US layoffs mount amid signs of economic slowdown

megszorit

By Andre Damon

28 March 2015

US corporations announced thousands of layoffs this week amid a series of plant closures, mergers and consolidations and signs of declining economic growth.

On Wednesday, US Steel announced 2,080 layoffs at its Granite City Works in Illinois. The Pittsburgh-based steelmaker plans to lay off over 4,500 employees nationwide, including over 1,800 workers in Alabama. Job cuts are also planned in Minnesota and Texas.

The same day, steelmaker Worthington Industries of Columbus, Ohio announced plans to lay off 555 employees nationwide. Of these, 310 are to lose their jobs as a result of the closure of a plant in Florence, South Carolina.

On Thursday, Ohio-based Republic Steel announced 200 layoffs at its Lorain, Ohio plant.

The steel companies said the layoffs were a response to a fall in demand stemming from the drop in oil prices and appreciation of the dollar, which have led to a reduction in international orders.

Also on Wednesday, HJ Heinz announced plans to buy Kraft Foods Group in a $36.6 billion deal that, according to one analyst, could lead to 5,000 job cuts, affecting nearly one quarter of Kraft’s North American work force.

The fate of tens of thousands of RadioShack workers and their families hung in the balance Friday as lenders and hedge funds wrangled at auction over the remains of the bankrupt consumer electronics chain, which presently employs 27,000 people at more than 4,000 locations nationwide.

Salus Capital Partners said Friday that it had outbid its nearest competitor, hedge fund Standard General, offering $271 million in cash as part of a plan that would completely dismantle the company, laying off all employees and selling off inventory and fixtures. Standard General had offered $16 million in a plan that would have kept 1,740 stores open, saving 7,500 jobs, but still laying off nearly 20,000 workers.

Office supply retailer Staples, which announced plans to merge with Office Depot in February, filed documents with the Securities and Exchange Commission showing that it intends to pay CEO Roland Smith $46.78 million for 16 months of work if the deal goes through. The merger would entail the closure of up to 1,000 stores and the potential layoff of tens of thousands of workers.

The plant closures and layoffs came as figures from the Commerce Department confirmed that the US economy slowed significantly in the fourth quarter of last year. The economy grew at an annual rate of 2.2 percent in the final three months of 2014, down from an initial estimate of 2.6 percent released in January.

The fourth quarter marked a significant slowdown compared with the second quarter, in which the economy grew at a 5 percent rate, and the third quarter, which had a growth rate of 4.6 percent. Analysts had expected the economy to grow at a 2.4 percent annual rate in the final quarter of last year.

Business investment on equipment in the fourth quarter was revised downward to show a 0.6 percent increase, down from a previously reported 0.9 percent. Reuters reported that the slowdown in investment likely reflected “the impact of the strong dollar and lower crude oil prices, which have caused a drop in drilling and exploration activity.”

Government spending contracted at a rate of 1.9 percent, led by cuts to federal spending.

Even the anemic pace of economic growth in the last quarter of 2014 was significantly higher than what is expected in the first quarter of this year, which ends next week. Economists from JPMorgan Chase, Macroeconomic Advisers and Goldman Sachs recently cut their estimates for first-quarter economic growth, all of them forecasting a rate of 1.4 percent to 1.5 percent. The Federal Reserve Bank of Atlanta is predicting even worse results, with a first-quarter GDP growth rate of just 0.2 percent.

A number of recently released economic figures underscore this gloomy outlook. The Commerce Department said Wednesday that orders for durable goods fell by 1.4 percent in February compared with a month earlier. The report also showed that non-defense capital goods orders fell for the sixth straight week.

The University of Michigan’s survey of consumer sentiment fell to 93.0 in March, down from 95.4 in February. Richard Curtin, chief economist at the University of Michigan’s Surveys of Consumers, told the Wall Street Journalthat, “most of the recent variation was among lower-income households, whose budgets are more sensitive to higher utility costs and disruptions in work hours.”

The significant appreciation of the dollar, which hit 0.95 euros earlier this month, up from 0.75 euros a year ago, has had a negative impact on the US trade balance and US corporate earnings.

Corporate profits fell 1.4 percent in the previous quarter, according to figures released by the Commerce Department on Friday. For the whole of 2014, corporate profits were down by 0.8 percent, the first annual fall in US corporate profits since 2008.

