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Save the Post Office from the Neoliberal Assault

Postal Workers: The Last Union

Contact your representative right now and ask them to support H.R. 1351, the United States Postal Service Pension Obligation Recalculation and Restoration Act of 2011.
by: Allison Kilkenny, Truthout | News Analysis

The recent attacks against the United States Postal Service (USPS) are more than signs of desperate times - a natural sunset moment for a service rendered archaic by FedEx and UPS. Rather, the Postal Service has been under constant, vicious assault for years from the right, who views this as an epic battle with the goal of finally taking down the strongest union in the country, the second largest employer in the United States (second only to Wal-Mart,) and a means to roll the country ever closer toward the abyss of privatization.

The Postal Service, which is older than the Constitution itself, stands at a precipice. If this great institution, which provides one of the oldest, most reliable services in the country, is permitted to fall and Congress kills its great union, then truly no collective bargaining rights, no worker contract, no union will be safe within the United States.

As the USPS spirals toward default, the historically uncontroversial mail service system has suddenly become a hot-button issue. It's an unlikely organization to inspire such hysteria. The Postal Service isn't paid for by taxpayer dollars, but rather fully funded by the sale of stamps. It's easy to forget what a marvel this is - that today, in 2011, one can still mail a letter clear across the country for less than 50 cents. And if the impressiveness of that feat still hasn't sunk in, attempt this brain exercise: consider what else you can buy for $0.44.

It was only a few years ago that the USPS was considered not only stable, but thriving. The biggest volume in pieces of mail handled by the Postal Service in its 236-year history was in 2006. The second and third busiest years were in 2005 and 2007, respectively. But it was two events: one crafted during the Bush years and another supervised by House Oversight Committee Chairman Darrell Issa, that would cripple this once great institution.

Perhaps it was its booming history that first drew Congress' attention to the Postal Service in 2006 when it passed the Postal Accountability Enhancement Act (PAEA), which mandated that the Postal Service would have to fully fund retiree health benefits for future retirees. That's right. Congress was demanding universal health care coverage.

But it even went beyond that. Congress was mandating coverage for future human beings.

"It's almost hard to comprehend what they're talking about, but basically they said that the Postal Service would have to fully fund future retirees' health benefits for the next 75 years and they would have to do it within a ten-year window," says Chuck Zlatkin, political director of the New York Metro Area Postal Union.

It was an impossible order, and strangely, a task unshared by any other government service, agency, corporation or organization within the United States. The act meant that every September 30th, the USPS had to cough up $5.5 billion to the Treasury for the pre-funding of future retirees' health benefits, meaning the Postal Service pays for employees 75 years into the future. The USPS is funding the retirement packages of people who haven't even been born yet.

The hopeless task was made even more daunting when Wall Street blew up the world's economies. It was this, and not the invention of email, that became the Postal Service's death knell. Zlatkin finds the whole "blame it on the Internet" excuse amusing. The Internet had already existed for quite a while in 2006, the USPS's busiest year, not to mention that every item purchased on Amazon and eBay - every piece of information addressed to stockholders and bank customers - still needs to be snail mailed, which is enough volume to keep the Postal Service prosperous.

"I've yet to figure out a way to mail a shirt through a computer," he chuckles.

When Wall Street's derivatives gamble blew up the country, businesses slowed their operations during the recession and, as such, the Postal Service was no longer handling historically high volumes of mail. The boom was over and the death spiral began.

At the same time, the USPS was bleeding money by overpaying into worker pension funds. An audit done by the Postal Service's Office of Inspector General came up with the figure of $75 billion in pension overpayments. Then, the Postal Regulatory Commission, an independent agency that actually received more autonomous power under PAEA, commissioned its own independent audit. The commission placed the overpayment at $50 billion.

Taking these figures into consideration, the projected $9 billion deficit the USPS now faces seems like chump change that could easily be corrected with some minor accounting tweaks.

