The Bright Side of Fiscal Suicide

Posted by Mark Radulich on 01.30.2009

The stimulus bill isn't all bad, not exactly.

When George Orwell wrote "1984" he included a vision of the future in which people would converse in a language called. Orwell described Newspeak as "the only language in the world whose vocabulary gets smaller every year". Orwell's idea with Newspeak was to have a world where all shades of meaning were removed from language, which reinforced the total dominance of the State.

Calling something one thing when it's the exact opposite also might be an example of Orwellian Newspeak, like calling a bill full of spending on liberal social programs an economic stimulus plan. When one thinks of economic stimulus, most people generally think low taxes and incentives toward investments. One might even consider loosening lending standards to encourage people to start small business'. Typically the way one might stimulate the economy is to encourage growth in the marketplace rather than giving money to needy people who don't grow the economy. They will buy stuff, that is true, but a pittance in sales tax (if that) is no match for exponential growth industries.

However, the House passed the very Orwellian named "American Recovery and Reinvestment Act of 2009" and this very same Act will probably pass in the Senate as well in some form or another. Now most of my brethren are crying out against this (as they should) and are encouraging Senate Republicans to vote against this bill in whatever form it takes. Now, I'm taking things from a more pragmatic approach. This is going to pass unfortunately. It will fail to stimulate the economy because most of the growth that we've had has been fraudulent and without actual "real dollar" support. This is of course the terrible downside to bubbles (dot.com, housing, etc.) But just because it won't do what it intended doesn't mean there isn't some good in there despite the fact that it won't pull us out of this correction.

Since I refuse to call a huge liberal spending program on the scale of the New Deal and The Great Society (both failures) by it's Orwellian name, let's just call it the Fiscal Suicide Act. As I stated earlier, the bill itself is not terrible when you see it for what it is, a bone being thrown at the most needy amongst us.

Rep. David Obey of Wisconsin, who chairs the House Appropriations Committee posted a summary of the Fiscal Suicide Act on US News and World Report. One of the areas that will benefit from an increase in spending is Education. Now I know many conservatives don't support anymore increases in spending for education because many kids are still dumber than mops despite the increases but, as always, there is a middle ground here. What competent, non-union educators want is competitive salaries to attract real professional teachers to the field as well as having resources actually ending up in the hands of students rather than disappearing in ether. The provisions of the Fiscal Suicide Act theoretically should do just that:

· $41 billion to local school districts through Title I ($13 billion), IDEA ($13 billion), a new School Modernization and Repair Program ($14 billion), and the Education Technology program ($1 billion).

· $79 billion in state fiscal relief to prevent cutbacks to key services, including $39 billion to local school districts and public colleges and universities distributed through existing state and federal formulas, $15 billion to states as bonus grants as a reward for meeting key performance measures, and $25 billion to states for other high priority needs such as public safety and other critical services, which may include education.

· $15.6 billion to increase the Pell grant by $500.

· $6 billion for higher education modernization.

Government healthcare is pretty atrocious and seemingly arbitrary in how they select recipients. From what many of my clients tell me, everyone that applies for Medicaid gets turned down the first time, then they get a lawyer who gets them accepted the second or third time around. When they finally do get Medicaid they awarded back pay from when they first applied, usually to the tune of several thousands of dollars. I personally would rather see all means tested social services and government programs for the needy done away with in favor of a Basic Income Guarantee but we seem to have a problem with basic math and reading in this country to understand a concept like the BIG so that will probably never happen. Since we are stuck with means tested government healthcare like Medicaid and Medicare, there has to be a better way to run a railroad. The Fiscal Suicide Act includes various provisions for "better" healthcare in this country such as:

· Health Information Technology: $20 billion to jumpstart efforts to computerize health records to cut costs and reduce medical errors.

· Prevention and Wellness Fund: $3 billion to fight preventable chronic diseases, the leading cause of deaths in the U.S., and infectious diseases. Preventing disease rather than treating illnesses is the most effective way to reduce healthcare costs. This includes hospital infection prevention, Preventive Health and Health Services Block Grants for state and local public health departments, immunization programs, and evidence-based disease prevention.

· Healthcare Effectiveness Research: $1.1 billion for Healthcare Research and Quality programs to compare the effectiveness of different medical treatments funded by Medicare, Medicaid, and SCHIP. Finding out what works best and educating patients and doctors will improve treatment and save taxpayers money.

