Senate Democrats knocked the Republicans off course momentarily when they whittled George W. Bush's tax cut down to $1.2 trillion, but the battle has just started.
Sure, they worked with moderate Republicans to cut $400 billion out of Bush's wish list, but the GOP essentially got 75% of the tax cut that, if implemented, would put progressive initiatives in a hole for another decade.
The skinflint Republicans are desperate to send that money back to their wealthy patrons not only because they sponsored the last election, but also because it takes money off the table that might otherwise be earmarked to cover the concerns of working families -- such as health care, environmental protection and saving family farms.
Democrats can claim the populist high road by promoting universal health care, but they won't get there by giving in on Bush's budget demands. Instead of allowing the Republicans to privatize Medicare and cut health benefits, Congressional Democrats should push to expand the government's health care program to cover all Americans, let them choose their own health provider, and pay for prescription drugs.
More than 40 million Americans are now uninsured -- and they generally are people working at low-wage jobs. People below the poverty line are covered by Medicaid while seniors are covered by Medicare.
Robert Naiman of the Center for Economic and Policy Research of Washington, D.C., cited in The Progressive, noted that a universal health insurance program would cost less than Bush's tax cut proposal. According to the Health Care Financing Administration, per capita health care costs in the United States run about $4,000 a year. "With about 40 million uninsured, it can't cost much more than $160 billion for the government to pick up the tab," Naiman writes. Multiply that by 10 years and you have the cost of Bush's tax cut. And since a government-administered program would get rid of about half the waste of the private system, Naiman says, the universal health care program could actually save the nation money we now spend on health insurance.
As we have said before, conscientious businesses that provide health insurance for their workers would benefit from a government-administered system, financed by a modest payroll tax. Small businesses and their employees would especially benefit from such a reform.
I now get my health insurance through my wife's employer, the local school district. The HMO plan costs about $226 a month for both of us. Next year we will find ourselves in our third HMO in three years with a plan that costs approximately 20% more -- and many private businesses are facing more than a 20% increase demanded by the insurance companies.
Much of those rising costs are being passed onto workers, who increasingly are unable to pay for health care for their children. A janitor at my wife's building, when asked last year by a librarian how she could let her kids go without health insurance, replied, "I can pay the rent, or I can pay for health insurance." Now the librarian is wondering how she's going to keep up with the insurance for her kids.
The Progressive's Anne-Marie Cusac in April reported that corporations increasingly are reneging on commitments to provide health coverage for early retirees. One former computer programmer accepted early retirement from IBM in 1994 with assurances that the company would cover health care for himself and his wife, only to be told two years ago that he would have to start paying for his insurance or get less coverage. He opted to pay $80 a month, but had to get another job because his pension has not kept up with the cost of living.
"I'm just going to have to work until I'm in the box and hear the dirt hit the lid," said the man, who has another three years before he qualifies for Medicare.
The article cited a December 2000 study by William M. Mercer Inc., a human resources and benefits firm, that showed only 31% of companies with 500 or more employees provide health coverage to retirees under the age of 65. That's down from 35% in 1999 and 46% in 1993. Part of the reason is an accounting rule that forces companies to report the benefits they owe to retirees as a liability. By cutting those benefits, they improved their balance sheets to look good for Wall Street.
Rep. John Tierney, D-Mass., has introduced the Emergency Retiree Health Benefits Protection Act of 2001, which would require employers to restore any post-retirement reductions or cancellations of health benefits, unless to do so would cause financial hardship. It also sets up a $5 billion loan guarantee fund for employers who need financial help to give their retirees benefits.
Tierney's bill is a hard enough sell, but universal health coverage will not make headway in Congress until the people demand it. Still, we got campaign finance reform moving. Write your senators c/o U.S. Senate, Washington, DC 20510; and your member of Congress c/o the House of Representatives, Washington, DC 20515; or phone them through the Capitol switchboard, 202-224-3121.
I don't envy Tom Daschle's task of herding those Democratic cats. As long as a John Breaux or a Zell Miller start off leaning toward the Republicans and are ready to cut a deal with them, Daschle has little more than the power of persuasion to keep them in line. That's where you, the voters, come in. If you live in a state with a Democratic senator, make sure he or she is on board with a progressive agenda. If you live in a state with a moderate Republican, such as James Jeffords of Vermont, Susan Collins and Olympia Snowe of Maine and Arlen Specter of Pennsylvania, work to get them on board.
The Congressional Progressive Caucus did count a victory April 6 when the US Senate approved Sen. Fritz Hollings' (D-S.C.) $85 billion amendment to the budget bill to provide a $500 rebate to every taxpayer in the US. The Progressive Caucus originally suggested the rebate plan, called "The American People's Dividend," although their plan would have given $300 to every man, woman and child in America. The idea gained the support of Sens. Joe Lieberman (D-Conn.) and Budget Chairman Pete Domenici (R-N.M.). Rep. Bernie Sanders, I-Vt., one of the architects of the plan, said it is fiscally responsible because it does not lock in huge long-term tax cuts for the wealthy that could create major deficits. Progressive Caucus Chairman Rep. Dennis Kucinich, D-Ohio, said, "Unlike President Bush's tax proposal which gives most of the tax benefits to the very few, the Progressive Caucus's proposal is fair because it gives every person equal tax relief."
Critics of the estate tax make a point of saying its repeal would help preserve small businesses and family farmers, but the April 8 New York Times cited Neil Harl, an Iowa State University economist, who said he has searched far and wide but he's never found a farm lost because of estate taxes. "It's a myth," he said. Even the American Farm Bureau Federation, one of the leading advocates for repeal, could not cite a case of a farm lost because of estate taxes. Still, the House of Representatives voted April 4 to reduce the tax and then abolish it in 2011. The bill now goes to the Senate.
Estate taxes are paid by few Americans because they are not assessed on the first $1.35 million of net worth left by a couple, the Times noted. Amounts above this are taxed at rates that begin at 43% and rise to 55% on amounts greater than $3 million. With other ways ways to reduce estate values for tax purposes, the tax averages 25% for the largest estates.
According to the IRS, only the richest 2% of Americans end up owing estate taxes, which generate $60 billion a year. Current law allows a farm couple to pass a $4.1 million estate untaxed, so long as the heirs continue farming for 10 years. Further refinements in the law might make it easier to pass farms and small businesses to heirs. But repeal of the estate tax is merely another sop to the super-rich. -- JMC