"You could actually transfer over payment from the pension funds to the healthcare retirement funds," says Zlatkin. "And it wouldn't cost taxpayers a single penny."

H.R. 1351, the United States Postal Service Pension Obligation Recalculation and Restoration Act of 2011, is a piece of legislation sponsored by Massachusetts Congressman Stephen Lynch. The act calls for the Office of Personal Management to do the definitive audit, come up with the actual figure of overpayment and then apply that to the ridiculous system of prepayment funding expenses. The Postal Service would then have that $5.5 billion a year to use for running its services and improving mail delivery.

This would eliminate the need to terminate Saturday mail delivery service, close down mail processing centers and there would be no need to lay off 120,000 workers (the Postal Service work force has already been reduced through attrition by over 100,000 employees over the last four years).

But there are political opponents that have no desire to see the USPS survive what is, for all intents and purposes, a stupid accounting maneuver. Namely, the GOP and moderate Democrats were the players behind the PAEA, and are now the same forces peddling the narrative that the Postal Service is broke, the union too demanding and the only solution is cuts, cuts and, oh yes, more cuts.

Zlatkin says the name "Darrell Issa" like he just smelled something seriously foul. He had his first encounter with the Congressman in May soon after the American Postal Workers Union (APWU) and the Postal Service reached a collective bargaining agreement. The agreement, through givebacks that the union offered, guaranteed the Postal Service over $4 billion in cost savings on employees over the life of a contract. At the time, Postmaster Patrick Donahoe hailed this as a victory for the Postal Service, its employees and the people they serve.

However, as the union was preparing to vote on the agreement, Issa called a hearing on the contract. The move was completely unprecedented. Here was a Republican chair of the Oversight Committee grilling the postmaster general about an agreement (Issa called the contract too generous) upon which a union was currently voting. "Talk about tampering with elections," says Zlatkin.

For Zlatkin, the only other name that inspires as much contempt is Dennis Ross (R-Florida), another member of the Oversight Committee. "Issa's henchman," as Zlatkin calls him, went after the postmaster for settling on the agreement, demanding to know why he didn't negotiate the contract.

"The bigger issue is really the longer-term changes we need to make to the Postal Service in terms of its viability," Ross said to Donahoe. "I hope we can empower you to do more."

Side note: It's interesting to hear the GOP refer to the Postal Service as if it's a business rather than an entity that provides a public service. The Postal Service is not designed to churn profits.

What empower meant was to starve the Postal Service and its union. Since that day, Donahoe has abdicated his responsibility as the postmaster general, according to Zlatkin. The APWU's collective bargaining agreements in the past have included layoff protections, which Donahoe immediately offered up as sacrifice to his Republican masters when he asked to bypass worker protection so he might obliterate 220,000 career positions from the workforce by 2015.

"All he's trying to do is appease that committee. He's violated a contract he's signed. He's violated labor law. From my understanding, by going to Congress and having them change the laws to change our contracts, he's violating the Constitution of the United States."

In fact, Zlatkin says his local union chapter is so disillusioned with the postmaster's behavior that they're putting out a press release to call for his resignation or termination. "He is either a well-meaning incompetent or a duplicitous front man for the people who want to privatize the postal service," says Zlatkin.

Soon after meeting with Donahoe, Issa introduced the Postal Reform Act to Congress, a bill that Zlatkin says would "Wisconsin" the Postal Service. "[The bill would] give them the kinds of powers that the Super Committee is having to just go in there temporarily and do what has to be done: rip into the contracts, close post offices without hearings. It's basically the Postal Service Destruction Act." The bill has one co-sponsor: Dennis Ross. And both men just happen to be in charge of the House Oversight Committee. Between the "Save The Postal Service" H.R. 1351 and the Postal Service Destruction Act, Zlatkin asks rhetorically, "which is gonna come to a vote?"

It makes sense that the Postal Service has become the target of rich, overwhelmingly white politicians. As former Deputy Assistant and Deputy Press Secretary to former President George W. Bush, Tony Fratto so eloquently tweeted: "Over the past 10 yrs I might have visited a post office 10 times, total."

