The People's Budget Plan Belongs on the Table

Obama's Deficit Reduction Plan

Calling his speech on reducing the deficit "The Country We Believe In," President Obama reminded us that our democracy is based on citizens caring about each other, taking responsibility not just for themselves but for their families, communities, and nation.  The strength of our country comes from carrying out our commitments to each other reflected in Head Start, Pell grants for college, Medicare, Social Security, and Medicaid.

President Obama called for reducing the deficit by $4 trillion over 12 years by cutting domestic and defense spending, reducing health care costs through more efficient and effective models of care, ending the Bush tax cuts for the wealthy, and revising the tax code.  The plan includes $2 trillion in spending cuts, $1 trillion in fewer tax breaks for the wealthy, and $1 trillion in reduced interest payments.

The President objected to the Republican deficit reduction proposal: “This is a vision that says even though America can’t afford to invest in education or clean energy; even though we can’t afford to care for seniors and poor children, we can somehow afford more than $1 trillion in new tax breaks for the wealthy.  Think about it.  In the last decade, the average income of the bottom 90 percent of all working Americans actually declined. Meanwhile, the top 1 percent saw their income rise by an average of more than a quarter of a million dollars each. That’s who needs to pay less taxes?” Obama questioned. “They want to give people like me a $200,000 tax cut that’s paid for by asking 33 seniors to each pay $6,000 more in health costs. That’s not right, and that’s not going to happen as long as I’m president.”

View Obama's 45 minute speech on the deficit.

It takes a few moments for it to download.

Read the transcript of the speech.

Read Eric Black's comments and summary of the speech's main points:  Obama's deficit speech:  One of the best and most important of his term

Washington Post economic reporter Ezra Klein reports that Ron Paul has proposed to radically change Medicare.  Instead of the traditional Medicare seniors receive now, in the future he proposes to give them vouchers to purchase private insurance.  As Medicare, a single payer program, is cheaper than private insurance, senior health care premiums will be much higher under Ron Paul's proposal.  According to the Congressional Budget Office, what seniors pay for health care would double and then continue going up as the portion that the government pays shrinks over time. 

Ezra Klein points out that the Affordable Health Care Act reduces cost over time through real reform in the health care delivery system that would reward high quality care and encourage experiments with new ways to deliver care. Ron Paul, in contrast, simply proposes cutting benefits. See Klein's article.

Note that CD3 Representative Erik Paulsen (R) voted against the Affordable Health Care Act which lowers seniors drug costs, provides preventive care without copayments, and increases the life of the Medicare Trust Fund by 12 years.  Paulsen consistently votes against the interest of middle class voters.  In 2011, he received 0% from theMiddleClass.org which rates Senators and Representatives on the percent of votes they cast which help middle class families and those aspiring to be middle class.

Read the Newsweek article on the Republican Deficit Reduction Plan: "War on the Weak - How the GOP came to view the poor as parasites—and the rich as our rightful rulers."

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The War on Labor

Find out what labor has contributed to the middle class and why Republicans are trying to remove collective bargaining rights from public employees, pass so called "right to work" laws, freeze salaries, lay off workers, and cut pensions.  Download "Attacking Unions is about Power."

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BROOKLYN PARK FAMILY GAINS HEALTH SECURITY

AFFORDABLE HEALTH CARE ACT REQUIRES INSURANCE PLANS
TO ACCEPT THOSE WITH PREEXISTING CONDITIONS

For years Democratic leaders have worked to end insurance companies worst practices, lower premium costs for families, and make sure every American has access to quality care. One year ago this Wednesday, President Obama and our Democratic leaders in Congress made that long-held dream a reality and signed the Affordable Care Act into law.

Click here to watch the video

Hear from other Minnesotans on how the Affordable Health Care Act has helped them here.


Republicans like Eric Paulsen, the CD3 Representative in the U.S. Congress, want to repeal the Affordable Health Care Act.  This first step in U.S. health care reform moves the U.S. closer to the right to health care for all citizens, one of the rights in the 1947 United Nations Declaration on Human Rights.  All other industrialized nations have recognized and provided for their citizens right to health care.  We should support this first step and move forward to meet world standards for our citizens' health care.

