Wine Train Stimulus Scam Gets Even Uglier With No-Bid Set-Aside Swindle
Come on and ride the train! You paid for it!
Straight from the Zomblog: “Fiscal conservatives have been howling in protest over the $54 million earmarked by Obama’s Stimulus Package to finance something called “The Wine Train” in California’s scenic Napa Valley. The notion that the government was squandering millions of taxpayer dollars to prop up a private tourist attraction seemed to epitomize everything that was wrong with pork-barrel politics masquerading as sober economic policy. I mean, while we’re subsidizing tourist traps, why not give a couple hundred million to Disneyland to build a new “Pirates of the Potomac” ride?
But the howls are about to get a lot louder. Because an investigation just published by California Watch and reprinted in the San Francisco Chronicle shows that the Wine Train scam was far worse than you imagined. The $54 million wasn’t just spent on an overpriced not-a-thrill ride for tipsy tourists: it was thrown down the toilet on a no-bid contract handed to a shady Alaskan front corporation which deviously abused race-based “set-aside” laws to land a vastly overpriced deal — which they then proceeded to subcontract at a much lower rate to a different company, while pocketing a cool $20 million for doing no work whatsoever.
The article merits a full read (and kudos to author Lance Williams at California Watch for actually doing some real investigative journalism), but these excerpts (with key sections highlighted) should make you nauseous enough:
…The main action today is in Napa, where, without competitive bidding, this unusual construction company won a $54 million federal contract to build a new railroad bridge and other structures for the famed Napa Valley Wine Train tourist attraction.
This is the world of Suulutaaq Inc. of Anchorage. Because the company was founded by Alaska Natives, it enjoys special access to federal contracts.
A Walnut Creek construction executive whose firm built a previous phase of the flood-control project said the government probably overspent by millions when it negotiated a contract with Suulutaaq rather than seeking competitive bids.
Meanwhile, investors aggrieved over the bankruptcy of the South Carolina dot-com Sailnet said they were surprised to learn of former CEO Samuel Boyle’s new job as CEO of Suulutaaq. Boyle did not mention having construction experience or ties to Alaska tribes, they told California Watch. Some said Boyle’s involvement in Suulutaaq boded ill for the Alaska firm.
…
Suulutaaq is one of dozens of Alaska Native corporations that have emerged as players in federal contracting via measures crafted in the 1980s and 1990s by former Sen. Ted Stevens, R-Alaska, a powerful lawmaker whose career ended with a contracting scandal.
For decades, the U.S. Small Business Administration has run a preferential contracting program to aid disadvantaged businesses. Qualifying firms can get federal contracts worth up to $5.5 million by negotiation, rather than competitive bidding.
The Stevens measures gave corporations that were set up by Alaska Natives special access – with no cap on the size of contracts they can obtain.
…
Obscene no bid contracts? YES WE CAN!
“Alaska Native corporations don’t have to prove that they’re socially or economically disadvantaged,” Sen. Claire McCaskill, D-Mo., said at a 2009 hearing. “They don’t have to be small businesses. And they can receive no-bid contracts worth billions of dollars.”
The companies employ few Alaska Natives and “rely heavily on non-native managers,” she said.
McCaskill also contended that some of the companies “may also be passing through work to their subcontractors.” In those cases, the companies were collecting a profit simply because they had special access to federal contracts, she said.
McCaskill proposed putting a cap on the no-bid contracts, but the measure stalled in the face of intense lobbying by tribal corporations.
…
The price tag might have been significantly lower but for the Wine Train, a private rail line established by the late Vincent DeDomenico, the wealthy creator of Rice-A-Roni pasta. Sixteen times each week, according to the Wine Train’s Web site, the train transports tourists from Napa to St. Helena aboard restored dining cars. A champagne dinner on the Vista Dome car costs $129 per person. About 125,000 people ride the Wine Train each year.
…
Brosamer, the Walnut Creek contractor, said the public was paying a premium for the Wine Train project, saying, “It would have been a hell of a lot cheaper if they had put it out to bid.”
But the quality of the construction is first rate, Brosamer said, because Suulutaaq subcontracted much of the job to the giant Peter Kiewit Sons Inc. engineering firm, which also is a contractor on the Bay Bridge.
“The reality is, Suulutaaq isn’t doing much,” Brosamer said.
Federal records show that Suulutaaq is paying Kiewit $28.1 million – 53 percent of the total stimulus contract. Suulutaaq is keeping about $20.4 million, or 38 percent of the total. The rest, about $4.7 million, goes to other subcontractors, all from the lower 48 states.
So, basically, a white wheeler-dealer got himself appointed CEO of a shell company that’s legally classified as an “Alaska Native corporation,” then, using this unique privileged status, finagled a no-bid contract to get $54 million in taxpayer funds for a construction job — and then used a small portion of that money to hire subcontractors to do the actual work, while pocketing the rest as pure profit.
Nice, eh? And guess what: You’re the sucker in this swindle.
One has the suspicion that the entire “Stimulus” is nothing but countless Wine Train-style deals bundled together and given an uplifting name to disguise that fact that it’s little more than a thousand unnecessary crooked backroom scams with essentially no oversight.
Handouts to shysters as economic theory? I feel like getting drunk. All aboard!”