US corporations have responded to the appreciation of the dollar and falling profits with the demand that the Federal Reserve delay its plans to begin raising interest rates this year. Last week, Fed Chairwoman Janet Yellen hinted that the US central bank might begin raising rates later than it had previously indicated, and the Fed issued interest rate projections for 2015 and beyond showing a slower pace of rate hikes than previously predicted once the increases begin.

Yellen reinforced this message in remarks at the Federal Reserve Bank of San Francisco on Friday, declaring that she expected the “level of the federal funds rate to be normalized only gradually” and warning of raising rates “too quickly.”

The continued influx of cash from the Federal Reserve has led the Dow Jones Industrial Average to nearly triple over the course of the past six years, while allowing Wall Street bonuses to hit the highest levels since 2008. Average CEO pay in the US is higher than ever.

The response of the corporate-financial aristocracy to the renewed slowdown in the US economy will no doubt be an intensification of the policies that have characterized official economic policy since the 2008 crash: virtually unlimited amounts of cash for the financial markets coupled with a relentless offensive against the jobs, wages and living standards of working people.

 

http://www.wsws.org/en/articles/2015/03/28/econ-m28.html

New discoveries show that Mars may have once been habitable

By Bryan Dyne
28 March 2015

A recent study using data from NASA’s Curiosity rover and published in the Proceedings of the National Academy of Sciences present data showing the presence of nitrates on Mars. This molecule, composed of one nitrogen and three oxygen atoms, may indicate that there was once a nitrogen cycle on ancient Mars, one of the necessary mechanisms on a planet to sustain terrestrial-like life.

The Mars rover Curiosity. Credit: NASA/JPL-Caltech/MSSS

The research was undertaken with an international team led by Jennifer Stern using Curiosity’s Sample Analysis at Mars (SAM) instrument suite. In earlier studies of Martian soils and rocks at Gale crater, nitrogen was detected in both scooped and drilled sediment samples. However, it was not clear whether the nitrogen detected was from the surrounding atmosphere, indicating molecular nitrogen, or from the rocks themselves, indicating nitrates. Using SAM and subtracting out the known sources of nitrogen within the instrument, Stern’s team was able to show that there were still up to 1100 parts per million (ppm) of nitrogen remaining, depending on the sample analyzed. From this, Stern’s team concluded that the nitrogen originated from the sediments and thus from nitrates.

Whether nitrogen is found in the atmosphere or in other forms plays an important role in biochemistry on Earth. While the majority of terrestrial nitrogen is in the atmosphere, making up 78 percent of the air we breath, it is in the inert form of molecular hydrogen (N2). To incorporate nitrogen into more complex molecules—such as nucleobases, amino acids, DNA, RNA and proteins—it must be in more accessible forms. The nitrate molecule (NO3) is one of the most prevalent and useful molecules seen on Earth for this purpose.

As such, the strong evidence of nitrates in a variety of different rocks and sediments on the Martian surface implies that, at a very early point in the planet’s history, there could have been large amounts of biologically useful nitrogen on the Red Planet.

Stern’s research complements a report released three weeks ago in Sciencewhich provides strong support for the existence of an ocean of liquid water on the surface of Mars during the planet’s early life. The ocean is estimated to have held more water than Earth’s Arctic Ocean. That is enough water to cover the entire surface of Mars in liquid 137 meters deep. More likely, the ocean covered almost half Mars’ northern hemisphere and reached depths greater than 1.6 kilometers.

This is much larger than previous estimates of a primordial Martian ocean, meaning that the planet’s surface could have been wetter for much longer than estimated, perhaps 900 million years. Combined with a thicker, warmer atmosphere, volcanism on the surface and the presence of nitrates, this likely led to rich reservoirs containing the diverse chemical elements needed for life.

Artist conception of the primitive ocean the NASA suspects once existed on Mars

This second discovery was made by a team led Geronimo Villanueva, working with the European Southern Observatory’s Very Large Telescope in Chile, and the W.M. Keck Observatory and NASA Infrared Telescope Facility in Hawaii. Using detailed maps of the Martian atmosphere, the scientists were able to distinguish the chemical signatures of two slightly different isotopes of water. The first is the familiar H2O. The second is the more exotic form HDO, in which one hydrogen atom is replaced by one its more massive forms, deuterium.

