Democrats Considering Direct Jobs Program — Will Deficit Fearmongering Prevent It?
Ryan Grim at the Huffington Post reported today that “as desperate Democratic lawmakers cast about for ways to create jobs from Capitol Hill, a 1970s-era jobs program is getting a fresh look”:
Known as CETA — the Comprehensive Employment and Training Act — the program provided direct government funding to hire temporary workers. At its peak in 1978, it had created 725,000 public service jobs and shaved roughly one point off the unemployment figure…The version of CETA being discussed by Democrats would be some type of public-private partnership through which the government would pay part of an employee’s salary, while he or she would train under and work for a private firm.
Of course, as in most other issues, Republicans automatically voiced their displeasure with the idea, as Michael Steel, a spokesman for Minority Leader John Boehner (R-OH) “gave CETA the instant thumbs down.”
While I would prefer a straight, WPA-style program (both for efficiency and accountability purposes), instead of a public-private partnership, it’s encouraging to see that Congress is finally willing to put such a plan on the table, albeit far later than it should have. There’s no reason that direct job creation — particularly for young people — has been avoided for so long.
However, the Wall Street Journal reported this morning that the administration is “lukewarm about proposals by congressional Democrats to introduce broad legislation to create jobs, instead favoring targeted measures that would be less likely to inflate the deficit.” “Hamstrung by the nation’s $1.4 trillion deficit and his pledge not to raise taxes on middle-class Americans, Mr. Obama is keen to avoid any measures suggestive of a second, big-ticket stimulus,” the Journal said.
As Paul Krugman noted today, deficit hysteria amounts to “scaring the government into inaction on unemployment.” That, combined with Republican insistence that repealing the stimulus is a sound jobs policy, are going to make serious job-creation proposals difficult to engineer. But as former Federal Reserve Vice Chairman Alan Blinder wrote:
Direct public-service employment is straightforward. As long as the new government jobs do not compete with the private sector, the net job creation should be one-for-one. So hire people to repair parks, not shopping malls. And if we restrict ourselves to low-wage jobs, the cost will not do grievous harm to the budget. For example, at an average all-in cost of $30,000 a year, one million new jobs would cost $30 billion.
As James Galbraith noted, in the absence of additional steps (including fiscal aid to states, which are seeing tax revenues plummet) “double-digit joblessness will linger on, breeding frustration and anger — perhaps all the way through to the mid-term elections.”
Of course, much like the brouhaha over stimulus accounting errors, a direct-jobs program opens its advocates up to criticism when, as Dean Baker put it, “reporters inevitably find some chump claiming to be employing his brother while splitting the government paycheck.” Does that making taking such a step not worth it? I don’t think so.
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ANALYSIS: Under Senate Bill, Families Would Pay 25% Less For Health Care In Individual Market
ANALYSIS: Under Senate Bill, Families Would Pay 25% Less For Health Care In Individual Market
Over the weekend, the Congressional Budget Office (CBO) released new estimates for how much a typical four-person family will spend on health care under the new merged Senate legislation. Below, I’ve compared the House bill with the Senate alternative and threw in the old Senate Finance Committee (SFC) numbers to show how Majority Leader Harry Reid (D-NV) improved the affordability measures for middle class Americans.
The chart below indicates what percentage of income a family of four purchasing coverage within the new health insurance exchanges can expect to spend in 2016 on a health care plan with an actuarial value of 70% (in 2009 dollars):
Meanwhile, MIT Professor Jonathan Gruber ’s new analysis relies on available CBO data to compare the cost of coverage within the Senate bill’s exchanges to the cost of an individual policy in the non-group market absent reform.
Even though the plan purchased under the Senate legislation would have an actuarial value of 70% — 10 percentage points higher than the policy sold in the individual market absent reform — a family would pay less for reform’s more substantial coverage than they would for a plan that offers less benefits and even fewer consumer protections in the unreformed individual market. Moreover, “the same plan that cost $6,000 without reform would cost $4,460 with reform, or 25% less,” Gruber concludes:
Analysis of the non-partisan information from the CBO suggests that for those facing purchase in the non-group market, the Senate bill will deliver savings ranging from $500 for singles to $1400 for families – even without subsidies. The savings are much larger for lower income populations that receive premium credits. This is in addition to the higher quality benefits that those in the exchange will receive, with actuarial values for low income populations well above what is typical in the non-group market today.
The Pros And Cons Of Jaime Dimon As Treasury Secretary
The Pros And Cons Of Jaime Dimon As Treasury Secretary
Last week, Treasury Secretary Tim Geithner had a much-publicized spat on Capitol Hill with Rep. Kevin Brady (R-TX), who told Geithner that “the public has lost all confidence in your ability to the do the job,” and asked if Geithner would “step down.” Geithner responded by telling the Republicans calling for his head that “I can’t take responsibility for the legacy of crises you bequeathed the country.”
Democrats have been critical of Geithner’s performance in recent weeks as well, with Rep. Peter DeFazio (D-OR) also calling for him to resign. And according to the New York Post, as Geithner gets battered, “JPMorgan Chase CEO Jamie Dimon is emerging as a potential replacement”:
Sources tell The Post that a number of policy makers have begun mentioning Dimon as a successor to Geithner, whose standing in Washington has suffered…[Dimon] has achieved rock star status during the financial crisis, having navigated JPMorgan through the recession and being a go-to guy when Uncle Sam last year needed Wall Street’s help during the collapses of Bear Stearns and Washington Mutual.
The Post cites “people familiar with Dimon’s thinking” as saying he “would love to serve his country.” No source in the article was willing to go on the record though, so who knows what their motivation for floating Dimon’s name was. As Laura Tara LaCapra wrote at The Street, “[Dimon's] name has been tossed about speculatively — and at times jealously — by those in the industry for some time.”
But politically, if such a personnel switch did come to pass, it would strike me as odd. Geithner’s problem is that he is perceived as being too cozy with Wall Street, and is blamed for the dichotomy between Wall Street’s resurgence and Main Street’s continued time in the doldrums. The failure of the “bailout” to translate into wider recovery is, fairly or not, laid on his doorstep, with 42 percent of Americans saying that “has done a poor job handling the credit crisis and federal bailout programs.”
