Good-Bye: Truth Has Fallen and Taken Liberty With It

Paul Craig Roberts
Infowars.com
March 24, 2010

Paul Craig Roberts posted this article at infowars.com and told them that this would be his last. To a journalist who wouldn't sell out when so many others did.  Good-Bye to you sir, and God Bless.

There was a time when the pen was mightier than the sword. That was a time when people believed in truth and regarded truth as an independent power and not as an auxiliary for government, class, race, ideological, personal, or financial interest.

	As the pen is censored and its might extinguished, I am signing off.

Today Americans are ruled by propaganda. Americans have little regard for truth, little access to it, and little ability to recognize it.

Truth is an unwelcome entity. It is disturbing. It is off limits. Those who speak it run the risk of being branded “anti-American,” “anti-semite” or “conspiracy theorist.”

Truth is an inconvenience for government and for the interest groups whose campaign contributions control government.

Truth is an inconvenience for prosecutors who want convictions, not the discovery of innocence or guilt.

Truth is inconvenient for ideologues.

Today many whose goal once was the discovery of truth are now paid handsomely to hide it. “Free market economists” are paid to sell offshoring to the American people. High-productivity, high value-added American jobs are denigrated as dirty, old industrial jobs. Relicts from long ago, we are best shed of them. Their place has been taken by “the New Economy,” a mythical economy that allegedly consists of high-tech white collar jobs in which Americans innovate and finance activities that occur offshore. All Americans need in order to participate in this “new economy” are finance degrees from Ivy League universities, and then they will work on Wall Street at million dollar jobs.

Economists who were once respectable took money to contribute to this myth of “the New Economy.”

And not only economists sell their souls for filthy lucre. Recently we have had reports of medical doctors who, for money, have published in peer-reviewed journals concocted “studies” that hype this or that new medicine produced by pharmaceutical companies that paid for the “studies.”

The Council of Europe is investigating the drug companies’ role in hyping a false swine flu pandemic in order to gain billions of dollars in sales of the vaccine.

The media helped the US military hype its recent Marja offensive in Afghanistan, describing Marja as a city of 80,000 under Taliban control. It turns out that Marja is not urban but a collection of village farms.

And there is the global warming scandal, in which NGOs. the UN, and the nuclear industry colluded in concocting a doomsday scenario in order to create profit in pollution.

Wherever one looks, truth has fallen to money.

Wherever money is insufficient to bury the truth, ignorance, propaganda, and short memories finish the job.

I remember when, following CIA director William Colby’s testimony before the Church Committee in the mid-1970s, presidents Gerald Ford and Ronald Reagan issued executive orders preventing the CIA and U.S. black-op groups from assassinating foreign leaders. In 2010 the US Congress was told by Dennis Blair, head of national intelligence, that the US now assassinates its own citizens in addition to foreign leaders.

As an economist, I am astonished that the American economics profession has no awareness whatsoever that the U.S. economy has been destroyed by the offshoring of U.S. GDP to overseas countries. U.S. corporations, in pursuit of absolute advantage or lowest labor costs and maximum CEO “performance bonuses,” have moved the production of goods and services marketed to Americans to China, India, and elsewhere abroad. When I read economists describe offshoring as free trade based on comparative advantage, I realize that there is no intelligence or integrity in the American economics profession.When Blair told the House Intelligence Committee that US citizens no longer needed to be arrested, charged, tried, and convicted of a capital crime, just murdered on suspicion alone of being a “threat,” he wasn’t impeached. No investigation pursued. Nothing happened. There was no Church Committee. In the mid-1970s the CIA got into trouble for plots to kill Castro. Today it is American citizens who are on the hit list. Whatever objections there might be don’t carry any weight. No one in government is in any trouble over the assassination of U.S. citizens by the U.S. government.

Intelligence and integrity have been purchased by money. The transnational or global U.S. corporations pay multi-million dollar compensation packages to top managers, who achieve these “performance awards” by replacing U.S. labor with foreign labor. While Washington worries about “the Muslim threat,” Wall Street, U.S. corporations and “free market” shills destroy the U.S. economy and the prospects of tens of millions of Americans.

