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Daley Weekly: Lame Duck Session More Reaction Than Action

Lame Duck
The Congress returned December 1 for two weeks. What are they doing with all this time?

The House is setting its collective hair on fire over the President’s Executive Order on Immigration. There are hearings in at least two committees to hammer away against the Obama “Kingship.”  There is a bill in the works to repeal all the President’s deferred prosecution, including for Dreamers. On Thursday the House voted to pass this legislation, known as the Yoho bill, by a vote of 219 to 197, an almost totally party line vote.

They may have reached a deal on appropriations that has them passing and omnibus appropriations bill to fund the government for a whole fiscal year.

Apparently the Republican Leadership may want to get this out of the way. The Homeland Security appropriations will run only until March in order to give the anti-immigrant bunch an opportunity to take another shot at the Administration. No government shutdown.

In case you were wondering, the term “lame duck” does not refer to the session but to the people conducting the session – elected officials whose terms are about to expire and who are not going to be back. Apparently the term originated in the 18th century as an allusion to stockbrokers who were unable to pay their debts.

Tax “Extenders”

After playing around with this for the better part of a year, the “extenders” apparently will pass in some form making a bunch of loopholes available for another year. House and Senate lists differ on which to include but they should close these differences quickly. This follows an attempt to pass a “compromise” that included not only an expanded list of “extenders,” but tried to make a number of them permanent. Progressive tax groups made their displeasure known and the President threatened a veto.

So it looks like they have settled on a short term fix. The Democrats in the Senate had apparently agreed to the now ignored “compromise.” If this is the Democrat’s strategy, be prepared for hard times ahead.

Police Body Cameras

The police officer who choked to death an unarmed black man on Staten Island was exonerated by a grand jury. The coroner had called it a homicide.

The President did take a stronger personal role in the matter of blacks and the cops by calling for cameras on police flack vests.

The problem is that the persistent poverty, discrimination, unemployment, poor health, bad schools, and hopelessness in people of color communities will not be solved by cameras on cops. It needs something like a domestic Marshall Plan and the politicians who have been in the ascendency are more interested in feeding cash to the corporations and the wealthy than they are in dealing with the quality of domestic society.

Economy

The U.S. economy added 321,000 jobs in November and there is evidence of regional improvements in consumer spending. The unemployment rate held at 5.8 percent. It remains to be seen whether or not the Democrats will be emboldened to resist another round of Congressional efforts to cut taxes, reduce critical spending, fight immigrants, and perpetuate inequality – the long list of discredited austerity programs that the Republican majority is sure to try to enact.

Medicaid

A committee appointed by Texas Governor Rick Perry has recommended that Texas join in the Medicaid Expansion. It looks like the state of Wyoming is coming to its senses, too, and is trying to figure out how to participate in expansion. Rumors abound that deals also are in the works in Montana and Idaho.

Pretty soon we will look at the map of non-expansion states and see the modern manifestation of a racist, slave-owning South.

Ebola

The mad scramble to contain Ebola may finally be showing some hopeful signs. There now are empty treatment beds in Liberia, which was hardest hit. Efforts to prevent its spread into Europe and the U.S. also appear to be holding. Sierra Leone has now become the new hot-bed of Ebola infection.

The appropriations bill now working its way through the U.S. Congress includes $5.3 billion to fight the Ebola epidemic.

Health Care Cost Slows

One of the big causes of the push for austerity economics has been the inexorable cost push in the health care sector of the economy. Austerity freaks should be cheering and dancing. In 2013 spending on health care grew at the lowest rate since 1960, the lowest on record.

You can read all about it in Health Affairs: http://content.healthaffairs.org/content/early/2014/11/25/hlthaff.2014.1107.full.pdf+html.

Tax Reform – the Myth

One of the things that the pundits suggest as a potential point of agreement between Obama and the coming Republican Congress is something they call “tax reform.” Here are two myths to watch out for:

Revenue Neutral. Even though it is patently obvious that the great give-away of tax loopholes to the rich and corporations has caused an enormous drain from the national treasury, the mantra is that reform should be “revenue neutral.”  That means that every cut that they make for the corporations needs to be balanced by some increase somewhere else.

In order to make it easier to do this, the House Republicans have tried to maximize the cuts being provided in the “extender” package they are pushing in the lame duck session. The more they permanently reduce taxes for the corporations on the extender bill, the less it costs them when they try to produce “revenue neutral” tax reform that cuts the rates for the corporations. Cut a bunch of rates now, without paying for them, and we will not have to account for them in the score for tax reform next year.