By taking the ratio of H2O and HDO in Mars’ atmosphere and comparing it to those values found in water trapped in a 4.5 billion-year-old Martian meteorite, Villanueva’s team was able to measure the atmospheric change in the intervening time span and determine how much water escaped to space. The forthcoming MAVEN probe will take similar measurements.

These maps were made over the course of three Martian years, amounting to six years on Earth. Beyond showing that Mars once housed a massive ocean, the research also revealed seasonal changes and local weather patterns across what was previously thought to be a mostly homogenous desert climate.

Mars’ polar ice caps were also studied, using the same H2O and HDO ratio, as they are suspected to contain a more direct record of water on Mars from 3.7 billion years ago to the present. The researchers found that Mars once had at least 6.5 times the amount of water currently contained in the ice caps, meaning a volume of water on ancient Mars of at least 20 million cubic kilometers. This is in general agreement with the atmospheric study.

Both the nitrogen amounts and water levels now thought to have existed on ancient Mars lead to the question: Where did this all go? Mars today is a barren world with an atmosphere that is 96 percent carbon dioxide and less than 1 percent as thick as Earth’s. There is no liquid water on its surface and one has to dig before finding any indication of biologically useable material.

It is suspected that Mars lost its atmosphere to space. The results gathered by the Curiosity rover as a whole are in agreement with in situ atmospheric measurements made by the Viking landers from 1976 to 1982, when this idea first gained traction. The three main mechanisms for losing atmosphere include interactions between the atmosphere and the solar wind, a massive impact by an asteroid or other body, and/or the atmosphere escaping as a result of thermal motion and the planet’s relatively low gravity. It is not clear which of these mechanisms (if any) is primary.

The loss of the ocean is somewhat more mysterious. Neither the solar wind nor low Martian gravity can account for the loss of liquid water. As the planet cooled and the water froze, one way for the ocean to have disappeared is for the frozen water to sublime into water vapor in the atmosphere and then into space. A more interesting hypothesis is that the ocean didn’t go anywhere at all, but was covered up by sediment and dirt as it froze. If so, this would mean that a great deal of water ice is under the northern lowlands of Mars, the Vastitas Borealis basin. It is unknown how far down a probe would need to drill in order to test this idea.

A further question is posed: What is the possibility that life developed on early Mars?

While a great deal more research needs to be done on this subject, these two results are further evidence that at the very least, the conditions once existed on Mars for a life cycle to begin.

 

http://www.wsws.org/en/articles/2015/03/28/mars-m28.html

New research suggests certain parasites may be subtly tweaking our health and even our personalities

The parasite made me do it: How a common infection could manipulate our behavior

The parasite made me do it: How a common infection could manipulate our behavior

(Credit: pogonici, via Shutterstock)

This article was originally published by Scientific American.

Scientific AmericanImagine a world without fear. It might be empowering to go about your daily life uninhibited by everyday distresses. You could cross highways with confidence, take on all kinds of daredevilry and watch horror flicks without flinching. Yet consider the prospect a little more deeply, and the possibilities become darker, even deadly. Our fears, after all, can protect us.

The basic aversion that a mouse has for a cat, for instance, keeps the rodent out of death’s jaws. But unfortunately for mice everywhere, there is a second enemy with which to contend, one that may prevent them from experiencing that fear in the first place. A unicellular organism (a protozoan), Toxoplasma gondii, can override a rodent’s most basic survival instincts. The result is a rodent that does not race away from a cat but is instead strangely attracted to it.

Toxoplasma‘s reach extends far beyond the world of cat and mouse. It may have a special relationship with rodent and feline hosts, but this parasite also infects the brains of billions of animals on land, at sea and in the air. Humans are no exception. Worldwide, scientists estimate that as many as three billion people may be carrying Toxoplasma. In the U.S., there is a one-in-five chance that Toxoplasma parasites are lodged in your neural circuits, and infection rates are as high as 95 percent in other countries.

For most people, this infection appears asymptomatic, but recent evidence shows that Toxoplasma actively remodels the molecular landscape of mammalian brain cells. Now some researchers have begun to speculate that this tiny single-celled organism may be tweaking human health and personalities in stealthy, subtle ways.