Americans, or most of them, have proved to be putty in the hands of the police state.

Americans have bought into the government’s claim that security requires the suspension of civil liberties and accountable government. Astonishingly, Americans, or most of them, believe that civil liberties, such as habeas corpus and due process, protect “terrorists,” and not themselves. Many also believe that the Constitution is a tired old document that prevents government from exercising the kind of police state powers necessary to keep Americans safe and free.

Most Americans are unlikely to hear from anyone who would tell them any different.

I was associate editor and columnist for the Wall Street Journal. I was Business Week’s first outside columnist, a position I held for 15 years. I was columnist for a decade for Scripps Howard News Service, carried in 300 newspapers. I was a columnist for the Washington Times and for newspapers in France and Italy and for a magazine in Germany. I was a contributor to the New York Times and a regular feature in the Los Angeles Times. Today I cannot publish in, or appear on, the American “mainstream media.”

For the last six years I have been banned from the “mainstream media.” My last column in the New York Times appeared in January, 2004, coauthored with Democratic U.S. Senator Charles Schumer representing New York. We addressed the offshoring of U.S. jobs. Our op-ed article produced a conference at the Brookings Institution in Washington, D.C. and live coverage by C-Span. A debate was launched. No such thing could happen today.

For years I was a mainstay at the Washington Times, producing credibility for the Moony newspaper as a Business Week columnist, former Wall Street Journal editor, and former Assistant Secretary of the U.S. Treasury. But when I began criticizing Bush’s wars of aggression, the order came down to Mary Lou Forbes to cancel my column.

The American corporate media does not serve the truth. It serves the government and the interest groups that empower the government.

America’s fate was sealed when the public and the anti-war movement bought the government’s 9/11 conspiracy theory. The government’s account of 9/11 is contradicted by much evidence. Nevertheless, this defining event of our time, which has launched the US on interminable wars of aggression and a domestic police state, is a taboo topic for investigation in the media. It is pointless to complain of war and a police state when one accepts the premise upon which they are based.

These trillion dollar wars have created financing problems for Washington’s deficits and threaten the U.S. dollar’s role as world reserve currency. The wars and the pressure that the budget deficits put on the dollar’s value have put Social Security and Medicare on the chopping block. Former Goldman Sachs chairman and U.S. Treasury Secretary Hank Paulson is after these protections for the elderly. Fed chairman Bernanke is also after them. The Republicans are after them as well. These protections are called “entitlements” as if they are some sort of welfare that people have not paid for in payroll taxes all their working lives.

With over 21 per cent unemployment as measured by the methodology of 1980, with American jobs, GDP, and technology having been given to China and India, with war being Washington’s greatest commitment, with the dollar over-burdened with debt, with civil liberty sacrificed to the “war on terror,” the liberty and prosperity of the American people have been thrown into the trash bin of history.

The militarism of the U.S. and Israeli states, and Wall Street and corporate greed, will now run their course. As the pen is censored and its might extinguished, I am signing off.

Who's James Green, and Why Should We All Be Pulling For Him?

