U.S. Economic/Financial News

Bipartisan Support in Senate for Rail Infrastructure

In an increasingly rare exhibition of bipartisanship, at a hearing of the Senate Commerce Subcommittee on Surface Transportation April 21, Sen. Trent Lott (R-Miss) and Sen. Frank Lautenberg (D-N.J.) agreed on the need for more ambitious plans for rail infrastructure development.

Three broadly different approaches were presented. The Administration's witness, Amtrak General Counsel Jeffrey Rosen, called for total de-funding of the national passenger railroad, supposedly as a "call to action." If the various states need long-distance passenger railroad service, let them pay for it. What Rosen did not say, was that the states cannot pay, Amtrak will be bankrupted, and all remaining long-distance (non-commuter) passenger rail service will be lost, in an infrastructure catastrophe which will kill many towns, smaller cities, and surrounding countryside which depend on it.

Amtrak has developed its own plan, which was presented by its chairman, David Laney, with additional supporting testimony from its president David Gunn, a highly-regarded railwayman who is being kept on well past retirement age.

Amtrak's objectives, as presented in oral testimony, are 1) to bring the infrastructure into good repair, and 2) to increase capacity for all users. Amtrak cannot continue to operate at the $1.4 billion budgeted in fiscal '05 (not to speak of zero funding). Annual budgets must begin at $1.8 billion minimally, or $1.6 billion if Amtrak is given a Federal loan facility for working capital. The Federal government must supply capital for necessary infrastructure expansion, if the states served by it agree to put up 15-30%.

Inspector General Mead added that future budgets must be minimally $1.7-2.0 billion per year, otherwise the railroads are entering an area of high risk. States should be given non-matched Federal grants to compensate them for the greatest part of the losses incurred in long-distance passenger service in that state.

Senator Lott, the subcommittee chairman, asked Rosen whether it was true that the Administration contemplated zero funding. Rosen gave a long answer: in essence, he said that it depends how you define "zero." Lott asked in follow-up, "Did the Administration contemplate the serious consequences of such a ridiculous proposal?... Lott "was stunned and disgusted," when he heard it.

The transportation system is vital to the economic development of the United States, said Lott. Without adequate airways, railroads, ports and highways, the economy cannot grow. The Administration is not stepping up to the challenge of transportation.

Senator Byron Dorgan (D-N.D.) said that the American people should not be lulled into the illusion that passenger rail can stand on its own. Government pays for it because we need it. It's an essential service, the American people have chosen to have it, and we'll fund it.

The only Senator who openly supported the Administration policy was John Sununu (R-N.H.).

Dems, GOP Call for Infrastructure at Building Trades Conference

Both Democratic and Republican Members of Congress spoke out for infrastructure development at the legislative conference of the Building Trades unions in Washington on April 18-20.

According to a press release from the Building Trades, Senator Barak Obama (D-Ill) told the delegates that the Administration had spent a trillion dollars on tax cuts for people who don't need them or don't ask for them. "If, he said, we had spent that trillion dollars on rebuilding the nation's infrastructure, it could have put thousands of people to work."

Rep. Nick Rahall (D-W.Va.) urged the delegates to lobby for a House-passed bill which would provide $248 billion for infrastructure and put tens of thousands to work. He noted that a roadblock had been set up by the White House and the Senate leadership with regard to the bill.

Senator George Voinovich (R-Ohio) said that America is in a dream world on infrastructure, and that the nation's infrastructure is falling apart, and also urged a lobbying effort, although his emphasis was on the Highway Bill.

Freshman Congresswoman Melissa Bean (D-Ill) said that for every $1 million invested in infrastructure funding, over 47,000 jobs are created.

Senator Mary Landrieu, (D-La) called for strengthening the economy by creating jobs with investments in our infrastructure: highways, transit systems, energy projects, off-shore drilling, and water projects.

Democrats Meet To Devise Strategy To Save Medicaid

Democratic elected officials, from the Senate and House of Representatives, and state governors, met with Senate Minority Leader Harry Reid (Nev) April 21 to work out a strategy to save Medicaid. Sen. Hillary Clinton (N.Y.), as chair of the Democratic Steering and Outreach Committee, convened the gathering, which included Senators Jay Rockefeller (W.Va.), Max Baucus (Mt.), and others; Rep. John Dingell (Mich), and other House members, as well as Michigan Gov. Jennifer Granholm (Mich), and representatives from various groups, such as the American Academy of Pediatrics, the Health Task Force for the Consortium of People with Disabilities.

Rockefeller and Dingell drew out essential points about the fact that over 50 million Americans are now getting health care through Medicaid. As quoted a press release issued by Reid April 21, Rockefeller said that Medicaid, "is the foundation of our health care infrastructure through its support of hospitals, doctors, community health centers, and nursing homes in every state throughout the country. The bottom line is that we should strengthen, not weaken, Medicaid."

Dingell pointed to why the enrollment in Medicaid has soared over 35% in the past few years: "Increased enrollment [is] due to declining employer-sponsored coverage, rising numbers of uninsured due to the Nation's economic woes, and an aging society. Rather than cut the program, we should shore it up...."

Medicaid Battle Brings Together Bipartisan Coalition

After the Bush Administration released its FY 2006 budget Feb. 6 calling for $60 billion in Medicaid cuts (over 10 years), a large House group filed H.R. 985 on Feb. 17, "To provide for the establishment of a Bipartisan Commission on Medicaid," and disallow any cuts in the programs. This effort was led by Rep. Heather Wilson (R-N.M.), and included many Republicans and Democrats, including Rep. John Conyers (D-Mich), Rep. Jim Gerlach (R-Pa), etc. However, they were not able to strike the Administration's Medicaid cuts of some $20 billions, from the Budget Resolution passed for FY 2006. The Senate did succeed in striking all cuts, by passing on March 21, an amendment with bipartisan sponsorship by Senators Jeff Bingaman (D-N.M.), and Gordon Smith (R-Ore).

Now, the Medicaid issue is in the stage of budget reconciliation. So, on April 13, a House group of 44 Republicans wrote to the Chairman of the Committee on the Budget, asking that the House/Senate reconciliation process remove any reductions pin Medicaid.

Medicaid Act Provisions: Life-and-Death Issues

Core U.S. health-care infrastructure is at stake in the Medicaid fight, as well as immediate life-and-death consequences for millions. A few parameters, quoted from the Feb. 17 bill, "Bipartisan Commission on Medicaid Act of 2005":

* Medicaid provides "essential health care to ... one in six Americans."

* Medicaid pays for health-care services for over one-quarter of American's children...

* Medicaid is America's largest single purchaser of maternity care, paying for over one-third of all the births in the Nation each year.

* Medicaid is America's single largest purchaser of nursing home services and other longterm care, covering the majority of nursing-home residents.

* Medicaid is the single largest Federal grant-in-aid program to the States, accounting for over 40% of all Federal grants to States.

* Medicaid is the single largest source of revenue for the Nation's safety net hospitals and health centers [community facilities open to all, especially in poor areas] and is critical to the ability of these providers to continue to serve Medicaid enrollees and uninsured Americans.

Thus thousands of facilities (hospitals, nursing homes, local health centers, etc.), and millions of jobs directly and indirectly, have come to be involved in the health care delivery system commissioned by the 1960s Medicaid program, enacted as Title XIX of the Social Security Act (42 U.S.C. 1396 seq.).