This week, two budgets were introduced in Congress. The Congressional Progressive Caucus introduced its “Back to Work” budget, and Republican economic mouthpiece Paul Ryan introduced his “Path to Prosperity” budget — for the third year in a row — to address the “huge deficit” problem the GOP has buffaloed much of the media into thinking is the premier problem America faces.

In actuality, many real economists — that is, people whose jobs are studying economics for their entire working lives as opposed to sucking the public teat for their entire working lives — think this is pure bunk. Personally, I’m more inclined to give credence to those who have won Nobel Prizes in the field. Much of this is the standard Republican ploy of creating a huge scare tactic to try to push through the agenda they have been trying to foist on the American public for the past 30 years, even though it has been proven wrong and, as recently as last year, overwhelmingly rejected by voters.

Their rigid adherence to failed dogma rather than even attempting to address the real underlying problems facing the country is unbelievable. To the Ryan group, there might as well have not been an election. They refuse to acknowledge that their approach is flawed. To them, there is no problem that can’t be fixed by a tax cut for the wealthy. They’ve completely perverted the term “entitlement” to try to make it seem like a dirty word.

Merriam-Webster says an entitlement is “a right to benefits specified especially by law or contract.” Notice the word “right.” These are programs that we have the right to, in most cases because we have paid for those rights throughout our working lives. In the case of Social Security, we’ve paid in more than most of us will ever use, and it doesn’t add a dime to the deficit! If there is to be a future shortfall, it could be easily addressed by raising the cap from $110,000 to $250,000 and voilá!, solvent until 2075! But we couldn’t possibly burden the upper crust with such a thing.

The Medicare/Medicaid problem could be addressed in any number of ways. The obvious fix would be a single-payer health care program like most of the developed world has, but we couldn’t put all those private insurance CEOs in a bind. The Ryan budget did claim it would “balance the budget” in 10 years, which is about the only new claim from the previous iterations. Alas, he leaves out the pertinent details on exactly how that would happen. Of his cuts, 68 percent would directly affect the middle class, elderly and poor. His plan would voucherize Medicare within 10 years, thus destroying the most efficient program in government and health care history, which would directly impact the elderly. Other domestic services slated for the chopping block include education, research and development, infant nutrition, workplace safety, border patrol, food and drug safety, Head Start, etc., to a degree not seen before. Other mandatory programs being slashed include Pell Grants, food stamps, school lunches, the Earned Income Tax Credit, the Child Tax Credit and supplementary support for the aged and disabled poor.

In other words, it falls mainly on those who can least afford it. The rich, meanwhile, would benefit from the reduction of tax rates from 6 percdent to 2 percent, and the reduction of the corporate tax rate to 25 percent. Coupled with the fact that they got 121 percent of income growth during the Great Recession, and corporate profits are at an all-time high, it doesn’t seem to make sense to give them these new bonuses at the expense of the rest of us. More smoke and mirrors.

Finally, this week Speaker of the House, John Boehner actually admitted in an interview with Martha Raddatz, “We do not have an immediate debt crisis. But we all know that we have one looming. And we have one looming because we have entitlement programs that are not sustainable in their current form. They’re gonna go bankrupt. Washington has a responsibility — to our seniors and near seniors — that we firm these programs up so that they’re there for the long term. Because if we don’t do it, not only will they not get benefits, we will have a debt crisis right around the corner. We have time to solve our problems, but we need to do it now.”

Next up — do we really have a debt crisis? Stay tuned.

Email columnist Don Burnard at letters@toledofreepress.com.

Tags: Don Burnard, John Boehner, Martha Raddatz, Medicaid, Medicare, Paul Ryan, The Hot Corner

This entry was posted on Thursday, March 21st, 2013 at 4:50 pm and is filed under Opinion, The Hot Corner.
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Although many Americans have followed its media coverage more closely than any political story since Watergate, “There is no such thing as the fiscal cliff,” said Michael J. Beazley, City of Oregon administrator and Lucas County Land Bank president.

“It’s a metaphor, and the challenge is that nobody really knows what it means to fall off a cliff,” Beazley said. “Very few people usually talk about it afterward. They’re usually smashed at the bottom.”

The term “fiscal cliff” comes from a statement Ben Bernanke, chairman of the U.S. Federal Reserve, made to the House of Representatives’ Financial Services Committee in February. Bernanke said the U.S. faced “a massive fiscal cliff of large spending cuts and tax increases” that would take place Jan. 1.

Local politicians prefer to refer to it as a fiscal “slope” or “scree,” because they say the economic effect will be felt gradually, not immediately as the word “cliff” implies.

“I think it’s not so much a cliff as a slippery slope, but the problem is it’s the kind of slippery slope that you have in the Himalayas,” said Peter Ujvagi, Lucas County administrator. “They call that stone — marble and small pebbles — ‘scree.’ You have to be very, very careful how you walk on it because one missed step and you’re sliding down the mountainside.”

Whatever it is called, many local city and county politicians, business leaders, administrators of government entitlement programs, religious and civic social service agency personnel and educators have called what could happen “irresponsible” and “bad public policy.” Congress could allow the nation to fall off the cliff by allowing the policies scheduled for early 2013 to go into effect. Or, as some suggest, Congress could purposely choose to not reach a compromise before Jan. 1 and force the nation to jump off the cliff as a way to motivate politicians to reach an immediate and comprehensive solution to the nation’s fiscal problems.

“That is a highly irresponsible approach for people to take,” said Steve Herwat, Toledo’s deputy mayor of operations. “The idea of thinking, ‘Let’s force the country into recession so that maybe we’ll wise up and not do what we’ve been doing’ is a ludicrous way to approach the issue.”

Wade Kapszukiewicz, Lucas County treasurer, said that if going over the cliff didn’t “destroy the economy, it would at least certainly send it back into another recession. Unemployment would go back up, and perversely, some right ideologues might look at this as some sort of short-term victory for their side because it would look like [President Barack] Obama failed.