If that is the case, how would the problem be assuaged by plucking a CEO directly from Wall Street to take over? For his part, Dimon has been very careful to applaud efforts at regulatory reform (aside from panning the idea of a Consumer Financial Protection Agency), and even penned a Washington Post op-ed fully supporting a robust resolution authority for taking apart failed financial institutions. He is also supportive of efforts to help troubled homeowners receive mortgage modifications, telling investors who were bashing the administration’s effort to that “they should get over it.”
Dimon has also said that “tax cuts should go to lower paid citizens, not the wealthy.” But he does not support limits on bank size, and JP Morgan is part of a Wall Street trifecta (including Goldman Sachs and Morgan Stanley) that is on pace to pay out $30 billion in bonuses, an increase of 60 percent from last year.
So if the perception is that Geithner is coddling the banks, would that change with Dimon, as opposed to someone without ties to Wall Street? I’m not sure that case can be made. But on the plus side, Dimon hasn’t characterized anything that he’s done as “God’s work.”
Rep. Debbie Wasserman Schultz: Republicans Have ‘Politicized Breast Cancer’
During an appearance on This Week with George Stephanopoulos, Rep. Debbie Wasserman Schultz (D-FL), a breast cancer survivor, strongly criticized Republicans for suggesting that the new mammogram guidelines released by the Preventive Task Force last week would restrict access to cancer diagnosis. “What’s unfortunate is that, the Republicans and Ms. Blackburn, have for the first time politicized breast cancer,” she said.
In the exchange below, Rep. Marsha Blackburn (R-TN) repeatedly misquoted the House health care bill to suggest that the Task Force’s guidelines would become law:
BLACKBURN: The guidelines that came out this week, by the Preventive Services Task Force, have a direct link to what would be offered if the House and the Senate bills were to go into law…if you go to page 1296 of the House bill, the engrossed copy…They become the law. They become the law. The mandate…. When you look at what’s going to happen with these 118 new bureaucracies on what insurances can be offered, and what’s going to be paid, you know that this is the bureaucrat in the exam room. This is how it’s going to happen. This is the first step.
Watch it:
In reality, the U.S. Preventive Services Task Force is an independent panel of experts in primary care and prevention. The panel offers evidence-based guidelines and issues recommendations on a scale of A to D (and even I) for providers to consider when treating patients. Grades A and B indicate that “there is high certainty that the net benefit is substantial” and suggest that providers “offer or provide this service.” Grade C “recommends against routinely providing the service” but stipulates that doctors should “offer or provide this service only if other considerations support the offering or providing the service in an individual patient.” Generally, all of these guidelines are a single piece of scientific data that could help guide physicians in treating individual patients. They are not binding.
The House and Senate health care bills only include “services recommended with a grade of A or B by the Task Force on Clinical Preventive Services” in standard benefit packages, but even these guidelines could be expanded by the Secretary of Health and Human Services. Last week’s mammogram guideline would not be included in the packages. It received a ‘C’ rating from the Task Force.
Ultimately, as Congresswoman Wasserman-Schultz points out, Republicans are manipulating the Task Force decision to scare women into opposing a health reform package that expands access to screenings. The legislation requires insurance companies to cover mammograms and other cancer screenings at no additional cost, ends unfair insurer price discrimination against women and guarantees that all health insurers provide women with the health care services they need.
The WonkLine: November 23, 2009
The WonkLine: November 23, 2009
Welcome to The WonkLine, a daily 10 a.m. roundup of the latest news about health care, the economy, national security, immigration and climate policy. This is what we’re reading. Tell us what you found in the comments section below, and subscribe to the RSS feed. Also, you can now follow The Wonk Room on Twitter.
Climate Change
Torrential rain of “biblical proportions,” fueled by global warming, have ravaged the Canary Islands, Vancouver Island and the United Kingdom with killer floods.
Sen. Blanche Lincoln (D-AR) — an opponent of strong climate legislation — is seeking hundreds of millions of dollars in emergency taxpayer funds for American farmers hit by extreme rain and flooding.
Climategate: Led by Rush Limbaugh and former Jim Inhofe (R-OK) staffer Marc Morano, right-wing global warming deniers are Swiftboating climate scientists with a coordinated disinformation campaign about the contents of illegally hacked emails.
Immigration
House Democrats are changing immigration reform legislation to reflect the tough economic climate, the Hill reports. Supporters of immigration reform “acknowledge the tough economic times create a difficult climate for legislation.”
According to the Houston Chronicle, “security training companies in Texas and elsewhere, bolstered by an alarming increase in kidnappings and violence in Mexico” have seen their business boom as more Americans and Mexicans must turn to private firms for security.
Over a hundred men, mostly refugees fleeing violence in Sri Lanka and Afghanistan, took part in a massive, hours-long brawl at a remote immigration processing station on Australia’s Christmas Island yesterday.
National Security
Indian Prime Minister Manmohan Singh arrives in Washington for the first official state visit of the Obama presidency today. Talks are “expected to be dominated by Afghanistan, climate change and nuclear energy cooperation.”
“Four United States troops have died fighting in Afghanistan in the last 24 hours,” NATO said in a statement today.
Brazil’s president, is set to receive Iran’s president, Mahmoud Ahmadinejad, on Monday “in his first state visit to Brazil.” “The visit is drawing criticism from lawmakers and former diplomats here and in the United States, who say it could undercut Western efforts to press Iran on its nuclear program.”
Economy
According to a new study, executives at failed Wall Street investment banks Bear Stearns and Lehman Brothers “cashed out nearly $2.5 billion from their firms between 2000 and 2008 even though the financial crisis hammered the shares they held.”
“A new wave of foreclosures stands to hurt people who may have never taken out a mortgage: renters,” reports the Washington Post, as “many investors are carrying upside-down mortgages on large rental buildings.”
Both Paul Krugman and Dean Baker take the New York Times to task for its front page government debt fearmongering.
