The Grand Delusion: Higher Taxes “Soak” The Rich
Squeezing, gouging, soaking, it’s all the same, and it’s all wrong. The richest Americans, we hear it said, pay most of the federal income taxes. That’s true. But since 1980 their AFTER-TAX SHARE of America’s income has TRIPLED. That’s a trillion dollars a year in extra income for the wealthiest 1%.
A trillion dollars is seven times more than the budget deficits of all 50 states combined.
A trillion dollars, if it hadn’t been redistributed to the rich, would provide an extra $10,000 a year for every family that has contributed to American productivity since 1980.
The defenders of unlimited wealth insist that the very rich have earned their money. But what does EARN mean? Does it mean that the million richest families worked harder than the other 99 million families for thirty years? Does it mean that one man can bet against the mortgage industry and make enough money to pay the salaries of 100,000 health care workers? Does it mean using American research and infrastructure and national security to build a corporation that pays zero federal income taxes?
Most of the fortunate 1% benefited from tax cuts, financial system de-regulation, ownership of 50% of the stock market, and a 15% capital gains tax. According to a study by the University of California, in 2008 only 19% of the income reported by the 13,480 individuals or families making over $10 million came from wages and salaries.
The very rich claim that their income growth stimulates the economy. But it hasn’t happened. Low-income earners spend a greater percentage of their overall income on consumption, but they have less purchasing power than they had thirty years ago.
What the very rich won’t admit is that they benefit the most from government-funded research, national security, infrastructure, property rights, and a financial industry tailored to their pleasure and profit.
Instead, they claim that anyone can be rich if only they work hard. Much of America wouldn’t know if this is true. They haven’t had a chance to work lately.
By: Paul Buchheit, CommonDreams.org, May 10, 2011
Decimation Of Democracy: Protests In Benton Harbor Follow Martial Law Enforcement
The stripping of all power of the local government in Benton Harbor, MI has brought the national spotlight to the tiny town on the shores of Lake Michigan. The first city to be declared in a “financial emergency” by Michigan Governor Rick Snyder, CMDreported that Emergency Financial Manager (EFM) Joseph Harris was assigned to the city back in 2010 by then-Governor Jennifer Granholm. But it wasn’t until March of this year that Harris essentially disbanded the local government and boards.
The Rev. Jesse Jackson, Sr. responded to this takeover while on a tour of the state, calling for a rainbow coalition to organize against the EFM bill and others that Snyder and the Republican-led Senate has passed. At a protest in Benton Harbor, Jackson said that he, along with Michigan Congressman John Conyers, Lansing Mayor Virg Bernero and Benton Harbor Mayor Wilce Cook will file a lawsuit to challenge the law’s constitutionality.
Governor “Decimates Democracy”
WNDU in South Bend reported on Jackson’s speech to members of Benton Harbor: “It simply decimates democracy and gives dictatory powers in someone who does not live here but has the power to sit down officials and cancel contracts, but have power over assets selling off the properties of the city and its assets, that’s un-American” says Jackson.
Jackson also wrote an op-ed piece for the Chicago Sun-Times calling for an “uprising” in Benton Harbor and around Michigan. The town’s poor, mostly African-American population has been highlighted by Jackson and Rachel Maddow of MSNBC.
“Benton Harbor, Mich., is a town of nearly 11,000 people, about 90 percent of whom are African American. It is a catalogue of the misery of the industrial Midwest,” said Jackson in the Chicago Sun-Times. “It was the headquarters and manufacturing center of Whirlpool, but the last Whirlpool plant closed years ago. Now Benton Harbor has a per capita income of about $10,000 a year. And it is plagued by the ills that accompany poverty in today’s America: high unemployment, broke government, failing schools, crime, drugs and despair.”
Community activist Rev. Edward Pinkney in his blog, Blanco, notes: “there is nothing to stop the state from abolishing democratic governance in any of Michigan’s cities, if an emergency can be declared or created. On April 15, the mostly black city of Benton Harbor, the poorest jurisdiction in the state, was placed under total financial martial law, its citizens suddenly made more powerless than blacks in Selma, Alabama, prior to the civil rights movement.”
A Developer’s Dream – A Corporate Coup?