Wendell Potter, a former executive at Cigna Insurance who testified on the practices insurance companies use to deny care and increase their profits, wrote a good article on the benefits of the Affordable Health Care Act on its first anniversary:

One Year Later:  Health Care Reform a Law Worth Keeping

Wendell Potter left his job at Cigna to speak out on a better health care system for America.  Bill Moyers interviewed him shortly after.  It's an interesting interview.  Potter began his shift from insurance company executive to promoting a health care system that takes care of people when he visited a makeshift health clinic set up at a fairgrounds in Tennessee by Remote Area Medical, an organization that usually provides health clinics in third world countries.  He told Bill Moyers, "It was absolutely stunning. When I walked through the fairground gates, I saw hundreds of people lined up, in the rain. It was raining that day. Lined up, waiting to get care, in animal stalls. Animal stalls."

You can watch the interview: 

Head of Public Relations Speaks out against Cigna.

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Mobilizing for Civilization:
The New Energy Economy


Watch the film on the internet

"The challenge is to save civilization itself," says environmentalist Lester Brown in this documentary based on his "Plan B" book.  This documentary delivers a clear and unflinching message – either confront the realities of climate change or suffer the consequences of lost civilizations and failed political states.

Brown, together with other notable scholars and scientists, including Nobel Laureate Paul Krugman, Pulitzer Prize winner and New York Times columnist Thomas Friedman, former Governor and Secretary of the Interior Bruce Babbitt, provides a glimpse into a new and emerging economy based upon renewable resources as well as strategies to avoid the growing threat of global warming.  An enlightening film for the entire family.

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  Governor Dayton's 2012-2013 Budget  

 

Listen to Senate Minority Leader Tom Bakk's 4 minute comments on the Budget

 Governor Dayton's State of the State Address

Governor Dayton's State of the State address emphasized investing in education, jobs, and infrastructure; protecting Minnesota's most vulnerable citizens; and improving government quality and efficiency while reducing its cost.

He stated his father's favorite quote from the Bible: “To whomsoever much has been given, of him shall much be required.” He asked of Minnesota's most successful citizens, "to please help your state, your children and grandchildren, your friends and neighbors, to regain what you and I have enjoyed so much and benefitted from so greatly during our lives here in Minnesota."

Listen to Governor Dayton's State of the State Address or read the transcript

Voter photo ID requirement could disenfranchise thousands of Minnesota's less advantaged ciizens.

WEEKLY UPDATE

Representative Mike Nelson

 

In his Weekly Update" on the legislative session in the House, Representative Mike Nelson observes a disturbing trend:  "Republican lawmakers continuing to recklessly rush bills through the legislature. . .  The GOP simply doesn’t seem to understand the proper process for passing a bill through the legislature. The process was not designed to be incredibly quick; it was designed to be thorough and deliberate to ensure public input was heard and there were no unintended consequences from the provisions of the bills."

He also notes that despite MN's deficit of $6.2 billion, Republicans are calling "for millions in brand new spending. Their plan to cut taxes for big corporations would add another $200 million to our already huge deficit and their voter identification bill would cost $40 million to set up the system."

To receive Representative Nelson's "Weekly Update," request a subscription  at rep.michael.nelson@house.mn

 

Wind or Nuclear: Minnesota's Energy Future

It looks like the MN legislature favors repealing the nuclear moratorium while our Governor prefers keeping it in place. What would be best for Minnesota? As we move away from carbon based energy, we need to keep in mind that money used for one type of energy development will curtail funds for another. Six important factors to consider in choosing where our energy money should be invested include Minnesota's energy resources, the cost of the energy produced, the cost of reducing CO2 using the energy source, the amount of water the energy source uses, the amount of pollution and/or toxic waste the energy source produces, and the contribution the type of energy development can make to Minnesota's economy.  Download a comparison of these factors for energy sources, especially for wind and nuclear.