When you can hand off parcels to your assistant who then ships it off at FedEx's higher rates, then yeah, the post office might not be for you. But as Marcy Wheeler explains, there are still tons of people who need the USPS's services: poorer people, people using a post office box, rural people who live outside delivery areas, eBay-type entrepreneurs, immigrants sending care packages to people from their country of origin and nonprofits.

"It's part of the class war and it's against the poor and it's a class war against working people," says Zlatkin. Of the 34 post offices the USPS is considering closing in New York City, 17 are in the Bronx. The South Bronx district ranks as the poorest Congressional district in America.

"Any time a post office is rumored to be closing, it's devastating to the neighborhood that it's in," says Zlatkin, "what happens when we get involved with elected officials and community people to try and keep a post office open, it's always the same people who turn out: elderly people, disabled people, poor people and small business owners. They're the people who are the ones who that depend on the postal service that they can't really afford or have access to alternatives."

UPS and FedEx aren't required to do what the Postal Service does and that is deliver the mail to every place, even if the recipient is located in hard-to-reach rural terrain, or an inner-city neighborhood deemed too "dangerous" for other services, like taxi cabs, in which to travel. If the USPS falls, it will be another strike in the class war where poor people are yet again cut off from a service that used to belong to everyone.

So, here we have a service that caters primarily to the economically disadvantaged and employs over 574,000 union members. No wonder it became such a mouth-watering target for the GOP. It would be quite a feather in the cap of Darrell "the liberal hunter" Issa to take out one of the largest unions in the country and simultaneously give the US a nudge in the direction of total privatization by crippling one of the last great public services.

"Obama is gonna have a job talk for the country," says Zlatkin. "Is he gonna talk about the necessity for maintaining the 120,000 postal jobs, or is he going to ignore it? I would guess he would ignore it. We were the second union to endorse Obama, the APWU and since that time, he hasn't been a, what we call, good friend to the postal workers, or the people they work for."

Military Spending: A Poor Job Creator

Military Spending: A Poor Job Creator

By William D. Hartung
Center for International Policy
September 2011

Plans for cutting the federal deficit have raised an important
question: what impact would military spending reductions have on jobs?

Contrary to the assertions of the arms industry, maintaining military
spending at the expense of other forms of federal expenditures would
actually result in a net loss of jobs. This is because military
spending is less effective at creating jobs than virtually any other
form of government activity.

The question is not whether military spending creates jobs – it is
whether more jobs could be created by the same amount of money
invested in other ways. The evidence on this point is clear.

• A billion dollars spent for military purposes creates 25% fewer jobs
than a tax cut;
• One and one-half times fewer jobs than spending on clean energy
• And two and one-half times fewer jobs than spending on education.

And though average overall compensation is higher for military jobs
than the others, these other forms of expenditure create more decent-
paying jobs (those paying $64,000 per year or more) than military
spending does.(1)

Part of the reason that military spending creates fewer jobs than
other forms of expenditure is that a large share of that money is
either spent overseas or spent on imported goods. By contrast, most
of the money generated by spending in areas like education is spent in
the United States.

In addition, more of the military dollar goes to capital, as opposed
to labor, than do the expenditures in the other job categories. For
example, only 1.5% of the price of each F-35 Joint Strike Fighter pays
for the labor costs involved in “manufacturing, fabrication, and
assembly” work at the plane’s main production facility in Fort Worth,
Texas.(2) A full 85% of the F-35s costs go for overhead, not for
jobs actually fabricating and assembling the aircraft.(3)

In a climate in which deficit reduction is the central focus of budget
policy in Washington, a dollar spent in one area is likely to come
from cuts in other areas. The more money we spend on unneeded weapons
programs, the more layoffs there will be of police officers,
firefighters, teachers and other workers whose jobs are funded
directly or indirectly by federal spending.

