NEWS,01.12.2012

Little apparent progress in US 'fiscal cliff' talks

With barely a month left before the 'fiscal cliff', US Republicans and Democrats have remained far apart in talks to avoid the across-the-board tax hikes and spending cuts that threaten to throw the country back into recession. While President Barack Obama visited a Pennsylvania toy factory to muster public support for tax hikes on the rich, portraying Republicans as scrooges at Christmas time, his primary adversary in negotiations, Republican House Speaker John Boehner, continued to describe the situation as a stalemate. The argument will resume on Sunday when Boehner, along with Obama's Treasury secretary, Timothy Geithner, and others, take to weekly political talk shows and pick up further steam next week with a possible confrontation in the House of Representatives between Democrats and Republicans over the timing of a vote on tax hikes. Lawmakers are nervously eyeing the markets as the deadline approaches, with gyrations likely to intensify pressure to bring the drama to a close. The markets, in turn watching the politicians, fell as Boehner spoke, but recovered afterward. It was a repeat of the pattern earlier in the week when the speaker offered a similarly gloomy assessment. The latest round of high-stakes gamesmanship focuses on whether to extend the temporary tax cuts that originated under former President George W Bush beyond their December 31 expiration date for all taxpayers, as Republicans want, or just for those with incomes under $US 250,000 , as Obama and his fellow Democrats want. After five days of increasingly confrontational exchanges, the work week drew to a close with an announcement by Democrats of a long-shot effort next week to force an early tax-hike vote in the Republican-controlled US House to break the deadlock. House Minority Leader Nancy Pelosi said she would undertake the rarely successful effort unless Boehner agreed by Tuesday to bring a bill to the floor allowing taxes on the wealthy to rise, something Boehner is highly unlikely to do until he is ready. "The clock is ticking," Pelosi said at a news conference. "The year is ending. It's really important with tax legislation for it to happen now. "We're calling upon the Republican leadership in the House to bring this legislation to the floor next week. "While Boehner offered no immediate response to Pelosi's threat, Cathy McMorris Rodgers of Washington state, recently elected by Republicans to be the fourth-ranking party leader in the House,in an interview not to expect any tax vote next week.Amid the competing statements from the two sides, there were some actual, albeit modest, signs of potential movement. Senate Minority Leader Mitch McConnell threw Republican proposals into the mix for reform of Medicare, the government health insurance program for seniors, which has exploded in cost in recent years and is a major contributor to the country's soaring deficit. McConnell of Kentucky told the Wall Street Journal in an interview that Republicans would agree to more revenue although not higher tax rates if Democrats agreed to such changes as raising the eligibility age for Medicare and slowing cost-of-living increases in the Social Security retirement program.Rodgers, in her Fox News interview, declined to completely rule out a much-discussed potential compromise in which Republicans would accept some increase in tax rates on the rich, but not to the level desired by Obama.More House Republicans although still just a handful expressed flexibility beyond that of their party leaders about considering an increase in tax rates for the wealthy, as long as they are accompanied by significant spending cuts. Most House Republicans refuse to back higher rates, preferring to raise revenue through tax reform. Obama, speaking in Pennsylvania, said he was encouraged by the shifting views of some Republicans, and urged House approval of a bill that has already cleared the Democratic-controlled Senate that would lock in the middle-class tax cuts and raise the rates for the rich. "If we can get a few House Republicans on board, we can pass the bill. I'm ready to sign it," Obama said. But neither he nor the other principals in the debate budged from their basic positions. Instead, Obama turned up the pressure on Friday, hitting the road to drum up support for his drive to raise taxes on the wealthy and warning Americans that Republicans were offering them "a lump of coal" for Christmas. In a visit to the Pennsylvania toy factory, Obama portrayed congressional Republicans as scrooges who risked sending the country over the fiscal cliff rather than strike a deal to avert the tax increases and spending cuts that begin in January unless Congress intervenes. "We already all agree, we say, on making sure middle-class taxes don't go up. So let's get that done. Let's go ahead and take the fear out for the vast majority of American families so they don't have to worry," Obama said at the Rodon Group factory, which makes K'NEX building toy systems as well as Tinkertoys and consumer products.In Washington, Boehner said Obama's plan to raise taxes on the rich was the wrong approach. "There is a stalemate. Let's not kid ourselves," the Ohio Republican said. "Right now we are almost nowhere."