Impact of Repealing the Health Care
Reform Law in the 3rd Congressional District

Committee on Energy and Commerce Minority Staff

In March 2010, Congress passed and President Obama signed into law historic health care reform legislation, the Affordable Care Act. With this bill, the United States became the last of the industrialized nations to assure health care for almost all its citizens.  In 1947, the U.S. signed the United Nations Declaration of Human Rights, which included health care as one of those rights.

Millions of Americans are already benefitting from this law: insurers are no longer allowed to discriminate against children and others who are sick; small businesses are receiving billions of dollars in tax credits to provide health care coverage for their employees; and seniors are saving money on prescription drugs and receiving free preventive care through Medicare.
House Republicans, including Erik Paulsen who represents Congressional District 3, voted to repeal these important new benefits. The Senate is not likely to spend time on this repeal bill, and, in any case, President Obama would certainly veto it. The repeal of the Affordable Health Care Act would increase health care costs for millions of Americans, causing many families to lose coverage, and would increase the national debt by over $1 trillion. The House Energy and Commerce Committee's Minority analysis describes the significant detrimental consequences repeal of the Affordable Care Act would have in the 3rd Congressional District of Minnesota.  Download the Report.

Dayton Signs Provision in Health Care Act

Allowing Adults without Children to Be Covered by Medicaid

 

Governor Dayton fulfilled his promise to make his first official act as Governor the signing of a provision in the Affordable Health Care Act that allows Minnesota to use Medicaid to cover adults without dependent children who earn up to 75 percent of federal poverty guidelines.  Christina Wessel, the MN Council of Nonprofits' Budget Project Deputy Director, explains the many benefits Minnesotans will gain as a result of Governor Dayton signing the provision opting into Medicaid for low income adults in "Medicaid for Minnesotans could mean a Happy New Year."  1) Close to 100,000 very low-income Minnesotans will gain access to a full set of benefits, won’t face enrollment limits and will be able to get their care closer to home.  2) Health care providers will get higher reimbursement levels than under the limited GAMC program, and those reimbursements won’t be capped.  3)  Minnesota will gain more than $1 billion for health care costs during the next biennium.

Dayton invited "tea party" protestors to be present at the signing and allowed them to speak.  He commented, "This is an office where all points of view are honored and respected."   Read more details of the signing in "They came to protest, but Dayton gives them the floor."

Education Leaders Applaud Dayton's 7 Point Education Plan

School district leaders and policy makers gave Mark Dayton high marks for his seven-point education plan PDF. In particular, educators praised the emphasis the governor placed on early-childhood education and kindergarten readiness as a means to closing the achievement gap.  Dayton aims to create a comprehensive pre-K-12 system in the state.

  He will place Education Commissioner Brenda Cassellius in charge of early-childhood initiatives, revive the Statewide Early Childhood Advisory Council, and re-establish the Children’s Cabinet.

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The 2010 Finale

Before leaving to spend Christmas and New Year's in Hawaii, President Obama held a press conference to celebrate the accomplishments of the post election Congressional  session.  In his opening remarks, the President lamented  the fact that the DREAM Act was successfully obstructed by Republicans in the Senate, but celebrated the accomplishments of the last few weeks.

New York Review of Books blogger Michael Tomasky notes that "the president can now claim a head-turning sequence of out-of-nowhere legislative victories. . .  very few Democrats in Washington would have been willing to predict two weeks ago that any of these measures would pass."  Following are the five important important pieces of legislation that passed passed with the expertise and hard work of the President, Senate Majority Leader Harry Reid, and Speaker of the House Nancy Pelosi as well as promotion of the legislation by grassroots activists.

1. Got the New START Treaty Through - The most significant arms control agreement in nearly two decades will make our world safer and reduce U.S. and Russian nuclear arsenals with inspectors on the ground to verify both countries are adhering to the START Treaty.  The bipartisan approval of the START Treaty strengthens American leadership on non-proliferation issues, reinforces our relationship with a vital ally, helps prevent nuclear weapons from falling into the hands of terrorists, and contributes to world peace.  Joe Cirincione provides further details on how Republican Senators were persuaded to support the treaty and on the Senators who voted against it:  Fresh Security Consensus Trounces Cold War Politics in New START Victory.


