“The Sequester Will Help The Economy”: Another Right-Wing Fairy Tale Debunks Itself
Remember all those fearless predictions by the usual grinning idiots on the right about how the sequester was going to work miracles for the economy? Well guess what? That never happened.
I know, I know. I’m trying to recover from the shock.
The sequester took effect on March 1, so we now have three months’ worth of jobs data that have been released in its aftermath. The results have been underwhelming, to say the least. As Brad DeLong observed this week, we are still in a depressed economy. And as Ed noted yesterday, the latest monthly jobs report was thoroughly mediocre.
I particularly wanted to highlight the point the New York Times’ Annie Lowrey made: that the report shows that the sequester is already, specifically beginning to have a negative impact on employment. Yesterday’s report shows that the federal workforce, which has suffered cutbacks due to the sequester, is shrinking at a dramatically accelerated rate:
Federal employment had been on a downward trend since the start of 2011, with the government shedding about 3,000 or 4,000 positions a month through February. Then sequestration hit on March 1. And in the last three months, the federal work force has shrunk by about 45,000 positions, including 14,000 in May alone.
Those newly unemployed federal workers, of course, now have less money to spend, which will also slow down the economy. In addition, the sequester is also causing cuts in programs like unemployment benefits and benefits to low-income people such as aid for Women, Infants, and Children (WIC) and the Low Income Home Energy Assistance Program (LIHEAP). Benefits to the unemployed and low-income folks act not only as a social safety net, but also as stimulus, since poor people and the jobless are likely to spend every penny they’ve got. Now, less of that money will be going into the pockets of those people and thus into the economy at large. That will also hurt the economic recovery, such as it is.
So, for those of you keeping score at home? The right wing/free market fundamentalists/austerity caucus? They are wrong. Again. And once again, they are continuing to drive the economy, and the country, into the ground.
By: Kathleen Geier, Washington Monthly Political Animal, June 8, 2013
“The Spite Club”: Driving Home The Fact Of Just How Little The GOP Cares About Your Well-Being
House Republicans have voted 37 times to repeal ObamaRomneyCare — the Affordable Care Act, which creates a national health insurance system similar to the one Massachusetts has had since 2006. Nonetheless, almost all of the act will go fully into effect at the beginning of next year.
There is, however, one form of obstruction still available to the G.O.P. Last year’s Supreme Court decision upholding the law’s constitutionality also gave states the right to opt out of one piece of the plan, a federally financed expansion of Medicaid. Sure enough, a number of Republican-dominated states seem set to reject Medicaid expansion, at least at first.
And why would they do this? They won’t save money. On the contrary, they will hurt their own budgets and damage their own economies. Nor will Medicaid rejectionism serve any clear political purpose. As I’ll explain later, it will probably hurt Republicans for years to come.
No, the only way to understand the refusal to expand Medicaid is as an act of sheer spite. And the cost of that spite won’t just come in the form of lost dollars; it will also come in the form of gratuitous hardship for some of our most vulnerable citizens.
Some background: Obamacare rests on three pillars. First, insurers must offer the same coverage to everyone regardless of medical history. Second, everyone must purchase coverage — the famous “mandate” — so that the young and healthy don’t opt out until they get older and/or sicker. Third, premiums will be subsidized, so as to make insurance affordable for everyone. And this system is going into effect next year, whether Republicans like it or not.
Under this system, by the way, a few people — basically young, healthy individuals who don’t already get insurance from their employers, and whose incomes are high enough that they won’t benefit from subsidies — will end up paying more for insurance than they do now. Right-wingers are hyping this observation as if it were some kind of shocking surprise, when it was, in fact, well-known to everyone from the beginning of the debate. And, as far as anyone can tell, we’re talking about a small number of people who are, by definition, relatively well off.
Back to the Medicaid expansion. Obamacare, as I’ve just explained, relies on subsidies to make insurance affordable for lower-income Americans. But we already have a program, Medicaid, providing health coverage to very-low-income Americans, at a cost private insurers can’t match. So the Affordable Care Act, sensibly, relies on an expansion of Medicaid rather than the mandate-plus-subsidy arrangement to guarantee care to the poor and near-poor.
But Medicaid is a joint federal-state program, and the Supreme Court made it possible for states to opt out of the expansion. And it appears that a number of states will take advantage of that “opportunity.” What will that mean?
A new study from the RAND Corporation, a nonpartisan research institution, examines the consequences if 14 states whose governors have declared their opposition to Medicaid expansion do, in fact, reject the expansion. The result, the study concluded, would be a huge financial hit: the rejectionist states would lose more than $8 billion a year in federal aid, and would also find themselves on the hook for roughly $1 billion more to cover the losses hospitals incur when treating the uninsured.
Meanwhile, Medicaid rejectionism will deny health coverage to roughly 3.6 million Americans, with essentially all of the victims living near or below the poverty line. And since past experience shows that Medicaid expansion is associated with significant declines in mortality, this would mean a lot of avoidable deaths: about 19,000 a year, the study estimated.