The take over of Benton Harbor has been linked to a commercial development plan, backed by Whirlpool and the very legislator who introduced the EFM bill, Rep. Al Pscholka. Pscholka is a former aide to the grandson of Whirlpool’s founder, Rep. Fred Upton, and former vice president of one of the companies involved with the Harbor Shores development and also on the Board of Directors of a non-profit involved with the development. The plan is to build a high-end lakeshore housing development and golf course, taking over the city’s sprawling public park and beach, Jean Klock Park, gifted to the city in 1917.
The latest protest on April 27th saw hundreds of people march through the streets of Benton Harbor with signs and chants decrying the takeover.
Business Insider, however, wrote that “Benton Harbor’s finances are indeed a mess – the result of mismanagement, poor accounting and too much spending.”
But Rev. Jackson doesn’t see it that way. He holds fast to the belief that the problems in Benton Harbor, as in other previously-industrialized cities in the Rust Belt, are a symptom of the resulting poverty that followed the end to factory jobs in these areas. The solution, he says, is to invest in the very people that have all but been forgotten by the Governor Snyder’s office.
“They’ve shut down the jobs, and taken over the schools. Now they want to shut down the democracy and turn the public parks into a rich man’s playground,” said Jackson. “But in Benton Harbor, as in Selma and Montgomery, they forget even the poorest people have a sense of dignity…. In Benton Harbor, it is time for the good people to make themselves heard.”
By: Jennifer Page, Center for Media and Democracy, May 3, 2011
Paul Ryan’s Moral Barbarism
Karl Rove’s column the other day joined the many conservatives expressing their hurt and anger that President Obama would depict Paul Ryan’s budget as harming sick and vulnerable citizens:
Mr. Obama likes campaigning more than governing. And for this president, campaigning means knocking down straw men and delivering a steady stream of misleading attacks. It means depicting opponents as indecent, heartless people who take special delight in targeting seniors and autistic children.
In fact, Obama has never accused Ryan, or anybody, of having a “special delight” in targetting seniors and autistic children. But he has accused them of pursuing policies that would harm, among others, seniors and autistic children. That’s because it’s incontrovertably true. The Center on Budget and Policy Priorities delves into the details of Ryan’s plan to slash Medicaid by more than a third over the next decade, and in half over the next two decades:
- Seniors: An overwhelming majority of Medicare beneficiaries who live in nursing homes rely on Medicaid for their nursing home coverage. Because the Ryan plan would require such deep cuts in federal Medicaid funding, it would inevitably result in less coverage for nursing home residents and shift more of the cost of nursing home care to elderly beneficiaries and their families. A sharp reduction in the quality of nursing home care would be virtually inevitable, due to the large reduction that would occur in the resources made available to pay for such care.
- People with disabilities: These individuals constitute 15 percent of Medicaid beneficiaries but account for 42 percent of all Medicaid expenditures, mostly because of their extensive health and long-term care needs. Capping federal Medicaid funding would place significant financial pressure on states to scale back eligibility and coverage for this high-cost population, many of whom would be unable to obtain coverage elsewhere because of their medical conditions.
- Children: Currently, state Medicaid programs must provide children with health care services and treatments they need for their healthy development through the Early Periodic Screening, Diagnostic and Treatment (EPSDT) aspect of Medicaid, which provides regular preventive care for children and all follow-up diagnostic and treatment services that children are found to need. A block grant would likely permit states to drop EPSDT coverage, meaning that children, particularly those with special health care needs, would not be able to access some care that medical professionals find they need (because Medicaid would no longer cover certain health services and treatments for children, and their parents wouldn’t be able to afford to pay for that care on their own).
- Working parents and pregnant women: Many state Medicaid programs already have extremely restrictive eligibility criteria for parents. In the typical state, working parents are ineligible for Medicaid if their income exceeds 64 percent of the poverty line (or $14,304 a year for a family of four), and unemployed parents are ineligible if their income exceeds 37 percent of the poverty line ($8,270 a year for a family of four). Under a block grant, states could cut these already low eligibility levels even further, cap enrollment, and/or require low-income parents to pay more for health services. States could do the same for low-income pregnant women who rely on Medicaid for their prenatal care, resulting in them forgoing services that are critical to ensuring a healthy pregnancy.
Now, Rove appears to be a pathological liar, or at least so deeply enmeshed in partisan spin it’s not clear that a distinction exists in his mind between objective truth and claims that are useful to his side. But many other conservatives have likewise expressed what has the ring of genuine outrage that Obama would accuse Ryan of snatching medical care away from people in nursing homes, very poor families, special needs children, and so on. I think it reflects, in part, an inability or lack of desire to think with any specificty about the concrete ramifications of imposing extremely deep cuts to Medicaid. Who do they think is on Medicaid? Prosperous, healthy people?
