Washington’s Three-Card Monte

Paul Jacob

12/18/2011 12:00:35 AM - Paul Jacob

There’s a big difference between the U.S. Congress passing legislation and a hustler playing three-card Monte on a city street: No citizen is forced to hand money over to the street hustler.

Yesterday, in an overwhelming 89 to 10 vote, the U.S. Senate passed a bill that the House is expected to agree to next week, sending it to President Barack Obama’s desk. At issue are several matters:

  • reversing (again) the cut in Medicare reimbursements to doctors,
  • extending this year’s payroll tax cut and
  • disallowing President Obama from procrastinating further on the regulatory permission for the Keystone XL oil pipeline to be built from Canada to the Texas gulf coast.

See if you can follow the shuffle on each of these three items in the legislation:

The Doctor Fix
Congress regularly cuts the rates for which Medicare will pay doctors for the care they provide patients. These reductions are enacted to save money. But doctors, like most of us, don’t work for free and don’t have to perform operations or provide care at prices that don’t allow them to make a profit. Having a health insurance program like Medicare that no doctor will accept wouldn’t provide much in the way of healthcare.

So, in its infinitely pandering wisdom, Congress regularly legislates reduced reimbursements for doctors treating Medicare patients to portray a sense of fiscal prudence, only to turn around later and reverse themselves by passing what they call a “doctor fix.” (Yes, Charlie Brown, you can have as much confidence in Congress as you have in Lucy.)

Those following the cards closely will remember that much of the $600 billion Obamacare was supposed to cut from Medicare over the next decade, which in fact allowed the Congressional Budget Office to score the 3,000-plus page bill as actually saving money, was in reducing what Medicare paid to doctors. But with typical Washington chutzpah, during the debate over Obama’s health care law, Obama signed legislation reversing a previously enacted cut in Medicare reimbursements to doctors.

The game continues with yesterday’s vote.

Payroll Tax Cut
Yesterday’s legislation also extended — for just two months — this year’s two-percent cut in the Social Security taxes workers pay on their first $106,800 earned in 2011 and $110,100 in 2012. When people claim the bottom half of income earners don’t pay taxes or even more specifically don’t pay income taxes, they are mistaken — forgetting about the payroll tax.

Some GOP congressvolk have argued against extending the payroll tax cut. Nebraska Sen. Mike Johanns said after yesterday’s vote, “I have been, and still am, concerned about the implications a long-term payroll tax reduction would have on Social Security — a program already paying out more than it takes in — but a two month extension of the payroll tax holiday is an acceptable resolution if it prevents the continued slow-walking of the Keystone pipeline.”

He has a point, in that if those Social Security taxes are set aside to pay out benefits later, it would be mighty irresponsible to reduce those taxes to a point where the program’s future funding is in jeopardy. Though it turns out, that’s a big “if.”

Social Security’s future funding is in jeopardy. Congress has consistently used the Social Security taxes rolling in each year (in amounts more than enough to pay out current benefits . . . until just recently) as more money they can borrow to spend immediately . . . to buy votes. Let future Congresses worry about paying future benefits!

Given that payroll taxes would only provide more money for Washington to splurge today, and do not secure a non-Ponzi-style Social Security System for tomorrow, cutting taxes on the working poor and the middle class is a good thing to do. But for politicians who do not wish to own up to the scam they’ve pulled on Social Security, expect continued shell games and fast talking.

Keystone XL Pipeline
The Keystone pipeline, which has been proposed to bring oil from Canadian tar sands down to refineries in Oklahoma and even Texas, needs approval from the U.S. State Department because the project crosses an international border. It would create tens of thousands of jobs, though how many is — surprise, surprise — disputed. Best of all, in my mind, it means more oil, thus likely cheaper oil, and more of the black gold coming from Canada as opposed to Saudi Arabia, Iraq or Venezuela.

People who sell or buy energy and wish to keep doing so tend to favor the pipeline. So-called environmentalists, who want oil to disappear from our economy to save us from global warming, and some Nebraskans, who worry about pipeline accidents causing problems in the huge Ogallala aquifer, oppose the project.

Let’s recognize that President Obama plays the game with the best of them, for he announced he would make a decision on the pipeline after the 2012 election. Some unions have endorsed the project; regular voters think creating jobs is a good thing. Inconveniently for the president, many of his supporters (read: environmentalists) oppose the project.

How to avoid having any of these groups fighting his re-election? Punt.

But yesterday’s vote forces Obama to make an assessment of the environmental issues in 60 days, and then to either approve or reject the project. No waiting for personal political reasons. This is good.

But expect the debate to be less than good. Much will be made about protecting the Ogallala aquifer, even though this legislation calls for a different route through the state of Nebraska.

Americans will also hear much yammering about pipeline safety from environmental groups. But how many will hear the words of Sierra Club Chairman Carl Pope? “We need to say the fossil fuel era is over and we’re going to invest in the future, and tar sands oil is not part of the future.”

Such high-stakes ideological play is beyond the usual congressional card tricks — which Senator Harry Reid recognizes are hard enough for Americans to buy into: “I know how difficult and hard it is for people to accept our way of doing business,” the Gambling State’s senior senator said after Saturday’s vote.

We don’t need merely a new deal, we could use a whole new deck, and something better than three-card Monte.