United States News Digest

Obama-Baucus Deal Exempts Big Pharma from IMAC Diktat

Oct. 11 (EIRNS)—The American Medical Association has written a letter to Senate Finance Committee chairman Max Baucus (D-Mont.), in response to the disclosure that the White House and Baucus have made deals to exempt drug companies and hospitals from decisions to be made by the proposed Independent Medicare Advisory Council (IMAC), aka, "death panels," included in the Baucus bill and demanded by the Obama Administration. The letter complains that it is unfair to protect the drug companies and hospitals from the commission and not others. The AMA writes: "This presents a serious inequity." The AMA and others also complain that the Council could cut only provider payments, without authority over benefits or premiums.

Baucus's agreement with the drug industry for its companies to contribute a total of $80 billion over ten years excludes price negotiations. The drug lobbyists are pushing to be sure that IMAC could not force negotiations either.

In a parallel deal, Baucus and the White House agreed to limit the hospitals' payment reduction to $155 billion over ten years, and in this case, they added a guarantee to the hospitals that for that ten-year period, the proposed Medicare Council would not extract any more.

The Oct. 11 Sunday New York Times reports that Rep. Jim Cooper (D-Tenn.) now predicts the end of IMAC: "This will start a race for the exits. Every other provider group will say, why are you letting these guys out? Why should we have to participate?" When House Energy and Commerce Committee chairman Henry Waxman (D-Calif.) heard last week about the hospital exemption, he said, "It amazed me. If they think Congress is too political to be involved in Medicare cuts, it seems rather political to have exempted the hospitals."

Unfortunately, none of these moves addresses the real issue, which is that the IMAC proposal is a Hitlerian T-4 mechanism to cut costs by killing people. The entire proposal must be scrapped.

Wall Street Going for Broke Against Rangel

Oct. 9 (EIRNS)—The New York Times today ran yet another editorial attack on Rep. Charles Rangel (D-N.Y.), demanding his removal as chairman of the powerful House Ways and Means Committee. Citing the usual litany of petty allegations of tax misreporting, and so-called abuse of his Congressional franking (postage) privileges, the Times expanded its targeting to House Speaker Nancy Pelosi (D-Calif.), accusing her of refusing to cave in to Wall Street's demand for Rangel's ouster, and jeopardizing her own reputation (!) as a Speaker committed to battling Congressional corruption. When the Republicans tried again, this week, to ram through a resolution to remove Rangel as committee chairman, until the expanded Ethics Committee probe is completed, two Democrats voted with the GOP, but it was still far short of the needed votes.

Rangel, one of the last remaining FDR Democrats in Congress, has been one of the most adamant members in demanding taxes against the rich to cover costs of expanded health care, and insisting on a genuine public option, and has endorsed Rep. John Conyers' (D-Mich.) bill calling for a single-payer insurance system, extending Medicare to all.

If Nancy Pelosi Wants A VAT, Throw Her in It

Oct. 7 (EIRNS)—When the American people and U.S. economy desperately need a large-scale infrastructure "blue-collar jobs" program to reverse mass unemployment and impoverishment, Speaker Nancy Pelosi is suddenly calling, instead, for a regressive value-added tax (VAT) to produce—more impoverishment.

Pelosi added her call for VAT today, to a growing number which have sprouted up over the past two weeks, since VAT was proposed by former Federal Reserve chairman Paul Volcker, who is reviewing the tax code on White House assignment. Those supporting the idea include, among others, John Podesta, head of the "Progressive Democratic" Committee on American Progress; Roger Altman, former Deputy Treasury Secretary under Bill Clinton and Robert Rubin; Urban Institute head Robert Reischauer and his deputy Rudolph Penner; Norman Ornstein of the neo-conservative American Enterprise Institute; and Michael Mussa of the top "deficit hawk" think-tank, the Peterson Institute for International Economics.

The "progressive" New America Foundation and Urban Institute have each just held "exploding debt, sky is falling, out-of-control deficits" forums at which VAT was pushed or called "the inevitable solution."

The European-style VAT "tax on everything" would be paid both by producers and distributors of goods at every stage and ultimately by consumers of goods. The right-wing Heritage Foundation, which supports a VAT tax, estimates it would cost the average American family $500/year for each 1% of a VAT tax.

Thus it would be not only a regressive tax on households, but also a self-defeating one in raising revenue, during a collapse of economic activity which it would intensify, and mass unemployment and impoverishment of households which it would worsen.

States Seek $50 Billion for High-Speed Rail Projects

Oct. 7 (EIRNS)—The head of the Federal Railroad Administration said yesterday that the agency has received applications from 24 states, seeking $50 billion for high-speed rail projects—six times the amount allocated in the "stimulus" program. The Obama Administration's "America Recovery and Reinvestment Act," passed by Congress early this year, allocated only $8 billion for high-speed rail. In fact, the only basis for carrying out such a program is through the LaRouche Plan, with bankruptcy reorganization followed by Federal credit for the projects.

"Interest in winning a share of the rail funds has been intense, not only by states, but by domestic and foreign rail, engineering and construction companies that want to build and operate the systems," AP reports.

Among the projects for which states have submitted proposals are:

* A California bullet-train line that would eventually run from Sacramento to San Diego;

* A maglev train from downtown Pittsburgh to the airport;

* A Southeast Corridor line between Charlotte, N.C. and Richmond, Va.;

* An Ohio project to link Cleveland, Columbus, Dayton, and Cincinnati;

* An Oklahoma line between Tulsa and Oklahoma City;

* A Florida high-speed line between Tampa and Orlando; and

* A number of Midwest projects linking to a regional system centered in Chicago.

Heroin, Real Cheap, Is Being Dumped on U.S. Streets

Oct. 7 (EIRNS)—Anecdotal media stories from Anchorage, Ala. to Atlanta, Ga., and Long Island, N.Y., report an upsurge of heroin being dumped on U.S. streets, real cheap. The worst-hit population reported in each case: American youth.

This is not some "market" effect, but a flank of Britain's opium war against the United States. Until now, the vast majority of heroin in the U.S. has come from Mexico and Colombia, but over the last couple of years, there has been a huge increase in Afghan opiates flooding the world market. That no action is being taken, is yet another reflection of the general breakdown in government functioning.

Yesterday, the executive director of the Atlanta Recovery Center, Mary Rieser, warned that the center is seeing "an alarming number of new students coming in addicted to heroin. The drug has grown in popularity amongst today's youth," such that heroin has become the most common addiction among those arriving for treatment and rehabilitation.

Anchorage drug rehab programs also report a surge in heroin available in south-central Alaska. "It's in such abundance, and it's so cheap out there that everything else is secondary," one program director said. "We don't even have a close second running drug of choice on this program. Right now, it is heroin and has been for the past three years."

A Sept. 25 New York Times article, titled "Young and Suburban, and Falling for Heroin," profiled the heroin epidemic among upper-middle-class youth in Suffolk County, Long Island. The New York City area is being inundated with cheap, plentiful heroin. Recent raids on "heroin mills" are picking up hundreds of thousands of bags this year, as opposed to several bags a year ago. Experts trace the spike in heroin use by younger and younger kids, to its widespread availability and low cost. A bag of heroin can sell for $5 to $25 for a 6-8 hour high. By comparison: a cocaine dose for a 30-minute high costs $40-60; and prescription painkillers (Vicodin, OxyContin, etc.) sell for $40 and up on street.