Posts Tagged ‘Medicare cuts’

Advancing Long Held Republican Right And Libertarian Dreams. Defunding and Privatizing Entitlements and Public Education. Can The Obama Administration and the Democratic Leadership Council Pull It Off?

In a speech to The Economics Club in Grand Rapids Michigan on June 2nd, 2010, former president George W. Bush first bragged on his use of torture, a war crime, and then speaking of his greatest regret as reported by Ted Roelofs of the Grand Rapids Press,

Bush said his greatest disappointment as president was failing to push through Social Security reform, a major campaign issue of his in 2004. Bush said Republican leadership balked at the proposal, saying it would cost them votes: “And the leadership of our party looked at me and said no.”

Indeed, many Republicans have wanted to do away with the last vestiges of FDR’s New Deal, namely social security and medicare by privatizing them along with public education and put them to rest once and for all. Indeed, whenever the more hard right Republican presidents, representatives or senators have wanted to put an end to these, the Democratic party has fended them off. But Bush’s lament may be premature. Since it took Democrats and a Democratic party to create these social contracts with its aging population to keep them out of poverty, one supposes it will take Democrats and a Democratic president to put an end to them and that time appears to be on the horizon. Especially a Democratic party that is run by the Democratic Leadership Council or DLC as it has become to be known by informed people. What millions of Americans seem not to realize is that the Democratic party today is no longer the party of the New Deal economic philosophies and the common citizen that once made it the most popular party for a generation. At the Institute for Policy Studies website “Right Web, Tracking militarists’ efforts to influence U.S. foreign policy“, the profile on this group that seized control of America’s oldest party, is described

The DLC was established in the wake of President Ronald Reagan’s 1984 landslide victory, in which he won 49 states, over Democrat Walter Mondale. During the Democratic convention in San Francisco, Mondale had successfully beat back a challenge from Gary Hart, who predicted that unless the Democratic Party adopted a new image it would be decisively defeated. Mondale proved unable to respond effectively to charges from the Republican right and neoconservative Democrats that the Democratic Party was the party of progressives-which Jeane Kirkpatrick variously labeled as the “San Francisco Democrats” and the “blame America first” Democrats-who were out of touch with mainstream America. As Dan Balz and Ronald Brownstein concluded in their book Storming the Gates, “Mondale’s landslide defeat exposed as a dead end the vision of regaining the White House by mobilizing an army of the disaffected with a message of unreconstructed liberalism.”

Pondering the Mondale defeat, a gathering coalition of Southern Democrats and northern neoliberals expressed concerns that the Democratic Party faced extinction, particularly in the South and West, if the party continued to rely on its New Deal message of government intervention and kept catering to traditional constituencies of labor, minorities, and anti-war progressives. In 1985, Al From, an aide to Rep. Gillis Long (D-LA), took the lead in formulating a new messaging strategy for the party’s centrists, neoliberals, and conservatives. Will Marshall, at that time Long’s policy analyst and speechwriter, worked closely with From to establish the DLC and then became its first policy director.

Also in describing the advance of the DLC and the “Third Way” (substituting traditional government functions with private for profit corporate interests), it says

In a 1986 conference on the legacy of “Great Society” of the Johnson administration, DLC chairman Gov. Charles Robb of Virginia took up the neoconservative critique of liberalism first articulated in the early 1970s by Daniel Patrick Moynihan, Norman Podhoretz, and other neoconservatives. According to Robb, “While racial discrimination has by no means vanished from our society, it’s time to shift the primary focus from racism-the traditional enemy without-to self-defeating patterns of behavior-the enemy within.” This speech signaled the end of the “New Politics” of the 1960s and 1970s in the Democratic Party and the rise of a new social conservatism in the party. Robb’s speech opened room for Democratic Party stalwarts to back away from political agendas that proposed government initiatives to address poverty, discrimination, and crime, and to join the traditional conservatives and neoconservatives in opposing affirmative action, social safety-net programs, and job-creation initiatives. Thus, the New Democrats of the DLC added their voices to the chorus of those calling for stiffer sentences, an end to affirmative action, reduced welfare benefits, and less progressive tax policies.

