New York Now; Caption Master #10

One of the things you have to understand about poverty in America in god forbid 2009 is that it doesn't look like the Great Depression. Coming up PBS is David Brancaccio speaks with us about the possibility of a modern depression and a primmer that could be titled how not to fritter away stimulus money on the legislative equivalent of drinking and womanizing. This is New York now. Funding for New York now is provided by the New York State Health Insurance Program offering New York State Public employers and employees the employer plan a plan as great as the Empire State United University professions represents thirty three thousand academic and professional faculty and all

state operated campuses of the State University of New York. You Pete is the union that makes you anywhere. More and more New Yorkers are enjoying next generation technology thanks to horizon and ongoing investment. And it's all fiber network horizon files for voice Internet and video services. Additional funding provided by w an 80 or so board for New York nows website comes from Philips Lytle did says York now with your host should you know are better. Hello everyone the budget is due in three weeks on one hand the governor is calling for cuts in spending and tax hikes on the other hand lawmakers are being distracted by calls for an MTA bailout. And the siren like temptation of twenty six

billion dollars in stimulus money but citizens groups were focused and the Capitol was buzzing this week with talk of reform. I'm going to introduce to a thousand doctors from all over New York rallied at the Capitol Tuesday to demand legislative reforms that will protect their communities access to health care. The physicians focused on the need for liability reform and budget items that affect patient access to care and in particular managed care reform. We're here to let the legislature know and the governor know that we're asking them to fulfill the promise they made last year to reform the system and make it more affordable and on the second side we're here to make the point that Attorney General Cuomo made so well in his series of agreements within Gen-X about the health insurance industry abuse of consumers. And that is in order to protect our patients from what is essentially five major companies in this state and physicians need to have the power to

negotiate collectively so that we can fairly advocate for our patients. Governor Paterson and Senate Majority Leader Malcolm Smith were among those who addressed the Medical Society of the state of New York earlier in the day. In other news state controller Tom DiNapoli announced that the State Department of Health made twenty eight point four million dollars in Medicaid payments to people who are enrolled in New York as well as another state's Medicaid program DiNapoli says paid around fourteen point one million dollars in Medicaid managed care premiums and about fourteen point three million dollars in fee for service payments. Almost 20000 people were still unrolled in New York state's Medicaid program after moving to Florida Puerto Rico and North Carolina. The states that should have been covering those costs. Our point is you should more quickly when you get this information from the federal government. Identify those who are doing Rowley's investigate where they should be placed in New York or in another state so that they're not accessing the system in New York if they shouldn't be so we see the fee for service side an opportunity to

prevent future loss of taxpayer dollars. We see on the Medicaid managed care side an opportunity to document cases where we double paid for people who are now residing out of state and we should be able to recover that money for the Medicaid managed care programs. The audit found that New York City accounted for 23 and a half of the twenty eight million dollars paid on behalf of enrollees DiNapoli said it was impossible to tell how much of that figure stemmed from fraud. New York has the largest Medicaid program in the nation. And finally for those of you in the throes of political withdrawal there is still one congressional race going on and it's in eastern New York assembly minority leader Jim to desk go at his opponent Democrat Scott Murphy debated for the first time this week in Saratoga Springs. A recent CNN College poll indicates to disco has a 12 point advantage among likely voters. The special election to fill now Senator Kiersten Gillibrand old district is March 30 first. The day after March 30 first the New York state budget is due which would suggest some serious activity at the Capitol right. Well actually the sweet specter of

26 billion dollars in federal stimulus money may be slowing down the rate of serious negotiation and the stimulus funds may also create another problem if New York doesn't spend the money wisely. We could find ourselves in even worse hot water than we're in now. Both Ken Adams of the Business Council of New York State and Bob Ward of the Rockefeller Institute want to shake the collective shoulders of the legislature. Look at lawmakers in the eye and say Don't screw this up. A new Rockefeller Institute report warns that when the money from Washington is gone. States who don't plan could find themselves experiencing a rainy day sort of like Noah did. New York and other states have this wonderful infusion. Hundreds of billions of dollars from Washington this is great news in the short run for New York it means about 25 billion dollars over the next couple of years and this is a very good short term gain but in the long run it's a big challenge and potentially a problem.

