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WEEKLY WONK

Originally Published: 4/12/2014

Budget Wars:  Last week Paul Ryan (R, WI) came out with his annual “cut everything” budget. (TWW, Ryan Budget, 4/5/14) This week the House passed it but the Senate won’t take it up. (ABC News) There are lots of other proposals, like the president’s proposal (TWW, Obama’s Budget, 3/8/14), which is never accepted as is. Of the many proposals, the ones to watch are the Ryan Budget, the budget proposed by House Budget Committee Ranking Member Chris Van Hollen (D, MD) (Wall Street Journal), and the one proposed by the Congressional Progressive Caucus (CPC), similar to the one they proposed last year. (TWW, Back-to-Work Budget, 3/16/13) Joshua Smith at the Economic Policy Institute (EPI) compared the 3. He wrote: “While it’s true that a budget proposal is a statement of values, it is also the reflection of its supporters’ understanding of the economy.” He pointed out the differences. “Chairman Ryan includes deep cuts to just about every budget function, and doubles down on the unspecified sequester cuts. Rep. Van Hollen’s budget gets rid of the onerous sequestration spending cuts but otherwise primarily stays the course. Meanwhile, the CPC’s budget calls for immediate stimulus spending in order to meet its stated goal of returning the economy to full employment over the next 3 years.” Smith also provided a graph of the impact on jobs from the CPC and Ryan budget proposals. It’s quite a stark comparison. Ryan’s budget will lose millions of jobs while the CPC budget will create jobs.

 

McCutcheon v. FEC:  Yeah, there’s an app for that. (Unlimited Corruption)

 

Frack, Baby, Frack:  The showdown with Russia has Europe worried about the gas it gets from them. Since Russian forces took hold of Crimea last month, the British prime minister, along with conservative politicians and energy executives, have been leading the charge for more fracking. The push has been going on for years, but with the latest problems in Russia, where Europe gets one-third of its gas, the push has taken on new urgency. (Washington Post)

 

Maryland:  The general assembly passed a marijuana decriminalization bill. Governor Martin O’Malley (D) said he will sign it. (Washington Post)

 

Minnesota:  The legislature has passed a bill raising the minimum wage to $9.50 an hour. Governor Mark Dayton (D) is expected to sign it. (Reuters)

 

New Mexico:  If you remember, a photographer refused service to a same-sex couple’s commitment ceremony, claiming it was against her religious beliefs. The couple took the case to the state Human Rights Commission which found that the photographer violated the state’s Human Rights Act, violating the state’s public accommodations law. The photographer appealed to the U.S. Supreme Court. The Supremes declined to take the case, leaving the decision in place. (Washington Post)

 

Medicare Payments:  Is it fraud? Maybe. The top 10 doctors alone received a combined $121.4 million in Medicare payments. Look at the information on the 10. It appears they are operating in affluent areas. (Just an observation.) Another interesting point: The payments were primarily for Part B - office visits, lab tests, x-rays, etc. Yet, everyone is pointing to the “high cost of drugs.” Drugs are paid for under the Part D portion of Medicare. But “more than half of the Medicare payments to these 10 doctors - $61.9 million in total - went toward drugs and ‘other costs.’” So, what’s going on here? “Some doctors said they were just passing through the payment to drug companies.” (Washington Post) Apparently the drugs they’re speaking about are for anesthesia, cancer treatments, etc. (See graphs at Washington Post) I guess the feds think something’s fishy, too, as they’re investigating. (Washington Post)

 

America in Decline:  According to the recent Social Progress Index (SPI), America is in decline. The SPI is “a new way to look at the success of countries.” It looks at 132 nations and evaluates 54 social and environmental indicators for each “that matter to people.” Rather than looking at GDP, it looks at things like “suicide, ecosystem sustainability, property rights, access to healthcare and education, gender equality, attitudes toward immigrants and minorities, religious freedom, nutrition, infrastructure, and more.” In essence, the “livability” of a country. It found: “While the U.S. enjoys the second highest per capita GDP of $45,336, it ranks in an underperforming 16th place overall. It gets worse. The U.S. ranks 70th in health, 69th in ecosystem sustainability, 39th in basic education, 34 in access to water and sanitation, and 31st in personal safety.” And, it ranks 23rd in access to the Internet. (Salon)

 

Medicaid:  There are 26 states whose governors decided not to take the federal money to expand Medicaid - offered with the passage of the Affordable Care Act (ACA). (The Advisory Board) There are people who now make too much money to qualify for Medicaid under the current income limits, but make too little money to pay for insurance. These are the ones who would fall under the new limits in states where Medicaid is being expanded. How many will go without insurance, how many will die, because Republican governors made a political decision? Thom Hartmann calls this the Conservative Death Panel.