Clinton/Gore was the first DLC presidency and the DLC has been firmly in control of the Democratic party ever since. And ever since 1980, Milton Freidman economic theories, a flattening tax rate with the wealthiest paying historically less in federal income taxes, a rise in corporations paying little or no income taxes to the federal government while taking jobs overseas with “free trade” agreements (major reasons for deficits), deregulation (which led to the financial meltdown we have experienced) and massive miltary industrial complex spending (the most in history) has been the norm no matter which party has had control. There has been no Keynesian economic theory being practiced (what is considered New Deal or modern era Liberal) since Richard Nixon was president. And in the Bush administration, we got all right wing economic ideology bullet points enacted (with the help of DLC and Blue Dog Democrats). What we ended up with was a collapsed financial system, a rapidly contracting economy instead of a growth economy, job loss and falling wages instead of more jobs and lifting all boats, and we even had war thrown in (which the right uses in trying to discredit New Deal policies by saying World War II helped the economy instead). Many Americans started looking around for another FDR type and thought they may have found such leadership in Obama’s speeches about hope and change. But as Harold Ford said in an interview concerning his position in the party and new head of the DLC in an article by Chris Cilliza in the Washington Post titled, “Harold Ford Jr.’s Seat at the Party

“This is the incubator,” Ford said of the DLC, which was founded in 1985 in the wake of Ronald Reagan’s landslide reelection. “If you look at the last ten great domestic policy ideas in the last 10-15 years … 75 percent have come out of this organization.”

While the DLC has drawn considerable criticism from the liberal blogosphere for advocating so-called Republican lite policies, Ford insisted that the organization is miscast by its Democratic detractors. “I don’t view it as a conservative or liberal or moderate or not moderate,” he said. “If you have a great idea, a strong idea you have the best minds in our party to work with.” (From, however, sounded a more feisty note: “Democrats have to win as a coalition party,” he said. “We can’t win any other way.”)

Ford predicted the DLC will play a major role in the issues debate that unfolds in the 2008 Democratic presidential primary process. The group will not side with any one candidate, he said, even though the organization has close ties to a number of potential nominees, from Vilsack to Sens. Hillary Rodham Clinton (N.Y.) and Joe Biden (Del.) to Gov. Bill Richardson (N.M.). Even Sen. Barack Obama (Ill.) has expressed interest in “find[ing] ways he could work with the DLC,” according to Ford. (Ford describes Obama as a “personal friend” and says they talk regularly.)

Enter The National Commission on “Fiscal Responsibilty” and Reform

Some of the myths created to attack social security by the right involve the idea that the United States spends too much on its very meagar social safety net, it is a ponzi scheme, is responsible for the national debt, and it is approaching insolvency. In this age of corporate media monopolies and right wing media propaganda, you can even go to small towns in “middle America” where you can hear people not educated in macroeconomics in any sense parroting these things as if they were speaking something noteworthy instead of jabber wockey. In writing about anti-entitlement billionaire Peter Peterson and his Peter G. Peterson Foundation created off of a $1 billion grant, Dean Baker for wrote in a piece titled, “Big Lies and Social Security: Peter Peterson’s Retirement is Secure

Like most of the granny bashers, Peterson routinely played fast and loose with the facts. For example, while warning about the poverty facing future generations, he suggested cutting the annual Social Security cost of living adjustment because the official consumer price index (CPI), to which retirees benefits are indexed, overstates the true rate of inflation. However, if the CPI really overstates inflation, then incomes are rising much more rapidly than the official data show; and future generations will be far richer than we could possibly imagine. (If income rises by 4 percent and the inflation rate is 3 percent, then real income has risen by 1 percent. But if our measure of inflation is wrong, and the rate of inflation is just 2 percent, then real income has risen by 2 percent.)…..

