Category Archives: Public Policy and Governance

About that Social Safety Net…

Congressional Republicans are now proposing that, starting in 2022, new Medicare recipients be allowed to choose from a list of guaranteed coverage options, and “be given the ability to choose a plan that works best for them.”  According to Paul Ryan, the plan’s author, “This is not a voucher program, but rather a premium-support model. A Medicare premium-support payment would be paid, by Medicare, to the plan chosen by the beneficiary, subsidizing its cost.  The premium-support model would operate similar to the way the Medicare prescription-drug benefit program works today. The Medicare premium-support payment would be adjusted so that wealthier beneficiaries would receive a lower subsidy, the sick would receive a higher payment if their conditions worsened, and lower-income seniors would receive additional assistance to cover out-of-pocket costs.”

According to Ryan, this budget proposal “gives seniors the freedom to choose a plan that works best for them and guarantees health security throughout their retirement years.” The plan and its details can be accessed at  http://budget.house.gov/UploadedFiles/PathToProsperityFY2012.pdf

Physicians for National Health Care has analyzed this proposal. The physicians’ diagnosis?

“Under Republican control, the House Budget Committee proposes phasing out the traditional Medicare program and replacing it with an insurance exchange offering a variety of private plans with the government’s role limited to offering a premium support (same mechanism as a voucher) to apply toward the purchase of a plan. This converts Medicare from a defined benefit (specified benefits are covered) to a defined contribution (the premium support being a specified dollar amount contributed toward the purchase of a private plan).

This proposal treats the budget as the patient, curing the budget problems with the trade off of further burdening the Medicare beneficiaries who are already paying too much out of pocket. It shifts future increases in health care costs from the government to the beneficiaries. It is much easier for Congress to control federal spending by limiting the value of the premium support rather than trying to reduce the benefit package.

The proposal would adjust the premium support for those with greater health care needs, but that is very difficult to do in a timely manner in that an adjustment next year doesn’t help to relieve this year’s increased costs. Also risk adjusting is very difficult in that it requires having a precise assessment of each individual’s health status and anticipated needs. It is a profound change from the current Medicare program in which equitable funding through the tax system is divorced from the uniform benefit package which everyone shares.

The proposal also would reduce premium support for wealthier Medicare beneficiaries, requiring them to pay more for exchange plans. Actually this principle of progressive financing already exists. Although the current standard premium for Medicare Part B is $96.40 for most individuals ($115.40 for new beneficiaries), it is indexed to income. Those with an income of $214,000 pay $438.20 (including an added Part D premium only for higher-income individuals).

Although progressive financing is an equitable concept, it belongs over on the tax revenue side for funding of the entire Medicare risk pool. By having it as a progressive premium on the benefit side, it fractures solidarity by creating a desire for the wealthy to obtain their own coverage and care independently of Medicare, since they are paying higher premiums anyway. Once they are on their own, they would look upon Medicare as a welfare program, not unlike Medicaid except with much fewer benefits, and chronic underfunding would be inevitable.

The debate that we should be having is over an improved Medicare for everyone. The sad state of politics today is certainly exemplified by the fact that those supporting the transfer of wealth from the masses to our plutocracy have been able to reframe the debate as a need to save our federal budget by cutting back on our social programs, especially Medicare and Medicaid (while reducing the tax rate on the wealthy from 35% down to 25%). What ever happened to common decency?”

What, indeed. In the same budget proposal, the GOP advocates drastic cuts in Medicaid, which provides (limited) medical assistance to the poor and disabled–and added tax cuts for businesses and wealthy individuals. I can’t help being reminded of the question posed to  infamous Senator Joseph McCarthy: “Until this moment, Senator, I think I never really gauged your cruelty or your recklessness.You have done enough. Have you no sense of decency?”

Stripping basic rights from workers and women, launching attacks on immigrants and gays, taking benefits from the poor and elderly to pay for tax breaks for the rich…I guess we know the answer to that question.

Tea and No Sympathy

There is an old joke that begins “Why tax the rich?” Answer: because that’s where the money is.

For some reason, the current crop of Tea Party Republicans in Congress continue to look for money in all the wrong places. Their insistence on spending cuts not only ignores basic economics–the sorts of cuts they are promoting would reduce consumer spending dramatically, and throw us back into recession–the cuts they are proposing are mean-spirited and inequitable.

Paul Ryan, the current poster-boy for “fiscal conservatism” unveiled a budget that would eliminate Medicare in favor of “subsidies” allowing the disabled and elderly to purchase private (far more costly) insurance. My husband and I were watching his press conference, as he explained this; as my husband pointed out, in reality this would be a “subsidy” all right–to private insurance companies.

The GOP budget was all like this: lots of pain for the have-nots, lots of gain for the already-haves.

Now, my well-meaning libertarian friends will argue that it isn’t government’s place to help people. Private charity, they believe, will take up the slack. However naive I may consider that belief, it does not answer a more basic question: if government is supposed to simply “get out of the way,” if the state is to be properly trimmed back to function only as a “night watchman,” where are the proposals to strip away all of the benefits government is lavishing on the well-to-do?

