Views and Opinions
- The Ryan Plan for Medicaid
- No to more furloughs - state workers are doing their share
- Public pensions: a system that works for all
- Boeing and the N.L.R.B
- Let's Not Be Civil
- The Government is Not a Household, and Shouldn’t Be Run Like One
- Budget Battles: Tax and Spending Myths and Realities
- The Peasants need Pitchforks
- Why Pay Congress?
- Previous articles are available here
The Ryan Plan for Medicaid
Posted April 30, 2011
Source: The NT Times Editorial
Here’s how Medicaid currently works: Washington sets minimum requirements for who can enroll and what services must be covered, and pays half of the bill in the richest states and three-quarters of the bill in the poorest state. If people are poor enough to qualify and a medical service recommended by their doctors is covered, the state and federal governments will pick up the tab, with minimal co-payments by the beneficiaries. That is a big plus for enrollees’ health, and a healthy population is good for everyone. But the costs are undeniably high.
Enter the House Republicans’ budget proposal. Instead of a commitment to insure as many people as meet the criteria, it would substitute a set amount per state. Starting in 2013, the grant would probably equal what the state would have received anyway through federal matching funds, although that is not spelled out. After that, the block grant would rise each year only at the national rate of inflation, with adjustments for population growth.
There are several problems with that, starting with that inflation-pegged rate of growth, which could not possibly keep pace with the rising cost of medical care. The Congressional Budget Office estimates that federal payments would be 35 percent lower in 2022 than currently projected and 49 percent lower in 2030.
To make up the difference, states would probably have to cut payments to doctors, hospitals or nursing homes; curtail eligibility; reduce benefits; or increase their own payments for Medicaid. The problems do not end there. If a bad economy led to a sharp jump in unemployment, a state’s grant would remain the same. Nor would the block grant grow fast enough to accommodate expensive advances in medicine, rising demand for long-term care, or unexpected health care needs in the wake of epidemics or natural disasters. This would put an ever-tightening squeeze on states, forcing them to drop enrollees, cut services or pump up their own contributions.
This is not the way to go. The real problem is not Medicaid. Contrary to most perceptions, it is a relatively efficient program — with low administrative costs, a high reliance on managed care and much lower payments to providers than other public and private insurance.
The real problem is soaring medical costs. The Ryan plan does little to address that. The health care law, which Republicans have vowed to repeal, seeks to reform the entire system to deliver quality care at lower cost. Read the complete source story here.
No to more furloughs - state workers are doing their share
Posted April 29, 2011
Source: The Olympian
The state Senate should back off its ill-conceived plan to force high-wage state employees to take additional furlough days. The plan may violate the labor agreement signed by Gov. Chris Gregoire and approved by a vote of union members.lympian.com/2011/04/28/1632128/no-to-more-furloughs-state-workers.html#ixzz1KtXmdjCP
Unpaid furloughs have been part of state employees’ lives since the economy slipped into a deep recession. State workers have taken 10 days off work without pay since last July.
In her collective bargaining negotiations with union members for the 2011-13 contract, Gregoire insisted on a 3 percent pay cut collected through another round of furloughs. Union members understood the need to share in the sacrifice to balance the state budget.
The memorandum of understanding on furloughs that is part of the union contract agrees that state employees will take an additional 15.6 furlough days over the two-year course of the budget, according to Tim Welch, spokesman for the Washington Federation of State Employees. Those furlough days are expected to save the state about $330 million.
Welch said the labor contract, ratified by union members, spreads the pain and includes everyone who makes more than $30,000 a year.
That’s why the Senate proposal to add additional furlough days for 53,000 higher-paid state workers is a violation of the contract, Welch said. Read the entire source story here.
Public pensions: a system that works for all
Posted April 29, 2011
Source: The Everett Herald
Pensions enable us to live out our older years in dignity. In the United States, an employer-provided retirement plan has long been considered an essential complement to Social Security and personal savings to ensure retirees have satisfactory incomes and certainty for household finances.
Since 1937, our state has developed a network of pension plans to enable financial security in retirement for its public servants. Now these pension plans cover all state and local public employees, including teachers, firefighters, police, social workers and natural resource and parks employees.
There are more than 300,000 public employees contributing to these pension plans and 130,000 retirees. All told, one out of every 14 Washington residents are in our public pension systems.
[...] These pensions come out of trust funds administered by the State Investment Board. Contributions to these trust funds come from employees and their public employers. Currently public employees contribute between 3.14 percent and 8.46 percent of their wages to their respective public pension funds. Their employers -- state and local governments -- contribute similar amounts to these trust funds.