Backdoor taxes to hit middle class
Oh yeah, you love that backdoor tax, don't you America?
Straight from Yahoo News: “The Obama administration’s plan to cut more than $1 trillion from the deficit over the next decade relies heavily on so-called backdoor tax increases that will result in a bigger tax bill for middle-class families.
In the 2010 budget tabled by President Barack Obama on Monday, the White House wants to let billions of dollars in tax breaks expire by the end of the year — effectively a tax hike by stealth.
While the administration is focusing its proposal on eliminating tax breaks for individuals who earn $250,000 a year or more, middle-class families will face a slew of these backdoor increases.
The targeted tax provisions were enacted under the Bush administration’s Economic Growth and Tax Relief Reconciliation Act of 2001. Among other things, the law lowered individual tax rates, slashed taxes on capital gains and dividends, and steadily scaled back the estate tax to zero in 2010.
If the provisions are allowed to expire on December 31, the top-tier personal income tax rate will rise to 39.6 percent from 35 percent. But lower-income families will pay more as well: the 25 percent tax bracket will revert back to 28 percent; the 28 percent bracket will increase to 31 percent; and the 33 percent bracket will increase to 36 percent. The special 10 percent bracket is eliminated.
Investors will pay more on their earnings next year as well, with the tax on dividends jumping to 39.6 percent from 15 percent and the capital-gains tax increasing to 20 percent from 15 percent. The estate tax is eliminated this year, but it will return in 2011 — though there has been talk about reinstating the death tax sooner.
Millions of middle-class households already may be facing higher taxes in 2010 because Congress has failed to extend tax breaks that expired on January 1, most notably a “patch” that limited the impact of the alternative minimum tax. The AMT, initially designed to prevent the very rich from avoiding income taxes, was never indexed for inflation. Now the tax is affecting millions of middle-income households, but lawmakers have been reluctant to repeal it because it has become a key source of revenue.
Without annual legislation to renew the patch this year, the AMT could affect an estimated 25 million taxpayers with incomes as low as $33,750 (or $45,000 for joint filers). Even if the patch is extended to last year’s levels, the tax will hit American families that can hardly be considered wealthy — the AMT exemption for 2009 was $46,700 for singles and $70,950 for married couples filing jointly.
Middle-class families also will find fewer tax breaks available to them in 2010 if other popular tax provisions are allowed to expire. Among them:
* Taxpayers who itemize will lose the option to deduct state sales-tax payments instead of state and local income taxes;
* The $250 teacher tax credit for classroom supplies;
* The tax deduction for up to $4,000 of college tuition and expenses;
* Individuals who don’t itemize will no longer be able to increase their standard deduction by up to $1,000 for property taxes paid;
* The first $2,400 of unemployment benefits are taxable, in 2009 that amount was tax-free.”
The Brett Favre Career Playoff Interception Record Watch Page has been updated!
"Winning? I'm only interested in some records!"
“Brett Lorenzo Favre is now the record holder for most career playoff interceptions thrown! This is the very definition of the culmination of a lifelong dream.
[01-25-10] When Favre’s 973rd annual unretirement and signing with the Minnesota Vikings was announced, the hopes, dreams and prayers of football fans around the world were sent skyward. A desperate plea was voiced in unison as all clutched to the belief that the career playoff interception record was finally again within reach. The road was long and arduous; the hands of the defending secondaries unsure and unreceptive to the gifts repeatedly bestowed upon them by the steadfast single-minded tenacity of the prolific Brett Lorenzo Favre. Then, it happened… In an inspired effort of unwavering determination, not merely one, but two interceptions were added to the impressive tally, resulting in a grand total of 30 career playoff interceptions thrown! Having your team dismissed from the playoffs yet again is surely a small price to pay for such an impressive record! Thank you Favre! Thank you for never letting us down!”
Go to the page and pay homage to the Favre!
Young Favre on draft day
The Official Favre Card!
Obama’s $59 billion giveaway to unions
"Unions, our exempt friends."
Here’s a quote to set the tone: “We spent a fortune to elect Barack Obama — $60.7 million to be exact — and we’re proud of it,” boasted Andy Stern, president of the Service Employees International Union
$60.7 million with a $59 billion return? That’s one hell of an ROI! Congratulations!
Straight from the Washington Times: “Democrats didn’t learn their lesson from the public outrage over vote buying. Sen. Ben Nelson, Nebraska Democrat, and Sen. Mary Landrieu, Louisiana Democrat, are still reeling from fallout over the hundreds of millions their states will get for a deal to buy their votes for the government health care takeover. If $400 million for those two senators generates so much anger, public outcry over a $59 billion special deal President Obama cut with unions on Thursday should be deafening.
Repeatedly throughout his presidential campaign, Mr. Obama promised that health care negotiations would be carried on C-SPAN precisely to prevent these types of special-interest favors. There is no logical public policy justification for why union workers should be exempt from paying the 40 percent tax on individual health insurance plans that cost $8,900 or more until 2018 when everyone else with the same insurance must pay the tax. Non-unionized American workers, who pay higher insurance simply because of existing health problems – or because they live in high-cost places such as New York, Los Angeles, Chicago or Miami – are not going to be so fortunate.