No, Medicaid is a bare-bones program throwing a lifeline to people who are in bad shape. Cutting Medicaid may be the politically easiest way for Ryan to clear budget room to preserve Bush-era revenue levels, as Medicaid patients have little political clout. But it is, well, deeply immoral. I’m actually surprised that conservatives not only can’t seem to imagine (or care about) the consequences of such policies, but they can’t even imagine that people like Obama would actually feel moral outrage at their plan. They can’t imagine a liberal objection as representing anything other than an attempt to score political points. It’s bizarre. I mean, of course Obama finds it morally objectionable to take away medical care to people in nursing homes and children with special needs. That’s why he’s a Democrat.
By: Jonathan Chait, The New Republic, May 3, 2011
The “Serious Republican Candidate”: Mitch Daniels Suddenly Discovers Planned Parenthood Funding
About a month ago, Time’s Joe Klein noted his disgust with the Republican presidential field, lamenting the fact that the candidates are “a bunch of vile, desperate-to-please, shameless, embarrassing losers.” The whole lot looks like a “dim-witted freak show.”
But, Klein said, the field may not be set. The columnist pleaded with Indiana Gov. Mitch Daniels (R) to run. “I may not agree with you on most things, but I respect you,” Klein said. He added that Daniels seems to respect himself enough not to behave like a “public clown.” This is an extremely common sentiment. Daniels, the former Bush budget director who helped create today’s fiscal mess, is supposed to be The Serious Republican Candidate For Serious People. He has no use for culture wars — Daniels famously called for a “truce” on these hot-button social issues — and despite his humiliating record, the governor at least pretends to care about fiscal sanity, earning unrestrained praise from the likes of David Brooks.
Perhaps now would be a good time for the political establishment to reevaluate their opinion of Mitch Daniels.
Gov. Mitch Daniels of Indiana said Friday that he would sign a bill cutting off Medicaid financing for Planned Parenthood, a move that lawmakers in several states have begun pondering as a new approach in the battle over abortion. Indiana becomes the first state to go forward.
Abortion rights supporters condemned the decision, saying it would leave 22,000 poor residents of Indiana, who use Planned Parenthood’s 28 health facilities in the state, with nowhere to go for a range of women’s services, from breast cancer screening to birth control.
Daniels, who apparently no longer has any use for his own rhetoric about a culture-war “truce,” said his decision was dictated by the fact that Planned Parenthood provides abortion services, adding that the health organization can resume its state funding by refusing to help women terminate their unwanted pregnancies.
That only 3% of Planned Parenthood’s operations deal with abortions, and that public funding of abortions is already legally prohibited, apparently didn’t matter.
What’s especially striking about this is how cruel and unnecessary it is. Daniels has been governor of Indiana for more than six years, and he’s never had a problem with Planned Parenthood funding. He was Bush’s budget director for more than two years, and he never had a problem with Planned Parenthood funding.
But now that he’s thinking about running for president, and has hysterical right-wing activists to impress, now Mitch Daniels has suddenly discovered Planned Parenthood funding — which has enjoyed bipartisan support for decades — is no longer acceptable to him.
It’s not as if Planned Parenthood, its mission, or its menu of health services has changed. The only thing that’s changed is the radicalism of new Republican Party and those who hope to lead it. The real-world effect of Daniels’ cruelty is unmistakable: fewer working-class families will have access to contraception, family planning services, pap smears, cancer screenings, and tests for sexually-transmitted diseases. Indiana has 28 Planned Parenthood centers in the state, and most of its patients live in poverty.
Also note that this was as clear a test of Daniels’ purported principles as we’ve seen to date — he had to choose between fiscal considerations (millions of dollars in federal health care funding) and culture-war considerations (cutting off a public health organization to satisfy rabid conservatives). As of late yesterday — Daniels made the announcement late on a Friday afternoon, probably out of embarrassment — the governor prioritized the latter over the former. To prove his right-wing bona fides, Daniels decided to put politics ahead of women’s health.
Ironically, the Republican who claims to oppose abortions is going to make it more likely more women will have unwanted pregnancies.
It’s indefensible. Daniels should be ashamed of himself and the pundits who praised Daniels’ “seriousness” should feel awfully foolish right about now.
By: Steve Benen, Political Animal, Washington Monthly, April 30, 2011
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
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