Health Care
“Companies and groups hiring lobbying firms on health issues nearly doubled this year as special interests rushed to shape the massive revamp of the nation’s health care system now in its final stretch before Congress.”
“Anxious that Saturday’s party-line Senate vote to open debate on a health care overhaul gives them little maneuvering room, Obama administration officials and their Congressional allies are stepping up overtures to select Senate Republicans in hopes of winning their ultimate support,” including Sens. Susan Collins (R-ME) and Olympia (R-ME).
“Small businesses, which the White House is courting, are lobbying for more generous tax credits.”
Wallace Selectively Quotes CBO To Suggest Senate Bill Increases Costs
Wallace Selectively Quotes CBO To Suggest Senate Bill Increases Costs
This morning on Fox News Sunday, host Chris Wallace selectively quoted the Congressional Budget Office analysis of the merged Senate legislation to suggest that the Senate health legislation would increase government outlays on health care over 20 years and bend the cost-cure upward:
WALLACE: According to the nonpartisan Congressional Budget Office, federal outlays for health care would increase during the 2010-2019 period and the government run health insurance plan would typically have premiums that were somewhat higher than the average premiums for the private plan. So here’s the question. The Democratic plan by the CBO’s own scoring fails to bend the famous health care cost curve at all over the course of these 10 years, and could you name a single Congress that has ever cut Medicare by half a trillion dollars as this legislation would?
Watch it:
As Sen. Arlen Specter (D-PA) pointed out, the $848 billion bill “would save $130 billion in the first 10 years and projected to have $650 billion saved in the second 10 years.” Page 16 of the CBO report does predict that “federal outlays for health care would increase during the 2010-2019 period,” but the last paragraph of that same page also notes that “during the decade following the 10-year budget window, the increases and decreases in the federal budgetary commitment to health care stemming for this legislation would roughly balance out, so that there would be no significant change in the commitment.”
As a result, the federal government would be spending less on health care in the decades following the initial 10-year window, despite the expansion in coverage:
Wallace’s claim that the bill “fails to bend the famous health care cost curve” is also inaccurate. The legislation establishes an Independent Medicare Advisory Board (IMAB)– which is required to “recommend changes to the Medicare program to limit the rate of growth in that program’s spending” — and places a 40% excise tax on insurers that offer expensive policies. While the budget office did not analyze the effect of the legislation on national health expenditures, the CBO is predicting that spending per Medicare beneficiary would decrease, as compared to the growth rate of the past two decades (from 8% growth rate to 6% growth rate).
As for the public option, the CBO did conclude that the plan could attract sicker enrolles and charge slightly higher premiums, but it would still reduce average premiums “and hence federal subsidies for premiums.” “That’s because average premiums would be even higher if the people enrolled in the public plan enrolled in private plans.” In fact, the CBO has concluded that the Senate’s public option would save the government $3 billion over 10 years.
Finally, while Congress has never voted to cut Medicare by half a trillion dollars, it did pass a series of Medicare cuts as part of the Balanced Budget Act of 1997. That act decreased Medicare spending by 12.7% over 10 years and instituted the kind of payment updates that the Senate bill is now recommending. Specter voted for that bill, with many of his then Republican colleagues.
Blanche Lincoln’s Website Still Says She Supports The Public Option
Blanche Lincoln’s Website Still Says She Supports The Public Option
This afternoon, Sen. Blanche Lincoln (D-AK) announced that she would vote for cloture on the motion to proceed but promised — at least 3 different times — to filibuster reform if it includes a public option. “I’m prepared to vote against moving to the next stage of consideration as long as a government-run public option is included,” she said. But Lincoln hasn’t always opposed a public plan. In July, Lincoln wrote in the Arkansas Democrat-Gazette: “Individuals should be able to choose from a range of quality health insurance plans. Options should include private plans as well as a quality, affordable public plan or non-profit plan that can accomplish the same goals as those of a public plan.”
In fact, that language is still up on her Senate website:
By September 1, Lincoln changed her mind. “I would not support a solely government-funded public option,” Lincoln said at an event in Little Rock. “We can’t afford that.” This afternoon, Lincoln expressed concern that the option could ignore the letter of the law and charge premiums that would not cover the cost of the program. (H/T Jon Walker)
Blanche Lincoln Justifies Opposition To Bill That Includes Public Option With Disingenuous Argument
Blanche Lincoln Justifies Opposition To Bill That Includes Public Option With Disingenuous Argument
NOTE: We are live-tweeting the Senate vote for cloture on the motion to proceed at @wonkroom.
In a dramatic and long winded speech on the floor of the Senate, Sen. Blanche Lincoln (D-AR) announced today that she would provide the 60th vote “in support of cloture on the motion to proceed” to the health care reform bill. But Lincoln also stressed that she is “opposed to a new government administered health care plan as a part of health care reform and will not vote on the health care proposal introduced by leader Reid as it is written”:
I’ve already alerted the leader, and I’m promising my colleagues, that I’m prepared to vote against moving to the next stage of consideration as long as a government-run public option is included. The public option as a part of health insurance reform has attracted far more attention than it deserves. While cost projections show that it may reduce costs somewhat, those projections don’t take into account who pays if it fails to live up to expectations. If in fact premiums don’t cover the cost of the public plan, it is taxpayers in this country who are faced with the burden of bailing it out.
Watch a compilation:
The Senate bill requires that “the premiums for the public plan be set to fully fund expenditures for medical claims, administrative costs, and a contingency reserve” and instructs the Secretary of Health and Human Services to negotiate reimbursement rates with physicians. The Senate’s public option would save the government $3 billion over 10 years, the Congressional Budget Office has concluded.
Lincoln, who supported giving Americans the choice of enrolling in a public option as recently as July, is arguing that the option could ignore the letter of the law and charge premiums that would not cover the cost of the program. Her skepticism may be well-founded, but it’s also short-sighted and inconsistent. She is doubting the integrity of the public option, while tacitly assuming that private insurers — who have a long-standing practice of exploiting loopholes in the law and skimming on coverage for beneficiaries to increase profits — will follow the new benefit and rate regulations. Lincoln supports ‘building on the current system’ and regulating private insurers without questioning their commitment to “live up to expectations.”