Just think about this for a minute. It’s one thing when politicians refuse to spend money helping the poor and vulnerable; that’s just business as usual. But here we have a case in which politicians are, in effect, spending large sums, in the form of rejected aid, not to help the poor but to hurt them.
And as I said, it doesn’t even make sense as cynical politics. If Obamacare works (which it will), millions of middle-income voters — the kind of people who might support either party in future elections — will see major benefits, even in rejectionist states. So rejectionism won’t discredit health reform. What it might do, however, is drive home to lower-income voters — many of them nonwhite — just how little the G.O.P. cares about their well-being, and reinforce the already strong Democratic advantage among Latinos, in particular.
Rationally, in other words, Republicans should accept defeat on health care, at least for now, and move on. Instead, however, their spitefulness appears to override all other considerations. And millions of Americans will pay the price.
By: Paul Krugman, Op-Ed Columnist, The New York Times, June 6, 2013
“A Matter Of Life And Death”: Leave It To Scott Walker To Turn Medicaid Expansion Into Medicaid Contraction
Several red states are turning down Medicaid expansion — only Scott Walker (R-WI) is actually using Obamacare as an excuse to cut Medicaid.
Wisconsin’s Badgercare health care plan is one of the best in the country. Families qualify for comprehensive coverage if they earn up to 185 percent of the federal poverty level.
So when the Affordable Care Act offered all 50 states a chance to expand their Medicaid programs to cover all the working poor who earn too much for Medicaid but make up to 133 percent of the poverty level, what did Governor Scott Walker decide to do?
He put forward a plan to drastically cut Badgercare.
If Walker gets his way, his state’s plan will only cover residents who earn 100 percent of the poverty level or below – $11,490 a year for a single adult.
Tens of thousands of Wisconsites will be forced from completely subsidized health care to the federal insurance exchanges, where they can purchase private plans with a subsidy. To do this, Walker has to give up federal funding that would cover 84,7000 residents, which would lead to a $119 million cut to his state budget.
“But a detailed analysis of the plan by the Legislative Fiscal Bureau finds that many of the people now receiving state Medicaid coverage would likely not buy the more costly insurance through the federal program,” The Milwaukee Journal Sentinel reports.
“As a general rule, they’re going to be really strapped to do it,” Jon Peacock, research director of the Wisconsin Council on Children and Families, told the Journal Sentinel. “They won’t scrape together the money unless they really need it.”
The Bureau estimates that 7 percent will not buy the coverage. Peacock thinks that’s overly optimistic.
A new UW Madison study shows that Badgercare – which was expanded in 2009 — reduces hospitalization and improves management of chronic disease.
Even Senate Majority Leader Scott Fitzgerald (R-Juneau) admits that Walker’s plan could send thousands to emergency rooms for care, driving up the cost of care for all residents. The legislature is considering additional payments to hospitals to make up for the costs of the uninsured.
Medicaid expansion is a great deal for the states. The federal government will fund 100 percent of the initial expense; that decreases to 90 percent over the next decade.
Rand Corporation just released a study that underlines the cruelty of rejecting expansion. “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,” according to The Washington Post‘s Ezra Klein and Evan Soltas.
“This is not a small issue,” writes The Guardian‘s Michael Cohen. “In fact, it is a matter of life and death.”
Cohen points to a New England Journal of Medicine study that shows increased access to Medicaid results in fewer deaths. A recent study in Oregon found that Medicaid eliminated economic hardships brought on by health problems and dramatically improved mental health.
What Walker is doing is even worse than his more than two dozen Republican colleagues who are rejecting expansion. He’s taking health care away from the working poor, knowing that doing so will cost his state money, well-being and even lives.
By: Jason Sattler, The National Memo, June 4, 2013
“The Naysayers Are In Control”: A Well-Paying Job Is More Effective Than A Lecture
More and more mothers, whether they wear a wedding ring or not, are becoming their family’s breadwinner.
An analysis of 2011 U.S. Census data found that 40 percent of households rely on mom as the primary or sole breadwinner. That’s a massive increase from 1960, when the figure was a mere 11 percent.
This trend won’t shock a lot of Americans. They already see it within their own homes or those of their neighbors. Plenty of mommies are better educated and better compensated than their husbands, and a growing numbers of daddies gladly accept that it is their duty, too, to change diapers and do carpool duty.
But here is the more sobering tale within the data: Nearly two-thirds of these “sole or primary” breadwinning women fit that description because they are the only one working in their household. These are primarily the single mothers. And they tend to be far less educated, and to be black or Hispanic. Their median household income was $23,000.
Compare that to the families studied where it was a married woman who earned more than her mate. Those homes had a median income of $80,000, well above the national median for all households of $57,100.
The most relevant message behind the study is not so much about marriage as about the growing economic divide in this country. If we understand that, we might just agree on policies that can address the problem.
Demographically, these single mothers are a growing and younger percentage of the population. They are the nation’s future, and it’s not a promising one.
