Bush Tax Cuts Turn 10: Wall Street Celebrates, Americans Suffer
Break out the bubbly, because there will be celebrations today on Wall Street and in corporate boardrooms and mansions all across America. Why? Because today is the 10th anniversary of the big Bush tax breaks for bankers and billionaires and the businesses that bankroll their big-budget campaigns.
Today is an opportunity to ponder these questions: If the Bush tax cuts are so great, why has the economy been so bad since they became law 10 years ago? And how about this brain teaser: If the GOP theology of cutting taxes for the rich brings in more revenue, why is Democratic President Bill Clinton the only president in the last generation to leave a surplus behind for the next president?
In 1980, President George H.W. Bush called it voodoo economics. Bush 41 conveniently changed his position when he became Ronald Reagan’s running mate that year. But the first President Bush was right the first time. The idea that tax revenues will go up when you cut taxes has cast an evil spell over the U.S. economy going all the way back to Ronald Reagan. In 1981, the new GOP math became 1 + 1 = 3. With this kind of fuzzy math, it’s no wonder that President Reagan left behind a massive budget deficit.
George W. Bush may have had George H.W. Bush for a father, but Ronald Reagan was his role model. The latest incarnation of voodoo economics was the creation of the second President Bush. The tax cuts for bankers and billionaires that became law in 2001 quickly turned the Clinton surplus into the Bush budget deficit as big as Donald Trump’s ego. Voodoo is what Republicans do so well.
But Bush 43 did not stop there in handing out goodies to Wall Street. In 2008, the president asked his Treasury Secretary, Henry Paulson, the former CEO of Goldman Sachs, to bail out Goldman Sachs and other Wall Street investment firms to the tune of three quarters of a trillion dollars. Of course, President Bush never even considered an attempt to rescue the millions of working Americans who first lost their jobs and then their homes because of malfeasance on Wall Street.
Last month, the Center for Budget Priorities released a study that demonstrated that the two biggest reasons for the current budget deficit were the Bush tax cuts and the wars in Afghanistan and Iraq. So what do the Republicans do? Do they vote to cut Pentagon spending or end dole welfare for wealthy Americans? Of course they don’t. They gut Medicare. Genius!
Yesterday, Frank Patitucci, CEO and Chairman of NuCompass Mobility Service, called on Republican Speaker John Boehner to increase taxes on Americans making more than $1 million a year. Patitucci explained his position by saying businesses need a strong middle class to prosper.
But I don’t want to be a party pooper or rain on Wall Street’s parade, so party hardy, guys. Don’t scrimp on the Dom Perignon and the caviar. Santa Claus comes only once a year. Let’s worry about the GOP cuts in healthcare for seniors and nutrition programs for women and their infant children another day.
By: Brad Bannon, U. S. News and World Report, June 7, 2011
Is Paul Ryan’s Medicare A Voucher System Or Not: Who Is Demagoguing Who?
During the White House meeting this week between President Obama and the Republican leadership, Rep. Paul Ryan took the President to task for demagoguing Ryan’s proposed Medicare changes.
According to the Congressman, the insistence on the part of the President- and his brother and sister Democrats – that the program is a voucher system rather than the ‘premium support’ program Ryan steadfastly claims the idea to be, is grossly misleading Americans, all for the purpose of political gain.
While Ryan’s confrontation with Obama brought cheers from the GOP freshman class who fill the corridors of Congress these days, the question that needs to be asked is, ”Who is demagoguing who?”
In truth, the concepts behind premium support and voucher programs are fairly close, each with a similar objective – the government helping out the beneficiary by paying a portion of a benefit, in this case an insurance premium.
Rep. Ryan likes to point out that his proposed Medicare program is the same as that employed by the Federal Employees Benefits Program and the Medicare Part D benefit that helps seniors pay for their prescription drugs. Both these programs operate using government premium support, whereby the government contributes towards the payment of the premiums charged by the private insurance carrier to the beneficiary, but makes the government’s share of the premium payment directly to the insurance company issuing the policy.
