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Health

Seniors Would Subsidize Outlandish CEO Pay Packages Under Ryan Medicare Plan

By Igor Volsky on Apr 12, 2011 at 8:40 pm

Yesterday’s revelation that former Aetna CEO Ronald A. Williams was compensated $72 million in 2010, including $14.3 million in stocks, wasn’t good news for Americans who had to forgo coverage because insurance is simply too expensive or the insured population dealing with ever-growing premiums and it established another argument against the GOP budget. The details of Willliams’ compensation package are rather impressive. Williams received “$50.4 million in value realized through the exercise of options,” “$1.1 million in salary, $2.75 million in incentive pay, an additional $2.3 million in pension value and other compensation of $299,838.”

These numbers are even more stark within the context of the GOP’s Medicare reforms. Under the budget plan introduced last week, seniors would be forced to enroll in a private health insurance plan by 2022 and, as the CBO has found, would actually end up paying more for the coverage they are currently receiving through traditional Medicare. That’s partly because insurers have to set aside a greater chunk of money to cover their administrative expenses and profits — including compensation packages like Williams’.

For instance, a comparison of traditional Medicare and private insurers in Medicare Advantage demonstrates that while both operate under the same rules and enroll the same population, traditional Medicare spends less than 2 percent of expenditures on administrative costs, while private plans in Medicare Advantage spend approximately 11 percent on additional expenditures like profits. Republicans want the taxpayer to subsidize these increased expenses through fixed vouchers and place seniors in a situation where they have to spend more on coverage every year so that CEOs like Williams can have a comfortable retirement.

Yglesias

Endgame

By Matthew Yglesias on Apr 12, 2011 at 8:22 pm

But I know:

— The myth of the irrational mother.

— Some smoke and mirrors in the appropriations deal.

— In chart form.

— Maybe Barack Obama is a true believer in style of governance.

— Or maybe he’s a true believer in increased public spending on health care.

— Equal Pay Day tips for working women.

Gonna go with Sheryl Crow’s version of “The First Cut Is The Deepest” now that I know some of these cuts aren’t really as deep as initially advertised.

Economy

Rep. Van Hollen: New Tax Brackets For Millionaires Is ‘Something That Should Be Looked At’

By Pat Garofalo on Apr 12, 2011 at 7:55 pm

The budget released last week by House Budget Committee Chairman Paul Ryan (R-WI) included a cut in the top income tax rate of ten percentage points, taking that rate — which is paid by just the richest two percent of Americans — from 35 to 25. Ryan claims that his tax code will raise the same amount of revenue as the current code, which, as Michael Linden notes, means that he’s necessarily planning a middle class tax increase.

House Budget Committee Ranking Member Chris Van Hollen (D-MD) delivered a speech at the Center for American Progress Action Fund today to lay out the principles that House Democrats envision for their 2012 budget plan. At the very least, Van Hollen explained, the Democrats’ budget will “raise the top income tax rate back to where it stood in the 1990s and close loopholes in the tax code in order to raise revenue levels.”

Several Democrats in the House — including Rep. Jan Schakowky (D-IL) and the Congressional Progressive Caucus — have endorsed additional tax brackets at the top of the income scale as a way to reduce the deficit, rather than resorting to draconian budget cuts. During an interview with ThinkProgress, Van Hollen said — while going to great lengths to emphasize that the Democratic leadership has not made a decision one way or the other — that additional tax brackets are “something that should be looked at”:

Speaking personally only and not as the ranking member of the Budget Committee or as a member of the Democratic leadership, just speaking for myself, I think that’s something that should be looked at as part of individual tax reform. I think that we do need to look at some of the ideas in the bipartisan fiscal commission’s approach, and I do think you can change some rates and broaden the base, but I think we should go into it with an open mind as to what the parameters are.

Watch it:

At the moment, the wealthiest one percent of Americans make nearly 25 percent of the country’s total income, and income inequality is the worst its been since the 1920s. The top 400 taxpayers — who have more wealth than the bottom 50 percent of Americans combined — are paying lower taxes than they have in a generation. In 2009, tax revenue was the lowest its been in 60 years.

Yglesias

Is It So Hard To Imagine A Southerner Winning The GOP Presidential Nomination In 2012?