2. Signed Extension of Tax Cuts & Unemployment Insurance - The package will spur jobs, businesses, and growth. While not everyone was happy with every part of this package, when taken as a whole, economists across the political spectrum agree that the economy will grow faster than they originally thought next year.  This bill also agrees with the the progressive deficit reduction proposals summarized below which suggest waiting two years while the economy continues to recover before implementing deficit reduction.

Many Democrats disagreed with the extension of the Bush Tax Cuts for the highest income Americans.  President Obama disagreed as well:  "Those arguments have not gone away. I still believe that it doesn't make sense for us to provide tax cuts to people like myself who don't need ‘em when our deficit and debts are growing. That's a debate that's going to continue into 2011," Obama said.

Tax cuts for the wealthy were part of the bill because Republican Senators prevented the bill that didn't include them from coming up for a vote on the Senate floor.  42 Republican Senators also signed a letter to President Obama stating they would not allow any other legislation to come to the Senate floor for a vote until legislation on the Bush tax cuts had been passed. In effect tax cuts for the wealthy were the #1 issue for Republicans and the price Democrats had to pay to pass other aspects of the bill such as extension of unemployment benefits and renewable energy credits and to move other important legislation forward.

See the chart for the Tax Cut and Unemployment Insurance bill as well as leading progressive Senators' objections to the tax cuts for the wealthy
below.

3. Overturned Don’t Ask, Don’t Tell - The Repeal of "Don't Ask, Don't Tell" ends a 17-year old law and long standing injustice.  President Obama stated, "this was the right thing to do for our military, and it was the right thing to do for our country's security."  No longer will thousands of patriotic Americans in uniform be forced to live a lie or leave the military because of their sexual orientation. We are a nation that believes all men and women are created equal. That principle of equality is now enshrined in law.

4. A New a Bipartisan Food Safety Bill - The Food Safety Bill constitutes the biggest upgrade of America’s food safety laws since the Great Depression.

5. Finally Got the 9/11 Health Bill Through - The 9/11 Health Bill will help cover the health care costs of police officers, firefighters, rescue workers, and residents who inhaled toxic air near the World Trade Center on that terrible morning, and the days that followed.

Listen to President Obama's speech.

Read the transcript.

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Investing in America: A Budget to Stimulate the Economy, Strengthen the Middle Class, and Reduce Debt

"The test of our progress is not whether we add more to the abundance of those who have too much, it is whether we provide enough for those who have too little," Franklin D. Roosevelt.

Our Fiscal Security, a Partnership of Demos, the Economic Policy Institute, and the Century Foundation, released their long term plan for the U.S. Budget, "Investing in America's Economy:  A Budget Blueprint for Economic Recovery and Fiscal Responsibility." Regarding job and economic growth as as the top priority of the nation, Our Fiscal Security  recommends across-the-board spending reductions be delayed until unemployment has fallen to 6% or less for six months.  The OFS Budget Blueprint includes gradual reduction of the nation's debt; investments to support long-term job and economic growth such as early childhood education, research, broadband, and transportation initiatives; and revenue increases that come primarily from those who have benefited the most from the economic gains of the last few decades.  It avoids shifting costs from the federal government to individuals and families.

The Our Fiscal Security Executive Summary states, "The federal budget represents one of the most concrete and measurable embodiments of the nation's values and priorities . . .  Budgetary solutions . . . can offer solutions to national problems, create economic security for those in need, and expand opportunities for millions."  It explains that a realistic solution to the budget deficit must look at the real contributors to the growth of the national debt - the rapid rise in health care costs and the lack of adequate revenue.

"Investing in America's Economy" and the Simpson-Bowles Proposal for Deficit Reduction are based on competing views of government spending.  The goal of the proposal presented by Deficit Commission Chairs, former Republican Senator Alan Simpson and former Clinton Chief of Staff Erskine Bowles, is to cap revenue at or below 21% of GDP.  The key goal of progressive plans is to strengthen the middle class and the economy and maintain benefits for Social Security, Medicare, Health Care, and programs for low income people. 