The other thing that they are proposing to use to find a “revenue neutral” plan is a little thing called “dynamic scoring.”   This is a purely ideological theory that says tax cuts actually produce tax revenue. Yep – cut those taxes and the economy will grow and more money will roll in and everything will be rosy. The trouble is that it doesn’t work and the experts at the Congressional Budget Office have refused to use it.

But next year the voodoo economics gang will be in charge and they are preparing to rattle a few beads over the national economy and, presto, we can cut the hell out of corporate taxes. Deficit hawks should be shuddering.

The U.S. Has the Highest Corporate Tax Rate in the World. This little myth is a media favorite. It says that, because the law sets a 35 percent top corporate tax rate, we have the highest corporate taxes. The problem here is that corporations simply do not pay this rate.

Here are some key findings from a study done by Citizens for Tax Justice:

  • “As a group, the 288 corporations examined paid an effective federal income tax rate of just 19.4 percent over the five-year period — far less than the statutory 35 percent tax rate.
  • Twenty-six of the corporations, including Boeing, General Electric, Priceline.com and Verizon, paid no federal income tax at all over the five-year period. A third of the corporations (93) paid an effective tax rate of less than ten percent over that period.
  • Of those corporations in our sample with significant offshore profits, two thirds paid higher corporate tax rates to foreign governments where they operate than they paid in the U.S. on their U.S. profits.
  • These findings refute the prevailing view inside the Washington, D.C. Beltway that America’s corporate income tax is more burdensome than the corporate income taxes levied by other countries, and that this purported (but false) excess burden somehow makes the U.S. “uncompetitive.”

Check it out: http://www.ctj.org/corporatetaxdodgers/sorrystateofcorptaxes.php.

Musical Chairs

In addition to having to get a new Attorney General confirmed by the Senate, Obama now has to get a new Defense Secretary. Every time the President needs something out of the Senate he is made more vulnerable to the extortionists. Obama apparently will nominate former Deputy Secretary of Defense Ashton Carter to Defense. John McCain likes him, so maybe everything will be O.K.

Schedule

The Congress is supposed to end its lame duck session next week and re-convene with its shiny new majorities on January 6.  

One of the Sorriest Episodes in Recent Memory

Screen shot 2014-08-04 at 6.27.42 PMIt is clear that there are those among us who are having trouble adjusting to the new reality of race in America. Their old world of white majority domination in political and economic life is slipping away.

The changes started back several decades ago when it became clear through the 1980 U.S. Census that a racial and ethnic transformation was occurring in the population.

I used to have a bit of fun back then going to Rotary Club meetings and talking about this transformation. I would suggest that those who get the yips about such things needed to recognize that there was a better than 50/50 chance that their grandchildren were going to have brown eyes.

Now the transformation that began back then is playing out and it is bringing out the worst in us. Read more

Daley View: WHY IS A RAVEN LIKE A WRITING DESK? and Other Musings

I was in the Hart Senate Office Building for a meeting with Senator Manchin’s staff that ended around 2:30 PM. 82655_600Normally I would have bolted for the door to get fresh air, but I was starving. I went into the basement to the American Grill and was putting mustard on my cheeseburger when the shooting started outside the building. They locked us in.

“Gunshots have been reported on Capitol Hill requiring staff in all Senate office buildings to immediately shelter in place. Close, lock and stay away from external doors and windows. Take annunciators, emergency supply kits and escape hoods; and move to your office’s assigned shelter-in-place location or the innermost part of the office away from external doors or windows.”

Reports of just what happened are still being pieced together, but apparently a woman suffering through her own mental illness tried to ram through security at the Executive Office Building next to the White House. When she failed, she led the police on a chase that ended just outside the Heart Building. She had a child in the car with her. The woman was shot and has died.

She was unarmed. The police aren’t even being paid. Read more

Bad Medicine Report Details Influence of Pharma in DC Budget Failure

Released to the Press

September 25, 2013

 

New Report Analyzes Interest Group Influence in Blocking Proposed Cost Saving Measures in Medicare

Report Finds Influence of Pharmaceutical Industry as Major Impasse to Common Sense Budget Fixes

Congress has failed to act on a commonsense, good-government approach to controlling health care costs. The significant resources the pharmaceutical industry has put toward influence and access has rendered Congress unable to act in the public interest.

Bad Medicine Report.image

 

Bad Medicine: Pharmaceuticals’ Prescription for Profits Over People, released by the Alliance for a Just Society details the overwhelming influence of Big PhRMA on congressional outcomes and finds that the imbalance created by industry spending harms both the interest of the American people and our democratic process.