1) Jobs figures come from Robert Pollin and Heidi Garrett-Peltier,
“The U.S. Employment Effects of Military and Domestic Spending
Priorities,” Department of Economics and Political Economy Research
Institute (PERI), October 2009. The study was commissioned by the
Institute for Policy Studies and WAND, Women’s Action for New
Directions. For a summary of these points, see “What Kinds of Federal
Spending Create the Most Good Jobs?” available at
and “Finding New Ways to Create Jobs” available at:

2) U.S. Committee on Armed Services, “Hearing to Receive Testimony on
the F-35 Joint Strike Fighter Program in Review of the Defense
Authorization Request for Fiscal Year 2012 and Future Years Defense
Program,” May 19, 2011, p. 14.

3) Andrea Shalal-Esa, “Lockheed, Pentagon Vow to Attack F-35 Costs,”, May 12, 2011.

Rick Wolff: A Tale of Two Lootings

A Tale of Two Lootings

August 3, 2011

A Tale of Two Lootings

by Richard D. Wolff

The political posturing around the debt ceiling "crisis" was mostly a
distraction from the hard issues. The hardest of those - underlying US
economic decline - keeps resurfacing to display costs, pains and
injustices that threaten to dissolve society. Its causes - two
long-term trends over the last 30 years - help also to explain the
political failures that now compound the social costs of economic

The first trend is the attack on jobs, wages and benefits, and the
second is the attack on the federal government's budget. The first
trend enables the second. A capitalist economy suffering high
unemployment with all its costly consequences shapes a bizarre,
disconnected politics. The two major parties ignore unemployment and
the system that keeps reproducing it. They argue instead over how much
to cut social programs for the people while they agree that such
cutting is the major way to fix the government's broken budget.

The first trend amounts to looting the US working class (the media
softens that to "disappearing middle class"). Since the 1970s, real
wages have been flat to declining, while productivity per worker has
risen steadily. What employers give workers (wages) has remained the
same while what workers produce for their employers (profits) rose.
Workers and their families responded by working ever more hours and
borrowing ever more money to get or keep the "American dream." By
2007, they were physically exhausted, families emotionally stressed
and deeply anxious about the debts that their flat real wages could no
longer sustain. When the system crashed, zooming unemployment, further
wage and benefit reductions and home foreclosures made everything
still worse for most Americans.

The second trend was looting the government. This happened because
exhausted and stressed workers turned away from participation or even
political interests after the 1970s. In contrast, employers used the
profits made possible by flat wages and rising productivity to buy
politicians, parties and policies. More than ever before, businesses
and top executives grabbed the levers of political power. They made
government serve their interests. Starting in the 1980s, Washington
lowered business taxes, deregulated businesses, cut taxes on
executives' and other high incomes, increased spending on the
military-industrial and medical-insurance complexes, provided more
opportunities and freedom for financial speculation, and so on. To
distract people from recognizing, debating, or opposing this political
shift, more was also spent on social programs and supports.

Washington was thus deprived of tax revenues (chiefly on corporations
and the richest individuals) while spending more on defense, business
supports and social programs. As this gap between revenues and
expenditures rose, Washington kept borrowing ever more. Rising annual
budget deficits added to the national debt. When the private
capitalist system crashed in 2007, business and the rich made sure the
government spent vast sums to bail out banks, insurance companies and
large corporations and to revive the stock market. Accordingly,
government deficits and debts zoomed upward.

Business and the rich made trillions from both trends. By keeping
workers' wages flat, profits soared as employers alone kept the full
fruits of rising worker productivity. Employers and the rich profited
further by getting Washington to lower their taxes. They then lent at
interest to the government what they no longer needed to pay in taxes.
After all, the government needed to borrow precisely because it had
stopped taxing corporations and the rich at the rates of the 1940s,
1950s and 1960s. Business and the rich happily financed a political
system that converted their tax obligations into secure, well-rewarded
loans to the government instead.

