The Ryan Plan For Medicaid: Not Good For Low-Income Americans Or State Budgets
With Washington looking for ways to rein in costly entitlement programs and state governments struggling to balance budgets, conservatives have revived an old nostrum: turning Medicaid into a block grant program.
The desire for fiscal relief is understandable. Medicaid insures low-income people and in these tough economic times, enrollment and costs — for the federal government and state governments — have swelled.
Representative Paul Ryan, and the House Republicans, are now proposing to ease Washington’s strain by capping federal contributions. Like his proposal for Medicare, that would only shift the burden — this time onto both state governments and beneficiaries.
Still, some governors may be tempted. His plan promises them greater flexibility to manage their programs — and achieve greater efficiency and save money. That may sound good, but the truth is, no foreseeable efficiencies will compensate for the big loss of federal contribution.
Mr. Ryan also wants to repeal the health care reform law and its requirement that states expand their Medicaid rolls starting in 2014. Once again Washington would pay the vast bulk of the added cost, so states would be turning down a very good deal to save a lesser amount of money.
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.
To encourage that process, President Obama recently proposed a simplified matching rate for Medicaid, which would reward states for efficiencies and automatically increase federal payments if a recession drives up enrollments and state costs. The president’s approach is better for low-income Americans and for state budgets as well.
By: The New York Times, Editorial, April 30, 2011
We Don’t Have A Spending Problem, We Have A Fraud Problem
Conservatives seem to have a knack for changing the subject whenever their backs are up against the wall. Over the last several weeks, there has been an orchestrated chorus by the House Republicans in particular to define the so-called “deficit problem” in terms of a wild spending binge by the federal government and the Obama administration. They seem to have easily forgotten who got us into this mess in the first place. That aside, everyone from Speaker John Boehner to Sen Mitch McConnell have been bellowing throughout the halls of Congress and at every available microphone that “We don’t have a revenue problem, we have a spending problem”.
It’s amazing how we all have bought into this line. The media, in its usual rush to get a headline or sound bite, immediately picked up this line and has been the waterboys for the GOP by enabling this hoax on the American people. The focus in most circles has been on spending cuts. Well, we need to re-characterize what is actually going on here. We don’t have a spending problem..we have a fraud problem.
This fraud has been played on the American people by an ideologically depraved Republican party for at least the last ten years. They have made everybody believe that if we just make the wealthy wealthier, somewhere down the road, we will all benefit. There would be job creation with full employment, small businesses would thrive, home prices would fall, gas would cost less than two dollars a gallon and there would be a chicken in every pot. And we believed it hook, line and sinker. Now we are back to square one. None of these things have happened except the fact that we have indeed made the wealthy wealthier. In 2010, the 400 Americans with the highest adjusted gross revenue incomes averaged $345 million. The average federal income tax was 17%, down from 26% in 1992. The income gap just keeps getting wider. Why does this continue to happen? Because we let it happen.
Just last week, Standard and Poor’s accentuated the Republican clarion that the sky is falling. This call comes from the same S&P who supported every toxic waste subprime security under the sky, the same S&P who sold its ratings to the highest bidder. Regulators have also assisted the GOP in their fraud. The Office of the Currency has gone out of its way to protect its clients, ie the banks. Efforts to reign in the banks and stop their predatory loan practices have been foiled at every turn. Even the banks are too big to fail. Profits for banks, corporations, CEO’s, Wall St and the wealthy just keep soaring. There is a lot of back scratching going on here, by and for a lot of wealthy people.
Now that the cat is out of the bag, all of these wealthy people are trying to figure out a way to take the spot light off themselves. They are beginning to see that they may not be able to stave off demands any longer that they pay their fare share. People who have been adversely affected for so many years are now demanding that this fraud be stopped. Teachers and other low wage earners, the poor, seniors, students and union members have all come to believe that they have sacrificed enough. Even some tea party members are beginning to see the light.
For too many years, the Republicans and their wealthy friends have had their hands in everybody’s pockets. Your pocket was the revenue stream for them. General Electric and the Koch Brothers were probably happier than anyone. The Republicans were also happy because their happy friends provided the cover that allows them to do whatever they want to in terms of policy. Being the ideologues that they are, this protection gives them unimpeded opportunity to push forward with their agenda, from dissolving women’s rights, overturning the Affordable Care Act, union busting, replacing Medicare with vouchers and completely eliminating any sense of environmental protection just to name a few. With happy and contented wealthy backers behind you for so many years, how could you go wrong. My, how things are changing.