It is unconscionable that $59 billion will be extracted from taxpayers and others to subsidize labor unions. The Obama administration and Congress are now planning on taking $15 billion more from hospitals and $10 billion more from pharmaceutical makers to cover part of this fortune. But there is no reason hospital and drug costs should go up to subsidize unions.
This transfer of wealth to unions has become part of a pattern. Over the last year, the unions have been given a long string of massive wealth transfers. Take the government forcing GM and Chrysler bondholders to forfeit their legal right to be the lead creditors so that auto unions could get large shareholdings in both companies through bankruptcy. Similarly, the stimulus package placed all sorts of restrictions on how the money could be spent, requiring that much of the spending go only to unionized workers.
In 2008, one of Mr. Obama’s most highly used campaign TV ads relentlessly attacked Republican candidate John McCain’s proposal to tax health insurance benefits provided by companies to employees. It was an unfair attack. Mr. McCain’s proposed elimination of employer deductibility for health insurance was merely being replaced with individual tax credits. Mr. Obama’s taxes aren’t offset by any such credits.
Mr. Obama is struggling with record-low approval ratings. The president should understand that legislation shouldn’t get passed simply because lawmakers and some interest groups can be purchased with billions in taxpayer funds. If the president has to pay that much to buy critical votes, his policies don’t have the genuine support of the people. Eventually, Democrats will pay a price for that.”
Deal Reached on Taxing ‘Cadillac’ Plans
"Everyone pays for health care! Except you, Union members..."
Straight from Fox News: “The White House has reached a deal with health care negotiators, including labor unions, on taxing the high-level “Cadillac” plans that workers with high-risk jobs often purchase.
The excise tax on high-cost insurance plans has been one of the biggest sticking points in the negotiations, as President Obama has favored the Senate plan, which calls for the tax, while House Democrats have preferred raising taxes on high-income earners.
A senior Democratic official speaking on background told Fox News that the threshold for exemption would be raised from $23,000 to $24,000 per family but would remain the same at $8,500 for singles with high-value plans. Dental and vision plans would be removed from that calculation, however.
State and local workers and union members are exempted until 2017. Labor leaders endorsed the deal Thursday.
“Our people were very pleased by it,” Gerald McEntee, president of the American Federation of State, County and Municipal Employees, said on a conference call. “We’re for this health care reform and ready to fight for it.”
Richard Trumka, president of the AFL-CIO, said the deal reduces revenue raised from the tax from the $150 billion estimate in the Senate version to $90 billion. It is not clear how the $60 billion will be made up.
The value of the plans that are taxed would be indexed to the consumer price index plus 1 percent, meaning over time more and more people would be affected by the threshold than would be if the tax had been indexed to health care inflation. Health care spending in 2008, the last year for which the Centers for Medicare and Medicaid Services has data, rose at a historically low rate of 4.4. percent. Inflation was at 6 percent in 2007.
The White House did not comment on the deal on Thursday, with White House Press Secretary Robert Gibbs saying only that on Wednesday the president and Democratic members of Congress “made a tremendous amount of progress in bridging the differences that existed between the two pieces of legislation that have passed the House and the Senate.”
“We may have more later in the day,” Gibbs said.
The deal must be vetted with rank-and-file members, but the agreement would be a major win for Senate Democrats.
House Speaker Nancy Pelosi and House Majority Leader Steny Hoyer said in a joint statement Thursday that the final bill will be posted online for 72 hours before the House votes.
But Republicans blasted the way the negotiations have been conducted.
“The definition of irony,” Michael Steel, a spokesman for House Minority Leader John Boehner, said in a statement Thursday. “Democratic leaders today emerged from a closed-door meeting to announce a backroom ‘deal’ on health care, then brag about the ‘transparent process.’”"
Negotiators Float Expanding Sources of Medicare Taxes to Pay for Health Bill
Straight from Fox News: “House and Senate negotiators are discussing an expansion of their health insurance proposal that would increase the Medicare payroll tax to include other sources of income like investment returns.
The Medicare payroll tax hits only wages. The Senate-passed health care bill would increase a worker’s Medicare tax from 1.45 percent to 2.35 percent of income for individuals making more than $200,000 a year and $250,000 for joint filers.
Industry and House Democratic sources confirm that Democrats are discussing an extension of the Medicare tax to dividends and other investment incomes. The thresholds would remain $200,000/$250,000 per year.
An industry source adds the tax would also hit small businesses organized as a pass-through in which a business’ revenue is treated as the owner’s taxable income.
Sources add these negotiations are still in flux.
The reason Democrats need the money is to fill the gaps that would be created if they reduced the taxes on insurance companies on their priciest benefits — known as the “Cadillac tax. Negotiators are considering an increase in the threshold.
The Senate-passed bill would hit insurance companies with a 40-percent tax on family plans worth more than $23,000. Democrats have discussed a new mark of $28,000, though the number remains fluid. Even a slight bump in that threshold exempts enough plans to reduce the revenue estimates of the tax by billions.
According to the Joint Committee on Taxation, the amended and Senate-passed bill forces a 40 percent excise tax on health coverage in excess of $8,500 for individuals and $23,000 for family plans. At that rate, revenue would be $148.9 billion over 10 years.