“My attitude is: We just went through an election. It’s over. The voters’ verdict is clear and straightforward. They want their representatives to serve them well and do what’s in the best interest of the country.

“And they don’t mind cuts to services — program cuts, spending cuts — as long as there’s the sense the burden is being shared and that the wealthiest among us pay a higher share.”

‘Totally artificial’

Beazley

David H. Davis, professor of political science at the University of Toledo, said the fiscal cliff is “totally artificial.”

“It was put in because Congress thought it would be a way to force itself to do something,” Davis said. “We automatically lose the Bush tax cuts. But we don’t have to. We could extend them for six months, a year or four years.

“There are mandatory cuts divided equally between military and civilian. That’s all artificial. It could go away. Now, nobody wants it to totally go away because there is a feeling, particularly by President Obama, that this is the time to make some important changes. And he’s certainly got a good point.”

Gbenga Ajilore, associate professor of economics at UT, said he “can see that argument because that’s what Congress did two years ago, but the problem with that argument is the fiscal situation is a real problem. We have a $16 trillion debt.

“That’s unsustainable. And it’s increasing because the economy isn’t doing well. Revenue, unless we have a 5 percent growth, is not going to go up as much. So that’s why we’re looking at an increase in taxes. You just can’t assume the economy’s going to turn around. You have to find ways to extract revenue. That’s why you fix the tax code.

“Fundamentally, there is a problem that needs to be fixed. You can argue that the Jan. 1 deadline for the fiscal cliff has created a fabricated crisis. But the fundamental issue of the debt and deficit is a problem that’s not going to go away.”

Politics vs. Wall Street

Mark Haskins, vice president of program services for Lutheran Social Services of Northwestern Ohio, blames Congress and Obama for the current situation.

“There were problems inherited from the Bush regime, but I’m tired of hearing about it. And what’s going on now is not better. The deficit has grown. So the problem started with Bush, because when Clinton left office, the budget was basically balanced.

“But Obama has continued the trend. The argument that, ‘I inherited this’ may be true, but it’s gotten worse. And I know why it’s gotten worse. There’s no sort of compromise like what occurred under the Clinton administration, when all kinds of things were done between the Republicans and the Democrats.”

Haskins said the only way to deal with the fiscal cliff is to either cut spending or increase revenues.

“I’m not an expert. But I do understand, as almost everyone understands, that the deficit is not good, and a growing deficit just makes things worse. And something has to be done to address it.”

David Black, associate professor of economics at UT, attributes the fiscal cliff crisis to Wall Street and the “major financial meltdown (2008 to 2010) of the flow of financial capital from lenders to borrowers that keeps the economy flowing, and it hasn’t been completely fixed yet.”

‘Increased uncertainty’

Michael Dowd, chairman of UT’s Department of Economics and an associate professor of economics, said Lucas County businesses will struggle because of the increased uncertainty the business community faces in dealing with the fiscal cliff.

“They won’t know what their tax bill is for next year other than these draconian levels that will be imposed by the fiscal cliff,” Dowd said. “With increased uncertainty, businesses are likely to reduce any sorts of investments in their own businesses — capital, machines, software — because they can’t project their own tax bills or profits in six months, a year, two years down the line.

“That also will likely discourage any additional hiring. Increased uncertainty is also likely to cause the consumers to pull back on spending.”

Andrew Solocha, associate professor of finance at UT, said consumers have already begun changing their shopping behavior.

“It’s already started. I really think people don’t have enough money in their minds budgeted for all these things, and there’s a conflict now between uncertainty and ‘Do I spend my money when I don’t know what’s going to happen at the end of the year?’

“It’s having an impact now on the Christmas shopping season before we potentially arrive at the fiscal cliff in January 2013.”

Loss of payroll tax cut

Ajilore said the two fiscal cliff issues Lucas County residents should be concerned about are the payroll tax cuts that are scheduled to expire and the loss of unemployment benefits.

“One of the big things about this recession is the increase in the long-term unemployment. Jobless benefits that helped tide the unemployed over may be lost, and that will hit people hard.”

Ajilore also said the payroll tax would have a more far-reaching effect on individual Americans than the Bush tax cuts because workers will see less money in their first paycheck of 2013, but the Bush tax cuts are getting all the press “because of how taxes are viewed politically.

“There’s an ideology that taxes are a drag on the economy. And to raise taxes, that just leads to big government. And there’s the general sense that we believe in small government, which means we need to cut taxes. The Bush tax cuts are a proxy for that ideology. The ideology says that if you let them expire, you’re raising taxes and that’s going to be a drag on the economy. That’s why the right ideology always focuses on that versus the payroll tax.”

‘Everybody will be hurt’

Mark V’Soske, president of Toledo Regional Chamber of Commerce president, said “if all the proposed [changes] go into effect, everybody — not just businesses, but everybody — will be hurt.”

“The marriage penalty will be re-established,” V’Soske said. “Dividends will be taxed at a higher rate. So will capital gains, and not just for the wealthy, but for every working person with a 401(k) or any kind of retirement investment. And retirees are going to be hurt badly.

Mark V'Soske

“But look at the business side; 75 percent of the U.S. economy is built on small businesses, not corporations. Many small businesses’ taxes are treated as regular income, personal income, to those individuals. And that will rise for many of [those] small businesses.

“That means fewer people will be working. Less people will get benefits. Businesses are not going to hire. They’re actually going to lay off people. If you increase the cost of doing business, you’ve got to cut somewhere. So regardless of what happens, I think we’re going to see a recession. It sounds like I’m preaching gloom and doom, but the reality is everybody is going to pay more. It’s going to cost more to do what we’re doing, and I think there’s going to be higher unemployment.

“We’re going to hurt a little more before we see the light of day if the right decisions are made at the federal level as to what’s happening. And that’s a big ‘if.’”

Potential loss of jobs

Deb Ortiz-Flores, executive director for the Lucas County Department of Job and Family Services (LCDJFS), said that the biggest problem her agencies face is the loss of funds to administer their programs, which may result in the loss of jobs.