Washington is one of four states with at least 99 percent its pension obligations funded. The newer pension programs are funded at 118 percent of future liabilities. The older plans are also doing well. They faithfully pay out all benefits to retirees. In fact, their net assets increased in the past 12 months, to total more than $14 billion.
Our public pension system delivers $216 million a month to 130,000 retired employees. That comes out to almost $2.6 billion a year. Unlike corporations or the wealthy, pensioners tend to spend all their benefits and they spend these benefits where they live. As a result, each $1 in pension benefits results in $1.37 in increased economic activity in our state -- $3.6 billion in 2009.
Drilling down a bit more, because taxpayer contributions account for only 15 percent of total pension funds, each $1 in public contributions results in a $9.69 increase in economic activity. Read the entire source story here.
Boeing and the N.L.R.B.
Piosted April 27, 2011
Source: The New York Times
It may be a difficult case to prove, but the complaint filed last month by the National Labor Relations Board against Boeing is a welcome effort to defend workers’ right to collective bargaining.
The N.L.R.B. is accusing the company of setting up a nonunion production line in South Carolina to retaliate against unionized workers in Washington State for striking. The board wants to force Boeing to make all of its new Dreamliner jets in Washington, rather than make 30 percent of them at the new line in Charleston.
The case hinges on proving Boeing’s intent. It is illegal to retaliate against workers for striking — there have been four strikes at the Washington facility since 1989 — or threaten workers in order to discourage strikes. But the company can decide to locate production in South Carolina because it makes business sense and may include “production stability” as a factor in its decision.
Boeing says it wants to diversify its assembly to make it less vulnerable to disruptions caused by potential future strikes. Further complicating the N.L.R.B.’s case, Boeing says opening the line in South Carolina will not lead to layoffs in Washington, where it is adding jobs, too.
The N.L.R.B.’s action lands squarely on an ambiguity in the nation’s labor protections — which enshrine the right to collective bargaining yet allow companies ways to avoid it by going to another state. Read the source story here.
Let's Not Be Civil
Posted April 19, 2011
Last week, President Obama offered a spirited defense of his party’s values — in effect, of the legacy of the New Deal and the Great Society. Immediately thereafter, as always happens when Democrats take a stand, the civility police came out in force. The president, we were told, was being too partisan; he needs to treat his opponents with respect; he should have lunch with them, and work out a consensus.
Let’s review the story so far.
Two weeks ago, House Republicans released their big budget proposal, selling it to credulous pundits as a statement of necessity, not ideology — a document telling America What Must Be Done.
But it was, in fact, a deeply partisan document, which you might have guessed from the opening sentence: “Where the president has failed, House Republicans will lead.” It hyped the danger of deficits, yet even on its own (not at all credible) accounting, spending cuts were used mainly to pay for tax cuts rather than deficit reduction. The transparent and obvious goal was to use deficit fears to impose a vision of small government and low taxes, especially on the wealthy.
So the House budget proposal revealed a yawning gap between the two parties’ priorities. And it revealed a deep difference in views about how the world works.
When the proposal was released, it was praised as a “wonk-approved” plan that had been run by the experts. But the “experts” in question, it turned out, were at the Heritage Foundation, and few people outside the hard right found their conclusions credible. In the words of the consulting firm Macroeconomic Advisers — which makes its living telling businesses what they need to know, not telling politicians what they want to hear — the Heritage analysis was “both flawed and contrived.” Basically, Heritage went all in on the much-refuted claim that cutting taxes on the wealthy produces miraculous economic results, including a surge in revenue that actually reduces the deficit. Read the entire source story here.
The Government is Not a Household, and Shouldn’t Be Run Like One
Posted April 15, 2011
It’s increasingly well understood — at least among the tiny slice of Americans who read wonkish economic blogs — that thinking about the government as a very big household that happens to employ an army is a bad thing. When economic times are good, households should spend and invest more, while government should spend and invest less. When they’re bad, households need to cut back, and the government needs to step in. But as Karl Smith says, that’s not the only place where the analogy breaks down. Another — and one that’s increasingly relevant — is “not realizing your personal control over spending versus revenues is essentially the exact opposite of the governments control over spending versus revenues.” He continues:
Most middle class folks can cut back on their spending with relative ease. They probably won’t get sick, malnourished or injured from exposure as a result of spending cuts. What this means is that if revenues are running higher than spending – a necessary condition for building up debt – the most obvious choice is to cut spending. Therefore, as a rule of thumb people develop the notion that debt comes from living beyond your means...to the government, the exact opposite is true.
It is much easier for the government to raise revenue than to cut spending. Moreover, most of the movement in the deficit is tied to movements in revenue, not movements in spending. Thus the exact same reasoning that leads you to associate debt and spending in your personal life should lead you to associate debt and revenue for the government.