Looting the working class and the state widened the gap between rich
and poor in the US to what it was a century ago. Now the corporations
and the rich want the state, whose budget they looted, to cut back
social supports and services for the working class whose wages and
productivity they also looted.

Republicans yell "class warfare" against advocates of a return to the
1940s tax rates on business profits, and the 1950s and 1960s rates on
high-income individuals. Both were far higher than they are today.
"Class warfare" better describes government policies since the 1970s.
Business and the rich made sure those policies shifted the burden of
federal taxation from business to individuals and from rich
individuals to everyone else.

Despite this double looting of working people and the state, many
victims direct their anger at the government instead of those who
control the government. Unemployed millions fired by private
capitalist employers (or suffering wage and benefits cuts imposed by
them) blame the government, not their employers. Millions foreclosed
out of their homes by private capitalist banks blame the government.
They want the government punished, made smaller and weaker, and they
are desperate to avoid further taxes. Republicans promise to do all
that. Those who fear that a smaller, tax-starved government will do
even less for them hear Democrats promising to cut less than
Republicans. This is politics disconnected from economic realities
(for example, high unemployment) and twisted into a contest between
more and less government spending cuts imposed on a working class
already reeling from economic crisis.

Neither party dares to return taxes on corporations and the rich to
what they were. Neither party dares to advocate that government hire
the unemployed to rebuild the US, to spend their government-job wages
on maintaining their mortgages (reviving the housing industry) and
thereby stimulate the whole economy from the bottom up. Above all,
neither party dares admit that so long as production remains in the
hands of tiny groups of rich shareholders and boards of directors,
they will keep looting the system.

Can the US do better than this capitalist system's performance? We
need to debate honestly and decide whether and how we can do better.
We should have had the courage to debate that over the last 50 years.
The cold war - and the priorities of corporations and the rich -
prevented that. Now it's long overdue. We need new political
organizations mobilizing people to demand and engage that debate,
theoretically and also in practical, political struggles.

[Richard D. Wolff is Professor of Economics Emeritus, University of
Massachusetts, Amherst where he taught economics from 1973 to 2008. He
is currently a Visiting Professor in the Graduate Program in
International Affairs of the New School University, New York City. He
also teaches classes regularly at the Brecht Forum in Manhattan.
Earlier he taught economics at Yale University (1967-1969) and at the
City College of the City University of New York (1969-1973). In 1994,
he was a Visiting Professor of Economics at the University of Paris
(France), I (Sorbonne).]

SPCT Supports Striking Verizon Workers

To all of the workers on picket lines, know that we stand by your side in solidarity.  The SPCT and the SPUSA are proud of you and join you in the streets to fight corporate greed and stand up for the working class!


The Verizon Strike as the Next Wisconsin

The picket lines are up. And all those who have been
wondering when working America will be fed up enough
to finally stand up and fight should not sit this
one out.

by Mark Engler -

Dissent Magazine
August 11, 2011 1:00 pm

The picket lines are up. This past weekend 45,000 Verizon
workers on the East Coast, represented by the Communications
Workers of America (CWA) and the International Brotherhood
of Electrical Workers (IBEW), went on strike. The cause of
the strike was the company's attempts to win massive
concessions from the unions. Verizon argued that the
employees should give up gains they had won over many years
of struggle and negotiation in previous contract fights.

As the Wall Street Journal put it, "Verizon Communications
Inc. is seeking some of the biggest concessions in years
from its unions." Demands include the weakening of health-
care benefits, cuts in pensions, reduced job security, and
elimination of paid holidays such as Martin Luther King, Jr.
Day. This despite the fact that the company reported
billions in profit last year, and that, in the words of New
York Times reporter Steven Greenhouse, "Verizon's top five
executives received a total of $258 million in compensation,
including stock options, over the last four years." The
unions argue that Verizon has made some $20 billion in
profit in the same time period, and Citizens for Tax Justice
has pointed out that the company has done so while paying
little to nothing in corporate income taxes.

