Discussing 'a $600 million dessert'

Updated: Friday, September 6, 2013
Discussing
KALAMZOO, Mich. (NEWSCHANNEL 3) - In the days after the State Senate narrowly extended Medicaid coverage to nearly a half-million Michigan residents, it became clear that Senators want poverty-stricken people to help pay for their own health care.

Tonight, in Tom's Corner, Tom Van Howe says that by turning down more than a half-billion dollars in Obamacare reimbursements over the first quarter of next year, and then asking poor people to help make up the difference, paints a picture of a remarkably insensitive group of politicians.

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The Michigan Senate Minority Leader, Gretchen Whitmer, explained her Republican colleagues' opposition to medicaid expansion, which is a part of the affordable care act, this way:

"It's because (expansion) is associated with Obamacare and because the tea party in Michigan is the tail that's wagging the dog in this chamber."

And I think she's right.

There is no other logic to the Senate, 26 of whom are Republicans, and 12 are Democrats, in delaying enrollment from January 1st to April 1st.

By doing so they knew full well that they were turning their backs on $7 million a day in federal money to be used for Medicaid.

That's a total of more than $600 million. Six-hundred-million that the state loses.

That's not a number pulled out of the air by some hand-wringing alarmist. It comes from Jim Haveman, the Director of this state's Department of Community Health.

In fact, yesterday he said his estimate may, in fact, be too low.

Republican response? Well, we probably won't get that many enrolled right away, so that figure may be too high.

So what's their best guess? They haven't got one.

Senate Majority Leader Randy Richardville, who to his credit, helped form the tiny coalition to get the matter through the Senate last week, doesn't even want to talk about it.

"It's like we had this really big dinner," he said. "We got the dinner done and people are going to ask for dessert.
 
“We're going to skip the dessert on this one. We're done. The legislature in total has gone through enough with this issue."

Dessert? He thinks $600 million is dessert? Sounds more like a main course of steak, potatoes, and choice of vegetable for a half-million people to me.

And of course during that same 90 day period state hospitals will continue offering what will amount to roughly a quarter of a billion dollars in expensive emergency room care to poor people.

Much of the cost of that gets picked up by the insured who pay higher premiums, and some of it gets picked up by federal reimbursement. But reimbursements will be reduced as of January 1, because that's ostensibly when people start signing up for Obamacare.

Look, you don't have to be a fan of Obamacare to take the money. Obamacare—even though it's the law of the land—may not work.

But the money is there for the taking. It's just smart government.

Phil Power, a former University of Michigan Regent, now a writer for Bridge Magazine, said yesterday he sometimes wonders if Republican lawmakers in Lansing would even vote against something called "Obamataxcut." Good point.

And then the icing on the cake. The Senate wants poor people, not just the new ones, the ones just above the poverty line, but all of them, to pay 5 percent of their income in copay fees.

So in addition to rent, food, transportation, clothing, and other things they can't afford, they have to fork over 5 percent in copay fees.

After four years it'll go up to 7 percent. Nobody knows how it'll get collected.

But its an intimidating little add-on that'll probably keep any number of qualified people from breaking the door down to enroll.

And those fees, all by themselves, could actually block the Medicaid expansion itself. The Center for Medicare and Medicaid Expansion has to approve Michigan's legislation.

And an expert said yesterday she thought the CMS would be taking a close look at Michigan's bill before giving it an okay.

Forget dessert. We may lose the whole enchilada.

In this corner...I'm Tom Van Howe.

Business News

Last Update on November 21, 2014 18:31 GMT

CHINA-ECONOMY

BEIJING (AP) -- China's central bank unexpectedly slashed interest rates on Friday to re-energize the world's No. 2 economy, joining a growing list of major economies that are trying to encourage growth in the face of a global slowdown.

On top of the rate cut, Chinese authorities promised to inject credit into the financial system if needed.

The People's Bank of China said it is trying to address "financing difficulties" caused by a shortage of credit. It also said the move was not a change in monetary policy and economic conditions are within an "appropriate range."

China's economic growth fell to a five-year low of 7.3 percent in the latest quarter and manufacturing and other indicators are declining. That has prompted suggestions Beijing might intervene to prop up growth.

EUROPE-ECONOMY

FRANKFURT, Germany (AP) -- European Central Bank head Mario Draghi says the chief monetary authority for the eurozone is willing to "step up the pressure" and broaden its stimulus efforts to help the struggling economy.

