“We’ll Never Stop Arguing About It”: Obamacare Is Helping A Lot Of People. Not Everyone Thinks That’s Good News
In politics there are some issues where liberals and conservatives share the same goal, but disagree about how to achieve it — we all want to have as little crime as possible, for instance, but there are different ideas about how to accomplish that. Then there are issues where the two groups have different goals — liberals want to preserve women’s reproductive rights, and conservatives don’t. And sometimes, there are issues we think fall in the first category, but actually belong in the second.
Health care may just be that kind of issue, where we talk as though we all have the same fundamental goals, but we actually don’t. There’s an interesting article in the New York Times today on a major success of the Affordable Care Act that demonstrates why we’ll never stop arguing about it. Here’s how it begins:
The first full year of the Affordable Care Act brought historic increases in coverage for low-wage workers and others who have long been left out of the health care system, a New York Times analysis has found. Immigrants of all backgrounds — including more than a million legal residents who are not citizens — had the sharpest rise in coverage rates.
Hispanics, a coveted group of voters this election year, accounted for nearly a third of the increase in adults with insurance. That was the single largest share of any racial or ethnic group, far greater than their 17 percent share of the population. Low-wage workers, who did not have enough clout in the labor market to demand insurance, saw sharp increases. Coverage rates jumped for cooks, dishwashers, waiters, as well as for hairdressers and cashiers. Minorities, who disproportionately worked in low-wage jobs, had large gains.
Before we go farther, we should remember that the ACA is a complex piece of legislation that affects every area of American health care, but for now we’re going to talk just about insurance coverage. When liberals see a report like this one, they say, that’s terrific — some of the most vulnerable people in America, and those who had the hardest time getting covered before, now have health insurance. They offer this as practical evidence of the law’s success.
But conservatives (not all conservatives, but many of them) don’t see that as a success at all. If the government is helping an immigrant who washes dishes for a living get health coverage, then to them that means that government is redistributing tax money from deserving people to undeserving people. The two groups look at the same practical effect, and interpret it in opposite ways.
That isn’t to say that the ACA didn’t give benefits to everyone, because it did. Millions of middle-class and even upper-class people were hurt by the fact that insurance companies used to be able to deny you coverage if you had a pre-existing condition, but the ACA outlawed that. And if the payment reforms in the law bring down overall health spending, we all benefit. But the most visible and dramatic parts of the law relate to the tens of millions of Americans who used to be without health coverage but now have it.
This is why Republicans continue to call the ACA a “disaster” and a “catastrophe” despite the good it has done. Liberals hoped that once the law was implemented and its practical effects became clear, the law would become hugely popular. Instead, views of the law divide closely on ideology and partisanship, and that hasn’t changed and won’t change.
That’s because there’s a fundamental clash of values at work, which means that liberals and conservatives will always judge it according to different standards. Because the law did a large amount to bring coverage to those who couldn’t afford it (through both the expansion of Medicaid and subsidies), and because it included a raft of new regulations meant to solve a variety of problems within the health care system, conservatives will always oppose it, whether it succeeds on its own terms or not. To doctrinaire conservatives, a government regulation that accomplishes what it sets out to isn’t a success at all; it’s a moral failure by definition. That’s why liberals will never convince them to support the ACA by pointing to its practical successes.
That isn’t to say that conservatives don’t make practical arguments against the ACA, because they do. But they’re mostly window dressing placed atop their moral objections to government involvement in health care. So yes, they predicted that Obamacare would destroy the economy, and cost millions of jobs, and lead to fewer people with health coverage, and balloon health care spending, and make premiums skyrocket. When they turned out to be wrong about all these things, conservatives didn’t say, “Well gee, I guess this law was a pretty good idea after all.” Because the fundamental moral objection remains, whatever the practical impact.
You can see it in the decision to accept or reject the law’s expansion of Medicaid. The federal government offered states a huge pot of free money to provide coverage to their poor citizens, and though some conservative governors tried to argue that it would be too expensive, those arguments were laughably weak. As one independent analysis after another has shown — from groups like the Rand Corporation, not exactly a bunch of lefties — taking the expansion leads to healthier state finances and better economic growth, on top of helping your state’s constituents. But for many governors, insuring poor people isn’t a moral good at all; just the opposite, in fact. So they were even willing to incur economic damage in order to avoid it (and to give Barack Obama the finger, of course).