Europe Is Divided AGAIN THIS Time It's Creditors vs. Debtors

The European Union used to be what psychologists call a "fantastic object," a desirable goal that fires people's imagination. I saw it as the embodiment of an open society -an association of nations which gave up part of their sovereignty for the common good and formed a union in which no nation would have a dominant position. The euro crisis is now threatening to turn the European Union into something fundamentally different. The member countries are divided into two classes creditors and debtors with the creditors in charge. Germany, as the largest and most creditworthy country, occupies a dominant position. As a result of current policies, debtor countries pay substantial risk premiums for financing their debt and this is reflected in their cost of financing in general. This has pushed the debtor countries into depression and put them at a substantial competitive disadvantage that threatens to become permanent. This is the result not of a deliberate plan but of a series of policy mistakes. Germany did not seek to occupy a dominant position and is reluctant to accept the obligations and liabilities that it entails. I have called this the tragedy of the European Union. Now, some recent developments give grounds for hope. The authorities are taking steps to correct their mistakes. I have in mind the June summit's decision to form a banking union, and the EU Central Bank's plan for unlimited intervention in government bond markets. Financial markets have been reassured that the euro is here to stay. This could be a turning point if it were reinforced by additional positive steps. Unfortunately, it has merely reinforced German resistance to further concessions. A distinguishing feature of the tragedy I am talking about is that it feeds on hope. Germany is willing to do the minimum but nothing more to hold the euro together. That is how the eurozone becomes permanently divided between creditors and debtors. This is such a dismal prospect that it must not be allowed to become reality. There must be a way to avoid it after all, history is not predetermined. When the European Union was only an idea, a fantastic object, it was conceived as an instrument of solidarity. Today, Europe hangs together out of grim necessity. That is not conducive to a harmonious partnership. The only way to reverse this seemingly inexorable fate is to recapture the spirit of solidarity.Since I am a fervent believer in the European Union as the embodiment of an open society, I have set up an Open Society Initiative for Europe OSIFE for short  and I have been looking for ways to achieve this goal.I realized that the best place to start would be where current policies have created the greatest human suffering. Clearly, that place is Greece. Within Greece, the fate of the many migrants and asylum seekers stuck there particularly resonated with me. Clearly, their plight cannot be separated from that of the Greeks themselves. An initiative confined to migrants would reinforce the hostility they face from some in the majority. The problem seemed intractable, and I couldn't figure out how to approach it. But I was in Stockholm recently to commemorate the centenary of Raoul Wallenberg's birth. This reawakened my memories of the Second World War the calamity that eventually gave birth to the European Union.Wallenberg was a heroic figure who saved the lives of many Jews by establishing Swedish protected houses in Budapest. During the German occupation of Hungary, my father was also a heroic figure. He helped to save his family and friends and others. He taught me to confront harsh reality rather than to passively submit to it. That is what gave me the idea. We could set up solidarity houses in Greece which could serve as community centers for the local population where migrants could also find food and shelter. There are already many efforts under way, and civil society is already heavily engaged, but the scale of the problem is overwhelming. I am talking about reinforcing existing efforts. The asylum policy of the European Union has broken down. Refugees have to apply in the country where they enter the EU, but the Greek government cannot process the cases, and some 60,000 refugees who sought to register have been put into detention camps here conditions are inhumane. Migrants who avoid registering and live in the streets are attacked by the hooligans of the Golden Dawn.Norway has expressed an interest in the fate of refugees in Greece and within the European Union. Sweden has made migration and asylum policy a priority. So Norway and Sweden are the primary candidates for supporting solidarity houses. Hopefully they would be joined by Germany and other member countries.Currently, the Golden Dawn is providing social services to Greeks while attacking the migrants. The initiative I propose would offer a positive alternative. It would be based on solidarity solidarity of Europeans with Greeks and Greeks with migrants. This would be a powerful demonstration of the spirit of solidarity that ought to infuse the European Union.

Walmart's New Health Care Policy Shifts Burden To Medicaid, Obamacare

 