Ultimately, if she’s is worried that the language of the health care bill won’t be properly implemented, she should encourage the Senate to establish a federal oversight mechanism that could force private health insurance companies and the public plan to abide by the new rules of reform. As it stands now, her objection to the public plan sounds rather manufactured and hypocritical.
Landrieu To Provide 59th Vote On Motion To Proceed, Responds To ‘Some Very Partisan Republican Bloggers’
Landrieu To Provide 59th Vote On Motion To Proceed, Responds To ‘Some Very Partisan Republican Bloggers’
NOTE: We are live-tweeting the Senate vote for cloture on the motion to proceed at @wonkroom.
This afternoon, Sen. Mary Landrieu (D-LA) took to the Senate floor to announce that she would vote on a motion to proceed with the Patient Protection and Affordable Care Act. Landrieu is the 59th Senator to commit to voting to open debate on the floor. Senate Majority Leader Harry Ried (D-NV) would still have to secure the support of Sen. Blanche Lincoln (D-AK) to begin considering the legislation.
In her remarks, Landrieu stressed that she was concerned about the bill’s costs to small businesses and individuals, the possible premiums spikes families could face in the time between when the bill passes and its reforms are implemented, and reiterated her opposition to a public health insurance option:
My vote today to move forward on this important debate should in no way be construed by the supporters of this current framework as an indication of how I might vote as this debate comes to an end. It is a vote to move forward to continue the good, and essential, and important and imperative work that is underway….We must enhance and expand tax credits that are in this bill that are for small businesses, particularly those of 25 and less and if we can expand it between 25 and 50, that would be a great help…I will continue to fight for more tax equity for the 27 million Americans who are currently self employed…in order to really deliver on our promise to lower costs for families focus on ways for premiums to be excessively raised between the time this bill is enacted and the time these provisions go into affect … I remain concerned that the current version of the public option included in this bill could shift significant risk to tax payers over time, unnecessarily…I’ve suggested that a free-standing community option…
Watch a compilation:
Landrieu also directly responded to “some very partisan Republican bloggers” who suggested that she agreed to support the bill only after Reid included “an extra $100 million in federal aid for low-income people in her state. “The Louisiana money is intended to adjust the percentage of federal payments to the state for Medicaid to avert a scheduled cut in U.S. assistance in 2011 for the program, which provides medical care for the poor. Louisiana had a bump in per capita income from the post-Katrina construction boom, which would force the decline in federal aid.”
Landrieu explained that following the hurricane, “some of those one-time recovery dollars were calculated into our per-capita income” and inflated the state’s income. As a result, the state is scheduled to receive less matching fund for the Medicaid program. “It is the number one request of my Governor, who is a Republican and it is unanimously supported by every member of our delegation, Democrat and Republican. I’ m proud to have asked for it. I’m proud to have fought for it, and I will continue to,” she said.
Although I don't agree with everything in this bill, I have concluded that I think it's more important that we begin this debate to improve our health care system for all Americans rather than just drop the issue and walk away....I will vote in support of cloture on the motion to proceed to this bill. But madam President, let me be perfectly clear, I'm opposed to a new government health care plan as a part of health care reform and I will not vote in favor of the proposal that has been introduced by leader Reid as it is written....I've already alerted the leader, and I'm promising my colleagues that I'm prepared to vote against moving to the next stage of consideration as long as a government-run public option is included.
Financial Services Industry Warns That Transactions Tax Will Cause ‘Stalling Of The Stock Market’
Financial Services Industry Warns That Transactions Tax Will Cause ‘Stalling Of The Stock Market’
With House Democrats seriously considering proposing a financial transactions tax (FTT) to pay for a new jobs creation package, the financial services industry has gone on the defensive. The premise behind a financial transactions tax is that it is so small (a fraction of a percentage point) that a normal investor who is buying a stock to hold is barely going to notice it. But an investment bank like Goldman Sachs, which is involved in lots of high-frequency trading, is going to pay a pretty penny. It’s estimated that an FTT can raise about $150 billion annually.
The Securities Industry and Financial Markets Association, a leading lobbying organization for banks and securities firms, said that such a tax would literally stall the stock market:
Imposing a tax on financial transactions is the wrong idea at the wrong time. Such a tax would likely result in a stalling of the stock market, cutting off companies’ ability to raise capital to fund new investments in plants and equipment, and thus create jobs. Furthermore, it would directly and detrimentally affect millions of Americans by imposing a tax on their savings such as mutual funds, just as they are seeing their investment assets regain value.
An analyst in Washington at Concept Capital, which advises brokers and dealers, told clients that “we cannot completely dismiss the slight possibility it could be part of a House jobs bill,” but vowed that it has “virtually no chance in the Senate.” Even right-wing tea party organizers Americans for Prosperity got into the act, saying that the FTT would be a “disaster.”
Contrary to SIFMA’s assertion, under the proposed plan, the tax would be refunded “for those involving assets kept in individual retirement accounts, education savings accounts and health savings accounts” and the first $100,000 in annual transactions. So “millions of Americans” would not see their savings accounts slammed.
But furthermore, an FTT will make the financial system allocate capital more efficiently, as trading for the simple sake of trading will be more expensive. Center for Economic and Policy Research co-director Dean Baker estimates that an FTT could free up more than $60 billion a year in capital and labor for productive uses.
Finally, I’m not sure where SIFMA gets off suggesting that an FTT would stall the stock market, as the United Kingdom already has both a tax on stock trades and a vibrant stock exchange. Wall Street was saved by taxpayers to the tune of $700 billion dollars, plus untold amounts of guarantees against losses and cheap money from the Federal Reserve. An FTT — the revenues from which could be put towards programs or deficit reduction — seems only fair.
Why Rush Wyden’s Choices Amendment?
Why Rush Wyden’s Choices Amendment?