James Green is one of two candidates for the 134th District in The Missouri House of Representatives.  He loves the 4th of July for what it stands for and for the fireworks.  He loves his son and being a dad.  He can't wait every summer for small town events like The Old Fashion Days in his hometown of Summersville or Pumpkin Daze in his current town of Republic.  He even liked the idea of buying a home in Republic because of the name of the town, and I didn't ask in our last interview but I'm guessing he puts his pants on one leg at a time too. I know, the last line was cheesy but hey, it was all too fitting.  The point that I'm trying to make is this; James Green is just like you and me.  From loving this country and state, to loving the things to do in it, and if he loses this election he will continue to work for "The Man" and do everything I listed above.  Actually, I’m pretty convinced at this point, that if he wins, he's still going to do all these things I listed because that's just who he is.  He isn't the guy who only comes around for a contribution, and he is sure not what we would call a "Politician." So if he’s not a politician type, then why would he be putting himself though the time consuming work involved in any campaign for office? It's not like our State Representatives make a ton of cash and up to this point hasn't raised much money.  He's true grassroots, believing that you shouldn't have to take ridiculous amounts of money to earn the trust of the people of Missouri.  "Sure, there is cost involved in running a campaign" says Green, "but it shouldn't take as much money as people spend trying to get elected.  I hope that my message can catch on and spread by word of mouth not only to voters but to other candidates, that the people of Missouri, and the rest of America, deserve better, and better doesn't always mean more money."  With social networking, Blogs like this one, You Tube, and message boards, we could see that start to become a reality.

 "America as a whole wanted change two years ago in the election, we got change but it wasn't the change we needed.  The States have got to remind the Federal Government, that according to the 10th Amendment of the Constitution, we hold all rights not delegated to the Federal Government in the Constitution, the States created the Federal Government, and we will not be bullied."  Green goes on to say, "I want to see true transparency in our Government at all levels period.  The American people deserve to know what is going on and we shouldn't need special decoder rings to understand any Bill or Law.  The 2,700 page Healthcare Bill was passed in the House on Sunday night and not one person I know saw it until Saturday.  How can anyone not see how unfair that is to the people who elected these officials?" I think he hits it on the head without even going into the specifics of the new Healthcare/tax-you-over-&-over-&-over-again Bill.  Needless to say, I was fired up, just like we all should be after talking with our new freedom-loving candidate.  

It’s now for us all to decide, do we want more of what we are getting? Or should we start sending new people, and new perspectives into our Federal and State offices?  Its time we all wake up and pay attention to what's going on.  We must take off our party blinders and start looking at the people who are running not just the 'R' or 'D' next to their names.  Not all conservatives are conservative, so watch out this fall.  We may find this out the hard way if we don't pay attention this time around.

Here is James Greens Bio:

James Glenn Green was born on 7/10/1979 in Mtn. View, Missouri.  He is a life long Missouri resident who was raised in his hometown of Summersville by his mother and father, Diann and Glenn Green.  His father, Glenn, who has been a huge influence on James’ life, has been the Pastor at the Arroll Community Church for over 30 years and served 3 terms on his local school board. His mother Diann is a cancer survivor and a huge source of strength in his life.  He has a 4-year-old son, Tyler James Green, who is truly the light in his life.

James is running for the 134^th seat in the Missouri House of Representatives.  Jim Viebrock, who is running for county commissioner, vacated this seat due to term limits.  James is a freedom-loving candidate who stands firmly on Family, Faith, and The Constitution.  James is pro-gun, pro-life, and a supporter of small businesses. He understands that Missouri small businesses create jobs, not out of touch bureaucrats in Washington D.C. As a proud supporter of the Tea Party Movement, he promises to hold the line when it comes to government waste and spending, which is out of control.

Before running for state office, James graduated from Summersville RII High School and then attended Ozark Christian College in Joplin and studied Biblical Literature.  He has worked in management for several years and has displayed leadership in all walks of life.  He is currently the Assistant General Manager at Sunshine Lanes Bowling Center and served as President of the Springfield High School Bowling Program from 2008 to 2009. 

James has dedicated his life to fighting for individual rights and a transparent constitutional government. 

Please Visit The Following:

www.electjamesgreen.com

www.youtube.com/electjamesgreen

www.facebook.com/electjamesgreen

www.twitter.com/electjamesgreen.com

You can contact The Committee to Elect James Green at:

James@ElectJamesGreen.com

Or make a Contribution on the top left hand side of this page.

