DISPATCHES

HEALTH CARE CONSEQUENCES

Critics of health-care reform point to what they say are “unintended consequences” when the health reforms kick in, such as 3M recently announcing it would stop allowing retirees to buy into its corporate health plan, starting in 2014. But Kevin Drum noted at MotherJones.com (10/5) that the Affordable Care Act will make high-quality private insurance available to everyone, so 3M will give its retirees money to buy into a private plan of their choice instead of carrying them on its company plan.

Economist Paul Fronstin, who directs the nonpartisan Employee Benefit Research Institute, told Minnesota Public Radio 3M is probably the first big company to announce such changes. But he expects more companies will follow, because the new law limits how much premiums can vary based on age and other factors, such as pre-existing medical conditions. “Employers are looking at that and saying, ‘Why do I need to be offering this benefit anymore when my retirees can go out and get something that’s actually better for them than what I’m offering,’” said Fronstin. “They can get something better than what I’m offering them and pay more, or they can buy something that’s less comprehensive than what I’ve been offering and pay less.”

McDonald’s also threatened to cancel its current “mini-med” healthcare policy because of the reform law, but Drum noted that the policy costs employees $1,664 per year and offers maximum coverage of only $10,000, according to the Wall Street Journal. (Another micro-med plan offers $2,000 annual coverage for $730 annual premium.) When ACA kicks in, a McDonald’s employee making the minimum wage would be eligible for Medicaid and pay nothing. An employee making $9 an hour would pay $858 for insurance with better coverage, no exclusions for pre-existing conditions and no caps. Even at $12 an hour — more than most hourly McDonald’s workers make — the annual premium is $1,720, only $1 a week more than the current mini-med policy. And again, that’s for real insurance that would cover major medical costs.

David Leonhardt commented in the New York Times (10/5), “The health care overhaul that passed Congress is far from ideal, as I have written many times ... But it does represent progress.

“The fact that it is beginning to disrupt the status quo — that some insurance policies will eventually be eliminated and some inefficient insurers will have to leave the market altogether — is all the proof we need.”

WHAT GOP PLEDGE WOULD ACTUALLY CUT. The House Republicans’ “Pledge to America’ calls for $100 billion in non-specific spending cuts the first year alone in an effort to balance the budget and pay down the debt. But Bloomberg News took a close look at what would take a hit if government spending was rolled back to pre-stimulus levels, which would require a 21% cut in discretionary domestic programs, and found the likely victims:

• Education: President Obama requested $73.4 bln for the Department of Education. A 21% cut across the board would take $15 bln from education and require a $5 bln cut to the Pell Grant program, which assists low-income college students.

• Health care: Expect a $6 bln hit to the national Institutes of Health, which includes the Centers for Disease Control and the National Cancer Institute.

• Social services: Justice Assistance Grants would lose $400 mln in assistance for local police forces.

• Housing: Departments of Transportation and Housing and Urban Development would lose $13 bln.

• Treasury: While there is some popular support for cutting IRS tax collectors and other federal auditors, the government could lose more revenue than it would save through budget cuts.

At the same time, of course, Republicans are pushing for extension of Bush-era tax cuts for the wealthiest Americans that would cost $41.1 bln next year.

$320B BROADBAND RIP-OFF. Since 1991, US telecom companies have pocketed an estimated $320 bln — about $3,000 per household — but David Rosen and Bruce Kushnick note at AlterNet (10/7) that the Organization for Economic Co-operation and Development (OECD) in June ranked the US 15th among 31 industrialized nations in broadband subscribers, with 26.4% penetration. (Netherlands and Denmark were tops in penetration, with 37.1% each. The US had the highest number of total subscribers, with 81.1 mln.)

But Rosen and Kushnick noted that people in Japan, Korea and Europe get faster broadband services for what US customers pay for inferior service. Part of the reason is that the faster countries have sunk more fiber-optic cable and connected more homes to the next-generation grid. The US ranks 11th, with 5% fiber penetration and averages 4.7 megabits per second (Mbps), compared with Japan (54%, 7.9 Mbps), Korea (49%, 12 Mbps) and European OECD countries (11%, no avg. available, but Romania had an average rate of 7.2 Mbps and Latvia clocked at 6.2 Mbps).