It's a great opportunity. If we do it right and what we've got to do is pursue is get leverage out of this money. It's not sent spent 26 billion for 26 billion it's spent 26 billion to make stuff happen to jumpstart the New York state economy to create new jobs. And for example if you look at building roads and bridges there's about four billion dollars for infrastructure in the state. We can use that 4 billion to build a bridge to no place to build a road that goes into the woods in a dead end. According to Adams the stimulus should be used to make Governor Paterson's four billion dollars in proposed taxes and fees disappear. Here's how the budget gap is around 14 billion dollars. If the legislature cuts the budget by Patterson's recommended 9 billion stimulus aid could be used to close the 5 billion dollars remaining in the gap and voila no new taxes needed. It could work says Adams. If the legislature doesn't expand or create new programs there could be a temptation to initiate a new program to expand something under Medicaid for example because we've got the money in the stimulus package. But what happens when the stim twenty seven months

from now that stimulus aid ends. How do we pay for that new program. We can't afford our course but we can afford the programs we have today. Which is why the governor's right to say even before the whole stimulus thing happen got to cut state spending. We've got to do what households all over New York state what the average viewer does. If you lose some of your income income you pull back on your spending. Somehow Albany we refused to do that traditionally Albany has also refused to think long term. Bob you've been studying New York State's government for a long time. You've written a book about it. What has New York's track record been when it comes to huge windfalls of cash. Well the having worked in the legislature all of the pressure is on you to spend spend spend. You have hundreds of thousands of people coming through the door asking you to spend money. Nobody comes through to door asking you to be a little more careful. And so when the state gets a big windfall whether it's the tobacco settlement or major new infusion of revenue from Wall Street or

in this case a big federal stimulus package those dollars tend to come in the door and they tend to go right out the door. Under the 1998 tobacco settlement agreement New York received billions of dollars over a period of several years. But after 9/11 the state needed the money sooner rather than later and sold bonds based on future tobacco settlement payouts but higher taxes are hurting the industry's bottom line which threatens the repayment of thirty seven billion dollars in municipal bonds backed by that money. So the question becomes do you do everything to shut all of your short term problem or do you try to focus a little bit more on the long term. New York's history has been to look very much at the short run. Unfortunately the focus in Albany has been somewhat scattered of late. The legislature seems to be distracted by the MTA toll hike. I'm wondering what you think about that considering part of your plan. If it should come to pass is that the legislature actually implemented Governor Scott's. But they're not even focused on that right now.

So you're right Susan it's a distraction. You know the MTA has come to Albany with the Ravitch commission proposal to fill its own budget gap and there is an awful lot of debate about that. I say one thing just from the Business Council point of view there's a payroll tax of one to have billion dollar tax on all employers in the 12 counties of the MTA region downstate which we think is a bad idea. This layering of taxes if you're downstate you get hit three times potentially again with stimulus it just doesn't have to happen. But you get your payroll tax for the MTA you. The governor has got his four and a half billion dollars of taxes. Folks have all kinds of income tax proposals out there. Oh and by the way we know that President Obama is going to bring us some higher taxes down the road. Point being We've got to back off all of that because raising taxes in the middle of a profound economic crisis will only make the crisis worse is no there's no way that we can actually raise taxes right now and create new private sector jobs which is what we most desperately need. I get back to what's the goal. Job security job growth consumer confidence spending and economic activity.