What the cat dragged in

Researchers first discovered T. gondii in 1908, and by the end of the 20th century they had a good grasp on how people could pick up this parasite. The story starts with cats: for reasons that scientists have yet to unravel, Toxoplasma can sexually reproduce only in the feline gut. The parasite breeds within its feline host and is released from the feline’s tail end. Cats are such obsessive groomers that it is rarely found in their fur. Instead people can become infected from kitty litter or by ingesting it in contaminated water or food.



Within a new host the parasite begins dividing asexually and spreading throughout the host’s body. During this initial stage of the infection, Toxoplasma can cause the disease toxoplasmosis in immunocompromised or otherwise susceptible hosts, leading to extensive tissue damage. Pregnant women are particularly at risk. If a woman is infected with Toxoplasma for the first time during pregnancy, the parasite may invade the developing fetus, cutting through tissues and organs as it spreads from cell to cell. Infection early in pregnancy can result in miscarriage or birth defects.

In otherwise healthy individuals, however, the only symptoms during this period are brief, flulike discomforts such as chills, fever and body ache. Within days the immune system gets the parasite under control, and Toxoplasma retreats into a dormant state. It conceals itself within a hardened wall in the host’s cells, a structure called a tissue cyst.

This stage of the infection has no other discernible symptoms, but individuals with dormant infections who develop compromised immune systems—because of AIDS, an organ transplant or chemotherapy—may experience severe complications. With the body’s defense systems weakened, Toxoplasma can reactivate and grow uncontrollably.

Once infected, a person will remain a carrier for life. Our immune system is apparently incapable of eliminating the tissue cysts, nor can any known drug. Nevertheless, the infection, detectable with a blood test, has long been viewed as relatively benign. After all, many people carry this parasite with no obvious ill effects. Only recently have scientists begun reexamining this belief.

Eat me, Mr. Kitty

In the 1980s researchers noticed unusual behaviors in Toxoplasma-infected mice. The rodents became hyperactive and groomed less. In 1994 epidemiologist Joanne Webster, then at the University of Oxford, observed that rats harboring tissue cysts behaved differently from their uninfected counterparts. Instead of fleeing from cats, the infected rodents moved toward them—making them easier prey.

Webster suspected that this “fatal feline attraction,” as she called it, was a crafty way for the parasite to get back into a cat’s belly to complete the sexual stage of its life cycle. In the years to follow, this idea gained ground: a large body of work now shows that the parasite can indeed manipulate rodents’ behavior by altering neural activity and gene expression.

Several well-controlled experiments have shown that although uninfected rodents avoid areas that have been infused with cat stench, infected rodents do not seem to mind. Even more bizarre, in 2011 neuroendocrinologist Robert Sapolsky of Stanford University, molecular biologist Ajai Vyas of Nanyang Technological University in Singapore and their colleagues found that—at least in terms of neural activity—infected rats appeared to be sexually attracted to cat scent.

In the mammalian brain, the “defensive” and “reproductive” neuronal pathways run in parallel. These pathways start at the olfactory bulb, involved in odor detection, and ter-minate at the limbic system, an area critical to basic reactions such as fear and arousal. Their proximity may partially explain how the parasite manipulates rodent behavior.

Working with 18 infected and 18 uninfected male rats, Sapolsky and his colleagues studied the rodents’ behavior when they were exposed to either the odor of female rats or cat urine. Then they sacrificed the animals and looked at their brains. The researchers found a slight enrichment of parasite cysts in the limbic system compared with other brain areas.

They also assessed which parts of the brain had been operating during exposure to odors by staining the cells with a solution that revealed c-Fos, a protein expressed when neurons are active. The Stanford researchers discovered that infected rodents had high levels of engagement in their brain’s reproductive pathway in response to the odor of both female rats and felines. In addition, the team found that infected rodents exposed to cat urine showed activation in the reproductive pathway similar to what uninfected rodents showed for the scent of a female rat. These results suggest that in infected rats, neural activity shifts from the defensive to the nearby reproductive pathway. Instead of smelling danger, the rats smell love.

Scientists are not sure how exactly the parasite elicits this fatal attraction, but one clue surfaced in 2014 in Vyas’s laboratory. Vyas and his colleagues showed that Toxoplasma increases its host’s levels of a neurotransmitter involved in social and sexual behavior. To accomplish this task, the parasite alters DNA methylation. Methylated genes are silent, blocked by a molecular cap. Toxoplasma uncaps a group of genes that spurs the creation of the sex-promoting neurotransmitter. Vyas and his team discovered this trick by performing the process in reverse: when they administered a chemical compound to the infected rats that silences the associated genes, the rats’ peculiar attraction to feline odor vanished.

