Gov Rick Scott: When Bad Governors Try Bad Ideas
Florida Gov. Rick Scott (R) came up with an idea he considered pretty clever. First, he told Floridians that people on welfare were more likely to be drug addicts. What did Scott base this on? Nothing in particular — he seemed to just make it up — but Scott was quite fond of the argument.
Second, the governor approved a policy based on his faulty assumptions: those who apply for welfare benefits will have to pass a state-mandated drug test. How’s that working out? Not well.
Since the state began testing welfare applicants for drugs in July, about 2 percent have tested positive, preliminary data shows.
Ninety-six percent proved to be drug free — leaving the state on the hook to reimburse the cost of their tests.
As part of the Scott administration policy, those applying for benefits have to pay a $30 out-of-pocket fee to pay for the drug test. If they pass, Florida reimburses them.
And while the state saves some money by not making benefits available to those 2% who fail the test, Florida is forced to reimburse everyone else, plus pay for staff and administrative costs for the drug-testing program, plus pay the legal fees associated with the likely court challenge.
This really wasn’t a great idea.
I’d also note for context that Rick Scott’s drug-testing policy is limited to low-income Floridians needing temporary aid. It doesn’t, in other words, apply to everyone seeking public funding — only the poor, who the governor assumes are probably drug-addicts.
And speaking of the nation’s worst governor, remember the $2.4 billion Florida was set to receive for high-speed rail? The project that enjoyed bipartisan support and was going to create tens of thousands of jobs? With Scott rejecting the funding, the money has now been officially reallocated for rail upgrades in the Northeast, high-speed rail in the Midwest, and related projects in California.
Florida’s unemployment rate is only 10.7%. It’s not like the state needed the boost.
By: Steve Benen, Contributing Writer, Washington Monthly Political Animal, August 26, 2011
Why The Rich Should Pay Higher Taxes
Wealthy Americans will recoil at the suggestion, likely responding with the tired mantra that the top earners pay most of the income tax. But two points can be made in response to that: (1) federal income tax is only a small part of the burden on the middle class.
Based on data from the Institute on Taxation and Economic Policy, the total of all state and local taxes, social security taxes, and excise taxes (gasoline, alcohol, tobacco) consumes 21% of the annual incomes of the poorest half of America. For the richest 1% of Americans, the same taxes consume 7% of their incomes. And (2) the richest people pay most of the federal income taxes because they’ve made ALMOST ALL the new income over the past 30 years. Based on Tax Foundation figures, the richest 1% has TRIPLED ITS SHARE of America’s income since 1980, AFTER TAXES.
But there are better reasons why the rich should pay higher taxes.
The very rich benefit most from national security, government-funded research, infrastructure, and property laws. Defending the country benefits the rich more, because they have more to defend. Taxpayer-funded research at the Defense Advanced Research Projects Agency (the Internet), the National Institute of Health (pharmaceuticals), and the National Science Foundation (the Digital Library Initiative) has laid a half-century foundation for their idea-building. The interstates and airports and FAA and TSA benefit people who have the money to travel.
Over a hundred years ago, Teddy Roosevelt, facing an epidemic of inequality not unlike today, reminded us that “Great corporations exist only because they are created and safeguarded by [democratic] institutions; and it is therefore our right and our duty to see that they work in harmony with these institutions.”
Here’s another good reason for the rich to pay more taxes: With the drop in tax revenue, funding for the preservation of American culture is disappearing. Do we want our national treasures deprived of maintenance because of budget cuts, as is currently happening in Italy? Do we want our national parks sold to billionaires? Do we want programs for music and the arts eliminated from schools, so that only children of the wealthy can participate in them?
The 1912 book “Promised Land” by Mary Antin revealed the wonder of a Russian immigrant coming to the U.S.: “In America, then, everything was free…light was free…music was free.”
Not that capitalist markets don’t have their place. But the current view of democracy has gone to the other extreme, in which individualism and personal gain trump societal responsibility, and growing inequality makes community support and safeguards unnecessary for the privileged elite.
Finally, back to the tax statistics. Why should financial earnings (i.e., capital gains) be taxed less than wage earnings from actual work? The richest 10% of Americans own over 80% of the stocks, the gains from which are taxed at a 15% rate. Most wage earners pay more.
Furthermore, over the past 15 years millionaires have seen their income tax rates drop from 30% to 22%. During approximately the same time period, American economic growth declined from an annual 3.2 percent rate to 1.7 percent. Lower taxes for the rich do not lead to productivity.
Will the rich stop investing or move to another country if their taxes are increased? Not likely. They have it too good here. As Warren Buffett recently stated, “I have worked with investors for 60 years and I have yet to see anyone – not even when capital gains rates were 39.9 percent in 1976-77 – shy away from a sensible investment because of the tax rate on the potential gain.”