Draghi said Friday at a banking congress in Frankfurt, Germany that if current efforts do not achieve the desired effect the ECB could "broaden even more the channels through which we intervene."

The ECB has already lowered its benchmark interest rate to near zero and started purchasing bonds made up of bank loans to companies -- an effort to boost lending and economic activity.

Some economists think the bank could widen the bond purchases to include corporate or government bonds in an effort to pump newly created money into the financial system -- so-called quantitative easing, or QE.

STATE UNEMPLOYMENT

WASHINGTON (AP) -- Unemployment rates fell in 34 U.S. states in October, a sign that steady hiring this year has been broadly dispersed through most of the country.

The Labor Department says unemployment rates rose in just 5 states, the fewest since April. Rates were unchanged in 11 states.

Nationwide, employers added 214,000 jobs in October, the ninth straight month of gains above 200,000. That's the longest such stretch since 1995. The U.S. unemployment rate fell to 5.8 percent, a six-year low, from 5.9 percent. Steady economic growth has prompted more companies to add jobs, though the additional hiring hasn't yet boosted wages.

Georgia had the highest unemployment rate, at 7.7 percent, though that was down from 7.9 percent in September. North Dakota continued to have the lowest rate, at 2.8 percent.

LEXUS RECALL

DETROIT (AP) -- Toyota is recalling nearly 423,000 Lexus luxury brand cars in the U.S. to fix fuel leaks that can cause fires.

The recalls affect the 2006 to 2011 GS, 2007 to 2010 LS and the 2006 to 2011 IS models.

Toyota says the cars' fuel lines have nickel phosphate plating to protect against corrosion. Some lines could have been built with particles coming in contact with a gasket. That can cause the sealing property to deteriorate and cause fuel leaks.

Toyota says it's not aware of any fires or injuries caused by the problem. The company found it after getting complaints of fuel odors.

Dealers will repair the gasket seating surface at no cost to owners.

Some of the Lexuses were recalled in 2009 to fix leaks in aluminum fuel pipes.

JAPAN-US-AIR BAGS

TOKYO (AP) -- Japan's transport ministry has told air bag maker Takata to conduct an internal investigation after cases of its air bags exploding triggered safety concerns in the U.S. and other countries.

Transport Minister Akihiro Ohta said Friday that the ministry ordered Takata Corp. to conduct its own investigation into the air bags and report back. The ministry's direct instruction to an auto parts maker is considered rare.

The ministry also ordered Takata and Japanese automakers to study whether additional recalls are needed at home following a U.S. decision to expand recalls nationwide from an earlier measure limited to high-humidity zones.

Takata air bags can inflate with excessive force, sending metal shrapnel toward the driver and passengers. The problems have caused six deaths and dozens of injuries.

FORD PICKUP-FUEL ECONOMY

DEARBORN, Mich. (AP) -- Ford says its new aluminum-bodied F-150 pickup will get up to 26 mpg on the highway, making it the most fuel efficient gas-powered full-size pickup.

The Ram truck is the current leader among pickups, getting up to 25 mpg on the highway with a gas engine.

Fuel economy is a key data point for the new F-150, which is arriving at dealerships this week. Ford shaved 700 pounds off the weight of the truck by switching the body from steel to lightweight aluminum, a dramatic change for the best-selling vehicle in the U.S.

The F-150 will get 26 mpg on the highway with a 2.7-liter EcoBoost engine, which is a $495 option. That is 13 percent better than the outgoing truck's 23 mpg.

ETHANOL IN GASOLINE

WASHINGTON (AP) -- The Obama administration is delaying a decision on whether to reduce the amount of ethanol in the nation's fuel supply.

Last year the Environmental Protection Agency proposed to reduce the amount of ethanol in fuel for the first time. The decision angered corn growers and ethanol companies who have since lobbied the government to reverse the decision.

The EPA said Friday it expects to make a final decision next year.

The ethanol targets are required by a 2007 law that tried to address global warming, reduce dependence on foreign oil and boost the rural economy by requiring oil companies to blend billions of gallons of biofuels into gasoline annually.

Lawmakers did not anticipate fuel economy would improve as much as it has in recent years, reducing overall demand for gasoline.