By Matthew Yglesias on Apr 12, 2011 at 7:40 pm

This was the state of the Intrade betting on the 2012 GOP primary as of around 4PM this afternoon when I got distracted and stopped working on this post for a while:

Am a crazy, or does this seem to be an underestimation of Haley Barbour? There are a lot of reasons to think Barbour won’t be the nominee, but at the end of the day the governor of a southern state in a southern-based party has to be seen as at least plausible. Add to that the fact that Barbour has unusually good DC and national media connections for a small state governor, and I’m thinking it’s more like 10 percent than 4.2 percent.

Politics

On Budget Deal, House Republicans Once Again Prepare To Break Their Own 72-Hour Rule

By Guest Blogger on Apr 12, 2011 at 7:30 pm

When Republicans took over the House in January, Speaker John Boehner (R-OH) promised the public, “I will not bring a bill to the floor that hasn’t been posted online for at least 72 hours.”

House Republicans are set to break that promise tomorrow afternoon when they push through a vote on the budget deal reached last Friday with Senate Democrats and President Obama. The agreement, which has been criticized by both progressive and Tea Party members of Congress, was posted online last night at 2 am, and is set to be voted on tomorrow at 2 pm — leaving less than 36 hours for public review.

It’s not the first time Republicans have waived the transparency rules they passed in January to move contentious legislation through the House. Last month, House Republicans debated and voted on a bill defunding NPR more than twenty hours before the review period had even ended.

The violation prompted an outcry from Rep. Anthony Weiner (D-NY), forcing then-presiding speaker Ted Poe (R-TX) to insist the GOP’s 72-hour rule actually meant only three calendar days:

Two weeks later, Republicans again waived the rule while considering another piece of radical right-wing legislation, the Government Shutdown Prevention Act, which would have implemented HR 1 without the Senate’s assent.

As Minority Leader, Boehner repeatedly said that a 72-hour review period was necessary to allow lawmakers to read the bills they were voting on and keep the public informed about pending legislation:

As Paul Blumenthal notes, the GOP House majority is evading their pledge — and their commitment to public involvement in the legislative process — “for nothing other than the pursuit of quick political wins and message control. This is very disturbing.”

– Kevin Donohoe

Security

American Drug Consumers Contribute $40 Billion A Year To Deadly Cartel Operatives

By Andrea Nill Sanchez on Apr 12, 2011 at 7:10 pm

Over the past couple of weeks, thousands of Mexicans have taken to the streets to protest the bloody drug war that has ravaged Latin America and left 35,000 people dead since 2006 in Mexico alone. Today, senior U.S. commanders told the Senate Armed Services Committee that Mexico and Central America make up one of the most dangerous regions in the world — rivaling the conflicts in Iraq and Afghanistan. Gen. Douglas Fraser, head of U.S. Southern Command, indicated that the Northern Triangle of Guatemala, El Salvador, and Honduras “is the deadliest zone in the world outside of active war zones.”

In 2009, State Department Secretary Hillary Clinton indicated that she felt “very strongly” that the U.S. and Mexico share co-responsibility in the drug war. “Our insatiable demand for illegal drugs fuels the drug trade,” stated Clinton about the United States. It turns out U.S. demand for drugs is also funding an army of organized criminals who are profiting off of the nation’s addictions and follies:

American consumers of narcotics drive the drug trade, and US weapons arm narco-criminals, says Andres Martinez, a fellow with the New America Foundation think tank.

US drug users contribute roughly $40 billion a year to Latin American cartels, Admiral James Winnefeld, head of the US Northern Command, in charge of US homeland security, added in testimony. The amount of US money that goes to Mexican cartels is so considerable that “if you ranked it among the world’s militaries, it would come into the top ten.”

Admiral James Winnefeld, head of the U.S. Northern Command, shed some light on how drug cartels are spending their profits. Night-vision goggles, heavily armored vehicles, and submarines are among the items purchased by increasingly sophisticated narco-criminals. Meanwhile, U.S. taxpayers spend $52 billion to treat, prevent, interdict, and enforce existing drug laws.