In 1991, Verizon, Quest and what became AT&T promised state public utility commissions to upgrade the old copper-wired phone network into high-speed and digital optical fiber networks in exchange for deregulation, Rosen and Kushnick noted. In California, Pacific Bell claimed it would spend $16 bln and wire 5.5 mln homes by 2000, but after a merger with SBC in 1997, in what became AT&T, it stopped building out the fiber-optic infrastructure. Similar promises by the former Bell Atlantic, SNET and Ameritech were forgotten as they were absorbed into AT&T and Verizon. Then in 1998, the phone companies rolled backward, offering customers ADSL service, “a watered-down ‘broadband’ connection that runs on good old copper wire.”

“Now, nearly two decades after Gore announced the Info Superhighway and the telcos secured deregulation to build out the next-generation communications infrastructure, the nation’s two largest phone companies, Verizon and AT&T, have begun to seriously deploy fiber services. In 2004 and with much fanfare, Verizon introduced FiOS, a fiber-to-the-home service. Today, it claims only 3.6 mln subscribers and new subscriptions have stalled.

“AT&T, which originally promised to launch its advanced service, U-verse, in 2006 in 15 markets, got it running in 2007 but in only 11 markets — and then not through an entire market. As of the end of Q-2, 2010, it claimed 2.5 mln subscribers. Sadly, the telecoms have only 6 mln full broadband fiber subscribers as of 2010. What happened to the other 94 mln households they promised to sign-up? ...

“After almost 20 years of telecom deregulation,” Rosen and Kushnick wrote, “the American communications infrastructure is in shambles. The FCC’s broadband plans are now in play. While much debate has taken place over the future of net neutrality, particularly in light of the Google-Verizon proposal to maintain Internet net neutrality on wireline distribution and end it on wireless communications, little attention has been paid to the never-ending rate hikes, failure to deliver on previous promises, poor state of fiber deployment, and into who pocketed the missing $320 billion in over charges.”

They concluded, “A century ago, giant corporate trusts dominated America’s economic landscape. A century later, they are back in full force and even greater control over the nation’s economic life and political culture.” See the Alliance for Customers’ Telecommunications and Broadband Rights at Teletruth.com.

HIGH COST OF DEPORTATION. In fiscal year 2010, Immigration and Customs Enforcement set a record for overall removals of illegal aliens, with more than 392,000 removals nationwide, the Department of Homeland Security reported (10/6). More than 195,000 of the removals were convicted criminals. ICE Director John Morton recently told ProPublica, “Congress provides enough money to deport a little less than 400,000 people,” and his perspective was “those 400,000 people shouldn’t be the first 400,000 people in the door but rather 400,000 people who reflect some considered government enforcement policy based on a rational set of objectives and priorities.”

The Center for American Progress in March estimated that it would cost $200 bln to enforce a federal dragnet to snare the estimated 10.8 mln undocumented immigrants in the US over five years. It would cost another $85 bln to maintain the status quo at the border and in the interior. Spending $285 bln to clear the US of illegal immigrants would require $922 in new taxes for every man, woman and child in the country, the center reported.

FIRE CREW LETS HOUSE BURN. Conservative writers at the National Review defended the privatized South Fulton, Tenn., Fire Department, which stood by and watched a family’s home burn down, with three dogs and a cat perishing, because the family had not paid a $75 subscription fee required by the city after the penny-pinching Obion County government refused to provide the service.

Homeowner Gene Cranick said he offered to pay whatever it would take for firefighers to put out the flames, but was told it was too late, WPSD-TV 6 reported (9/29). The fire crew actually refused to show up until the fire spread to a neighbor’s home who had paid the fee. Mayor David Crocker said the city of South Fulton provides the service for residents outside the city, but “either they accept it or they don’t.” In an interview with NWTNToday.com, he likened it to an insurance policy, where an insurance company wouldn’t be expected to pay for an unprotected vehicle after it was wrecked.

The firewatchers were condemned not only by the Humane Society of the US, but also by the International Association of Fire Fighters (IAFF), which represents more than 298,000 professional firefighters and paramedics, called the firefighters who refused to help the Cranicks “incredibly irresponsible ... [Firefighers] shouldn’t be forced to check a list before running out the door to see which homeowners have paid up,” the group stated.

Kevin Drum noted at MotherJones.com (10/4) that county officials considered merging municipal fire departments into a county fire department in 2008, but the half-million-dollar cost would require a 0.13-cent property tax increase, a fee on electric meters or a flat subscription fee. “The county commissioners of Obion County apparently decided against this plan,” Drum wrote. “Didn’t want to increase taxes, I suppose. As a result, Gene Cranick’s house burned down.”

