2012 - %3, October

Why Medicaid Is Important Even to the Middle Class

| Mon Oct. 29, 2012 1:34 PM EDT

Bob Somerby was happy to see Paul Krugman writing about Medicaid in the New York Times today, but thinks he errs in hauling out a bunch of facts and figures that portray Medicaid primarily as a program for the poor without giving equal time to a few other facts and figues:

As far as we know, none of that is wrong. But what about all the middle-class people who receive (expensive) nursing home care through the Medicaid program, at least in certain states?

To what extent does Medicaid pay for nursing home care for middle-class seniors? To what extent do middle-class voters understand this topic when they heard that Romney wants to slash spending for this program?

We don’t know the full answer to that first question. That said, we’ll guess that the vast majority of middle-class voters don’t understand that Medicaid may pay the bills for the future care of their own parents or grandparents.

Until recently, I would have agreed with Bob. But a couple of months ago the Kaiser Health Tracking Poll asked a question about Medicaid, and it turned out that:

  • 67 percent of respondents supported the Medicaid expansion in Obamacare.
  • Even among middle-class families, 61 percent said that Medicaid was important to them.
  • Of those who said Medicaid was important to them, 49 percent said it was because "you or someone you know" has received long-term nursing care via Medicaid.

As a matter of pure numbers, total Medicaid spending in 2010 was a little under $400 billion, and of that, $123 billion was for long-term nursing care. So that's roughly a third of Medicaid spending.

That's for everyone, of course, not just middle class folks, but it's obviously a big chunk of Medicaid spending no matter how you slice it. And judging from Kaiser's poll responses, most middle-class voters probably do understand that. It's one reason the Obama campaign may have missed a bet by not making a bigger deal out of Mitt Romney's plan to slash Medicaid and then dump the whole program on the states.

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Prisoners to Remain on Rikers Island As Hurricane Sandy Heads for New York

| Mon Oct. 29, 2012 1:07 PM EDT

UPDATE, October 30: NYC DOC Deputy Commissioner Matthew Nerzig provided the following statement via email: “No power outages on Rikers last night. No significant flooding or disruption of our operations. The Commissioner [DOC Commissioner Dora Schriro] spent the night there.”

The authors would still appreciate hearing from families whose loved ones (prisoners or staff) weathered the storm on Rikers and can provide accounts of their experiences. Email: solitarywatchnews@gmail.com.

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 At a press conference yesterday afternoon on New York City’s preparations for Hurricane Sandy, Mayor Michael Bloomberg was asked about the safety of prisoners on Rikers Island, which lies near the mouth of Long Island Sound, between Queens and the Bronx. Bloomberg appeared annoyed by the question, and responded somewhat opaquely: “Rikers Island, the land is up where they are and jails are secured.” Apparently unable to fathom that anyone’s main concern would be for the welfare of the more than 12,000 prisoners on Rikers, Bloomberg then reassured listeners: “Don’t worry about anybody getting out.”

Pollster: Undercounted Cellphone Users Hide Obama's Lead

| Mon Oct. 29, 2012 1:04 PM EDT

Are Obama voters underrepresented in presidential polls because they use cellphones?

That's the argument put forward by Democratic pollster Stan Greenberg in a new memo released Monday. Government data shows that an increasing percentage of Americans have ditched their traditional land-line phones and now use only cellphones. A year ago, 32 percent of adults used only a cellphone, according to the Center for Disease Control, which tracks cellphone usage. But more and more Americans are relying solely on their cellphones—Greenberg estimates that that figure is now 37 percent. And government statistics show still larger percentages of hispanics, blacks, and young people—all of whom are more likely to favor Obama, polls show—use cellphones only.

Why does this uptick in cell-only users matter? Because, as Greenberg writes, some polls used to gauge the state of the presidential race don't reach these people—and could therefore be lowballing Obama's standing. (Robocalls are used by many pollsters, but cellphones are blocked from receiving robocalls.) Greenberg went back and analyzed 4,000 of his polling firm's interviews this election season and found that cell-only voters break for Obama in significant numbers. As the following charts show, people who only use a cellphone said they'd vote for Obama by an 11-point margin, and those who mostly use a cell opted for Obama by 9 points. On the other hand, those who said they used a landline and a cellphone backed Romney by 3 points.

Courtesy of Greenberg Quinlan RosnerCourtesy of Greenberg Quinlan Rosner

Cellphone-only respondents, Greenberg says, are "attitudinally and culturally distinct." They're less conservative, but not necessarily libertarian, either, though they praise both the National Rifle Association and same-sex marriage. They're a crucial piece of the electorate not entirely captured by polls used in the presidential race.

