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The costs of sequestration

trahant MARK
TRAHANT

 
Austerity

Tuesday night President Barack Obama will lay out his case that Congress ought to reverse the $1.2 trillion worth budget cuts that are beginning March 1.

The White House message is that there should be a debate about the long-term deficit, but that Congress should “permanently turn off the sequester.”
That package should have balance and include spending cuts and revenues. As Dan Pfeiffer, a senior advisor to the president, wrote: “And over the long-term, we need to find a solution that does this in a balanced way. The president has already reduced the deficit by over $2.5 trillion, cutting spending by over $1.4 trillion. And he's willing to do more. And we can't just cut our way to prosperity. Even as we look for ways to reduce deficits over the long term, our core mission is to grow the economy in a way that strengthens the middle class and everyone willing to work hard to get into it.”

Grow the economy. Those three words should be the heart of the debate because the economic evidence is that the sequester will do just the opposite. (The Congressional Budget Office calls this a “subdued” economy. And, according to The Washington Post, the administration has started preparing to reduce the number of federal employees. “The memo also told agencies to “identify the most appropriate means to reduce civilian workforce costs,” including with hiring freezes, by releasing temporary employees and through early retirement or voluntary separation incentives. In other words: Think hard about how to get rid of people,” The Post said.)

Friday the White House released new details about the stark nature of those cuts, including deep cuts to food safety, mental health, head start, teaching jobs, workplace safety, in other words, across virtually all platforms of the federal government. The total tab: $85 billion, half from defense and half from domestic programs.

“Tribes would lose almost $130 million in funding from the Department of the Interior,” the White House said. Native American program “reductions would be necessary in many areas including human services, law enforcement, schools, economic development and natural resources.”

The White House said “Indian Health Service and Tribal hospitals and clinics would be forced to provide 3,000 fewer inpatient admissions and 804,000 fewer outpatient visits, undermining needed health care in tribal communities.” (more…)

(Canadian) penny for your thoughts

trahant MARK
TRAHANT

 
Austerity

I was in Vancouver last week for a couple of days and I went out of my way to not spend any cash. I paid for my hotel with a credit card, used a cell phone for a cup of coffee at Starbucks, and walked to a meeting so I wouldn’t need to pay for a taxi. I didn’t want the hassle of trying to spend my Canadian dollars at the last minute; I usually end up with Canadian coins with no recourse other than to “collect” them.

But staying cashless in Canada meant I missed out on the last penny. As of today, the Canadian mint will no longer make the penny. People won’t be able to use that coin at the store for purchases. Instead the clerks will round up or down the sale price to the nearest nickel. (Credit card or check purchases will still be the exact amount.)

I have been writing a lot about saving programs from the budget axe. This is a good example of something that would be easy to do, save a significant sum of money, and send a signal that it’s OK to end traditions of the past.

The United States now spends twice as much on production of the penny, and the nickel, than the coins are worth. It also makes no sense to print dollars. We should have done what Canada did twenty-five years ago with the Loonie and Twonie, the one and two dollar coins.

Slate magazine says the U.S. loss on the penny and nickel is about $116 million. However the magazine says the U.S. could really save money - big money -- by eliminating cash all together. That would force people to use electronic transactions for everything. One study says it would save 1 percent of the Gross Domestic Product, roughly, $150 billion. (more…)

Will bad news delay sequester?

trahant MARK
TRAHANT

 
Austerity

Will bad news delay the sequester? Wednesday the government released the fourth quarter’s Gross Domestic Product, the output of goods and service produced by labor in the United States. That number decreased by .01 percent. It doesn’t sound like a big deal, decimal point next to a digit that small, but it reflects a shrinking economy instead of a growing one. And the main reason for the contraction: Government spending.

From the report: “Real federal government consumption expenditures and gross investment decreased 15.0 percent in the fourth quarter, in contrast to an increase of 9.5 percent in the third. National defense decreased 22.2 percent, in contrast to an increase of 12.9 percent. Nondefense increased 1.4 percent, compared with an increase of 3.0 percent. Real state and local government consumption expenditures and gross investment decreased 0.7 percent, in contrast to an increase of 0.3 percent.”

In other words, government is shrinking across the board. And this is before the sequester. Those numbers will decline even more after the sequester begins.

At the White House, Press Secretary Jay Carney was asked about the data - and quickly blamed Republicans in Congress. “Talk about letting the sequester kick in as though that were an acceptable thing belies where Republicans were on this issue not that long ago, and it makes clear again that this is sort of political brinksmanship of the kind that results in one primary victim, and that's American taxpayers, the American middle class,” Carney said. “You're correct that the GDP number we saw today was driven in part by -- in large part by a sharp decrease in defense spending, the sharpest drop since I think 1972. And at least some of that has to do with the uncertainty created by the prospect of sequester.” (more…)

Austerity and Indian health

trahant MARK
TRAHANT

 
Austerity

The Indian Health Service faces, what IHS Director Yvette Roubideaux calls, a “new reality” requiring a business model to match this era.

For example the 2012 budget was $4.3 billion. But when third party collections and the Special Diabetes Program is added to that base, the funding totals $5.38 billion. Third party collections, mainly Medicaid, Medicare and insurance, are important because that money is “generated and kept” at each service unit.

