Erika Eichelberger

Erika Eichelberger


Erika Eichelberger is a reporter in Mother Jones' Washington bureau. She has also written for The NationThe Brooklyn Rail, and TomDispatch. Email her at eeichelberger [at] motherjones [dot] com. 

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No, Sen. Inhofe, Obamacare Would Not Have Killed You

| Mon Oct. 21, 2013 12:35 PM EDT

Sen. James Inhofe (R-Okla.)

On Sunday, Sen. James Inhofe (R-Okla.) said that if Obamacare had been fully in place this year, he probably would have died of a heart attack. That's not true.

After going in for a routine colonoscopy a few weeks ago, Inhofe’s doctors found that his arteries were dangerously clogged, so they immediately took him to the ER, the 79-year-old senator told Aaron Klein on his WABC radio show Sunday. He suggested that if he had been living a part of the world with "socialized medicine like Obama is trying to impose upon America," he never would have gotten the life-saving surgery: "A person can find out, here in the US, that he has this emergency situation where he has got to have immediate heart surgery. And if you are in a country other than the US, a lot of them, you can't get it done. In my case, with my age, that would have been about a six-month wait. Because I hadn't had a heart attack," Inhofe said.

"It's preposterous and couldn't be further from the truth," says Ethan Rome, executive director of Healthcare for America now, a non-profit that backs Obamacare. "When people in authority say such ridiculous things," he adds, "It's a dangerous thing because people will take him seriously." Here's what the senator got wrong:

1. Obamacare is not socialized medicine. "Obamacare bears no resemblance to Canadian-style socialized medicine," says Jonathan Gruber, an MIT economist who helped craft the massive health care law. Obamacare expands private health insurance coverage for most people, and in states that are allowing it, the law also expands one of our existing public health programs, Medicaid.

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GOP Picks Anti-Food Stamp Crusader to Determine Future of Food Stamps

| Thu Oct. 17, 2013 12:50 PM EDT

House Speaker John Boehner with Rep. Steve Southerland (R-Florida).

Shutting down the government and threatening a default in an attempt to block poor people from getting health insurance isn't the only thing House Republicans did over the past two weeks. They also continued their push to defund food stamps.

It went unnoticed amidst the debt ceiling fight, but last weekend, Democratic and Republican leaders in the House selected the lawmakers that will negotiate with the Senate to hammer out a final version of the farm bill, the massive bill that funds agriculture and nutrition programs. The main stumbling block for months has been how much money the bill should devote to food stamps; the House wants to strip $39 billion from the program, and the Senate wants to cut just $4 billion. The fact that Republicans in the House named one of the most anti-food stamp members of Congress to the committee that will decide the future of food stamps does not bode well for the program.

Rep. Steve Southerland (R-Florida) has been leading the GOP effort to slash the food stamp program, called the Supplemental Nutrition Assistance Program, or SNAP. "For the past six months, Southerland... [has] delivered 45 speeches about food stamps... and presented his idea to 13 governors," Eli Saslow wrote in a profile of the congressman in the Washington Post last month. Southerland, who fought for the $39 billion worth of cuts and another provision that imposes new work requirements on food assistance recipients, told state human service secretaries last year that food-stamp reform is "what I'm about."

Usually, only agriculture committee members negotiate the final farm bill; Southerland is on the leadership committee, not the agriculture committee. His appointment to the committee that's ironing out the final deal is a sign the House intends to fight tooth and nail to keep the deep food stamp cuts.

Passage of a final bill is already a year overdue. In June, the House failed to pass its measure because both Republicans and Democrats opposed it: Democrats thought the food stamp cuts were "heartless," while conservative Republicans thought they didn't go far enough. In September, the House split food stamps from the rest of the agriculture bill and passed the harsh cuts separately, with zero Democratic votes. The House plan would cut 3.8 million people off the program next year.

Democrats countered the Southerland appointment by placing Congressional Black Caucus chair and food stamp advocate Rep. Marcia Fudge (D-Ohio) on the committee. President Barack Obama has threatened to veto any farm bill that includes GOP-level food stamp cuts.

