Bogusia blog

Q+A: Will Obama talk tax reform in State of the Union?

WASHINGTON (Reuters) – President Barack Obama has proposed revamping the dizzying U.S. tax code and many observers are eyeing his State of the Union address on Tuesday for signs of his commitment.

Presidential leadership is essential for such a politically and economically complex task, last successful after Republican President Ronald Reagan struck a deal with congressional Democrats for a major code rewrite in his second term in 1986.

Reagan used a State of the Union address to publicly direct advisers to make recommendations for a tax code rewrite and made it a top priority.

With Obama half way through his first term and a new election campaign looming, many see the next two years as a ground-laying phase, leaving legislation for a second term.

Here are some key questions and elements of the debate:

WHY ARE PEOPLE TALKING ABOUT TAX REFORM NOW?

The fledgling economic recovery and concerns about annual deficits topping $1 trillion have pushed a tax overhaul up the economic agenda. Many budget experts note that both individual and corporate taxpayers are spending more money each year to prepare taxes -- while the government is getting less efficient at collecting.

Among the loudest voices of complaint are from big corporations, who blast the top 35 percent marginal rate, the highest in the industrialized world. Many economists and Obama officials agree with their argument that the high rate makes the U.S. less attractive relative to its peers.

Toyota recalls 1.7 million vehicles as quality woes mount

TOKYO (Reuters) – Toyota Motor Corp said it would recall more than 1.7 million vehicles worldwide, bringing its total for recalls to nearly 16 million since late 2009 and dealing a blow to its efforts to restore its reputation for quality.

Although the situation is different from last year, when Toyota attracted intense scrutiny from U.S. safety regulators over unintended acceleration problems that were blamed for dozens of fatalities, the latest recall may make it harder for Toyota to convince investors it has put its quality problems behind it.

Shares of Toyota, the world's top automaker, extended early declines and closed down nearly 2 percent on the Tokyo Stock Exchange after the announcement.

"Toyota faces harsh competition from Honda, which is in a much better situation in the U.S. market -- this is reflected in its stock price which now stands at multi-year highs," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.

"That's why investors are a little nervous and sold Toyota when this negative news came out," he said.

U.S. SALES SUFFER

Toyota was the only major automaker to see its sales fall in the United States last year, and just squeaked by General Motors Co to keep its spot at the top of the global sales ranking.

The biggest recall among those announced Wednesday was to fix a faulty fuel pump and connecting pipe in 1.34 million vehicles, including the Noah minivan and other models sold in Japan as well as 141,000 Avensis units sold overseas. That is Toyota's biggest recall in six years and its second-biggest ever for a single defect, said Toyota spokeswoman Shiori Hashimoto.

Toyota said in a filing to Japan's transport ministry that no accidents had been reported because of the defects.

Toyota said it was also recalling around 335,000 Lexus units sold overseas, including about 245,000 sold in the United States, due to trouble with a fuel pressure sensor connected to an engine fuel delivery pipe.

In two other filings on Wednesday, Toyota said it would recall about 75,000 Crown models and about 6,200 Townace vans in Japan to fix the same fault found in Lexus cars sold in the U.S. and elsewhere.

Toyota's Hashimoto declined to say how much the latest recalls would cost the Japanese carmaker.

For the financial year to March, Toyota expects operating profit of 380 billion yen ($4.6 billion), lower than both Honda and Japan's No.3, Nissan Motor Co. are forecasting.

Toyota's last big recall was in October when it said it would fix 1.66 million Avalons, Highlanders and other models worldwide mainly for a defect in the master cylinder brake seal.

Toyota shares closed down 1.9 percent at 3,400 yen, underperforming a 0.6 percent fall in the benchmark Nikkei average.

Shares of Honda, Japan's second-largest automaker, gained 0.7 percent to 3,470 yen.

(Additional reporting Noriyuki Hirata, Tim Kelly and Antoni Slodkowski; Editing by Lincoln Feast)

U.S. gives employers more leeway with health rule

WASHINGTON (Reuters) – U.S. employers offering health insurance to workers will not lose protected status under the new healthcare law if they decide to switch healthcare plan providers, U.S. administration officials said on Monday.

At issue is President Barack Obama's pledge that people can keep their current healthcare plan if they liked it and administration officials have said the protected status aims to minimize disruption in coverage.

Under the overhaul passed earlier this year, employers must adhere to certain rules to keep special "grandfathered" status that exempts them from imposing other provisions in the law such as an appeals process and mandatory preventive care.

Any plan that made significant changes to their employees' coverage, such as reducing workers' benefits, increasing costs or changing health insurance carriers would lose protection.

But officials at the U.S. Departments of Health and Human Services, Labor and the Treasury said, if an employer chooses another health insurance company to provide coverage, they can keep their protected status.