I recall hearing Mr. Peterson pontificate for an hour, completely unchallenged, on a major public radio talk show. At one point, he assured his audience, with reference to the solvency of Social Security, “trust me, there is no trust fund.” Mr. Peterson repeated this lie verbatim, just in case the meaning escaped his audience.Of course, there is a Social Security trust fund that holds more than $2 trillion in government bonds. Under the law, these bonds are to be repaid from general revenue, which comes almost entirely from the personal and corporate income tax. In other words, the bonds held by the Social Security trust fund, which are supposed to pay the Social Security benefits of retired workers, are effectively tax obligations for wealthy people like Mr. Peterson. If the bonds held by the Social Security trust fund are never repaid, Mr. Peterson and/or his heirs could save tens of millions of dollars from their future taxes. It shouldn’t be surprising he is trying to convince the public that the trust fund doesn’t really exist.

In addressing common lies like those by commission co-chair (of the new The National Commission on “Fiscal Responsibilty” and Reform) Alan Simpson, Nobel Prize economist Paul Krugman wrote in his New York Times column titled, “Zombies Have Already Killed The Deficit Commission

Social Security is a government program funded by a dedicated tax. There are two ways to look at this. First, you can simply view the program as part of the general federal budget, with the the dedicated tax bit just a formality. And there’s a lot to be said for that point of view; if you take it, benefits are a federal cost, payroll taxes a source of revenue, and they don’t really have anything to do with each other.

Alternatively, you can look at Social Security on its own. And as a practical matter, this has considerable significance too; as long as Social Security still has funds in its trust fund, it doesn’t need new legislation to keep paying promised benefits.

OK, so two views, both of some use. But here’s what you can’t do: you can’t have it both ways. You can’t say that for the last 25 years, when Social Security ran surpluses, well, that didn’t mean anything, because it’s just part of the federal government — but when payroll taxes fall short of benefits, even though there’s lots of money in the trust fund, Social Security is broke.

So in keeping with backing the DLC and the conservative Blue Dogs and in a show of “bipartisanship” (a word DLC Democrats use when implementing Republican ideas and rejecting all amendments and legislation from real progressives and liberals), Obama created this “deficit” commission (called The Cat Food Commission by liberals and true progressives). The two co-chairman that have been appointed are well known enemy of social security and medicare, former rep. Alan Simpson (R) and DLC public budget cutter under Clinton, former chief of staff Erskine Bowles. The commission has been “partnered” with right wing groups such as the Heritage Foundation, The Committee for a Responsible Budget, The New America Foundation, and the DLC’s Progressive Policy Institute (not really progressive, but corporatist and neoconservative like the AEI). Simpson has recently caused a stir by calling social security recipients “lesser people” which spurred to send a letter requesting his removal as co-chair. Saying it is responsible for current deficits and the debt is irresponsible since it is the only spending connected to a dedicated tax and a currently solvent trust fund and is purely an ideological argument. Any needed adjustments can be made through tweaking or raising the cap. And the rise in the costs associated with medicare is directly related to the rise in the for profit healthcare sector. If this administration were really concerned with the rising cost in this regard, they would have expanded medicare or some similar single payer system across a wider healthier population instead of making tax payers pay for the added private sector health insurance profits to prop up their stock prices. And let’s put to bed this notion that federal income taxes are too high on individuals and corporations impeding job growth and that further cuts in domestic non-military spending and federal income tax rates are needed. They are the lowest in 60 years which if this ideology were true, we would already be near full employment. What we need is something like the WPA again for infrastructure for a temporary kick (a stimulus directed at economic activity). The reason unemployment is up and tax receipts are down is a lack of domestic economic activity. Until people are buying products in the marketplace, there will be no big increase in hiring or business reinvestment. There is no demand. Without hiring or if the continued decreases in wages occur there will be less economic activity. The federal income tax rate is not currently in play. Privatization of entitlements is nothing more than a stock market scheme to prop up stock prices (which could actually create a false evaluation bubble). Haven’t we had enough of that? And if the United States defaults on its bond obligations in the social security trust fund, U.S. treasury bonds and notes will lose their AAA rating. If that happens, the foreign countries holding US bonds which are propping up the tax cuts for billionaires and multi-national corporations as well as the massive military industrial complex and its two elective wars, will dump them probably inducing near total collapse. It could still happen with the bone headed decision to freeze domestic spending while still spending huge amounts on the military and war.