Latin American leaders have often called on the U.S. to consider legalizing marijuana use and focusing more on treating drug addicts. In an op-ed in the Wall Street Journal, Fernando Henrique Cardoso of Brazil, César Gaviria of Colombia, and Ernesto Zedillo of Mexico, wrote, “it’s high time to replace an ineffective strategy with more humane and efficient drug policies…The revision of U.S.-inspired drug policies is urgent in light of the rising levels of violence and corruption associated with narcotics.” The strategy, after all, has worked in other countries. Yet, the legalization of marijuana across the country remains a political land mine.

There are still things the U.S. could do to stop exacerbating the problem. While U.S. drug users are essentially funding the drug cartels, the U.S. federal government is funneling over a billion dollars into the Merida Initiative, a counterdrug assistance program for Mexico and Central America. Most of that money has been spent on the militarization of the drug war which has had the unintended effect of increasing the profitability of the illicit drug business. Hal Brand of the Strategic Studies Institute notes that the Merida Initiative is “not being partnered with any real efforts to ramp up prevention, treatment, or other demand-side programs in the United States. Rather, the money spent on the Merida Initiative seems to have come at the expense of such programs.” Brand also argues that the initiative has paid comparatively little attention to the structural problems that have fueled the drug trade and violence, including, corruption, human rights abuses, poverty, impunity, and the flow of guns from the U.S into Mexico.

Yglesias

The Cost Of a Law Degree

By Matthew Yglesias on Apr 12, 2011 at 7:05 pm

I can’t speak to the merits of the program Michael Coyne is advocating for as the solution here, but surely this is a problem:

Tuition costs at law schools accredited by the American Bar Association have doubled in the past nine years; total inflation during that same period was less than 25%.

This is, however, increasingly what we’re finding in all aspects of the higher education system. Annie Lowrey wrote a month ago that in the law school sub-element of this, we’re finally seeing applications to law school decline in response to the increasingly bleak value proposition law schools have to offer.

Economy

FLASHBACK: Romney’s Private Equity Firm Caused Several Corporate Bankruptcies, Thousands Of Layoffs

By Pat Garofalo on Apr 12, 2011 at 6:25 pm

Former Massachusetts Gov. Mitt Romney (R) launched a presidential campaign exploratory committee yesterday, complete with a video in which Romney claims that his days in the private sector taught him all about job creation:

Across the nation, over 20 million Americans still can’t find a job or have given up looking. How has this happened in the nation that leads the world in innovation and productivity? The answer is that President Obama’s policies have failed. He and virtually all the people around him have never worked in the real economy. They just don’t know how jobs are created in the private sector. That’s where I spent my entire career.

In 1985, I helped found a company. At first we had ten employees. Today, there are hundreds. My work led me to become deeply involved in helping other businesses, from innovative start-ups to large companies going through tough times. Sometimes I was successful and helped create jobs. Other times, I wasn’t. I learned how America competes with companies in other countries, why jobs leave, and how jobs are created here at home.

Romney is right to be talking about job creation considering the unemployment rate, but his record in the private sector is one of job destruction. As Politico detailed, Romney’s company, Bain Capital, was in the business of buying up distressed companies, slashing them to bits, and then selling them off, resulting in lots of job losses:

– In 1992, the firm acquired American Pad & Paper. By 1999, the year Romney left Bain, two American plants were closed, 385 jobs had been cut and the company was $392 million in debt. The next year, Ampad was forced into bankruptcy.

– Bain Capital and Goldman Sachs bought Dade International for about $450 million in 1994. The firm quickly fired or relocated at least 900 workers. Over the next several years, it sunk increasingly into debt and laid off 1,000 workers. In 2002 — after Romney had left Bain — it filed for Chapter 11 bankruptcy protection.

– A 1997 buyout of LIVE Entertainment for $150 million resulted in 40 layoffs, roughly one in four of the company’s 166 workers. The job cuts affected all aspects of the company, from production and acquisition to legal and public relations.

– In 1997, Bain bought a stake in DDI Corp., a maker of electronic circuit boards. Three years later, Bain took the company public and collected a $36 million payout. But by August 2003, the company filed for bankruptcy protection, laying off more than 2,100 workers.

22 percent of the money Bain Capital raised from 1987 to 1995 was invested in five businesses — Stage Stores, American Pad & Paper, GS Indusries, Dade, and Details. These five made Bain $578 million in profit, even as all five eventually went bankrupt.

