UFE's E-News August 2009

In this Issue:

 

Article One

The Healthcare "Debate" – McCarthyism For The New Millennium

The debate on healthcare reform is looking a bit like a food fight in the mess hall at summer camp. Reading about it is like bad reality TV – you don't want to watch, but you just can't tear your eyes away.

Those in opposition to healthcare reform are crying "red," burning people in effigy and equating President Obama with Hitler. Meanwhile, Sarah Palin is going on about a "death panel" that will determine human worth. Don't be surprised if you start hearing rumors about government mandated sterilization too.

Opponents' responses are outlandish, ill informed, and perceived by some as racist. But, the commentary is moving on a muddy two-way road with the muck flinging both ways. Nancy Pelosi and Steny Hoyer have called opponents to the reform bills "simply un-American."

While we're busy throwing punches at ourselves à la Jim Carrey in Liar Liar, 46 million people in this country continue to go without health insurance coverage, a large portion of whom are people of color. It's incredible. It's absurd. It's flabbergasting.

Before we start channeling McCarthy and reinstating Communist trials, let's just analyze the situation a bit: in 1948 the UN declared quality health care to be an indisputable and universal human right. Ergo, we need to break down barriers to accessing care. A good start might be...hmmm...making it affordable for everyone.

And yet, our current healthcare system is designed to be discriminatory, denying coverage to many who can afford it in addition to all those who cannot, all for the sake of private companies receiving enormous profit. That this disproportionately happens to people of color demonstrates that our healthcare system is yet another example of structural racism leading to increased economic inequality in the US.

The goose might not lay that golden egg of equal healthcare for all, but it's about time we woke up to the fact that too many people are suffering and start taking steps toward helping them.

For more on this issue, check out:

The White House's "Reality Check"

Tim Wise on healthcare and race

Matt Yglesias' healthcare blog

"The Fight of Our Generation" to take action with Citizens for Tax Justice.

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Article Two

Ten Years, $1 Trillion – Who's Going to Pay?

Healthcare has been the black hole of this nation's economic and political agenda for decades. Anyone who ventures into the land of reform – especially, as we're now seeing, when it comes to broadening public healthcare – is sure to become a target for verbal stoning. The Obama administration has been hit hard over the past few weeks; and this weekend we saw them soften their position on a public healthcare option. Nonetheless, healthcare is in severe need of reform, so let's roll up our trousers and wade through the muck.

There are many injustices and inequalities embedded in the nation's healthcare system and possibly as many ways to go about addressing them. A key step in reforming the system is making it affordable for everyone. Some proposals for doing this, like the employer responsibility requirement outlined in the Senate Finance Committee Health Bill, would worsen the situation. Others, like the proposed surtax from the House Ways and Means Committee, in part, present a progressive solution.

The surtax will only affect 1.2% of taxpayers, will raise an estimated $540 billion dollars over 10 years, and help redistribute tightly controlled wealth by taxing those who can most afford it to subsidize affordable health care. Those who would be affected by this tax have received millions in tax cuts instituted by the Bush Administration. UFE has been working to reverse these tax cuts through progressive tax reform for years.

Though the surtax will not be a cure-all to financing health insurance reform, it represents an important step in the right direction.

For more on this issue, check out:

The Center on Budget and Policy Priorities on the upper-income surtax and an excise tax on expensive insurers

"Taxing the Top to Pay for Health Care Reform" by Chuck Collins, Institute for Policy Studies

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Article Three

California vs. Texas: An Economic Heavyweight Bout

In July, The Economist put our nation's two mammoth states, California and Texas, in the ring for a comparison of their economies. They praised Cali's usual glitz, their universities and infrastructure, and their techie sector for constantly putting the "in" in innovation. Texas, on the other hand, once an outlier of forward moving societies, was credited with its business friendliness and relative insulation from our current national economic emergencies.

NY Times conservative columnist, Ross Douthat, alluded to the idea that Texas is much better off than any other state, and that conservative politics is the answer to all our woes. Don't be fooled, though. His argument has its flaws.