4 Things the Fed Could Do About a Default

| Wed Oct. 16, 2013 12:13 PM EDT

Congress could finalize a deal to prevent a default by Wednesday afternoon, but it's still not certain if the House will approve of the plan. In the event that we do default, the Treasury Department could possibly stave off total catastrophe for a while by prioritizing certain payments over others. But there are also measures that the Federal Reserve could take, not just to soften the impact of going over the debt brink, but to prevent default altogether. Here are four of them:

The central bank could cancel the nation's debt: We owe a lot of our debt to ourselves, after all. As Rep. Alan Grayson (D-Fla.) wrote in an op-ed for Reuters last week:

The Treasury Department issues U.S. debt, and lots of it. So you would think that America is deeply indebted to its bondholders. Yet increasingly, it is the U.S. monetary authority, the Federal Reserve, and not private investors, who buys this debt.

So a simple solution to the impasse is as follows: Federal Reserve Chairman Ben Bernanke should simply cancel the Treasury debt that it owns. The government can just forgive the government's debt.

This wouldn't solve the debt problem entirely. The Federal Reserve doesn't own all U.S. government debt; it owns only roughly $2 trillion of it. (Well $2,076,927,000,000.00, as of last Wednesday, but who's counting?)

Yet canceling this debt would give the government substantial room under the debt ceiling to manage its finances. It would end the debt ceiling standoff in Congress, and it would prevent a default.

That's probably not going to happen, though.

Fed Chairman Ben Bernanke could lend to the Treasury Department: That might entail breaking the law, but it could be a better option than Armageddon. As the New York Post noted last week:

Some Washington insiders and Wall Streeters are talking about a second option to avoid a default: looking to Bernanke to lend money to the Treasury.

But, it turns out, under normal circumstances, lending to the US Treasury is illegal under the Federal Reserve Act.

But Cullen Roche, founder of the Orcam Financial Group and an expert on monetary policy, believes that in this emergency Bernanke could play a get-out-of-jail-free card.

“If the options are default or no default then I think the Fed should exercise what’s called the ‘exigent circumstances’ clause [of the Federal Reserve Act] and lend directly to the US Treasury,” said Roche.

“They did this with Bear Stearns and AIG [in the 2007-2008 financial crisis] so I think saving the US government is a bit more important than those two entities.

The Fed could keep lending to banks even if Treasurys plummet: If the Fed can't prevent default, then it can at least soften the blow. The Fed makes short term loans to US banks and takes US Treasurys as collateral. But if Treasurys drop in value, they may no longer qualify as adequate backing. The Fed could choose to continue lending to banks nonetheless, something the Fed considered at the height of the 2011 default scare. As Charles Plosser, the president of the Philadelphia Federal Reserve Bank told Reuters in 2011, "Do we treat [Treasurys] as if they defaulted and don't lend against them?" Or, he asks, "Do we treat them as if they didn't default, in which case we would be saying we are pretending it never happened?"

It could prop up the price of Treasurys: If the federal government hits the debt limit and has to stop paying interest on a portion of it's debt, the value of Treasurys will decline. But as Marcus Stanley, executive director of Americans for Financial Reform explains, "the Fed could support the price of that debt on the assumption that the government would eventually continue to pay it off." That would mean the Fed could buy Treasurys from anyone on the market for a reasonable market price instead of the depreciated price.

As Stanley notes, "When you have power to print money, you really have a lot of things you can do."

Why Harry Reid Fears a Long-Term Shutdown Deal

| Tue Oct. 15, 2013 3:00 AM EDT

As the week of a possible government default began, talks aimed at ending the shutdown and the debt ceiling crisis revolved around a new wrinkle: the resistance of Senate Majority Leader Harry Reid and his fellow Senate Democrats to an agreement funding the government for a longer, rather than shorter, period of time. Say what?

Why is kicking the can down the road a couple of months a better option than staving off another government-spending showdown for a half year, as Republicans prefer? It's because the Republican plan would lock in for even longer the $1.2 trillion in budget cuts known as sequestration, which went into effect in March and which Democrats really hate.