"The purpose of the grandfather regulation is to help people keep existing health plans that are working for them," the agencies said in a statement.

"This amendment furthers that goal by allowing employers to offer the same level of coverage through a new issuer and remain grandfathered, as long as the change in issuer does not result in significant cost increases, a reduction in benefits, or other changes described in the original grandfather rule."

The change comes after complaints that preventing companies from choosing another insurer would restrict "their ability to shop around for the best deal," one official told reporters in a conference call speaking on background.

Health insurance providers include Aetna Inc, Cigna Corp and UnitedHealth Group Inc, among others.

The amended rule only affects group health insurance plans, not those sold to individuals. Only a small number of employer plans are expected to be affected, officials said.

People magazine says Ryan Reynolds is sexiest man

NEW YORK – Can life get much better for Ryan Reynolds? After all, he's married to Scarlett Johansson.

Oh, yes it can. People magazine has bestowed its "sexiest man alive" title on the 34-year-old actor.

Reynolds is about to star on-screen as the Green Lantern. The Canadian native told People: "The sexiest thing about Canadians is that there's an inherent ability to be self-deprecating. That has served me well in my career and personal life."

It's the 25th anniversary of People's first sexiest man — Mel Gibson. Others given the title include John F. Kennedy Jr., Harrison Ford and Richard Gere. George Clooney, Brad Pitt and Johnny Depp have won it twice.

People announced its 2010 list on Wednesday.

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Online:

Medicare Part D Changes Not Overwhelming, Experts Say

THURSDAY, Nov. 11 (HealthDay News) -- Seniors enrolled in Medicare Part D prescription drug plans will come across some changes as they choose a new plan or reassess an old one during the upcoming open enrollment period, but experts say those differences won't be monstrous.

Open enrollment starts Nov. 15 and continues through Dec. 31, and any changes will take effect Jan. 1, 2011.

"Some of the doom-and-gloom predictions because of health-care reform or the freezing of Advantage Program payments [Medicare benefits provided through private plans] have been a major distortion that haven't come to pass," said Joe Baker, president of the Medicare Rights Center, a nonprofit consumer counseling and advocacy group. "While there are changes and new things to look at, it's not a lot of change."

Medicare Part D prescription coverage comes in two forms: original prescription drug plans (PDPs), which simply add drug coverage to Original Medicare, and Medicare Advantage Plans, which are like HMOs or PPOs.

Next year, 1,109 PDPs will be offered nationwide, the fewest since Part D was introduced in 2006. The average Medicare beneficiary will have a choice of 33 PDPs, although this number will vary from state to state.

"Seniors will continue to have many Part D plans, even though the overall number has declined," said Tricia Neuman, vice president and director of theMedicare Policy Project of the Kaiser Family Foundation.

The average monthly premium will rise 10 percent in 2011, to an average of $40.72.These can range from a low of $29.01 (in New Mexico) to a high of $46.51 (in Utah/Idaho), according to the Kaiser Family Foundation. In 2011, Medicare beneficiaries receiving low-income subsidies will have access to a larger number of plans that have no monthly premiums, according to the Kaiser Foundation.

But good news comes in the form of 2011 "donut hole" coverage, the gap that sets in after regular coverage has been reached and before catastrophic coverage kicks in. The consumer's share of costs will continue to decrease, until the doughnut hole is closed completely in 2020, according to the Medicare Rights Center.

Beneficiaries who find themselves in the donut hole will see a discount of 50 percent for brand-name drugs and 7 percent for generics.

That 50 percent coverage will be "a real help with relatively high drug costs," said Neuman.

The gap will start after $2,840 has been spent on drugs, while catastrophic coverage takes over at $4,550 out-of-pocket spending, according to Kaiser.

To choose the best plan for them, beneficiaries will have to do some digging during the upcoming enrollment period.

"Year in and year out, you have to look at things again because plans, drugs and your health changes. You need to make sure your plan is still a good deal," said Baker.

Look at premiums but also look beyond that, at factors like which drugs are covered by a specific plan, how much those drugs will cost you and if there's a limit on the number of prescriptions.

"Cheaper isn't necessarily better if a drug isn't approved for the plan. Then the cheap plans isn't so cheap any more," Baker explained.

"There are still many choices, but it's a good idea to compare and reassess if it's the best plan," Neuman added.

Although the open enrollment period is the same as last year, seniors should note that the Jan. 1 to Feb. 14 disenrollment period for Medicare Advantage plans is different.

"In the old days, you could either disenroll and move to Original Medicare or move to another Advantage plan,." Baker said. "This year, you can only move to Original Medicare."

More information

The U.S. Centers for Medicare & Medicaid Services has more on the prescription drug plans.