Yet it is virtually impossible to bring up the topic of single mothers, whether in Congress or at the dinner table, without inviting a howling lecture. Everybody’s got a convenient scapegoat to blame, and their certitude of their own uprightness permits them to do absolutely nothing to change the status quo. Except to call for more discipline imposed on the already unfortunate.
Attitudes about poorer families feed into the politics of welfare reform, food stamp allocation, education grants, fair wage policy and childcare subsidies.
Concern, when it’s genuine, is not misplaced. Moralizing doesn’t help.
It’s not the fact that these women are unmarried with children that drives their household poverty. It’s their lack of education and too few jobs, including for the equally under-educated men who are most likely to marry them.
Low-income families are more likely to divorce. Arguments and stress about money, after all, are often a contributing factor in divorce.
Those who wish to promote marriage often miss a truth about poorer mothers. The single mother without a college degree, and perhaps more so one without a high school diploma, might be making the best choice for her children by continuing to stay single. College-educated men aren’t exactly searching low-income areas to find a suitable spouse. The men who are more readily available to many of these single mothers — the men they may have already partnered with to father their children — tend to be of similar if not lower education levels.
And less-educated men have seen their real wages shrink along with job opportunities in the last 40 years, as Stephanie Coontz, director of research and public education at the Council on Contemporary Families, has pointed out.
Coontz also observes that stable single-parent households are better for children’s development than domestic situations in constant flux due to their mother’s relationships, or homes where there is constant parental conflict.
People who are better-educated and who have firm employment opportunities are more likely to marry and stay married.
A study published last year in the Journal of Marriage and Family found that low-income people value marriage as an institution and share thoughts about romance similar to people in higher income brackets.
Researchers at UCLA found that “low-income respondents were more likely than affluent couples to report that their romantic relationships were negatively affected by economic and social issues such as money problems, drinking and drug use.”
The low-income respondents actually held more negative views about divorce than their wealthier counterparts.
So let’s not pontificate about marriage or make false assumptions about mothers raising kids who aren’t living with a spouse.
Ordinary people in this country need to be able to find stable, legal employment that pays wages that make it possible to raise a family in a safe, nurturing environment. We have the ability to make that happen through education and training programs, minimum-wage legislation, trade policy, fiscal policy and other means.
If we ever resolve to turn the tide that is swamping Americans of modest means, we’ll inevitably find that some policy gambits succeed and others are bound to fail. Have you noticed, though, that our political class isn’t even trying?
The naysayers are in control. Their message is that nothing can be done. They also happen to be the loudest moralizers.
We know where that will lead us, because we’re already there.
By: Mary Sanchez, The National Memo. June 3, 2013
“Between A Rock And A Stupid Place”: The Medicaid Scandal Of State Level Republicans
As the reality of states refusing the insanely generous terms of the Affordable Care Act’s Medicaid expansion (viz., the Texas legislature’s proactive legislation prohibiting the state from participating), begin to sink in, with it comes the realization that a completely perverse situation will now prevail in these states. The New York Times‘ Robert Pear explains for anyone who hasn’t heard:
More than half of all people without health insurance live in states that are not planning to expand Medicaid.
People in those states who have incomes from the poverty level up to four times that amount ($11,490 to $45,960 a year for an individual) can get federal tax credits to subsidize the purchase of private health insurance. But many people below the poverty line will be unable to get tax credits, Medicaid or other help with health insurance.
You will occasionally hear that people left exposed by states refusing to expand Medicaid are “covered” by Obamacare health insurances exchanges, and that’s true for what little it’s worth. The subsidies designed to make coverage affordable for the working poor (and a big chunk of the middle class), however, don’t kick in until a beneficiary’s income is above the federal poverty line. That’s because it did not occur to the Affordable Care Act’s sponsors that the Medicaid expansion provisions covering all Americans up to the poverty line would become voluntary for the states. And you know what? Had they known the Supreme Court was going to so rule, they probably would have thought no state would hate its own poor people enough to turn down the fiscal deal represented by the expansion (that was certainly the assumption a lot of otherwise smart observers made when the Court’s decision came down). Turns out as many as 25 states may in fact go in that stupid and malevolent direction, leaving up to 5.7 million Americans at the very heart of Obamacare’s intended coverage population without meaningful access to health insurance.
Now normally you’d think a Court-created “hole” in a legislative plan of this size would lead to a legislative “fix,” wouldn’t you? But that is for sure not happening until such time as Democrats regain control of the House and of 60 Senate seats–the temporary majorities that made enactment of the Affordable Care Act over the united opposition of the GOP possible in the first place.
The scandal of state-level Republicans leaving so much federal money on the table and so many poor people in the lurch may well become a campaign issue in 2014. But while this treachery is very likely to become a long-term political issue for Republicans in the affected states–particularly in the South, where its racial dimensions are impossible to ignore–the overall landscape going into the 2014 midterm election is hardly promising for Democrats there or nationally.
So putting things right and holding the happy architects of this wildly unfair situation may take a good long while. But payback’s hell.
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, May 28, 2013
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