IMMIGRATION-ECONOMICS

WASHINGTON (AP) -- The White House says President Barack Obama's immigration executive actions would boost the economy by expanding the U.S. labor force and increasing worker productivity. It says average wages would rise over a 10 year period, a claim that Obama critics and even some labor allies dispute.

The report by Obama's Council of Economic Advisers estimates the administrative actions would increase the gross domestic product by $90 billion, or 0.4 percent, over 10 years. It says wages for native workers will rise by 0.3 percent by 2024

The report aims to counter critics such as Sen. Jeff Sessions of Alabama, the top Republican on the Senate Budget Committee, who say the executive measures would reduce wages and cost American workers' jobs. AFL-CIO President Richard Trumka also says Obama's moves to provide access to temporary visas could suppress wages in the tech sector.

Obama's actions could spare nearly 5 million immigrants illegally in the U.S. from deportation and make them eligible for work permits.

AEREO-BANKRUPTCY

NEW YORK (AP) -- Online streaming service Aereo says that it has filed for Chapter 11 bankruptcy protection, saying an unfavorable ruling by the U.S. Supreme Court was too difficult to overcome.

In June, the Supreme Court ruled that Aereo operates much like a cable TV company. As a result, the court said the service violates copyright law unless Aereo pays broadcasters licensing fees for offering TV station programs to customers' tablets, phones and other gadgets.

CEO Chet Kanojia said in a statement Friday on the company's website that the Supreme Court decision "effectively changed the laws that had governed Aereo's technology, creating regulatory and legal uncertainty."

Kanojia said that the Chapter 11 filing will allow Aereo Inc. to maximize the value of its business while avoiding the cost and distraction of litigation.

FRANCE-HSBC

PARIS (AP) -- HSBC says it has been placed under formal investigation in France over services it offered to clients required to pay taxes in France.

In a statement Friday, Switzerland-based HSBC Private Bank said French investigators demanded a 50 million euro ($62 million) bond.

France's government is increasingly cracking down on tax dodgers, including establishing an office dedicated solely to investigating financial crimes.

HSBC said the investigation involves the bank's actions from 2006-2007.

RUSSIA-SAUDI ARABIA

MOSCOW (AP) -- Russia's foreign minister says there should be no intervention in global energy production, even as the country's economy takes a hit from rapidly falling oil prices.

After a meeting with his Saudi counterpart in Moscow, Sergei Lavrov said both Russia and Saudi Arabia did not want oil production targets to be affected by "political or geopolitical designs."

The theory that the United States has manipulated global oil production to bring down prices is a popular theme on state-owned television in Russia, where the economy and state budget are heavily dependent on oil exports.

Also on Monday, Russian Energy Minister Alexander Novak told Russian news agencies that the government was reviewing the possibility of lowering oil production, but still wasn't sure whether such a move would be feasible.

GULF PLATFORM-EXPLOSION

NEW ORLEANS (AP) -- A drilling company says a worker killed in an offshore explosion was cleaning a piece of equipment during routine maintenance at its oil-and-gas platform in the Gulf of Mexico.

Houston-based Fieldwood Energy LLC says another worker suffered "visible injury" and two other workers reported ringing in their ears. The company says the three injured workers have been released from the hospital.

Fieldwood says the worker who was killed Thursday was cleaning a piece of equipment that separates oil from water liquids when an "isolated pressure event" occurred. The company says the victim was employed by the Louisiana company Turnkey Cleaning Services, which specializes in cleaning offshore facilities.

The explosion happened on the Echo Platform, which is about 12 miles offshore near the mouth of the Mississippi River.

DOW CHEMICAL-THIRD POINT

NEW YORK (AP) -- Dow Chemical Co. says it will add four new members to its board of directors after pressure from hedge fund activist Daniel Loeb's Third Point.

Shares of the specialty chemicals maker rose 2.6 percent to $52.82 in morning trading Friday.

The new additions are Mark Loughridge, Raymond Milchovich, Robert Miller, who will join the board in January. Richard Davis will join in May.

Dow has also agreed to include the group in its nominees for election at the 2015 annual meeting nominate.

In January, Third Point disclosed that it bought a stake in Dow, but did not disclose how many shares it bought. Third Point says Dow is its biggest investment.

As recently as last week, Third Point published a website and video pushing Dow to shake up its board and increase shareholder value.

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