 

Obamacare:  Here’s a number that the press has missed this week: 8.2 million. “That’s how many people have taken up employer-sponsored insurance since September, and most of them were previously uninsured. . . Obamacare was actually driving millions of uninsured Americans to sign up for employer insurance.” (Washington Post)

 

Medicare Advantage:  The Centers for Medicare and Medicaid Services (CMMS) have reversed their earlier decision (TWW, Medicare Cuts, 3/1/14) to cut payments to private health plans offering Medicare Advantage. (Washington Post)

 

Permafrost:  A group of researchers at Florida State University have found new evidence that “permafrost thawing is releasing large quantities of greenhouse gases into the atmosphere via plants, which could accelerate warming trends.” We’ve known this for quite a while, but what they found is that “the associated changes in plant community composition in the polar regions could lead to way more carbon being released into the atmosphere as methane.” (TG Daily)

 

Fracking:  More earthquakes have hit Oklahoma. Seismologists say state earthquake activity is “soaring.” “Last Year’s number of ‘felt’ earthquakes - those strong enough to rattle items on a shelf - hit a record 222 in the state. This year, less than 4 months into the year, the state has recorded 253 such tremors, according to state seismic data.” It’s being linked to oil and gas exploration, which has increased in recent years. Underground work “can alter pressure points and cause shifts in the earth.” (Reuters)

 

Maine Moose:  New England researchers say that Maine Moose are dying literally by having their blood drained by ticks. “According to scientists, warmer weather has caused an explosion in the tick population.” (Raw Story)

 

Equal Pay:  This week we had “Equal Pay Day.” An analysis by the National Partnership for Women & Families of the latest U.S. Census Bureau data shows that “the gender-based wage gap affects women in nearly every corner of the country.” Here’s a map they put out. Go to your state for the details. They found that women who are employed full time, year round, are paid just 77¢ for every dollar paid to men, amounting to a yearly gap in wages of $11,607. Black women are paid just 64¢ and Latinas just 54¢. The largest differences are in Wyoming, Louisiana, West Virginia, Utah, and Alabama. Black women in Louisiana and Latinas in New Jersey suffered the worst gaps for minority women. Recent research by Pew Research found that the pay gap, while still there, has been narrowing. The Paycheck Fairness Act would close some of the loopholes, but congress won’t pass it. It couldn’t even get through the Senate this week where it needed 60 votes for cloture. (GovTrack) So Obama issued an Executive Order “banning federal contractors from retaliating against employees who discuss their compensation.” (USA Today)

 

Unemployment Compensation:  The Senate voted 59-38 to “resurrect” federal jobless benefits for the long-term unemployed. Since so many Republicans had voted for it, they appealed to House Speaker John Boehner (R, OH) to get the bill through the House. (Miami Herald)

 

Mortgage Forgiveness Debt Relief Act:  In 2007 a law was passed that allowed homeowners to sell their homes for less than what they owed - if the lender went along with it - and not be taxed for the amount of the loan that was forgiven. That law expired in December and has not been renewed. Therefore, that forgiven debt can now be taxed. This is also true for homeowners working with their lenders to refinance their underwater property for a lesser amount - also forgiving a portion of the original loan. “A recent analysis by the Urban Institute found that about 2 million homeowners will be at risk of incurring that kind of tax liability. A congressional analysis estimates that borrowers will be on the hook for $5.4 billion in extra taxes if Congress fails to renew the tax break.” (Washington Post)

 

Trading:  The Justice Department is looking into high-frequency trading to see whether it violates insider trading laws. If you don’t understand what they’re getting at, here it is in a nutshell. You have a million shares of some stock. You call your trader and say you want to sell. Before processing your order, the broker puts in an order to sell his own shares. The trader’s sale gets more money than you do because the trader’s sale drives down the share price. So, they made money because of the information that you were selling. And you lose money. Not to mention that you’ve just paid for the trader to do the job. “High-powered computers and advanced computer software allow high-frequency traders to - in milliseconds - step in front of other investors’ trades and make essentially riskless profit.” (USA Today)

 

Bank Regulations:  The Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency, and the Federal Reserve wrote a new rule for banks. They raised the “leverage ratio” - the amount of capital a bank holds against its assets. It has been at 3% but now it’s 5%. The requirement is “more stringent” than for banks in Europe and Asia and “could force the 8 biggest banks in the United States to find as much as an additional $68 billion to put their operations on firmer financial footing.” According to the NY Times: “Faced with that potentially onerous bill, Wall Street titans are expected to pare back some of their riskiest activities, including trading in credit-default swaps, the financial instruments that destabilized the system during the financial crisis.”

 

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