Where this all leaves us is that the ACA will never become something we agree on, no matter what it does or doesn’t do in the real world. But even that’s not the whole story, because there are political factors at work. Smart Republicans understand that with each passing year, the law becomes more and more entrenched and harder to unwind, no matter how much they hate it. It’s one thing to keep people from getting insurance, but it’s something quite different, and far more politically dangerous, to take away insurance people already have — and if they really repealed the law, that’s what they would be doing, not just to a few people but to 20 million or so.
That’s why Republicans have so much trouble coming up with their “repeal and replace” plan. It’s not because there aren’t conservative health care wonks who could give them an outline. It’s because any real repeal would be so spectacularly disruptive to the system that it would a political nightmare. Just today there’s an article in The Hill on the efforts of the Republican task force charged with producing the new repeal-and-replace legislation, under the title, “GOP group promises ObamaCare replacement plan — soon.” If you’ve been following this issue, you know that title is a joke. As the piece says:
Coming up with a plan to replace ObamaCare has been an aim for the Republican Party for so long that it’s become a laugh line even in conservative circles. Despite voting more than 50 times in the House to repeal the law, the GOP has not once voted on legislation to take its place.
But every couple of months, they say that they’ll be releasing their plan any day now.
If Republicans actually took the White House and held Congress, my guess is that they’d pass something they called “repeal and replace” but which would leave the ACA largely intact. Just as they propose to privatize Medicare but rush to tell seniors who love it that their own coverage wouldn’t be affected, it would be some kind of time-delayed change that would avoid kicking people who now have insurance off their coverage. And if Hillary Clinton gets elected in the fall, it’ll be another four or eight years before they could even try this. No matter what happens between now and then, conservatives won’t ever decide that the ACA has worked out well, whether it actually did what it was designed to do or not. As far as they’re concerned, the design itself was the problem. But they may decide, as they did with Medicare, that doing away with it isn’t worth the bother — at least not worth bothering to to try all that hard.
By: Paul Waldman, Senior Writer, The American Prospect; Contributor, The Plum Line Blog, The Washington Post, April 18, 2016
“Cleaning Up Another Republican Mess”: Louisiana Ready To Make Big Gains Through Medicaid Expansion
Few states need Medicaid expansion more than Louisiana, which made it all the more difficult to justify former Gov. Bobby Jindal’s (R) refusal to consider the policy. By all appearances, the Republican made a plainly political decision without regard for the state’s needs: Jindal wanted to be president (yes, of the United States), so he took a firm stand against “Obamacare.”
Louisiana’s current governor, Democrat John Bel Edwards, ran on a platform of Medicaid expansion through the Affordable Care Act, won his election fairly easily, and immediately adopted the policy. The Times-Picayune in New Orleans reported yesterday that the governor went directly to the legislature to explain why this was the smart move for Louisiana.
Medicaid expansion is estimated to save Louisiana $677 million over the next five years and more than $1 billion over the next decade, Department of Health and Hospitals officials told Senate Health and Welfare Committee members Monday (April 18).
The cost estimates came after Gov. John Bel Edwards testified before the committee about his decision to expand Medicaid eligibility to about 375,000 people between July 1 and June 30, 2017. DHH officials will make an effort in the coming weeks to educate legislators about the benefits of Medicaid expansion and what they said was misinformation given to the Legislature to justify not expanding Medicaid under former Gov. Bobby Jindal.
“I believe the folks in the prior administration who said we couldn’t afford Medicaid expansion, they took the worst case scenario on every variable,” Edwards told lawmakers in the GOP-led legislature. “If you look at what we’re doing in light of experience in other states … we know we’re going to save money.”
And he knows this because it’s true.
I can appreciate why this may seem a little counter-intuitive. Ordinarily, when state policymakers recommend expanding benefits to struggling families, critics will respond, “We’d like to help, but we can’t afford it and we’re not willing to raise taxes.”