Kevin Williamson at NationalReview.com (10/4) compared the family whose home was destroyed to “jerks, freeloaders and ingrates.” Jonah Goldberg wrote that while the story is “sad,” it will probably “save more houses over the long haul” because more people will pay for the subscription fire service. And John Derbyshire applauded the fire department for being “crunchy rather than soggy,” that is, injecting certainty into the surrounding society.

Zaid Jilani concluded at ThinkProgress.org (10/4), “It has been 28 years since conservative historian Doug Wead first coined the term ‘compassionate conservative.’ It now appears that if any such philosophy ever existed, it has few adherents in the modern conservative movement.”

ThinkProgress noted (10/5) that after the fire, the Obion County Budget Committee decided to expand the subscription-only fire service to additional towns. The local ABC-TV affiliate reported that Union City Fire Department Chief Kelly Edmison objected to the new expansion, saying that “the best option is a true fire tax. It eliminates this having 911 or whoever check to say, ‘Are they covered or not covered?’ The last thing a firefighter wants to do is to not be able to help when they’d like to.”

JOBS STILL LAG. The Bureau of Labor Statistics (10/8) reported a gain of 64,000 private-sector jobs in September, but 83,000 state and local government workers lost their jobs (58,000 were teachers and other school workers who were not called back for the new school year), making September the first month of the year that, barring changes in temporary Census workers, the labor market lost jobs. The unemployment rate held steady at 9.6%. The underemployment rate, which includes part-time workers who are looking for full-time work, rose to 17.1%.

The 64,000 new jobs are about half of what is required to absorb new labor force entries, the AFL-CIO noted. To lower the unemployment rate to 6% by 2013, the economy needs to add 350,000 jobs a month. More than 26 mln US workers are without jobs or full-time work.

OHIO A.G. ALLEGES FORECLOSURE FRAUD. Ohio Atty. Gen. Richard Cordray filed a lawsuit against Ally Financial and its GMAC mortgage unit, alleging fraud in foreclosures across the state in what could be the first in a wave of claims against the nation’s largest lenders. In the lawsuit filed in state court in Toledo, Cordray asked for civil penalties of up to $25,000 for each violation of consumer laws and for Ally to pay back losses to homeowners. Cordray told reporters his office was at the beginning of the probe of the foreclosure process, “and we’ll see where it leads us,” David Dayen reported at Firedoglake.com (10/6). Approximately 450,000 foreclosures have been filed in Ohio since 2005, and many of them are thought to involve “robo-signers,” bank officials who signed off on thousands of foreclosure affidavits per month without verifying the information on the mortgage documents. Cordray has sent letters asking for meetings with the other four top lenders in the state — Bank of America, JPMorgan Chase, Citi and Wells Fargo — to discuss their use of robo-signers and how they plan to remedy the practice. Cordray also said he was in contact with other attorneys general across the nation, and that there is “deep concern” nationally over these practices.

GMAC has acknowledged legal missteps in processing mortgages and JPMorgan Chase has acknowledged the possibility of missteps, and both have suspended all foreclosures in the 23 states where they need a court’s approval, the New York Times reported (9/30).

FAMILIARITY BEATS REPUBLICANS. Tom Jensen noted at his Public Policy Polling blog (10/11) that actual Republican candidates seem to be running behind the GOP’s generic numbers in preference polls, as Democrats do better in Senate races when voters learn about the Tea-flavored Republican candidates than in House elections that are much more likely to be determined by the national tide. “We’ve seen time and again in Senate races this year that the better voters get to know the Republican candidates the less they like them. But unfortunately for Democrats I don’t know that voters ever get to know the House candidates well enough for that same effect to occur.”

NOBEL PRIZE NOT GOOD ENOUGH FOR FED NOMINEE. Peter Diamond just won a Nobel Prize in economics, but that doesn’t mean the MIT economics professor is qualified, in the eyes of Sen. Richard Shelby (R-Ala.), to sit on the Federal Reserve board. “I do not believe he’s ready to be a member of the Federal Reserve Board,” Shelby said in July, “I do not believe that the current environment of uncertainty would benefit from monetary policy decisions made by board members who are learning on the job.” After the prize was announced (10/11), citing the work of Diamond and two other economists that helps economists “understand the ways in which unemployment, job vacancies and wages are affected by regulation and economic policy,” Shelby replied, “while the Nobel Prize for Economics is a significant recognition, the Royal Swedish Academy of Sciences does not determine who is qualified to serve on the board of governors of the Federal Reserve system.’’ So despite the Senate Banking Committee voting 16-7 in favor of Diamond in August, Republicans continue to block an up-or-down vote in the full Senate.