Senate Majority Leader Harry Reid (D-NV) has agreed to include a watered-down version of Sen. Ron Wyden’s (D-OR) ‘Choices Amendment’ in the merged Senate bill. Wyden, an ubiquitous presence on cable television, has been hawking his idea of instantly opening up the insurance exchanges to Americans in employer-sponsored coverage for months. He introduced the amendment in the Senate Finance Committee just hours before it ended its marathon mark-up session, but withdrew it for later consideration.
Under this compromise, a small sliver of the population — individuals and families under 400% of the federal poverty line who receive employer-sponsored coverage and spend 8-9.8% of their income on premiums — could “convert their tax-free employer health subsidies into vouchers that they can use to choose a health insurance plan in the new health insurance exchanges.” Currently, individuals in employer-based coverage who have to spend more than 9.8% of the incomes on premiums aren’t required to purchase health insurance and don’t quality for affordability credits if they enter an Exchange:
“As I have long said, empowering Americans to choose the health insurance that works best for them and their family is the single best way to hold health insurance companies accountable,” Wyden said in a statement. “While this is just one step in the direction of guaranteeing choices for all Americans, it is a major step because – for the first time – it introduces the concept of individual choice to a marketplace where it has long been foreign. This is a significant step toward real reform.”
The theory of instantly “empowering Americans to choose the health insurance that works best for them” is sweeter than the reality. The merged senate bill establishes a time line that more or less allows everyone to choose a plan from an exchange by 2017. In this way, the legislation builds on the current structure but also sows the seeds for an eventual transition to a more ‘individualistic’ system — or what Wyden calls “real” reform.
This ‘time release’ approach — to borrow a pharmaceutical term — is intentional. Opening the exchanges only to small businesses, individuals and the self-insured for a limited period preserves the employer contribution in the health care system and allows the exchanges to build a capacity for covering more people over time. It helps the Exchanges find their footing without being overrun by millions and millions of new applicants from the employer market. Care continuity is also better preserved.
In short, the existing legislation accomplishes the main goals of Wyden amendment on a more realistic timetable. Wyden was concerned that it didn’t have his name stamped all over it. Now it does.
Support Iran’s Opposition Or Bomb Iran: You Can’t Do Both
Support Iran’s Opposition Or Bomb Iran: You Can’t Do Both
Washington Times national security editor Barbara Slavin has an article on Iranian filmmaker and dissident Mohsen Makhmalbaf, who has become a spokesperson for Iran’s Green Movement in the wake of the June 12 elections. Makhmalbaf called upon President Obama to more explicitly support Iran’s opposition movement and more strongly condemn Iranian human rights abuses. He also had some interesting things to say about the prospect of further sanctions:
“Inevitably, you are going to put [new] sanctions on Iran,” Mr. Makhmalbaf told a small group of Iran specialists and journalists in Washington. He said the U.S. should “let the Iranian people know why you are going to sanction and what the targets are so they can support you.”
He rejected proposed U.S. legislation that would target gasoline imports to Iran, saying that would hurt average people. He said it was better to focus on the Revolutionary Guards, who have been at the forefront of repressing demonstrations and who have taken control of considerable elements of the Iranian economy.
You know who also opposes U.S. legislation targeting gasoline imports to Iran? The Iranian regime. For some, this shared interest is quite enough to tar Makhmalbaf as a regime apologist. Those who are genuinely interested in supporting Iran’s opposition — and not just in smoothing the road toward a U.S.-Iran war — understand that this is silly, of course. The Iranian opposition — and its supporters outside the country — include a number of different factions and trends with various end goals and methods of reaching them.
Speaking of smoothing the road toward a U.S.-Iran war, the very same Washington Times also runs an editorial today telling Americans to Get Ready To Bomb Iran:
Force need not be used to be effective, but the threat of force must be credible to have any chance of influencing Iranian behavior. Right now, there is no credible threat emanating from the United States. The Obama administration unambiguously opposes military action against Iran, particularly by Israel. But it would help to have a little ambiguity on this issue. So long as Tehran thinks the United States will work actively to prevent Israel from taking action, it has one less reason to worry. It would be most helpful if the United States began to send signals to Tehran that the United States will assist Israel in its preparations for military action and maybe even participate when the attack ultimately is launched.
If the regime in Tehran is not made to fear serious consequences for its continued intransigence, it has no reason to abandon its nuclear ambitions.
Leaving aside that anyone who talks seriously about bombing Iran has revealed themselves to be no friend of Iran’s opposition — Abbas Milani represents the overwhelming consensus when he writes that “the forces now controlling Iran would be immeasurably strengthened by an American or (especially) Israeli attack” — this shows a pretty serious misapprehension of the situation in Iran right now.
It’s not at all clear that Iran’s ruling hardliners, who are currently weathering the most serious crisis of legitimacy in the Islamic Republic’s history, wouldn’t actually welcome a military strike by either Israel or the U.S. Such a strike, in addition to extinguishing the Green Movement, would effectively end the ongoing debate within the regime over whether to obtain a nuclear weapon in favor of those who have been arguing “yes,” in very much the same way that the preventive U.S. invasion of Iraq convinced Iran’s hardliners that they needed to keep open the option of having a strategic deterrent.
It’s pretty broadly understood across the U.S. defense establishment that a strike on Iran — either by Israel or the U.S. — would very likely result in a number of disastrous consequences, consequences Iran knows that the U.S. would rather avoid. There’s really no credibility to be generated by pretending otherwise.
Why Does The Senate Bill Establish Two Separate Exchanges?
Why Does The Senate Bill Establish Two Separate Exchanges?
Over at FiredogLake, Jon Walker points out that the merged merged Senate bill would “create two exchanges per state. There would be an exchange for individuals and a “Small Business Health Options Program” know as the SHOP exchange for businesses.” “This is, pure and simple, a dumb idea,” he writes. “The more customers using one exchange the larger the risk pool and the better the bargaining power.”
It’s unclear why the Senate separates the individual and small business markets rather than follow the Massachusetts model of combining the two markets. Under the Senate bill, insurers would pool risk for all policies in the individual market (inside and outside of the exchange) and all small business policies (inside and outside of the exchange) but couldn’t combine the risk unless the state voluntarily merges the two markets.
