A budget deal struck between Republican congressional leaders and the White House on 10/26 would negate a previous GOP ploy to stage a crisis in Social Security funding in January.

The deal will prevent a benefits cut by transferring funds from the main Social Security trust to the Social Security Disability Insurance (SSDI) trust, which would otherwise run short of funding next year and be forced to cut payments to beneficiaries by 20%. Congress has used that rudimentary policy solution to the shifting tides of financing between the two Social Security trust funds for decades, but Republicans had moved to block such a transfer back in January in hopes of creating a high-pressure legislative crisis around the disability program.

At the time, Democrats and groups that oppose Social Security cuts objected loudly. The move amounted to taking disability benefits hostage, they said, to create leverage for forcing retirement benefit cuts that could be easily avoided by ditching payroll tax rules that benefit the highest-earning workers. Outgoing House Speaker John Boehner (R-Ohio)’s strategic reversal doesn’t give program advocates an outright win, Social Security Works President Nancy Altman told ThinkProgress.org (10/27), but it’s an improvement over a manufactured crisis.

By abandoning that crisis-creating strategy Boehner hoped to resolve the last big budget fight of the Obama-Boehner era. If it passes, the bill will raise the nation’s debt limit far enough to push the next showdown over it into 2017. It would finance government operations through the end of Obama’s presidency as well, thus ending a cycle of precarious high-stakes dealmaking that’s gone on since Republicans took over the House in early 2011.

Conservatives in Boehner’s caucus poo-pooed the deal, but the House passed it 266-167 on 10/28 with 79 Republicans joining 187 Dems for the bipartisan majority. Without a deal, America would have run out of debt ceiling headroom on 11/3 and could face another federal government shutdown in December.

The deal scrounges funds from a variety of places to pay for a $112 bln two-year increase in total spending on the military, domestic programs, and ongoing warzone operations. In exchange for loosening sequestration cuts to military and discretionary spending, the deal extends sequestration cuts to so-called mandatory spending programs through 2025 instead of allowing them to lapse in 2023.

That extension of the sequestration rules will primarily affect Medicare. The deal that created the automated annual cuts included a 2% yearly trim to the payments health care providers receive from the program. The budget deal cut at the end of 2013 between Ryan and Sen. Patty Murray (D-Wash.) extended those cuts from 2021 to 2023, and the 10/26 deal tacks on another two years.

It’s a blow to Medicare service providers, but doctors should have an easier time stomaching the extension than in previous years. Back in the spring, Congress finally passed a permanent fix to Medicare’s reimbursements formula after deep-seeded flaws in that algorithm had created a constant threat of unsustainably steep cuts to what doctors could charge Medicare. That permanent “doc fix” moves the program toward a reimbursement model that prioritizes the value and efficacy of the care provided rather than rewarding doctors based on the sheer volume of procedures and appointments they bill.

Changes to SSDI would save about $4 bln or $5 bln over the next decade without cutting benefits. Much of that savings comes from changing how applications for benefits and benefit renewals are evaluated by administrators and medical professionals. The deal also creates a pilot program to explore solutions to what’s known as the “cash cliff” in SSDI – the blunt rules that revoke a beneficiaries entire check if she earns more than $1,090 from work in a given month. The pilot will test different sliding-scale approaches to adjusting disability benefits downward when recipients find paying work.

Some of the deal’s other spending cuts will likely be overshadowed by the changes to safety net programs. It would sell off about 8% of the nation’s Strategic Petroleum Reserves, for example, bringing in a small one-time revenue jolt with global oil prices currently sitting at about half their 2014 levels.

Another less-discussed provision would cap profits for insurers from the federal crop insurance system, saving close to $5 bln over ten years. That industry has had a tough couple of years thanks to severe drought around America’s farm country, but historically insurers have gotten a very generous deal from the system. If the Boehner deal is adopted, their agreements with the federal government would all have to be renegotiated by the end of 2016 with far less favorable terms that would still allow significant profit in all but the most disastrous years for farming. It’s a small version of a more sweeping change to crop insurance that the White House has wanted for some time, but which didn’t survive a years-long fight to renew the Farm Bill. (Alan Pyke, ThinkProgress.org)

Members of the House Freedom Caucus were upset that the bipartisan backroom deal spoiled their plans to shut down the government and stop its authority to service the national debt. Rep. Mark Meadows (R-N.C.) blasted the “monstrosity of a budget deal” pushed by Boehner, Talking Points Memo reported (10/27). “Leadership’s determination to ram through this legislation days before we reach the debt limit, with zero input from rank and file members of Congress, demonstrates precisely what is wrong with Washington, D.C.,” Meadows said. He called on speaker candidates to oppose the deal.

