Trump’s Medicaid Fraud

Trump’s Medicaid Fraud

The current Medicaid work rules amount to a deliberate attack on the Affordable Care Act, which allowed an expansion of Medicaid for those who could not afford health care but did not qualify for Medicaid under the older and draconian poverty requirements.

Medicaid recipients receive medical benefits like doctor or hospital visits, but not funds they can use to support themselves. Medicaid appropriations go to venders who provide the services. Therefore, Medicaid recipients have no choice but to find work, or to starve.

What state governors call work rules are really just rigmarole designed to trick people or to get recipients ensnarled in a complex labyrinth of regulations and bureaucracy that justify removing them from the rolls. Trump aficionados like Seema Verma, HHS administrator, know that perfectly well as does the Governor of Arkansas, Asa Hutchinson, who patronized the Federal Judge who would not go along with the deception.

States like Arkansas have established elaborate rules that require recipients to report they are already working to government administrative authorities in order to receive benefits. Authorities have not always made clear recipients would be expected to log into the Internet and report their work each month. Those who did not obey, or understand, these requirements find they are removed from the rolls; those who lost one of their low paid jobs and did not meet other rules and regulations can find themselves removed as well.

If ever there were useless regulations these are it. The Washington Post [Amy Goldstein, March 29, 2019] quoted Governor Hutchinson that “I remain fully committed to a work requirement, and we are in this for the long haul because we believe it is the right policy.” Really!

Work requires a transaction where someone gets paid for their time doing specific work. No such transaction takes place for Medicaid recipients that allows a “work requirement.” The Trump Administration Medicaid regulations, and Governors like Asa Hutchinson who apply them, choose to make and enforce a deliberate fraud.

Unconstitutional Appropriations – Trump demands the Trifecta

Unconstitutional Appropriations – Trump demands the Trifecta

If you think politicians should observe the written conditions of the U.S. Constitution, then you might agree with me that a second shut down would be better than what’s going on with Trump’s current threats. The compromise appropriation passed by Congress and signed into law by Trump followed the requirements in Article I of the constitution exactly. For Trump to threaten to take appropriated funds for his personal appropriations bluntly and crudely violates one of the simple and plain English restrictions written into the Constitution. The restriction says

“No money shall be drawn from the treasury, but in consequence of appropriations made by law; . . .”

Some constitutional phrases allow or require interpretation; leave room for the creative cloudy thinking judges and politicians love to do. Not here; not with this one. Funds appropriated go into a budget and fund specific departments and agencies of the government. The constitution does not permit taking appropriated funds and spending them on unappropriated projects. Changes require a supplemental appropriation signed into law.

We might suppose members of Congress, House and Senate, would object to having their constitutional authority erased as so much irrelevant nothing. The emergency excuse is irrelevant even with an emergency since federal appropriations already fund emergency response agencies and we have armed forces ready to respond.

I would expect patriotic members of Congress would abandon their partisan politics to make a unanimous vote to end this unconstitutional threat to our institutions and constitution. They only need two-thirds, which neuters those who refuse to agree English words mean what they mean.

Next in the separation of powers we have the third branch of government: the federal courts. I would expect all patriotic members of the federal bench to agree English words mean what they mean. For the courts to fail to stop this unconstitutional nonsense a district court judge, then two of three appeals court justices and five members of the Supreme Court must fail to do the duty they took an oath to do.

For Trump to get his way requires a complete Trifecta of constitutional failure; a breakdown of all three branches of government. We can hope it doesn’t happen, but I hear some nervous tremors from those who say it won’t.

Mr. Beutner and the Los Angeles Public Schools

Mr. Beutner and the Los Angeles Public Schools

The Los Angeles Public School teachers left their classrooms in the first teacher strike in thirty years. I read the teachers and their union want class size reduced and support staff restored to previous or even reasonable levels.

The school system’s latest Superintendent, Austin Beutner, has no experience in education. Reports describe him as a former investment banker and non-profit executive brought into the school system by the school board to get the system’s finances in order.

I always get disgusted with everyone who thinks anyone with a history of financial success automatically qualifies for all other jobs including education. So many show their contempt for education by expressing such views. I do not hear the reverse that teachers are professionals qualified to take over an investment banking firm, but they would have to do exactly what Mr. Beutner has to do: start fresh and learn something new.

Newspaper accounts quoted Mr. Beutner: “If we agreed to [union] demands, the district would be come immediately bankrupt and would be taken over by the state that same day.” Even if its true, it takes no financial skill to determine that, which is irrelevant to what’s important anyway.