This direct payment is what is often considered the point of distinction between a voucher and premium support. In a voucher program the government gives the financial support directly to the beneficiaries who are then on their own to do what they will with the money, so long as they don’t look to the government to do anything else for them.
Using this standard alone, Rep. Ryan would have a point.
Indeed, his plan proposes seniors going to private insurers for their health care coverage with the government contributing a share of the premium charges and making the payment directly to the insurance company. This is just as the federal government does in the cases of federal employee benefits and Medicare Part D.
However, there is a more important distinction between premium support plans and vouchers.
In the plan that provides heath care benefits for federal employees, on which Ryan relies to make his premium support case, if a government employee’s premium costs go up –and they always do – the government increases the premium support in lockstep with the increased premium.
Not so with RyanCare.
Ryan’s proposal, that would turn Medicare into a private insurance program with the government providing assistance to seniors on their premium payments, limits increases in that support to the cost of living index – an amount wholly insufficient to cover the extra costs as we know that rising costs of health care and premium charges always exceed annual cost of living increases. Thus, if premiums increase (and of course they will) the costs of these increases will be shifted to our senior citizens who, in most instances, would not appear to have the ability to take on these increased costs on their fixed retirement budgets.
This, by anyone’s definition, is a voucher program.
In a recent piece by Washington Post blogger Ezra Klein, Ezra interviewed Henry Aaron of the Brookings Institute and Bob Reischauer of the Urban Institute. Messrs. Aaron and Brookings are the two gentlemen who originally came up with the term “premium support” to describe their idea for a Medicare system where the program is opened up to competition by private insurers but has safeguards built in to protect Medicare beneficiaries from the very cost shifting program the Ryan plan proposes.
While Ryan has largely adopted this model – the two originators make clear that he has done so without the key cost shifting safeguards that they believe are so essential to it working.
According to Aaron-
If one does the arithmetic, income grows a few percentage points faster than prices. Health-care spending grows faster than income by a couple of percentage points. So we’re looking at linking to an index that grows less rapidly than health-care costs by three to four percentage points a year. Piled up over 10 years, and that’s a huge erosion of coverage. It’s vouchers, not premium support.
Clearly, Ryan’s plan bears a far greater resemblance to a voucher program than the premium support programs he looks to as back up for what he is selling.
We can have a debate as to whether we would be better off turning Medicare over to the private markets. While I believe it is an idea fraught with dangerous consequences to our future seniors (those who are not yet 55 years of age), an honest debate to discuss these different ideas cannot hurt.
However, when Ryan and friends continue to play the political game of blaming the President for misleading the public when it is, in fact, Ryan who is attempting to mislead, there will be no honest debate.
It is not the President who is demagoguing on this one – it is Paul Ryan.
By: Rick Ungar, The Policy Page, Forbes, June 5, 2011
Ryan Plan “V” Word: A Voucher By Any Other Name…
When President Obama met with congressional Republicans this week, GOP leaders were particularly incensed about Democrats using the word “voucher” when describing the Republican plan to end Medicare. Paul Ryan and others prefer “premium support,” and consider the Dems’ rhetoric to be “demagoguery.”
There are two main problems with this rhetorical disagreement. The first is that the GOP plan really does rely on vouchers, whether the party cares for the word or not. The second is that plenty of far-right Republicans are inclined to ignore their party’s talking-point instructions.
Here, for example, was Sen. Ron Johnson (R) of Wisconsin, a Tea Party favorite, explaining one of the things he likes most about his party’s Medicare plan.
“What I like about the Paul Ryan plan is it’s trying to bring a little bit of free-market principles back into Medicare.
“If you need subsidized care, we’ll give you vouchers. You figure out how you want to spend. You select what insurance carrier you want to use. It’s a start.”
It’s not just Johnson. Last week, GOP presidential hopeful Herman Cain argued, “Nobody’s talking about the fact that the centerpiece of Ryan’s plan is a voucher. Now, a lot of people don’t like to use that term because it has a negative connotation. That is what we need.” Even Fox News has referred to the Republican plan as being built around “vouchers.
If conservative Republicans are using the word, why is it outrageous when Democrats do the same thing? Are Johnson, Cain, and the Republican cable news network all secretly siding with the left?