Ortiz-Flores said LCDJFS faces a loss in the 50 percent matching funds the federal government pays for administration of at least five programs:

• Medicaid and health care services program;
• Supplemental Nutrition Assistance Program (SNAP), commonly called food stamps;
• Temporary Assistance for Needy Families (TANF), child care subsidies that cover child care expenses so TANF recipients can complete required work hours;
• The Supplemental Security Income through Social Security;
• The Lucas County Division of Child Support Services.

“In Lucas County in 2007, we had 60,000-some people on food assistance,” Ortiz-Flores said. “We’ve lost almost half of that in our administrative dollars, but yet we have 96,000 to 98,000 people on food assistance now. The benefits for folks did not change, but the administrative dollars for us to administer the benefits changed drastically. We had 400-some employees in 2007, and we’re down to less than 320.

“When I started in 1999, we had over 650 employees, and we’re down to less than half the staff size.”

At Lucas County Children Services, Julie Malkin, public information officer, said the agency has no idea what to expect.

“When the economy went down in 2008, we thought we’d see an increase in caseload. Nationwide, that did not happen. If Congress doesn’t come to terms with the current budget issue and starts to cut programs, we may be affected, but we simply do not know.”

United Way

Jane Moore, interim president and CEO at United Way of Greater Toledo, said the cuts to federal programs may “impact the community to such a degree that it would affect our ability to stay on our main focus in graduating kids.

“It will affect every aspect of education, income and health, from community health centers to the Department of Education, which would lose billions. We don’t know how that will trickle down to Toledo Public, Sylvania and Perrysburg schools, but we know it will have a severe impact on kids and families.”

Moore said United Way works with students “to get ready for school, to stay in school, to re-engage with school; and we work with their families to be able to support them.

“So families need to be housing stable, and HUD (Housing and Urban Development) is slated for the same extensive reductions. For the housing stability efforts, Lucas County gets $4.2 million. Well, you can do the math real quick and see what kind of impact that would have.

“If families aren’t housing stable, their kids aren’t going to be focused on their learning. If families are not healthy and don’t have access to health care, kids are not going to be focused on their education. If families are not financially stable — while it impacts directly services for kids and families, it also could have an impact on people who have jobs in those systems. So if the financial stability is eroded, that’s going to have a serious impact.”

Heating and health care

In Lucas County, the federal low-income utility assistance program is administered by the Economic Opportunity Planning Association (EOPA). Its ability to offer assistance with winter heating bills would be severely affected.

“That helps a lot of people who are working. It’s not just for the very, very poor,” Moore said. “So families who are struggling during the winter with utilities rely on that, and a cut in that funding would have a serious impact on housing. If you don’t have any utilities, eventually you may start in the shelter system, which starts this whole kind of cycle downward.”

Ohio Medicaid began offering SCHIP, the State Children’s Health Insurance Program, in 1997 to cover uninsured children. The program is also known as Healthy Start.

Moore is concerned that SCHIP’s funding may be cut, something she fears because it provides health insurance for children of working parents, usually employed at minimum wage jobs without health insurance benefits.

In addition, the Dental Center of Northwest Ohio serves children covered through SCHIP, and cuts in federal funding would severely limit oral health care coverage to children living in Lucas County.

‘Leadership matters’

Patrick A. McLean, the City of Toledo’s director of finance, said it makes a difference who the voters elect.

“Leadership matters, and who gets elected matters,” McLean said. “What we’ve seen over time in Washington is through redistricting and through the primary process, we’ve seen the partisan divide has gotten worse.”

Solocha said voters could become a bigger part of the solution if they become more proactive.

“If they’re Republican, they need to go to the Republican leaders and tell them to start compromising,” Solocha said. “And those people who are strongly Democrats need to explain to their contingency that they need to compromise as well. This is an important issue. This is not the same as it was last time. We’re in credit trouble. We weren’t that far over 60 percent (national debt as compared to GDP) before. We are now. So we’re in a much deeper debt crisis than we were before. So there is a little bit more urgency this time than there was last time.

“None of us can do anything ourselves, but collectively, we can. That was probably reflected in the election.”

Veterans Affairs

Shedrick Williams, with the Lucas County Veterans Service Commission (VSC), said a loss of federal funding would not affect his agency’s services because VSC is funded by Lucas County millage, not the federal government.

“We’ll still be able to have services for veterans, like emergency financial, rent assistance or anything of an immediate emergency need,” he said.

Williams said he isn’t concerned about a loss of services for the veterans served by the Department of Veterans Affairs (VA), either.

“From my experience, when this has happened in the past, the federal government doesn’t shut down. After a while, we operate without a budget. And at some point, if the budget isn’t pursued forward, they usually won’t table it. They never stop giving those services out, like the VA or financial aid or anything like that to assist people. It’s never stopped it in the past. Never.”

Planned Parenthood

Administrators at Planned Parenthood fear a disruption in birth control, HIV testing, men’s and women’s  health care, emergency contraception, pregnancy testing and sexually transmitted disease/infection testing, treatment and vaccine services should funding be cut in the wake of tax policy changes. More than 3,300 Lucas County residents made nearly 6,500 office visits to Planned Parenthood between July 1, 2011, and June 30, 2012, according to Celeste C. Ribbins, vice president of community initiatives for Planned Parenthood of Greater Ohio.

Religious charities

Mark J. Hill, vice president of development for Lutheran Social Services of Northwestern Ohio (LSS), fears that not dealing with the fiscal cliff situation appropriately may result in the loss of Medicare and Medicaid reimbursement for the mental health services his agency offers.

“We’re hopeful when the levies pass, when public services stay funded, because we don’t have that funding, and we wouldn’t have the staff to handle what will result if public agencies aren’t able to see people,” Hill said. “We don’t have any public dollars outside of Medicare and Medicaid, other than some of our clients’ insurance. So we’re raising money for people who are uninsured and who are ‘the least of these’ in the community.”

Hill is also concerned that the loss of federal funds could limit his organization’s services to severely troubled teens and older citizens in its assisted living and long-term care facility.