Rep. Paul Ryan, the likely next speaker, got the support of a majority of the “Freedom Caucus” in his race for speaker before the deal was announced, but conservative Rep. Thomas Massie (R-Ky.) said Ryan must have been in cahoots with leaders on the substance of the package.

Rep. Tom Cole (R-Okla.) a longtime ally of Boehner, said on C-SPAN’s Washington Journal (10/27) he expected between 70 and 90 Republicans to vote against the bill (167 voted no). He said a “governing” caucus on the order of 70 to 100 can be expected to vote with the leadership and Democrats on the agreements.

JEB SEES RUBIO AS THREAT. James Hohmann of the Washington Post reported (10/28) that Bush’s campaign is fixated on Marco Rubio, “who has clearly emerged as the gravest threat to Bush,” oblivious to Ben Carson and Donald Trump, who are far ahead of both of them in the polls.

Rubio has gained on Bush in their home state of Florida, but both now trail Trump in the polls. The Tampa Bay Times, which routinely polls 160 top Florida pols, reports that “confidence is dropping” in Bush: “In late August, more than 85% of our Political Insiders predicted Bush would win Florida’s primary. This week, just 42% predicted Bush would win, while 33% said Rubio and 22% said Trump.” One cautionary note for Rubio, Hohmann wrote, is that Rubio must tread more lightly than Bush in attacking the other because he needs Jeb’s finance network to ultimately fall in line if he’s going to prevail.

PROBE CLEARS IRS IN TEA PARTY REVIEWS. The Justice Department notified members of Congress (10/23) that it was closing its two-year investigation into whether the IRS improperly targeted Tea-Party and other conservative groups that sought non-profit status. There will be no charges against former IRS official Lois Lerner or anyone else at the agency, the Justice Department said in a letter.

The probe found “substantial evidence of mismanagement, poor judgment and institutional inertia leading to the belief by many tax-exempt applicants that the IRS targeted them based on their political viewpoints. But poor management is not a crime,” Assistant Attorney General Peter Kadzik said in the letter, according to CNN (10/23).

“We found no evidence that any IRS official acted based on political, discriminatory, corrupt, or other inappropriate motives that would support a criminal prosecution,” Kadzik said. “We also found no evidence that any official involved in the handling of tax-exempt applications or IRS leadership attempted to obstruct justice. Based on the evidence developed in this investigation and the recommendation of experienced career prosecutors and supervising attorneys at the department, we are closing our investigation and will not seek any criminal charges.”

Republicans cried foul when the targeting of various Tea Party-related groups seeking tax-exempt status was noted in 2013, but Democrats noted that the IRS also targeted groups on the left and the center.

ThinkProgress.org reported in 2014 (4/23/14) that IRS documents provided to ThinkProgress under the Freedom of Information Act contradicted claims by Rep. Darrell Issa (R-Calif.) and his House Oversight and Government Reform Committee that only Tea Party organizations applying for tax-exempt status “received systematic scrutiny because of their political beliefs.” The 22 “Be On the Look Out” keywords lists, distributed to staff reviewing applications between 8/12/10 and 4/19/13, included more explicit references to progressive groups, ACORN successors, and medical marijuana organizations than to Tea Party entities.

A Senate report written by Sen. Carl Levin (D-Mich.) and released 9/5/14 found that the IRS did mismanage applications from groups applying for tax exemption, but it argued that mismanagement affected both liberal and conservative groups.

“The subcommittee found no evidence that political bias influences the decisions made by IRS personnel,” the report stated. “A review of nearly 800,000 pages of documents and nearly two dozen interviews produced no evidence of political bias influencing IRS decisionmaking about how to process applications filed by conservative organizations, and no evidence that the IRS singled out conservative groups for harsher treatment than other groups.”

HOUSE VOTES TO REOPEN EX-IM BANK. The House voted to reopen the federal Export-Import Bank (10/27) after a debate that underscored the split between the Republican Party’s split between traditional pro-business members and ascendant free-market conservatives who are suspicious of big corporations, Jackie Calmes reported in the New York Times.