Kiss and spit

With evidence mounting that Toxoplasma can influence its host’s brain, other scientists set out to understand the parasite’s effects at a much smaller scale: within each host cell. Their findings suggest that this microbe is particularly insidious—the changes it makes may be permanent.

To replicate, Toxoplasma must invade a cell. Stanford parasitologist John C. Boothroyd has dubbed this process “kiss and spit.” The parasite first attaches to the host cell (the kiss) and then releases an arsenal of foreign proteins into that cell (the spit). Toxoplasma then enters the host cell, and the injected proteins help it redecorate its new home.

The parasite’s first act is establishing a protective bubble in which it can divide in peace without attacks from host cell proteins. (Later, during the infection’s dormant stage, these bubbles thicken to become tissue cysts.) The parasite then moves the mitochondria, which serve as the cell’s powerhouses, to be adjacent to the protective bubble. It also acts on the cell’s DNA, inhibiting the expression of some host genes while activating others. Finally, Toxoplasma modifies host proteins to alter their function and inhibit the immune response.

Altogether, these modifications ensure that the host cell will live a long time and supply energy to the parasite, without alerting immune cells that a parasite has moved in. Although these findings have principally been made with rodents, work with human cell cultures suggests that the same changes probably take place in the human body. In our labs, we are studying how Toxoplasma replicates and interacts with its host in an effort to develop new drugs to treat this infection.

Remarkably, a study that Boothroyd’s group published in 2012 showed that Toxoplasma not only spits into the cells it invades but also spits into cells that it does not infect. This behavior—spitting proteins in passing without lingering in the cells—is a recent discovery in the microbial world. Consequently, cells that are not harboring Toxoplasma contain parasite proteins that can co-opt and reprogram that cell. In the brains of infected mice, cells that have been spat into but not invaded are even more common than ones containing parasites. This widespread scattering of proteins means Toxoplasma can affect its host at a global level, making it easier to imagine how the parasite might manipulate the activity of an entire animal.

In 2013 biologist Michael Eisen of the University of California, Berkeley, and his colleagues found that a rodent’s strange attraction to cat odors may be permanent, even if there are no longer signs of infection. In one study, Eisen exposed mice to a mutant strain of the parasite that does not appear to form brain cysts. Four months later the infected mice had no detectable parasites in the brain, yet they were still attracted to cat odors instead of repelled. This finding suggests that even if the parasite can be removed from the body, behavioral changes may persist. The infection leaves a mark, like a permanent parasite-given tattoo.

The human connection

The fact that people do not throw themselves into the lion cage at the zoo strongly argues that Toxoplasma does not affect humans in the way it transforms mice. Mammalian brains are not all the same, and Toxoplasma‘s tricks are most likely specially suited for rodents. The parasite has little to gain, in evolutionary terms, by adapting to control the human brain. We are, after all, a “dead-end” host—the parasites within us are unlikely to return to the cat gut for breeding. Nevertheless, these cysts lodged in our brains could be manipulating us in subtle, unexpected ways.

A large body of research, mostly conducted by parasitologist Jaroslav Flegr of Charles University in Prague, supports the idea that Toxoplasma harbors the potential to change human behavior. In a series of personality assessments spanning more than a decade and involving nearly 2,500 individuals, Flegr and his colleagues found that certain traits often coincide with a Toxoplasma infection. For example, infected men tend to be introverted, suspicious and rebellious, whereas infected women tend to be extraverted, trusting and obedient.

Using a simple reaction time test, Flegr has also found that infected individuals are slower to respond than uninfected peers. This lag may relate to another correlation he has identified. In a 2009 analysis of 3,890 military conscripts in the Czech Republic, those with latent toxoplasmosis who also had a negative blood type, meaning they lacked the protein RhD, were six times more likely to be in a fender bender than those who were Toxoplasma-free or who had a positive blood type. The function of RhD is unknown. Flegr’s results suggest RhD somehow protects people against Toxoplasma‘s effects, but how it does so remains a mystery.