Read more

Will SEC order a dose of sunlight for corporate political spending?

Mary Jo White, the new Chair of the U.S. Securities and Exchange Commission, was recently confirmed to a five-year term that secures her position until 2019. With that kind of job security, Ms. White should be able to rise above the partisan pressures of Washington politics and advance a proactive agenda at the SEC that furthers its mission of protecting investors and promoting transparent, well-functioning markets.

But already, Chair White’s resolve is being put to the test through the debate on a proposed SEC rule that would require disclosure of public companies’ political spending. Read more

The Great Big PhRMA Medicare Heist

Part 1: Rigging the System is Profitable

 

While millions of Americans struggle to pay for their prescription medication, big pharmaceutical companies reap $600 billion in annual profits.  $116 million is spent on direct lobbying, and with a 77,500% return, the investment certainly pays off.  Profits have been bolstered by pharmaceutical companies’ myriad of policy wins.  A well-funded barrage from lobbyists has created patent protections, limiting competition from lower-cost drug options, and, not surprisingly, price protections built into federal policies.  By comparison, when you look at the return of individual investors, multinationals, and the oil industry, we see a stark contrast:

 

The Amazing ROI of Corporate Lobbying
by JLMC.
Explore more infographics like this one on the web’s largest information design community – Visually.

 

 

Senior citizens–without blue chip stocks, without millions in expendable liquidity for political campaign contributions–average a meager salary of $22,000. The influence of money has certainly trumped the voices of the citizenry in the halls of Congress. Just look at the recent collapse of a federal gun violence bill and the influence of the gun owner lobby over the cries of the general public.

An income of $22,000 a year is hardly a fighting chance against the lobbying power of Big Pharma.  Many seniors struggle to pay for food, rent, and heat, let alone afford the sticker price on their medicines.  Drug companies, meanwhile, can spend billions in campaign contributions, PR, and advertising to ensure that their voices are heard over those of ordinary Americans.

And it certainly has been. The industry owns the story being told in Washington DC and the mainstream media.  (We tell a different version at hookedonpharma.com)

The tale that big drug companies have successfully spun is one of despair, hardship, and weak patent laws that no longer serve to protect the financial gains of private enterprise.  It runs like this: pharmaceutical companies are American institutions.  They produce life-saving drugs.  This innovation takes a lot of time and costs a lot of money.  Prices are set where they are for a reason, and people who use these drugs should pay for them.  Generic manufacturers are already able to take away name-brand profits when patents run out.  If you take away the “free market” structure of programs like Medicare Part D, pharmaceutical companies will collapse.  It is in the nation’s best interest to leave price controls in place to preserve a “life-saving” American institution.

The story is horribly fatalistic, and geared to churn the better nature in all of us.  And when told by pharmaceutical industry lobbyists who outnumber members of Congress 2:1, the narrative has taken parable status in recent years.  By targeting hundreds of millions of dollars on key members and committees, pharmaceutical companies have gotten their way in the majority of almost 1500 bills in the past eight years.

Medicare Part D is no exception.

Congress passed Medicare Part D, a prescription drug “benefit” program for seniors, in 2003.  This may initially sound like a blessing for seniors, but, among other pitfalls, the bill prevented Congress from negotiating drug prices under Medicare.  Instead of ensuring that Medicare Insetparticipants can afford prescription medication, the legislation made certain that pharmaceutical companies could maximize profits.  Immediately following the passage of the legislation that saw $116 million in lobbyist strong-arming, the same companies increased prescription prices and saw profits skyrocket.  America’s seniors are footing that bill in part through the Medicare Part D “doughnut hole,” a period when Medicare stops paying for prescriptions and the individual must pick up the “market-rate price” for their medicines.

The so-called free-market drumbeaters would have the country believe that any negotiation amounts to government intervention in the market. What they are saying is that they don’t want American citizens and taxpayers to be able to negotiate a better contract with the pharmaceutical industry.

They have created a Free Market Red Herring in the process.

 

 

 

 

 

Part 2: The Free Market Red Herring

MedicarePartDprofits

When in doubt the opposition cries free market foul play. Part D was engineered and pushed through by companies, not American taxpayers. The clause against allowing negotiated prices was the one piece that held higher-than-market prices in place, thereby guaranteeing a direct flow of taxpayer dollars into the profit columns of the industry.

What business would accept contracts term like these? “I am offering you a horrible deal, ensuring you lose on every transaction. You’ll take it and there’s nothing you can do about it.”

None.

So now what?

