Governor Walker’s Health Care Plan Hurts Our Economy

Governor Walker Will Not Expand Medicaid

The Post-Crescent reported on February 13, 2013 that Governor Walker has decided against accept federal dollars to expand Medicaid. This is an important decision and will have a big impact on our economy in the Fox Cities.

Governor Walker’s approach, which he calls a “hybrid,” has two components. One is that eligibility for Medicaid (Badgercare) will be tightened. Today, a household is eligible if its income is less than twice the official federal poverty level of $11,490 for individuals and $15,510 for couples. Under the Governor Walker’s approach the eligibility level will be lowered to the federal poverty level, and people whose incomes are above that will have to buy their health insurance through the health insurance exchange that will be set up. Since their incomes are very low, they will presumably be eligible for subsidies under the Affordable Care Act.

Thus, a part of the cost of health insurance for those who are no longer eligible for Medicaid will be shifted to the people themselves. This is indeed Walker’s goal. He said, ““I want to have fewer people in the state who are uninsured, but along with that I’d like to have fewer people in the state who are dependent on government.”

The Effect Depends on the Size of the Subsidy

How this works out in practice will depend on the size of the subsidy. Clearly, a family with an annual income of $31,000 a year does not have a lot of money to spend on health insurance. So, if the subsidy is large enough, this may work well, but there is reason to doubt that the subsidies will be large enough.

On February 15, 2013, the Post-Crescent reported that at an analyst who is no friend of Obamacare said, “To me, this [Walker’s plan] is crazy policy. These exchange plans were never designed for Medicaid-eligible people. They’re designed for middle-class people who can afford deductibles and co-pays.”

The Wisconsin Hospital Association agrees. An article in the Business Journal on line quotes the association’s president Steve Benton: “Hospital executives are concerned that Walker’s plan will result in fewer people with insurance coverage and an increase in uncompensated care.”

Walker’s Plan Will Likely Cost Jobs in the Fox Cities

This is a key point for our economy in the Fox Cities. We have three major hospitals: Appleton Medical Center, St. Elizabeth and Theda Clark, and we have two major health care organizations: Affinity and Thedacare. They are an important part of our economy, and they are among our largest employers. (Thedacare and Affinity Health Care are Appleton’s largest employers after Kimberly-Clark.) Our health care organizations bring money into the Fox Cities because they are regional centers. Their patients include many people from outside the Fox Cities. So, any change in health care policies will have a profound effect on our community.

The income of our hospitals is heavily dependent on Medicare and Medical Assistance (Badgercare). According to data provided by the Wisconsin Hospital Association, 44.1% of revenue of hospitals in our area (Analysis Area 3 of the report) came from Medicare, 10.2% came from Medical Assistance, 40.9% from commercial insurance and 4.7% from all other sources. In other words, 53.3% came from Medicare and Medical Assistance.

Hospitals report what they call “deductions” from gross revenue, and these include the cost of charity care as well as the discounts obtained by large payers like Medicare or insurance companies. According to the report cited above, such “deductions” account for 49.2% of revenue in our area. Discounts provided to Medicare accounted for 27.4% of gross revenue, deductions for Medical assistance 6.8%, discounts to Commercial insurance companies 12.7% and the cost of charity care was 1.3%. All other deductions were 1.1% of revenue.

Walker’s Plan Will Likely Drive Up the Cost of Health Insurance

If the number of people without health insurance increases as WHA expects, the cost of charity care will rise. Some part of the rise will be absorbed by the hospitals, and they will try to offset the rise through cost savings including hiring fewer people. So, Walker’s plan will cost jobs in the Fox Cities.  Another part of the cost will be passed on to the rest of us in the form of higher hospital charges, which will lead to higher health insurance premiums. This will hurt businesses in our community. So, Walker’s plan will hurt business and individuals in the Fox Cities by reducing the number of jobs here and by raising the cost of health insurance. 

Walker’s Plan Fits With the Goal of Reducing the Size of Government

None of this should surprise us.  We have to remember that Governor Walker – an accredited member of the Radical Right – has one overriding goal. He wants to reduce the size of government and lower taxes. He does not care who suffers in the process because in the radical rightist mind, everything will be just hunky-dory in the end if we can just get government “out of the way.” This quasi-religious faith in the power of free enterprise to solve all problems is at the root of his policies. As he said, “I’d like to have fewer people in the state who are dependent on government.”