Without a doubt, this is a conflict of national
significance. As Bob Master, CWA District 1 legislative and
political director, explained Wednesday in a conference call
with supporters,

This is an enormously profitable company, which we
believe is trying to take advantage of an anti-union
environment and, in a sense, to replicate at a giant
private-sector corporation what the governors of Ohio,
New Jersey, and Wisconsin have been trying to do to the
public sector. Our members feel very strongly that we
need to draw a line here.

The parallel to Wisconsin is apt for several reasons. First,
like the Republican elected officials in their attacks on
unionized schoolteachers and other public employees, Verizon
is taking aim at one of the last bastions of the American
middle class. As a main strategy in its public relations,
the company is trying to stoke resentment about the fact
that the CWA and IBEW workers actually have living-wage
jobs. It is hoping that "I don't have a pension, why should
they" logic will carry the day.

Accordingly, on Wednesday Verizon took out a full-page ad in
the Philadelphia Inquirer suggesting that a typical employee
makes $80,600 in annual pay and $42,000 in benefits. The
union disputes this claim, contending that salaries are
generally in the $60,000 to $77,000 range, and that benefits
are less costly than the company would suggest. But,
regardless, the debate over numbers misses some critical
questions: What's wrong with workers sharing in the profits
of a healthy corporation? isn't that the way our economy is
supposed to work?

(On a side note, it's always a treat when companies plead
poverty at the negotiating table and then turn around and
spend big bucks on media spots, anti-union consultants, and
pricey PR firms - but that's another story.)

The fate of 45,000 middle-class jobs is a big deal for all
of America. Last month, the entire U.S. economy had a net
gain of only 117,000 jobs. Not only is that for the whole
country, it represents a pretty decent month given the
numbers from the past year. Furthermore, almost all of the
new jobs now being created are low-wage. Given these
realities - and the fact that concentrating all wealth in
the hands of the rich is a very bad strategy for creating
the kind of demand the economy needs to rebound - what
happens to the Verizon workers is a matter of broad public

Bob Master is right that Verizon's aggressive bargaining
stance, like Governor Scott Walker's public-sector power
grab, is the product of a political climate in which
corporate interests feel they can do whatever they want to
working people, and employees will have no recourse. The
Verizon strike is unfortunately akin to Wisconsin in that it
is a defensive battle - an effort to stop tragic rollbacks
in previously established standards of fair employment.

The background for the contract dispute is that Verizon is
now making most of its profits from its wireless services.
While a small number of wireless technicians are involved in
the strike, that part of the company is mostly non-union. In
an ideal world, CWA and IBEW would be able to "bargain to
organize," balancing any concessions at the negotiating
table for current union members with agreements that the
company will remain truly neutral and allow workers at
Verizon Wireless to make their own decision about whether or
not to unionize. But this is not an ideal world. Like in
Wisconsin, labor and its allies face a difficult fight
merely to stave off the worst of a rabidly anti-union

That said, there is a case for hope. The mass protests in
Madison earlier this year gave some cause for optimism that
a new type of energetic, broad-based, community-labor
mobilization might become a lasting force in that state's
politics - and become a model for movements in other parts
of the country. Wisconsinites' success this week in
recalling some Republican State Senators (although not as
many as hoped) suggested that the struggle will be a long
one, but that progressive efforts could have some real legs.

As for the strike, all those who have been wondering when
working America will be fed up enough to finally stand up
and fight should not sit this one out. If the Verizon strike
becomes a rallying point in this country for a movement
against runaway corporate power and for a fairer economy, it
could have much broader implications than what contract
terms are ultimately hammered out for those now walking the
picket lines. That these workers are not rolling over in the
face of company insistence on concessions is important and
courageous. And they deserve widespread support.

Reich: Medicare is Solution, NOT Problem medicare-is-the-solution-not-the- problem?tmpl=component&print=1&layout=default&page=

Medicare Is the Solution, Not the Problem

By Robert Reich,

Robert Reich's Blog: 23 July 11

Not only is Social Security on the chopping block in order to respond to Republican extortion. So is Medicare.

