the old subsidies, which many say are crucial to the mission of care for the poor.
Savannah Memorial has plenty of company in Georgia. Republican Governor Nathan Deal said no to $33 billion in new federal Medicaid funding over the next decade. But as the federal government significantly reduces funding on Disproportionate Share Hospital (DSH) payments for the care of the uninsured, states like Georgia which turned down Obamacare's Medicaid dollars will be on the hook to make up the difference. For Grady Memorial Hospital, the largest in the metro Atlanta area, what could have been an annual boon of $60 million and coverage for 27,000 uninsured patients instead will be a $45 million loss. Georgia taxpayers will have to pay more even as hospitals likely cut services. Meanwhile, three cash-strapped rural hospitals have already closed their doors. Another 15 may follow suit in 2014. All because a Republican Governor said "no" to free money from Washington, DC.
And the funding is virtually free to the states. The federal government will pay for 100 percent of the cost of the Medicaid expansion until 2017 and 90 percent after that. The loss to rejectionist red state coffers, the Commonwealth Fund found, is staggering. As USA Today summed it up:
By 2022, Texas could lose $9.2 billion by not expanding Medicaid as allowed under the Affordable Care Act, while Florida could lose $5 billion over that period, the study conducted by The Commonwealth Fund shows...Also during that period, the study showed, Georgia could lose $2.9 billion, while Virginia could lose $2.8 billion.
"There are no states where the taxpayers would actually gain by not expanding Medicaid," said Sherry Glied, lead author on the study. "Nobody wins."
But the billions the "opt-out" states will have to come up with in future years will be more than offset by their extra costs to compensate hospitals and other providers for the care of the uninsured. As Ezra Klein and Evan Soltas summed up an analysis by the RAND Corporation of 14 Medicaid rejecting states earlier this year
It finds that the result will be they get $8.4 billion less in federal funding, have to spend an extra $1 billion in uncompensated care, and end up with about 3.6 million fewer insured residents.
So then, the math works out like this: States rejecting the expansion will spend much more, get much, much less, and leave millions of their residents uninsured. That's a lot of self-inflicted pain to make a political point.
Which is just one of the reasons why an increasing number of red state governors are accepting the dollars from DC. GOP governors in Michigan, Pennsylvania and Ohio ran the numbers. In Ohio, Governor John Kasich's decision to take Washington's money will actually produce a $400 million surplus for the Buckeye State (one which Republican legislators want to give away in the form of more tax cuts). The simple math-and simpler consideration in insuring millions of indigent patients as the DSH funding is reduced over time is precisely why hospital associations in Texas, Kentucky, Georgia, Mississippi, North Carolina and every other state pleaded with Republican governors and legislatures to take Obamacare's money for Medicaid expansion. In October, the Fitch ratings agency released a special report titled, "Adverse Expansion: Hospitals, States and Medicaid," which warned that:
"Hospitals operating in states not expanding Medicaid, which usually have higher uninsured and poverty rates, will have to absorb the full impact of the ACA reimbursement cuts without the full benefit of increased insured volumes," said Adam Kates, Director in Fitch's Public Finance group. Texas, Florida, Georgia, Louisiana, Mississippi, and South Carolina are not expanding Medicaid and have among the highest uninsured and poverty rates, and some of the most stringent Medicaid eligibility requirements. Fitch believes hospitals in these states, particularly those with weak payer mixes, will be particularly vulnerable.
It's no wonder Arizona Governor Jan Brewer, certainly no friend of Barack Obama, explained her decision to extend Medicaid coverage to 300,000 more people in her state this way:
"It's pro-life, it's saving lives, it is creating jobs, it is saving hospitals."
Those are three pretty good arguments for avoiding the triple whammy so many Republican states are bringing on themselves.
| December 4, 2013
Republicans Decry Medicare Cuts They Voted for Three Years in a Row
In 2010, the GOP steamrolled to its House majority by scaring the bejesus out of seniors about $716 billion in Obamacare cuts to Medicare. Three years later, House and Senate Republicans are repeating their tried and untrue talking point. Untrue, that is, not just because the savings from private Medicare Advantage insurers and providers do not constitute cuts to core Medicare benefits. Just as important, those exact same savings are a central feature of the Paul Ryan House GOP budget 95 percent of Congressional Republicans voted for three years in a row.