As for the substance behind the claim, it’s worth noting that this isn’t just about semantics — the GOP claim that their scheme doesn’t include vouchers is just wrong. Paul Krugman explained yesterday:
[T]he ACA is specifically designed to ensure that insurance is affordable, whereas Ryancare just hands out vouchers and washes its hands. Specifically, the ACA subsidy system (pdf) sets a maximum percentage of income that families are expected to pay for insurance, on a sliding scale that rises with income. To the extent that the actual cost of a minimum acceptable policy exceeds that percentage of income, subsidies make up the difference.
Ryancare, by contrast, provides a fixed sum — end of story. And because this fixed sum would not grow with rising health care costs, it’s almost guaranteed to fall far short of the actual cost of insurance.
This is also why Ryancare is NOT premium support; it’s a voucher system. No matter how much they say it isn’t, that’s exactly what it is.
Given this reality, why do Republicans throw such a fit about the use of the “v” word? Because vouchers don’t poll well. For the right, the key is to come up with phrasing, no matter how deceptive, that persuades the public. If GOP leaders throw a big enough tantrum, they’re hoping everyone — Dems, pundits, reporters, even other Republicans — will use the words they like, rather than more accurate words that make the party look bad.
No one should be fooled.
By: Steve Benen, Contributing Writer, Washington Monthly Political Animal, June 4, 2011
Gov. Rick Scott May Personally Benefit From New Law That Hands Medicaid Program Over To Private Companies
Florida Gov. Rick Scott (R) signed “a landmark Medicaid overhaul” yesterday that will put “hundreds of thousands of low-income and elderly Floridians into managed-care plans.” The proposal “gives managed care companies more control over the program that’s paid for with federal and state money,” a shift the state GOP claims will “hold down spiraling costs in the $20 billion program.” However, as TP Health editor Igor Volsky pointed out, a five-county pilot program in Florida already revealed that such a plan produces “widespread complaints and little evidence of savings.” Under managed care, states “have to ensure that private payers aren’t looking out for short term profits by denying treatments or reducing reimbursement rates” and — given what occurred during the pilot program — the results “are already less than promising.”
But Scott may have another reason to push a dubious bill into law. As Mother Jones reported, one of the private managed-care companies that stand to gain from the new law is Solantic, “a chain of urgent-care clinics aimed at providing emergency services to walk-in customers. Solantic was founded in 2001 — by none other than Rick Scott:
The Florida governor founded Solantic in 2001, only a few years after he resigned as the CEO of hospital giant Columbia/HCA amid a massive Medicare fraud scandal. In January, according to the Palm Beach Post, he transferred his $62 million stake in Solantic to his wife, Ann Scott, a homemaker involved in various charitable organizations.[…]
“This is a conflict of interest that raises a serious ethical issue,” says Marc Rodwin, a medical ethics professor at Suffolk University Law School in Boston. “The public should be thinking and worrying about this.”
Scott’s office dismissed the conflict of interest concern as “incorrect and baseless.” However, Scott’s history of fraud with entitlement programs (in that case Medicare) should certainly raise a red flag here. And it is not as if Scott is completely clean when it comes to the mix between professional office and personal interest.
Incidentally, Scott also just signed a bill that will require anyone applying for welfare benefits to pay for a drug test to qualify for benefits. They will only recoup that fee if they pass. One company that provides such drug tests? Solantic.
By: Tanya Somander, Think Progress, June 3, 2011
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GOP And Media Alert: Vouchercare Is Not Medicare
What’s in a name? A lot, the National Republican Congressional Committee obviously believes. Last week, the committee sent a letter demanding that a TV station stop running an ad declaring that the House Republican budget plan would “end Medicare.” This, the letter insisted, was a false claim: the plan would simply install a “new, sustainable version of Medicare.”
But Comcast, the station’s owner, rejected the demand — and rightly so. For Republicans are indeed seeking to dismantle Medicare as we know it, replacing it with a much worse program.
