Sunday, February 21, 2010

Here Come the State Bailouts - $4.3 Billion here, $675 Million there…

This is something I thought would begin last year but is here in spades now. Note how this bailout is being handed out, through Health and Human Services. So, is it a state bail out, or a Medicade bailout? If they were to give cash directly to the states it would add to our current account deficit - this likely is an attempt to side-step that. Watch the accounting and the money trail!

Will this “debt forgiveness” simply be written off and not accounted for properly? By taking from money owed Medicare (an accounts receivable), this when properly accounted would put Medicare in an even deeper hole. Perhaps that hole is so deep that they don’t think anyone will notice?

Where exactly in the rule of law does it allow for Medicare debt forgiveness? Is this not monetizing? This is not a little question or a minor detail, the rule of law and accounting standards need to be followed or confidence in the system will continue to deteriorate.
States get extra Medicaid aid but two want more

NEW YORK (Reuters) - U.S. states will get an extra $4.3 billion to pay for drugs for elderly or disabled people covered by Medicaid and Medicare, but at least two of the states with the biggest health plans said they need more cash.

“This relief will help states continue to provide critical health care services to the nearly 60 million beneficiaries who depend upon it," U.S. Health and Human Services Secretary Kathleen Sebelius said in a statement on Thursday evening.

Medicaid is the joint state-federal health plan for the poor, disabled and elderly. Medicare covers people who are at least 65 years old or have long-term disabilities and the federal government pays for it.

Both New York Democratic Governor David Paterson and California Republican Governor Arnold Schwarzenegger applauded the federal assistance Sebelius announced. New York's share is $400 million; California will get over $675 million.

But like many states whose tax revenues have crumpled during the recession, New York's deficit has soared and now is expected to top $8 billion, while California must shut a nearly $20 billion budget gap -- and Schwarzenegger expects the federal government to chip in nearly $7 billion.

To underscore the cash crunch in the most populous state, Schwarzenegger last month traveled to Washington, D.C., and met with Sebelius, a former Democratic governor of Kansas.

On Thursday the Hollywood icon turned politician also thanked the White House, a sharp contrast with the criticism he recently heaped on its healthcare overhaul plans.

In a statement Schwarzenegger said that "our bipartisan efforts for a more fair and equitable relationship with the federal government are paying off."

"These funds are important, and while we still have more work to do, I appreciate the commitment of the Obama Administration in responding to our requests for these much-needed funds that are owed to our state."

New York's governor also welcomed the extra dollars but added that, "Given the serious nature of the fiscal crisis that states across the country continue to face, further action is still needed."

He urged Congress to include President Barack Obama's proposal to give states an extra two quarters of increased reimbursements for Medicaid in any job-growing legislation.

The number of New Yorkers whose health care is covered by Medicaid hit a record of 4.2 million in October 2009, 13 percent above the previous high set in August 2005.

On Friday, Paterson, whose short-term savings plans include possibly delaying income tax refunds owed to New Yorkers by several weeks, released a list of parks to be closed.

Jones Beach State Park, one of Nassau County's most crowded parks on Long Island, will shut one swimming pool and cancel fireworks on the July 4th U.S. Independence Day holiday.

And here’s more from California. Writing off Medicare debt frees up their budget in a robbing Peter to pay Paul process. Make no mistake, $4.3 billion is a huge sum of money, and yet it is truly just the tip of the iceberg. This type of thing is occurring against a background of HUGE shortfalls and rising taxes. The numbers are spiraling out of control, these types of actions are an indication that the end of current debt backed money game is near.

Feds grant $675 million in budget relief to California

WASHINGTON — Sometimes pleading pays.

The high-profile lobbying campaign that Gov. Arnold Schwarzenegger launched with the state's Democratic senators for more cash from the federal government yielded a $675 million dividend Thursday, a welcome bit of relief for the state's deficit-riddled budget.

U.S. Health and Human Services Secretary Kathleen Sebelius said the Obama administration will forgive $4.3 billion in health care payments owed by states to the federal government through the end of the year. California's share is $675 million.

The news came a month after Schwarzenegger made a high-profile trip to Washington to lobby for some $7 billion in federal relief he said the state is due. California faces a nearly $20 billion budget shortfall.

"Today's announcement shows that our bipartisan efforts for a more fair and equitable relationship with the federal government are paying off," the governor said in a statement. "While we still have more work to do, I appreciate the commitment of the Obama administration in responding to our requests."

The money at issue is part of the states' share of prescription drug costs for low-income seniors who were once covered by the state Medicaid programs but are now enrolled in the federal Medicare Part D program.

The decision to forgive some of those costs is essentially an extension of the federal economic stimulus act passed last year.

"We believe today's action will help states as they struggle to maintain Medicaid and other budget priorities in these difficult economic times," Sebelius said in a news release.

If a provision in President Barack Obama's budget plan is approved, California could net an additional $160 million in relief, the governor's staff said.

Schwarzenegger gave credit to Democratic Sens. Dianne Feinstein and Barbara Boxer, who argued as far back as 2006 to the Bush administration that California was being shortchanged under the prescription drug program.

Simply “an extension of the stimulus act passed last year?” Amazing how dysfunctional our money system and politics are. Freedom’s Vision would cure most of this and end these increasingly desperate attempts at piecemeal monetization, piecemeal default. While they default in this corner, they are backfilling with even more debt in another. Our nation has no accounting standards at this point, it is very close to a free for all.

Recession over, or simply an Enron style paper mirage?

James McMurtry - "We Can't Make Here" Anymore:

It’s a debt backed money process that is simply out of control. We're Doing Something About it! Come Join the Swarm!