Immigration Reform, Activism, and Moral Certainty

by Duane Campbell

English: Eliseo Medina, Executive Vice Preside...

English: Eliseo Medina, former Executive Vice President of the Service Employees International Union, testifying on immigration reform before the Subcommittee on Immigration of the U.S. Senate Judiciary Committee, April 30, 2009. (Photo credit: Wikipedia)

An argument is being made in many places in the Latino community condemning Obama for his not taking executive action on immigration and condemning Civil Rights veterans such as DSA Honorary Chairs Dolores Huerta and Eliseo Medina for their positions of not condemning the Obama lack of action. Here is an example. http://voxxi.com/2014/09/24/latino-leaders-wrong-obama-immigration/

A problem with this effort is that attacking our allies does not move immigration policy forward. And, an argument from a position of moral correctness does not necessarily change policy. We need to be on the morally correct side, as Huerta and Medina are, but that is not enough. See prior posts on this blog about Medina and Huerta.

I learned this in the anti war movement against the war in Viet Nam. We had hundreds of thousands in the streets opposed to the war, but the war went on. 58,000 U.S. soldiers died, 100,000s were injured. Over 1.2 million Vietnamese died. Although we were morally correct, the war went on.

In El Salvador between 1982 and 1992 the U.S. backed government carried out a civil war against the population. At least 75,000 were killed. In Nicaragua between 19 79-1990 at leas 40,000 were killed. In Guatemala the civil war cost at least 200,000 lives. Our solidarity efforts in the U.S. were morally correct, but our efforts did not change U. S. policy.

Moral correctness does not change policy because political and economic power largely controls this country. We have a political oligarchy- the control of our government by the super rich. Our government is dominated by corporations. We need to study and to understand neoliberal capitalism. Then, we will need to go to work to change it.

In the current immigration debate. Continue reading

10 Ways President Obama Can Take Executive Action on Immigration to Protect Workers Rights

10 Ways President Obama Can Take Executive Action on Immigration to Protect Workers’ Rights Now    An Important statement from the AFL-CIO

President Barack Obama should advance the rights of workers by taking executive action on immigration. Emilio said: “I’m here because it is important that while the president considers taking administrative action to protect many of our families from being deported, he also has to consider that we are all workers and will remain as easy prey of exploitative companies if we do not count with any relief.”

Here are 10 ways Obama can take executive action right now to provide relief to workers:

http://www.aflcio.org/Blog/Political-Action-Legislation/10-Ways-President-Obama-Can-Take-Executive-Action-on-Immigration-to-Protect-Workers-Rights-Now

Sign the AFL-CIO’s petition calling on President Obama to take executive action now.

Why Does the Obama Administration Keep Getting It Wrong on Education Policy?

by Amy B. Dean

A Dialogue With Albert Shanker Institute Executive Director Leo Casey

 

President Barack Obama and Secretary of Education  Arne Duncan (wikimedia)

President Barack Obama and Secretary of Education
Arne Duncan (wikimedia)

Albert Shanker Institute executive director Leo Casey talks about community schools, public education, teacher evaluation, standardized testing, Common Core, the political dimension of corporate education “reform” and what policies are needed to revitalize public education.

Maintaining and directing the federal bureaucracy is one of the most important (and underappreciated) presidential tasks. When Barack Obama was elected, progressives had high hopes that, after eight years of Republican rule, federal agencies would take significant turns for the better. In some instances, this has been the case. But the priorities of the Obama administration’s Department of Education seem little changed from the failures of the Bush administration.

The administration’s signature policy, Race to the Top, is designed to help only those states (19 so far) that encourage the proliferation of charter schools and increase reliance on high-stakes testing. This is not entirely surprising, given that Arne Duncan, Obama’s education secretary, came to Washington with a suspect record. As Chicago’s public schools chief, he closed 44 public schools and opened over 100 charters, advancing a pro-corporate “reform” agenda while doing little to meet the city’s actual needs.