As a consequence of their different goals, the costs of balancing the deficit fall more heavily on the middle class in the Simpson-Bowles Plan since it relies on more spending cuts.  In contrast, the costs of balancing the budgt rely more heavily on the most affluent in progressive plans since they include more tax increases for the wealthiest Americans. See the comparison of the Deficit Commission Chairs' Proposal to the progressive plan of one of the Deficit Commission members, Representative Jan Schakowsky.


The difference between an austere budget and one that maintains financial security for middle class and seniors is 1% of GDP.

What is the bottom line difference between Representative Schakowsky and Our Fiscal Security's budget proposals and the Bowles/Simpson Deficit Commission proposal?  It comes down to about $1.3 trillion dollars.  Representative Schakowsky's proposal and the OFS Budget Blueprint propose raising an additional $1.3 trillion in revenue over 10 years to promote economic recovery and maintain safety net programs for workers, families, and seniors.  Mr. Bowles and Mr. Simpson  cap government revenue at 21% of G.D.P.  To keep tax rates low, they balance the budget by reducing payments to low and middle income Americans. 

$1.3 trillion sounds like a lot of money.  How much is it really over 10 years?  It amounts to less than 1% of the U.S. Gross Domestic Product.  As the world's largest economy, the U.S. has an annual GDP of about $14 trillion each year.  The Schakowsky proposal and the OFS Budget Blueprint, in other words, propose to raise federal revenue over 10 years to 22% of GDP, 1% more than the Deficit Commission Chairs' proposal.


How does a nation's tax rate relate to prosperity?

Prosperity for all citizens requires both a strong public sector and a strong private sector.  Actually as a percent of G.D.P., the United States has one of the lowest tax rates in the world including all levels of taxes - local, state, and federal.  The United States rate is 27.3% whereas Germany has 36.2% and Denmark has 50%.  Yet Germany is second highest in exports, and Denmark has a growing export industry and an unemployment rate of 4%.  Both countries also have strong social safety nets and far less inequality in income than the U.S. 

Higher tax rates to provide services to citizens, in other words, do not necessarily harm the private sector.  They can enhance the private sector, for example, by lowering the cost of health care, by providing the educational investment necessary for highly skilled workers, by funding research later used in products sold by private corporations, by building the public infrastructure used to transport goods, by making instant communication widely available, and by transitioning the country to clean energy.  These government provided benefits do not just help lower and middle income Americans, but are essential for thriving American businesses that contribute to increasing the wealth of high income people too.  See how U.S. taxes compare internationally

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President Obama and Congress Did It while They Could!
Major Legislation Passed for the American People in 21 Months

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The Senate District 46 2010 Legislators

Our Senate District 46 Legislators will continue to give our state and district the excellent service you have come to expect.  Thank you for your votes and your confidence in them.

Senator Linda Scheid

Representative Mike Nelson (46A)

Representative Debra Hilstrom (46B)

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Spoils of American Economy Stack up at the Top

Some people think that requiring American workers to be paid a minimum wage, expecting people whose gains from the U.S. economy are astronomical to pay their fair share of taxes, and making sure all our citizens can get good health care and a high quality education are extreme policies.  Democrats know they are wrong.  Democrats' are committed to families and workers, to Main Street rather than Wall Street.

Lori Sturdevant documents the escalating inequality in the U.S. "as the spoils of the American economy have been stacking up in the financial accounts of people at the top."  She notes that economic inequality does great harm to citizens by shortening life spans, increasing crime, mental illness, and chemical dependency, and threatening economic recovery.  Read her carefully researched article.