Union leaders met with President Obama at the White House on Monday to discuss their opposition to the tax. One frustrated union source whose boss attended the meeting said the president’s senior advisers “are part of the problem” with changing the tax limits on Cadillac plans because while they know it is flawed they also know of the “pile of new studies that clearly dispute rising health care costs will be controlled by the tax.”
Democrat Hill sources on Tuesday indicated that the president’s support for the Cadillac tax remains.”
Coakley in trouble? Pharma and HMO lobbyists to the rescue!
Democrat Martha Coakley
Straight from the Common American Journal: “With Democrat Martha Coakley in trouble in the Massachusetts special election to fill Ted Kennedy’s seat, Democrats could lose vote No. 60 for President Obama’s health-care bill. In response, an army of lobbyists for drug companies, health insurance companies, and hospitals has teamed up to throw a high-dollar Capitol Hill fundraiser for Coakley next Tuesday night. [Click here to view the invitation.]
Of the 22 names on the host committee–meaning they raised $10,000 or more for Coakley–17 are federally registered lobbyists, 15 of whom have health-care clients. Of the other five hosts, one is married to a lobbyist, one was a lobbyist in Pennsylvania, another is a lawyer at a lobbying firm, and another is a corporate CEO. Oh, and of course, there’s also the political action commitee for Boston Scientific Corporation.
All the leading drug companies have lobbyists on Coakley’s host committee: Pfizer, Merck, Amgen, Sanofi-Aventis, Eli Lilly, Novartis, Astra-Zeneca, and more. On the insurance side of things, Blue Cross/Blue Shield, Cigna, Humana, HealthSouth, and United Health all are represented on the host committee…
…If Coakley pulls it out, this is the crowd that will have brought her here. If health-care reform passes, this is the crew that will have won.”
Dozens of Taliban suicide bombers, gunmen storm Kabul
Straight from the Debka File: “The city is wreathed in smoke and flame after at least ten suicide bombers backed by gunmen attacked the defense, justice, education and foreign ministries and the national bank. Rockets also landed near the presidential palace as Hamid Karzai was swearing in his new cabinet ministers. The attack, say DEBKAfile’s military sources, was a severe setback to Barack Obama’s new Afghan strategy, US commanders’ belief that the military situation was beginning to stabilize and Karzai’s third effort to form a government.
Taliban gunmen also ran through a Kabul shopping center tossing grenades and a blast was reported at a cinema. The Serena Hotel, frequented by foreigners, blazed as the Afghan National Army and police struggled for control. According to first reports, military and intelligence officers died in the assault, although only three people were reported dead and 30 injured. Afghan forces killed five insurgents at the shopping center.
Taliban of Afghanistan claims 20 of their number mounted the assault on the capital.
DEBKAfile’s military sources report that many more would have been involved in order to keep up coordinated assaults on at least six locations for several hours, while also incurring fatalities.”
Hide the Job Decline: $500k in Stimulus Funds to ClimateGate Professor
Straight from Dvorak Uncensored: “Here’s how the stimulus money is being used:
The latest example of this is a $500,000 grant to Michael Mann, Professor at Penn State University and unintended c0-star of the ClimateGate e-mail scandal. The leaked e-mails revealed collaboration among scientists to stifle dissenting views on the extent of man-made global warming.
Mann is also the creator of the “Hockey Stick” graph, which purported to show a sharp increase in recent temperatures. That work has been thoroughly discredited by researcher Stephen McIntyre. Yet, in June 2009, the National Science Foundation awarded Mann a three-year $500,000 to further study the climate’s response to human activity.”
UN Glacier Melt Report was Speculative Nonsense
Straight from Dvorak Uncensored:
“A WARNING that climate change will melt most of the Himalayan glaciers by 2035 is likely to be retracted after a series of scientific blunders by the United Nations body that issued it.
Two years ago the Intergovernmental Panel on Climate Change (IPCC) issued a benchmark report that was claimed to incorporate the latest and most detailed research into the impact of global warming. A central claim was the world’s glaciers were melting so fast that those in the Himalayas could vanish by 2035.
In the past few days the scientists behind the warning have admitted that it was based on a news story in the New Scientist, a popular science journal, published eight years before the IPCC’s 2007 report.
It has also emerged that the New Scientist report was itself based on a short telephone interview with Syed Hasnain, a little-known Indian scientist then based at Jawaharlal Nehru University in Delhi.
Hasnain has since admitted that the claim was “speculation” and was not supported by any formal research. If confirmed it would be one of the most serious failures yet seen in climate research. The IPCC was set up precisely to ensure that world leaders had the best possible scientific advice on climate change.
This sort of stuff really pisses me off. Taking advantage of a frightened public like this is just plain wrong. The original article here and New Scientist angle here.”
Global Warming Roundup
Global Warming Deniers
Newsweek, April 28, 1975
Copenhagen Conference Carbon Footprint
Head of IPCC Poised to Make $Billions$
Dr. Rajendra Pachauri
Straight from Dvorak Uncensored: “Head of IPCC Poised to Make a Fortune for Himself — Wow, this guy is really something. Exactly how all the facts in this article were ignored by the media until now is astonishing. He will be the first Carbon billionaire, not Gore. Gore is small potatoes compared to this genius.