And, better yet, that’s one line on the budget can continue to grow. Even as Congress threatens sequester or other budget cuts.

“We also must work on customer service – if more of our patients have insurance or other health coverage, we do not want them to go to other providers,” Dr. Roubideaux wrote on her blog. “Even though IHS is a ‘service,’ it is also a healthcare system, and we need to think like a business. We are encouraging every one of our employees to contribute towards ensuring that we provide the best quality of care and to maximize the resources we have to provide that care. No one in the IHS system can afford to ignore the bottom line. If our goal is to provide the best care possible, we need to ensure that we can survive in the changing health care marketplace in which our facilities must thrive.”

One key element in that third party collections is Medicaid. Medicaid is a state-federal partnership, an insurance program for low-income families. However the Affordable Care Act expands access to Medicaid, an idea that’s supposed to make sure that more people can afford basic health insurance. But the rules of Medicaid, because it’s a partnership are up to state governments. Moreover not every state is choosing to participate.

A recent study from the Harvard Law School says: “There is strong empirical evidence that ‘opting out’ of expansion will have many negative implications by any measure, not only for individual and public health outcomes, but also for state fiscal stability. In other words, expanding Medicaid to residents with income up to 133% federal poverty level is in every state’s interest. While political battles loom large in the coming months, states will benefit from analyzing the actual costs and benefits of the Medicaid expansion and making an informed decision that best serves states’ residents at large.”

American Indians and Alaska Natives are a big part of that equation, a benefit for state governments as well as a source of revenue for the Indian health system. (The Indian health system includes the IHS as well as tribal, nonprofit and urban Indian programs). (more…)

Murray’s contrast

trahant MARK
TRAHANT

 
Austerity

It’s hard to see the U.S. Senate as a democratic institution in the 21st century. A voter from Wyoming has nearly seventy times the representation as a citizen from California. And that understates the case significantly because on top of that lop-sided balance, the Senate also has rules that call for super-majorities, giving those small states even more power.

Alan Durning from the Sightline Institute made this point a couple of years ago when he wrote: “The Senate doesn’t just magnify small-states’ influence a little. It magnifies their power massively. Consider the Cascadia region, which covers all of Idaho, Oregon, and Washington, plus parts of Alaska, California, Montana, and Wyoming (along with the Canadian province of British Columbia). Each of these states, of course, has equal representation in the US Senate. This chart shows the number of people per US Senator in these states. There are 18 million Californians for each of the state’s two Senators. In Wyoming, the equivalent number is 272,000. If every US Senator represented the same number of people as do Wyoming’s two Senators, Oregon would have 14 Senators.That’s right, Oregon would have 14 Senators! Washington, for its part, would have 24, far outnumbering its current 9 Representatives in the House.California? California would have 136.”

Now calculate those numbers for Indian Country. The Census says there are 5.1 million American Indians and Alaska Natives in the U.S. So, using the same formula of 272,00, there would be at least 18 Native American representatives in the Senate.

Don’t like that formula? Well, the collective land mass of tribal nations, villages, and communities, tops 87,000 square miles. That’s a larger land base than most states (the average for the 50 states is only 75,881.66 square miles).

Later today we’ll find out if the Senate is going to take even baby steps to limit filibuster (now at the point where a Senator only has to threaten a filibuster to stop legislation unless there are 60 votes).

But on the issue of austerity, the irony is that the Senate represents the best hope going forward for a balanced approach to how budgets are cut.

Congressional budgets are a relatively modern enterprise. Before the 1970s, the federal budget was presented by the President and then Congress passed appropriation bills for each agency. (more…)

The austerity case

trahant MARK
TRAHANT

 
Austerity

A new regular writer here. From his website self-description: "Mark Trahant is writing a book about austerity. He blogs, posts often on Twitter (including daily news poems). Trahant was recently a Kaiser Media Fellow and is the former editor of the editorial page for the Seattle Post-Intelligencer. Mark is a member of Idaho’s Shoshone-Bannock Tribe and a former president of the Native American Journalists Association. He is the author of The Last Great Battle of the Indian Wars, about Henry Jackson, Forrest Gerard and the campaign for American Indian self-determination. He lives in Fort Hall, Idaho." He's writing now most regularly on austerity.

The next four years will be defined by austerity. President Barack Obama, indeed, the country, will jump from one economic crisis to another. And until a consensus emerges about what we should do next, well, every fight will leave both sides unsatisfied.

President Obama made the case for progressive investment by government. He said during his inaugural address: “We understand that outworn programs are inadequate to the needs of our time. So we must harness new ideas and technology to remake our government, revamp our tax code, reform our schools, and empower our citizens with the skills they need to work harder, learn more, reach higher.”

He also promised hard choices ahead, yet, “we reject the belief that America must choose between caring for the generation that built this country and investing in the generation that will build its future.”

But most important he talked about promises. “The commitments we make to each other through Medicare and Medicaid and Social Security, these things do not sap our initiative, they strengthen us. They do not make us a nation of takers; they free us to take the risks that make this country great.”

And so it is with Indian Country. The promises made through treaties are not gifts from Washington, but promises that ought to be secure even during an era of austerity. But how to make that so? (more…)