Mr. Buffett is admitting what everyone else is beginning to realize. The rich take much more than they pay for.
By: Paul Buchheit, CommonDreams.org, August 22, 2011
Public Service Announcement: Gov Rick Perry Pushes For Higher Taxes
When Texas Gov. Rick Perry kicked off his Republican presidential campaign yesterday, his speech buried the needle on the Cliche-O-Meter, offering up one generic, predictable GOP theme after another. There was, however, one line in particular that stood out as interesting.
“We’re dismayed at the injustice that nearly half of all Americans don’t even pay any income tax. And you know the liberals out there are saying that we need to pay more.”
In this context, “we” refers to Perry and everyone who shares his worldview.
The oddity, of course, is that the governor seems to be arguing that Americans don’t pay enough in income taxes. Or more accurately, it’s unjust that more Americans aren’t paying income taxes.
This is an increasingly popular argument in right-wing circles — Michele Bachmann, one of Perry’s presidential rivals, has pushed the same line — though it’s entirely counter-intuitive. The argument isn’t even subtle: far-right Republicans are annoyed that many Americans don’t make enough money to be eligible to pay income taxes, so they believe it’s important to get more of these lower- and middle-income Americans paying more to the government.
In case anyone’s forgotten, the relevant details matters here: millions of Americans may be exempt from income taxes, but they still pay sales taxes, state taxes, local taxes, Social Security taxes, Medicare/Medicaid taxes, and in many instances, property taxes.
It’s not as if these folks are getting away with something — the existing tax structure leaves them out of the income tax system because they don’t make enough money to qualify.
Perry considers this an “injustice,” one which he apparently intends to fix, and which he feels strongly enough about to include in his closely-watched kick-off speech.
This should make for quite a 2012 debate, shouldn’t it? Some of the most far-right candidates want Americans with less to pay more in taxes. Seriously.
By: Steve Benen, Contributing Writer, Political Animal, Washington Monthly, August 14, 2011
Populist Sen Mitch McConnell: “I Think Everyone Should Pay Their Fair Share, Including The Rich”
Today, Senate Minority Leader Mitch McConnell (R-KY) named three Republicans to the fiscal super committee that was created by the debt ceiling deal. All three have taken the Americans for Tax Reform anti-tax pledge and support a cockamamie constitutional balanced budget amendment. “What I can pretty certainly sayto the American people, the chances of any kind of tax increase passing with this, with the appointees that John Boehner and I are going to put on there, are pretty low,” McConnell has said.
But McConnell has not always been so virulently anti-tax. In fact, in a 1990 campaign ad, McConnell said that “everyone should pay their fair share, including the rich,” prompting the Associated Press to say that he sounded like a “populist Democrat”:
“Many Republican candidates are, in fact, holding fast to the no-new-taxes position that Bush embraced and then abandoned, even as they try to portray themselves as friends of senior citizens and the disadvantaged. Others are sounding more and more like populist Democrats. ‘Unlike some folks around here, I think everyone should pay their fair share, including the rich,’ Sen. Mitch McConnell, R-Ky., says in a campaign ad.” [Associated Press, 10/28/90]
“A twist of untraditional Republicanism is added to McConnell’s message when he says, ‘Unlike some folks around here, I think everyone should pay their fair share, including the rich. We need to protect seniors from Medicare cuts too,’” wrote Roll Call reporter Steve Lilienthal. “After proclaiming his independence from the President and Congressional leaders, McConnell reassures voters that he will back a ‘fair deal for the working families of Kentucky.’” [“Democrats Flood Airwaves Charging GOP Party of Rich,” Roll Call, 11/5/1990]
If McConnell truly believes this, he should be appalled by current conditions. Tax rates on the richest Americans have plunged in recent years, and millionaires today pay tax rates that are 25 percent lower than they were in 1995. Meanwhile, income inequality is the worst its been since the 1920s, with the top 1 percent of Americans taking home 25 percent of the country’s total income. Just the richest 400 Americans hold more wealth than the bottom 50 percent of Americans combined, and the richest 10 percent of Americans control two-thirds of the country’s net worth.
From the sounds of it, once upon a time McConnell would have found this troublesome. It’s a shame that he doesn’t any longer.
By: Pat Garafalo, Contribution by: Sarah Bufkin; Think Progress, August 10, 2011
How The Budget Deal Affects The Affordable Care Act
So how does this mammoth budget-cutting deal, with its congressional “supercommittee” affect health reform?
Good question, because lots of people in Washington are asking it too.
More specific answers will become clearer in the next few weeks, but here’s a first version of the road map to both the policy and the politics.
First, understand there are two different processes – and each, separately, aims at cutting more than $1 trillion over the next decade.