I’m seeing many attempts to shout down anyone making this obvious point, and not just from Republican politicians. For some reason, many commentators seem to believe that accurately describing what the G.O.P. is actually proposing amounts to demagoguery. But there’s nothing demagogic about telling the truth.
Start with the claim that the G.O.P. plan simply reforms Medicare rather than ending it. I’ll just quote the blogger Duncan Black, who summarizes this as saying that “when we replace the Marines with a pizza, we’ll call the pizza the Marines.” The point is that you can name the new program Medicare, but it’s an entirely different program — call it Vouchercare — that would offer nothing like the coverage that the elderly now receive. (Republicans get huffy when you call their plan a voucher scheme, but that’s exactly what it is.)
Medicare is a government-run insurance system that directly pays health-care providers. Vouchercare would cut checks to insurance companies instead. Specifically, the program would pay a fixed amount toward private health insurance — higher for the poor, lower for the rich, but not varying at all with the actual level of premiums. If you couldn’t afford a policy adequate for your needs, even with the voucher, that would be your problem.
And most seniors wouldn’t be able to afford adequate coverage. A Congressional Budget Office analysis found that to get coverage equivalent to what they have now, older Americans would have to pay vastly more out of pocket under the Paul Ryan plan than they would if Medicare as we know it was preserved. Based on the budget office estimates, the typical senior would end up paying around $6,000 more out of pocket in the plan’s first year of operation.
By the way, defenders of the G.O.P. plan often assert that it resembles other, less unpopular programs. For a while they claimed, falsely, that Vouchercare would be just like the coverage federal employees get. More recently, I’ve been seeing claims that Vouchercare would be just like the system created for Americans under 65 by last year’s health care reform — a fairly remarkable defense from a party that has denounced that reform as evil incarnate.
So let me make two points. First, Obamacare was very much a second-best plan, conditioned by perceived political realities. Most of the health reformers I know would have greatly preferred simply expanding Medicare to cover all Americans. Second, the Affordable Care Act is all about making health care, well, affordable, offering subsidies whose size is determined by the need to limit the share of their income that families spend on medical costs. Vouchercare, by contrast, would simply hand out vouchers of a fixed size, regardless of the actual cost of insurance. And these vouchers would be grossly inadequate.
But what about the claim that none of this matters, because Medicare as we know it is unsustainable? Nonsense.
Yes, Medicare has to get serious about cost control; it has to start saying no to expensive procedures with little or no medical benefits, it has to change the way it pays doctors and hospitals, and so on. And a number of reforms of that kind are, in fact, included in the Affordable Care Act. But with these changes it should be entirely possible to maintain a system that provides all older Americans with guaranteed essential health care.
Consider Canada, which has a national health insurance program, actually called Medicare, that is similar to the program we have for the elderly, but less open-ended and more cost-conscious. In 1970, Canada and the United States both spent about 7 percent of their G.D.P. on health care. Since then, as United States health spending has soared to 16 percent of G.D.P., Canadian spending has risen much more modestly, to only 10.5 percent of G.D.P. And while Canadian health care isn’t perfect, it’s not bad.
Canadian Medicare, then, looks sustainable; why can’t we do the same thing here? Well, you know the answer in the case of the Republicans: They don’t want to make Medicare sustainable, they want to destroy it under the guise of saving it.
So in voting for the House budget plan, Republicans voted to end Medicare. Saying that isn’t demagoguery, it’s just pointing out the truth.
By: Paul Krugman, Op-Ed Columnist, The New York Times, June 5, 2011
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June 6, 2011 Posted by raemd95 | Affordable Care Act, Budget, Conservatives, Consumers, Elections, GOP, Government, Health Care Costs, Health Reform, Ideologues, Ideology, Journalists, Lawmakers, Media, Medicare, Politics, Pundits, Republicans, Right Wing, Seniors, Under Insured, Uninsured, Voters | Canada, Canadian Health Care, Canadian Medicare, CBO, Comcast, Commentators, Demagoguery, Elderly, Government Health Insurance, House Republicans, Insurance Companies, Low Income, Medicare Vouchers, Out of Pocket xpenses, Politicians, Poor, Private Health Insurance, VoucherCare | Leave a comment