20 Ways ObamaCare Will Take Away Our Freedoms

FireAndreaMitchell.com
March 23, 2010

With ObamaCARE now passed, containing the Cornhusker Kickback, Gator-Aid, the Lousiana Purchase, and other shady deals, Investors Business Daily gives up 20 ways that ObamaCARE will take away our freedoms. IBD’s sections described below are taken from HR 3590 as agreed to by the Senate and from the reconciliation bill which takes out the Cornhusker Kickback and Gator-Aid as displayed by the Rules Committee.

	An autographed copy of the bill after the House passed Obamacare in Washington, Sunday, March 21, 2010.

1. You are young and don’t want health insurance? You are starting up a small business and need to minimize expenses, and one way to do that is to forego health insurance? Tough. You have to pay $750 annually for the “privilege.” (Section 1501)

2. You are young and healthy and want to pay for insurance that reflects that status? Tough. You’ll have to pay for premiums that cover not only you, but also the guy who smokes three packs a day, drink a gallon of whiskey and eats chicken fat off the floor. That’s because insurance companies will no longer be able to underwrite on the basis of a person’s health status. (Section 2701).

3. You would like to pay less in premiums by buying insurance with lifetime or annual limits on coverage? Tough. Health insurers will no longer be able to offer such policies, even if that is what customers prefer. (Section 2711).

4. Think you’d like a policy that is cheaper because it doesn’t cover preventive care or requires cost-sharing for such care? Tough. Health insurers will no longer be able to offer policies that do not cover preventive services or offer them with cost-sharing, even if that’s what the customer wants. (Section 2712).

5. You are an employer and you would like to offer coverage that doesn’t allow your employers’ slacker children to stay on the policy until age 26? Tough. (Section 2714).

6. You must buy a policy that covers ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services; chronic disease management; and pediatric services, including oral and vision care.

You’re a single guy without children? Tough, your policy must cover pediatric services. You’re a woman who can’t have children? Tough, your policy must cover maternity services. You’re a teetotaler? Tough, your policy must cover substance abuse treatment. (Add your own violation of personal freedom here.) (Section 1302).

7. Do you want a plan with lots of cost-sharing and low premiums? Well, the best you can do is a “Bronze plan,” which has benefits that provide benefits that are actuarially equivalent to 60% of the full actuarial value of the benefits provided under the plan. Anything lower than that, tough. (Section 1302 (d) (1) (A))

8. You are an employer in the small-group insurance market and you’d like to offer policies with deductibles higher than $2,000 for individuals and $4,000 for families? Tough. (Section 1302 (c) (2) (A).

9. If you are a large employer (defined as at least 101 employees) and you do not want to provide health insurance to your employee, then you will pay a $750 fine per employee (It could be $2,000 to $3,000 under the reconciliation changes). Think you know how to better spend that money? Tough. (Section 1513).

10. You are an employer who offers health flexible spending arrangements and your employees want to deduct more than $2,500 from their salaries for it? Sorry, can’t do that. (Section 9005 (i)).

11. If you are a physician and you don’t want the government looking over your shoulder? Tough. The Secretary of Health and Human Services is authorized to use your claims data to issue you reports that measure the resources you use, provide information on the quality of care you provide, and compare the resources you use to those used by other physicians. Of course, this will all be just for informational purposes. It’s not like the government will ever use it to intervene in your practice and patients’ care. Of course not. (Section 3003 (i))

12. If you are a physician and you want to own your own hospital, you must be an owner and have a “Medicare provider agreement” by Feb. 1, 2010. (Dec. 31, 2010 in the reconciliation changes.) If you didn’t have those by then, you are out of luck. (Section 6001 (i) (1) (A))

13. If you are a physician owner and you want to expand your hospital? Well, you can’t (Section 6001 (i) (1) (B). Unless, it is located in a country where, over the last five years, population growth has been 150% of what it has been in the state (Section 6601 (i) (3) ( E)). And then you cannot increase your capacity by more than 200% (Section 6001 (i) (3) (C)).

