Assembly Democrats have again proposed as they did last year a major extension of the “millionaires tax” plus adding new tax brackets in ranges of $1 – $5 million, $5 – $10 million, $10 million to $100 million and another bracket above $100 million. The top rates would be 10.32% for those above $100 million. The rate for those at $1 million to $5 million would be 8.82%.
The current millionaires tax is set to expire at the end of 2017 and will be the key issue in negotiating a new state budget by April 1st. If the tax is not extended, the top tax rate would be 6.85% for all taxpayers with annual incomes of $300,000 and higher – basically a flat tax for those at that income level and higher. The Assembly estimates that the added high income tax brackets would generate an additional $5.6 billion in revenues when fully phased in and effect 66,143 taxpayers.
Governor Cuomo has proposed extending the current tax but Senate Republicans have so far not committed to it though the failure to do so will lead to a major budget deficit of several billion dollars in future years with a loss of $700 million estimated for the last quarter of the coming fiscal year, April 1, 2017 – March 31, 2018. State lawmakers though are also concerned about potential massive federal budget cuts that could be enacted by Republican controlled Congress which could cost the state billions of dollars. One report suggests that the Trump Administration may proposed budget cuts of up to $1 trillion.
Last year, the Legislature approved multi-year middle class tax cuts which are set to take effect on April 1st and eventually lower rates to 5.5% by 2025 for those with incomes between $40,000 and $150,00. This will lead to an additional loss of some revenue. There will be great pressure to extend the millionaires tax in order to avoid deficits and to pay for the popular proposals in the Governor’s budget including a big increase in school aid and free tuition in public colleges.
Four Republican Senators introduced a health care bill that would allow states to keep Obamacare or opt for a different plan that would automatically insure people in a high deductible plan. It’s a nice try at a compromise, but it is unlikely to go anywhere but it shows that there will be many different plans and ideas and it will difficult for the House and Senate to come up with a plan to replace the Affordable Care Act. And, it takes 60 votes to pass a replacement, even though rules enacted earlier this month allow a repeal in the Senate with only 50.
The battle has been joined in herein Albany on Friday, we had our Save My Care Bus tour press conference in Albany are Friday. Elliott Easton, who lost his health insurance after a job layoff spoke along with Albany Mayor Kathy Sheehan, County Executive Dan McCoy and State Senator Neil Breslin. We noted that the Governor’s office says a repeal of the Affordable Care Act could cost the state $3.7 billion with 2.7 million in danger of losing their health care.
If Congress were to move ahead with repeal or enact a budget for the 2017-2018 fiscal year in October with massive cuts as Trump proposes, then the State Legislature would have to come back to Albany in the fall if a big deficit opened up. Plans to make major cuts in programs include a block grant for Medicaid and cuts and elimination of a wide variety of programs including the Legal Services Corporation and the Corporation for Public Broadcasting along with cuts or specific programs in agencies that the Trump people don’t like, especially the EPA.
President Trump apparently told Congressman Elijah Cummings he wants to meet with him to discuss lowering prescription drug prices. Cummings responded, saying he wants to bring Senator Bernie Sanders along. Meanwhile, the pharmaceutical companies publicly stated today that they are planning a massive public relations campaign in the next several years to tout the value of their drugs in terms of saving money for the health care system. The problem of course is that the drug companies want to keep all the money that would have been spent on health care rather than just recover costs for research, development, marketing and a reasonable profit. It would be like Dr. Jonas Salk saying after he and others discovered the polio vaccine that they should get to keep all the health costs of polio that would have occurred had it not been cured.
Drug price escalation has become so unpopular it has resulted in both Republican President Donald Trump and Governor Andrew Cuomo both proposing to take concrete action to limit prices, a populist position that has long been championed by Vermont Senator Bernie Sanders. Trump said over the weekend that he will not be cutting Medicare and that he will be seeking to force drug companies to negotiate prices for drug purchases for Medicare and Medicaid. Meanwhile, Governor Cuomo unveiled plans last week to establish a state review board to put caps on drug prices in Medicaid and then establish a surcharge if they exceed the Medicaid prices in private insurance. The surcharges would be used to lower insurance premiums.
I have been saying for a long time that the drug companies are their own worst enemies, raising their prices beyond any relation to research and development costs and instead charging whatever they could get away with. So, now they are in the crosshairs of two powerful politicians.
No one should underestimate the power of the pharmaceutical lobby which is legendary in Albany and Washington for thwarting almost every piece of legislation that would limit its freedom to set its prices. The drug companies are one of the biggest political donors of all and, in addition they make contributions to patient groups and other community organizations to enlist their support to take the lead in fighting the regulation of prices and access to medicines. The pharmaceutical lobby just successfully defeated a price control ballot proposition in California, saying it would lead to increases in drug prices for those not in public programs effected by the ballot proposal.
