The Final House Bill--Title I

I've begun reading the final House Bill.

Title I of the bill deals with the immediate reforms that will take place on January 1, 2010.  Here is what will happen:

TITLE I—IMMEDIATE REFORMS

Sec. 101. National high-risk pool program.  A temporary high-risk pool program would be established on January 1, 2010 to provide health benefits to individuals who have been denied coverage because of a pre-existing condition, were offered coverage that excluded pre-existing conditions or were offered coverage at a premium rate above the rate for the temporary high-risk pool program.  That means if you can not get affordable coverage now, you will be able to get it as of January 1st.

Sec. 102. Ensuring value and lower premiums.  Health insurance issuers would have to report their medical loss ratio.  If their medical loss ratio was below 85% (or a lower level as specified by the Secretary), the insurance company will have to rebate the difference to its enrollees.  This terminates when the health insurance exchange is established.

Sec. 103. Ending health insurance rescission abuse.  Insurance companies will not be allowed to rescind individual or group coverage without convincing evidence of fraud.  Individuals or groups that have their insurance rescinded will have the opportunity to challenge the rescission with a third-party review.

Sec. 104. Sunshine on price gouging by health insurance issuers.  Insurance companies will have to justify increases in premiums prior to implementation of the increases. 

Sec. 105. Requiring the option of extension of dependent coverage for uninsured young adults.  Insurance companies will have to cover children of enrollees up to age 27 who are not otherwise covered.

Sec. 106. Limitations on preexisting condition exclusions in group health plans in advance of applicability of new prohibition of preexisting condition exclusions.  Until preexisting conditions exclusions are totally prohibited, insurers will be able to exclude preexisting conditions only if they occurred within a shorter period such as 30 days (the permissible look-back period allowed varies from 9 months to 30 days depending upon section of existing law that is being amended. 

Sec. 107. Prohibiting acts of domestic violence from being treated as preexisting conditions.  An insurer will not be allowed to impose a preexisting condition exclusion on the basis of domestic violence.

Sec. 108. Ending health insurance denials and delays of necessary treatment for children with deformities.  Insurers must cover outpatient and inpatient diagnosis and treatment of an enrollee’s  minor child’s congenital and developmental deformity, disease, or injury if the child is under 21.

Sec. 109. Elimination of lifetime limits.  Insurers may no longer impose lifetime limits or caps on coverage.

Sec. 110. Prohibition against postretirement reductions of retiree health benefits by group health plans.  Insurers can not cut retiree benefits.

Sec. 111. Reinsurance program for retirees.  A temporary reinsurance program will be established to reimburse employment-based plans for 80% of the cost of providing health benefits to retirees (55 and older and not eligible for Medicare or Medicaid), eligible spouses, surving spouses and dependents if claim exceeds $15,000 up to $90,000.  Payments must be used to reduce the cost of health insurance premiums, contributions, copayments and so on.

Sec. 112. Wellness program grants.  Small employers will be provided with grants for up to 3 years and a total of $50,000 to cover 50% of the cost of wellness programs.  Wellness programs are those related to tobacco use, obesity, stress management, fitness, nutrition, substance abuse, depression, and mental health promotion.

Sec. 113. Extension of COBRA continuation coverage.  COBRA coverage is extend until the date the individual would be able to purchase insurance through the insurance exchange.

Sec. 114. State Health Access Program grants.  Grants would be made to states to help them expand their state health insurance programs to expand coverage to the uninsured.

Sec. 115. Administrative simplification.  Six months after enactment of this law the Secretary is required to submit a plan for administrative simplification (use of electronic record keeping primary) in order to reduce costs including provisions to protect the privacy of records.

Have Obama and Democrats saved the economy? Perhaps

It’s great news.  The economy in the third quarter grew at its best pace in two years thanks largely to the Obama stimulus.  The economy grew at a 3.5 percent pace in the third quarter.  Because of Republican NO/Nothing Party policies under the Bush adminstration the economy had shrunk 6.4 percent in the first quarter. 