Private School Vouchers: Bad for Education in Our Community

Governor Walker Supports Vouchers

The Appleton Post-Crescent (January 31, 2013) reported that Gov. Scott Walker is in favor of expanding the voucher program that allows families to use public money to attend private schools.  Since this is going to be an important issue this year we should understand what it can and cannot do in our community. What is the purpose of the voucher program?  Can the use of public money to support private education provide a solution to the problems of education in our community?

Will the Program Help Education the Fox Cities?

There are 12 private schools in the Fox Valley that offer secondary education through the 12^th grade.  They are listed in the table below.  (The table includes all schools within 25 miles of ZIP Code 54911 according to Private School Review, and on-line source of information about private schools.)

Private High Schools in the Fox Valley

School Name	Location	Enrollment
The Academy of the Fox Cities	Appleton	68
Xavier High School	Appleton	585
Fox Valley Lutheran High School	Appleton	611
St Mary Central High School	Neenah	233
Oshkosh Christian School/Valley Christian High School	Oshkosh	204
Lourdes High School	Oshkosh	291
Wyldewood Christian School	Oshkosh	37
Beth Haven Academy	Green Bay	17
Starr Academy	New London	37
Notre Dame de la Baie Academy	Green Bay	718
Adventist Junior Academy	Green Bay	39
Bay City Baptist School	Green Bay	84
TOTAL		2924

 As you can see, the total enrollment of all of the private high schools in the Fox Valley is 2924 students.  This contrasts with a total enrollment of 12,925 students in all high schools in the Fox Cities according to data on the website high-schools.com.  It is easy to see that the private schools in our area could not possibly enroll any large percentage of the high school students in our area.  The private schools would be overwhelmed.  So, under the voucher program, most of our students will have to remain in our public high schools, and we will have to educate them adequately and prepare them for the world in which they will live and the jobs by which they live.  The voucher program cannot do this for us.  In fact, the voucher program will make it harder for us to educate our children because the voucher program will drain money from the public schools – money that might have been used to make the public schools better for everyone.

Vouchers in the Fox Cities Will Give Money to Religious Schools

In addition, we can see that almost all of the schools listed above are religious institutions. (The one exception is The Academy of the Fox Cities, which enrolls only 68 students.)  A religious school considers the inculcation of religious values to be an important part of its mission.  Parents who send their children to a religious school do so at least in part because they wish their children to learn those values.   

There is nothing wrong with a school’s inculcating religious values.  A religious group is certainly entitled to establish schools for the purpose of inculcating the group’s values, and it is equally the right of parents to send their children to those schools.  However, it is no part of the duty of the state of Wisconsin to support such schools.  We provide public schools which are very carefully nonsectarian in order to provide our children with the knowledge and skills that they will need and to teach them the basic values of democratic society in the United States.  Religious schools are private precisely because their missions are not compatible with the limitations that we impose on our public institutions, which must not support specific religious groups.  If our state were to give money to support religious schools, it would be violating our most basic political traditions concerning the separation of church and state.

The Voucher Program Will Not Increase Choices For Parents

Governor Walker says that we need the voucher program to provide parents with choices about where to send their children to school, but that is not true.  Of the schools shown in the table above, 6 large schools enroll 92% of the students (2645 out of 2924), and all of the large private schools have financial aid for parents who cannot afford the tuition.  Fox Valley Lutheran High School says on its web site, "No student will be denied a Christian high school education due to financial need!"  This means that parents already have choices.  They do not need the voucher program. So, what is its real purpose?

The Real Purpose of Vouchers is to Take Money From the Public Schools

The real purpose of the voucher program is to reduce the funds available for public education by funneling the money to private, religious schools.  Reducing the size of all government functions is the main goal of the Radical Right. This goal was most famously expressed by Grover Norquist (of the “no tax” pledge), when he said, "I don't want to abolish government.  I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub."  Governor Walker and the other radical rightists in Madison have already made large cuts in state aid to local school systems, and the governor is planning to make a large part of those cuts permanent by using this year’s budget surplus to fund cuts in state income taxes.  Now, he wants to take some of the remaining funds and give them to private, religious schools.

In short, we should oppose the voucher program because:

·         The voucher program will not help parents or children, because they already have choices.