Why has the administration’s education agenda gone so badly awry? What should progressives be demanding at the present moment? And if Democrats and Republicans have very similar priorities for education, are there any improvements we can hope for under a future administration?

To answer these questions, I recently spoke with Leo Casey, a former vice president of New York City’s United Federation of Teachers. Currently, Casey is executive director of the Albert Shanker Institute, a think tank named for the iconic leader of the American Federation of Teachers (AFT) who is credited with developing the high professional standards associated with today’s teaching profession.

Continue reading

Obama Promises $10.10 an Hour to Federal Contract Workers, But Details Are Fuzzy

  by Bruce Vail

President Barack Obama announced Tuesday he would order an increase in the minimum wage for some workers indirectly employed by the federal government, drawing praise from labor union supporters and scorn from one top Republican Party opponent.

“In the coming weeks I will issue an executive order requiring federal contractors to pay their federally funded employees a fair wage of at least $10.10 an hour—because if you cook our troops’ meals or wash their dishes, you should not have to live in poverty,” Obama said during his State of the Union address. The promise was accompanied by an exhortation to Congress, state and local legislators, and private companies to take their own steps to raise minimum wages. Continue reading

Obama and Friends Discover Inequality

by Jack Rasmus

Jack Rasmus

Jack Rasmus

Today, January 28, 2014, President Obama will address the nation in his State of the Union (SOTU) speech to Congress. A major theme of the address will be the growing income inequality in the US.

His speech represents an echo of similar themes and talks that have been presented this past week at the World Economic Forum (WEF) in Davos, Switzerland. That’s where every January the big capitalists of the world gather to discuss amongst themselves the major issues of the past year and what to do about them—in between being entertained by various cultural celebrities and performers who have been allowed into their club as junior partners in wealth. The annual Davos cultural events are not unlike the small venue side-shows held in the big Las Vegas casinos: the entertainers strut and sing while the real betting and dice-rolling discussions involving future capitalist policy initiatives go on behind ‘invitation-only’ doors requiring tickets for entry costing hundreds of thousands of dollars to attend ( the typical ticket price of entry for a Corporate CEO and his entourage at Davos, for example, exceeds $500,000). Continue reading

Will the Tea Party Pay for the Shutdown?

by Amy B Dean

Tea Party.The Tea Party lost big by forcing this fall’s government shutdown, and it is slated to take a major hit in next year’s midterm elections. Such is the current wisdom, in any case, among mainstream political pundits. But this analysis is too easy. It imagines that progressives will make gains without the hard work of organizing. And it presumes that Democrats can put forward a compelling agenda that will give people something to vote for, rather than merely expressing distaste for Washington altogether.

To get a more nuanced take on the political fallout of the shutdown, I spoke with longtime electoral strategist Steve Cobble. He is an associate fellow at the Institute for Policy Studies, a co-founder of Progressive Democrats of America and a senior political adviser to Free Speech for People, a group engaged in the fight to roll back Citizens United and end the idea that corporations are people. Cobble served as a leader in the Jesse Jackson campaign of 1988 and more recently in Dennis Kucinich’s presidential campaigns in 2004 and 2008. Continue reading

Obama’s Budget—More Cuts Coming

Jack Rasmus

Jack Rasmus

By Jack Rasmus

With Obama’s publication of his 2014 budget proposals this past April 2013, the current round of deficit cutting set in motion by Obama’s Simpson-Bowles Commission four years ago may be coming to a conclusion of sorts by this September 2013. The important question is: why now a conclusion after four years of deficit cutting negotiations by Obama and Congress? And what might this last act—the final phase in what has been a negotiations farce aimed at creating the appearance of major differences between the two sides—actually produce in terms of federal government spending and tax changes?

To understand the proposals in Obama’s budget it is useful to compare those proposals, and their economic impact on the deficit, with the Congressional Budget Office’s ‘baseline’ budget estimates. The CBO’s baseline represents estimates of the spending and tax revenue levels for the coming decade prior to Obama’s 2014 budget. The differences thus reveal how much Obama is proposing in his 2014 budget to cut (or increase) spending on programs and to raise (or cut) in taxes, as well as when (in what years).