No one in the world exercised more influence on the events leading up to the Copenhagen conference on global warming than Dr Rajendra Pachauri, chairman of the UN’s Intergovernmental Panel on Climate Change (IPCC) and mastermind of its latest report in 2007.
Although Dr Pachauri is often presented as a scientist (he was even once described by the BBC as “the world’s top climate scientist”), as a former railway engineer with a PhD in economics he has no qualifications in climate science at all.
What has also almost entirely escaped attention, however, is how Dr Pachauri has established an astonishing worldwide portfolio of business interests with bodies which have been investing billions of dollars in organisations dependent on the IPCC’s policy recommendations.
These outfits include banks, oil and energy companies and investment funds heavily involved in ‘carbon trading’ and ‘sustainable technologies’, which together make up the fastest-growing commodity market in the world, estimated soon to be worth trillions of dollars a year.
related story:
Carbon traders already making millions. And they are not who you think they are.
The oil companies, given huge amounts of permits, found it easy to trim their emissions a little and so make huge profits. Expanding businesses and public services, on the other hand, were forced to buy more permits. In its first year of operation Shell made a profit from carbon-trading of £49.9million and BP a profit of £43.1million.
How much detail will the public and “warmists” need to read and hear about before it dawns on them that this is one huge scam and the money is coming out of their pockets in the form of increased prices and taxation? Dumbing down the educational system and subverting the media has indeed paid off.”
Petraeus: Iran’s nuclear infrastructure can be bombed
"I'm a TINY bit worried by this news..."
Straight from the Debka File: “The deployment in the Middle East of the USS Dwight D. Eisenhower carrier strike group in the first week of January adds muscle to the words of Gen. David Petraeus, CENTCOM commander, on Jan 10 that Iranian nuclear infrastructure, albeit strengthened against attack with enhanced underground tunnels, wasn’t fully protected.
“Well, they certainly can be bombed,” he said to CNN. “The level of effect would vary with who it is that carries it out, what ordnance they have and what capability they can bring to bear.”
This judgment contradicts recent US media estimates that Iran’s nuclear facilities buried deep in fortified tunnels are now protected against air or missile strikes.
Declining to comment on the likelihood of an Israeli strike, Gen. Petraeus said there was still time for diplomacy, but pointed out: “It would be almost literally irresponsible if Centcom were not to have been thinking about ‘what ifs’ and making plans for a whole variety of different contingencies.”
DEBKAfile’s military sources add: CENTCOM was substantially beefed up by the USS Eisenhower carrier which President Barack Obama deployed in the New Year to the Persian Gulf and Mediterranean in support of the US Fifth and Sixth Fleets. He ordered this six-month deployment, the first since he took office a year ago, in view of the rising tensions around Yemen and Iran.
The Eisenhower carries eight air squadrons on its decks.
Air Wing Seven is made up of four fighter-bomber squadrons, a squadron each of early-warning surveillance, electronic warfare and tactical support aircraft and another of anti-submarine helicopters. Its strike force consists of the USS Hue City guided missile cruiser, and two guided missile destroyers, the USS McFaul, USS Farragut and USS Carney.
Obama said in a recent interview that he had not intention of sending US combat troops to the terrorist havens of Somalia and Yemen because “working with international partners is most effective at this point.”
This statement ties in with pumping up America’s naval and air strength in the two volatile regions to avoid sending in more boots on the ground which the US cannot afford at this time.”
Mayo Clinic in Arizona to Stop Treating Some Medicare Patients
Straight from Bloomberg: “Dec. 31 (Bloomberg) — The Mayo Clinic, praised by President Barack Obama as a national model for efficient health care, will stop accepting Medicare patients as of tomorrow at one of its primary-care clinics in Arizona, saying the U.S. government pays too little.
More than 3,000 patients eligible for Medicare, the government’s largest health-insurance program, will be forced to pay cash if they want to continue seeing their doctors at a Mayo family clinic in Glendale, northwest of Phoenix, said Michael Yardley, a Mayo spokesman. The decision, which Yardley called a two-year pilot project, won’t affect other Mayo facilities in Arizona, Florida and Minnesota.
Obama in June cited the nonprofit Rochester, Minnesota-based Mayo Clinic and the Cleveland Clinic in Ohio for offering “the highest quality care at costs well below the national norm.” Mayo’s move to drop Medicare patients may be copied by family doctors, some of whom have stopped accepting new patients from the program, said Lori Heim, president of the American Academy of Family Physicians, in a telephone interview yesterday.
“Many physicians have said, ‘I simply cannot afford to keep taking care of Medicare patients,’” said Heim, a family doctor who practices in Laurinburg, North Carolina. “If you truly know your business costs and you are losing money, it doesn’t make sense to do more of it.”
Medicare Loss
The Mayo organization had 3,700 staff physicians and scientists and treated 526,000 patients in 2008. It lost $840 million last year on Medicare, the government’s health program for the disabled and those 65 and older, Mayo spokeswoman Lynn Closway said.
Mayo’s hospital and four clinics in Arizona, including the Glendale facility, lost $120 million on Medicare patients last year, Yardley said. The program’s payments cover about 50 percent of the cost of treating elderly primary-care patients at the Glendale clinic, he said.
“We firmly believe that Medicare needs to be reformed,” Yardley said in a Dec. 23 e-mail. “It has been true for many years that Medicare payments no longer reflect the increasing cost of providing services for patients.”