·         The voucher program will harm our public schools and reduce our ability to educate our children.

·         Vouchers for religious schools go against our basic tradition of the separation of church and state.

Our public schools are one of the real glories of our community. They are among the best in the country. We have to do what we can to preserve and improve them.  Call your representatives now and let them know that you oppose giving our community’s public education’s funds to sectarian, religious institutions.

 

Progressive Democrats are the Party of Fiscal Responsibility

 

Republicans of the Radical Right are Fiscally Irresponsible

It never ceases to amaze me that radical rightist Republicans are able to present themselves as the party of fiscal responsibility when the truth is that they are anything but.  Yesterday (January 23, 2013), the Post-Crescent reported that Governor Walker and his allies in the legislature are hoping to give us all a reduction in our income taxes.  The paper says, “The governor has made his proposed income tax cuts a key part of his budget, which he is expected to present next month, and highlighted the cuts in his State of the State address last week.”  Governor Walker is proposing these cuts, he says, because our state has a budget surplus of about $342 million.  The budget surplus is largely due to the fact that Wisconsin has collected more in revenue than was projected, and the extra revenue is due largely to the improvement in our economy.  To use this extra revenue to cut taxes makes no sense from the point of view of fiscal responsibility.

Cutting Taxes is Like Giving Your Bonus Back to the Boss

The extra revenue is like a bonus that a company’s employees receive when the company does especially well.  Now let me ask you, if you received a bonus from your employer and you found that it exceeded your expectations, would you go back to your employer and say, “I don’t really need that money.  So please don’t give it to me,” or would you use the money to pay down your debts, make an extra contribution to your retirement account, add to your savings account, or save it for your children’s education?  Would you expect to receive a similar bonus every year, or would you treat the bonus as an unexpected windfall?

We Cannot Count on Having a Surplus Every Year

The situation of our state is just like the situation of an employee who has received a bonus.  The improvement of our economy has given our state some extra revenue, and the money could be used to improve our roads and bridges or to restore the cuts that were made in the funding for education in the budget for the last biennium.  We could also use that revenue to pay down our state’s debts or to put money away in the state’s Rainy Day Fund.  This last alternative would be particularly prudent because we cannot assume that a growing economy will give us a budget surplus every year.  We have to assume that we will sometimes have deficits in the future.  In this situation, using the money for a tax cut is an example of shortsighted fiscal irresponsibility.

We Don’t Really Know the Size of the Surplus

It gets worse.  The real size of the budgetary surplus is questionable because Governor. Walker’s administration has been budgeting based on the same suspect accounting methods for which he criticized his predecessor.  Governor Walker has been using cash flow accounting rather than accrual accounting just as his predecessor did, because cash flow accounting allows him to ignore obligations accrued in this year that will not be paid until next year.  Using cash flow accounting, the state can make the budget appear to be in balance merely by shifting expenses from the current year into next year.  So, it is hard to tell just how big the surplus really is, and it is equally hard to tell how much money might be available to fund the tax-cut.  In short, the Republican radical rightists in Madison are fiscally irresponsible not only because they are failing to pay down the state’s debts or to save money for a rainy day but also because they are doing so when they do not really know how much money they have.  Why are they doing this?

The Real Goal of the Radical Right Is To Reduce Key Government Services

They are doing it because the real goal of the radical right is not fiscal responsibility.  The real goal is to shrink the size of government.  The radical rightists believe that taxes should be cut whenever possible in order to force reductions in the size of government.  Of course, “reductions in the size of government” means reductions in key government services.  It means reductions in things like education, conservation, healthcare and the maintenance of roads and bridges.  We need these services, and our fellow citizens are smart enough to see that.  As a result, the radical right’s strategy has never worked. It was tried by President Reagan, and instead of shrinking the size of government, it led to unprecedentedly large federal deficits.  It was tried again by President Bush, and the result was the same.  Why does this happen?  It happens because everybody loves paying less tax, but we all resist reductions in government services that we know are important.  The radical rightists do not want to recognize the fact that their strategy has never worked, because they have a blind faith in the rightness of their cause and because people like the Koch brothers can always be counted on to support politicians who push for lower taxes.

Progressive Democrats Are the Real Party of Fiscal Responsibility

It is time for us to recognize that the Republican radical right is the party of fiscal irresponsibility.  We progressive Democrats are the only real fiscal conservatives in the country because we understand that if we want to have government services we have to pay for them.  We must reject budgeting based on fantasy.