More recently, Flegr and his colleagues found that some of the changes that occur in mice also exist in humans—albeit in a gender-specific manner. In 2011 the researchers asked 34 Toxoplasma-infected students and 134 noninfected students to rate the intensity and pleasantness of urine samples from different animals. Curiously, infected men found cat urine odor more pleasant than uninfected men; in women, the opposite occurred.

Another line of research has focused on a potential link between toxoplasmosis and schizophrenia. In 2001 psychiatrist E. Fuller Torrey of the Stanley Medical Research Institute and neurovirologist Robert Yolken of the Johns Hopkins University School of Medicine reported significantly more antibodies associated with Toxoplasma in patients experiencing their first schizophrenic episode as compared with healthy peers. Although this initial study was limited to only 38 people, additional studies in the ensuing years have largely supported this link.

Fascinating and attention-grabbing as these studies may be, they come with several caveats. The sample sizes are relatively small, meaning the findings are preliminary. They do not definitively demonstrate that Toxoplasma causes behavior changes in humans. In the case of schizophrenia, it is important to note that the condition is complex and may involve many triggers. The parasite may be one contributor, but it is also possible that people with schizophrenia may simply behave in ways that make them more likely to pick up an infection. No hard evidence has emerged to date that directly implicates the parasite as a cause for any psychosis, including schizophrenia.

Ultimately these provocative findings probably reflect a complex exchange among various factors. Certain genetic predispositions, for example, or even an interaction between Toxoplasma and another infectious agent could mean that some people are more susceptible to the parasite’s persuasion. Only larger studies from multiple research groups will determine precisely what this parasite may do to the people it infects.

An accidental meddler

As researchers continue to uncover the astonishing effects that Toxoplasma has kept secret for so long, many scientists are beginning to think that Toxoplasma‘s impressive cellular and molecular tricks make it capable of causing disruptions in a human host. At the very least, the findings from human surveys beg for further clarification.

If you are curious whether you carry the parasite, you can get a blood test. In the meantime, you can increase your odds of staying Toxoplasma-free by maintaining good hygiene for you and your feline friends. If cats wander through your yard, the Centers for Disease Control and Prevention recommends wearing gloves and a mask when gardening and keeping any sandboxes closed up when not in use. Other basic health tips—cleaning fruits and vegetables, thoroughly cooking meats and washing hands regularly—are also important for avoiding an infection.

The notion that Toxoplasma could radically reorient the brain and behavior is certainly disturbing. But perhaps these findings are a reminder of a more basic truth. Each person is actually a rich ecosystem. For every human cell in the body, there are 10 more bacterial cells that influence physiology, metabolism and health. The protozoan Toxoplasma is just another stowaway within the system and one that warrants further study. After all, we will never fully understand ourselves without learning about our microbial companions.

http://www.salon.com/2015/03/27/the_parasite_made_me_do_it_how_a_common_infection_could_manipulate_our_behavior_partner/?source=newsletter

 

US House passes sweeping new bipartisan assault on Medicare

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By Kate Randall
27 March 2015

In a 392-37 vote, the US House on Thursday approved a bill that makes sweeping changes to the Medicare program that provides health insurance to more than 54 million seniors and the disabled. The Medicare Access and CHIP Reauthorization Act must be approved by the US Senate and signed into law by President Obama, who indicated his support for the measure earlier this week.

The bipartisan bill, drafted by Republican House Speaker John Boehner and Democratic Leader Nancy Pelosi, ties future payments to doctors for Medicare services to “quality of care,” shifting away from traditional fee-for-service payments. And for the first time, the universal Medicare program will institute means testing for higher-income seniors, requiring higher premiums for these individuals to access benefits.

The bill constitutes a historic attack on the Medicare program. Boehner called it the “first real entitlement reform in nearly two decades”—a reference to the assault on welfare launched under the Clinton administration in 1996. “Today is about a problem much bigger than any doc-fix or deadline. It’s about solving our spending problem,” he said.

Pelosi echoed Boehner’s comments, declaring that it had been a “privilege” to work with the House leader, and that she hoped the agreement “will be a model of things to come.”

The coming together of the Republican and Democratic Party leadership behind the overhaul exposes the unanimity within the ruling class on the need for sharp cuts in “entitlement” programs—Medicare, Medicaid and Social Security.

It provides a permanent “fix” to a 1997 law that tied doctors’ Medicare fees to overall economic growth. As overall health care costs have risen sharply, that formula threatened deep reimbursement cuts to doctors, cuts that Congress has blocked with patchwork measures 17 times since 2002.