The one that you’ve probably heard most about is the “supercommittee” of 12 members of Congress. They are supposed to identify savings by Thanksgiving. Entitlements – Medicare, Medicaid, Social Security and aspects of the Affordable Care Act – are part of their turf. So are taxes and revenue – at least in theory. It’s not so clear that the Republicans see it that way given the public statements of Congressional leaders.
If they agree on some kind of grand deal by Thanksgiving, Congress has to take it or leave it by the end of December, eliminating the usual congressional dilly-dallying. (It looks like dilly-dallying to the casual observer or much of the public, but remember that all that arcane, tedious process IS policy in Congress. If you slow something down, make it go through hoops, amend it, hold it up, etc., it doesn’t become law. That may be good or, depending on your point of view, bad politics.)
If Congress takes any recommendations that the supercommittee agrees on, that’s the law. If the committee fails, or Congress rejects it, then the “trigger” gets pulled. The official name is “sequestration.” That’s a fancy name for automatic cuts – 2 percent across-the-board cuts in Medicare, for instance, affecting all health care providers, doctors, hospitals, etc. It won’t affect beneficiaries – at least not directly.
Medicaid is not subject to the trigger. Neither, according to the preliminary interpretations I’ve received from analysts and congressional staff, are the big, key subsidies in the health care reform law – the Medicaid expansion and the subsidies that will help low-income and middle-income people afford health care in the new state exchanges.
Other parts of the health reform law are, however, subject to automatic cuts. Among them: Cost-sharing subsidies for low-income people. This isn’t the help paying the premium; this is the help with the co-pays when people do get care. But the payments are made to health plans, not directly to beneficiaries so it won’t have the direct impact of discouraging care. It may affect how health plans make decisions about what markets to participate in. Gary Claxton and Larry Levitt at Kaiser Family Foundation explain here.
Also, the supercommittee could have a partial deal – meaning there’s still a trigger, but a smaller one. Maybe they won’t reach agreement on $1.2 trillion to $1.5 trillion in savings, which would avoid the trigger. But maybe they could agree on, say, $500 billion. That means a trigger wouldn’t have to go as deep because some of the savings would already be identified.
To recap – before we go on to the second stage of this process: The “super-committee” can do whatever it wants to health care, Medicare, Medicaid, Social Security, etc. – if it can agree, if it can get the rest of Congress to agree and if the president doesn’t veto it.
Will the Democratic Senate and the Obama White House agree to cuts that eviscerate health reform? Not likely. In fact, the Democrats “won” on very few aspects of the budget/debt deal. Walling off Medicaid and key parts of the health coverage expansion were two of the “wins.” That’s a bright line worth paying attention to as this moves forward.
Does that mean other health-reform related spending will be untouched? Given how many moving parts there are to any spending deal, and the fact that defense and tax policy are also part of the mix, chances are it will be affected. But expect to see that bright line remain visible – maybe not quite as bright, but visible. (The CLASS Act, the voluntary long-term care program created under health reform, is a different story; it’s quite vulnerable.)
The second part is the annual appropriations process. The budget deal provides for cuts – real cuts in spending, not just slowing the rate of growth. Health programs (aspects of the health reform legislation touching on exchange creation, prevention, community clinics, etc., and just about everything else at the Department of Health and Human Services – the FDA, NIH, CDC, etc. – will be subject to these cuts. But this isn’t an across the board process, it’s a line-by-line, or at least category/agency-by-category/agency, process. And there is some horse trading.
It’s safe to say that the Republicans will try to cut discretionary portions of the new health law. That’s not a new political dynamic, it doesn’t arise out of the debt ceiling or the Wall Street woes. It’s what we’ve seen since last fall’s elections and the repeal/defund fights of the past few months. And House Budget Chairman Paul Ryan has publicly tried to insert health care into any potential deal. So expect to see more Republican push to cut, and continued Democratic push back. Will health spending emerge unscathed? It’s too soon to know but, given the amount of savings Congress needs to find –both in this budget deal and in the perennial quest to fund the “doc fix” payments – some cuts are clearly possible. Some of it may affect aspects of exchange establishment, regulation, prevention, public health, etc. But it’s hard to see the Democrats allowing cuts so deep that they basically constitute a side door to repeal.
One further twist – some Republicans are calling for a delay in health reform implementation to save money.”Delay” may sound better to an ambivalent public worried about spending than “repeal.” What’s delayed (if anything), how it’s delayed, how long it’s delayed, and what stopgaps are created in the meantime could have an impact on how many people get covered in 2014.
Assorted committees and government agencies are still examining the new budget law and how it will affect … everything. So the perspective I’ve outlined here – and I’m writing amid all the market turbulence – may change as the economic and political climates change. But the lines in the sand around the trigger – health reform, Medicaid and Social Security – tell us something about where the White House will come down.
By: Joanne Kenen, Association of Health Care Journalists, August 10, 2011
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