The revenue stream that the Republicans have depended on for so long is now drying up…that stream is you. They are finding that when they put their hands in your pockets now, they are feeling the seam of the sewn pocket. There just isn’t any more money there. They become flushed and filled with extreme panic, finally realizing that they are going to have their taxes raised after all these years. Their backs are against the wall. So what do they do now? Change the debate..”Let’s raise taxes on everybody”. Nice try!
It’s well past time that shared sacrifice mean exactly what it says. It is no longer acceptable that the poor, under privileged, seniors and the disenfranchised continue to carry the load for corporations, Wall St and their deadbeat tax-evading friends. No, let’s not raise taxes on everybody. Let’s end the fraud and insist that the wealthy start paying taxes just like everyone else. This being Easter Sunday, this may be a good symbolic time to increase taxes only for the rich. We should leave that rate in place for oh say, the next 40 years. Besides, they have accumulated a fair amount of wealth over the years and should easily be able to live off that profit during that time. Perhaps take a trip or two or just wander around the world enjoying their spoils. We will pledge to re-visit this issue after that time. If, and only if, the middle class has reached a level playing field, then we can talk about lowering the tax rate for the wealthy. I think Moses and the Pharaoh’s would be happy with this compromise. So it is written, so let it be done.
By: raemd95, mykeystrokes.com, April 24, 2011
Yes, Paul Ryan Does Cut Taxes For The Rich
A number of conservatives have asserted that, contrary to what I’ve written, the House Republican budget written by Paul Ryan does not cut taxes for high earners. (See John McCormack, Ramesh Ponnuru, Charles Krauthammer, and McCormack again quoting Ryan.) Here’s the argument. Ryan keeps overall tax levels the same as they are right now by making the tax cuts permanent. He would then reduce the corporate tax rate and the top income tax rate by ten percentage points, from 35% to 25%. But he would make up for that additional revenue loss by closing “loopholes and deductions,” many of which benefit the rich. Therefore, his plan doesn’t really cut taxes on the rich.
There are four problems with this claim, each of them fatal.
First, the argument simply reflects a legitimate difference in baselines. Under current law, the Bush tax cuts are in full effect, but expire at the end of 2012. Keep Bush-era tax levels in place is not a tax cut compared with the tax code now, but it is a tax cut compared with the tax code in 2013. Which is the true baseline? I think both sides have a point, and Congressional scorekeepers have taken to using both baselines.
When President Obama accuses Ryan of cutting taxes for the rich, he’s using the post-2012 baseline. I consider that the best point of reference because the most important force in our political system is inertia. Given our multiple veto points, it takes great effort to enact a policy change that the parties disagree upon. Ryan proposes to make that change. Therefore, I think it’s fair to describe him as “cutting taxes,” even if revenues did remain at present levels (which I dispute, but more on that later.) I do think there’s merit in both baselines. The argument that Obama is lying about Ryan — that calling him a tax-cutter is, in Krauthammer’s characteristically understated phrasing, “scurrilous” — rests upon the assumption that the current-policy baseline is not only more preferable but the only remotely honest point of reference. That seems like a huge stretch.
Second, even if we accept Ryan’s preferred baseline, his description of his plan is hard to accept at face value. Tax reform is a trade where you take away deductions (that’s hard) and use the money to reduce rates (that’s easy.) The rate reductions are specified. The reduced deductions aren’t. Another way to put this is that Ryan has proposed a specific tax cut that would benefit the affluent, accompanied by utterly vague promises to find offsets. At the very least, the rate-lowering portion ought to carry more weight than the deduction-closing portion.
Third, even if we accept both Ryan’s baseline and assume he will match every dollar in lost revenue from the rate cuts with another dollar in reduced deductions, he will almost certainly wind up cutting taxes for the rich relative even to the post-Bush tax code. Ryan implies that his plan would leave the rich paying the same effective tax rates as they do now because he’s “getting rid of loopholes and deductions, which by the way are enjoyed by the top [tax] rate filers, the people in the top two brackets.” But he hasn’t put out any details. In 1995, House Republicans loudly promised to promote shared sacrifice by rooting out corporate welfare in the tax code. The actual savings they produced turned out to consist of proposals that hurt the poor (by cutting the Earned Income Tax Credit), benefited business (by letting them swipe funds from employee pensions, keeping the money as profit and thus increasing corporate tax revenue), or other reverse-Robin Hood measures.