“In terms of the fiscal cliff, it’s always a concern because it’s the clients who matter,” he said. “And they’re going to be the first to suffer from that if Congress doesn’t do something.”

Suzie Stapleton, administrator at Assumption Outreach Center (AOC), said going off the fiscal cliff will have a “dramatic, Day One impact” on her clients.

“A lot of our people are elderly, living on $500 Social Security widow’s or widower’s pensions,” Stapleton said. “They’ve got to pay their rent and their utilities out of that. There is no money left.”

Stapleton said in addition to retirees, AOC also serves people with mental or physical disabilities, recently released ex-convicts, young single mothers, and young men who can’t find work and live in the ZIP codes of 43604, 43608, 43610, 43611 and 43620.

If the country goes off the fiscal cliff, “it will just make life tougher,” Stapleton said. “Right now, we give them a sense of hope. But if they’re going to get less and less, I’m not sure how much we’ll be able to give unless the people of Toledo become more generous, and I don’t know how they can be more generous than they already are.

“We want to prevent people from having to go into garbage cans and Dumpsters scouring for food. We want to uphold their dignity. I’m afraid that if we get more budget cuts, that it’s going to affect poor people more than almost anyone else. I’m afraid people would be forced to steal just to eat.

“If we’re not careful, we’re going to put people in a position where they aren’t going to be able to pay their bills. They’re going to lose their places. It puts a burden on society, on the poor — an extra burden they don’t need.”

Local business woes

John Gibney, vice president of marketing and communications for the Regional Growth Partnership, said that in the economic development world, ‘fiscal cliff’ serves as another term for uncertainty.

“In general, businesses do not like any type of uncertainty,” Gibney said. “In the time between now and a resolution, we might see companies putting off capital investment and hiring decisions. Once the issue is ultimately resolved, it becomes a ‘known’ and businesses will be more apt to move ahead.”

Mark Austin, Lucas County chief deputy treasurer, said a rise in unemployment may wreak havoc on both the unemployed and the local business community.

“If any person draws a paycheck from any job, and they don’t have that paycheck, that means they can’t buy things,” Austin said. “That means they go on unemployment, or if those unemployment benefits aren’t there, they suffer. And if they can’t buy things, the vendors who sell those things don’t get the money.

“Lucas County gets most of its revenue from sales tax. If the sales tax receipts aren’t coming in, that means the county has to tighten its belt even more, which means it isn’t able to deliver services or it’s more difficult to deliver services.”

Practical advice

Dowd said the best advice for anyone trying to adjust to the loss of pay that will result if the payroll tax cuts are not renewed is to return to “first principles.”

“‘First principles’ is understanding monthly income and yearly income versus monthly and annual costs — the expenses you face,” Dowd said. “It’s budgeting. It is getting a clear handle on income versus expenses. Where are you spending money? What’s the amount you have in savings? What cushion do you have?’

“Get a handle on your costs. Have an idea of your expected income each month. The more information you have, the better you can perhaps make adjustments to your spending. That’s a hard question, because no individual is certain.”

Ajilore has four suggestions for taxpayers.

“First, consider cashing in investments in 2012 since the taxes on investments will increase if we fall off the fiscal cliff.”

Ajilore also said taxpayers can figure out now what their taxes will be for 2013. He suggests looking at your 2011 tax return to identify your tax bracket. After determining how that tax bracket will change, study how the tax treatment of charitable contributions will change (fewer deductions allowed in 2013 if the nation goes over the fiscal cliff), and check the 2011 payroll tax to determine how that will change should the 2 percent payroll tax deduction expire.

Ajilore encourages those losing unemployment benefits to determine how they can re-create themselves by transferring some work skills into another field where they can earn at least some money.

He also suggests checking the IRS website to see what resources it offers that will help people determine exactly how their taxes will change in 2013.

It’s not politics anymore

Dowd said the fiscal cliff discussion can no longer center on the politics of the Republican and Democratic parties.

“It’s math at this stage,” Dowd said. “The estimates now are that my kids will have a lower standard of living than I do, and that’s the first time that’s ever happened in the U.S. And that’s a very sad thing.

“Connect the dots. Their standard of living will be lower but the debt will be higher. It’s a bad situation.”

Solocha said one of the real issues the nation must face is the divergence among the political parties.

“You have to have politicians willing to create policies where they may not reach their goal, but at least the country’s going in the right direction,” Solocha said. “And that requires a consensus amongst both parties. And that’s been very difficult over the past four years.

“In my view, a Republican needs to stand up and say, ‘Here we are. We’re ready to compromise. Let’s go into a room and knock this off.’ I think that could be done.

“But there’s got to be somebody who has the courage. And this takes a lot of courage, I would think, because it’s your career and everything you’ve ever worked for. Can you imagine a politician who signed the contract to not raise taxes turn around and say, ‘Well, for the greater good of the United States, I can’t honor my contract because there’s a greater good to all this.’

“That takes a lot of guts. You have to stand up to your peers.”

However, as a political scientist, Davis disagreed, saying it’s not possible to talk about the fiscal cliff with out talking about the Republican Party.

“That’s what brought about the problem. We have two political parties that are bitter enemies,” Davis said. “That’s quite unlike the situation for much of 20th-century American history. They would cooperate when it got time to make the deals. They would do that.

“The Republicans today are very intransigent. A lot of them would rather see the whole thing tumble down. You may not have to mention the Democrats, but you cannot not mention the Republicans. Most Republicans would rather see the whole thing tumble down as a way to disgrace the Democrats.”

‘We must act’

Beazley said there is a broad consensus that the nation must act.

“The question is, ‘What type of a fiscal slope should we have as opposed to a cliff?’ And then, ‘What are the components of that slope?” Beazley said.

“You’ll have one side, ideologically, that will say, ‘OK. I think there was a clear consensus. Romney, in the election, said we’re not going to do any tax increase at any level, but I will close loopholes at a variety of levels to make up some of this gap, and we’ll cut spending.’

