"I'd rather be waterboarded"

98 Percent of Welfare Applicants Pass Drug Test

$178 million to save $5,000 a month? How does that even make sense???

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Thanks to Florida Gov. Rick Scott's insistence that people on welfare use drugs at a higher rate than the general population, the state's Legislature implemented a policy earlier this year requiring all applicants for temporary cash assistance to pass a drug test before getting any help.

The results: Ninety-eight percent passed. And the process will cost the state $178 million.

-snip-

Cost of the tests averages about $30. Assuming that 1,000 to 1,500 applicants take the test every month, the state will owe about $28,800-$43,200 monthly in reimbursements to those who test drug-free.

That compares with roughly $32,200-$48,200 the state may save on one month’s worth of rejected applicants.

Net savings to the state: $3,400 to $5,000 annually on one month’s worth of rejected applicants. Over 12 months, the money saved on all rejected applicants would add up to $40,800 to $60,000 for a program that state analysts have predicted will cost $178 million this fiscal year.

Text of S&P downgrade of U.S. rating

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Standard & Poor’s Ratings Services said today that it lowered its long-term sovereign credit rating on the United States of America to ‘AA+’ from ‘AAA’. Standard & Poor’s also said that the outlook on the long-term rating is negative. At the same time, Standard & Poor’s affirmed its ‘A-1+’ short-term rating on the U.S. In addition, Standard & Poor’s removed both ratings from CreditWatch, where they were placed on July 14, 2011, with negative implications.

The transfer and convertibility (T&C) assessment of the U.S.–our assessment of the likelihood of official interference in the ability of U.S.-based public- and private-sector issuers to secure foreign exchange for debt service–remains ‘AAA’.

We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.

Our lowering of the rating was prompted by our view on the rising public debt burden and our perception of greater policymaking uncertainty, consistent with our criteria (see “Sovereign Government Rating Methodology and Assumptions,” June 30, 2011, especially Paragraphs 36-41). Nevertheless, we view the U.S. federal government’s other economic, external, and monetary credit attributes, which form the basis for the sovereign rating, as broadly unchanged.

We have taken the ratings off CreditWatch because the Aug. 2 passage of the Budget Control Act Amendment of 2011 has removed any perceived immediate threat of payment default posed by delays to raising the government’s debt ceiling. In addition, we believe that the act provides sufficient clarity to allow us to evaluate the likely course of U.S. fiscal policy for the next few years.

The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year’s wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.

Our opinion is that elected officials remain wary of tackling the structural issues required to effectively address the rising U.S. public debt burden in a manner consistent with a ‘AAA’ rating and with ‘AAA’ rated sovereign peers (see Sovereign Government Rating Methodology and Assumptions,” June 30, 2011, especially Paragraphs 36-41). In our view, the difficulty in framing a consensus on fiscal policy weakens the government’s ability to manage public finances and diverts attention from the debate over how to achieve more balanced and dynamic economic growth in an era of fiscal stringency and private-sector deleveraging (ibid). A new political consensus might (or might not) emerge after the 2012 elections, but we believe that by then, the government debt burden will likely be higher, the needed medium-term fiscal adjustment potentially greater, and the inflection point on the U.S. population’s demographics and other age-related spending drivers closer at hand (see “Global Aging 2011: In The U.S., Going Gray Will Likely Cost Even More Green, Now,” June 21, 2011).

Standard & Poor’s takes no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.’s finances on a sustainable footing.

The act calls for as much as $2.4 trillion of reductions in expenditure growth over the 10 years through 2021. These cuts will be implemented in two steps: the $917 billion agreed to initially, followed by an additional $1.5 trillion that the newly formed Congressional Joint Select Committee on Deficit Reduction is supposed to recommend by November 2011. The act contains no measures to raise taxes or otherwise enhance revenues, though the committee could recommend them.

The act further provides that if Congress does not enact the committee’s recommendations, cuts of $1.2 trillion will be implemented over the same time period. The reductions would mainly affect outlays for civilian discretionary spending, defense, and Medicare. We understand that this fall-back mechanism is designed to encourage Congress to embrace a more balanced mix of expenditure savings, as the committee might recommend.

We note that in a letter to Congress on Aug. 1, 2011, the Congressional Budget Office (CBO) estimated total budgetary savings under the act to be at least $2.1 trillion over the next 10 years relative to its baseline assumptions. In updating our own fiscal projections, with certain modifications outlined below, we have relied on the CBO’s latest “Alternate Fiscal Scenario” of June 2011, updated to include the CBO assumptions contained in its Aug. 1 letter to Congress. In general, the CBO’s “Alternate Fiscal Scenario” assumes a continuation of recent Congressional action overriding existing law.