The House bill will do away with the scheduled payment cut, set to kick in April 1, and replace it with a 0.5 percent yearly raise in payments through 2019. After this, a new payment system based on “quality of care” will be implemented.

Such language has been adopted by Medicare in other frameworks, and is generally measured by readmission rates and similar statistics. In other words, doctors who see more of their patients readmitted will receive cuts in reimbursement. However, readmission is closely correlated with poverty and other social factors, thus cutting spending on health care in lower-income and working class areas.

By disconnecting reimbursements from services provided, doctors will also be incentivized to ration care and cut back on testing—the overarching aim of all the health care “reform” proposals backed by both Democrats and Republicans. The change will result in reduced services for Medicare patients overall and deep spending cuts by the government.

This shift has long been promoted in the private insurance sector. It is also a key goal of the Obama administration, which earlier this year set a goal to tie the vast majority of Medicare payments to programs promoting cost-cutting.

The second main feature of the bill would institute means testing for Medicare recipients, requiring higher-income seniors to pay more toward Medicare premiums for insurance and prescription drug coverage. Initial estimates are that this change would result in Medicare savings of around $30 billion over the next decade.

Congressional Republicans and Democrats alike are well aware that this fundamental change opens the floodgates for transforming a program that for the last half-century has provided health care insurance to those over the age of 65, regardless of income, into a poverty program available to only those poorest segments of society. This is seen as a first step in it being starved of funds and ultimately dismantled.

Boehner, salivating at these prospects, commented, “We know we’ve got more serious entitlement reform that’s needed. It shouldn’t take another two decades to do it.” He indicated that the Republicans would continue to push for funding cuts to other federal benefit programs.

Some Congressional Republicans balked at the overall cost of the measure, which the Congressional Budget Office estimates at $214 billion over the next decade. This would be paid for through $141 billion in new spending, with the balance divided between higher monthly premiums for higher-income Medicare recipients and payments by nursing homes and other health care providers.

Boehner and the Republicans see the implementation of means testing—and the subsequent savings for government—as a starting point for future overhauls to Medicare and other federal programs. This particularly applies to Social Security, the universal retirement program enacted in 1935 in the wake of the Great Depression.

Both Medicare and Social Security are not “gifts” by the government, but benefits based on the funds workers pay into these programs for their entire working lives through deductions from their paychecks.

As window dressing, the bill also provides two more years of funding to the Children’s Health Insurance Program (CHIP), which serves 8 million low-income children, as well as to the nation’s 1,200 community health centers. While Pelosi and the White House had pushed for four-year extensions for both of these programs, the majority of Congressional Democrats willingly compromised on this issue in order to push through the changes to Medicare.

The bill also includes abortion funding restrictions at community health centers, incorporating components of the so-called Hyde Amendment, which forbids federal funding of abortion except in the cases of rape, incest, or the endangered life of the mother.

Leaders of the House “pro-choice” caucus assured skeptical Senate Democrats that the bill’s language provides no additional abortion restrictions beyond those that already apply. In fact, the Obama administration acceded to these reactionary and unconstitutional restrictions in language in the Affordable Care Act (ACA).

Speaking Wednesday on the occasion of the fifth anniversary of his signing into law of what is popularly known as Obamacare, the president indicated his support for the new bipartisan Medicare bill. “I’ve got my pen ready to sign a good bipartisan bill,” he said.

The coinciding of the ACA’s anniversary and the current bipartisan bill is noteworthy. From the start, Obama’s health care overhaul has been aimed at a fundamental restructuring of the health care system, aimed at lowering costs for the government and corporations while slashing health care services for the vast majority of Americans.

Taking its cue from Obamacare, the change in Medicare represented by Pelosi and Boehner’s bill will set an example that can rapidly be extended throughout the health care system. Despite many Congressional Republicans’ vocal opposition to the ACA and vows to see it repealed, they are in agreement with its aim of rationing care and funneling more money to the health care industry.

Although the bill faces some opposition in the Senate, it is expected to pass, either before Congress leaves for spring recess today or on its return in two weeks. If it does not pass before the recess, Congress will likely pass a temporary fix to the Medicare payments to doctors.

 

http://www.wsws.org/en/articles/2015/03/27/medi-m27.html