Cornell Economics Professor Robert Frank wrote in the New York Times " . . . the economist’s cost-benefit approach . . . has much to say about the effects of rising inequality. . . it has imposed considerable harm across the income scale without generating significant offsetting benefits.  No one dares to argue that rising inequality is required in the name of fairness. So maybe we should just agree that it’s a bad thing — and try to do something about it."  Democrats couldn't agree more.  Read Professor Frank's article: Income Inequality:  Too Big to Ignore

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Families and the U.S. Economy Do Better under Democrats' Leadership

Comparisons of economic results under Democratic and Republican Presidents show that deficits have increased a lot more under Republican Presidents, and the stock market has gone up a lot more under Democratic Presidents.  What accounts for the better economic results under Democratic Presidents?  Democrats focus their policies on strengthening and growing the middle class.  Economists say that 70% of the economy depends on individual spending.  When more individuals have money to spend, the economy thrives.  Contrary to Republican claims that taxing the wealthy will lead to job loss, using increased revenue to help low income people actually increases economic activity and helps the overall economy, including employment.

Download a report that contains graphs for deficits and stock market performance under Democratic and Republican Presidents.  It includes weblinks to  articles in the Huffington Post by Rev. Jesse Jackson and in MinnPost by Eric Black that challenge Newt Gingrich's statement that tax cuts and elimination of regulation leads to jobs. And it gives Moody economist  Mark Zandi's estimate of the effect different expenditures by the federal government have on the economy as measured by Gross Domestic Product.

Republican Tax Cuts for the Wealthy
and Deregulation Were a Catastrophe

In his recent book, The Chronicle of Catastrophe, Michael Cuddehe shows where the tax cuts for the wealthy and deregulation of the Bush years really led.  Download the Introduction.

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Near Universal Coverage for Americans Brings U.S. Closer to Worldwide Standards for Health Coverage
Cost Savings and Improved Benefits for Seniors

 

The Affordable Health Care Act brings the U.S. closer to the universal coverage one finds in almost all other industrialized nations.  The bill will provide coverage for 32 million  of the 45 million Americans who currently lack health care.

Improved Benefits for Seniors - The Affordable Health Care Act eliminates seniors' copays for preventive care and provides seniors with 100% coverage for an annual checkup.  It improves drug coverage for seniors by gradually closing the donut hole, the period after initial coverage when seniors with higher drug costs now have to pay the full costs of their drugs.  Seniors who now fall into the donut hole will be able to buy their drugs for half their retail price.  The bill includes cost saving measures which are expected to save Medicare $500 billion over 10 years.  These savings will extend the solvency of the Medicare program an additional 12 years to 2029.

Medicare Cost Savings - Some of the savings will come from bringing the costs of Medicare Advantage Plans in line with Medicare.  Private insurance companies currently subcontract with Medicare to provide health care for seniors for an annual fee paid by Medicare and the seniors who purchase the plan.  The original idea was that competition among private insurance companies would reduce costs, but instead the Medicare Advantage plans currently cost 14% more than Medicare.

Other savings will come from slower increases in payments to hospitals and other service providers and reduction in Medicare fraud.  The Affordable Care Act provides the Centers for Medicare and Medicaid Services with new tools that are designed to prevent fraud before it happens.

Quality Health Care Costs Less! - Most important, the Act provides payment incentives for coordination and improvements in care for people with chronic diseases.  Diseases like diabetes, atrial fibrillation, congestive heart failure, respiratory conditions, and arthritis account for 75% of the health care costs of seniors.  Health care systems like the Mayo Clinic, St. Mary's Hospital in Duluth, and the Veterans Health Care System have already demonstrated that with good chronic care, health care costs can be substantially reduced.  Keeping people healthy is a win for everyone.  Seniors are hospitalized less frequently and gain a higher quality of life and medical care costs go down.

Further Information and Help - For more information on Medicare and to keep up with current Medicare issues, visit the Medicare Rights Center, a national nonprofit consumer service organization that helps people with Medicare understand their rights and benefits. 

For help in choosing the Medicare Supplemental, Medicare Advantage, or Medicare Part D Drug plan that meets your needs best, call the Senior Linkage Line, 1-800-333-2433 between 8 a.m. and 4:30 p.m. Monday through Friday.  The Senior Linkage Line provides help in the 7 county metro area.  You can get help over the phone or at a counseling center near your home.  You can also request a booklet of the insurance plans available for 2011.

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