As Sarah Lueck explains, allowing multiple exchanges to participate in the same geographic area would increase administrative costs and “diminish the ability of an exchange to improve efficiency by creating a well-functioning marketplace”:
If there were multiple exchanges in the same area, the exchanges would have to spend money on marketing and advertising in order to attract customers….Also, permitting multiple exchanges in a single area would require a vastly more complex risk-adjustment system. Risk adjustment provides higher payments to insurers enrolling higher-cost beneficiaries, while lowering payments to plans enrolling healthier individuals with lower-than-average costs. In areas with multiple exchanges, the risk-adjustment mechanism would have to compensate for risk differentials across the various exchanges, as well as among the insurers within each exchange. This would make it more difficult to risk-adjust accurately.
One possible reason for the separation, a source suggests, is the reluctance of some insurers operating in the small group market to expand their options to individuals. The may not want to change their business model or cover a potentially sicker crop of newly insured individuals.
The so-called SHOP-exchanges have also been promoted by the National Federation of Independent Businesses (NFIB) and championed in the Senate by Sens. Dick Durbin (D-IL), Blanche Lincoln (D-AK) and Sen. Olympia Snowe (R-ME). But why they’re still necessary in the broader context of health reform is somewhat of a mystery.
SHOP may not make policy sense, but it may help win the support of a few moderate lawmakers.
Steve King Reminisces About The Days When Football Players Could ‘Get A Job Because They Knew Someone’
Steve King Reminisces About The Days When Football Players Could ‘Get A Job Because They Knew Someone’
Yesterday, Republican members of the House Immigration Reform Caucus (HIRC) dedicated a three and a half hour long pseudo-hearing in a nearly empty room in the Rayburn building to spewing their “well-worn rhetoric about the hordes of illegal aliens destroying the American way of life.” During the event, “American Jobs in Peril: The Impact of Uncontrolled Immigration,” Rep. Steve King (R-IA) seemed to suggest that the U.S. should rid itself of its immigrant workers because, back in the good ‘ol days, high school “football stars” could get good-paying jobs not because they were qualified to work at them, but rather, because “they knew someone”:
Thirty years ago in the packing plants there in that town — which I do call my hometown — you had to know somebody to get a job. And I can remember looking at the football stars on our football team that graduated back in those years in the mid to late 60s and thinking:
“Those guys will get the best-paying jobs at the beef plant. They can just take their degree and go out and get a job — IF they know someone. If they don’t, they won’t get the job. Well I can’t do that because I’m not tall enough or strong enough.”
But today it’s entirely different.
Watch it:
King attributes the end of cronyism in the meatpacking industry and the deterioration of wages and working conditions to undocumented immigrants. The United Food and Commercial Workers International Union (UFCW), which has represented meatpackers for almost a hundred years, has a different take about the sequence of events.
Back in March, Center for Immigration Studies Senior Fellow Jerry Kammer — who was also a panelist at the event — offered an interpretation of the industry’s history similar to King’s, minus the football players. The UFCW was quick to point out that Kammer’s misinterpreted and manipulated “data to reach a totally biased and flawed conclusion” and demonstrated a “complete lack of understanding about the history of the meatpacking industry.” They also provided their own account of what happened:
Immigrants worldwide have been essential in strengthening the U.S. meatpacking industry, by organizing around increased wages and improved industry standards. But during the ‘80’s, something happened. Consolidation, mergers, and company-induced strikes helped drive down wages for meatpackers. During the strikes, companies aggressively recruited strike breakers-not immigrants but individuals who came from the decimated farm industry-to cross the picket lines.
Many of these workers soon realized something: these jobs were tough. Too tough to perform at the wages companies were offering. So, they left. But the damage was done. And the UFCW has been fighting to rebuild wages and standards for these jobs ever since.
In direct reference to yesterday’s event, UFCW’s Director of Civil Rights and Community Action, Esther Lopez, commented, “Given their [King and his allies] terrible track record on worker issues, it really is the height of hypocrisy that they are now trying to portray themselves as champions of workers.”
The House Immigration Reform Caucus (HIRC) is a group of (mostly Republican) representatives founded by former Rep. Tom Tancredo (R-CO) with the mission of stopping “the explosive growth in illegal immigration,” “reversing the growth in legal immigration,” and halting “amnesties.” The forum featured panelists from two of the three organization which “stand at the nexus of the American nativist movement,” and are often referred to as part of the “Nativist Lobby.”
Cross-posted at Think Progress.
ClimateGate: Hacked Emails Reveal Global Warming Deniers Are Crazed Conspiracy Theorists
ClimateGate: Hacked Emails Reveal Global Warming Deniers Are Crazed Conspiracy Theorists
Thousands of “emails from the University of East Anglia webmail server” — a top climate research center in the United Kingdom — “were hacked recently” and dumped on a Russian web server. Global warming deniers are sifting through the illegally obtained letters of private correspondence for “proof” that the scientific consensus on climate change is actually a global conspiracy.
— “If you own any shares in alternative energy companies I should start dumping them NOW,” says the Telegraph’s James Delingpole.
– Hot Air’s Ed Morrissey claims the emails discuss “repetitive, false data of higher temperatures.”
– The National Review’s Chris Horner salivates, “The blue-dress moment may have arrived.”
– “The crimes revealed in the e-mails promise to be the global warming scandal of the century,” blares Michelle Malkin.
– The Australia Herald-Sun’s Andrew Bolt claims the emails are “proof of a conspiracy which is one of the largest, most extraordinary and most disgraceful in moderrn [sic] science.”
Evidently due to this e-mail conspiracy, Arctic sea ice is at historically low levels, Australia is on fire, the northern United Kingdom is underwater, and the world’s glaciers are disappearing. Oh yeah, and it’s the hottest decade in history.
I don't know how you get from some scientist having sexed up a graph in East Anglia ten years ago to The Final Nail In The Coffin of Anthropogenic Global Warming. Anyone who comes to that connection has more screws loose than the Space Shuttle Challenger. And yet that's literally what some of these bloggers are saying!
