“A Lesson In Civics”: If A Budget Cut Doesn’t Impact The Wealthy, Congress Won’t Fix It
As thousands of air travelers suffered through flight delays last week, the average American got a lesson in civics: when you cut government spending, it has real life consequences. Americans are fond of saying that they want to slash government spending in the abstract, but loath to point to specific programs that they actually want to cut. With sequestration, this ambivalence has come home to roost. Because the automatic spending cuts known as sequestration affect all programs evenly, the ones that touch middle-class Americans, not just the poor, have suffered equally.
We haven’t just learned a lesson about the effects of budget cutting, though. We’ve also been able to see the priorities of Congress in stark relief. The flight delays, a result of furloughs at the Federal Aviation Administration, were not the first effects of sequestration. Those were visited on the poor. Yet the FAA was the only agency that saw swift and bipartisan action. After Congress was flooded with calls from angry travelers—not to mention, as lawmakers started down flight delays for their own flights home for recess—the Senate and House each passed a bill with overwhelming support within forty-eight hours. When’s the last time you remember that happening for any other issue?
The poor have long known that a budget cut passed in Congress means hardship in real life. This dynamic was in full force as sequestration went into effect. The first to be hit by the reduction in funds, by and large, were low-income Americans. Preschoolers have been kicked out of Head Start. Food pantries have closed. Native American health services have been reduced. Thousands of cancer patients on Medicare have been turned away from clinics. Meals on Wheels is delivering to fewer elderly people. The long-term unemployed will receive severely reduced benefit checks.
While these cuts have been well covered by local media, the rest of us haven’t heard much about them. Yet when furloughs delayed flights, they dominated the media, as did the cancellation of White House tours. In mainstream cable news coverage, flights were mentioned about two and a half times more than Head Start, over twice as much as cancer patients, and six and a half times more than Meals on Wheels. White House tours were even worse: they were mentioned thirty-three times as often as the sequester’s impact on the poor.
The coverage of tours and flights was likely driven by something we don’t see very often: budget cuts that impact nearly all Americans. Targeted cuts tend to focus on programs that the poor rely on, and we rarely hear those stories. But even middle-class and well-to-do Americans were feeling what it’s like to have reduced government spending in their daily lives when they went to the airport and waited an extra hour to take off. This is surely a mere inconvenience compared to losing food or housing if you’re poor, but it’s still important: Americans of all income levels may finally be learning the importance of government spending in their lives.
As Suzanne Mettler has demonstrated, many Americans do in fact benefit from government services. But few realize it. Mettler calls this the “submerged state”: the variety of public programs that are delivered in such a way, such as through the tax code, that many don’t realize they’re getting assistance. The epitome of this contradiction is the senior who shouts, “Get your government hands off my Medicare!”
For this reason, perhaps, well-off Americans tend to be less concerned with spending on the social safety net and more interested in cutting government spending. This has huge consequences for our political system. A body of research has shown that the needs and desires of the poor rarely influence how their representatives vote. On the other hand, Congress’s priorities nearly duplicate those of the wealthy.
And here is the last lesson sequestration has taught us: just how much more Congress cares about what’s bothering upper-middle-class citizens than what’s going on at the bottom of the income scale. There are tons of different programs expecting a big impact from sequestration. None of them saw multiple bills introduced in the Senate, one of which was passed with huge support on both sides of the aisle and signed within a matter of days. Had they continued, the furloughs would have been more than an inconvenience. They could have meant sharply reduced economic output. But the same could be said of many of the cuts to other programs. The lesson is not that the flight delays should have gone unaddressed. It’s that if a budget cut doesn’t impact a wealthy constituency, Congress can’t to be bothered to fix it.
By: Bryce Covert, The Nation, April 28, 2013
“The Stealth Sequester”: Americans Are Starting To Feel The Pain, They Just Don’t Know It Yet
So far, the much-dreaded “sequester” – some $85 billion in federal spending cuts between March and September 30 – hasn’t been evident to most Americans.
The dire warnings that had issued from the White beforehand – threatening that Social Security checks would be delayed, airport security checks would be clogged, and other federal facilities closed – seem to have been overblown.
Sure, March’s employment report was a big disappointment. But it’s hard to see any direct connection between those poor job numbers and the sequester. The government has been shedding jobs for years. Most of the losses in March were from the Postal Service.
Take a closer look, though, and Americans are starting to feel the pain. They just don’t know it yet.
That’s because so much of what the government does affects the nation in local, decentralized ways. Federal funds find their way to community housing authorities, state unemployment offices, local school districts, private universities, and companies. So it’s hard for most Americans to know the sequester is responsible for the lost funding, lost jobs, or just plain inconvenience.