Now, Ryan was not around then. But we can get a measure of his intentions from the more specific tax plan laid out in his “Roadmap” from 2010. That plan constituted a massive tax cut for the rich, combined with a tax hike on the middle class.
The Tax Policy Center examined various proposals to reduce tax deductions while using the revenue to lower rates across the board. All the plans decreased the tax burden for the top-earning 1%. The problem is that tax deductions are just not worth as much to very rich people as low tax rates.
It’s true that the Bowles-Simpson deficit reduction plan includes proposals that would lower rates to around 25% while increasing the effective tax rate paid by the very rich. To do that, you have to do things like raise the estate tax rate and completely eliminate the preferential treatment of capital gains. But Ryan’s budget promises instead — and this is the only specific policy commitment in its tax section, other than lowering rates — to expand the preferential treatment of income from wealth:
Raising taxes on capital is another idea that purports to affect the wealthy but actually hurts all participants in the economy. Mainstream economics, not to mention common sense, teaches that raising taxes on any activity generally results in less of it. Economics and common sense also teach that the size of a nation’s capital stock – the pool of saved money available for investment and job creation – has an effect on employment, productivity, and wages. Tax reform should promote savings and investment because more savings and more investment mean a larger stock of capital available for job creation. That means more jobs, more productivity, and higher wages for all American workers.
Fourth — almost there! — even if you reject everything I’ve written to this point, Ryan’s plan includes the repeal of all the taxes in the Affordable Care Act, including the taxes on the affluent. Here’s the Path to Prosperity’s description of health care taxes he proposes to undo:
The new law imposes a 0.9 percent surtax on wages and a 3.8 percent surtax on interest, dividends, and capital gains. Both taxes only apply to filers in the top two income brackets, but as discussed elsewhere in this section, those filers include small businesses employing millions of Americans, and the new taxes on capital will reduce the pool of capital available for investment and job creation.
There. Per Paul Ryan, these are upper-bracket taxes he proposes to lower. He could keep those taxes in effect, and cover a few of the uninsured people he throws off their coverage, or make the progressively-more-inadequate health care vouchers he uses to replace Medicare slightly less inadequate. But he chooses not to do that, because he believes it’s more important to tax capital at lower rates. It’s fine for him to believe that. But he and his defenders have to stop insisting that he doesn’t propose tax cuts for the rich. He indisputably does so.
By: Jonathan Chait, The New Republic, April 20, 2011
Republicans’ 2012 Slogan: It’s Anything But The Economy, Stupid
The GOP has turned one of the most effective slogans in American political history on its head. The Republican rallying cry for 2012 will be “Anything but the economy, stupid.” Let’s see how that works out for them next year.
Last year Republican leader John Boehner promised Americans that his party’s priority would be fixing the economy and creating jobs if voters gave the GOP control of the House of Representatives. Republican House candidates echoed their leader’s call to focus on the economy like a laser beam. This year, they have done almost everything but. Two of the first three bills introduced by House Republicans at the start of the 112th Congress in January were designed to take away a woman’s right to choose. One of them, H.R. 3, would have allowed abortion only in cases of “forcible” rape. Like there’s some other kind.
Then there was the battle in the first week of April that almost led to the shutdown of the U.S. government and the end of all programs to create jobs. What was the GOP hang-up on waiting till the last hour to avoid the debacle? Concern that the budget wasn’t doing enough to create jobs? No. The issue that the GOP pushed in the negotiations until the very end was defunding programs at Planned Parenthood designed to limit the number of abortions.
But that’s not all Republicans are doing to create jobs. Tuesday, Speaker Boehner hired a lawyer at $520 an hour to defend an unconstitutional law, the Defense of Marriage Act. The law passed in 1994 defines marriage as the union between a man and a woman. President Obama wisely decided not to waste any money defending the law because it’s clearly unconstitutional. The 10th Amendment reserves the power to regulate marriages to the states. So much for wasteful government spending and states’ rights. But at least the GOP has created one good paying job.
Meanwhile, the religious right is busy attacking a conservative potential GOP presidential candidate, Mitch Daniels. He is the governor of Indiana and former director of the Office of Management and Budget. Daniels angered religious conservatives because he had the nerve to say economic issues are more important than social issues. The religious right feels anyone like Daniels who short changes social issues is either a heretic, a lunatic, or both. Yes, the Taliban wing of the Republican Party believes that persecuting gays is more important than creating jobs. Good luck trying to sell that message to the millions of Americans who are one paycheck away from bankruptcy. If they are lucky enough to have a paycheck.