Suffer The Children Part Two

On April 11th, 2010, this author wrote, “Suffer The Children. The War On Public Education. One School District’s Story.” The piece is about how the Tea Party, backed by right wing organizations and big money, took over the school board election of Wake County, NC, the state’s largest school system and intended to end the highly regarded and successful diversity program it had and replace it with “neighborhood schools” zoning, with charter schools and privatization. In it, I wrote

With the rise of Ronald Reagan’s presidency, anti-federal government rhetoric, and the rise of political based economics largely discredited previously by economists as “voo doo” economics, ideological and financial pressures have mounted. Income tax cuts at the top became prevalent and the Department of Education funding cut. This has produced strains on state and local governments to fund education more resulting in the rise of property taxes on America’s middle class. In economic downturns such as the one we have been in since 2007, the results are state and local governments become deluged in red ink with no cushion. For many who have memories before “Reaganomics”, there wasn’t these large property and local tax increases, lotteries, and such. With the Reagan revolution and the rise of Milton Freidman’s Chicago School of economics, there has come the idea that privatization is the model of the future. Privatization can best be described as getting rid of what is public and instead funding private interests as a replacement (through tax payer dollars or public debt usually accompanied with tax cuts, tax “credits” for private schools and/or inflating the money supply). However, private interests, more than not, conflict with the public interest and do not share the same goals.

And on the Wake County system (which wasn’t broken), I wrote

Its diversity program was based on socio-economic factors and its success was accomplished with a magnet school program which helped draw diverse people into schools in different neighborhoods. It created diversity on every level, socio-economic, racial or ethnic, disability or ability, regardless of neighborhood demographic or location. One of its goals was to achieve no more than 40% of a schools population being dependent on subsidized lunches and allowed for even distribution of resources through all schools independent of neighborhood make up….

The article also went on to mention that Tom Oxholm was a Republican accountant that was elected in the GOP landslide of ’94 and was part of a group to show that the school system was wasteful with taxpayer money, but came to the conclusion this was not so and co-authored the aforementioned book (“A School District’s Journey to Excellence: Lessons from Business and Education”). He determined the Wake School System was efficiently managed and was actually a bargain. He also cited the Wake County Board of Commissioners with chronically underfunding it.

On the background of vouchers and charters, I borrowed and quoted the history of this movement from the UCLA study titled, “Equity Overlooked: Charter Schools and Civil Rights Policy“,

School choice is a longstanding concept with important early historical roots in the days of resistance to southern desegregation. Although eventually blocked by the Supreme Court, one early reaction to Brown v. Board of Education was to shut down public school districts and provide state-financed vouchers allowing white students to attend private schools (referred to as segregation academies). “Freedom of choice” plans, another popular southern resistance strategy, were versions of token integration. In what was often an atmosphere of violence, intimidation and virulent opposition, black students were given the opportunity to “choose” to transfer to majority white schools. These plans were used for years to effectively preserve segregation. In 1968, more than a decade after Brown v. Board of Education, the Supreme Court ruled in a case from New Kent County, Virginia, that “rather than further the dismantling of the dual system, the plan has operated to simply burden children and their parents with a responsibility be] placed squarely on the School Board.” Freedom to choose in New Kent meant that, three years after the strategy was adopted, no white student in the county had elected to attend the segregated black school, and 85% of the county’s black students were still attending all-black schools. Similar patterns were documented across the South.