I read one quote from a striking teacher that makes clear what’s relevant to the strike “We have a charter school on campus that is eating away at our spaces, our resources.” Now we know the real financial problem: charter school students get a bigger share of the budget than their share of students; get amounts out of proportion to their numbers.

If that assertion is false it takes no financial genius to prove it false. Now – January 23, 2019 - the union and Mr. Beutner have reached a tentative settlement that will give teachers a raise, reduce class size and hire more support staff; certainly a good thing. However, it does not answer the question Mr. Beutner was hired to evade. It does not justify the percentage of the total financial budget going to the public schools compared to that going to the charter schools. Those who believe in education should demand an answer.

The George Herbert Walker Bush Tax Cuts

The George Herbert Walker Bush Tax Cuts

Many of us remember George Herbert Walker Bush for his famous declaration: “Read my lips; no new taxes.” Being a man of financial prudence he decided his own federal budget deficits forced him to renege. He raised taxes and then lost his bid for reelection in the 1992 elections.

The ideological part of the Republican party would never forgive him, although the Ross Perot third party bid probably cost him more votes than angry Republicans. It did after all give them an alternative to Democrats. What I would like to examine though is how much of a tax cut really occurred and also the timing of the cuts. Remember Mr. Bush did not take office until January 1989 and left office in January 1993. Before Mr. Bush took office President Reagan succeeded in getting substantial tax cuts.

Suppose we invent a hypothetical rich couple earning $900,000 in wages and salaries and $100,000 of capital gains and look at their federal personal income taxes for a joint return and a standard deduction each year in 1986, 1987, 1988 and 1991.

Taxes in 1986 had 15 different tax rates that started at 11 percent for the first $3,670 of taxable income for married couples filing a joint return and went up by 1 to 4 percent increments until it reached 50 percent for taxable income of $175,250 or more. The 1986 taxes for our hypothetical couple came to $514,876.00. Only 40 percent of reported capital gains was taxed in that year.

Their 1987 federal taxes were before George HW Bush became president where tax cuts by Congress and President Reagan left 4 different tax rates that started at 11 percent for the first $3,000 of taxable income for married couples filing a joint return. Rates went up by 4 to 13 percent income increments until it reached 38.5 percent for taxable income of $90,000 or more. Now with the Reagan tax cuts the 1987 their tax drops to $361,529.41, a savings of $153,448.59. That is a 29.7 percent reduction in taxes.

In 1988, again during the Reagan presidential years, the top tax rate dropped again. This time from 38.5 percent to 33 percent on the first $149,250 of taxable income. Therefore not only is the rate lower but also the lower rate applies to more income. Now with the Reagan tax cuts in 1988 our hypothetical couple would pay $278,600 in federal income taxes, a savings of $82,929.41. That is 22.9 percent reduction over 1987 taxes and a 45.9 percent reduction over taxes in 1986.

Compare federal income taxes for a couple filing a joint return on the median household income in 1986, which was $24,897. Assuming the $24,897 was wage income this lower income couple paid $2,202.76 in federal taxes. After the tax cut for the rich the working class couple with the same $24,897 income in 1987 paid $2,480.55, a tax increase of $277.79. That is a 12.6 percent increase in taxes. It was called a rich persons tax cut with good reason.

In 1991 the top tax rate dropped from 33 percent to 31 percent for taxable income over $82,150, but the 1990 exemption amount of $4,100 for a married couple filing a joint return was suddenly subjected to a means test. For couples earning over $157,900 started losing the exemption deduction until it became negative and had to be added to taxable income. Beginning in 1991 during George Bush’s presidency our hypothetical couple had to pay $306,079.91 in taxes, an increase from $278,474.00 in 1990, or $27,605.91 more tax in 1991. The 1991 increase was 9.9 percent over 1990, but still 40.6 percent below the taxes from 1986.

If the taxes of 1986 had remained the same from 1987 through 1992 our hypothetical couple would have paid $1,279,952.43 more in taxes that they did. I did not adjust for interest earnings or it would have been more. The Reagan-Bush tax cuts from 1987 to 1992 cut taxes for our hypothetical rich couple by 41.4 percent.

It’s always good to quantify the arrogance of the idle rich, but gee poor ol’Herbert Walker lost his job. The new President Bill Clinton and the Democrats had the Trifecta for two years: control of the White House and both houses of Congress. The Democrats raised 1993 taxes although they remained well below 1986. Our hypothetical rich couple saved $145,793.88 in 1993 taxes over taxes for 1986.