Mayo will assess the financial effect of the decision in Glendale to drop Medicare patients “to see if it could have implications beyond Arizona,” he said.
Nationwide, doctors made about 20 percent less for treating Medicare patients than they did caring for privately insured patients in 2007, a payment gap that has remained stable during the last decade, according to a March report by the Medicare Payment Advisory Commission, a panel that advises Congress on Medicare issues. Congress last week postponed for two months a 21.5 percent cut in Medicare reimbursements for doctors.
National Participation
Medicare covered an estimated 45 million Americans at the end of 2008, according to the Centers for Medicare & Medicaid Services, the agency in charge of the programs. While 92 percent of U.S. family doctors participate in Medicare, only 73 percent of those are accepting new patients under the program, said Heim of the national physicians’ group, citing surveys by the Leawood, Kansas-based organization.
Greater access to primary care is a goal of the broad overhaul supported by Obama that would provide health insurance to about 31 million more Americans. More family doctors are needed to help reduce medical costs by encouraging prevention and early treatment, Obama said in a June 15 speech to the American Medical Association meeting in Chicago.
Reid Cherlin, a White House spokesman for health care, declined comment on Mayo’s decision to drop Medicare primary care patients at its Glendale clinic.
Medicare Costs
Mayo’s Medicare losses in Arizona may be worse than typical for doctors across the U.S., Heim said. Physician costs vary depending on business expenses such as office rent and payroll. “It is very common that we hear that Medicare is below costs or barely covering costs,” Heim said.
Mayo will continue to accept Medicare as payment for laboratory services and specialist care such as cardiology and neurology, Yardley said.
Robert Berenson, a fellow at the Urban Institute’s Health Policy Center in Washington, D.C., said physicians’ claims of inadequate reimbursement are overstated. Rather, the program faces a lack of medical providers because not enough new doctors are becoming family doctors, internists and pediatricians who oversee patients’ primary care.
“Some primary care doctors don’t have to see Medicare patients because there is an unlimited demand for their services,” Berenson said. When patients with private insurance can be treated at 50 percent to 100 percent higher fees, “then Medicare does indeed look like a poor payer,” he said.
Annual Costs
A Medicare patient who chooses to stay at Mayo’s Glendale clinic will pay about $1,500 a year for an annual physical and three other doctor visits, according to an October letter from the facility. Each patient also will be assessed a $250 annual administrative fee, according to the letter. Medicare patients at the Glendale clinic won’t be allowed to switch to a primary care doctor at another Mayo facility.
A few hundred of the clinic’s Medicare patients have decided to pay cash to continue seeing their primary care doctors, Yardley said. Mayo is helping other patients find new physicians who will accept Medicare.
“We’ve had many patients call us and express their unhappiness,” he said. “It’s not been a pleasant experience.”
Mayo’s decision may herald similar moves by other Phoenix- area doctors who cite inadequate Medicare fees as a reason to curtail treatment of the elderly, said John Rivers, chief executive of the Phoenix-based Arizona Hospital and Healthcare Association.
“We’ve got doctors who are saying we are not going to deal with Medicare patients in the hospital” because they consider the fees too low, Rivers said. “Or they are saying we are not going to take new ones in our practice.” “
Air Force Completes Killer Micro-Drone Project
The Wasp Micro Air Vehicle
Straight from Wired: “The Air Force Research Laboratory set out in 2008 to build the ultimate assassination robot: a tiny, armed drone for U.S. special forces to employ in terminating “high-value targets.” The military won’t say exactly what happened to this Project Anubis, named after a jackal-headed god of the dead in Egyptian mythology. But military budget documents note that Air Force engineers were successful in “develop[ing] a Micro-Air Vehicle (MAV) with innovative seeker/tracking sensor algorithms that can engage maneuvering high-value targets.”
We have seen in recent years increased strikes by larger Predator and Reaper drones using Hellfire missiles against terrorist-leadership targets in Afghanistan and Pakistan. But these have three significant drawbacks.
First, you can never be quite sure of what you hit. In 2002’s notorious “Tall Man incident,” CIA operatives unleashed a Hellfire at an individual near Zhawar Kili in Afghanistan’s Paktia province. His unusual height convinced the drone controllers that the man was Bin Laden (who stands 6 feet, 5 inches). In fact, he was merely an innocent (if overgrown) Afghan peasant.
A second problem is that the Hellfire isn’t exactly the right weapon for the mission. Originally designed as an anti-tank missile, it’s not especially agile, nor is it designed to cope with a target that might swerve or dodge at the last second (like cars and motorbikes).
And thirdly, such strikes tend to affect a number of others, as well as the intended target. It raises the risk of killing or injuring innocent bystanders.
This was the rationale for Project Anubis. Special Forces already make extensive use of the Wasp drone made by AeroVironment. This is the smallest drone in service, weighing less than a pound. It has an endurance of around 45 minutes, and line-of-sight control extends to 3 miles.
It might seem limited compared to larger craft, but the Wasp excels at close-in reconnaissance. Its quiet electric motor means it can get near to targets without their ever being aware of its presence.
