Catalyst

Privatization Gone Amok

President Bush’s reasons for vetoing SCHIP (State Children’s Health Insurance Program)  are yet another example of the corrosive effect of the current economic theory of market fundamentalism that dominates U.S. policy domestically and globally.  We heard it first from Ronald Reagan:  “Get government off our backs!”  It is consistently reinforced with the questionable premise that private enterprise is more efficient than the government.  It is the belief that market forces work best and to everyone’s benefit when government gets out of the way.  President Bush even resurrected the great bugaboo of the last century – creeping socialism – when he gave as one of his reasons that the bill goes “too far toward federalizing health care.”

Never mind the number of uninsured children who would be covered by this bill:  an additional 4 million children over the already 6.6 million children who are already enrolled in the program. And this number of enrollees does not include all children in poverty in the U.S., nor does it extend coverage to legal immigrant children.

Never mind that the program will not be federal, but is a joint program of the federal and state governments, that is state-run and managed.  The President also is concerned that SCHIP will siphon off some children who are currently insured by private health insurance companies.  The number is amorphous.  Never mind that the American Medical Association and trade associations for private insurance and drug companies support expanding SCHIP to cover more uninsured children.  Nor does he allude to the reality that a primarily market-based approach to providing health care to individuals in the U.S. has been neither efficient nor comprehensive as the some 48 million uninsured attest.

But SCHIP is not the only example we have of our flawed commitment to privatization as the headlines in newspapers continue to reveal.  The extensive use of private contract workers to manage many of the logistics of the horrific Iraq war is a reality too little known by U.S. citizens until yet another disaster happens, such as the killing of 17 Iraqis citizens by Blackwater Security Guards or the shooting of two Iraqi Christian women returning home from work by an Australian Security company. All in the employ, and therefore in the name of the U.S.  We are now hearing from military spokesmen that the private security guards are thwarting U.S. efforts to create trust among Iraqi citizens.

Then we are consistently informed that the private contractors who provide supplies to the troops have overcharged for the services, or the building contractors have extensive cost over-runs not to mention shoddy workmanship and buildings which are uninhabitable when finished.  The mammoth new U.S. Embassy in Iraq has postponed its opening indefinitely while a Kuwaiti contractor fixes a long list of problems.  This delay will cost another $144 million.  Our Iraq experience clearly shows that the private sector is not necessarily more efficient than government.  One of the main difficulties is the lack of oversight and accountability of the private sector.  Other obvious difficulties are that the private sector is a for-profit sector seeking all the profit it can possibly grab, and it appears that there is no cost too great for the U.S. taxpayers to pay to fund this war.  The cost is in the trillions and rising.   

The reconstruction of the U.S. Gulf Coast after Katrina illustrates the same gross failures of the government “getting off peoples’ backs and letting the market hold sway.”  The list is long and depressing and the people who have been harmed by this approach are numerous.  But someone is benefiting.

Isn’t it time that we raise our voices in protest and challenge this economic model that is demoralizing to people and depleting our resources to the benefit of a few?  Private enterprise has its merits, but it demands checks and balances.  The government has a responsibility to ensure the well-being and security of its citizens as well as being a good steward of our resources.  The drive toward privatization evades that responsibility and erodes our sense of social solidarity in addressing the needs and problems of our people and the peoples whose lives we impact, such as the people of Iraq.

Posted by Maria Riley, OP - Senior Advisor, Global Women's Project.

A Moral Budget?

The middle of winter marked the start of the annual budget cycle; and
true to form, the President submitted his budget to Congress on the
first Monday in February.   In it he requested a total of $2.9 trillion
and promised to achieve a surplus by 2012, three years after the end of
his second term.  Part of this unlikely outcome reflects the
expectation of a nearly two thirds reduction in Iraq/Afghanistan
military operations in FY 2009–from $142 billion to $50 billion.

Ten days after receiving this document the Senate finally completed
work on the FY 2007 budget by appropriating $464 billion for the nine
(out of an original 13) remaining line items in the budget for the
current fiscal year, which is already one-half over.  During the five
and a half months between the beginning of FY 2007 and today we have
witnessed the annual budget ballet, which included a midnight session
in December in which the 109th Congress  rolled 520 mostly unread
tariff exemptions costing upward of $25 billion into the law that
deals with the revenue side of the budget process.