DeLauro: Chamber of Commerce ‘Ignoring The Needs’ Of 57 Million Workers Without Paid Sick Days
DeLauro: Chamber of Commerce ‘Ignoring The Needs’ Of 57 Million Workers Without Paid Sick Days
In response to the threat posed by the H1N1 virus (swine flu), Rep. Rosa DeLauro (D-CT) and Sen. Chris Dodd (D-CT) have proposed legislation that would require all businesses with more than 15 employees to provide seven days of sick leave. As I’ve noted before, the Centers for Disease Control has advised workers who contract the virus to stay home, to prevent them from infecting other workers, but nearly half of the private sector workforce has no paid sick leave — and the number increases to 78 percent of hotel workers and 85 percent of food service workers.
In response to the new legislation, the big business community — led by the Chamber of Commerce — has voiced its opposition to the very notion of paid sick days, by downplaying the extent of the problem. The Chamber said that “the problem is not nearly as great as some people say,” while the National Association of Manufacturers claimed that employers who don’t provide sick leave are “clearly the exception.”
The Wonk Room sat down with DeLauro today to discuss her bill. She said that by steadfastly opposing paid sick leave, the Chamber and its allies are simply ignoring the 57 million working Americans who currently have no paid sick days:
[The Chamber of Commerce] is just ignoring the needs of a bulk of a workforce, people who get up every day, go to work, want to work, but you know what? They get sick. People get sick and to not have the opportunity to take a day or two days, nobody’s talking about two weeks…What we are trying to do is address the issue of 57 million people — who are hard-working people — who today have not one paid sick day.
Watch it:
DeLauro noted that the arguments coming from the Chamber are the same that the group employed to oppose the Family and Medical Leave Act of 1993:
They said at that time that business was going to crash, that this country was going to go to hell in a handbasket, that we couldn’t survive this kind of an act. Well, they were proven wrong, and they are wrong in this instance.
Watch it:
DeLauro correctly noted that the U.S. economy loses $180 billion in productivity annually due to sick employees attending work and infecting other workers. DeLauro is also a sponsor of the Healthy Families Act, which would permanently require seven paid sick days for workers (again, at firms with more than 15 employees). In both bills, leave could be used to care for a sick child or elderly relative.
After Inhofe’s Endorsement, Carly Fiorina Challenges Climate Science
After Inhofe’s Endorsement, Carly Fiorina Challenges Climate Science
Our guest blogger is Daniel J. Weiss, a Senior Fellow and the Director of Climate Strategy at the Center for American Progress Action Fund.
Following the endorsement of Sen. Jim Inhofe (R-OK) Wednesday for her campaign to unseat Sen. Barbara Boxer (D-CA), ex-Hewlett Packard CEO Carly Fiorina questioned the science of climate change. Boxer, as the chair of the Senate environment committee, is the chamber’s leading advocate for action to create jobs, make America more energy independent, and cut global warming pollution. Ranking environment committee member Inhofe — “Senator Climate Change Denier” — led a failed boycott of Boxer’s Clean Energy Jobs and American Power Act (S. 1733). After news of Inhofe’s endorsement of Fiorina came out, a reporter asked whether she believes in global warming. Fiorina admitted she is skeptical about climate science:
I think we should have the courage to examine the science on an ongoing basis.
Fiorina’s refusal to recognize the science of climate change and her belief that cap and trade legislation “will kill jobs” puts her in opposition to California’s business and political leadership.
Gov. Arnold Schwarzenegger (R-CA), the leader of the California Republican Party, recently noted that California is “already experiencing” the devastating impacts of global warming:
In California, we are already experiencing rising sea levels eroding our coastal infrastructure, reduced snow pack in the Sierra leading to prolonged droughts and more conflict over water, drier forests suffering more frequent and ferocious forest fires, and worsening smog-related public health threats and crop damage. The implications for our state if these trends continue are simply staggering.
Fiorini’s opposition to binding reductions of global warming pollution will make it very difficult to encourage innovation and create jobs, accord to her Silicon Valley neighbor, venture capitalist John Doerr, who testified in July that the United States “must put a price on carbon and a cap on carbon emissions” because “no long-term signal means no serious innovation at scale, which means fewer new American success stories.”
On the same day he endorsed Fiorina, Inhofe “proudly” declared in a speech on the Senate floor that 2009 is “the Year of the Skeptic.”
A Doctor Should Know Better: Coburn Says ‘Botox Tax’ Would Apply To Reconstructive Breast Surgery
A Doctor Should Know Better: Coburn Says ‘Botox Tax’ Would Apply To Reconstructive Breast Surgery
Cosmetic surgeons and some conservative lawmakers are mischaracterizing that the new 5% “botox tax” on cosmetic surgeries and procedures in the merged Senate health reform bill. The tax, which would raise an estimated $5 billion over the next decade to help fund health reform, is narrowly tailored towards voluntary cosmetic procedures. But some critics, like long-time contrarian Sen. Tom Coburn (R-OK), are suggesting that the reform bill would also tax more serious operations, like breast reconstruction surgery following cancer:
Just yesterday — the day before yesterday, U.S. preventive task forces, services, recommended because it’s not cost effective that women under 50 not get mammograms unless they have risk factors. Well, you tell that to the thousands of women who were diagnosed with breast cancer lat last — last year under 50 with a mammogram. You tell them it’s not cost effective. Also in this bill is a 5% tax on the breast reconstruction surgery after they had a mastectomy. They’re going to tax having your breast rebuilt after your breast is taken off because it is elective plastic surgery. It is elective cosmetic surgery. We’re going to have a tax on it because we’ve taxed elective cosmetic surgery. We’re in trouble as a nation because we’ve taken our eye off the ball.
Coburn may be one of only two doctors serving in the Senate, but he’s no more knowledgeable about what constitutes ‘elective cosmetic surgery’ under reform legislation, than the average layman. Section 9017 of the merged Senate bill relies on the IRS definition of ‘cosmetic surgery,’ which defines the procedure as “any procedure which is directed at improving the patient’s appearance and does not meaningfully promote the proper function of the body or prevent or treat illness or disease.”