But Medicare isn't the nation's budgetary problems. It's the solution. The real problem is the soaring costs of health care that lie beneath Medicare. They're costs all of us are bearing in the form of soaring premiums, co-payments, and deductibles.

Medicare offers a means of reducing these costs - if Washington would let it.

Let me explain.

Americans spend more on health care per person than any other advanced nation and get less for our money. Yearly public and private healthcare spending is $7,538 per person. That's almost two and a half times the average of other advanced nations.

Yet the typical American lives 77.9 years - less than the average 79.4 years in other advanced nations. And we have the highest rate of infant mortality of all advanced nations.

Medical costs are soaring because our health-care system is totally screwed up. Doctors and hospitals have every incentive to spend on unnecessary tests, drugs, and procedures.

You have lower back pain? Almost 95% of such cases are best relieved through physical therapy. But doctors and hospitals routinely do expensive MRI's, and then refer patients to orthopedic surgeons who often do even more costly surgery. Why? There's not much money in physical therapy.

Your diabetes, asthma, or heart condition is acting up? If you go to the hospital, 20 percent of the time you're back there within a month. You wouldn't be nearly as likely to return if a nurse visited you at home to make sure you were taking your medications. This is common practice in other advanced countries. So why don't nurses do home visits to Americans with acute conditions? Hospitals aren't paid for it.

America spends $30 billion a year fixing medical errors - the worst rate among advanced countries. Why? Among other reasons because we keep patient records on computers that can't share the data. Patient records are continuously re-written on pieces of paper, and then re-entered into different computers. That spells error.

Meanwhile, administrative costs eat up 15 to 30 percent of all healthcare spending in the United States. That's twice the rate of most other advanced nations. Where does this money go? Mainly into collecting money: Doctors collect from hospitals and insurers, hospitals collect from insurers, insurers collect from companies or from policy holders.

A major occupational category at most hospitals is "billing clerk." A third of nursing hours are devoted to documenting what's happened so insurers have proof.

Trying to slow the rise in Medicare costs doesn't deal with any of this. It will just limit the amounts seniors can spend, which means less care. As a practical matter it means more political battles, as seniors - whose clout will grow as boomers are added to the ranks - demand the limits be increased. (If you thought the demagoguery over "death panels" was bad, you ain't seen nothin' yet.)

Paul Ryan's plan - to give seniors vouchers they can cash in with private for-profit insurers - would be even worse. It would funnel money into the hands of for-profit insurers, whose administrative costs are far higher than Medicare.

So what's the answer? For starters, allow anyone at any age to join Medicare. Medicare's administrative costs are in the range of 3 percent. That's well below the 5 to 10 percent costs borne by large companies that self-insure. It's even further below the administrative costs of companies in the small-group market (amounting to 25 to 27 percent of premiums). And it's way, way lower than the administrative costs of individual insurance (40 percent). It's even far below the 11 percent costs of private plans under Medicare Advantage, the current private-insurance option under Medicare.

In addition, allow Medicare - and its poor cousin Medicaid - to use their huge bargaining leverage to negotiate lower rates with hospitals, doctors, and pharmaceutical companies. This would help move health care from a fee-for-the-most-costly-service system into one designed to get the highest-quality outcomes most cheaply.

Estimates of how much would be saved by extending Medicare to cover the entire population range from $58 billion to $400 billion a year. More Americans would get quality health care, and the long- term budget crisis would be sharply reduced.

Let me say it again: Medicare isn't the problem. It's the solution.

[This is drawn from a post I did in April, also before current imbroglio.]


Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written thirteen books, including "The Work of Nations," "Locked in the Cabinet," "Supercapitalism" and his latest book, "AFTERSHOCK: The Next Economy and America's Future." His 'Marketplace' commentaries can be found on and iTunes.

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