United States News Digest

Obama: Cut Social Security, Medicare, Medicaid

July 11 (EIRNS)—President Barack Obama has insisted that slashing Medicare, Medicaid, and Social Security be placed front and center in the negotiations with Congressional Democrats and Republicans on raising the debt ceiling. Obama came into his July 7 meeting with eight Congressmen with three options: a small deal for $2 trillion in cuts over 10 years; a medium proposal for $3 trillion in cuts; and a big deal for $4 trillion in reductions, in exchange for increasing the debt ceiling past the November 2012 elections. The Wall Street Journal reports today that most of the Congressmen favored the big package, and as a result, Obama was gunning for "a blockbuster deficit reduction deal," but talks broke down yesterday.

Among the ruses under discussion to slash Social Security, is to replace the existing Consumer Price Index used to calculate annual inflation adjustment for Social Security payments, by the so-called "chained CPI," an artifice of the Simpson-Bowles "Catfood" Commission which significantly lowers the reported inflation rate by factoring in people switching to cheaper goods when prices rise. For example, if people switch from eating steak to catfood, because the price of steak rises, the "chained CPI" does not consider this to be inflation. The Congressional Budget Office calculated that this cheap accountant's trick would cut $112 billion from Social Security payments over a decade, raise taxes by $60 billion, and reduce veterans' payments by $24 billion.

Rep. Jan Schakowsky (D-Ill.), a Glass-Steagall signer, refers to this as the "chainsaw CPI," arguing that even the existing CPI actually understates real inflation for seniors, who spend relatively more on health care and medicine.

Transportation Bill Would Lead to Half-Million Layoffs

July 8 (EIRNS)—Open warfare has broken out on the House Transportation and Infrastructure Committee, which previously, under both Democratic and Republican chairmen, had been the most bipartisan committee in the House. What prompted the warfare is a draft proposal for a six-year transportation bill floated by Rep. John Mica (R-Fla.), the current chairman of the committee, that would restrict highway spending to the expected revenues into the highway trust fund of about $35 billion a year, or $210 billion over the six years of the bill. (This compares to $286 billion in the previous six-year bill, which expired in 2009.) Mica claims that through public-private partnerships, that amount can be leveraged up to $75 billion a year.

Committee Democrats went ballistic as soon as the GOP proposal was made public. Rep. Nick J. Rahall (D-W.Va.), the ranking Democrat on the committee, called the proposal the Republicans' "Road to Ruin" bill, because of the funding levels in it. "The dramatic, mindless cuts proposed to surface transportation programs will destroy nearly 500,000 American jobs next year alone, undermine our Nation's long-term economic competitiveness, and jeopardize our economic recovery." Rep. Pete DeFazio (D-Ore.) called Mica's theory about leveraging the $35 billion a fantasy. "We need $87 billion just to maintain the existing transit system, just to maintain the existing highways and bridges in this country," DeFazio said. "If you want to improve it, you're talking about $115 billion a year, more than three times what they're proposing."

"It is obvious that this woefully underfunded bill needs to be pronounced DOA—Dead on Arrival!" declared Rep. Corrinne Brown (D-Fla.). "Instead of creating good jobs, it increases our nation's unemployment rate, and rather than improve our infrastructure, brings about greater deterioration."

States Game Medicaid To Balance Budgets

July 8 (EIRNS)—Illinois Gov. Pat Quinn signed his state's budget the week before the July 1 deadline, but it was all smoke and mirrors, plus terrible cuts which are going to cost human lives. One of the accounting gimmicks surfaced this week: The state legislature had increased the length of time the state takes to pay Medicaid bills to 110 days. On June 30, Quinn ordered a $276 million reduction in Medicaid spending, which will increase that payment cycle to 162 days.