Janesville: An American Story

Amy Goldstein, Janesville: An American Story (NY: Simon & Shuster, 2017), 297 pages, $27.00

In Janesville, Wisconsin December 23, 2008 the General Motors Plant closed right after the last Chevy Tahoe rolled off the assembly line. The closing left everyone in fear in a town of 63,000 about three fourths of the way between Chicago and Madison. In Janesville, the book, author Amy Goldstein writes a narrative account of the personal losses resulting from a strictly economic decision made by absentee managers.

The book begins earlier in June 2008 when the announcement comes for the plant to be closed. Narrative continues with year by year events through 2013 followed by a brief epilogue. Material includes personal interviews of people and families affected by the shut down. Goldstein lists these people at the beginning as a “Cast of Characters” that she followed and interviewed over five years. The cast of characters has 14 family members from three families and eleven other people.

Goldstein divides the material into fifty-five generally short chapters with six yearly breaks – 2008, 2009, and so on - to help readers keep track of time. All three families relied on jobs in manufacturing from GM and from Lear Corporation, an auto parts supplier making car seats for GM. The Lear plant would close shortly, April of 2009. One family, the Vaughns, had both spouses lose jobs at Lear. The other families, the Whiteakers and the Wopats, had one spouse lose a job at GM, which provided their primary support.

Two of the eleven other people in the story, Kristi Beyer and Sue Olmstead, lost manufacturing jobs from plant closures; Beyer worked at Lear, Olmstead lost a job at another Janesville auto parts supplier. The remaining nine people Goldstein followed include their Congressman Paul Ryan, a state senator, three educators, two business women, the director of Rock County job center and a journalist now doing a radio show.

The unemployed Vaughns go back to school at Blackhawk Technical College. Mike studies HR and Barb studies law enforcement. They find jobs in their new fields at lower pay.

The unemployed Jerald Whiteaker takes a $4,000 buyout rather than continue in layoff since he knows he does not want to leave Janesville. He takes a succession of low paid jobs that prevent him from supporting his family. His two daughters get jobs and his wife works part time. They get by, barely.

The unemployed Matt Wopat takes unemployment and SUB benefits for a while before deciding to return to school in a Blackhawk degree program. He does not plan to leave Janesville but retains his UAW negotiated option to work at his Janesville wage of $28 an hour at another GM plant. After a short stint in school he does not see much return from his Blackhawk efforts and so decides to leave for a job at GM’s Fort Wayne, Indiana plant. He commutes back to Janesville on weekends.

The unemployed Kristi Beyer attends classes in law enforcement at Blackhawk with Barb Vaughn. After two years they finish and both take jobs at the county jail at much lower wages of $16.47 an hour.

The stories of coping by the laid off move along interspersed with stories of Janesville and Wisconsin politics and efforts by others to provide charitable services or otherwise cope with the dulling effect of a regional recession and 13.4 percent local unemployment.

Goldstein describes efforts to cope with details of charity efforts, describing a new food bank called ECHO (Everyone Cooperating to Help Others) and an enterprising high school teacher who stockpiles food in a closet to donate to needy students not too embarrassed to ask for it. A charity health clinic operated before the GM shutdown, but now overwhelmed, it has to turn away patients.

A social worker at the Janesville Schools, Ann Forbeck, works as a homeless student liaison with a mission to help homeless students in a system with four hundred homeless kids. Homeless shelters, it turns out, do not admit teenagers and no one over 15 is eligible for foster care. Goldstein follows Forbeck through her extensive fund raising efforts to provide for teenagers, her many refusals, and an incident of a brother and sister dumped out of car abandoned by a mother who shouts “I can’t keep these kids” before driving off. Finally after several years delay we learn she co-founds a group that provides temporary shelter for homeless teens.

The Rock County supervisors devised an incentive package to keep GM in Janesville with $152 million of state and local incentives, additional UAW give backs of $213 million and some private incentives. Goldstein reported it as the largest incentive subsidy offered in Wisconsin history; it was barely half of Michigan giveaways.

A local banker, Mary Willmer, and a wealthy local women, Diane Hendricks, also promote luring business investment with tax breaks. They approached the Janesville City Council to help bring a start up tech company with a $25 million government grant and 125 jobs. There is opposition but only 1 vote against $9 million of incentives from the declining coffers of Janesville. There would be many delays.