White House Press Secretary Robert Gibbs said that “obstructing a nominee as well-qualified as Peter in a time of economic crisis is a harmful attempt to score political points that hurts our middle class and our broader economic recovery.” Obama urged the Senate to confirm Diamond and “dozens of other nominees who are being blocked,” Gibbs said.

Republicans have forced nearly every major bill and nomination in the current session to pass under filibuster rules, which require 60 votes to close the debate, but even then filibustering senators can force up to 30 hours of post-cloture debate. And individual senators can stop a bill or nomination from proceeding with “secret holds.” ThinkProgress.org noted (9/16) that there are 132 secret holds on Obama’s judicial nominees and no way to know who is behind them. “Obstructionism could get a whole lot worse if any one of the Tea Party’s radical slate of candidates joins the Senate. Under the Senate’s anachronistic rules, just one senator can forbid any Senate committee from holding hearings after 2 p.m. Likewise, a single senator can demand that every proposed amendment to a pending bill be read aloud — wasting hours of time in the process. Indeed, the Senate’s ability to function is built upon unanimous consent agreements. If just one senator refuses to join any of these agreements, the body will effectively shut down. This is not an academic concern. When Nevada GOP Senate candidate Sharron Angle served in the state legislature, it was common to say that bills passed “62 to Angle,” because of Angle’s pattern of casting solitary “no” votes. Likewise, Kentucky GOP candidate Rand Paul has promised to oppose any budget which includes a penny of deficit spending, effectively demanding that the Senate do the impossible. Sen. Jim DeMint (R-S.C.), who is already staking out a role as the leader of the Senate’s emerging extremist faction, admitted that his goal for the Senate is “complete gridlock.” In other words, next year’s Senate class could include a number of senators who simply aren’t in touch with reality, and it only takes one to sabotage the entire legislative body.”

GOP PITCH: ‘BRING BACK PRE-EXISTING CONDITIONS.’ In a column for USA Today (10/4), Sen. Sherrod Brown (D-Ohio) noted that “The Tea Party vision of 21st-century America would gut Medicare and Social Security, ignore the minimum wage, and scale back consumer protections and regulations that keep Wall Street honest and our food supply safe. It seems to me that Tea Party activists, increasingly influential in the Republican Party, do not seem to much like America the way we are.

“Tea Party populism is driven by anger at our government and at our country. Real populism fights for all Americans, while Tea Party populism divides us.

“Republicans have always been good at coming up with catch phrases and slogans that traffic in fear and misinformation.

“But impatient progressives, like generations before us, have the truth on our side. And this time we have the perfect bumper sticker:

“Bring back pre-existing conditions. Vote Republican.”

NEWT CAN’T FIGURE OUT FOOD STAMPS. Newt Gingrich’s new messaging strategy for the GOP is to label Democrats as “the party of food stamps,” while claiming the GOP is “the party of paychecks.” But House Speaker Nancy Pelosi (D-Calif.) fired back (10/6), noting that food stamps are “the biggest bang for the buck” in terms of economic stimulus, since for every $1 a person receives in food stamps, $1.79 is put back in the economy. Gingrich said on Fox News (10/6) that he didn’t understand “how liberal math turns $1 into $1.79.”

Ben Armbruster noted at ThinkProgress.org (10/7) that the conservative *Wall Street Journal* in 2009 explained this “liberal math” that Gingrich doesn’t understand: “Money from the program — officially known as the Supplemental Nutrition Assistance Program — percolates quickly through the economy. The US Department of Agriculture calculates that for every $5 of food-stamp spending, there is $9.20 of total economic activity, as grocers and farmers pay their employees and suppliers, who in turn shop and pay their bills.

“While other stimulus money has been slow to circulate, the food-stamp boost is almost immediate, with 80% of the benefits being redeemed within two weeks of receipt and 97% within a month, the USDA says.”

From The Progressive Populist, November 1, 2010