“The Obama side said, ‘We’re going to raise taxes on people who are millionaires’, and drawing some line. He made that very clear in his campaign as well.

“Each side presented a clear message about what they intended to do if they won. Obama won the election narrowly. He doesn’t have control of the House. The House side wants to follow the Romney approach.

“What I don’t have is solutions.  Go back to the 1970s. Nine percent of all the country’s income was locked away in the top 1 percent of earners. That’s gone up to closer to 25 percent now.

“Twenty-five percent of all income — not wealth, income — is going to the top 1 percent. So the spending power of the middle class has been stagnant or trickled down consistently for 10, 20 years now. Whereas the economy has grown significantly during that time, the growth has been sequestered in the top 1 percent.”

Consumer confidence

Beazley said Lucas County residents should take hope that the nation can survive the fiscal cliff situation because consumer confidence has been growing.

“We can rely on two empirical measures — actual consumer spending, which is going up, and the actual question asked to consumers, ‘Are you feeling more confident?’ and that is going up as well,” Beazley said. “Compared to historical levels, consumer confidence may be low, but that’s because we’re still climbing out of a recession. Consumer debt is on the increase, which is usually a sign that people are going back to work, that they have confidence that they’re going to continue to have a job, continue to pay their bills.

“People are spending again. That’s good for the economy. More people go to work, and it feeds on itself.”

Political preservation

Beazley said “there isn’t a good way to prepare for a fiscal cliff outside of a parachute. That’s why I believe it is very likely that the problems will be dealt with.

“No. 1, the cliff jump will be postponed. This Congress will very likely, at minimum, take action to defer the challenge pursuant with a temporary bill to extend the tax cuts and most of the status quo until sometime in 2013 when the new Congress and the post-inauguration administration comes in and deals with it. At minimum, that is likely to happen.

“I don’t see it as very likely that this Congress and this president right now will have a ‘grand bargain’ that deals with this problem for a five- or 10-year period or brings a significant deficit reduction compromise on taxes and spending.

“But that is more likely than an actual falling off the fiscal cliff. I expect the sides to negotiate in a challenging way. The failure of the sides to really achieve genuine compromise and solve the problems will be trumped by the political preservation needs of all sides. That political preservation need will allow them to at least come up with some compromise or to postpone the problem. I strongly believe that. That’s the likeliest thing. I don’t expect us to be going over this cliff.

“There is no reasonable way to prepare for this sort of hit. The best thing to do is to not jump. And I expect that even Congress can get that right. And I have low expectations of Congress.”

Tags: Andrew Solocha, Assumption Outreach Center, Ben Bernanke, Celeste C. Ribbins, David Black, David H. Davis, Deb Ortiz-Flores, Dental Center of Northwest Ohio, Economic Opportunity Planning Association, Fiscal Cliff, Gbenga Ajilore, Jane Moore, John Gibney, Julie Malkin, Lucas County Children Services, Lucas County Division of Child Support Services, Lucas County Land Bank, Lucas County Veterans Service Commission, Lutheran Social Services of Northwestern Ohio, Mark Haskins, Mark J. Hill, Mark V’Soske, Medicaid, Michael Dowd, Mike Beazley, Patrick A. McLean, Planned Parenthood, Regional Growth Partnership, Shedrick Williams, State Children’s Health Insurance Program, Supplemental Nutrition Assistance Program, Suzie Stapleton, Temporary Assistance for Needy Families, United Way, University of Toledo, Wade Kapszukiewicz

This entry was posted on Friday, November 30th, 2012 at 12:10 pm and is filed under Community, Government.
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When 104-year-old Stella Bailey died Oct. 9, she was exactly where she wanted to be — at her Rossford home of 90 years, with her husband and family close by.

“She didn’t suffer none. That’s the good part,” said 96-year-old Jay Bailey, Stella’s husband of 60 years.

Family members had visited just before she died, Jay said.

“She was laughing and joking with the little baby,” he said. “She lived a ripe old age.”

Stella was able to remain at home with the help of PASSPORT, a state Medicaid waiver program funded through the Ohio Department of Aging and the Ohio Department of Job and Family Services.

The program, administered in Northwest Ohio by the Area Office on Aging of Northwestern Ohio (AOoA), links Medicaid-eligible seniors with long-term care services, such as home health aides, home-delivered meals, medical equipment, medical transportation, adult day care and more.

PASSPORT services usually supplement care provided by family members, said Pam Wilson, AOoA’s vice president of long-term care.

“Many of the people we serve do have families who are dedicated to keeping them at home and are actively participating and assisting with the care,” Wilson said. “Our services wrap around that family unit and provide support in places where the family may be struggling.”

Stella started using PASSPORT in 2003. Home health aides assisted Jay in caring for Stella seven hours a day, seven days a week.

“She’s been real good,” Jay said of primary aide Lori Kott of Maumee-based Nursing Resources. “I wouldn’t have made it without her.”

Most older adults prefer to stay home as long as possible, Wilson said.

The PASSPORT program helped 104-year-old Stella Bailey stay at home until she died. Also pictured is her husband, Jay Bailey, and home health aide Lori Kott.

“It’s often where they’ve lived for many years and a place where they are comfortable and want to stay,” Wilson said. “Being in the home lets you feel more a part of your family and a part of your community. It’s just that familiarity. Every time someone makes a physical move, it’s disruptive to the person, it’s disruptive to their health. It’s very common that people become disoriented, even though they may not have been disoriented in the past, if they end up in the hospital or they go from hospital to a nursing home. It’s trauma.”

PASSPORT also helps the health and well-being of caregivers, Wilson said.

“If you have those supports in place, families can often be caregivers for longer periods of time because they have the support and don’t burn out as they may if they were doing all the care themselves,” Wilson said. “It’s not uncommon that we hear, ‘Gosh, I wish I knew about you a couple years ago.’”

If the primary caregiver is a spouse, PASSPORT gives them more time together, Wilson said.

“A lot of times it’s stressful on the caregiver to make those regular trips to the nursing home when they want to go every day and stay for hours,” she said.