So if the stimulus money is not spent wisely if we blow it. What are how is that going to affect people who are watching this TV show right now sitting on their couch in someplace like Canandaigua. If we blow it. Your property taxes will go up your income tax will go up. Your government services that you get in your communities could go down. I mean if we blow it up we would be on this risk is that we stay on a spending path with a level of government services our economy can no longer bear. And then there's this day of reckoning. I say the day is here now. We fix this stuff now. Governor Paterson is trying to do that. The legislature must come around and work with him on that. But if we sort of use this if we blow it by blow it I mean if we take the stimulus aid and we paper over today's problems and we look the other way there will be a day of reckoning for New York state that people will be no reason to for a business to be here anymore. The gap between what we're going to have to spend and the tax base is such

that there just be this it's just it all falls apart. One of your colleagues compared the stimulus money to a methadone clinic. Why did he do that. Well when you are addicted to one substance like heroin sometimes people use methadone to kind of replace the more damaging drug. And. The fundamental problem does not go away when you do that. So here in New York the fundamental problem is that we have never structurally balanced the budget we have never brought spending and revenues into line so every year we have a budget gap of 3 5 billion dollars or more that the governor and the legislature have to solve with changes in spending tax and fee increases more gambling more borrowing things that many people would argue we shouldn't be doing. So this new stimulus money papers over a short term problem allows us to continue our old habits. Many of them bad habits unless we affirmatively

decide to change. And of course if you're going to change the first thing to do is admit that you have a problem. My name is Karen De Wet and I have a problem. I'm a policy wonk kidding. Back when I was only a problem I'd be doing fairly well. Karen what is here from New York State Public Radio in Joe Donnelly of the Albany Times Union thanks so much for joining me today. We have a lot to talk about let's get right to it. What is distracting legislators from negotiating a budget. Well the. All kinds of things happening right now. The the MTA needs a bailout and their deadline is March 25th which is only five days five or six days away from when the budget's due March 30 first and without that the NTSA threatening to put the so-called doomsday player in where they're going to cut all the service that's going to raise. That really matters. Yeah absolutely. Well it's that New York City tabloids I guess named for it. OK. And there's another distraction. Rockefeller drug. I'm sorry. Yeah Rockefeller drug laws.

Rockefeller drug laws because the assembly is pushing it hard. They actually passed it the other day a Rockefeller Drug Law plan that would reform these you know old drug laws that require judges to throw people in jail for long periods of time. They want to change it so that judges would have more discretion and it would have a fiscal impact according to this Assemblyman silver. It would save the state hundreds of millions of dollars over time because you know incarcerating these people that long that they're at that time unfortunately it's a tough thing to sell in the Senate because the Senate they have upstate Democrats who are concerned with what prisons in their district for instance. So it's going to be a very difficult thing to sell in the Senate. It has budgetary implications because they would need more money initially for drug treatment you can't just say OK you're not going to jail just you know go back on the street you have to give them some kind of treatment so they're not addicted to drugs or similar so that would be more convenient if it were

part of the budget and they can you know that some of this money to it. You mentioned something about all of these things have a common thread. Karen Yes what is the common thread. Well the Senate Democrats need to be on board with the budget with the MTA plan if they want to with the Rockefeller drug laws and you know they have a 30 to vote majority so they need all 32 members and they have probably bad boys played by yes the three the Gang of Three are the three amigos who already are saying that they don't want to do the MTA plan that Speaker Silver has put forth which would be a bridge tolls on the East River are like $2 fare hike Yeah. So they're already throwing a wrench into into the MTA plans. Jim what is it about these three politicians. Well actually these three politicians are more on board with the with the Democrats than they have been but they also have issues with another issue measure that's coming on the assembly that also is a distraction that is the proposal to tax relatively wealthy New Yorkers hiring New