Since Obama himself has been quoted as indicating Medicare is the main cause of future deficits, we can begin with that program.

Medicare in the 2014 Budget

The Medicare program has five basic spending categories: hospitals (Part A), doctors (Part B), nursing homes, prescription drugs (Part D), and government payments to private insurance group plans including the private insurance subsidy to ‘Medicare Advantage’.

The CBO baseline costs for Medicare for 2012-2023 shows Medicare costs for Part A (Hospitals & Nursing homes) and Part B (Doctors fees) rising by an increment of $195 billion from 2012 to 2023. However, receipts and revenues will rise by $227 billion. In other words, the two main programs will continue to show a net surplus of receipts over expenditures by 2023. So where’s the cost crisis?

The answer to that lies with the Prescription Drug program (Part D) and the Medicare program’s subsidies to Group Plans including Medicare Advantage private insurance supplement.

The Prescription Drug program (Part D) was introduced by George Bush in 2005. The legislation provided for no payroll tax to cover the cost of the program. From the very beginning of the program and continuing today, it has been totally paid for out of the general US budget—i.e. out of deficits. It has cost more than $500 billion since its initial passage, and is still rising in costs terms as pharmaceutical companies continue to inflate prices for their products at double digits every year. The Bush law specifically prevents any limits on drug company cost increases. States and cities cannot even negotiate drug price reductions. Nor can they legally purchase the same drugs from outside the US, often produced by the same company. Nor can individuals buy drugs legally from Canada. Free trade is ok for businesses, but not for government or consumers, in other words!

Part D cost increases in the CBO baseline are projected to rise by an additional $114 billion over the coming decade. But there are no receipts or revenues whatsoever to pay for the program for the next decade. That results in a negative incremental cost of $114 billion for the program through 2023. Similarly, Medicare program subsidies for group plans are projected to rise by an additional $127 billion by 2023. That’s a combined total of$241 billion in increased costs for the Medicare program overall through 2023. Subtract the $32 billion in excess receipts over cost for Hospital and Doctors fees (Part A and B), and the shortfall declines to $209 billion. Subtract further the $90 billion in cost cutting for Medicare called for in the March ‘sequestered’ spending cuts, and the result is a net shortfall in Medicare of $119 billion.

In other words, the total additional cost for the Medicare program in general over the coming decade is approximately equal to the cost for prescription drugs. The Medicare cost problem is therefore essentially the refusal to enact a payroll tax for prescription drugs and to allow drug companies to price gouge the public and government. So why not finally pass a tax to pay for Part D? Why not introduce some price cost limits on prescription drugs?

In short, if Prescription Drugs were properly funded by a payroll tax, as Hospital and Doctors have been from the beginning of the Medicare program, there would be no net cost increase in Medicare through 2023. Fund part D and there’s no Medicare cost crisis whatsoever. Even if not funded, the $209 billion shortfall hardly constitutes the ‘primary cause’ of the $7 trillion projected deficits through 2023, that Obama and others are claiming is the root problem with the deficits.

The root cause of the $7 trillion projected deficit is not Medicare; it’s not even prescription drugs. The root cause of the $7 trillion in projected deficits is the $4 trillion extension of the Bush tax cuts, plus the continued trillion dollar a year U.S. defense spending program.

Another simple solution to the $119 billion total incremental cost for Medicare over the decade is that proposed by the Trustees of the Social Security program themselves in their 2011 annual report. According to their own calculations, a mere 0.25% increase in the payroll tax for Medicare (now at only 1.45%) would solve all Medicare cost issues through 2022. Another 0.25% after 2022 would solve all shortfalls for a further second decade. But you won’t hear that mentioned in the press or media.