But Medicaid expansion is one of those policies in which states get to do both: participating states receive federal funds to implement the program, while expanding coverage for low-income families who would otherwise go uninsured. At the same time, hospitals’ finances are strengthened as medical facilities see fewer patients who can’t pay their bills.
Since implementation of the Affordable Care Act began, how many states have found Medicaid expansion hurt state budgets? None. Republicans will be quick to argue that someday, maybe, in the future, the fiscal challenges will become more acute, but given pre-ACA reimbursement rates, there’s no reason to believe they’re correct.
It’s exactly why every governor with access to a calculator – including plenty of red-state Republicans – have found the arithmetic undeniable.
As for Louisiana in particular, as we talked about last week, the state really is having an “elections have consequences” moment right now. Gov. Edwards, the region’s only Democratic governor, hasn’t been in office long, but he’s already making strides to clean up the Republican mess he inherited.
By: Steve Benen, The Maddow Blog, April 19, 2016
“The ‘Texas Miracle’ Fraud”: Turns Out It Involves Taxing The Poor To Help The Rich Get Richer
Remember “The Texas Miracle”? It was the story of how Rick Perry was going to be president because his state, Texas, was doing so much better than all the other states. Texas was doing so well, we were told, because it was very conservative: Low taxes, light regulation, and few pesky unions. We were supposed to compare Texas to California, which, we were told, was an apocalyptic mess because it was run by liberals.
Then we sort of stopped hearing about The Texas Miracle for a while, because Rick Perry forgot how to count and it no longer seemed like he was personally responsible for managing the economy of his vast state, but conservatives still enjoy telling themselves that Texas proves that their economic policy preferences are objectively superior to those of liberals. Except, well, maybe Texas isn’t that miraculous.
At Washington Monthly, Phillip Longman argues that Texas’ growth is fueled primarily by the energy boom and by population growth. And that population growth is not happening because people from other states are fleeing to Texas to avoid high taxes and onerous regulations, but because of immigration from Mexico and a high birthrate. More importantly (and probably obviously, to people who care about such things), the spoils of the Texas miracle have not been shared equally: Economic mobility is higher in California’s major urban areas than in those of Texas. Plus: “Texas has more minimum-wage jobs than any other state, and only Mississippi exceeds it with the most minimum-wage workers per capita.” Texas is falling behind various states in terms of per capita income.
As Longman concludes:
But regardless of its sources, population growth fuels economic growth. It swells the supply and lowers the cost of labor, while at the same time adding to the demand for new products and services. As the population of Texas swelled by more than 24 percent from 2000 to 2013, so did the demand for just about everything, from houses to highways to strip malls. And this, combined with huge new flows of oil and gas dollars, plus increased trade with Mexico, favored Texas with strong job creation numbers.
But for some, the good news on Texas continues apace. J.D. Tuccille, at the libertarian magazine Reason’s Hit & Run blog, points to a paper from the Federal Reserve Bank of Dallas showing that Texas created more high-wage jobs than low-wage ones between 2000 and 2013. Tuccille also points out that “in 2012, ’63,000 people moved from California to Texas, while 43,000 in Texas moved to California.’” (That… actually seems pretty statistically insignificant when we’re talking about the two most populous states in the union, each with more than 25 million residents, but ok, sure.)
Even if it is the case that the Texas miracle is driven primarily by a resource boom and population growth, conservatives and libertarians could still argue that Texas is booming because of their preferred policies. They support exploiting natural resources, and libertarians, at least, support open borders. To use another example, while it’s a fact that North Dakota’s economic boom is happening almost solely because North Dakota happens to be on top of tremendous amounts of very valuable natural resources that recently became easier to extract, conservatives would argue that they are the ones who support drilling that oil, damn the environmental consequences.