Nevertheless, two weeks after the House GOP published its anti-Obamacare playbook, the National Republican Senatorial Committee (NRSC) is similarly resurrecting the same deceptive attack to target Democratic candidates in 12 states. As NRSC spokesman Brad Dayspring put it:
"By voting for ObamaCare, Democrats like Mark Pryor, Kay Hagan, Mary Landrieu and Mark Begich cut $717 billion from Medicare -- including $154 billion from Medicare Advantage -- which will hurt seniors."
But just in the 2010 and 2012 elections, Republicans who want to repeal, delay, defund or otherwise damage the Affordable Care Act won't own up to the glaring contradiction in the Medicare demagoguery. They may hate what the ACA spends money on, but they love every dollar it raises from savings and new taxes.
In September, the ranking Democrat on the House Budget Committee Chris Van Hollen (D-MD) called Congressional Republicans to task for precisely that hoax:
[House Republicans] have to explain to the American people how they voted for a budget that includes all of the Medicare savings from ObamaCare, that includes the same level of revenue generated from ObamaCare and, in fact, would not even balance in 10 years, if not for the Affordable Care Act.
Van Hollen was actually giving the Republicans too much credit. Their budget, as we'll see below, doesn't balance in 10 years. But it does indeed count on all of the cost savings and new tax revenue that more than pay for the Affordable Care Act.
That's exactly what that 95 percent of House and Senate Republicans voted for when they blessed Paul Ryan's budget in 2011, 2012 and 2013. While repealing Obamacare, slashing Medicaid funding by a third and leaving roughly 38 million more people uninsured, the Ryan budget still runs up trillions in new red ink thanks to its massive tax cut windfall for the wealthy. Paul Ryan's blueprint does not, as Republicans claim, balance in 10 year because it does not identify a single tax break it will close to fill the gaping hole left by almost $5 trillion in tax cuts. And yet, the Ryan plan still assumes every single dollar in revenue generated to fund the Affordable Care Act. The $716 billion in savings from Medicare providers, the capital gains and Medicare payroll tax surcharges for households earning over $250,000 a year and other new revenue raisers are all still in there. As Ezra Klein explained "Paul Ryan's love-hate relationship with Obamacare" in March:
Every Ryan budget since the passage of Obamacare has assumed the repeal of Obamacare. Kinda. Ryan's version of repeal means getting rid of all the parts that spend money to give people health insurance but keeping the tax increases and the Medicare cuts that pays for that health insurance, as without those policies, it is very, very difficult for Ryan to hit his deficit-reduction targets.
Not just difficult, but virtually impossible. Obamacare, as the CBO has repeatedly projected, reduces the national debt over the next decade. Its revenue exceeds its spending by an estimated $109 billion over the next 10 years. But without the revenue-raising provisions from Barack Obama's Affordable Care Act, Paul Ryan and his GOP would have to plug a $1 trillion hole in their budget.
The GOP hypocrisy doesn't end there. After all, the Ryan budget doesn't just pocket that $716 billion in Medicare savings to help fund its massive tax cut windfall for the wealthy. As it turns out, his blueprint turns the Medicare system for 49 million seniors into an underfunded voucher scheme that will dramatically shift health care costs onto the future elderly. As ThinkProgress explained during the 2012 campaign:
Seniors currently under the age of 55 could use their government contribution to purchase insurance from an exchange of private plans or--unlike Ryan's original budget--traditional fee-for-service Medicare...
But the budget does not take sufficient precautions to prevent insurers from cherry-picking the healthiest beneficiaries from traditional Medicare and leaving sicker applicants to the government. As a result, traditional Medicare costs could skyrocket, forcing even more seniors out of the government program. The budget also adopts a per capita cost cap of GDP growth plus 0.5 percent, without specifying how it would enforce it. This makes it likely that the cap would limit the government contribution provided to beneficiaries and since the proposed growth rate is much slower than the projected growth in health care costs, CBO estimates that new beneficiaries could pay up to $2,200 more by 2030 and up to $8,000 more by 2050. Finally, the budget would also raise Medicare's age of eligibility to 67.