In both vouchers and freedom of choice plans, educational choice was used in the aftermath of Brown as a way to circumvent desegregation.

During this same time period, economist Milton Friedman proposed a model for education reform, based on his economic philosophy, calling for the privatization of public schools.

So with the (false) media framing that Obama is an extreme liberal and progressive pushing for an expansion of “big guvmint”, Obama’s Secretary of Education would be for the previous Wake County “government schools” approach of a free and appropriate education for every child regardless of socio-economic status, race, or disability instead of the new “Tea Party” school board philosophy, right? Wrong. Not only is Arne Duncan pushing for similar schemes (at least in the form of charters), he is closing schools in poor neighborhoods, firing teachers, and attacking the Teachers’ Union. He is also taking away the professionalism of teaching credentials by taking billions of public money that should be going to school districts in hard times and giving it to organizations like Teach For America to provide for less experienced, lower wage people to teach our children for these private backed or charter school interests. When are you going to wake up America and quit listening to people giving you alternative realities (WMD’s anyone?) and a failed financial sector with “too big to fail” bank bailouts because they took away the regulatory Glass-Steagall Act and replaced it with the Gramm-Leach-Bliley Act? When you have to pay a privateer to go to the bathroom with your declining wages?


21% Medicare Reimbursement Cut Scheduled To Go Into Effect March 1st. Republican Senator Jim Bunning (KY) Uses Unanimous Consent Procedure That Delays Senate Action

Retiring Republican Senator and former baseball player Jim Bunning (KY) giving the standard Republican excuses that he doesn’t want to pay for a bill that isn’t paid for (despite massive deficit spending under Bush and Republican Presidents and Cheney’s declaration that deficits don’t matter) decided to use the parliamentary maneuver of unanimous consent to hold up a bill that provided out of work Americans unemployment benefits. The bill in question also had appropriations for medicare reimbursements. The bill would increase the deficit by $10 billion from 2010 to 2020 with $7 billion of it for Americans that lost their jobs under the current recession by extending benefits. In discussing this issue, Emily Walker reports for Medpage Today in, “Medicare Pay Cut Goes Into Effect on Monday”, that

Sen. Dick Durbin (D-Ill.) chastised the Hall of Fame pitcher for being the lone voice of dissent on the “extenders” package.

“Everyone acknowledges there is only one objection,” Durbin said on the Senate floor Thursday night. “Everyone in this chamber acknowledges we are a caring and compassionate country, and we will, on an emergency basis, extend a helping hand to those who have lost their jobs.”

He even used baseball to try to appeal to Bunning to stop his one-man filibuster against the bill.

“I am very proud of what you have done in your baseball career,” Durbin told him. “But let me tell you, this is a wild pitch you are throwing tonight because this is a pitch that is hitting somebody in the stands; it is hitting an unemployed worker in Illinois. That is a wild pitch that should not have been thrown, Senator.”

The problem arose from what is known as something called the sustainable growth rate formula or SGR which is a Medicare accounting scheme that ties Medicare Part B reimbursements to GDP. This formula has caused cuts in Medicare reimbursement nearly every year this decade and has been fought by the Medical industry for years. Just imagine if this formula was applied to the Military Industrial Complex or its 1000 + bases in around 135 countries and it’s spending which is more than the next 10 nations combined or if it was applied to subsidies to big oil or the tax cuts that have been implemented steadily to the top income tax rate imposed by Republican Presidents. Maybe then there would be public money to spend on the well being of the public in hard times. Imagine if the foreign and US corporations that haven’t been paying income taxes while doing business in the United States as was shown in a study by the GAO and reported in a Reuters article titled, “Study says most corporations pay no U.S. income taxes” had been doing so. Would we be so far in debt? Would we have enough to meet the basic quality of life needs for our citizens? I suppose that would interfere with someone’s ideology or some politicians campaign war chest and I guess we just can’t have that, can we? I expect the Senate will pass an appropriate extension when it returns to session. I doubt it is willing to face the heat if it didn’t.