A majority of Republicans aligned with all but one Democrat on a 313-118 vote to reauthorize the 81-year-old agency, which helps finance the sale of American-manufactured goods overseas. But only a quarter of Republicans supported the bill on an earlier vote to free it from a hostile committee.

Big and small businesses alike have complained of lost sales opportunities since the bank’s authorization expired on 9/30, and General Electric recently announced that it would move some operations out of the US to take advantage of foreign countries’ export financing. In September GE said it would close its Waukesha, Wis., plant and move 350 jobs manufacturing gas engines to Canada. Business interests formed an alliance with organized labor to push for reopening the bank.

The bank’s future may not be resolved until December, as the House bill moves to the Senate, which approved a similar bank reauthorization as part of an unrelated transportation bill. Senate Majority Leader Mitch McConnell (R-Ky.) opposes the bank reauthorization, as does Rep. Paul Ryan (R-Wis.), Boehner’s likely successor, but the bipartisan House vote strengthens bank’s proponents in negotiations between the House and Senate.

House Minority Leader Nancy Pelosi (D-Calif.) cited estimates that the bank had helped create 1.5 mln jobs since 2007 in export industries and had earned $7 bln over two decades for the Treasury through proceeds from loan repayments. The bank returned $1 bln in profits to the Treasury last year.

NOTORIOUS PILL PROFITEER UNDERCUT. The free market can work if there is competition, as Martin Shkreli found out to his chagrin. The former hedge fund manager obtained the rights to manufacture Daraprim, a life-saving drug used to treat toxoplasmosis, an infection caused by a parasite. It is particularly important in treating HIV/AIDS. Shortly after paying $55 mln for the marketing rights to Daraprim in August, Shkreli’s Turing Pharmaceuticals increased the price from $13.50 to $750 per pill in October.

Then a compounding pharmacy, Imprimis Pharmaceuticals, announced (10/22) that it would offer “customizable compounded formulations” of the two main ingredients in Daraprim for less than $1 a pill, since the patents on those drugs had expired.

“While we respect Turing’s right to charge patients and insurance companies whatever it believes is appropriate, there may be more cost-effective compounded options for medications, such as Daraprim, for patients, physicians, insurance companies and pharmacy benefit managers to consider,” said Mark L. Baum, CEO of Imprimis. Time magazine reported (10/22).

The cheap version of Daraprim is only the beginning, according to the release. The company plans to partner with third party insurers and buyers to implement a new program called Imprimis Cares that will make over 7,800 FDA-approved generic drugs available at an affordable price.

NOT JUST TRUMP: LATINOS DOWN ON BUSH, RUBIO, CRUZ, TOO. After kicking-off his presidential campaign with a promise to do away with Mexican “criminals” and “rapists,” it comes as a surprise to very few people that Donald Trump is not popular with Hispanic voters, but they don’t much like the rest of the Republican field either.

According to an AP-GfK poll (10/26), the entire Republican party’s feeble rebrand effort following the 2012 election was a complete dud. Trump, the Republican frontrunner, is viewed unfavorably by 72% of Hispanics. Despite his continued insistence that he “will win with Hispanics,” only 11% view him favorably.

But sons of Cuban immigrants, Marco Rubio and Ted Cruz, have failed to make major inroads with Latino voters this cycle and Jeb Bush’s Mexican wife and his fluency in Spanish have done little to endear him to the crucial voting bloc. Bush, who speaks fluent Spanish and married a Mexican-born woman, is viewed most favorably by Hispanics, with 26% giving the former Florida governor a positive rating. Rubio, a Florida senator and Cuban-American, comes in second, with 23% viewing him favorably. Both Bush and Rubio are viewed unfavorably by more than one-third of Hispanics polled.

An analysis from the political opinion research, Latino Decisions, said that under the best case scenario for a GOP presidential nomineee — with black voters supporting the Democrat at pre-Obama levels and 60% of white voters backing the GOP nominee, the Republican presidential nominee would still need at least 42% of the Latino vote to win the White House in 2016, Sophia Tesfaye noted at Salon.

In 2012, Mitt Romney won a meager 27% of the Hispanic vote.

TRUMP IS SELECTIVE IN JOURNOS THAT COVER HIM. Journalists for Univision, the largest Spanish-language television station in the US, were removed from a Donald Trump campaign event in Florida (10/23). The news was first reported by Jorge Ramos, Univision’s flagship news anchor, on Twitter, and was later confirmed by the Hollywood Reporter.