To summarize, even according to government estimates (CBO and Trustees), there is no Medicare cost crisis. There is a problem with escalating prices for prescription drugs. With no price controls, as is presently the case, Part D costs are projected in the CBO baseline to rise by 17% a year for the next four years and by 19% a year on average over the coming decade. And there is a problem with no tax to fund the Part D program. A simple addition to the payroll tax to cover Part D and some reasonable price controls on drugs would resolve the problem.

Up to now, the Obama administration’s solution to the ‘problem’ of runaway drug costs and escalating subsidies to Medicare Advantage and other group plans—which together are the true source of Medicare cost problems—has been to cut payments to Doctors and to draw down the surplus in the Part A hospital fund. Unlike the projected 17% a year increase in payments to drug companies, payments to doctors in the CBO baseline are to decline from current $68 billion in 2012 to $61 billion in 2016 when Obama leaves office. Cutting payments to doctors will mean more leaving the Medicare system and refusing to take medicare patients. That will accelerate the creation of a two tier health care system in the US already well underway.

But even cutting doctors payments and drawing down the surplus in the medicare trust funds are not long term solutions. Drawing down the trust fund surplus to pay for prescription drugs and group plans will exhaust the remaining trust funds by the end of this decade. Obama and Republicans know this and are therefore preparing to implement major cuts in medicare coverage and to raise Medicare recipients ‘out of pocket’ costs for reduced Medicare coverage. That comes next in the Medicare cost cutting plan that neither Republicans or Obama are ready to make public. Recall the Simpson-Bowles solution: make medicare recipients pay 20% more of Part A hospital coverage, pay more deductibles, and raise the eligibility age beyond 65. Or, as the Business Roundtable and Teaparty radical, Paul Ryan, have proposed: privatize medicare starting in 2022 and provide vouchers. Obama prefers the former; Republicans in the House prefer the latter. But whichever the case, it all amounts to rationing of health care services for all but the wealthy who can afford to pay out of pocket.

That further rationing of health care services for seniors is implied in Obama’s 2014 budget.

In his Budget Obama has proposed to cut Medicare by $364 billion over the decade. Not included in that is a second proposal to freeze payments to doctors over the decade at 2013 payment rates, starting with an immediate 24% reduction in doctors payments in 2014 followed by a slow adjustment to the 24% cut thereafter. Unfortunately, the Obama 2014 budget does not indicate the total ‘savings’ from this reduction and freeze. But one can probably assume the total is somewhere around $100-$150 billion cumulative over the decade. The total cuts to Medicare alone are thus at least $500 billion in Obama’s 2014 budget.

Social Security in the 2014 Budget

To begin with, it is essential for readers to understand that the Social Security retirement trust fund (OAS) currently has a $2.77 trillion surplus, whose arguing social security is going to go broke soon conveniently ignore. Nor does the press and media bother to note that fact much. Like Medicare, the truth about the condition of Social Security lies in understanding the financial condition of its separate programs.

Like Medicare, Social Security is composed of several programs. There’s the retirement program (OAS) and there’s the disability insurance program (DI). The OAS has the massive $2.77 trillion surplus and, in addition, remains virtually fully funded from payroll taxes through 2023 without having to draw down the surplus. It is the DI program, on the other hand, has a funding trouble. Since the economic crisis erupted in 2007-08, approximately 2 million more workers went on disability. The lack of real job recovery has meant fewer payroll tax contributions to the DI fund. The result has been a shortfall in the DI fund of about $30 billion every year.

But the shortfall in the DI fund is used by opponents of social security to argue the entire program is in trouble. They then also use a base year of the recession and poor job recovery and extrapolate out for decades to create the false impression that social security revenues are insufficient while costs rise. That dishonest approach to calculating costs and revenues creates a false picture of tens of trillions of false liabilities for social security in general, requiring the major cuts to benefits that both Republicans and Obama now propose.

But here are the facts: For the OAS program, benefit payments are projected to rise at a rate of 11% a year from 2012 to 2023, from $773 billion in 2012 to $1.422 trillion in 2023. But revenues from the payroll tax are projected to rise at nearly the same annual rate, of 10.5%, from $570 billion to $1.125 trillion. Other revenues (interest, taxes on benefits, etc.) increase the revenue total by 2023 to $1.320 trillion. So we’re talking about a $100 billion shortfall at most by 2023, which is not bad considering 77 million babyboomers are expected to retire starting 2013.