Once more specific details of the President’s proposal and the Governor’s plan are out, they will face major opposition in a changed political landscape. While Trump is clearly siding with corporate interests on most economic and environmental issues, he seems to have an ax to grind with the drug companies not just regarding prices. His disapproval, seems to be related to how they have moved manufacturing out of the country. Pfizer which was based in Brooklyn now has a large plant in Ireland, for example.
Cuomo seems to be responding to concerns from the insurance industry which has been crusading against the high drug prices which are forcing them to raise rates. Also, though Cuomo seems to have decided on being a Democratic populist. He is increasingly signing on to the political platform of Senator Bernie Sanders in a number of areas as he prepares to run for re-election in 2018. Last week, Cuomo announced plans for a college tuition subsidy program with Sanders at his side. And, Sanders has been one of the loudest voices to attack drug prices and call for Congress to allow Medicare to negotiate drug prices and approve importation of medicine from Canada and other countries which meet safety standards.
I think it is very important in this difficult political time for us health and health services advocates to act like winners who have the vast majority of the American people on our side regarding Medicare, Social Security, Medicaid and even the Affordable Care Act. Polls show only about 20% want to fully repeal the ACA rather than fixing and improving it. We need to pursue our advocacy with the understanding that what the conservatives in Congress are trying to do is against the wishes of the American people including many of the working class people who voted for Donald Trump. The plans to privatize Medicare and block grant Medicaid come from those who want to put corporate control over these programs and reduce government spending on them.
It is a good sign that it has taken just a few weeks for activists to mobilize and make plans to defend Medicare, Medicaid and the Affordable Care Act. While national leaders Senators Chuck Schumer and Bernie Sanders are mounting public efforts like this Sunday’s day of local events, advocates are conducting a National Bus Tour to Protect Health Care next week that will include stops in New York City, Albany and Binghamton. The Albany event will be held at 11:00 am on Friday, January 20 behind the State Capitol.
Bernie Sanders has been leading the Senate Democrats outreach effort to plan days of action on Sunday, January 15 in local areas across the country. Sanders is also trying to hold Donald Trump to his campaign promise not to cut Medicare and Social Security. Sanders is planning to introduce an amendment to protect the programs today in the budget debate in Washington.
Meanwhile it seems that Trump and Congressional Republicans are heading for a conflict after Trump’s chief of staff Reince Priebus said last week that Trump does not intend to “meddle” with Medicare and Social Security. Republicans in the House though are eager to move ahead and cut the programs despite the fact that they are having trouble just focusing on the repeal and replacement part of the Affordable Care Act.
That will also cause some problems for Medicare since the ACA included many positive changes for Medicare and if it is repealed with no replacement, those benefits will be eliminated. One key benefit in the ACA for Medicare was drug coverage in the “donut hole” or coverage gap that is slated to be fully covered by 2020 and the donut hole eliminated.
The attempt by right wing conservatives to turn the country’s economy over to the wealthy and corporations has always been their “overreach” and resulted in their loss of power. I have no doubt if they keep it up that it will happen again because organized, united generations of activist young people, working people and seniors are more informed and more able to exert their power than ever before.
We owe it to all the committed activists and legislators in the generations before us who fought for Medicare, Medicaid and national health insurance to enlist in the current battle to fight for health care as a human right. Those in control in Congress don’t seem to see it that way. To them, Medicaid should be a block grant, Medicare should be voucherized and the Affordable Care Act should be dismantled.
The battle has now begun in earnest this week. Today, the Alliance for Retired Americans is mobilizing with a call-in day to Congress to oppose Medicare vouchers. On January 15, health care advocates and Congressional leaders like Senator Bernie Sanders are leading efforts to call local meetings on health care across the country to mobilize to protect health care. Sanders said on The Rachel Maddow Show last night that his role in the Democratic Senate leadership is outreach and that the party must understand that building grassroots activism is even more important than its fundraising operations.
Senator Chuck Schumer, the new Senate Minority Leader, also appeared on the show and said the Republicans will get no help from Democrats in replacing the Affordable Care Act. He predicted it will become clear what a chaotic mess they have made if they proceed to repeal the ACA without a replacement. It seems pretty clear that the replacement will offer some tax credits and high deductible health savings plans, not offer the guarantee of coverage and subsidies in the Affordable Care Act.
For those of us who have been active in senior advocacy fighting to protect Medicare and Social Security, this is an intergenerational moment. Older persons, particularly those who are grandparents, can speak up not just for their own Medicare insurance but also speak up for their grandchildren and children who might be in danger of losing their health coverage. The moral voice of families and caregivers has a tremendous power that needs to be brought to bear on those who are proceeding ahead in Washington and are more motivated by their hatred of government programs than they are about making sure that sick children, adults and seniors have the insurance coverage needed to treat them.
This is not a time for despair but for activism and moral leadership and remember those who had a dream of someday seeing programs like Medicare, Medicaid and the Affordable Care Act. They are not perfect programs but they have done more to improve the health of ordinary Americans than the inadequate alternatives prescribed by their opponents.