A tiny sampling: Brandeis University in Waltham, Massachusetts is bracing for a cut of about $51 million in its $685 million of annual federal research grants and contracts. The public schools of Syracuse, New York, will lose over $1 million. The housing authority of Joliet, Illinois, will take a hit of nearly $900,000. Northrop Grumman Information Systems just issued layoff notices to 26 employees at its plant in Lawton, Oklahoma. Unemployment benefits are being cut in Pennsylvania and Utah.
The cuts — and thousands like them — are so particular and localized they don’t feel as if they’re the result of a change in national policy.
It’s just like what happened with the big federal stimulus of 2009 and 2010, but in reverse. Then, money flowed out to so many different places and institutions that most Americans weren’t aware of the stimulus program as a whole.
A second reason the sequester hasn’t been visible is a large share of the cuts are in programs directed at the poor – and America’s poor are often invisible.
For example, the Salt Lake Community Action Program recently closed a food pantry in Murray, Utah, serving more than 1,000 needy people every month. The Southeast Alaska Regional Health Consortium is closing a center that gives alcohol and drug treatment to Native Alaskans.
Some 1,700 poor families in and around Sacramento, California are likely to lose housing vouchers that pay part of their rents. More than 180 students are likely to be dropped from a Head Start program run by the Cincinnati-Hamilton County (Ohio) Community Action Agency.
Most Americans don’t know about these and other cuts because the poor live in different places than the middle class and wealthy. Poverty has become ever more concentrated geographically.
A third reason the sequester is invisible is many people whose jobs are affected by it are being “furloughed” rather than fired. “Furlough” is a euphemism for working shorter workweeks and taking pay cuts.
Two thousand civilian employees at the Army Research Lab in Maryland will be subject to one-day-per-week furloughs starting on April 22, for example, resulting in a 20 percent drop in pay. The Hancock Field Air National Guard Base is furloughing 280 workers. Many federal courts are now closed on Fridays.
Furloughs spread the pain. The hardship isn’t as evident as it would be if it came in the form of mass layoffs. But don’t fool yourself: A 20 percent pay cut is a huge burden for those who have to endure it.
Bear in mind, finally, the sequester is just starting. The sheer scale of it is guaranteed to make it far more apparent in coming months.
Some 140,000 low-income families will lose their housing vouchers, for example. Entire communities that depend mainly on defense-related industries or facilities will take major hits.
If you thought March’s job numbers were disappointing, just wait.
With the sequester, America has adopted austerity economics. Yet austerity economics is the wrong medicine at exactly the wrong time. Look what it’s done to Europe.
By: Robert Reich, The Robert Reich Blog, April 8, 2013
“The GOP Trickle Down Effect”: Sequestration Takes A Toll On Cancer And Medicare Patients
A funny thing happened on Rush Limbaugh’s radio show yesterday. The Republican host was complaining about a Washington Post report on sequestration cuts hurting cancer patients in the Medicare program, and told his listeners to ignore the news. “All of this is manufactured and made up,” Limbaugh said. How does he know? Because the sequester didn’t include “any cuts in Medicare,” he added.
And then Limbaugh got a call from a conservative oncologist — in this case, a physician who apparently shares the host’s worldview and has no use for the Washington Post — who conceded that the report is, in fact, accurate, forcing Limbaugh to change the subject.
Sequestration cuts are affecting Medicare — though not as much as some other programs — and as Sarah Kliff explained, cancer clinics really are turning away thousands of patients as a result of the Republican spending cuts.
Oncologists say the reduced funding, which took effect for Medicare on April 1, makes it impossible to administer expensive chemotherapy drugs while staying afloat financially.
Patients at these clinics would need to seek treatment elsewhere, such as at hospitals that might not have the capacity to accommodate them.
Kliff talked to one Long Island oncologist who said he and his staff held an emergency meeting earlier this week and decided they would no longer see one-third of their 16,000 Medicare patients. “It’s a choice between seeing these patients and staying in business,” Jeff Vacirca, chief executive of North Shore Hematology Oncology Associates said.
But if Medicare was supposed to be shielded from the sequestration policy, how is this happening? It has to do with how medical offices are reimbursed for medications that need to be administered by a physician — such as those given to cancer patients.
The New York Daily News reported today:
The so-called sequester cuts will force three-quarters of the thousands of cancer clinics nationwide to start referring Medicare patients to hospitals, according to the American Society of Clinical Oncology and other cancer treatment groups, which have appealed to the White House and Congress for help.
Elderly cancer patients are being hit hard because their drugs are among the handful of pharmaceuticals that were affected by the sequester cuts.