PASSPORT services are also cheaper than a nursing home, saving taxpayers money, said Justin Moor, AOoA’s vice president of planning and program development. A year of nursing home care in Ohio costs about $62,000 on average, whereas a year of PASSPORT services costs about $21,000, Moor said.

“PASSPORT is about a third of the cost to taxpayers, so for each senior that gets their care through PASSPORT, the savings to taxpayers is about $40,000 a year,” Moor said.

When PASSPORT started in July 1990, about 90 percent of Medicaid dollars for long-term care went to nursing homes and 10 percent to home care services. Today, it’s closer to 60-40, Moor said.

“It’s working well. It’s been growing every year,” Wilson said. “We do feel it’s one of those cost-saving options to help with state budget issues.”

About 2,800 Northwest Ohioans participated in PASSPORT in 2011 and the program has served more than 20,000 Northwest Ohioans since 1990, Wilson said. Statewide, more than 31,000 Ohio seniors participate in PASSPORT each year.

To qualify, applicants must be 60 or older, need help with at least two daily living activities such as bathing, dressing or walking, and meet Medicaid’s financial eligibility guidelines, which include an income of no more than $2,090 per month and no more than $1,500 in assets, not including their home.

AOoA’s nurses and social workers oversee the service plans and perform the initial eligibility assessment. The services are provided by more than 120 contracted agencies.

PASSPORT does not negate the need for nursing homes, Wilson said.

“We certainly support the need for nursing homes. We know we can’t do all the care in the community,” Wilson said. “We want people to get the care they need and nursing homes are doing a wonderful job with rehab after illnesses and surgeries, but we don’t want them to feel like they are going to be stuck there.”

Wilson said too many people don’t know about PASSPORT and the AOoA.

“Our goal is to make sure people know we’re here and not to wait to call for help,” Wilson said. “A lot of people don’t look for the kinds of services we offer until they need help and then generally they need it immediately. Having a little support in place lets us be able to add some additional supports when something happens. Whether Medicaid-eligible or not, we’re always willing to help connect people with those community resources that can help a person stay at home.”

For information, visit www.areaofficeonaging.com or 2155 Arlington Ave., or call (419) 382-0624.

Tags: Area Office on Aging, Medicaid, Ohio Department of Aging, Ohio Department of Job and Family Services, PASSPORT, Sarah Ottney

This entry was posted on Thursday, October 11th, 2012 at 2:09 pm and is filed under Community, Seniors.
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Sen. Sherrod Brown (D-Ohio) spoke at a local pharmacy on Aug. 26, highlighting proposed legislation that aims to curtail prescription drug abuse and strengthen penalties for pharmaceutical theft in Ohio.

During a press conference at Kahler Pharmacy in South Toledo, Brown outlined the Strengthening and Focusing Enforcement to Deter Organized Stealing and Enhance Safety (SAFE DOSES) Act, a bipartisan bill committed to eliminating prescription drug crime on Ohio streets.

“Drug addicts have shown that they will stop at nothing to feed their addiction,” Brown said in a news release. “We must equip local and federal law enforcement with the right tools to crack down on pharmaceutical theft, including tougher jail sentences for these criminals. Not only will this help keep prescription painkillers off our streets and out of the hands of abusers, but it will help protect pharmacies and their employees from being targeted in these often-violent crimes.”

Sen. Sherrod Brown (center) spoke Sunday at Kahler Pharmacy about legislation he's introduced to prevent prescription drug abuse. Pictured with him are (left) Peter Kosterman, the pharmacy's chief operating officer, and Dr. Nicholas Tabb, owner of the pharmacy.

According to the news release, if passed, the SAFE DOSES Act would:

• Prohibit stealing, fraudulently obtaining, or trafficking a medical product such as prescription drugs.
• Increase criminal penalties when death occurs as a result of a stolen substance.
• Enhance civil penalties for profits made off of stolen products.
• Increase penalties for “fences,” when someone knowingly purchases stolen property and later resells it in the legitimate market.
• Put pharmaceutical theft under the Racketeering Influenced and Correct Organization law, which has been effective in breaking up organized crime.

Although most prescription pain medications are used by patients who actually need them, Brown said there is a rise in criminals who abuse the Medicaid system by trying to acquire multiple prescriptions from doctors and having them filled at multiple pharmacies, a crime he said undermines taxpayers.

“The drugs that people are likely to steal are legal drugs that are helpful to many in our country,” Brown said. “Those people that have had traumatic injuries, car accidents or surgeries need Oxycontin or Percocet or Vicodin. They’re legal; they should be legal, but we’ve got to try to deal with those problems of addiction and try to deal with those problems of robbery beyond that.”

In an effort to eliminate pill mills (doctors, pharmacies or clinics that prescribe painkillers for nonmedical reasons), “doctor shopping” and “pharmacy shopping,” Brown introduced the Stop Trafficking of Pills (STOP) Act in 2011, a bill that would require a national adoption of a Medicaid “Lock-In” program.

“It says to Medicaid beneficiaries, ‘You can only have one doctor and one pharmacist. You can’t doctor shop, you can’t pharmacy shop so you can get this pain medication at multiple places,’ ” Brown said.

Joining Brown at the press conference was Kahler Pharmacy owner, Dr. Nicholas Tabb. Since taking over the 31-year-old drugstore in March, the longtime employee said the rise in narcotic-related crime has made the safety and security of both his family and his new business a top priority.

“I’m the father of a very young family and I think any effort to keep drugs off the street, no matter which drug it is, is a good start,” Tabb said. “I live in the neighborhood and I know that drug abuse leads to crime; and, I think this measure will help keep more drugs off the streets.”

Part of that priority, he said, involves maintaining that safe, neighborhood atmosphere of his small business.

“As a pharmacist, I think people go to the doctor and come to the pharmacy to get better. They’re sick, they don’t feel well, and they come here to feel safe and to get their medication,” he said. “And, I think people would feel more safe if the place they go isn’t more likely to be robbed or held up.”