We view the act’s measures as a step toward fiscal consolidation. However, this is within the framework of a legislative mechanism that leaves open the details of what is finally agreed to until the end of 2011, and Congress and the Administration could modify any agreement in the future. Even assuming that at least $2.1 trillion of the spending reductions the act envisages are implemented, we maintain our view that the U.S. net general government debt burden (all levels of government combined, excluding liquid financial assets) will likely continue to grow. Under our revised base case fiscal scenario–which we consider to be consistent with a ‘AA+’ long-term rating and a negative outlook–we now project that net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 79% in 2015 and 85% by 2021. Even the projected 2015 ratio of sovereign indebtedness is high in relation to those of peer credits and, as noted, would continue to rise under the act’s revised policy settings.

Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act. Key macroeconomic assumptions in the base case scenario include trend real GDP growth of 3% and consumer price inflation near 2% annually over the decade.

Our revised upside scenario–which, other things being equal, we view as consistent with the outlook on the ‘AA+’ long-term rating being revised to stable–retains these same macroeconomic assumptions. In addition, it incorporates $950 billion of new revenues on the assumption that the 2001 and 2003 tax cuts for high earners lapse from 2013 onwards, as the Administration is advocating. In this scenario, we project that the net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 77% in 2015 and to 78% by 2021.

Our revised downside scenario–which, other things being equal, we view as being consistent with a possible further downgrade to a ‘AA’ long-term rating–features less-favorable macroeconomic assumptions, as outlined below and also assumes that the second round of spending cuts (at least $1.2 trillion) that the act calls for does not occur. This scenario also assumes somewhat higher nominal interest rates for U.S. Treasuries. We still believe that the role of the U.S. dollar as the key reserve currency confers a government funding advantage, one that could change only slowly over time, and that Fed policy might lean toward continued loose monetary policy at a time of fiscal tightening. Nonetheless, it is possible that interest rates could rise if investors re-price relative risks. As a result, our alternate scenario factors in a 50 basis point (bp)-75 bp rise in 10-year bond yields relative to the base and upside cases from 2013 onwards. In this scenario, we project the net public debt burden would rise from 74% of GDP in 2011 to 90% in 2015 and to 101% by 2021.

Our revised scenarios also take into account the significant negative revisions to historical GDP data that the Bureau of Economic Analysis announced on July 29. From our perspective, the effect of these revisions underscores two related points when evaluating the likely debt trajectory of the U.S. government. First, the revisions show that the recent recession was deeper than previously assumed, so the GDP this year is lower than previously thought in both nominal and real terms. Consequently, the debt burden is slightly higher. Second, the revised data highlight the sub-par path of the current economic recovery when compared with rebounds following previous post-war recessions. We believe the sluggish pace of the current economic recovery could be consistent with the experiences of countries that have had financial crises in which the slow process of debt deleveraging in the private sector leads to a persistent drag on demand. As a result, our downside case scenario assumes relatively modest real trend GDP growth of 2.5% and inflation of near 1.5% annually going forward.

When comparing the U.S. to sovereigns with ‘AAA’ long-term ratings that we view as relevant peers–Canada, France, Germany, and the U.K.–we also observe, based on our base case scenarios for each, that the trajectory of the U.S.’s net public debt is diverging from the others. Including the U.S., we estimate that these five sovereigns will have net general government debt to GDP ratios this year ranging from 34% (Canada) to 80% (the U.K.), with the U.S. debt burden at 74%. By 2015, we project that their net public debt to GDP ratios will range between 30% (lowest, Canada) and 83% (highest, France), with the U.S. debt burden at 79%. However, in contrast with the U.S., we project that the net public debt burdens of these other sovereigns will begin to decline, either before or by 2015.

Standard & Poor’s transfer T&C assessment of the U.S. remains ‘AAA’. Our T&C assessment reflects our view of the likelihood of the sovereign restricting other public and private issuers’ access to foreign exchange needed to meet debt service. Although in our view the credit standing of the U.S. government has deteriorated modestly, we see little indication that official interference of this kind is entering onto the policy agenda of either Congress or the Administration. Consequently, we continue to view this risk as being highly remote.

The outlook on the long-term rating is negative. As our downside alternate fiscal scenario illustrates, a higher public debt trajectory than we currently assume could lead us to lower the long-term rating again. On the other hand, as our upside scenario highlights, if the recommendations of the Congressional Joint Select Committee on Deficit Reduction–independently or coupled with other initiatives, such as the lapsing of the 2001 and 2003 tax cuts for high earners–lead to fiscal consolidation measures beyond the minimum mandated, and we believe they are likely to slow the deterioration of the government’s debt dynamics, the long-term rating could stabilize at ‘AA+’.

On Monday, we will issue separate releases concerning affected ratings in the funds, government-related entities, financial institutions, insurance, public finance, and structured finance sectors.”

Steve King: Covering Birth Control Could Make Us A 'Dying Civilization'

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The new set of guidelines issued by the Department of Health and Human Services this week that will require health insurers to cover birth control with no co-pays have been controversial for a number of reasons, ranging from cost issues to moral objections.

Some conservative groups, such as Americans United for Life, have condemned the guidelines because they might force insurers to cover the morning after pill, which many anti-abortion advocates equate with abortion. The Catholics for Choice organization opposes the fact that the guidelines exempt certain religious organizations from having to cover birth control. And some businesses worry that the expanded coverage will raise insurance premiums for everyone.