Greenberg isn't the first pollster to point out Obama's bump from cellphone users. Back in September, the New York Times' Nate Silver found that Obama fared better in polls that include cellphone users. The right-leaning Rasmussen polling shop—which tends to show Romney faring better than Obama—doesn't include cellphones; neither does the left-leaning Public Policy Polling, which shows Obama doing better in the race. Gallup—which puts Obama ahead among registered voters and Romney in the lead among likely voters—includes cellphones in its sampling.

Greenberg's key takeaway is this: Pollsters aren't capturing what he calls "the new diversity of the American electorate" if they aren't surveying voters who depend on cellphones. If pollsters were doing that, Greenberg suggests, Obama would have a bigger lead over Mitt Romney than he's got right now.

Romney's Charitable Trust—Not Very Charitable

| Mon Oct. 29, 2012 1:03 PM EDT

When Mitt Romney has come under fire for employing aggressive tax avoidance strategies that have reduced his federal tax rate to one lower than most middle-class Americans pay, his defenders have often pointed to his generous charitable donations as proof that he has contributed his fair share. The argument has never been especially compelling, given that a lot of his charitable contributions went to his own family foundation, which then gave money to such worthy causes as the Heritage Foundation or the George W. Bush library. But today Bloomberg Bloomberg added a new wrinkle to the story, reporting that Romney has taken advantage of a complicated—and now mostly outlawed—charitable trust to defer and avoid paying capital gains taxes on some of his earnings.

Using the Freedom of Information Act, Bloomberg smartly requested the tax returns of a charitable trust set up by Romney in 1996, which have never been publicly released. (The trust is separate from both the Romneys' family trust and foundation.) The documents reportedly show that Romney used a loophole to essentially rent the tax-exempt status of a nonprofit—in this case, that of the Mormon church—to lower his tax rate while not actually giving much money to the charity itself. Bloomberg explains:

When individuals fund a charitable remainder unitrust, or "CRUT," they defer capital gains taxes on any profit from the sale of the assets, and receive a small upfront charitable deduction and a stream of yearly cash payments. Like an individual retirement account, the trust allows money to grow tax deferred, while like an annuity it also pays Romney a steady income. After the funder’s death, the trust’s remaining assets go to a designated charity. 

Congress restricted the loophole just a year after Romney set us his trust to require that at least 10 percent of the trust's initial investment remain for the charity at the end of the trust's life. The Romney trust was projected to leave 8 percent to the nonprofit, which would have made it illegal under the new law, but according to Bloomberg, existing trusts like Romney's were grandfathered into the law.

Setting up the trust, worth between $750,000 and $1.25 million in 2001, enabled Romney to take an upfront deduction for his charitable donation to the trust, while also earning annual payments worth 8 percent of the trust's assets. Unlike much of his own portfolio, Romney's charitable trust investments have been very conservative. (It's now just all cash.) As a result, according to Bloomberg, the trust earned only $48 last year, while paying out nearly $37,000 to the Romneys. Meanwhile, the principal, which goes to the charity upon Romney's death, has been dwindling as a result of those payouts, down to $421,000 in 2011. According to Bloomberg:

The current investing strategy favors the Romneys over the charity because they get a guaranteed payout, said Michael Arlein, a trusts and estates lawyer at Patterson Belknap Webb & Tyler LLP.

"The Romneys get theirs off the top and the charity gets what's left," he said. "So by definition, if it's not performing as well, the charity gets harmed more."...

If the CRUT maintains the same investing strategy, assets will continue to shrink, said Jerome M. Hesch, a tax and estate planning attorney at the law firm Carlton Fields. The trustee acted prudently in protecting against losses during a stock market decline, he said.

Nevertheless, "what's going to go to charity is probably close to nothing," Hesch said.

The Bloomberg story provides yet another example of Romney relying on every tax avoidance scheme in the book to shield his fortune—and in this case, using his church in the process. He should be glad this scoop is likely to got washed away in the hurricane coverage this week.

Will Prop. 38's Micro Appeal Work?

| Mon Oct. 29, 2012 12:45 PM EDT

Here's an interesting mailer that we got a couple of days ago from the folks supporting Prop. 38, which would raise taxes in California to provide additional funding to schools. It's personalized to me—or to my zip code—and tells me just how much extra money my local schools would get if 38 passes. Clever!

And yet…oddly wrong. Of those three schools, only the middle school is near me. The two elementary schools are a couple of miles away even though I have two elementary schools within half a mile of my house. (Not to mention the nearby high school.) Does that mean that my local elementary schools wouldn't get any Prop. 38 money? Or just that the Yes on 38 campaign uses a really lousy mapping program?

I don't know. But I'm curious: does an appeal to such naked local self-interest work? It might! Something about it feels ineffective, though, as if the gameplaying is a little too obvious. Opinions?