The SAFE DOSES Act recently passed through the House of Representatives and is currently awaiting Senate approval. Confident that the bill will pass by September, Brown said he hopes to have it put into effect by the beginning of next year.

Tags: "doctor shopping", "pharmacy shopping", Brian Bohnert, Kahler Pharmacy, Medicaid, Nicholas Tabb, prescription drugs, Sherrod Brown, Strengthening and Focusing Enforcement to Deter Organized Stealing and Enhance Safety (SAFE DOSES) Act

This entry was posted on Monday, August 27th, 2012 at 10:04 am and is filed under Community.
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After my column “Eat the rich and starve to death,” a reader challenged me to draw up a balanced budget for the United States federal government. As an added bonus, I was asked to outline the consequences of any cuts or reductions made. I quote the reader, “You have to explain the ripple effect of each program you cut. If it means people die, then you have to say that. If it means all of our insurance rates will go up, you have to say that.” While it is impossible to predict the exact outcomes of each program cut, I can make general assumptions about what we could assume would happen.

I would like to point out that I used the numbers provided by the White House from their proposed 2013 budget. If there is any overlap in funds or discrepancies I apologize in advance, however I did my best to make sure that no funds were double-counted or exaggerated.

The fiscal 2013 budget looks to add $901 billion to the national debt according to the White House. As a fiscal conservative, most readers would assume that I would slash Medicare/Medicaid spending to nothing, cut Social Security, alter tax structure, etc. However, overhauling the system is a difficult task that I would use as an approach to lowering the deficit, since it is a long-term plan that takes time to implement and see real changes. I have taken the approach of decreasing wasteful spending and eliminating programs that require less funding, receive alternative funding or have been unsuccessful at accomplishing the goals they set out to achieve.

Congressional salaries

Currently, members of Congress take home $174,000 a year, while House/Senate party leaders take $193,400 and the Speaker takes $223,500. The president takes home a $400,000 salary, a $50,000 annual expense account, a $100,000 nontaxable travel account and $19,000 for entertainment. The vice president then takes home $230,700. I would pay all members of Congress, the president and vice president a modest salary the same as the median U.S. household income, $50,000. This would save us $67.9 million a year. A small dent, but a necessary change.

Military spending

Defending our nation and promoting interstate commerce are truly the two main purposes of a federal government. However, having bases in foreign nations such as Germany or Japan seems unnecessary given our current economic situation. Furthermore, according to Business Insider, $11 billion has been “lost” in Iraq since ’07. If we were to cut down on wasteful spending such as that and cut the $851 billion broadly labeled “National Defense Budget” by 25 percent we would save $223.75 billion, roughly 25 percent of the deficit so far. I should also point out that if this cut meant a decrease in pay or treatment options for service members, I would reinstate these funds in a second (Veterans Affairs is separately funded).

Unemployment insurance solvency

This is the section for which I am sure to get an angry response or two; all I can say is do not blame the messenger. When the nation is in the state that it is in, we cannot afford to pay for individuals to sit around and not work. This is not a moral conflict or an ideological statement, it is a fact. In 2013 unemployment insurance is set to contribute nearly $4 billion to the deficit, but the White House states that by 2015 this spending will result in a nearly $8 billion decrease of the deficit. If it is going to net out anyway, why not just do away with it all now? That puts $4 billion back on the books.

Wastebook

Sen. Tom Coburn (R-Okla.) created the 2011 Wastebook, which highlights useless government grants on ridiculous studies and projects. Once totaled the 100 items listed sum up to nearly

$7 billion in waste. Let’s assume a 10 percent deviation in case anything has been double-counted so far, that is $6.2 billion in waste. If we spend frugally and stop using federal funds to buy iPads for kindergartners (one of the items outlined in the report), we could see some real savings.

Programs to severely cut

There are a few programs that I would drastically cut for one of three reasons — their job details do not require massive funding anymore, they receive alternative funding, or they have been unsuccessful in accomplishing their goals. Those programs I would reduce funding for would be NASA ($17.7 billion to $2 billion), the Department of Defense ($525.4 billion to $325.4 billion), Treasury Department ($14 billion down to $2 billion), Department of Transportation ($74 billion halved to $37 billion), Health and Human Services ($76.4 billion down to $1.4 billion), State Department ($51.6 billion down to $600 million) and the Department of Justice ($27.1 billion down to $10 billion).

Programs to eliminate

The amount of money spent on ineffective programs in this country is truly nauseating. When the national debt is continuing to climb due to frivolous spending, it is time for some programs to go. I would eliminate Housing/Urban Development ($44.8 billion saved, they already receive funds from the sale/purchase of any home, which should adequately fund them), the National Science Foundation ($7.4 billion saved), Department of Energy ($27.2 billion saved), Department of Education ($69.8 billion saved), Corporation for National and Community Services ($1.1 billion saved, the government does not need to try and fund citizens who want to help make a difference and work with charities), Corps of Civil Engineers ($4.7 billion saved), Overseas Contingency Operations (separate than D.O.D. or defense budget, works to train foreign militaries and promote coalition partnerships, save $96.7 billion) and the Department of Labor ($12 billion saved).

Sum it all up and we have savings of more than $905 billion, all without raising taxes or touching Medicare, Medicaid or Social Security.

Some of these cuts would mean that federal employees will lose their jobs, federal funds for research will diminish, and some regulatory holes will open. My suggestion as an alternative would be to allow states to have the right to regulate industries and fund research (it is not in the constitution that the EPA must exist), and allow the private sector to thrive. Brokers and dealers are governed by FINRA, a self-regulating organization (SRO). While FINRA is a bad example due to their demonstrated incompetence, there are several SROs out there who effectively regulate their specific fields. As for the federal employees who will be out of work due to these cuts — it truly is for the best for our struggling economy. These employees do not contribute to GDP or economic growth; they draw pay from the tax pool but do not create any goods or services that result in positive economic growth. Hopefully, these employees would be forced to find a job with the private sector and contribute to strengthening the economy.