· Community Health Centers: $1.5 billion, including $500 million to increase the number of uninsured Americans who receive quality healthcare and $1 billion to renovate clinics and make health information technology improvements. More than 400 applications submitted earlier this year for new or expanded CHC sites remain unfunded.

· Training Primary Care Providers: $600 million to address shortages and prepare our country for universal healthcare by training primary healthcare providers including doctors, dentists, and nurses as well as helping pay medical school expenses for students who agree to practice in underserved communities through the National Health Service Corps.

· Indian Health Service Facilities: $550 million to modernize aging hospitals and health clinics and make healthcare technology upgrades to improve healthcare for underserved rural populations.

COBRA Healthcare for the Unemployed: $30.3 billion to extend health insurance coverage to the unemployed, extending the period of COBRA coverage for older and tenured workers beyond the 18 months provided under current law. Specifically, workers 55 and older, and workers who have worked for an employer for 10 or more years will be able to retain their COBRA coverage until they become Medicare eligible or secure coverage through a subsequent employer. In addition, subsidizing the first 12 months of COBRA coverage for eligible persons who have lost their jobs on or after September 1, 2008 at a 65 percent subsidy rate, the same rate provided under the Health Care Tax Credit for unemployed workers under the Trade Adjustment Assistance program. [Ways and Means]

Medicaid Coverage for the Unemployed: $8.6 billion to provide 100 percent Federal funding through 2010 for optional State Medicaid coverage of individuals (and their dependents) who are involuntarily unemployed and whose family income does not exceed a State-determined level, but is no higher than 200 percent of poverty, or who are receiving food stamps.

Universal healthcare scares the pants off most rational people but if this trains coming one hopes that $600 million is enough to fund it (one hopes).

The last item I want to focus is Environmental clean-up. Unfortunately there's not a lot of profit in waste clean-up or refurbishing brownfields and superfund sites. That's an area that really does have to be funded by the government, at least in the immediate future. When someone learns how to make money off of environmental clean-up we hopefully won't need government programs but until then, not living in cancerous toxic waste is probably a good thing (even if we are paying through the nose for it).

· Superfund Hazardous Waste Cleanup: $800 million to clean up hazardous and toxic waste sites that threaten health and the environment. EPA has 1,255 sites on its National Priority List, selected based on a hazard ranking system. There are many Superfund sites ready for construction, but not funded due to budget shortfalls and over 600 sites with ongoing construction that could be accelerated.

· Leaking Underground Storage Tanks: $200 million for enforcement and cleanup of petroleum leaks from underground storage tanks at approximately 1,600 additional sites. There are an estimated 116,000 sites with the potential to contaminate important water supplies.

· Nuclear Waste Cleanup: $500 million for nuclear waste cleanup at sites contaminated as a result of the nation's past nuclear activities. Accelerating the completion of projects will reduce long-term costs.

· Closed Military Bases: $300 million for cleanup activities at closed military installations allowing local communities to redevelop these properties for productive use. The Department estimates that there is a $3.5 billion environmental cleanup backlog at bases closed during previous BRAC rounds.

· NOAA Habitat Restoration: $400 million for ready-to-go habitat restoration projects.

· Brownfields: $100 million for competitive grants for evaluation and cleanup of former industrial and commercial sites - turning them from problem properties to productive community use. Last year EPA was only able to fund 37% of Brownfields applications.

Reducing Wildfires Threats: $850 million for hazardous fuels removal and other efforts to prevent wildfires on public lands. Making these investments today will create jobs in the short run, but also save long term costs of fighting fires in the future.

· State and Private Forest Service Wildfire: $550 million for state and local volunteer programs and hazardous fuels reduction efforts which states and communities have determined are of the highest priority.

· Federal Forest Service Wildfire: $300 million for urgently needed hazard reduction on federal lands.

Bureau of Indian Affairs: $500 million to address maintenance backlogs at schools, dams, detention and law enforcement facilities, and over 24,000 miles of roads. BIA schools alone have an over $1 billion construction and maintenance backlog including shamefully unsafe conditions.

The Fiscal Suicide Act will be a reality and will probably cause more overall harm to the economy than not but there will also be pockets of society that will benefit from it. You can't really argue against educated children, providing modern healthcare and cleaning up toxic waste. So to paraphrase Monty Python, always look on the bright side of Fiscal Suicide.