In the third quarter, consumer spending on big-ticket manufactured goods went up 22.3, the largest growth since 2001.  Housing jumped 23.4, the biggest jump since 1986 and the first time since 2005 that spending on housing has been positive.  All of this improvement can be traced directly to Democratic/Obama policies that were almost universally opposed by the Republican NO/Nothings.

Source: http://www.msnbc.msn.com/id/33529806/ns/business-stocks_and_economy/

The other good news is that there was a decline in the number of people claiming first time jobless benefits fell last month and the number of people continuing to claim unemployment insurance dropped 148,000.

Source:http://www.msnbc.msn.com/id/33529791/ns/business-stocks_and_economy/

Great job Democrats.  Much remains to be done and the economy is going to continue to have bumps along the way to recovery but this is fantastic progress.

We need to raise the marginal tax rate to 45%

The Tax Policy Center has a table showing the top marginal income tax rate.  In the 1950s it was as high as 91%.   In the 1950’s the economy was strong, GNP went from $284.6 billion 1950 to $482.7 billion by the end of the 1950's. In 1954, there were reported to be 154 millionaires in the U.S.  The high marginal tax rate didn’t keep people from becoming millionaires or the economy from booming.

Today the top marginal tax rate is 35%.  The House has proposed a 1% surtax on people with incomes over $500,00 to pay for health reform and up to 5.4% for people with incomes over $1 million. 

Makes sense but let's do more.  Let’s take the top marginal tax rate to 45%.  That’s less than half of what it was in the 1950’s boom years. We could cover the cost of Health Reform with money left over for other progressive programs to improve the country.  It's something worth considering.

http://www.epi.org/economic_snapshots/entry/snapshot_20091028/

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=213

The public option is an issue of fairness

My friend Rick opposes the public option for health reform.  In a recent email to me, he discussed his various options and “backup plans” for health insurance—his company, his wife’s company, VA Health care, and eventually Medicare.  Notice that half of these are government run public options for those who qualify.  I’m happy for Rick.  He and his family are covered.  They will face increasing premiums, particularly if there is no health reform and there is always the risk that Rick’s company will stop providing health insurance coverage to retirees and that Rick’s wife might be laid off or have her company drop her coverage.  It all depends upon the size and viability of the companies.  Even if that happens, Rick has the back-up public option of VA health care and Medicare at 65.  He has options.

Rick also writes “I stayed on a career path with companies that provided insurance.  I had several opportunities to move to independent employment at a higher income bracket, but would have had to purchase insurance on my own.  I chose not to do that.”  I know a number of people who have done that including people who were miserable in their jobs but felt they couldn’t pursue other options because they had pre-existing conditions that would make it difficult, if not impossible for them to get insurance.  I know people who had great ideas for small start-up businesses that never pursued their dream because of the difficulty and cost of getting individual insurance.  I know people who stayed with large companies even though they desperately wanted the excitement, independence and opportunity that employment in a small company might have offered them.  I know people who dreamed of pursuing a career in the arts, who had the talent and were willing to make the financial sacrifices to do so who never pursued their dreams because they or a loved-one had a pre-existing condition that made getting individual insurance problematic and going without it too risky. I know people who wanted to stay with large companies not just because of the access to insurance but because they liked working in a large company who were laid off through no fault of their own, lost their insurance, and were unable to find work with a company that offered insurance.  I know people who lost their jobs from a company that provided insurance not because of poor performance but because they developed cancer or another expensive-to-treat disease that would have driven up health insurance costs for their company.  Of course, they weren’t told that their illness was why they were being fired or laid off but everyone knew that was the case.  I’ve known people who wanted to take time off to care for an elderly relative during their few remaining years or sick child or who wanted to just spend more time with their family and would have made the financial sacrifice to do so it had not been for the risk of going without insurance or being able to afford individual coverage.

