National Fiscal Hypocrisy Week

Monday 29 November 2010

by: Robert Reich  |  Robert Reich's Blog

http://www.truth-out.org/robert-reich-national-fiscal-hypocrisy-week65508

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.

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