Big Money Trumps Science in the Nation and in Wisconsin

Richard Schoenbohm and I both contributed to this post.

Governor Walker is going to try again to pass the iron ore mining bill that barely failed in the last legislative session, and big money is again promoting the project. 

During the last session,  Wisconsin Manufacturing and Commerce (WMC), the powerful big-business lobby in Madison, alleged it was a myth that the bill would allow mining corporations to dump toxic waste into wetlands.  WMC claimed in a slick release that this environmental concern is “completely false, and ridiculous. Like current law, the bill requires any mining company to go through a permitting process before disturbing any wetland.”¹

It is no myth, and the concern is not false.  The Nature Conservancy reports that the bill prevents in-depth scientific evaluation of proposed mines by limiting amount of time the DNR will have to create the Environmental Impact Statement (EIS) to one year. The report says,

Unlike in Michigan and Minnesota, the bill limits the amount of time the DNR will have to create the Environmental Impact Statement (EIS) to one year no matter the complexity of the site or the quality of the company’s Environmental Impact Report (EIR).

·   The data gathered and used by the company during the writing of the EIR no longer has to be shared with the DNR, nor is the department consulted in the methods used to gather the data.

·     By removing contested case hearings as well as hearings on the Environmental Impact Statement, there is no third party verification of the company’s data or methodologies.

·        The DNR cannot consider the quality of the information submitted by the company when deeming the application complete. An application could include poor environmental evaluations, but the Department would have no option but to rule the application complete. The Department would not have the time to redo many of these studies in the remaining 360 days. A comprehensive hydrological study takes a minimum of two years.

So how does WMC, a lobby arm of corporate interests, get press time on a scientific issue?  It certainly isn’t its scientific credential.  It is money.  Energy corporations, for example, know that enough expensive propaganda produces policy decisions in their favor despite scientific evidence to the contrary.  How much money?  Here is what Shawn Lawrence Otto reports in Fool Me Twice:  Fighting the Assault on Science in America.

Public data from the Securities and Exchange Commission and charitable organizations’ reports to the IRS show that between 2005 and 2008, Exxon-Mobile gave about $9 million to groups linked to climate change denial, while foundations associated with the private oil giant Koch Industries gave nearly $25 million.  The third major funder was the American Petroleum Institute (API). Between them they created and funded dozens of groups engaged in producing pseudoscience, activism, organizing, media outreach, and lobbying and implemented an all-out propaganda campaign.  But this was a drop in the bucket compared to what they would spend overall.  Between 1999 and 2010, the energy industry spent more than $2 billion fighting climate change legislation, more than $500 million of it from January 2009 to June 2010, or almost $1,900 per day in lobby expenditures for every US senator and representative in Washington – and those numbers don’t include nonreportable expenses like publicity, earned media, rallies, and polling.  They spent an estimated $73 million more on anti-clean-energy ads from January through October 2010, and Koch family foundations gave an overall $48 million to groups engaged in climate change denial between 1997 and 2008.”²

Wisconsin is no different. A lot of big money has been spread around by supporters of the mining project.  Wisconsin Manufacturers and Commerce spent at least $2 million to influence last year’s recall election, and its members gave more than $1.15 million to candidates in the 2012 election cycle.  Americans for Prosperity, a group founded by the Koch brothers, spent about at least $8 million to influence elections in Wisconsin in 2011-2012.

So, we should not be surprised to learn that Governor Walker is going to try again this year to pass the mining bill. In his “state of the state” speech on January 15, 2013, he said,

One of the best ways we can show the people of Wisconsin that their state government is focused on jobs is to pass a bill that streamlines the process for safe and environmentally sound mining. Start with the legislation that was approved in the Joint Finance Committee last session, include some reasonable modifications, and send me a bill to sign into law early this year.

Maybe you think that Governor Walker’s support of the mining bill is unrelated to the financial support he and other radical rightists in Wisconsin have received, but we are skeptical.

 

1.       Wisconsin Manufacturing and Commerce, Mining Bill 426:  Iron Mining Reform
2.      Shawn Lawrence Otto, Fool Me Twice:  Fighting the Assault on Science in America, p. 198, Rodale, 2011.