14. You are a health insurer and you want to raise premiums to meet costs? Well, if that increase is deemed “unreasonable” by the Secretary of Health and Human Services it will be subject to review and can be denied. (Section 1003)

15. The government will extract a fee of $2.3 billion annually from the pharmaceutical industry. If you are a pharmaceutical company what you will pay depends on the ratio of the number of brand-name drugs you sell to the total number of brand-name drugs sold in the U.S. So, if you sell 10% of the brand-name drugs in the U.S., what you pay will be 10% multiplied by $2.3 billion, or $230,000,000. (Under reconciliation, it starts at $2.55 billion, jumps to $3 billion in 2012, then to $3.5 billion in 2017 and $4.2 billion in 2018, before settling at $2.8 billion in 2019 (Section 1404)). Think you, as a pharmaceutical executive, know how to better use that money, say for research and development? Tough. (Section 9008 (b)).

16. The government will extract a fee of $2 billion annually from medical device makers. If you are a medical device maker what you will pay depends on your share of medical device sales in the U.S. So, if you sell 10% of the medical devices in the U.S., what you pay will be 10% multiplied by $2 billion, or $200,000,000. Think you, as a medical device maker, know how to better use that money, say for R&D? Tough. (Section 9009 (b)).

The reconciliation package turns that into a 2.9% excise tax for medical device makers. Think you, as a medical device maker, know how to better use that money, say for research and development? Tough. (Section 1405).

17. The government will extract a fee of $6.7 billion annually from insurance companies. If you are an insurer, what you will pay depends on your share of net premiums plus 200% of your administrative costs. So, if your net premiums and administrative costs are equal to 10% of the total, you will pay 10% of $6.7 billion, or $670,000,000. In the reconciliation bill, the fee will start at $8 billion in 2014, $11.3 billion in 2015, $1.9 billion in 2017, and $14.3 billion in 2018 (Section 1406).Think you, as an insurance executive, know how to better spend that money? Tough.(Section 9010 (b) (1) (A and B).)

18. If an insurance company board or its stockholders think the CEO is worth more than $500,000 in deferred compensation? Tough.(Section 9014).

19. You will have to pay an additional 0.5% payroll tax on any dollar you make over $250,000 if you file a joint return and $200,000 if you file an individual return. What? You think you know how to spend the money you earned better than the government? Tough. (Section 9015).

That amount will rise to a 3.8% tax if reconciliation passes. It will also apply to investment income, estates, and trusts. You think you know how to spend the money you earned better than the government? Like you need to ask. (Section 1402).

20. If you go for cosmetic surgery, you will pay an additional 5% tax on the cost of the procedure. Think you know how to spend that money you earned better than the government? Tough. (Section 9017).

Obamacare: Taxing The American People Into Oblivion

Steve Watson and Paul Watson
Prisonplanet.com
Tuesday, March 23rd, 2010

H.R. 3590, The Patient Protection and Affordable Care Act, to give it its full title, is rammed full of tax increases which will further economically cripple Americans already laboring under the worst financial crisis since the great depression.

The partnering Reconciliation Act, currently in the Senate, also contains a raft of pork barrel and tax hikes, there to fund the trillion dollar cost of nationalizing medicine.

As reported by Bloomberg News today, analysis by the nonpartisan congressional Joint Committee on Taxation reveals that the bill will generate $409.2 billion in additional taxes by 2019.

In addition, the Congressional Budget Office states that the bill also levies almost $69 billion more in penalties for those who fail to meet mandates to buy insurance.

The Journal of Accountancy boils down some of the tax hikes and penalty fees in H.R. 3590 and the Reconciliation Act – the highlights include:

Excise Tax on Uninsured Individuals – Individuals who fail to maintain minimum essential coverage will be subject to a penalty equal to $750. The fee for an uninsured individual under age 18 is one-half of the adult fee.

Excise Tax on High-Cost Employer Plans – The federal government would impose a 40% tax on the value of employer-sponsored health coverage exceeding certain thresholds. Those levels are projected to be $8,500 for self only and $23,000 for any other level by the year 2013. This excise was announced with fanfare by the White House and labor unions in January and remains in the final bill.