California's problem: Their political trends make passage of revenue-generating legislation nearly impossible (at the moment, anyway) – see Proposition 13. Cash might go into their economy, but doesn't come out in proportion. At this moment, when increased tax revenue is so urgent, Gov. Arnold is parading about the web as the "budget slasher" and placing autographed government vehicles on the auction block. California's incessant refusal to extend a greater tax liability to the people who can actually afford to help with the state's budget crisis is leading the state's economy off of a colossal Californian cliff.

Texas' problem: What benefits there are in their current economic approach don't apply to the majority of the population, because the state government isn't investing in the things that will yield a thriving and sustainable economy. Texas' snubbing of taxes to improve public services – namely their miserable education and healthcare systems – has the potential to create a generation of people who either need "Dummies" manuals just to do the bare minimum at their jobs or won't have the good health to work at all – that is, if drought or addiction to fossil fuels don’t eventually wipe out the state's economy.

We call this bout a draw – both are losers for now. Sure, the two states can learn a few what-to's and what-not-to's from one another, but neither has the details worked out right. The skeleton key to both states' problems is taxes. With additional tax revenue – collected through progressive means – California could pay for all of its rave-worthy resources, and Texas could start investing in the futures all of its residents.

Read more:

"Is Texas a Model for Growth?" blog post by Matt Yglesias

Steve Benen's take on WashingtonMonthly.com

"Texas is not the only red state," says Paul Krugman

Listen to a podcast on OnPointRadio.org

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Article Four

Momentum Building for "Say on Pay"

Responding to growing public outrage over extreme CEO and executive compensation at companies like AIG and Goldman Sachs in the midst of the financial crisis, the US House of Representatives passed Say on Pay legislation sponsored by Rep. Barney Frank on July 31, 2009.

Pending approval by the Senate and President Obama (who has indicated his support), the legislation would require public companies to give shareholders an annual non-binding vote on executive pay packages. The bill would also mandate a shareholder vote on so-called "golden parachute" agreements (such as the $47 million severance package AIG's CEO received upon his firing). The bill also contains provisions requiring greater independence of compensation committees and consultants, and prohibits large financial institutions from having risky incentive-based compensation provisions. Once passed, the SEC would have 6 months to implement regulations, and companies would then have 6 months to comply. For a more detailed summary, see this blog.

United for a Fair Economy and our Responsible Wealth project have been calling attention to extreme CEO pay for more than a dozen years. In the past year, Responsible Wealth members filed 6 shareholder resolutions asking companies to allow an annual advisory vote on executive compensation. RW's proposal at Prudential garnered a 61.5% vote in favor.

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Article Five

Estate Tax Update: The Fight's Not Over Yet

Healthcare reform is not the only issue under debate this fall – but try telling that to the media. Within the clouds of propaganda, there are other critical matters on the table. Take, for instance, the estate tax – the most progressive tax in the US, paid by less than 0.5% of all estates. The right wing has been yearning for years to get rid of the tax and, while permanent repeal is off the table, opponents are still trying to gut the tax in the reform process.

Congress passed the final budget in May that would keep the estate tax at the 2009 exemption of $3.5 million per spouse, with a 45% rate on amounts above the exemption. In April, the US Senate voted for a budget amendment to further reduce the estate tax. The amendment would have permitted a $5 million estate tax exemption per spouse ($10 million per couple) and a lower 35% rate. Fortunately, Congress did not include this measure in the final budget – thanks to the efforts of UFE's members and those of allied organizations.

But, there's still the issue of a one-year repeal of the estate tax in 2010 to be addressed, another morsel left behind by the Bush Administration. The Senate wants to pass permanent estate tax changes this year, but may not get to it because they are working on healthcare reform; given the slugfest that the debate has turned into, we're not too surprised.

The House is considering passing a "one-year patch" when it returns in September to prevent the 2010 hiatus. Under a tight timeframe with a packed Congressional agenda, this would be a solid step toward passing a permanent estate tax law in 2010 as part of an overall tax reform.

Your voice is an important part of determining what the tax reform will look like. Check out UFE's Quick Facts, Quick Action page to see what you can do.

For recent news on the estate tax, see:

"Estate Tax Reform Delay Likely, With 1-year 'Patch' For 2009" by Arthur Postal, National Underwriter

"Bid to Block Estate Tax Repeal" by Martin Vaughn, Wall Street Journal

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