Tag Archives: Supreme Court

The Big Day

Breaking News: CJ Roberts tacks left to uphold mandate and Affordable Healthcare Law; then to the right to allow states not to expand Medicaid.

America must have some of the stupidest, least informed and most gullible people on earth, but that is another story. Today the Supreme Court finally announced their ruling that there will be comprehensive reform of our badly broken healthcare system during our lifetimes.

We learned that the 6 percent among us who don’t have insurance and don’t want it are required to have it or face a penalty*; and if the other 10 or so percent who don’t have health insurance, but want it can buy it.

John Roberts, as Zeus, ruling from on high. (DonkeyHotey)

Today we learned that the 20 or so percent of us with preexisting conditions will get to keep our health insurance or ever buy it again.

Today we learned our children up to 26 can stay on our policies or finally be forced to leave the nest and do without healthcare.

Today we learned health insurance companies will have to spend money on covering the people they insure and prove it.

Today we learned preventive care to save money (and lives) is something that can survive in our late stage form of capitalism.

Today we learned we are to get health insurance exchanges to allow us to simply and clearly compare policy costs and coverage.

Today we learned our seniors’ prescriptions will not again have a “doughnut hole” of coverage forcing countless people to do without.

Today we learned small business tax breaks will continue.

Today we learned that the 13 million adults and 3.7 million children living within 133 percent of the poverty level will be allowed access to healthcare through Medicaid – if the state in which they live isn’t so stupid as to opt-out of the 100% federally paid program – first three years and then matched on a sliding scale thereafter – today we learned that our federal government cannot penalize a state for not taking care of some of its least fortunate citizens, but we can penalize them at the ballot box.

Today we learned that those working Americans who cannot afford health insurance because they are within 400 percent of the poverty level, will get some tax credit help.

Today we learned that we are going to continue to provide healthcare to seniors, the disabled, government workers, prisoners and some of the poorest among us, while tens of millions of working and recently unemployed Americans will no longer be denied healthcare and receive help to afford it.

We already know that this is about Republican politics and the corrupt lobbying power of their masters and that any suggestion of an independent judiciary evaporated a decade ago.

We expect that Sotomayer, Breyer, Kagan and Ginsburg will, at the very least, vote to preserve most of the intent of Congress.

We knew that Scalia, Thomas and Alito would nullify the entire bill. Roberts would naturally join them unless Kennedy negotiates a narrower decision on the Commerce Clause or jumps to the other side. That didn’t happen. Kennedy stayed with the Republican nominated justices. Together they decided this was not a valid extension of the the Commerce Clause. It was Roberts who would cast the deciding vote. Citing Hooper v. California, Roberts felt “every reasonable construction must be resorted to, in order to save a statue from unconstitutionality” and concluding the law was Constitutional because it was within the right of Congress to levy a tax on individuals who do not have insurance.

The bill before the court was terribly flawed (see my Dew story when the bill passed, Hold your nose and swallow), but throwing out the entire bill with this Congress would have been devastating in lives and at terrible cost to our economy. However, a more limited ruling would have made for great political sport watching this or the next POS Congress try come up with a compromise bill to fix the problems.

In retrospect, it would have been so simple, if two years ago, President Obama had just fired Rahm Emanuel and asked Congress for a one page bill that allows all Americans to purchase Medicare at any age. Then a separate bill on expansion of Medicaid. Maybe next time.

Incredibly high fictitious cost of health care

Health care reform doesn’t go into effect for 3 more years, so why is it costing really really big businesses so much right now? In the last month, company after company has announced quarterly earnings and included huge accounting charges for health care costs.

Companies announcing charge offs for health care costs
“Why? For what? And should we be scared shitless?” Glad you asked. First off, except for exercising their Supreme Court given right to paid free speech, which resulted in hundreds of millions of dollars being spent on lobbyists to fight the health care reform bill, it hasn’t cost big business a nickel. Nothing. Nada.

Here’s what has happened. Way back in 2003, under Bush/Cheney, the brain trust in charge of our government at the time, decided to add a prescription drug benefit to those on Medicare. You probably wondered at the time, “what the hell do Republicans care about seniors?” Me, too. I knew they were having a difficult time squandering the Clinton budget surpluses so they could begin starving the states, so the states, in turn, could begin starving the poor. Plus, Bush Inc. had already paid off the campaign money they’d gotten from the super rich, the oil cartels, defense contractors and Wall Street. But they still owed big health insurance, big pharma and big business and thought they might be able to buy some senior votes in Florida, so they hatched this scheme: establish a huge new subsidy to create a private for profit prescription drug insurance plan industry to buy hundreds of billions of dollars of pharmaceuticals at non-negotiable retail and provide a tax subsidy to big business to help them get rid of workers at or nearing retirement age (Medicare Part D) – a real win-win. Even got Ted Kennedy to vote for it. Except for the donut hole, a diabolical stroke of campaign genius that must have Lee Atwater wish he could have come back from hell to enjoy it. But I digress.