Medicare reimbursed oncologists for the cost of chemo drugs, plus 6%. But under the sequester, the federal government is now providing only 4% on top of the drugs’ cost, which can run $900 to $15,000 for a full course, depending on the cancer.
That 2% difference may not sound like much, but given the costs involved, it’s an enormous pay cut for the cancer clinics, which some are now saying is a prohibitive new expense they can’t afford.
Ted Okon, director of the Community Oncology Alliance, told Kliff, “If you get cut on the service side, you can either absorb it or make do with fewer nurses. This is a drug that we’re purchasing. The costs don’t change and you can’t do without it. There isn’t really wiggle room.”
Note, this doesn’t mean the sequester is necessarily cutting off cancer patients, but rather, it means these patients are being told by their local oncology clinics that they’ll have to seek care at hospitals — where the care will be less efficient and more expensive.
In case anyone’s forgotten, it’s within Congress’ power to simply turn the sequester off. The whole thing could take five minutes. But for now, congressional Republicans have ruled out the possibility of turning it off, and have also ruled out the possibility of a compromise to replace these brutal spending cuts.
With each passing day, we learn of increasingly drastic consequences associated with the policy.
By: Steve Benen, The Maddow Blog, April 5, 2013
“Exposing Republican Intransigence”: John Boehner Rejects Obama’s Offer To Cut Social Security
House Speaker John Boehner (R-OH) preemptively rejected President Barack Obama’s upcoming budget proposal Friday, slamming the president’s offer to cut Social Security as “only modest entitlement savings.”
President Obama’s budget plan, which he will send to Capitol Hill on Wednesday, will reportedly seek $1.8 trillion in deficit reduction through a combination of new revenues and spending cuts. The most controversial cut is the move to the chained consumer price index (“chained CPI”) for Social Security, which would significantly reduce annual cost-of-living adjustments for Social Security beneficiaries. President Obama has long suggested that he could support the measure, which would cut federal spending by about $130 billion over the next decade, only if Republicans agree to raise new tax revenues.
To many of the president’s liberal allies, such a proposal has been a non-starter. When he floated the idea in late 2012, many House Democrats warned that they would rather go over the “fiscal cliff” than accept the cut. Similarly, in an exclusive interview with The National Memo in March, AFL-CIO president Richard Trumka vowed that America’s largest labor federation would oppose any budget deal that included chained CPI, saying the index is “another example of how Washington creates fancy-sounding phrases to mask stupid policies that only work for the rich.”
The public seems to stand with Trumka; recent polling suggests that Americans strongly oppose any Social Security cuts.
The budget reportedly includes several other cuts, such as $400 billion in health care savings (including additional means-testing for Medicare,) and $200 billion in cuts to farm subsidies, federal employee retirement programs, and unemployment compensation. Obama’s budget also aims to raise $600 billion in new revenues, including an increased cigarette tax, which would be used to finance the president’s proposal for universal pre-K.
“While this is not the president’s ideal deficit-reduction plan, and there are particular proposals in this plan like the CPI change that were key Republican requests and not the president’s preferred approach, this is a compromise proposal built on common ground, and the president felt it was important to make it clear that the offer still stands,” a senior Obama administration official told The Hill.
Obama’s offer to meet in the middle has already failed to move House Republicans, however. Not waiting for the full proposal to be released, House Speaker John Boehner quickly released a statement Friday blasting Obama’s plan.
“Despite talk about so-called balance, the president’s last offer was significantly skewed in favor of higher taxes and included only modest entitlement savings,” Boehner said. “In the end, the president got his tax hikes on the wealthy with no corresponding spending cuts. At some point we need to solve our spending problem, and what the president has offered would leave us with a budget that never balances.”
“If the president believes these modest entitlement savings are needed to help shore up these programs, there’s no reason they should be held hostage for more tax hikes,” Boehner added.
Although Boehner’s statement still completely ignores the $2.5 trillion in deficit reductions to which the White House has agreed since 2010, it does at least acknowledge that Obama is offering “entitlement savings” — even if Boehner rejects the compromise out of hand. This is a modest step in the right direction, considering that until this budget, Republicans have consistently denied that Obama has offered them anything at all.
In the end, that subtle shift may end up as the most significant result of Obama’s budget deal. Although the proposal has no real chance of becoming law — as evidenced by Boehner’s immediate rejection — making a highly publicized compromise offer will further expose the Republicans’ intransigence.
In March, President Obama reportedly offered congressional Republicans a choice: accept a deal that raised revenue in exchange for chained CPI and means-testing of Medicare, or walk away with no budget deal at all. In April, it appears that Boehner has made his decision.
By: Henry Decker, The National Memo, April 5, 2013
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