Obama Crew: It's About the Math, Not Mittmentum

| Mon Oct. 29, 2012 12:31 PM EDT

With the 2012 race Sandy-fied—President Barack Obama has canceled campaign events to tend to concentrate on the hurricane and its aftermath—the Obama campaign's top two strategists, David Axelrod and Jim Messina, held a conference call with reporters Monday morning to  contend there's no such thing as Mittmentum. As could be expected, the pair said the Obama campaign is better positioned in this final week of the campaign. Axe noted that this is not due "to a mystical faith in a wave [of pro-Obama voters] that's going to come." It is attributable, he said, to hard-and-fast data regarding early voting in several states and polls in the swing states.

"You're going to get spun and spun and spun" by the Romney camp, Axelrod told reporters on the call. He urged the journalists to "focus on the data."

Messina pointed to the lead item in Politico's "Playbook" today, which outlined why each campaign believes it is winning. The Romney gang focused on intangibles, including the possibility of lousy jobs numbers being released this Friday: "We're focused, but we're loose, unlike our friends in Chicago." The Obama team was fixated on statistical indicators: "The early vote numbers make clear that the right combination of diversity, female voters and young voters are showing up. In Iowa and Nevada, we're racking up 2-1 margins... We're cutting their absentee margin in Florida, with big registration and early-vote numbers in North Carolina... Now they face a superior organization, which makes all the difference in a close election."

And that's sort of how the call went, with Messina citing metrics and data. "We're leading in every battleground state." he stressed. "We're in the close race we've always prepared for." He cited two recent polls showing Obama with a lead in Virginia. Axelrod noted that the campaign's organizational endeavors have propelled "sporadic voters" to the polls for early voting. This campaign, he said, doesn't concentrate on registered or likely voters; "we pay more attention to actual voters."

The campaign's top duo noted that Obama has led in 14 of the last 16 polls in Ohio (Romney and Obama tied in two) and that early-voting in Florida  has essentially erased the Republican's advantage in mail-in ballots there. Again and again, they contended that Romney is struggling with the electoral map and that his campaign has repeatedly made claims that did not pan out: we're surging in Michigan, Pennsylvania is tightening. Obama still has a double-digit lead among women voters, Axelrod said.

At this point in the campaign, the Obama strategists are sticking with what's always worked for them: the math. During the 2008 primary campaign, they were obsessed with the delegate count and, as Hillary Clinton fought on, insisted continuously that the numbers favored them. They were right. Now, they are asserting once again that the fundamental calculations are on their side—and using the data to counter the Romney campaign's claims of inevitability.

Reality-based spin does have its benefits. But with a hurricane slamming into the east coast and the race still tight (and within the margin of error in many critical states), the math could change by—or on—Election Day. "We like where we are," Axelrod said. Maybe he does, but he also told reporters, "In eight days, we'll know who was bluffing." That was one assertion that could not be denied.

UPDATE: The Obama campaign has put out a memo outlining much of its eight--days-out case. You can read it here.

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Why We Have So Many Dumb Rules: A Case Study

| Mon Oct. 29, 2012 12:16 PM EDT

New York mayor Michael Bloomberg has gotten a lot of abuse for his campaign to ban the sale of sugary drinks in cups larger than 16 ounces. There are lots of reasons for this, but among the economically literate his proposal is widely viewed as gratuitously inefficient. Simply taxing sugary sodas would be a lot more sensible, so why not do that instead?

Well, here's what's happening in Southern California, where the city of El Monte has placed an initiative on the November ballot to tax sugary drinks. El Monte has a high rate of obesity and big fiscal problems, so it seemed like a winner:

But then the beverage industry converged on El Monte, turning the race into the most expensive campaign in the city's history — and giving it an increasingly David-versus-Goliath feel.

The beverage industry forces are open about their desire to not just kill El Monte's proposal but to make the sugary drinks tax politically unfeasible to other cities. They've brought together consultants from across the country, including the firm of a Washington, D.C., political strategist whose famous "Harry and Louise" advertisements helped derail the Clinton administration's healthcare legislation in the early 1990s.

....Ads targeting Asians, for example, feature a woman named Stephanie Dang explaining how the tax would hit "boba milk tea." Ads targeting Latinos show a Mexican American woman talking about chocolate milk....Driving around El Monte last week, [El Monte mayor Andre] Quintero seemed overwhelmed by the opposition. The "No on H" committee has spent close to $1.3 million, compared to his side's $57,000.

The same thing happened in New York, of course, where the 16-ounce rule came only after attempts to levy a tax failed. And it explains a lot of other suboptimal policies too. Why do we have CAFE fuel economy standards for cars, for example? Part of the reason is that a more sensible policy — a carbon tax or a cap-and-trade plan — is politically impossible thanks to the anti-tax jihadists in Washington. So instead we implement a hodgepodge of command-and-control rules that don't fall foul of Grover Norquist's blood pledge and which the public accepts because it has no idea that these rules end up costing them more than a simple tax would.