Yorkers maybe $250000 a household taxable income a year. Carl Krueger one of the three people is the Senate finance chairman. Yes. And he doesn't like this idea at all. Although he's not against taxes per se. Right. He wasn't against the apparel tax for the MTA. Right right. You extrude. Well he actually he is. He's not embracing it at the moment. I talk to him about it just yesterday he's not bracing at the moment. But the the Senate Democrats are split on the topic of of raising taxes for the budget from hiring from raising personal income taxes on high earners. That's another distraction. They've got to overcome that. And the distractions are because they're new because they don't haven't hired enough people yet. What is what is there it's you know it's sort of democracy in action you take that tack to set the monolith with the legislative leaders says this is what my conference is doing and this is what we're going to do it is like we're for the mind of every man and woman for them salaries but it's messy

it's very messy and at a certain point Senate Senator Malcolm Smith and Governor David Paterson are going have to show some leadership make some deals say OK if you agree on this we'll let you have this and do the wailing into it. We haven't really seen that story. Quick question Is it primarily because their majority is very slim or is it or is it primarily because they're not you know quite well organized enough. I think both both They're not they're not they're they haven't had power in 43 years and it's a little bit difficult that rough if you agree to do it and I think it's also because they have diverse. Members they have different constituents and different interests and you have Craig Johnson out of Long Island $250000 in Long Island Nassau County is not just went to school teachers went to school teachers a range of people yeah so you know how can you get a how can he put his arms around something like this. And also the other element is there are the Republicans there's 30 of them in the Senate now. Well

31 I guess and they are in lockstep. Yeah and they're deciding that they're not going to play ball for now and let the Democrats sweat it out they're like OK well you see how easy it is. We only have about a minute and a half but I want to get into other things that are coming week they're going to be budget resolutions from the assembly and the Senate we hope we hope and projecting. What are the sticking points going to be. Well I think where where to make cuts they're going to have to make some cuts. And this tax the rich proposal whether to put it in I think it's very likely that the assembly Democrats will put it in the Senate Democrats I mean so far they were supposed to have the MTA plan this week and they were unable to get it together so can they get a budget proposal together based on all the differences they have. The other issue this week is Governor Paterson sort of relaunched his make over starting on Monday when he said that he was going to pay for his trip to the inaugural and all of this came out of something that Jim wrote. So is his is this like a take two for Governor Paterson and is it working.

Well I do think there's a. A strategy afoot. The he said he was going to pay for his inaugural expenses out of his campaign war chest as opposed to charging taxpayers as he initially planned which went how much was like $20000 $25000 if he went to western New York and said hey I'll take a pay cut which plays pretty well in that blue collar region and count me of Erie County. And I think we're going to hear more of that he actually did a lot of radio stops this week this week and has as begun in meaning you know I'm I've made some mistakes and I'm going to try to turn over a new leaf. Jim 0.0 of the Albany Times Union thank you so much carried away to New York State Public Radio thank you. That brings us to our poll question of the week with a deadline of April 1st Are you confident legislators will pass an on time budget to vote. Go to our website dot org slash New York now. Last week we asked do you trust the Paterson administration to effectively distribute federal

stimulus cash. Just 19 percent of you said yes. With the vast majority saying that they do not have faith that the money will be spent wisely. We love to hear from you. We urge you to vote now or read or comment on my blog. Slash New York now. The D-word found a place in print this week I'm talking about depression. If you didn't grow up during the 30s when you think of the Great Depression images of Nathan Detroit breadlines Speakeasies and Tommy guns probably come to mind. Well that's entertaining. It's not really a realistic view of Depression era America. Earlier this week we were lucky enough to speak with David Brancaccio The award winning host of PBS is now who told us that if modern America falls into the kind of economic spiral it experienced after 1929 we need to prepare for a new kind of American poverty. One of the things you have to understand about poverty in America in god forbid 2009 is that doesn't look like the Great Depression. People will

still have roofs over their heads by and large will be some people who are homeless people still will have television sets. Will people actually start day in day out. Possibly not but they will be poor. They will be desperately poor. An example is just days ago working on a story for now. I was in the vat of what could have done the story here I think in New York State. Lovely woman with an ok rental house certainly a very pleasant house. She worked part time didn't have health care. Her husband a great health care plan. He got laid off because of the economy. No health care plan and here is the horrible thing Susan. She called him to announce her diagnosis of breast cancer as he was calling her to announce that he would been laid off. So you're saying cobra that thing where if you lose your job you can continue your health care plan for 18 months. Apparently a loophole she got nothing. So this woman will be featured on now shortly has been running around trying to get a cut rate operation which she did but she doesn't have