People go without coverage and/or have poor coverage and/or don’t have access to employer-subsidized health insurance for many different reasons. 

Access to a public option is essentially an issue of fairness.  Rick and most Americans have options for obtaining health insurance, many have multiple options and back-up plans.  However, millions of Americans, sometimes by choice but most often for reasons outside of their control, have limited options for obtaining health insurance if they can do so at all.  That’s not right. 

Now I know the argument opponents of health reform make.  A public option will destroy private insurance.  A public option will lead to single-payer “socialized” medicine.  Is it possible that such things might happen?  Perhaps, but the chances are remote.  I think it is equally likely that without health reform the majority of Americans will be without health insurance within twenty years because they either no longer work for an employer that provides insurance (companies are dropping coverage every day) and/or the cost of insurance, even insurance subsidized by their employer, is just too expensive.  There are all kinds of possibilities. 

What is certain is this.  Nearly 50 million Americans today are without health insurance because they don’t have access to an affordable option.  They are simply asking for an affordable public option.  Most Americans have health insurance options, many multiple options.  The 50 million don’t have affordable health insurance options, many not even one.  We need a public option.  It’s an issue of fairness.  It's the right thing to do.  It's the American thing to do.

Increased support for public option

A new NBC/WSJ poll shows increased support for a public option public health plan administered by the federal government.  48% of Americans favor a public option, 42% oppose.  That compares to 47% opposing and 43% supporting in August.  If Americans are asked whether it is important to give people the choice of a public option, 72% said it was important or very important.

AMERICANS WANT A PUBLIC OPTION!

Why aren't seniors getting a SSA COLA increase in 2010?

Are Democrats responsible for seniors not getting a SSA COLA increase? Not by a long shot.  Democrats want to give seniors some help.  Republican NO/Nothings don’t think seniors need any help.

Here are the facts:

Congress does not set the COLA it is automatic and is based upon the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) which has been negative this year.

This from Social Security Online:

The first COLA, for June 1975, was based on the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the second quarter of 1974 to the first quarter of 1975. The 1976-83 COLAs were based on increases in the CPI-W from the first quarter of the prior year to the corresponding quarter of the current year in which the COLA became effective. After 1983, COLAs have been based on increases in the CPI-W from the third quarter of the prior year to the corresponding quarter of the current year in which the COLA became effective.
Section 215(i)(1) of the Social Security Act defines the calendar quarters that are to be used in the calculation of a Cost-of-Living Adjustment (COLA). In particular, the Act defines a "cost-of-living computation quarter" to mean a third calendar quarter with respect to which the Consumer Price Index (CPI) has increased relative to the last such quarter. Simply put, this means that, if a COLA becomes effective in any year, the COLA must be greater than zero.
If there is no COLA in one year, how is the next COLA calculated? Assuming Congress does not intervene by enacting a general benefit increase, the next COLA would become effective in December of the next year that has a third-quarter average CPI greater than the average for the last cost-of-living computation quarter.
For example, because there is no COLA effective for December 2009, the next COLA (2010 or later) will use the average CPI for the last cost-of-living computation quarter—the third quarter of 2008—as the base. That average is 215.495, so any future third-quarter average CPI must exceed 215.495 for that quarter to be a cost-of-living computation quarter. To further illustrate, if the third-quarter average for 2010 were 1.0 percent greater than 215.495, the COLA effective for December 2010 would be 1.0 percent.
There have been proposals to change the COLA formula--See www.urban.org/UploadedPDF/311063_retirement_no18.pdf

but they usually call for less of an increase rather than more arguing that the impact of inflation on seniors is less than the CPI-W.

Democrats want to help

Obama has proposed a one-time payment of $250 (about 2% of average benefit) which Republicans oppose this saying "that "despite various claims to the contrary, Social Security beneficiaries have enjoyed a real-terms increase in the purchasing power of their benefit checks and will continue to do so even in the absence of a COLA adjustment. See: http://www.gop.gov/policy-news/09/09/21/do-seniors-need-a-social. Therefore, it looks like there will be no increase AND no one-time payment to ease the pain. Thank the NO/Nothing Party. They don't think seniors need any help.