Budget Battles: Tax and Spending Myths and Realities
Posted April 14, 2011
NY Times Editorial
Here are two numbers to keep in mind when thinking about the House Republicans’ budget plan: They want to cut spending on government programs over the next decade by $4.3 trillion. And they want to cut tax revenues over the same period by $4.2 trillion.
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Government spending needs to be brought under control. But slashing vital services just to pay for more tax cuts is bad public policy and bad economics.
It won’t fix the deficit, no matter what the Republicans claim.
We’ve seen this play before. President Ronald Reagan promised that tax cuts would spur more economic growth and pay for themselves. During his tenure, the deficit hit what was then a peacetime high of 6 percent of gross domestic product, and he eventually decided that he had no other alternative but to raise taxes to try to close the gap.
The Clinton years disproved the notion that higher taxes would inevitably stifle economic growth, or cost politicians their jobs. Taxes were raised in 1993, including higher income tax rates on the wealthiest. The economy was strong, and the stock market surged. Read the entire source story here.
The Peasands Need Pitchforks
Posted April 11, 2011
Robert Scheer at Truthdig.com
[...] The delusion of a classless America in which opportunity is equally distributed is the most effective deception perpetrated by the moneyed elite that controls all the key levers of power in what passes for our democracy. It is a myth blown away by Nobel Prize winner Joseph E. Stiglitz in the current issue of Vanity Fair. In an article titled “Of the 1%, by the 1%, for the 1%” Stiglitz states that the top thin layer of the superwealthy controls 40 percent of all wealth in what is now the most sharply class-divided of all developed nations: “Americans have been watching protests against repressive regimes that concentrate massive wealth in the hands of an elite few. Yet, in our own democracy, 1 percent of the people take nearly a quarter of the nation’s income—an inequality even the wealthy will come to regret.”
That is the harsh reality obscured by the media’s focus on celebrity gossip, sports rivalries and lotteries, situations in which the average person can pretend that he or she is plugged into the winning side. The illusion of personal power substitutes consumer sovereignty—which smartphone to purchase—for real power over the decisions that affect our lives. Even though most Americans accept that the political game is rigged, we have long assumed that the choices we make in the economic sphere as to career and home are matters that respond to our wisdom and will. But the banking tsunami that wiped out so many jobs and so much homeownership has demonstrated that most Americans have no real control over any of that, and while they suffer, the corporate rich reward themselves in direct proportion to the amount of suffering they have caused.
Instead of taxing the superrich on the bonuses dispensed by top corporations such as Exxon, Bank of America, General Electric, Chevron and Boeing, all of which managed to avoid paying any federal corporate taxes last year, the politicians of both parties in Congress are about to accede to the Republican demand that programs that help ordinary folks be cut to pay for the programs that bailed out the banks. Read the source story here.
Why Pay Congress?
Posted April 7, 2011
Nicholas D. Kristof, in the NY Times
If we careen over a cliff on Friday and the American government shuts down, hard-working federal workers will stop getting paychecks, but the members of Congress responsible for the shutdown are expected to be paid as usual.
That’s partly because Congressional pay is not subject to the regular appropriations process, and partly because of Constitutional concerns. The Senate passed a bill proposed by Barbara Boxer of California that would suspend Congressional paychecks in any government shutdown, but the Republican-controlled House has blocked it. House Republicans approved a similar pay suspension, but it was embedded in legislation that has zero chance of becoming law.
The upshot is that federal workers who do important work for the public — cleaning up toxic waste, enrolling sick people into lifesaving medical trials, answering medical hot lines, running national parks, processing passport applications — risk being sent home and going unpaid. But members of Congress would continue to receive $174,000 a year. As the humorist Andy Borowitz wrote in a Twitter message: “That’s like eliminating the fire dept & sending checks to the arsonists.”
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Imagine how disastrous it would be if the Republicans shut down government for any length of time. Unpaid federal employees would cut back on shopping. Some would miss house payments. Family members might drop out of college. The I.R.S. might not be able to deliver some tax refunds. Small businesses would stop getting government loans. In sum, after the Democratic stimulus, we would have the Republican drag.
Republicans are also threatening to refuse to raise the government debt ceiling. By July, that could mean a default on U.S. government bonds. The Federal Reserve chairman, Ben Bernanke, says that would be “catastrophic,” and Treasury Secretary Tim Geithner warns that we could see “a financial crisis potentially more severe than the crisis from which we are only now starting to recover.”
All this seems mind-bogglingly petty and pusillanimous. If members of Congress shut down government and trigger a new financial crisis, then they shouldn’t just have their own pay docked. They should also learn the discipline of a market economy and be fired by the public that they are betraying. Read the source story here.