Most hospitals wouldn't comment to Illinois Statehouse News on what the longer payment cycle will mean for them, but Quinn's budget spokeswoman, Kelly Kraft, was quite candid. "The budget passed by the General Assembly will push $1.4 billion in Medicaid bills into next year," she said Kelly Kraft. This, in a state which is already $4 billion behind in paying its bills. A spokesman for the Illinois Hospital Association would only say that the hospitals accepted the longer payment cycle, as the alternative they were offered of lower reimbursement rates was unacceptable. In contrast, neighboring Iowa pays within 60 days and that state's reimbursement rate is about 26% higher than the Illinois rate.

Kentucky Gov. Steve Beshear is taking a different approach: shoving all the state's Medicaid recipients into HMOs. In making the announcement, yesterday, that Kentucky would be opening its Medicaid program to privatization, Beshear claimed that this would save the state $375 million over the next three years, and potentially $1.3 billion, numbers immediately disputed by the Republican State Senate President. Democrats, who once fiercely opposed the cost-cutting/profiteering approach of HMOs, endorsed Beshear's plan, which still needs to be approved by the Federal Department of Health and Human Services.

Wisconsin Turns to Slave Labor

July 8 (EIRNS)—The real agenda behind Wisconsin Gov. Scott Walker's anti-collective bargaining scheme, which ignited such an uproar in the state, became clearer this week when Racine County Executive Jim Ladwig told several media outlets that he is going to expand the work that prison inmates are allowed to do, to include work that had been previously done only by unionized county workers. The inmates don't get paid for that work—though they may win early release as a result. This is made possible by the Walker bill's shutdown of collective bargaining rights for the unions. Prior to the law's enactment, the unions were able to put prohibitions into their contracts to prevent the use of prison labor to do county work. Now, they can't.

It's the not-paid aspect that has bean counters and Republicans in and out of the state jumping for joy. "These reforms will ultimately help balance budgets, avoid layoffs, and at the same time improve services," Walker spokesman Cullen Werwie said. "In this case, [Racine] County employees can build a parking lot instead of just mow grass."

Obama Justice Department Endorses Torture

July 4 (EIRNS)—On June 30—to no one's surprise—the Department of Justice announced that its two-year review of Bush-Cheney-era torture has been completed, and that only two cases, out of 101 cases of abusive interrogations reviewed, will be referred for criminal investigation. Full responsibility for this travesty, or what Salon columnist and constitutional lawyer Glenn Greenwald calls "a total legal whitewash for the Bush torture regime," lies directly with President Barack Obama.

The cases referred for criminal proceedings involving the deaths of two prisoners—one at Iraq's Abu Ghraib prison, the other at Afghanistan's Bagram prison—are but two of at least 100 documented cases in which prisoners died in custody during the "war on terror," with at least 30 of these deaths officially classified as homicides.

But from the beginning, Obama let it be known that he wanted to shut down any investigation of the Bush-Cheney crimes. About ten days before his inauguration, Obama signalled that he was abandoning his campaign promises, and insisted on ABC's "This Week" that "we need to look forward as opposed to looking backwards." As Attorney General Eric Holder was planning to launch a full investigation, the White House viciously attacked him. "Didn't he get the memo that we're not relitigating the past?" Obama's chief of staff Rahm Emanuel once yelled. Emanuel insisted that the authors of the infamous "torture memos" should not be prosecuted. The pressure on Holder continued from Obama's press secretary Robert Gibbs, who declared, "Those that followed the legal advice and acted in good faith on that legal advice shouldn't be prosecuted."

This kind of political pressure on a law-enforcement officer is not only wrong, it is illegal. And indeed, as we have pointed out, the U.S. government had no choice: It is obligated, by law and by treaty, to investigate and prosecute war crimes and torture.

But when Holder announced the "review" of torture cases, he stated, when pressed, that three categories of those responsible for the torture policy would be given immunity from investigation and prosecution: 1) the top level officials who ordered the torture, such as Cheney and Rumsfeld; 2) the lawyers, such as John Yoo and Jay Bybee, who approved it; and 3) those who were acting within the confines of the guidelines issued by the military and the CIA. Who did this leave? Simply the lowest-level CIA interrogators and soldiers who were caught doing what they believed everyone all the way up the chain of command, to the Vice President and the President, wanted them to do.