I’ll consider those proposals to strip the needy of the last shreds of the social safety net when those “limited government” advocates also propose removing the cushy tax breaks enjoyed by businesses, the subsidies to obscenely profitable oil companies, and the mortgage deductions for second and third homes.

Until I see those proposed “cuts,” and efforts to make the effective tax rate on millionaires approach the truly confiscatory policies being proposed for the poor, I’m calling this what it is: despicable.

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Sermon for a Sunday Morning

Last week, Vermont Senator Bernie Sanders renewed his call for “shared sacrifice” in addressing the budget deficit.

In remarks made after it was reported that some of this nation’s largest and most profitable corporations paid no U.S. taxes despite posting huge profits, Sanders said it is grossly unfair for congressional Republicans to propose major cuts to Head Start, Pell Grants, the Social Security Administration, nutrition grants for pregnant low-income women and the Environmental Protection Agency while ignoring the reality that some of the most profitable corporations pay nothing or almost nothing in federal income taxes.

Sanders has previously advocating tax reform to close corporate tax loopholes and eliminate cushy tax breaks for oil and gas companies. He has also introduced legislation to impose a 5.4 percent surtax on millionaires that is calculated to yield nearly $50 billion a year. The senator has said that spending cuts must be paired with new revenue so the federal budget is not balanced solely on the backs of working families. “We have a deficit problem,” he said, “and it has to be addressed. But it cannot be addressed on the backs of the sick, the elderly, the poor, young people, the most vulnerable in this country. The wealthiest people and largest corporations in this country have got to contribute. We’ve got to talk about shared sacrifice.”

So many people insist that this is a “Christian nation.” Wouldn’t a truly Christian nation follow Sander’s advice?

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Abuses of Power

For the past couple of months, I have been watching the political shenanigans in Wisconsin, Indiana, Ohio, Michigan, Maine and elsewhere with increasing disbelief, trying to figure out what has prompted such disdain for civility, democratic process and  individual rights.

In the latest bizarre twist from Wisconsin, the Governor and GOP leadership simply ignored an order of the federal court. The court had issued a stay of the law repealing collective bargaining rights, pending an evidentiary hearing on whether it had been passed in a manner consistent with the state’s open door law. The legislature could have abided by the order, or it could have held another vote, after proper notice. Instead, those in charge decided to thumb their noses at a court order.

The belligerent and tone-deaf Governor of Maine unilaterally decided to erase a mural that he didn’t like. It was on the walls of the state’s Department of Labor, and portrayed the history of the labor movement.

In Michigan, the Governor has proposed–and the legislative majority has apparently approved–a bill that gives him unprecedented, nearly dictatorial powers of the sort not seen in the United States (probably because those powers appear to conflict with our constitutional system of checks and balances).

In Indiana, the Republicans who now control both houses have been indulging in some of the most vindictive lawmaking we’ve seen. (A former student of mine who has been lobbying this session recently characterized the chamber as “the Hatehouse.”)  They are busily passing measures to marginalize gays, harass immigrants, and make it difficult if not impossible for women to control their own reproduction. (During arguments over the imposition of a three-day waiting period before women can obtain an abortion, a woman legislator asked that an exception be added for cases of rape; the sponsor angrily responded that such an exception would be a ‘major loophole’ because women would all claim to have been raped! The proposed amendment was then voted down.)

I could go on and on, unfortunately. But the larger question is: what is going on? What explains this epidemic of bullying?

I don’t know if I can explain the “why” of all this, but I think I can characterize the “what.”

One of the goals of this nation’s founders was memorably related by John Adams, who explained that the Constitution was intended to establish a nation of “laws, not men.” We would have a country where the rule of law trumped the exercise of raw power. No one was to be above the law, and the purpose of the law was to limit the ability of those in power to abuse that power. What we are seeing is what happens when people elected to office behave like thugs, using their positions for personal and political aggrandizement rather than for the common good.

The people elected in 2010 talk a lot about the constitution, but their actions betray their absolute ignorance of its central purpose.

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Why It’s Harder Than It Looks

I was listening to NPR as I was driving to work this morning, and heard a (pretty typical) news item that seems to me a perfect example of the perils of public policy–or why, as I continually tell my students, “it’s more complicated than it seems.”

The U.S. Defense Department has cut funding for an engine  being developed by Rolls Royce and G.E. Robert Gates, Defense Secretary, has called the project a waste of taxpayer money. But some 400+ Indiana jobs are directly tied to the continued development of that engine, and–predictably–scrapping it has generated opposition from both Andre Carson and Mike Pence.

I have no information that would allow me to comment on the merits of this project, but it is a textbook example of the problem we face cutting public budgets. Even apparent “no brainers”–attempts to cut programs that are self-evidently unnecessary or wasteful–run headlong into the reality that the cuts will cost some people jobs or money. Those people vote. They make campaign contributions. Thus the protests from Carson and Pence.

Pence’s objections are particularly illuminating: he has been a reliable opponent of government spending, even spending that most of us would consider appropriate. He talks incessantly about the need to make the “hard” decisions. But when those decisions affect his constituents or donors, his tune changes considerably.

Pence is not alone. We have legislatures filled with folks who want to make the “hard decisions”–so long as those hard decisions don’t require them to make any sacrifices or take any electoral risks.

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