Democrats want to replace the economy-crimping sequester with a less austere plan that includes more targeted cuts and higher total spending levels. Reid is okay with extending current sequester-level spending—but only until mid-January, so a broader budget deal that includes Democratic priorities can be worked out before deeper spending cuts go into effect. If the House somehow forces a longer-term deal, it would be much harder for Reid and Democrats to negotiate a substitute for the sequester, say, six months from now because the fiscal year (which began October 1) would be half over. That would mean that the current deep budget cuts, which have already resulted in the loss of hundreds of thousands of jobs, would likely drag on and on.

Reid does not want a deal that un-shuts the government to prevent him from waging a fight over sequestration. In September, he says, he agreed to a temporary continuing resolution that would keep the US government open for two months at the spending levels dictated by sequestration, and considered that a concession to House Speaker John Boehner and the Republicans. He did so with the expectation that he could still try to undo some of the consequences of sequestration in the 2014 budget. And with the House Republicans now on the ropes in the dual shutdown/debt ceiling crisis, he has seen his leverage increase and has pushed for the chance to wage another battle over sequestration.

As my colleague Tim Murphy and I reported earlier this year, below are some of the sequester's initial impacts on programs that help struggling Americans. The harmful cutbacks explain why Reid and Democrats desperately want a way out of Sequester Land. (Exact numbers will be different for 2014, because sequestration was not in effect for the entirety of 2013, and Congress could restructure the cuts).

Public housing subsidies: $1.9 billion in cuts hit 125,000 low-income people who lost access to vouchers to help them with their rent. The housing authority in Rochester, New York, cut 600 vouchers after losing $2.5 million in funding. In Dubuque, Iowa, new Section 8 housing vouchers were put on hold. And in New Orleans, the housing authority recalled 700 Section 8 vouchers for low-income families.

Foreclosure prevention: 75,000 fewer people received foreclosure prevention, rental, and homeless counseling services.

Educational programs: Learning programs for poor kids saw a total of $2.7 billion in cuts. The $400 million slashed from Head Start, the preschool program for low-income children, meant reduced services for some 70,000 kids. Here's how that panned out at the local level. The Head Start program in Jefferson County, Alabama, closed for 10 weeks, affecting 276 kids. Fifteen staffers were furloughed. In Fayetteville, Arkansas, the Head Start program ended 13 days early. In Eureka, Kansas, the program closed for good.

Title I Funding: The Department of Education's Title I program, the biggest federal education program in the country, subsidizes schools that serve more than a million disadvantaged students. It was cut by $725 million.

Rural rental assistance: Cuts to the Department of Agriculture resulted in the elimination of rental assistance for 10,000 very low-income rural people, most of whom are single women, elderly, or disabled.

Social Security: Although Social Security payments themselves were not scaled back, cuts to the program resulted in a backlogging of disability claims.

Unemployment benefits: More than 3.8 million people receiving long-term unemployment benefits saw their monthly payments reduced by as much as 9.4 percent, and lost an average of $400 in benefits over their period of joblessness.

Veterans services: The Transition Assistance Program was forced to cut back some of the job search and career services it provides to 150,000 vets a year.

Nutritional Assistance for Women & Children: The government's main food stamp program is exempt from cuts, but other food programs took a whack. Some 600,000 women and children were cut from the Special Supplemental Nutrition Program for Women, Infants, and Children, which provides nutrition assistance and education.

Special education: $978 million in cuts affected 30.7 million children. For example, because of the scaling back of federal grants to states for students with disabilities, cash-strapped states and districts had to come up with the salaries for thousands of teachers, aides, and staff that serve special-needs kids. In Fort Myers, Florida, the Lee County school district had to lay off 100 employees, including 15 teachers, due to the lack of special education funding.

Job training programs: $37 million was slashed from a job retraining and placement program called Employment Services Operations, and $83 million was cut from Job Corps, which provides low-income kids with jobs and education.

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