Increase in additional tax on distributions from Health Savings Accounts and Archer Medical Savings Accounts not used for qualified medical expenses – An increase from 10% to 20% on taxes of money in a health savings account not used for qualified medical expenses. For Archer medical savings accounts, an increase from 15% to 20%.

Additional Hospital Insurance Tax on High-Income Taxpayers – High income tax payers, making on a joint return over $250,000 and a standard return over $200,000, are required to pay an additional 0.5% of wages. This applies to both self-employed, and regularly employed individuals.

Fees on Health Plans – A fee applied to all health insurance providers based upon net premiums and any third party fees associated with the administration of those programs. The fees will total $6.7 billion annually. This figure begins at $8 billion in the Reconciliation Act and rises to $14.3 billion by 2018.

Tax on Indoor Tanning Services – The act imposes a 10% tax on amounts paid for indoor tanning services. Like a sales tax, the tax will be collected from the person tanning when payment for the tanning services is made.

Business Insider boils down 15 more tax hikes here – highlights include:

Tax on individuals without acceptable health care coverage – A 2.5% income tax on individuals who do not have health care coverage, limited to a cost less than the average national health care premium.

Excise tax on elective cosmetic medical procedures – A tax of 5% is levied upon the am mount paid for any cosmetic surgery. This does not include the need for such surgeries created by trauma or a disfiguring disease. If the tax is not collected by that professional completing the procedure, their business is still liable for the requirement.

The Reconciliation Act also legislates for the following surcharges: 1% surcharge on individuals making more than $350,000, 1.5% surcharge on individuals making more than $500,000, 5.4% surcharge on individuals making more than $1 million.

Yet more tax provisions in the bill are highlighted by INvestors Business Daily in their piece titled 20 Ways ObamaCare Will Take Away Our Freedoms – highlights include:

Taxes On Employers – If you are a large employer (defined as at least 101 employees) and you do not want to provide health insurance to your employee, then you will pay a $750 fine per employee (It could be $2,000 to $3,000 under the reconciliation changes) (Section 1513).

Taxes on Pharmaceutical Companies – The government will extract a fee of $2.3 billion annually from the pharmaceutical industry (Section 9008 (b)).

Taxes on medical device manufacturers – The government will extract a fee of $2 billion annually from medical device makers (Section 1405).

• 
  
  

As a candidate and President, Barack Obama has had one core message for middle class Americans: I won’t raise your taxes.

By putting his name to the health care reform bill today he has swiftly put to bed any pretence that he would uphold that pledge (multi-trillion dollar bailouts aside).

While the new taxes on individuals are bad enough, the penalties imposed on pharmaceutical corporations, health insurers and employers are will inevitably serve as a double whammy as the hikes will undoubtedly be passed on to the general public in the form of higher costs.

“Simply, you have nationalized healthcare by proxy.” writes Jonah Goldberg of the LA Times.

“Insurance companies are now heavily regulated government contractors. Way to get big business out of Washington! They will clear a small, government-approved profit on top of their government-approved fees. Then, when healthcare costs rise — and they will — Democrats will insist, yet again, that the profit motive is to blame and out from this Obamacare Trojan horse will pour another army of liberals demanding a more honest version of single-payer.”

“The Obama administration has turned the insurance industry into the Blackwater of socialized medicine.” Goldberg concludes.

A swift dose of propaganda is sure to silence some critics. However, if the softly softly approach fails, the myriad of new taxes and regulations contained in the Obamacare bill will be aggressively enforced by no less than 16,500 new “combat trained” IRS agents armed to the teeth with shotguns, who will also closely scrutinize Americans’ income tax returns and be waiting to pounce should they find evidence of anyone trying to avoid paying for mandatory government health care.

Even if you agree with socialized health care in principle, the fact is that this will only benefit the insurance companies who wrote it. Meanwhile millions of Americans will be subjected to more taxation, harassment, and oppression at the hands of a federal government run amok. An out of control leviathan, hell-bent on an agenda to control every aspect of your life, as they lay in wait to exploit the momentum achieved through the passage of Obamacare by ramming through nightmare cap and tax levies to further financially castrate already beleaguered Americans.