As the New York Post’s Josh Koshman wrote, “there’s little question [Romney] made a fortune from businesses he helped destroy.” Travis Waldron noted today that Romney’s company also boosted its profits — and thus enriched Romney — by abusing offshore tax havens.

Politics

Barrasso Dismisses Question About Big Corporations Paying No Taxes: ‘We Don’t Need More Revenue!’

By Zaid Jilani on Apr 12, 2011 at 6:25 pm

Late last week, White House and congressional negotiators struck a deal to keep the government running, cutting “$38.5 billion under current funding levels, per Republican demands,” and $78 billion below what Obama called for in his initial 2011 budget. Today, we learned that these reductions include painful cuts to programs that provide for poor infants, low-income women, veterans, and other Main Street Americans who have watched as the country has grown more and more unequal and unfair.

Yet at the very same time, poor and working class Americans are being asked to pay, some of the country’s wealthiest corporations — like Bank of America, Citigroup, Exxon Mobil, and General Electric — have gone quarters or entire years without paying any federal corporate income tax at all.

Today, during an appearance on MSNBC, host Contessa Brewer asked Sen. John Barrasso (R-WY) why he is defending Rep. Paul Ryan’s (R-WI) plan that would privatize Medicare and hobble Medicaid at a time when these corporate tax dodgers are failing to pay their fair share. Barrasso went on a lengthy rant about his belief that Medicare and Medicaid are broken and concluded by saying that we don’t need anymore revenue:

HOST: You’re senator, a doctor, this whole issue of taking the cuts to Medicare at a time when there are big corporate tax cuts that they’re able to get away scot-free without paying taxes, really we have to stick it to poor people?

BARRASSO: Well, you know that Medicaid’s a broken system, there’s no real success at trying to throw more money at a broken system. So I like the idea of block grants. Medicare, we know that the president’s health care law cut 500 billion from our seniors on Medicare, not to save Medicare, but to start a whole new government program. The fundamentals are that we’re at 14 trillion in debt. We owe more and more to foreign countries and we need to make sure that we pass on to the next generation to our kids and grandkids a country without this kind of debt it’s irresponsible. We need to get the spending under control [...] We need to work for a solution that limits the amount of spending. We don’t need more revenue! The American people aren’t worried that they’re taxed too little, it’s that we spend too much.

Watch it:

It’s shocking for Barrasso to simply dismiss egregious corporate tax dodging in the United States, given how much money the country is losing as a result. In fact, if just five of the nation’s largest banks paid their taxes at the full rate, we could rehire each of the 132,000 teachers laid off during the recession — twice. As for Barrasso’s claim that Americans aren’t “worried that they’re taxed too little,” it appears that Americans are very worried that the wealthiest are taxed too little. A Wall Street Journal/NBC News poll released last month found that 81 percent of Americans supported a special surtax on millionaires.

Related Posts

Yglesias

Necessary Myths

By Matthew Yglesias on Apr 12, 2011 at 6:16 pm

Ta-Nehisi Coates on the strangely persistent myth of the black confederate:

It’s worth considering how this claim lingers. James McPherson is a Pulitizer-Prize winning historian, one of the titans of his field. Bruce Levine wrote a highly readable investigation into the charge. Historians from the Park Service have debunked the myth. There is a website specifically devoted to further debunking the myth. And yet it does not simply linger, it thrives and actually spreads to reputable places like The Takeaway. The information is widely available. We simply can’t cope with it.

That black people are participants in the spread of this myth doesn’t mean much to me. I’m sure somewhere there are Jews who deny the Holocaust. All this says to me is that it is extremely painful–for blacks and whites–to face up to the fact that Civil War was about the right of white people to pilfer the labor of blacks. We really need to believe that our ancestors were better than this. But they weren’t. And, as proven by our inability to accept the truth, neither are we.

This is the kind of thing I tried to keep in mind when I was in China and marveling over the fact that Mao Zedong is on all their currency. To outsiders, the guy seems like a monster responsible for the deaths of tens of millions of people. But he’s also the architect of the current Chinese state. We’ve got Andrew “Trail of Tears” Jackson on our money, Jefferson Davis Highway in Northern Virginia, and apparently the notion that blacks fought on both sides of the Civil War. The desire to make the history of your own country more benign than it really was is powerful.

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