In recognition of what the administration views as a new interest in
transparency by the Democratic majority in  the 110th Congress elected
in November, the President included, for the first time, $142 billion
for operations in Iraq and Afghanistan (plus a 2007 supplemental
appropriation of $99.6 billion).  The President refused, however, to
consider rolling back any of the tax breaks enacted for his friends in
the early years of his tenure, which he credits for the economic
growth of the past six years.  Instead, he would reduce Medicare and
Medicaid by cutting $100 million from their annual growth and squeeze
other programs, including housing, education, home heating for the
elderly, health care for children, and support for local police, but
avoid tackling  Social Security.

At the Center of Concern we have consistently maintained that the
budget is the major moral document produced by government, mainly
because it lists our priorities and sets the parameters for action,
thus reflecting our approach to the common good.  The Center for Budget
and Policy Priorities notes that the President emphasized fiscal
irresponsibility and deepening economic inequality as problems he wants
to address, but that if accepted as is, the budget would make both
problems worse by cutting vital social programs, increasinjg defense
spending, making tax cuts that favor the rich permanent, shifting
entitlements to block grants to the States and then cutting them, and
generally endorsing a smoke-and-mirrors budget-balancing farce.

Congress began working on the budget resolution when it returned from
the Presidents' Day recess.  There is some possibility that the new   
Democratic majority would want to return to its old pay-as-you-go
modality, which would requite that any proposed reduction in taxes or
increase in spending would have to be balanced by an equal increase in
revenue  If that should happen, the income and  expenditure totals
would become most important.  Domestic discretional spending would be
most vulnerable, especially via block grants to the States, which
recent Congresses have tended to favor.  Resolution of these issues
will continue to be extremely difficult, e.g., for the Department of
Agriculture, which administers the Food Stamp program.

Income inequality would  be sharply increased if the early  Bush tax
cuts are extended and relief from the Alternative Minimum Tax is
continued:  the Center on Budget and Policy Priorities notes that the
top 1 per cent of households will receive over $1 million in tax cuts
over the next ten years, and that "the annual cost of the tax cuts for
those with incomes over $1 million also will exceed the total savings
in each of the next five years from the cuts the President's budget
proposes in an array of domestic non-entitlement programs, including
education, health research, environmental programs and others" like
energy assistance for low-income households, especially the elderly.   
All of this, of course, includes the assumption that our foreign
millitary operations in Iraq and Afghanistan,  budgeted for  $145
billion in this document and the subject of a Presidential request for
a supplement of $99 billion in FY 2007, will not exceed 50 billion in
2009.

It is often said of legislative proposals sent from the White House to
Capitol Hill that they are "dead on arrival."  This is particularly
true of budgets.  It is difficult, however, to conjecture what might
enliven this particular cadaver.  Preferential option for the  poor,
perhaps?  Are these the moral choices a moral President should present
to a society that prides itself on being moral?  The budget resolution,
due next month, may enlighten us.  But don't hold your breath.

For further detail and analysis, please consult:
Center on Budget and Policy Priorities (CBPP.org)
Center for Tax Justice (CTJ.org)
Urban Institute-Brookings Institution Tax Policy Center (taxpolicycenter.org).

Posted by Martin McLaughlin, Adjunct Associate, Agribusiness Accountability Initiative and author of the book World Food Security.

New Year Resolutions for the New Congress

What would you like to see as the New Year resolutions for the New Congress?  Now I know we are supposed to make New Year resolutions for ourselves, but my need for reform pales in the light of Congressional needs, so I have turned my attention to what I hope from Congress in the coming year.

First, I hope the New Congress governs.  That is simple enough.  Didn’t “We the People” elect them to do that?  And there are so many things that we want attended to in our country: global warming, energy policy, health care, a living wage (forget minimum), social security, education, declining employment and the decline of the middle-class–the list is very long.  We also want to see a foreign policy that truly reflects our best values and instincts and attends to the many truly troubling issues around our globe.  Of course, we want to see as quick a resolution to the Iraq quagmire as possible.  So Congress, please get to work and govern.

I also ask that they return democratic processes to the act of governing.  Transparency, ethics, following time-honored rules for committee participation and voting, control of the special interests, elimination of ear-marking and whatever else needs to be done to bring back civility, integrity and bipartisanship in governing.  I am tired of the small souled “I gotcha” attitude that has ruled our legislative process for too many years while neglecting the truly important needs of the country.