Find out who your enemies are and why Obamacare is merely the next step in the new world order agenda to regulate every aspect of your existence.

Obamacare Taxes Begin Immediately

Shannon Pettypiece and Alex Nussbaum
Bloomberg
March 24, 2010

Insurers will be required by September to begin providing health coverage to kids with pre-existing illnesses and allow parents to keep children younger than 26 on their plans as the clock has begun ticking on many of the law’s provisions. Medicare recipients will receive a $250 rebate for prescription drugs when they reach a coverage gap called the donut hole if the Senate passes and the president signs companion legislation approved March 21 by the U.S. House.Indoor tanning salons will charge customers a 10 percent tax beginning today in just one of the changes Americans will see as a result of the U.S. health-care overhaul signed into law by President Barack Obama.

The $940 billion overhaul subsidizes coverage for uninsured Americans, financed by Medicare cuts to hospitals and fees or taxes on insurers, drugmakers, medical-device companies and Americans earning more than $200,000 a year. Many of the changes in the bill of more than 2,400 pages, such as requiring most people to have health insurance and employers to provide coverage, will take at least two years to go into effect.

Read entire article

States Sue Over Overhaul That Will Bust State Budgets

Bloomberg.com

By Pat Wechsler

March 23 (Bloomberg) -- President Barack Obama faces a fight over the health-care overhaul from states that sued today because the legislation’s expansion of Medicaid imposes a fiscal strain on their cash-strapped budgets.

Florida, Texas and Pennsylvania are among 14 states that filed suit after the president signed the bill over the constitutionality of the burden imposed by the legislation. The health-care overhaul will make as many as 15 million more Americans eligible for Medicaid nationwide starting in 2014 and will cost the states billions to administer.

States faced with unprecedented declines in tax collections are cutting benefits and payments to hospitals and doctors in Medicaid, the health program for the poor paid jointly by state and U.S. governments. The costs to hire staff and plan for the average 25 percent increase in Medicaid rolls may swamp budgets, said Toby Douglas, who manages the Medicaid program for California, which hasn’t joined the lawsuits.

“The states are coming through the worst fiscal period in the history of record keeping,” said Vernon Smith, a former Medicaid director for Michigan and now a principal at the research and consulting firm Health Management Associates in Lansing, Michigan. “Medicaid is the most significant, most visible and most costly part of this expansion and states fully expect to see increases in their spending.”

California’s Deficit

For California, with a $20 billion budget deficit, the extra load will cost at least an additional $2 billion to $3 billion annually, said Douglas, chief deputy director for California’s health care programs. He said the overhaul is currently projected to add 1.6 million people to the 7 million enrolled in his state’s program.

“We face enormous challenges just sustaining our existing program,” said Douglas in a March 18 telephone interview. “I just don’t see states having the capacity to move forward on these changes in this environment.”

The numbers of new enrollees because of the overhaul are based on current estimates and may be low, he said in an e-mail. The estimate doesn’t incorporate the growth that the program, known in California as Medi-Cal, may experience even without the new federal legislation, he said.

Medi-Cal recipients are projected to increase 4.3 percent to 7.3 million in fiscal 2011, which begins July 1, spokesman Norman Williams said.

Court Challenge

Douglas’s state is battling in court over Medicaid spending cuts it tried to make this fiscal year. The Ninth U.S. Circuit Court of Appeals on March 3 barred California from reducing payments to doctors and hospitals, saying federal law required states to maintain “equal access to basic health care” for the poor. California is appealing the decision to the U.S. Supreme Court.

The federal government mandates that states provide health coverage under Medicaid to children, pregnant women, and the elderly and disabled poor. States set the rules on eligibility and decide which benefits to provide, making for a complex hodge-podge of coverage standards across the nation. The health- care overhaul simplifies the system by setting a minimum national floor and requires that all states cover childless adults, who will make up almost all of the expansion enrollees.