But here’s one important fact that Texas’ conservative and libertarian boosters reliably fail to mention (perhaps because they don’t know it): If you’re not rich, Texas is not actually a low-tax state. In fact, most Texans pay more taxes than most Californians. That seems strange and incorrect at first — Texas doesn’t even have an income tax! — but it’s true. Thanks to sales and property taxes, Texas is among the states with the ten most regressive tax systems. Texans in the bottom 60 percent of income distribution all pay higher effective tax rates than their Californian counterparts. Texas’ top one-percent are the ones enjoying the supposed low-tax utopia, paying an effective rate of 3.2 percent. The rate for the lowest 20 percent is 12.6 percent. Kevin Drum has a helpful chart.
This is not unusual for a conservative state. As the Institute on Taxation and Economic Policy says: “States praised as ‘low tax’ are often high tax states for low and middle income families.” So… is this part of the conservative policy package that we are supposed to introduce everywhere to spur growth? Slash taxes for the rich and raise taxes on… the poor and middle class? It seems like it might be difficult to campaign on that.
When “growth” is its own self-justifying goal, creating an economy that only delivers for a privileged few doesn’t really seem like a problem. Still, don’t move to Texas expecting a better life, unless you own a petrochemical refinery.
By: Alex Pareene, Salon, March 7, 2014
“The Vicious Circle Of Income Inequality”: New Forces Are Causing Inequality To Feed On Itself
Almost every culture has some variation on the saying, “rags to rags in three generations.” Whether it’s “clogs to clogs” or “rice paddy to rice paddy,” the message is essentially the same: Starting with nothing, the first generation builds a successful enterprise, which its profligate offspring then manage poorly, so that by the time the grandchildren take over, little value remains.
Much of society’s wealth is created by new enterprises, so the apparent implication of this folk wisdom is that economic inequality should be self-limiting. And for most of the early history of industrial society, it was.
But no longer. Inequality in the United States has been increasing sharply for more than four decades and shows no signs of retreat. In varying degrees, it’s been the same pattern in other countries.
The economy has been changing, and new forces are causing inequality to feed on itself.
One is that the higher incomes of top earners have been shifting consumer demand in favor of goods whose value stems from the talents of other top earners. Because the wealthy have just about every possession anyone might need, they tend to spend their extra income in pursuit of something special. And, often, what makes goods special today is that they’re produced by people or organizations whose talents can’t be duplicated easily.
Wealthy people don’t choose just any architects, artists, lawyers, plastic surgeons, heart specialists or cosmetic dentists. They seek out the best, and the most expensive, practitioners in each category. The information revolution has greatly increased their ability to find those practitioners and transact with them. So as the rich get richer, the talented people they patronize get richer, too. Their spending, in turn, increases the incomes of other elite practitioners, and so on.
More recently, rising inequality has had much impact on the political process. Greater income and wealth in the hands of top earners gives them greater access to legislators. And it confers more ability to influence public opinion through contributions to research organizations and political action committees. The results have included long-term reductions in income and estate taxes, as well as relaxed business regulation. Those changes, in turn, have caused further concentrations of income and wealth at the top, creating even more political influence.
By enabling the best performers in almost every arena to extend their reach, technology has also been a major driver of income inequality. The best athletes and musicians once entertained hundreds, sometimes thousands of people at one time, but they can now serve audiences of hundreds of millions. In other fields, it was once enough to be the best producer in a relatively small region. But because of falling transportation costs and trade barriers in the information economy, many fields are now dominated by only a handful of the best suppliers worldwide.
Income concentration has changed spending patterns in other ways that widen the income gap. The wealthy have been spending more on gifts, clothing, housing, celebrations and other things simply because they have more money. Their extra spending has shifted the frames of reference that shape demand by others just below them, so these less wealthy people have been spending more, and so on, all the way down the income ladder. But because incomes below the top have been stagnant, the resulting expenditure cascades have made it harder for middle- and low-income families to make ends meet. Despite taking on huge amounts of debt, they’ve been unable to keep pace with community standards. Interest payments impoverish them while enriching their wealthy creditors.
But perhaps the most important new feedback loop shows up in higher education. Tighter budgets in middle-class families make it harder for them to afford the special tutors and other environmental advantages that help more affluent students win admission to elite universities. Financial aid helps alleviate these problems, but the children of affluent families graduate debt-free and move quickly into top-paying jobs, while the children of other families face lesser job prospects and heavy loads of student debt. All too often, the less affluent experience the miracle of compound interest in reverse.