The Air Force’s 2008 budget plans described the planned Project Anubis as “a small UAV [unmanned aerial vehicle] that carries sensors, data links, and a munitions payload to engage time-sensitive fleeting targets in complex environments.” It noted that after it was developed by the Air Force Research Laboratory, Anubis would be used by Air Force Special Operations Command. The total cost was to be just over half a million dollars.
No official announcements have been made since then, and the Air Force did not return a request to comment on this story (hardly surprising for a weapon so likely to be used covertly). But the current Air Force R&D budget does mention the effort, briefly. This newer document refers to Project Anubis as a development that has already been carried out. According to the budget, $1.75 million was spent to reach the goal.
The current state of Project Anubis is unknown. It could be one of tens of thousands of military research efforts that started, made some progress and ended without a conclusion. Or Anubis could now be in the hands of Air Force Special Operations Command.
If so, Anubis would solve both of the problems associated with the Predator-Hellfire combination. It would follow and catch the most elusive target, and its ability to take a video sensor close to the target should mean it can be positively identified before the operator has to make a go or no-go decision.
(There may be a classical reference here: The god Anubis was responsible for weighing the hearts of the dead to judge whether they would have eternal life. The Project Anubis MAV will have to make similarly fine judgments.)
A tiny warhead, weighing a fraction of a pound, could mean extremely little collateral damage, compared to the 20-pound warhead on a Hellfire.
I reported in 2007 on a rumor that the miniature Wasp drone (photo at top) might get a lethal “sting.” It now appears that word of this new weaponry was more than idle talk.”
GMAC to Get Another $3.5B in Aid From Treasury
Please Buy Our Crap!
Straight from Fox News: “GMAC Financial Services is close to getting approximately $3.5 billion in additional aid from the U.S. government, on top of $12.5 billion already received since December 2008, according to people familiar with the situation.
The announcement, expected within days, will coincide with GMAC taking additional steps to absorb losses related to its mortgage operations, these people said. The cleanup is designed to return the Detroit-based finance company to profitability in the first quarter of 2010, according to one of these people.
A GMAC spokeswoman declined to comment on any potential government action but said, “GMAC has been conducting a strategic review of its business and evaluating options to address the challenges in its mortgage operation.” The spokeswoman said GMAC wants to prepare itself to repay the U.S. government.
The willingness by the U.S. Treasury to deepen taxpayer exposure to GMAC reflects the troubled company’s importance to the revival of the auto industry. The company was told to raise additional capital as part of government-led stress tests of large banks conducted earlier this year. The tests were to determine whether firms would need more capital to continue lending if the economy deteriorated in 2009 and 2010.
GMAC has only filled a portion of its capital hole and, unlike other banks that participated in the stress tests, has been unable to attract much capital from private investors. The Treasury said earlier this year that it would make as much money available to GMAC as needed to fill its capital hole and projected the firm would need another government infusion of as much as $5.6 billion.
GMAC’s capital needs have turned out to be somewhat less than originally envisioned, in part because impact from the bankruptcies of General Motors Corp. and Chrysler Corp. was not as severe as federal regulators originally projected.
Iran Warns West It Will Make Its Own Nuclear Fuel
Ahmadinejad Taunts
Straight from Fox News: “Iran warned on Saturday the West has until the end of the month to accept Tehran’s counterproposal to a U.N.-drafted plan on a nuclear exchange, or the country will start producing nuclear fuel on its own.
The warning was a show of defiance and a hardening in Iran’s stance over its controversial nuclear program, which the West fears masks an effort to make nuclear weapons. Tehran insists the program is only for peaceful, electricity production purposes and says it has no intention of making a bomb.
“We have given them an ultimatum. There is one month left and that is by the end of January,” Foreign Minister Manouchehr Mottaki said, speaking on state television.
However, even if Tehran started working on the fuel production immediately, it would likely take years before it can master the technology to turn uranium, enriched to the level of 20 percent, into rods that make the fuel.
Iran dismissed an end-of-2009 deadline imposed by the Obama administration and the West to accept a U.N.-drafted deal to swap most of its enriched uranium for nuclear fuel. The deal would have reduced Iran’s stockpile of low enriched uranium, limiting — at least for the moment — its capabilities to make nuclear weapons.
The U.S. and its allies have demanded Iran accept the terms of the U.N.-brokered plan without changes.
Instead, Tehran came up with a counterproposal: to have the West either sell nuclear fuel to Iran, or swap its nuclear fuel for Iran’s enriched uranium in smaller batches instead of at once as the U.N. plan calls for.
This is unacceptable to the West because it would leave Tehran with enough enriched material to make nuclear arms.
The U.N. deal has been the centerpiece of the West’s diplomatic effort toward Iran.
Under the plan, drafted in November, Iran would export most of its stockpile of low-enriched uranium for further enrichment in Russia and France, where it would be converted into fuel rods. The rods, which Iran needs for a research reactor in Tehran, would be returned to the country about a year later.
Exporting the uranium would temporarily leave Iran without enough stockpiles to further enrich the uranium into the material for a nuclear warhead, and the rods that are returned could not be used to make weapons.
“They (the West) must decide on supplying fuel for the Tehran reactor on one of the two offers, purchase or swap,” Mottaki said. “Otherwise, the Islamic Republic of Iran will produce the 20 percent enriched fuel with its own capable experts.”