In other words, complicated, hidden costs are always better than simple, open costs. That's always been the case to a certain extent, but it's become practically a truism over the past couple of decades. Thanks to conservatives, it's all but impossible to pass a simple, effective policy these days. So instead we get a morass of obscure, convoluted rules that barely get the job done and have a bunch of terrible side effects.

And then conservatives complain about how oppressive all our rules are. Pretty nice work if you can get it.

Palm Beach County Screws Up Another Presidential Election

| Mon Oct. 29, 2012 11:56 AM EDT

Just in case 2012 hasn't filled you with Bush-Gore-repeat nightmares yet, there's bad news from the South Florida epicenter of the 2000 debacle: Election officials in Palm Beach County say they screwed up at least 60,000 absentee ballots and have to perform a recount.

That's right: The county that gave you the butterfly ballot is back. An error by the county's printer caused ballots to go out to absentee voters with a typo, and as completed votes roll back into the supervisor's office by mail, volunteer workers have to copy the votes by hand onto new ballots to ensure they're counted by the county's tabulation machines.

"It won't be able to read [the misprinted ballots]," county elections supervisor Susan Bucher told the Palm Beach Post when the problem came to light two weeks ago. "It will just kick them out."

If you're asking, "How the hell?" here's the deal:

Chicago Thugs in Labor Department Already Making Excuses to Delay Jobs Report That Would Sink Obama

| Mon Oct. 29, 2012 11:40 AM EDT

The most important jobs report in the history of the nation (really!) might turn out to be a fizzle:

The U.S. Labor Department on Monday said it hasn’t made a decision yet on whether to delay Friday’s October jobs report, the final reading on the labor market before next week’s federal elections. A Labor official said the agency will assess the schedule for all its data releases this week when the “weather emergency” is over.

I'm willing to bet that the report will be released on time. But if it's not, can you just imagine the level of crackpot conspiracy theories we're going to have to endure about it? And that's without even knowing which candidate it putatively helps.

Personally, I'm all for delaying it. In fact, at this point I think I'm all in favor of modifying the First Amendment to ban all news coverage of any kind for the week before Election Day. Who's with me?

Why Mitt Romney Wanted to Shutter FEMA

| Mon Oct. 29, 2012 11:06 AM EDT

Everyone is having fun today with a clip from an old Republican primary debate in which John King asks Mitt Romney about federal handling of disaster relief. Romney makes a general statement about how it's always better for states to handle things, and King then follows up:

KING: Including disaster relief, though?

ROMNEY: We cannot afford to do those things without jeopardizing the future for our kids. It is simply immoral, in my view, for us to continue to rack up larger and larger debts and pass them on to our kids, knowing full well that we'll all be dead and gone before it's paid off. It makes no sense at all.

WTF? Is Mitt Romney really opposed to federal funding of disaster relief? What was going on here?

It's worth remembering the context. This debate was held in June 2011, just a few weeks after the disastrous tornado that hit Joplin, Missouri. At the time, FEMA was close to running out of money and Republicans were busy holding the country hostage over extension of the debt ceiling. This meant that, yes, FEMA funding really had become controversial. Democrats wanted to pass a supplemental spending bill to keep FEMA going, but on May 30, House Majority Leader Eric Cantor went on Face the Nation to say that he had conditions: there would be no money for Joplin unless something else was cut first.

"I know that America is just stunned by the scope of devastation and loss and the horrific tragedy that the people of Joplin and other places across the country really are experiencing this tornado season," Cantor said. The federal government typically pays for disaster relief, but Cantor has said repeatedly that the government must maintain fiscal discipline. On Sunday, he compared the situation to that of a family putting off buying a new car when a family member became ill.

"When a family is struck with tragedy — like the family of Joplin ... let's say if they had $10,000 set aside to do something else with, to buy a new car ... and then they were struck with a sick member of the family or something, and needed to take that money to apply it to that, that's what they would do, because families don't have unlimited money. And, really, neither does the federal government."

So a week later, this was the background for King's question. Republican orthodoxy that demanded spending cuts in return for raising the debt ceiling had infested everything, even emergency spending. Sure, Joplin might be suffering, but by God, America was out of money and there was nothing left for them. Romney, who was still in his severely conservative phase back then, went along because he didn't dare cross Eric Cantor. This is the real problem here. There's no telling if Romney really believed what he was saying or not, but as president he probably wouldn't dare cross Cantor either.

For more, see Tim Murphy's explanation of how Paul Ryan's budget plan would affect disaster response and funding.