any money for chemotherapy. Now that's poverty in America and frankly unless they look the health care issue that is what a depression is going to look like more of us in this situation in a country where health care is tied to jobs and jobs are increasingly hard to find Let's hope we don't get into a depression right. Let's hope in fact the wheels of policy in Washington do move forward. You mentioned the group of seven nations changing the financial architecture of the entire world. Is that change going to encompass greater regulation over a Wall Street. A lot of what we need to do is to rethink rethink sort of a basic premis of the financial markets which is the idea that making ever increasing amounts of money each in short term. In the short term is the goal the law. Somehow there needs to be revolution not necessarily in regulation but in in long term thinking. And you know word that's useful here is

sustainability. We often think of sustainability in terms of the environment the greening of the earth. If Wall Street firms have thought more sustainably and had worried less about the short term profits and about just existing in the longer term we might not be here. That's something like steady state economics. It's a way to think about it and you know it's usually the socially responsible investment crowd applying your values to your portfolio. They're the ones who've done a lot of thinking in this area. Community Banking This is where the money when you when you take out a loan didn't just come from the faceless Capital Markets. When you give a deposit to your community bank it stays generally in the community to then loan to a local business. There's a lot I think the the outline of the way forward out of this mess may be found with people who have that kind of thinking Gosh that's the change the metrics that change how we value things. Getting back to now Bill Moyers handpicked you because of your tenure in

public broadcasting. This is a very difficult time for many different organizations including PBS. How is public TV different from our commercial brethren in terms of its content and approach. As someone who has worked in PBS or in public broadcasting all of his life when you know actually earlier my career worked in commercial radio and so I can compare I also have a wife who's now a public schoolteacher and loves it used to be in commercial television and hated it. It really is a difference in thinking in the the fundamental difference is this we try to dignify the intelligence of the viewer. We know the viewers bring intelligence to the table. And so we don't have to talk down to our viewers we know that we can discuss and engage big ideas from many different angles with many different sides. We want and I'm sure this is your thinking too. When you sit down with somebody to to to produce something for it for public television you want people to emerge from the experience not as commercial broadcasting

does wanting to buy something by an advertisers product. What we want people to do is emerge from this experience a more intelligent person a different person maybe a better person who has some added information or added perspective. And I think that's a profound difference. Trouble is of course these are tough times sure but are there tough times for our business model. I talked to Robert Kuttner very famous economist talking about big topics it was public broadcasting it was the now program. And he said any organization that's dependent on foundations and individual largess is going to have a rough road ahead. And so we have to keep demonstrating every minute of the day on public television that we are giving our viewers something that they cannot get elsewhere. Ultimately I think perspective that's all the time we have for this week. Join us next week when we explore the state's troubled economic development infrastructure Empire zones an idea. Thanks for watching and have a great weekend.

Funding for New York now is provided by the New York State Health Insurance Program operating New York State Public employers and employees. The employer plan a plan as great as the Empire State United University professions represents thirty three thousand academic and professional faculty on all state operated campuses of the State University of New York. U-V is the union that makes SUNY work more morning are all enjoying next generation technology thanks to the rise and ongoing investment in its all fiber network horizon files provide Internet and video services.

Additional funding provided by W.A. support for New York nowas website comes from Philips Lytle. Hi I'm Susan are better with this week's New York now poll question. This week we asked with a deadline of April 1st for you Clinton and legislators will pass an on time budget.

Cast your vote and reader comments on my blog at New York Mail's website at WMATA dot org slash New York now. Love to hear from you. You can also e-mail me at and why now at WMATA dot org and join me for the results of this week's poll. Next time on New York now.