The 2009 law gave big business a 28% tax deduction on retiree, or early retiree drug benefits, but it was more than just another corporate tax loophole. It was a tax-free treatment of the government subsidy to pay for companies providing the equivalent of Medicare Part D – the law gave them a subsidy and let them also deduct it from their taxes. Technically, accountants, lawyers and Adam’s house cat* refer to this as “double-dipping.” Republicans and the Chambers of Commerce refer to this as “pro-business.” When the new health care reform law goes into effect in three years, the subsidy will continue, but the tax deduction big business got for spending the subsidy will end.

snake oil“Then the tax deduction was worth billions of dollars?” you might ask. No, not by a long shot. In fact, the loss of the deduction will have almost no affect at all on company valuation or profit, but they’d like us to think it does. The explanation of how they came up with such extravagant numbers and why now, is a wee bit technical. Here goes: accounting rules require companies to recognize the present value today of future cash costs for as long as they offer the drug benefits and make this adjustment by writing down the deferred tax asset balances. Another way of saying it would be, they can pick any number they want and they can do whenever they want. These announcements are big businesses’ way of attempting to influence the off-year elections with the hope that the next Congress will give them back the deduction, which they don’t really use, doesn’t have any impact on jobs, but they are greedy and like to have more of whatever they want than they would ever need and don’t mind scaring the bejesus out of us as sport.

“But these tax deductions were real, so there’s a real cost to the companies’ investors, right?” In most cases, no. Big companies don’t pay taxes in America . That’s why we have those island governments just off our shores. According to the GAO’s most recent data (why it is so old, I have no idea, but I’m guessing that it has something to with providing political cover to those who write tax law), shows that two-thirds of US corporations paid no federal income taxes from 1996 through 2005 (those include the Clinton boom years) and 94% paid less than 5%.

So tomorrow when you read, “Company X earnings down due to health care reform costs,” just smirk and turn (or click) the page.

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*A variation of “Adam’s off ox.” The form commonly used is ‘not to know one from Adam’s off ox,’ meaning to have not the slightest information about the person indicated. The saying in any form, however, is another of the numerous ones commonly heard but of which no printed record has been found. But in 1848 the author of a book on ‘Nantucketisms’ recorded a saying then in use on that island, ‘Poor as God’s off ox,’ which, he said, meant very poor. It is possible that on the mainland ‘Adam’ was used as a euphemistic substitute. The off ox, in a yoke of oxen, is the one on the right of the team. Because it is the farthest from the driver it cannot be so well seen and may therefore get the worst of the footing. It is for that reason that ‘off ox’ has been used figuratively to designate a clumsy or awkward person.” From “A Hog on Ice” by Charles Earle Funk (1948, Harper & Row).

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Note: the post was edited on 4/23/10 to correct a stupid error of fact in paragraph 3. The original post, referred to “George Herbert Walker Bush” which was fortunately caught by alert reader/writer/commenter, Cliff Green.

In Case You Missed It

The U.S. Supreme Court announced on Friday (source: Reuters) it would hear a challenge to the 44-year-old voting rights law aimed at preventing states and local governments from making it harder for minorities to vote. Nine states are affected by the voting rights law: Alabama, Alaska, Arizona, Georgia, Louisiana, Mississippi, South Carolina, Texas and Virginia. Think there’s any coincidence that from this list only Virginia voted for Obama?

Freedom around the world is down for the third straight year (source: Freedom House). Another example of a George Wrongway Bush goal (2nd Inaugural). The full list of other goals are too long to list, but lowlights include the results of the ownership society; compassionate conservatism; no child left behind; the uniter not the divider; immigration reform; peace in the Middle East; et cetera ad nauseum.

2008: the greatest loss of jobs since 1945 (source: Wall Street Journal). What happened in 1945? Oh, yeah. The war ended and our troops came home.

The estimated cost to insure the 47 million US uninsured affordable: $17.8 billion in first year; $188.5 billion in 2010 (source: The Commonwealth Fund) about the cost for a year of war in Iraq and Afghanistan.

The War in Iraq Costs
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Compare to the cost of Providing Healthcare, School Teachers, Affordable Housing Units, and more or find your individual cost. Source: National Priorities Project