Remember, I am not suggesting that this is a long-term viable option. I am simply stating that if we want to eliminate the national debt we have to start with a balanced budget, and to do that cuts must be made. It is as simple as that.

Ben Treece is a 2009 Graduate from the University of Miami (Fla.), BBA International Finance and Marketing. He is a partner with Treece Investment Advisory Corp (www.TreeceInvestments.com) and a stockbroker licensed with FINRA, working for Treece Financial Services Corp. The above information is the express opinion of Ben Treece and should not be construed as investment advice or used without outside verification.

Tags: Ben Treece, Federal budget, Medicaid, NASA, Social Security, Treece Blog

This entry was posted on Friday, May 11th, 2012 at 8:02 am and is filed under Toledo Business Link, Treece Blog.
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People tend to search for patterns to the things in their lives, hoping to make some sense of what seems to be the random occurrences that they are confronted with. So I found myself when reading Michael Miller’s piece about the scheduled stories, observances and release of the 3-D Cameron movie version of events, all of which would culminate in the dinner and ball on April 14 to commemorate the sinking of the Titanic. I couldn’t help but be struck by some of irony surrounding this event, beginning with the fact that the anniversary of this disaster falls on tax day here in the U.S.

In parallel with the doomed liner that many will soon be celebrating, I also couldn’t help but notice that the nation likewise seems to be charting an ill-advised course in what many see today as increasingly dangerous waters; while traveling at a pace (at least of spending) that many more are calling at best reckless, and at worst an ongoing act of negligence. Unlike the tragedy that faced those on that terrible “Night to Remember,” the issue that we seem to face today is not one of too few lifeboats to save those on board, but too many of them to keep the ship upright and in trim, if not so many that they’re threatening to drag the ship down themselves.

The unemployment “insurance” boat had been extended by the national legislature to a keel length of 99 weeks to ensure that all were carried beyond the sucking effect of what still appears to be little more than a sinking economy. For those of us with failing math skills, that’s nearly two years of escape provided at a time when the government providing such rescue is also telling us that the economy and unemployment that they are designed to carry us away from are now improving. And while the latest congressional compromise for extending a tax cut will see the limit reduced 73, this might still seem to some to be an awfully long lifeboat and an awfully long time to be spending in it.

Social Security was designed as more of a retirement safety net than a lifeboat to sail the seven seas, but it seems over time to have become one over the decades since its construction. Like unemployment insurance, not only are many spending far more time in this boat than was ever anticipated, but the boat itself has been forced to grow to serve a far larger function than originally designed for or intended for it. While this boat appears to be carrying this increasing load well enough today, it’s showing every sign of becoming over-crowded. Referring back to the compromise that adjusted the unemployment boat, it also appears to be one with a leak that Congress not only refuses to plug, but created in the first place.

Medicare and Medicaid, once lifeboats themselves to ensure that seniors and the poor would have an escape from the ravages of disease in this country (the cost of medicine and not the illnesses themself), have apparently now become minicruise ships. Like the other boats discussed, they are operating far beyond their original mandate, and curiously find themselves dispensing treatment for conditions requiring Viagra for those with erectile dysfunction or abortions for those pregnant in the name of providing full access.

Very soon, the next and newest lifeboat will come into use on the great liner, as the Affordable Health Care Act is implemented. This boat promises to be larger than any of those in the fleet that we have seen before. Although it was originally designed to support the boats of private health insurance that were previously carrying many, it seems more likely now to run over those that came before in its way to be of service. More, it promises to morph into more of a hospital ship than a lifeboat, providing every service known to medical care, even to those who may not desire such treatments

None of this even talks about the boats providing food stamps, aid to dependent children or simple welfare. They have largely gone unnoticed, surrounded as they are with the increasing size of their ever-growing counterparts. They too, however, contribute to the weight that the big ship carries and the increasing instability that it has.

It’s getting a bit crowded on deck, but not as much with passengers trying to escape as it is with a fleet of lifeboats that are as great a threat to safety of the ship as the iceberg that was struck. Berg or boats, however, there is little doubt that the vessel that began the voyage is now under a threat of Titanic proportions.

Tags: Affordable Health Care Act, Just Blowing Smoke, Medicaid, Medicare, Social Security, Tim Higgins, Titanic, unemployment

This entry was posted on Wednesday, February 22nd, 2012 at 5:05 pm and is filed under Just Blowing Smoke, Opinion.
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Ohio is receiving a $12.4 million federal performance bonus for boosting the number of poor children covered by health insurance.

The Ohio Department of Job and Family Services has enrolled an additional 14,523 children since April in Medicaid, the joint state-federal health care plan for the poor.

The U.S. Department of Health and Human Services announced the bonuses for Ohio and 14 other states Monday that met goals for increasing coverage of children under Medicaid.

Ben Johnson, a state human services spokesman, said a key accomplishment for Ohio was speeding up benefits for people who were presumed eligible but who hadn’t completed all the paperwork yet.

About 1.2 million Ohio children are enrolled in Medicaid, with another 100,000 or so who are potentially eligible but not signed up.

Tags: Federal Government, Medicaid, Ohio

This entry was posted on Tuesday, December 28th, 2010 at 6:14 pm and is filed under Community, Government.
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New prescription copayments and other changes are now in effect for many people covered by the Ohio Medicaid program’s managed care plans.

Most of the 1.5 million Ohio residents in Medicaid managed care are members of groups exempted from the new charges, including children under 21, pregnant women and in long-term care facilities such as nursing homes. However, about 400,000 Medicaid enrollees must now pay up to $3 for a non-generic prescription.

The changes that began Feb. 1 are expected to save the state budget about $243 million on Medicaid, the tax-funded health care for the poor.

New cards have been mailed to everyone enrolled in the state’s seven Medicaid managed care plans, and all prescriptions must be reauthorized.

Tags: Medicaid

This entry was posted on Tuesday, February 2nd, 2010 at 9:24 am and is filed under Community, Health Care, State of Ohio.
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