Second, I ask that Congress begin to dismantle those recent laws that have reduced the civil liberties and human rights of our own citizens and residents and of the “enemy combatants.”  It is with great grief that I, and many others, have witnessed the destruction of our civic soul by the use of legalized torture.  In the process we have lost whatever shreds of moral authority that we may have had in the world.  Rather than the power of ideals and values, we now rule by unrestricted military, economic and political force.

Third, I ask that Congress exercise its responsibility of oversight and accountability—especially in financial matters.  Weekly, more reports come out of the abuse of government contracts and the wasting of millions and billions of dollars in the fiasco of Iraq reconstruction and the rebuilding of the U.S. Gulf Coast well into two years after Katrina.  This is our, the people’s, money that is being squandered or siphoned off by corrupt “private contractors.”  Who is following up on those reports and fining those who are “ripping off” the Government?  The myth we have been fed is that the private sector is more efficient and less expensive than Government.  Let’s examine that myth and redirect our precious resources towards the needs of people—domestically and globally.

PS.  Don’t waste essential accountability hearings on the misuse of intelligence regarding WMDs in Iraq.  The country knows that story and is not interested in Congress again wasting its time.

That is the beginning of my wish list for 2007.  What are your wishes?

Posted by Maria Riley, OP, Coordinator, Engendering Economic and Social Justice Project.

Bloggers: Bigger Job Still Undone: VOTE OUT THE MYTH!

I was so outraged I shouted at my car radio. The interviewer on “All Things Considered” was asking Democratic Congressman Dave Obey what was going to happen to fiscal responsibility now that the Democrats, with their reputation for government spending, were taking over power from the Republicans. To add unbelievably shameless insult to injury, President Bush went on to warn the new Congress to be responsible in dealing with budget issues.

What planet have these people been living on?

Even the openly Republican Omaha World Herald in its lead editorial December 21^st noted that “the speed with which Republicans abandoned their historic devotion to spending restraint these past six years has been astounding. . . . Republicans ill-served the country by abandoning their support of budget restraint.” The editorial writers express surprise that the promise of a return to “woefully needed discipline in the wake of a fiscal process gone entirely off the rails” is coming from Democrats. And they sprinkle the editorial with a liberal dose of suspicious comments like “if the [Democrats] mean what they say.”

If the myth that the Republicans are the fiscally responsible party and the Democrats are the profligate spenders is allowed to stand unchallenged, the step toward responsible government made in this last election will be reversed all too soon

Every conscious or unconscious expression of that myth must be confronted immediately with the facts. For the last quarter century, not only have Republicans presided over the most blatant fiscal irresponsibility, they have let it be known that it was part of a deliberate strategy to “starve the beast” – to put the federal government in such terrible financial condition that it is rendered ineffective.

Do interviewers and editorial writers not remember that it was a Republican president 25 years ago who took the national debt that he had inherited from the previous 204 years and doubled it in two terms? Do they forget that it was Republicans who repudiated their own president, George H. W. Bush, when he tried to be fiscally responsible by raising taxes? Have they blotted out the fact that it was Democrat Bill Clinton who painfully restored fiscal discipline and handed a significant budget surplus to the incoming George W. Bush – who rapidly redistributed it to his wealthy base?

How many decades of blatantly contrary evidence does it take to deflate a myth like the one the Republican party and its media enablers – whether consciously or unconsciously – are promoting?

That myth has to be shown up for what it is and destroyed. It builds an unconscious foundation of false and destructive assumptions that have the power to control political decisions. It has already done far too much damage to too many people. Twenty-five years of living this lie is enough.

Posted by Jim Hug, SJ - President, Center of Concern.

Fiscal Responsibility--or Irresponsibility?

It's October now, autumn, and the fourth quarter of the year. Leaves are falling, and the air is crisp as the globe cools. But there are other, not altogether seasonal, changes in the air.

The Forbes 500 has been reduced to 400 in order, it seems, to establish a minimum wealth of $1 billion and eliminate anyone who is not a billionaire. The Federal minimum wage, though, remains at the same level ($5.15 per hour) for the ninth straight year, despite continuing inflation and six pay raises for Congress during that period. The Center on Budget and Policy Priorities has just released a report noting that the median earnings of full-time workers declined in 2005 by 1.8% ($774) for men and 1.3% ($427) for women. The Budget Center also reports that wages accounted for the smallest share of income since 1929 while corporate profits reached their highest level since 1950.

