National Fiscal Hypocrisy Week

Welcome to National Fiscal Hypocrisy Week.

Today (Monday), Congress takes up a measure delaying by one month a scheduled 23% cut in federal reimbursements to doctors. The cut will automatically go into effect unless Congress acts. But of course Congress will act. Doctors threaten to drop Medicare patients if their rates are cut. Congress has delayed scheduled Medicare cuts for years.

The best outcome would be an agreement to contain future health-care costs by allowing Medicare to use its bargaining power with drug companies and medical suppliers to reduce rates; by allowing Americans to buy drugs from Canada; by applying the antitrust laws to health insurers; and by giving the public an option to buy their health care from a government-run public option.

Likelihood of any of this happening over Republican and DINO objections is zero.

Tuesday, the President meets with Republican and Democratic congressional leaders to begin working out a compromise for extending the Bush tax cuts. Both parties say they want to preserve the tax cuts for lower- and middle-income families. But this would cost $3 trillion over the next decade. Republicans also want to extend them permanently for the top 2 percent of earners, for an added $700 billion. The top don’t need the cuts, don’t deserve them, and won’t spend the windfall (and thereby stimulate the economy).

The best outcome would be an agreement to extend the tax cuts for the bottom 99 percent, for two years. This would stimulate the economy in the short term when it most needs it, and reduce the long-term deficit.

Likelihood of this happening over Republican and DINO objections is zero.

Meanwhile, unless Congress agrees to extend unemployment benefits by Tuesday, 800,000 long-term unemployed will start running out. Extended benefits are not only necessary given the record number and level of long-term unemployed, but they’re also one of the best means of stimulating spending. The unemployed will spend every dollar of benefits they receive.

The best outcome would be another six-month extension, at a cost of $34 billion. This would help an additional 4 million long-term jobless who would otherwise run out of benefits over the next few months. Add in a new WPA that offers work to the jobless — everything from teacher’s aides to improving public parks and installing insulation in public buildings.

Likelihood of this happening over Republican and DINO objections is zero.

Finally, on Wednesday, the President’s deficit commission will issue a report on how to reduce the nation’s long-term deficit. The initial draft was regressive — cutting $3 of spending for every $1 of tax increase, and decimating the Earned Income Tax Credit, among other things.

The best outcome would be a unanimous report that focused on taming rising health-care costs (see first item above), rejected Republican calls to extend the Bush tax cuts for the wealthy (see second item above), and supported extending unemployment benefits for the long-term jobless and a new WPA (third item). Ideally, the report would also call for new investments in infrastructure and education that would grow the economy and thereby shrink the deficit as a share of GDP.

Likelihood, zero.

National Fiscal Hypocrisy Week may be carried over into next week, too.

About Robert Reich 545 Articles

Robert Reich is the nation's 22nd Secretary of Labor and a professor at the University of California at Berkeley.

He has served as labor secretary in the Clinton administration, as an assistant to the solicitor general in the Ford administration and as head of the Federal Trade Commission's policy planning staff during the Carter administration.

He has written eleven books, including The Work of Nations, which has been translated into 22 languages; the best-sellers The Future of Success and Locked in the Cabinet, and his most recent book, Supercapitalism. His articles have appeared in the New Yorker, Atlantic Monthly, New York Times, Washington Post, and Wall Street Journal. Mr. Reich is co-founding editor of The American Prospect magazine. His weekly commentaries on public radio’s "Marketplace" are heard by nearly five million people.

In 2003, Mr. Reich was awarded the prestigious Vaclev Havel Foundation Prize, by the former Czech president, for his pioneering work in economic and social thought. In 2005, his play, Public Exposure, broke box office records at its world premiere on Cape Cod.

Mr. Reich has been a member of the faculties of Harvard’s John F. Kennedy School of Government and of Brandeis University. He received his B.A. from Dartmouth College, his M.A. from Oxford University, where he was a Rhodes Scholar, and his J.D. from Yale Law School.

Visit: Robert Reich

1 Comment on National Fiscal Hypocrisy Week

  1. Robert- Why should physicians have 23% of current billings reduced? I am on Medicare, have few medical needs, but when it comes to losing specialists in the local medical community I feel my healthcare plan (insurance) has become of less value. And through support by those like yourself, it will be of much less value as the Medicare Czar cuts, and cuts and cuts coverage (benefits).
    Question: Have you ever had an original idea?

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