These were the years of Governor Scott Walker’s cuts in school budgets and attacks on unions. Goldstein reviews the protest that included some from Janesville that join the throngs on the Wisconsin capital steps. A later chapter covers the Walker recall vote. Janesville Local 95 of UAW works for the governors recall, but mostly with help by those older and retired since only 438 remain as UAW members out of more than 7,000 from a decade before. Mary Willmer and Diane Hendricks support Walker with $510,000 in contributions in the winning campaign, but Janesville votes for recall, although only 53 to 46 percent.

Goldstein gives periodic reports on Paul Ryan, but these reports only add depressing details to a disheartening story; Ryan has no help for Janesville. He offers his personal “American Idea” for an approach to poverty: people who need help should not look to government like the case of FDR’s New Deal or LBJ’s Great Society. Instead they should turn to the generosity of their own community, which he thinks the dedicated people of Janesville are doing so well. He sounded like Herbert Hoover in the great depression, but there are few signs of anger from the victims in her stories. She also reports on repeated efforts of the director of the Rock Country Job Center, Bob Borremans, to get Congressman Ryan to visit the Center, but he never came.

The book reads easily in a direct journalistic style and readers can follow along and wonder what they might do in the same situation. For the most part, Goldstein does not offer judgments and refrains from moralizing opinions or conclusions. Readers will have to do that. There are detailed source notes and a bibliography that lists 15 related books that take a look at other disruptions brought by corporate America’s unilateral decisions. Two of them, George Packer’s book, The Unwinding, and Steven Greenhouse’s book, The Big Squeeze, are reviewed on this site.

I wish though she had asked more questions. Could the Wopats admit the $28 dollar wage and the option to move to Fort Wayne be appreciated as part of an UAW negotiated contract? It would have been worse without the UAW. What happened to house and real estate values? When a primary employer picks up and leaves house prices take a tumble. Did Matt Wopat commute to Fort Wayne because he could not afford to move, or was it just a choice? Would they continue to vote for Paul Ryan, and why?

No one in the book questioned what continues in the United States as the absolute right of corporations to move and destroy local job and housing markets, or to demand tax subsidies and special favors to stay, or to come, to a place like Janesville. If companies move and the CEO, its management, board of directors, and stockholders make profitable gains, while wage earners confront even bigger losses, no one compares gains and losses. Everyone accepts the glorious workings of the free market, even the victims; just ask Paul Ryan.

My Plan for Infrastructure Spending

My Plan for Infrastructure Spending

Politicians have returned to talking infrastructure spending to boast the economy and create jobs. The press actually suggests it could be something bipartisan. Trouble is titanic budget deficits make new infrastructure hard to pay for especially when Congress keeps cutting taxes for the rich who do not agree they should have to pay taxes.

Two years ago Trump discussed ways to make it profitable for his friends in business to take over infrastructure expansion, but they couldn’t figure out how to make it profitable for business to bother without turning over parks, waterways, airports and highways to corporate America and letting them charge monopoly prices.

I have a good plan though because I notice the credits at the beginning and end of PBS television news and views has a longer and longer list of foundations and trusts that give away money. The rich hope to get us to feel good about them so they can feel good about themselves.

The growth of foundation portfolios goes with tax cuts for the rich and corporate America, and with income inequality. It should also help Americans realize the United States has an idle rich so bloated with income and assets they can’t possibly spend on themselves they put it in tax free foundations. That way they can direct national resources by personal preference without need to respond to representative government, or those pesky voters.

For the last three decades, at least, America’s productivity gains have been converted to profits not wages. These profits to the rich and foundation assets amount to lost wages for the working class. But the rich can show their public spirit by contributing 25 percent of their required annual foundation giveaways to pay for infrastructure spending. Here is a plan that requires nothing from Trump or a do-nothing Congress.

It’s a perfect, fast action plan, but I’m not holding my breath! Chairitee! Chairitee!

Grown Up Anger

Daniel Wolff, Grown Up Anger: The Connected Mysteries of Bob Dylan, Woody Guthrie and the Calumet Massacre of 1913, (NY: Harper-Collins, 2017), $26.99

In Grown Up Anger author Daniel Wolff connects a labor history narrative with the evolution of mid 20th century protest music. As the title suggests, the labor history emphasizes the 1913 copper strike in Keweenaw County in Michigan’s Upper Peninsula, and the protest music discussion emphasizes the work of Woody Guthrie and Bob Dylan. Woody Guthrie was born in 1912 while Bob Dylan was born in 1941, and so the music covers the depression era in the 1930’s into the modern era. There are 14 chapters with 259 pages.