We have just entered a new fiscal year without a Federal budget and without a good deal of other legislation. Some things do not change, however; there is a kind of annual ritual with Congress scrambling to pass a ”continuing resolution” permitting government to spend in fiscal year 2007 at fiscal year 2006’s levels, but avoiding the appropriation of money to fund a new budget for the new fiscal year. And all this happens against the background of highly vocal devotion to fiscal responsibility, which everybody claims, but nobody has.

The Constitution vested the power to raise and spend money in the Congress, which was thought to be more representative of the people than the Executive Branch and more likely to act as a brake on the fiscal desires of executives and bureaucrats. As the years went by, however, and political parties became stronger, these relationships grew more and more complex and the problems more difficult to resolve. The inevitable pressure for reform and against deficits led eventually to passage of the Gramm-Rudman-Hollings Balanced Budget and Emergency Deficit Control Act of 1985, which now theoretically governs the process and the timetable for adopting the federal budget. (These three
senators are no longer in the Congress.)

Theoretically, because the budget timetable seems to work as long as the legislative action deals with the budget as a whole, as in passing the required budget resolution; but when money is to be made available, the required action becomes an appropriations bill which generally is far more controversial and vigorously argued than the overall budget. There are thirteen of these appropriations bills, which must be passed by both houses of Congress and signed into law before money can be spent. Each such bill is considered by a different committee of the House and the Senate; varying versions are passed by the two houses and must be reconciled before going to the White House.

When Congress adjourned on September 30, the House had passed twelve appropriations (all except Labor/HHS), but the Senate had passed only two (Defense and Homeland Security).; consequently, a continuing resolution was passed September 30, because no one wants to repeat the pain of September 1995, when Clinton let the executive agency doors close briefly.

When Congress reconvenes in a “Lame Duck” session on November 13, it will have to complete action on the budget, before its term ends, but will also have on its plate such matters as minimum wage increase, estate tax reduction, immigration reform, rescission powers to the President (like a line-item veto), offshore oil drilling, reforming lobbying practices, tightening port security, warrantless wiretaps, tax breaks for business, possible trade legislation, Defense policy, the fate of UN Ambassador John R. Bolton, exporting nuclear technology to India, and cuts in Medicare payments to doctors.

How any of these matters will be handled is unknown; possibly the only major step will be the annual “omnibus bill,” which includes everything not passed separately, plus the “pet projects” (like the famous Bridge to nowhere of last year) that the final tradeoffs include in a bill that everybody supports, but nobody reads.

The upcoming limping session also presents some unusual problems. During the final frenetic couple of weeks of the legislative session the more disciplined House of Representatives, having passed all but one of its appropriations bills, used the time to pass a flood of local legislation designed to give a boost to dozens of Republican Representatives who seem to be in danger of losing their seats. Did I mention this is campaign season?

Thus many voters can reward their members for such low-cost items as providing protection for Native American languages, preserving open space and farmland, and water planning. There are 165 of such bills to tug at the heartstrings of voters who my not realize that no money has been appropriated for any of them. They are on the books, however, in case there is a significant shift in the Congressional power structure as a result of the November 7 elections. After all, this is politics.

Fiscal responsibility, however, has to consider not only whether there is a budget, but also what is in it and whether it is in deficit. The U.S. national debt, whose ceiling was recently raised by Congress, is now $8.5 trillion; the estimate for the FY 2006 deficit (reduced from an earlier inflated OMB estimate) is just under $300 billion, which would be added to that total. There will be a strong push to bring in this budget with a surplus, but without affecting funds for the Iraq operation or rescinding or reducing any of the tax breaks for the wealthy that the Bush administration has already pushed through. 

Clearly it is better to live within our means and not to have deficits; but the moral question is, who pays? It depends on what stays in the budget and what gets cut. Should we be spending $500 billion so more Americans die in an unjust war in Iraq than died on 9/11, and sacrificing even more revenues to the majority party’s rich friends and supporters while the minimum wage remains static, the welfare rolls steadily increase, and the percentage of the population covered by health care decreases? Should we hide our trade-offs and pet projects for local constituents in omnibus bills or Christmas trees?

That is another, more complex matter. Meanwhile, it should be clear that neither the federal budget process nor its outcome promotes the common good of poor people here or elsewhere.

Posted by Martin McLaughlin

Adjunct Associate, Agribusiness Accountability Initiative

Author of the book World Food Security.