So why not start drawing on the $2.77 trillion surplus, instead of making retirees pay the difference? After all, the payroll tax rate was increased in 1986, justified at the time as necessary to create the surplus in anticipation of the boomers retiring.

Another simple solution is to raise the annual income ‘cap’ to cover the 15% of wage earners whose income has risen faster than the income base since 1986. Currently, the payroll tax covers only 85% of wage earners, when the law intended 100%. Raising the cap would generate revenue by 2023 well in excess of the $100 billion shortfall, and do so for several additional decades to come with money left over.

But none of these, or other simple solutions, are being considered by Obama or House Republicans. Instead, both sides are in agreement to cut retirees annual cost of living adjustments to retirement benefits by changing the cost of living adjustment formula. And both continue to agree to raise the eligibility age for social security retirement benefits.

The first of these two alternatives—reducing the cost of living adjustment—is already baked into Obama’s 2014 budget. The second—raising the retirement eligibility age to 68 or higher—will likely come as part of the deal later in 2013 deal on the deficit.

The device by which Obama in his budget proposes to reduce annual cost of living adjustments for retirees is by changing the price index by which the adjustments are calculated. Instead of using the Consumer Price Index, he has proposed to substitute it with a ‘Chained CPI’ index. The latter will reduce the deficit by $232 billion, bringing the total deficit reduction from Medicare and Social Security retirement to more than $700 billion. (The amount Obama offered to cut the programs initially back in the summer of 2011). But this $700 billion is just the beginning offer to cut social security spending. Additional DI program spending cuts are being worked out administratively and through court action as well—all off budget. Eligibility for DI is being raised and benefits are being reduced in parallel. That will add at least another $100 billion in benefit reductions over the coming decade. So Obama is offering and presiding over no less than $800 billion in social security-medicare cuts. And that’s before further cuts are part of the final deficit cutting deal later this year, integrated with corporate tax cuts and the tax code revision.

It is clear, in other words, that both Republicans and Obama are targeting about $1 trillion in social security-medicare spending cuts over the decade. That $1 trillion, plus the $2.8 trillion already obtained in deficit reduction from the Fiscal Cliff and Sequestration, means only another $500-$600 billion in deficit cutting remains for a final deficit deal later this year.

But that is not quite accurate either. The tax code revisions will result in hundreds of billions more in corporate tax cuts that will have to be offset by further tax hikes and/or additional spending cuts. There is also the restoration of defense spending cuts of $500 billion required by the March 1, 2013 ‘sequestered’ spending provisions. Another $1 to $1.5 trillion will have to be extracted in tax hikes and/or spending reductions. Which raises the question of what does Obama’s 2014 budget suggest in terms of tax changes and additional spending cuts?

Tax Proposals in the 2014 Budget

Throughout the 2012 election period Obama was explicit in advocating a major reduction in the corporate tax rate, from current 35% to 28%. In that regard, his position was essentially that of Republican candidate, Mitt Romney. Obama also favored publicly working some compromise for Multinational Corporations, reducing their offshore tax liability to entice them to pay some part of the current $1.9 trillion they are hoarding in offshore subsidiaries without paying taxes. (Actually, the ‘offshore’ accounts are located in New York). His budget proposes taxing ‘international income’ only at the rate of $15 billion a year. At that rate it will take more than 50 years to tax the current $1.9 trillion.

Obama has also been an advocate of even more generous tax cuts for smaller businesses and for Research & Development. His budget proposes raising the business R&D credit to 17%, resulting in a tax cut of $118 billion, and allowing small businesses to write off equipment investment immediately, resulting in another $69 billion in revenue loss. Just these two items, plus the corporate tax rate reduction and letting multinational companies off the tax hook, will cost the US budget at least $700 billion to $1 trillion, and likely much more.