Enrichment is at the core of the nuclear controversy. Iran currently has one operating enrichment facility that churns out 3.5 percent enriched uranium. The country needs fuel enriched to 20 percent to power a Tehran medical research reactor. For nuclear weapons, uranium needs to be enriched to 90 percent or more.
The U.N. has demanded Iran suspend all enrichment, a demand Tehran refuses, saying it has a right to develop the technology under the Non-Proliferation Treaty.
Iran has also defiantly announced it intends to build 10 new uranium enrichment sites, drawing a forceful rebuke from the U.N. nuclear watchdog agency and warnings of the possibility of new U.N. sanctions.”
Bankers Get $4 Trillion Gift From Barney Frank: David Reilly
Straight from Bloomberg: “Dec. 30 (Bloomberg) — To close out 2009, I decided to do something I bet no member of Congress has done — actually read from cover to cover one of the pieces of sweeping legislation bouncing around Capitol Hill.
Hunkering down by the fire, I snuggled up with H.R. 4173, the financial-reform legislation passed earlier this month by the House of Representatives. The Senate has yet to pass its own reform plan. The baby of Financial Services Committee Chairman Barney Frank, the House bill is meant to address everything from too-big-to-fail banks to asleep-at-the-switch credit-ratings companies to the protection of consumers from greedy lenders.
I quickly discovered why members of Congress rarely read legislation like this. At 1,279 pages, the “Wall Street Reform and Consumer Protection Act” is a real slog. And yes, I plowed through all those pages. (Memo to Chairman Frank: “ystem” at line 14, page 258 is missing the first “s”.)
The reading was especially painful since this reform sausage is stuffed with more gristle than meat. At least, that is, if you are a taxpayer hoping the bailout train is coming to a halt.
If you’re a banker, the bill is tastier. While banks opposed the legislation, they should cheer for its passage by the full Congress in the New Year: There are huge giveaways insuring the government will again rescue banks and Wall Street if the need arises.
Nuggets Gleaned
Here are some of the nuggets I gleaned from days spent reading Frank’s handiwork:
– For all its heft, the bill doesn’t once mention the words “too-big-to-fail,” the main issue confronting the financial system. Admitting you have a problem, as any 12- stepper knows, is the crucial first step toward recovery.
– Instead, it supports the biggest banks. It authorizes Federal Reserve banks to provide as much as $4 trillion in emergency funding the next time Wall Street crashes. So much for “no-more-bailouts” talk. That is more than twice what the Fed pumped into markets this time around. The size of the fund makes the bribes in the Senate’s health-care bill look minuscule.
– Oh, hold on, the Federal Reserve and Treasury Secretary can’t authorize these funds unless “there is at least a 99 percent likelihood that all funds and interest will be paid back.” Too bad the same models used to foresee the housing meltdown probably will be used to predict this likelihood as well.
More Bailouts
– The bill also allows the government, in a crisis, to back financial firms’ debts. Bondholders can sleep easy — there are more bailouts to come.
– The legislation does create a council of regulators to spot risks to the financial system and big financial firms. Unfortunately this group is made up of folks who missed the problems that led to the current crisis.
– Don’t worry, this time regulators will have better tools. Six months after being created, the council will report to Congress on “whether setting up an electronic database” would be a help. Maybe they’ll even get to use that Internet thingy.
– This group, among its many powers, can restrict the ability of a financial firm to trade for its own account. Perhaps this section should be entitled, “Yes, Goldman Sachs Group Inc., we’re looking at you.”
Managing Bonuses
– The bill also allows regulators to “prohibit any incentive-based payment arrangement.” In other words, banker bonuses are still in play. Maybe Bank of America Corp. and Citigroup Inc. shouldn’t have rushed to pay back Troubled Asset Relief Program funds.
– The bill kills the Office of Thrift Supervision, a toothless watchdog. Well, kill may be too strong a word. That agency and its employees will be folded into the Office of the Comptroller of the Currency. Further proof that government never really disappears.
– Since Congress isn’t cutting jobs, why not add a few more. The bill calls for more than a dozen agencies to create a position called “Director of Minority and Women Inclusion.” People in these new posts will be presidential appointees. I thought too-big-to-fail banks were the pressing issue. Turns out it’s diversity, and patronage.
– Not that the House is entirely sure of what the issues are, at least judging by the two dozen or so studies the bill authorizes. About a quarter of them relate to credit-rating companies, an area in which the legislation falls short of meaningful change. Sadly, these studies don’t tackle tough questions like whether we should just do away with ratings altogether. Here’s a tip: Do the studies, then write the legislation.
Consumer Protection
– The bill isn’t all bad, though. It creates a new Consumer Financial Protection Agency, the brainchild of Elizabeth Warren, currently head of a panel overseeing TARP. And the first director gets the cool job of designing a seal for the new agency. My suggestion: Warren riding a fiery chariot while hurling lightning bolts at Federal Reserve Chairman Ben Bernanke.
– Best of all, the bill contains a provision that, in the event of another government request for emergency aid to prop up the financial system, debate in Congress be limited to just 10 hours. Anything that can get Congress to shut up can’t be all bad.
Even better would be if legislators actually tackle the real issues stemming from the financial crisis, end bailouts and, for the sake of my eyes, write far, far shorter bills.”