Medicaid Spending

Medicaid spent more than $344 billion in 2008, about 15 percent of total national health-care expenditures that year, according to the Centers for Medicare & Medicaid Services, which administers the program. It currently covers 60 million, about the same as Medicare, the federal program for the elderly and disabled, according to the Kaiser Family Foundation in Menlo Park, California. The U.S. government covered about 57 percent of Medicaid’s cost in 2008, the foundation said.

Florida will have to spend an additional $1.6 billion for Medicaid and hire 1,000 new workers to accommodate the overhaul, the state’s Attorney General Bill McCollum said yesterday in Orlando, Florida.

“This is a bad bill,” he said. “That’s a political determination and a practical one.”

The states that sued are Alabama, Colorado, Florida, Idaho, Louisiana, Michigan, Nebraska, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Virginia and Washington, McCollum said in a statement on his office’s Web site.

The complaint posted on the Florida attorney general’s Web site called the legislation an “encroachment on the sovereignty of states,” and said Florida will be asked to “broaden its Medicaid eligibility standards to accommodate upwards of 50 percent more enrollees.”

Insurance Mandate

Besides the added Medicaid costs, the states are also challenging the right of the federal government to impose a mandate requiring individuals to buy health insurance. Virginia Attorney General Ken Cuccinelli, whose state filed a separate lawsuit today challenging the law, called the health legislation an “unconstitutional overreach” of the federal government’s authority.

Nancy-Ann DeParle, director of the White House Office of Health Reform, said the president isn’t “concerned” about the potential legal challenges. Congress has the “inherent authority” to mandate coverage under the commerce clause that allows the federal government to regulate interstate commerce, she told Bloomberg Television yesterday.

The historic health-care bill, which the House passed March 21 after 13 months of debate and discord, marks the biggest expansion of health coverage since enactment of Medicaid and Medicare in 1965. Obama signed it into law today.

Legislation Amendments

The House on March 21 also passed legislation amending the overhaul, expanding the number of those who will be covered by insurance and raising the total cost to $940 billion. The Senate is scheduled to take up these amendments this week. The package of bills would increase the number of Americans insured by 32 million, raising the portion of people under the age of 64 with insurance to about 94 percent.

The bills raise the threshold for people to qualify for Medicaid to 133 percent of the federal poverty level, which was $22,050 for a family of four and $10,830 for an individual for the 48 contiguous states in 2009, according to guidelines set by the Department of Health and Human Services.

The biggest challenge states face is dealing with a program where the growth in annual spending regularly exceeds the growth in state revenue, said Smith of Health Management Associates.

“It has been a very, very difficult period for the states,” Smith said. “They had to cut spending at a time when significantly more people needed it.”

Falling State Revenue

Most states have confronted drops in revenue since the beginning of the recession in late 2007 as tax collections fell for an unprecedented fifth straight quarter by the end of December last year, according to the Nelson A. Rockefeller Institute of Government in Albany, New York. In the first nine months of 2009, states suffered the biggest decline in revenue ever recorded.

In fiscal 2009, Medicaid enrollment increased a record 3.29 million nationally, with another rise of 1.29 million the year before, based on reports compiled for the Kaiser foundation.

Medicaid spending accounts for about 22 percent of state spending, according to the National Governors Association, which said it doesn’t expect revenue to return to pre-recession levels until at least 2014. Budget directors estimate the fiscal 2011 budget gap could expand to $102 billion and may even reach $180 billion, the Kaiser study said. States by law, unlike Washington, must balance their budgets.

“In the past, Medicaid was only as strong as its weakest link,” said Stephen Somers, president of the health-policy nonprofit Center for Health Care Strategies Inc. in Hamilton, New Jersey. “ Now, there is the first universal floor and it will form the foundation for universal coverage.”

To contact the reporter on this story: Pat Wechsler in New York atpwechsler@bloomberg.net