But Rep. Steve King (R-Iowa) expressed a fairly extreme concern on the House Floor Monday night about the expanded preventative health coverage: offering free birth control to women could eventually kill off the entire human species.

KING: We have people that are single, we have people that are past reproductive age, we have priests that are celibate. All of them, paying insurance premiums that cover contraceptives so that somebody else doesn't have to pay the full fare of that? And they've called it preventative medicine. Preventative medicine. Well if you applied that preventative medicine universally what you end up with is you've prevented a generation. Preventing babies from being born is not medicine. That's not— that's not constructive to our culture and our civilization. If we let our birth rate get down below replacement rate we're a dying civilization.
The new guidelines under the Affordable Care Act were nearly unanimously recommended by a panel of experts at the non-partisan Institute of Medicine, and they ensure that health insurance companies will fully cover a range of preventative health services for women, including contraceptives, cervical cancer screening, breast-feeding supplies and HIV testing and counseling.

An estimated 98 percent of sexually active women in America have used some form of birth control at some point in their lives. According to a recent Thomson Reuters/NPR poll, 77 percent of American voters believe that insurers should cover the cost of birth control with no co-pays.

How the US got $14 Trillion in Debt and Who are the Creditors

Bachmann Has Cold Shoulder for Tough Questions

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Rep. Michele Bachmann really doesn't want to answer questions about her husband's Christian counseling clinics or about why her district has been dubbed a "suicide contagion area" by Minnesota officials.

Bachmann has an increasing amount to answer for. Mother Jones broke a story this week about the "teen suicide epidemic" in Bachmann's district. Nine teenagers have died during the last two years, and some parents are directly assigning blame to Bachmann.

“I feel if I hadn't moved to this district my daughter wouldn't have died,” one mother told Mother Jones.

So far Bachmann has said nothing about the problem, although she wasn't shy about opposing antibullying measures proposed in her state in 2006.

A photojournalist with TV station WQAD in Moline, Ill., said his station has evidently been cut off from Bachmann in retribution for an anchor just asking about whether so-called reparative therapy, aimed at turning gay people straight, is offered by her clinics.

The Latest Debt Ceiling Demands

"Because of our deep belief in personal freedom..."

Polls: Voters Want Debt Limit Deal to Cut Spending and Raise Taxes.

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Voters appear to favor raising some taxes as part of a deal to raise the debt ceiling, two new polls show.

With the U.S. expected to go into default if the debt ceiling isn’t raised soon, Quinnipiac University’s Polling Institute released a survey Thursday showing voters, 67% to 25%, prefer a deficit-reduction deal that includes both spending cuts and higher taxes on the wealthy and corporations rather than only cuts spending. Democrats, predictably, favored a plan with the tax increases, 87% to 7%, independents were less enthusiastic, 66% to 26%, while Republicans were divided, 43% to 48%.

The survey of 2,311 registered voters had a margin of error of 2 percentage points.

A Gallup poll released Wednesday concluded that Americans want the majority of deficit reduction to come through spending cuts, but most favor some combination of reduced expenditures coupled with higher revenues.

When asked how Congress should reduce the federal deficit, 30% said “mostly with spending cuts” and 32% chose “equally with spending cuts and tax increases.” Just 20% said the deal should be exclusively spending cuts and 11% wanted a deal mostly or only with tax increases.

The poll of 1,016 adults had a margin of error of 4 percentage points.

SEIU "thugs" acquitted

This made national news at the time, the big bad SEIU "thugs" attacking a poor innocent man. Will the acquittal make the headlines? Somehow I think not.

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Service Employees International Union members Elston McCowan and Perry Molens had been accused of misdemeanor assault in the August, 2009 tussle with button salesman Kenneth Gladney. The fight caught national attention at a time when there was rampant speculation the union had been dispatched to tamp down opposition to President Obama’s health care reform.

Jurors heard conflicting testimony in the two-day trial over who actually started the fight, and they viewed video tape showing the end and aftermath of the brawl — but no video showed who threw the first punch.

Gladney, who took the witness stand wearing a neck brace, testified that McCowan had started the fight by cursing him for displaying an offensive President Obama button, and then slapping Gladney’s hand. Gladney testified that Molens then joined in the attack against him.

McCowan testified that Gladney was the first to turn what had been a verbal argument into a physical fight. Molens testified that he came upon a fight in progress and pulled Gladney off his fellow union member McCowan.

McCowan and Molens were represented by high-profile defense attorney Paul D’ Agrosa, whose legal fees, McCowan said, were paid by the union. During his closing argument, D’ Agrosa questioned whether Gladney was wearing a neck brace to the trial for sympathy, saying it reminded him of a “Brady Bunch” episode.

Gladney had testified that he underwent recent neck surgery not related to the August 2009 fight. Later, outside the court, Gladney told a reporter he belived his neck problems were the result of “blunt trauma” he suffered in the fight.