Walmart, the nation’s largest private employer, plans to begin denying health insurance to newly hired employees who work fewer than 30 hours a week, according to a copy of the company’s policy.Under the policy, slated to take effect in January, Walmart also reserves the right to eliminate health care coverage for certain workers if their average workweek dips below 30 hours  something that happens with regularity and at the direction of company managers.Walmart declined to disclose how many of its roughly 1.4 million U.S. workers are vulnerable to losing medical insurance under its new policy. In an emailed statement, company spokesman David Tovar said Walmart had “made a business decision” not to respond to questions from and accused the publication of unfair coverage. Labor and health care experts portrayed Walmart’s decision to exclude workers from its medical plans as an attempt to limit costs while taking advantage of the national health care reform known as Obamacare. Among the key features of Obamacare is an expansion of Medicaid, the taxpayer-financed health insurance program for poor people. Many of the Walmart workers who might be dropped from the company’s health care plans earn so little that they would qualify for the expanded Medicaid program, these experts said.“Walmart is effectively shifting the costs of paying for its employees onto the federal government with this new plan, which is one of the problems with the way the law is structured,” said Ken Jacobs, chairman of the Labor Research Center at the University of California, Berkeley. For Walmart, this latest policy represents a step back in time. Almost seven years ago, as Walmart confronted public criticism that its emplyees coudn't afford its benefits, the company announced with much fanfare that it would expand health coverage for part-time workers. But last year, the company eliminated coverage for some part-time workers those new hires working 24 hours a week or less. Now, Walmart is going further. “Walmart likely thought it didn’t need to offer this part-time coverage anymore with Obamacare,” said Nelson Lichtenstein, director of the Center for the Study of Work, Labor and Democracy at the University of California, Santa Barbara. “This is another example of a tremendous government subsidy to Walmart via its workers.”In pursuing lower health care costs, Walmart is following the same course as many other large employers. But given its unrivaled scale, Walmart’s policies tend to influence American working conditions more broadly. Tom Billet, a senior consultant at Towers Watson, a professional services firm that works with large companies to develop benefit plans, said other companies are also crafting policies that will exclude some part-time workers from medical coverage. Billet portrayed the growing corporate interest in separating out part-time workers as a reaction to another aspect of Obamacare the new rules that require companies with at least 50 full-time workers to offer health coverage to all employees who work 30 or more hours a week or pay penalties.Several employers in recent months, including Darden Restaurants,owner of Olive Garden and Red Lobster, and a New York area Applebee's franchise owner, said they are considering cutting employee hours to push more workers below the 30-hour threshold.“In the past, firms were less careful about monitoring whether someone was full- or part-time,” Billet said, noting that some of his clients were planning to track workers’ hours more carefully. “I expect health plans like Walmart’s won’t be uncommon as firms adjust to this law.” For Walmart employees, the new system raises the risk that they could lose their health coverage in large part because they have little control over their schedules. Walmart uses an advanced scheduling system to constantly alter workers’ shifts according to store traffic and sales figures. The company has said the scheduling system improves flexibility and efficiency. But in recent interviews with The several workers described their oft-changing schedules as a source of fear that they might earn too little to pay their bills. Many said they have begged managers to assign them additional hours only to see their shifts cut further as new workers were hired.The new plan detailed in the 2013 "Associate’s Benefits Book" adds another element to that fear: the risk of losing health coverage. According to the plan, part-time workers hired in or after 2011 are now subject to an “Annual Benefits Eligibility Check” each August, during which managers will review the average number of hours per week that workers have logged over the past year. If part-time workers hired after Feb. 1, 2012, fail to reach the 30-hour threshold, they will lose benefits the following January, according to the book. Part-time workers hired after Jan. 15, 2011, but before Feb. 1, 2012, must work at least 24 hours a week to retain coverage and will also be subject to an eligibility check each year. Those hired before 2011 aren’t subject to the minimum hours requirements or eligibility checks.As for full-time workers under the plan, those who lose hours and slip to part-time at any point during the year will see their spouses’ health coverage dropped immediately. Those workers will also lose their dental and life insurance policies in the following pay period, according to the plan.Some Walmart workers who are excluded from the company’s health care plans are likely to become eligible for Medicaid under the Obamacare expansion, which aims to replace a patchwork of standards now set by individual states with one minimum federal threshold income below 133 percent of the federal poverty line, which for an individual currently comes to $14,856. However, the Supreme Court ruled earlier this year that the decision to expand the program is voluntary for the states. At least eight states, including Texas, have said they will not expand the program, which would leave Walmart workers there with one less option. Part-time workers who lose their Walmart insurance but earn too much to qualify for Medicaid should be able to buy insurance through the health care exchanges to be established under Obamacare  essentially, online marketplaces offering an array of health care plans. For workers who do qualify for health coverage under Walmart's new policy, the latest package represents an upgrade over previous plans. Walmart’s health plans began covering 100 percent of spine and heart surgeries this year at select hospitals and medical centers. They also include a smattering of preventative care services required by Obamacare. But the company’s plans still leave many workers facing significant financial distress in the event of major illness. Under the new policy, one major offering, the so-called Health Reimbursement Account Plan, costs nonsmoking workers $34.80 a month a seemingly affordable sum. Yet it comes with an annual deductible of $2,750, a hefty expense given that half of Walmart’s hourly workforce earns no more than $10 an hour. While a shifting of Walmart employees to Medicaid rolls may increase the burden on American taxpayers, it is likely to be a better deal for the workers themselves. “The packages Walmart is providing for low-income people aren’t offering very much coverage except for catastrophes,” said Linda Blumberg, a senior fellow at the Urban Institute, a left-leaning think tank. “It’s likely they’ll be better off going with a government-sponsored plan.”