Politics, Government & Public Policy: July 2013 Archives
Detroit may be the first, but it certainly won't be the last city or state to shift employees or retiree health care costs onto Obamacare. Cities and states are drowning in debt, but they can't print money like the feds can... so guess who will get stuck with these unfunded promises?
Unfunded retiree health care costs loom larger than ever for localities across the country, and the health law's guarantee of federal subsidies to help people with modest incomes afford coverage has made the new insurance markets tantalizing for local governments. A study issued this year by the Pew Charitable Trusts found 61 of the nation's major cities wrestling with $126 billion in retiree health costs, all but 6 percent of that unfunded."The Affordable Care Act does change the possibilities here dramatically," said Neil Bomberg, a program director at the National League of Cities. "It offers a very high-quality, potentially very affordable way to get people into health care without the burden falling back onto the city and town."
But if large numbers of localities follow that course, it could amount to a significant cost shift to the federal government. Authors of the health care law expected at least some shifting of retirees into the new insurance exchanges, said Timothy S. Jost, a law professor at Washington and Lee University who closely follows the law. "But if a lot of them do, especially big state and local programs," he said, "that's going to be a huge cost for the United States government, and it's mandatory spending."
Unlike many of our debts, promises of health care are hard to pay for with inflation. The cost of health services will rise along with inflation.
Despite dire warnings it doesn't appears that sequestration has hurt job growth, weak as it is.
Since the $80 billion cuts to defense and domestic programs took effect a little over four months ago, the economy has added an average of 183,000 jobs a month. That number is well below what would be expected after the recession officially ended in June of 2009, but it's slightly higher than the 181,000 average monthly job gains since the labor market began improving in October of 2010. Job growth has also been stronger during the four post-sequester months than it was over the previous 12 months, when it averaged 174,000 gains a month.
Though the federal government payroll is shrinking due to layoffs, attrition, and furloughs --bad for the affected workers but good for the country.
In one possible sign of sequestration's effects, the federal government is still shedding jobs. The New York Times pointed out that federal employment has dropped by 40,000 jobs over the past four months, including 5,000 in June, the most recent month for which the Bureau of Labor Statistics has provided data.Furthermore, Rampell notes, federal workers affected by sequestration are more likely to be furloughed than fired outright. The number of federal employees working part-time for economic reasons jumped to 148,000 in June, from 58,000 the year before, a likely affect of the sequester. Rampell also provided evidence that the industries most dependent on defense spending are lagging behind all others in term of job gains.
I suggest another "meat-cleaver" "across the board" cut next year! How about 5%?