To pay for the tax cuts for corporate America coming later this year, Obama’s budget proposes to limit tax deductions and exclusions for businesses, especially for employer health insurance and pension contributions. That is projected to raise $493 billion. It will also mean the acceleration of employers abandoning their health insurance and pension plans for their workers and further exacerbate those crises and costs to workers. Minimal added taxes on tobacco would raise another $83 billion. An increase in the Estate Tax would only take place after Obama leaves office, which politically means not at all. A token ‘financial responsibility’ tax on banks is also another proposal likely ‘dead on arrival’ given the Republican dominated US House, as will prove similar for the proposal for a token ‘fair share’ tax on millionaires.

Netting out the tax cuts and the tax hikes, it means a net gain for businesses in terms of tax cuts of about $400-$500 billion, for which other tax hikes on the middle class and spending cuts will have to occur. That’s $500 billion plus the roughly $600 billion gap ($4.4 trillion minus $3.8 trillion). In short, another minimal $1 trillion in tax hikes and spending cuts—apart from and in addition to the social security-medicare cuts already proposed—will become part of a final deal later this year when the tax code revisions are integrated with the deficit cutting.

The additional, final $1 trillion will likely come from two general sources: eliminating deductions, credits, and exemptions for middle class tax payers and cutting further discretionary spending programs like education, transportation, and other non-defense discretionary programs.

Defense Spending in the 2014 Budget

Almost $500 billion in defense related spending was cut in the March 1 ‘sequestered’ provisions that went into effect. Obama has vowed to restore at least $400 billion of that. For 2013, the sequestered discretionary spending cuts amount to $64 billion. Obama has proposed restoring $40 billion of that $64 billion in defense spending.

Over the decade it is clear that the budget strategy involving defense is to ‘move the money around’. Spending for what is called ‘overseas contingency operations’ (which means for wars in Iraq and Afghanistan) would be reduced. Much of the reduction would be in turn transferred to spending on new military equipment, earmarked largely for the US Navy and Air Force, as US military strategy ‘pivots’, as they say, to the western Pacific. The US Army had its land wars in the middle east; now the money goes to the Navy and Air Force. US military equipment suppliers simply get to change their ‘product mix’ sales to the US government and the military industrial complex continues virtually unaffected.

Obama is engaging in what might be called a strategy of ‘moving the money around’. Defense spending on middle east wars are to be shifted to defense spending increases for the pacific region. Social Security retirement benefits are to be cut in order to offset the rising costs of disability benefits. Medicare benefits for hospital, and doctors fees, are reduced and costs shifted to retirees in order to offset continued runaway prices and costs for prescription drugs. Simple solutions like raising the cap on social security payroll tax, implementing a token percentage tax to cover prescription drugs, placing some kind of controls on runaway drug prices, addressing the reason why so many workers are now going on disability, etc., are totally ignored and boycotted in the press and media as alternatives for consideration. Instead, the focus is on reducing benefits and making retirees and workers pay more for less. What all these Obama-Republican measures represent is a shifting of the cost burden of social security, medicare, and other discretionary social program in the budget from one sector of the working and middle classes to another; from the wealthiest households to the remaining 95% rest. Meanwhile, the wealthiest households and their corporations continue to get still further tax reductions and the Pentagon and war corporations get to shift their profits from the middle east conflicts to the western pacific to address a ‘threat’ from China that doesn’t exist.

 

Jack Rasmus is the author of the 2012 book, “Obama’s Economy: Recovery for the Few”; host of the weekly radioshow, ‘Alternative Visions’, on the Progressive Radio Network; and ‘shadow’ chairman of the Federal Reserve in the recently formed Green Shadow Cabinet. His website is: www.kyklosproductions.com, his blog: jackrasmus.com, and twitter handle: @drjackrasmus. (A longer version of this article summarizing the history of US austerity programs and deficit cutting since 2009 will appear in the June 2013 issue of ‘Against the Current’ magazine; also available on the author’s website in July).

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