The Senate bill doesn’t tax all cosmetic operations. Surgeries to “ameliorate a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or disfiguring disease” are excluded from taxation.
Under that standard, surgery performed to reconstruct a woman’s breast after cancer — a disfiguring disease — would not be taxed:
The tax is intended to discourage consumers from undergoing unnecessary surgeries or procedures. As much as one-third of nation’s health care expenditures are spent on procedures that don’t improve health outcomes. Capturing some of that spending and re-investing it into health care reform would help to slow the growing rate of health care spending, finance reform, and ultimately reduce costs for everyone. In short, the tax would help fill the wrinkles in America’s broken health care system.
The WonkLine: November 20, 2009
The WonkLine: November 20, 2009
Welcome to The WonkLine, a daily 10 a.m. roundup of the latest news about health care, the economy, national security, immigration and climate policy. This is what we’re reading. Tell us what you found in the comments section below, and subscribe to the RSS feed. Also, you can now follow The Wonk Room on Twitter.
National Security
Iran analyst Genieve Abdo writes “as [Iran's] religious and political crisis unfolds, it is becoming clearer that the central problem, among many, lies with Khamenei and his absolute power as Supreme Leader.” Abdo suggests that the Supreme Leader will not be replaced after he dies.
Dipali Mukhopadhyay writes that acknowledging the role played by warlords in Afghanistan governance “need not mean the abandonment of formal institutional capacity building on the part of international, intervening organizations.”
Venezuela has blown up two pedestrian bridges on its border with Colombia in the latest sign of deteriorating relations between the Andean neighbors.
Economy
The House Financial Services Committee approved a measure yesterday, proposed by Reps. Ron Paul (R-TX) and Alan Grayson (D-FL), “that would allow Congress to order audits of all the [Federal Reserve's] lending programs as well as of its basic decisions to set monetary policy.”
House Democrats are looking at implementing a financial transactions tax, but Speaker Nancy Pelosi (D-CA) said yesterday that any such tax “would have to take effect internationally to keep Wall Street jobs and related business from moving overseas.”
“What’s Obama’s trade policy?” asks McClatchy’s Kevin Hall. “So far, there isn’t much of one.”
Climate Change
Sen. Bob Corker (R-TN) tells President Obama not to be a leader on climate change, saying, “As a country, I know we’re not there yet, so I would hope the president wouldn’t be out in front of where the country has been.”
Sen. John McCain (R-AZ) trashes the efforts by his former best friends, Sen. Lindsey Graham (R-SC) and Sen. Joe Lieberman (I-CT) to develop climate and clean energy legislation: “Obviously, they’re going nowhere.”
The Department of Labor announced “nearly $55 million in grants to help workers, many in underserved communities, find jobs in expanding green industries,” as the United States and China race for clean energy jobs.
Immigration
Former CNN anchor Lou Dobbs told Reuters that he is “mulling” a Senate or White House run, stating “Do I seek to have some influence on public policy? Absolutely. Do I seek to represent and champion the middle class in this country and those who aspire to it? Absolutely.”
The White House denies claims made by Latino leaders that Chief of Staff Rahm Emanuel “has his fingerprints all over” the Obama administration’s support of barring undocumented immigrants from purchasing health insurance at full cost on the exchange.
Federal prosecutors dropped all 72 immigration charges against Sholom Rubashkin — the owner of the company which underwent the nation’s largest immigration raid.”
Health Care
The Senate will vote on Saturday on a motion to proceed with the health care reform bill. Senate Majority Leader Harry Reid (D-NV) doesn’t have the 60 votes necessary to overcome a filibuster but remains ‘cautiously’ optimistic that hold outs Sens. Mary Landrieu (D-LA) and Blanche Lincoln (D-AK) will vote for the motion by 8pm.
Yesterday, the House “overwhelmingly approved a physician repayment bill to permanently fix the way doctors who cover Medicare patients are reimbursed. Only one Republican member [Rep. Michael Burgess (R-TX)] voted with Democrats for the bill that was approved 243-183.”
“Chances of business supporting the Obama administration’s health overhaul are fading fast, after Senate Majority Leader Harry Reid’s bill took a liberal turn,” the Wall Street Journal is reporting.
Gregg: Kanjorski Amendment Allows Gov’t To Break Up Wal-Mart ‘Because They Don’t Have A Union’
Gregg: Kanjorski Amendment Allows Gov’t To Break Up Wal-Mart ‘Because They Don’t Have A Union’
Can Kanjorski break them up?
Though regulatory reform legislation has been moving in the House for weeks, the Senate only started today, with members of the Senate Banking Committee giving their opening statements regarding Chairman Chris Dodd’s (D-CT) reform bill. Republicans, who have already said that they will lend the regulatory reform effort zero support, were unanimously opposed to the bill, particularly the provision to create a Consumer Financial Protection Agency (CFPA).
But Sen. Judd Gregg (R-NH) also took a few minutes to criticize the Kanjorski amendment, stating that it was too “European,” and that it empowers the government to break apart Coca-Cola and Wal-Mart, the latter because “they don’t have a union“:
The Kanjorski amendment that was dealt with yesterday on the House side was an exercise in European politics where there was some belief that a group of thoughtful people can choose winners and losers in the marketplace that are still doing well, that aren’t at risk, and decide how those winners and losers should be structured. Well where does that stop? Is Coca-Cola, should they be broken up under the House bill? Wal-Mart, maybe, because they don’t have a union, should be broken up under the House bill? This is undermining the American advantage, especially relative to our European neighbors.
Watch it:
While Wal-Mart’s lack of unionization is a shame, Kanjorski’s amendment clearly states that it only pertains to financial institutions, which can be broken apart only for threatening the financial system, and only after more stringent capital requirements have proven ineffective in removing the threat:
Scott Valentin, the banking analyst at FBR Capital Markets, told DealBook that he expects the Kanjorski’s push will meet its demise in the Senate, as “Wall Street’s objections…will win out in the end.” Valentin “based his opinions partly on meetings he had with Senate Republican staffers the day before the final language of the bill was released.”
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