It was not obvious to me how the title, Grown Up Anger, relates to labor history and protest music but Wolff uses the opening pages to explain his choice. “History happens in a classroom. I didn’t (voluntarily) approach the world that way.” Instead he connected through anger, “Specifically, the voice of Bob Dylan.” Wolff explains his feeling that Dylan’s “Like A Rolling Stone” was the sound of unresolved anger, which “didn’t seem to need to justify itself.”

Since it was July 1965 and Wolff was thirteen years old, he felt adolescent anger that could not be discussed with dismissive adults; “If you did, you got a look that meant, ‘Oh, yes, you’re a child.’’ By now, 52 years later, looking back generates Grown Up Anger, which can be written down in articulate prose.

The remainder of Chapter One provides a reminiscence for 1960’s music and the Bob Dylan and Woody Guthrie place in it. Wolff introduces the Guthrie song “1913 Massacre” that makes an early connection to the Keweenaw copper strike, a song I did not previously know about. Chapter 2 introduces more Bob Dylan biography; chapter 3 introduces more Woody Guthrie biography. Both chapters relate their early interest in music.

Chapter 4 narrates the early history of Keweenaw County, Michigan copper mining and union organizing, which picks up again and continues in chapters 7, 9, and 12. The history moves along to the December 24, 1913 Christmas party and the infamous “Massacre” that took place at Italian Hall in Calumet. I reviewed a book length account of the 1913 Keweenaw strike by Steve Lehto, Death’s Door on this blog. Death's Door Death's Door Lehto, Ella Reeve Bloor and Arthur Thurner are also important sources used in Wolff’s account.

The other chapters - 5, 6, 8, 10, 11, and 13 - return to narrate and analyze the music and careers of Guthrie and Dylan. We find out “both Guthrie and Dylan spent their childhoods in relatively prosperous, supportive, Middle American families.” Woody Guthrie and his cousin Jack Guthrie left Oklahoma for California looking for music careers. They succeeded getting a radio show and confronted the great “Okie” migration in John Steinbeck’s Grapes of Wrath and In Dubious Battle in the process.

Dylan was 14 in 1955 when Emmett Till was murdered in Mississippi and was already trying to express himself through music. He graduated from Hibbing High in 1959 and recalled “I just turned my back on it. It couldn’t give me anything.” He went to the University of Minnesota and then to New York to pursue music as a career.

While Dylan and Guthrie remain the central theme of the music narrative it wanders and weaves its way into a variety of related historical events and musical figures. There are composer-musicians, Earl Robinson, Paul Robeson, Lead Belly, Alan Lomax, Pete Seeger, Joan Baez; music groups, the Kingston Trio, Peter, Paul and Mary, the Weavers; agitators and activists, Upton Sinclair, Bill Haywood, Elizabeth Gurley Flynn.; one composer-musician-activist Joe Hill. There are music titles and discussion of lyrics for many songs, especially Dylan and Guthrie songs and the songs of others that influenced them and of their influence on each other.

As the discussion moves along it mixes more with politics and political events; the House Un-American Activities Committee and the Communist purges of the 1940’s and early 1950’s. Suddenly lyrics were subversive and folk singers like Guthrie and the Weavers were denounced as Communists. Wolff describes the post 1955 folk revival and the Guthrie and Dylan part in it. The Dylan song “Like a Rolling Stone” has a suspicious connection to a doggerel poem composed by Joe Hill on the eve of his execution, or assassination as I would see it. The first stanza in his twelve line poem reads “My will is easy to decide. For there is nothing to divide. My kind don’t need to fuss and moan. Moss don’t grow to a rolling stone.”

A final chapter takes a driving tour through present day Keweenaw where copper mining ceased in 1968, fifty years ago. Wolff gives inequality data from 1913 and today and finds nothing has changed. The book ends with a brief allegory where the landscape beneath the surface in the world’s shell remains a molten core in a “kind of rage.” Enough said.

I cannot think of a comparable book, but that’s not a criticism. The narrative reads easily and chapter titles and divisions help move the story along. There are footnotes although they are not numbered but appear by the page rather than by number, which I don’t like. A bibliography includes some standard labor history books like Philip Foner, Jeremy Brecher, Melvin Dubofsky and Foster Rhea Dulles. I wonder about the audience that reads the book since I am guessing people interested in Guthrie and Dylan would not know much about strikes like the Keweenaw strike. In that way people interested in the music could get a first introduction to labor history. America would be better off if it knows more of its labor history. I predict it would create more Grown Up Anger.