When Republicans go down to ignominious defeat in 2012, they will have only themselves to blame.
By: Brad Bannon, U. S. News and Worl Report, April 21, 2011
In Politics Of Temper Tantrums, Washington Post As Spineless As GOP In Debt Ceiling Debate
Yesterday, The Washington Post editorial page turned into Springfield, circa 1991. Not Springfield, Illinois or Springfield, Massachusetts. That more famous Springfield. The one that’s home to the Simpsons.
You see, 20 years ago Lisa Simpson wished for a world in which every nation laid down its arms and there was peace. And it was done. But then two crafty aliens landed in Springfield and took over the earth, armed only with a slingshot and a club.
What does that have to do with The Washington Post? Well, we’re just days into the debate about raising the debt ceiling and they’ve already given up.
Here’s what I mean:
Every politician knows that voting to raise the debt ceiling, particularly in an electoral environment like this one, is dangerous. Large swaths of the electorate are opposed. And the most angry and energized conservatives have made it an article of faith to punish legislators who facilitate more government spending. Voting to raise the debt ceiling is a tough vote–politically.
But on the merits, it’s got to be one of the easiest votes ever. Everyone from the U.S. Chamber of Commerce to former U.S. Labor Secretary Robert Reich agrees that we must raise the debt ceiling. That’s true of just about every economist of every political stripe, too. They say that if we don’t it will lead America, and perhaps the global economy, to literal economic ruin. The stakes couldn’t be higher.
Democrats are on board. They’re pushing for a “clean” vote on the debt ceiling—an up or down vote on that issue alone. In essence they’re saying: let’s do what needs to be done and get it over with. Then we can move on to the myriad other pressing matters confronting the nation.
Republicans are in a different place. They’re making increasingly belligerent demands to tie various kinds of “reforms” to the debt ceiling vote. Deep spending cuts. A balanced budget amendment. Caps on future spending. All sorts of things that may or may not have merit, but which are also deeply partisan and political. And they say they won’t vote to raise the debt ceiling unless their demands are met—if they vote for it at all.
Their position in a nutshell: I’m a Republican and I’m not going to prevent economic ruin unless I get these other things that I really, really, really want. It’s the politics of temper tantrum. Only this time the baby’s got his finger on the nuclear launch codes.
Cue the media. There’s a reason “freedom of the press” is enshrined in the First Amendment. It’s because the Founding Fathers envisioned a Fourth Estate that held government accountable at times just like these.
Instead, we get this: buried in the sixth paragraph of yesterday’s editorial about Standard and Poor’s, the Post dismisses the idea of a “clean vote” saying it’s “unrealistic as a political matter” because “you couldn’t get enough Republican votes in the House to increase the debt limit without some spending cuts attached.”
Well, I guess that’s that. The Republicans have rattled their slingshot and the Post editorial page has fled for the hills.
What’s even more galling is that you needed look no further than the front page of yesterday’s Post to see just how political the issue has become for Republicans. There, Philip Rucker told the sad story of Arizona freshman Republican Rep. David Schweikert. Schweikert concedes that failing to raise the debt ceiling will cause economic chaos, but then he surveys the angry faces of his Tea Party constituents in town hall after town hall and wrings his hands. Destroying the economy on one hand and lessening my chances for reelection on the other…oh what is a Republican to do!
Here’s an idea: suck it up and do the right thing. Vote for the bill and, if you lose your re-election, well, at least you have the comfort of knowing that you didn’t help ruin the world’s economy. Isn’t that what we say we want from our leaders? To take tough votes and put aside personal, ideological, or political goals when the nation’s interest calls for it?
Of course, as much as I would like to think otherwise, my saying so probably won’t encourage Republicans to do much of anything. If only there were an influential, well-respected, credible voice with a broad reach whose job it was to offer opinions like that… Sigh.
Perhaps not all is lost. In the aforementioned Simpsons episode the aliens are eventually vanquished when Moe the bartender hammers a nail through a board and chases them with it. There are a couple months to go in this debate. There’s still time for the Post to find its spine. Someone get them a nail and a board.
By: Anson Kaye, U.S. News and World Report, April 21, 2011
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