More than anything else, what’s transformed the “rags to rags in three generations” story is the reduced importance of inherited wealth relative to other forms of inherited advantage. Monetary bequests are far more easily squandered than early childhood advantage and elite educational credentials. As Americans, we once pointed with pride to our country’s high level of economic and social mobility, but we’ve now become one of the world’s most rigidly stratified industrial democracies.
Given the grave threats to the social order that extreme inequality has posed in other countries, it’s easy to see why the growing income gap is poised to become the signature political issue of 2014. Low- and middle-income Americans don’t appear to be on the threshold of revolt. But the middle-class squeeze continues to tighten, and it would be imprudent to consider ourselves immune. So if growing inequality has become a self-reinforcing process, we’ll want to think more creatively about public policies that might contain it.
In the meantime, the proportion of our citizens who never make it out of rags will continue to grow.
By: Robert H. Frank, Economics Professor, The Johnson Graduate School of Management at Cornell University; The New York Times, January 11, 2014
“Yes, McDonald’s Can Do Better”: More Than Greed, Profitable Fast Food Companies Could Pay A Living Wage
When I was 18, I spent a year and change flipping burgers in one of those restaurants where customers eat from a tray balanced across their car windows. It was one of the three jobs I held at the time, affording a simple budget and enough left over to save up to go to college after a couple of years. I put in hard hours for my employer and it eventually worked out just fine for me. It also makes for a nice story, but one that is embarrassingly dated. The fast food industry in which I worked is not the fast food industry of America today—just ask the thousands of workers on the streets, standing up for same opportunity to get by and get ahead that built the American Dream.
For today’s fast food work force, erratic scheduling makes holding down more than one job impossible—you can’t commit to a second employer if you’re on call for the first. At the same time, low wages barely cover basic household needs, leaving millions of workers in poverty despite being employed, and making saving for the future impossible. And the 18-year-old serving your root beer float? Now she is 29, and likely to have been to college and have a family to support.
What else has changed since I was behind the counter? Oh yeah, fast food companies are making more money than ever.
In our report “A Higher Wage is Possible,” my co-author Amy Traub and I show how Wal-Mart could meet worker demands for a fair wage without passing costs onto consumers. Every year, Wal-Mart directs a portion of its profits to buying back its own public stock, consolidating ownership and increasing earnings per share. If they used that money to invest in their workforce instead, Wal-Mart could offer a raise of $5.83 per hour to all of its 825,000 low wage workers. In addition to pulling thousands of families out of poverty, Wal-Mart would see lower turnover and higher productivity and contribute to economic growth that benefits Wal-Mart, retail, and the economy overall.
Share repurchases have become an increasingly popular business strategy. Last year, McDonald’s Corp spent $2.6 billion on them. YUM! Brands Inc, which includes Taco Bell, KFC, and Pizza Hut, spent $965 million. But while the long term value of buying back shares accrue mainly to those executives whose compensation is tied to stock performance, using that money to invest in the workforce would have benefits that apply to all stakeholders—workers, customers, communities, and shareholders too.
A quick calculation shows that McDonald’s and Yum could give raises of $2 to $3 per hour to every U.S. worker at their restaurant locations using just the money they now spend buying back shares. Since the details of their corporate pay structures are not public record, that is a raise applied to even the workers already earning above the threshold of $15 demanded on the streets. If we broke out the low-wage workers, or added in the billions in additional money paid to dividends each year, that raise could go even higher—without costing customers a dime.
There are lots of good reasons why fast food employers should do better for their workforce. It’s a win-win situation for everyone with a stake in the economy—and that is everyone. Moreover, fast food can do better, by using the money now syphoned to the top to invest in their workers and grow the economy.
To people like me who made their way through jobs similar to those of the workers on the street yesterday, the cripplingly poor terms of employment in today’s fast food industry look like more than just greed. It looks like the end of opportunity and the exchange of performance on paper for the substance of the American Dream.
By: Catherine Ruetschlin, The American Prospect, December 6, 2013