A spokesperson for the campaign claims that the Univision TV crew was barred from covering the event because “Mr. Trump is suing Univision for $500 mln and until that is resolved it is a conflict of interest,” Ian Millhiser reported at ThinkProgress.org (10/24).

Trump sued the popular Spanish-language network, claiming that Univision breached an agreement to broadcast Miss Universe pageants through 2019 — although Millhiser noted it’s unclear why Trump still has a stake in this lawsuit since he sold the Miss Universe Organization in September. Univision says it backed out of a business relationship with Donald Trump due to his description of Mexican immigrants as “rapists.”

Trump’s campaign also has withheld press credentials from the Des Moines Register since July, when an editorial in Iowa’s largest daily newspaper called for Trump to withdraw from the race.

OBAMA TOPS BROWNBACK IN KANSAS POPULARITY. After getting elected in 2010, Kansas Gov. Sam Brownback (R) said he intended to launch an economic “experiment” built on massive tax breaks that were supposed to generate new businesses that would generate even more taxes.

The experiment failed miserably, Steve Benen noted at maddowblog.com (10/26) and among Brownback’s disastrous results include debt downgrades, weak growth and state finances in shambles.

The state’s voters apparently have noticed, a year after they inexplicably re-elected Brownback. Only 18% of Kansas residents said they were “very” or “somewhat satisfied” with Brownback, Steve Kraske reported in the Kansas City Star (10/24). “Kansas, in case there’s any misunderstanding, is a heavily Republican state,” Kraske noted.

But the same poll by Fort Hays State University showed that President Barack Obama, long a punching bag for Republicans, rated higher. as some 28% of respondents expressed satisfaction with the Democratic chief executive. “You read that right: President Obama is woefully unpopular in one of the nation’s most heavily Republican states, but Kansas’ GOP governor is in even worse shape,” Benen noted at maddowblog.com.

He noted that a Louisiana poll in May found Obama more popular, with a 42.1% positive rating in the Pelican State, than Gov. Bobby Jindal (R) who had a 31.8% positive rating. Back in Kansas, the Topeka Capital-Journal quoted Bob Beatty, a political scientist at Washburn University, describing Brownback’s weak public support as “epic,” adding that Brownback may very well be the least popular governor in Kansas history.

TEXAS CUTS MEDICAID PAYMENTS TO PLANNED PARENTHOOD. Texas moved to cut off Medicaid funding for clinics in the state affiliated with Planned Parenthood. The move targets $3 mln, most of it federal money, paid to clinics that provided non-abortion health services to low-income Texas women.

The state’s Office of the Inspector General informed Texas Planned Parenthood affiliates that their Medicaid contracts would be terminated based on conversations in undercover videos that suggested doctors would be willing to alter their abortion methods in order to preserve intact tissue. The inspector general also accused Planned Parenthood of creating an unsanitary work environment by allowing the undercover group access to the Houston clinic, the Dallas Morning News reported (10/19).

Planned Parenthood officials have denied claims that they have broken the law or turned a profit from fetal tissue donation, the News reported. The videos, they say, are heavily edited.

Meanwhile, in Louisiana, a federal judge has temporarily blocked Gov. Bobby Jindal’s attempt to cut off Planned Parenthood funds beginning Monday, Meteor Blades noted at DailyKos.com (10/19).

Lawyers for Planned Parenthood Gulf Coast, the Planned Parenthood arm that provides medical services in Louisiana, argued that Jindal’s fight to cut funding for its non-abortion-related services is politically motivated. “In fact, uncontradicted evidence in the record at this time is that PPGC does not perform abortions in Louisiana, is not involved in the sale of fetal tissue and none of the conduct in question occurred at the PPGC’s two Louisiana facilities,” US District Judge John deGravelles wrote in his 59-page ruling. He said it appears likely Planned Parenthood will be able to prove that the funding cutoff was being attempted for reasons unrelated to the organization’s competence.

There are big differences between the two states, Blades noted. In most cases, federal and state monies are combined to cover Medicaid reimbursements. But two years ago, Texas lawmakers axed family planning providers having anything to do with abortion (even if they didn’t directly provide the procedure) from the Medicaid Women’s Health Program. Consequently, the federal government pulled its funding for the service, and it now costs Texans $36 mln annually for the state-funded program.

From The Progressive Populist, November 15, 2015


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