Those are the real cuts in Medicare benefits. And Paul Ryan, John Boehner, Eric Cantor, Mitch McConnell and 95 percent of Republicans on Capitol Hill voted for them in 2011. And 2012. And 2013.
| December 3, 2013
Pope Francis' Rerun Novarum
Karl Marx famously said that historical events occur twice, first as tragedy and then as farce. So it would seem with the reaction of American conservatives to Evangelii Gaudium, the new 85-page apostolic exhortation issued by Pope Francis. Just days after Sarah Palin fretted that some of the Pope's statements "sound kind of liberal," Rush Limbaugh called Francis' critique of income inequality and trickle-down economics "pure Marxism." Meanwhile, Stuart Varney of Fox News branded the Pope's teachings on social justice "neo-Socialism."
As it turns out, the critics of Pope Francis could have lifted their talking points from any gathering of Gilded Age robber barons 122 years ago. When Pope Leo XIII issued his influential Rerum Novarum in 1891, the defenders of unfettered and unburdened capitalism denounced the Holy Father using much of the same language.
A quick glance back at Leo's "Of New Things" shows that Francis' teachings on social justice are not. The United States Conference of Catholic Bishops highlights the critical role Rerum Novarum played in the growth of the American labor movement by encouraging millions of Catholic workers to join unions. As the UCCSB explains:
This groundbreaking social encyclical addresses the dehumanizing conditions in which many workers labor and affirms workers' rights to just wages, rest, and fair treatment, to form unions, and to strike if necessary. Pope Leo XIII upholds individuals' right to hold private property but also notes the role of the state in facilitating distributive justice so that workers can adequately support their families and someday own property of their own. He notes the poor "have a claim to special consideration."
Over a century before Pope Francis warned that trickle-down economics "expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system," Leo XIII cautioned:
The richer class have many ways of shielding themselves, and stand less in need of help from the State; whereas the mass of the poor have no resources of their own to fall back upon, and must chiefly depend upon the assistance of the State. And it is for this reason that wage-earners, since they mostly belong in the mass of the needy, should be specially cared for and protected by the government.
It wasn't Marx but Leo who explained that "the labor of the working class--the exercise of their skill, and the employment of their strength, in the cultivation of the land, and in the workshops of trade--is especially responsible and quite indispensable" before concluding:
It may be truly said that it is only by the labor of working men that States grow rich.
When Pope Leo XIII spoke on the rights of capital and labor, his words were not well-received by the union-bashers of his day--or ours:
Let the working man and the employer make free agreements, and in particular let them agree freely as to the wages; nevertheless, there underlies a dictate of natural justice more imperious and ancient than any bargain between man and man, namely, that wages ought not to be insufficient to support a frugal and well-behaved wage-earner. If through necessity or fear of a worse evil the workman accept harder conditions because an employer or contractor will afford him no better, he is made the victim of force and injustice.
Like Francis, Leo emphasized both the moral priority of caring for "the least of these" while reminding all of Jesus' guidance that "it is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God."
Therefore, those whom fortune favors are warned that riches do not bring freedom from sorrow and are of no avail for eternal happiness, but rather are obstacles;(9) that the rich should tremble at the threatenings of Jesus Christ - threatenings so unwonted in the mouth of our Lord(10)...
Whoever has received from the divine bounty a large share of temporal blessings, whether they be external and material, or gifts of the mind, has received them for the purpose of using them for the perfecting of his own nature, and, at the same time, that he may employ them, as the steward of God's providence, for the benefit of others.
Almost 125 years and three papal encyclicals later, Pope Francis has reiterated Pope Leo's counsel that workers must not be left "isolated and defenseless" in the face of "the callousness of employers and the greed of unrestrained competition." As he put it last week:
"In this context, some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. Meanwhile, the excluded are still waiting."
Waiting, that is, for social justice.