Screaming “monopoly” doesn’t work here: patent holders are conveniently protected against anti-trust proceedings.  And technically, there are a lot of pharmaceutical and biotech companies throughout the country so consolidation can’t be used as a factor either.  But when competitors collude to rig a piece of legislation so that there is no recourse or correction, the nation has a problem.  Or so they would have the nation believe.

The fact is, there are commonsense solutions Congress can enact right now, and ones that will save benefits for seniors, cut costs for taxpayers, and do little to hurt the profits of Big Pharma, despite their rhetoric.

Under the Medicare Drug Savings Act introduced by Senator Rockefeller of West Virginia, Medicare could save $140 billion over 10 years. Some analysts estimate that the nation would recover between 2% and 7% of the subsidized profits if Congress required drug-pricing negotiations in Medicare.

Pharmaceutical profits jumped nearly overnight after Medicare Part D was enacted in 2006.  And since 2005, big drug companies have seen an almost 50% increase in profits.  Big Pharma has successfully scared the public into believing their profits are necessary for the common good.  Yet, while profits continue to skyrocket, and drug prices have significantly outpaced inflation, Big Pharma drug innovation is on the decline.  In fact, studies indicate that taxpayers, not pharmaceutical companies, are funding most of the research leading to major medical breakthroughs.  Sounds like Americans can afford to miss out on the same allergy medicine in a different color and another t.v. commercial.  But apparently $552 billion in remaining profits and a 50% tax write off for research and development expenses are just not enough to motivate someone to help sick people.

Instead of being concerned with Big Pharma profit margins, Congress needs to ensure that seniors receiving Medicare get the best quality and most affordable healthcare they can receive. Medicare Part D is not a comprehensive solution, but is certainly a bad policy and one that was enacted under the collective boot of 1,100 Big Pharma lobbyists, constructed to pad the pockets of the drug industry. It’s time to make a change.  Congress can and should make Medicare drug coverage work for people, not Pharma.

 

 

Part 3: Setting People-First Policy Priorities

Bad Prescription

Admittedly, funding healthcare requires prioritizing.  But the priorities are simple.  Congress can prioritize the senior, who needs prescription medication to survive.  Congress can at the same time prioritize taxpayers, saving them billions.  Or, Congress can prioritize the big pharmaceutical companies:  companies that spend more paying lawsuit settlements and penalties than they stand to lose in profits if Congress allowed Medicare to negotiate drug prices.

This system of negotiations is not just an abstract concept with theoretical implications.  Its success has been shown in numerous organizations and other countries.  For example, the Veteran’s Administration (which negotiates prices with pharmaceuticals) is able to obtain the top 10 drugs covered by the plan at a price 48% lower (on average) than Medicare.  Other wealthy nations that negotiate pharmaceutical prices pay 150% to 300% less than Medicare.

It seems clear that Congress, by refusing to save seniors and the average American taxpayer money, worries more about profits than the people it was elected to represent.

The Alliance for a Just Society affiliates met in Washington, D.C. to address their Congressional leaders in the Senate and drive home the need for senior-first policies and to prioritize freeing Medicare to negotiate prescription drug prices.  To bolster the voices of these delegates representing 20 states, the Alliance delivered a national petition, signed by 350 organizations, dozens of legislators, and nearly 8,000 Americans, to the Senate.  The simple demand: allow Medicare to negotiate prescription drug prices. Unfortunately, the bill introduced by Senator Rockefeller has yet to make it past congressional committee, where many good bills go to die.  This is where Americans should renew their efforts: get the bill out of committee, and give the Senate a chance to vote.

Republicans and Democrats may not agree on much, but both sides of the aisle can agree that a good government considers the needs of its citizens.  A good government allows individuals to thrive.  So many seniors have worked the majority of their lives to provide for themselves, their family, and the prosperity of the nation.  Now is not the time to turn our backs on them and to profit off their illnesses. It is time to make it possible for all Americans to retire with dignity.

 

 

 

 

Daley’s Glossary: Guideposts in the Labyrinth of our current Fiscal Debate

Listening to the current national fiscal debate is like standing before a labyrinth with only your ears to guide you. There are strange terms and “impending deadlines” being thrown out into the airwaves and the only things to be sure of– is the spot marked “you are here.”

Because the wonky debate inside the DC Beltway will be conducted in head-spinning clichés that the media like so much, I feel compelled to offer a brief series of definitions to clarify the situation and make our imperative clear:

We must continue to push cutting prescription drug costs and increasing taxes on Wall Street to fill gaps in the government’s revenues. We must continue to insist that there be no cuts to social insurance programs American families need for their security. Stay strong. This is an historic fight.

Read more