Rep. Walter Jones, R-N.C. did introduce something called the Emergency COLA bill that would provide for a COLA in 2010 equal to the average COLA over the past 10 years--roughly 3%. It hasn't received No/Nothing Party backing.

The Senior Citizens League (TSCL) says this about the COLA and proposed bills:

• Although the COLA is intended to help seniors keep up with inflation, a recent study by TSCL that analyzed 20 key expenditures found that people 65 and over have lost 20 percent of their buying power since 2000.
• Common senior expenses have soared since the beginning of the decade, such as Medicare Part B premiums (up 112 percent), heating oil (up 96 percent), and a dozen eggs (up 99 percent).
• Almost 70 percent of beneficiaries depend on Social Security for 50 percent or more of their income. Social Security is the sole source of income for 15 percent of beneficiaries.

The TSCL Solution

• The Emergency COLA Bill (H.R. 3557), introduced last month by Congressman Walter Jones (NC) and encouraged and promoted by TSCL from the beginning, would provide a COLA for 2010 equal to the average of the COLA over the past ten years. That average is roughly three percent.
• The bill would give the average beneficiary an additional $415.20 in Social Security payments in 2010, a boost of $34.60 per month.
• More importantly, the bill prevents seniors from losing the compounding effect of a COLA increase, which could result in thousands of dollars more throughout retirement for millions of seniors.

See: http://seniorjournal.com/NEWS/Politics/2009/20091016-SenCitLeaguePushes.htm

Also, the House voted to stop the Medicare premium increases. This has Democratic support and the NO/Nothings may be willing to go along with it.

See: http://seniorjournal.com/NEWS/SocialSecurity/2009/20090925-HousePassesBill.htm

See the following for more:

http://www.snopes.com/politics/social security/cola.asp

http://www.ssa.gov/OACT/COLA/colaseries.html

http://www.politifact.com/truth-o-meter/statements/2009/sep/28/chain-email/e-mail-claims-democratic-congress-blame-no-cola-in/

Senate health bill to have public option

Senate Majority Leader Harry Reid announced today that the bill he intends to bring to the floor of the Senate will contain a public option with an opt-out provision for states that do not want to give their citizens a choice.

A different take on the 60 Minutes program on Medicare fraud.

Sunday, 60 Minutes did a piece on Medicare fraud saying it amounted to $60 billion per year. Some people watched the program and said, “You see that’s why we shouldn’t have programs like Medicare.” I saw it and said “We should have tougher law enforcement and a stronger program to fight Medicare fraud.” The Obama administration agrees. Here is an exerpt from the 60 Minutes program covering that aspect of the story.

"We have to understand this is a major fraud area," United States Attorney General Eric Holder told Kroft.

Holder is taking a crime that has been in the backwaters of law enforcement and made it a top priority at the Justice Department.

[Why has it been in the backwaters of law enforcement? Why haven’t previous administrations made fighting Medicare fraud a top priority?]

Kim Brandt, Medicare's director of program integrity.

"We're as frustrated by that as the law enforcement officials that you went out with. And in fact, our primary focus over the past years has been to tighten our enrollment standards to make it so it's much harder for people like that to be able to get in the program, and to be able to commit that kind of fraud," Brandt said.

"Well, it really does come down to the size and scope of the Medicare program, and the resources that are dedicated to oversight and anti fraud work. One of our biggest challenges has been that we have a program that pays out over a billion claims a year, over $430 billion, and our oversight budget has been extremely limited," Brandt said.

About that there is little dispute: Medicare has just three field inspectors in all of South Florida to check up on thousands of questionable medical equipment companies.

"Clearly more auditing needs to be done and it needs to be done in real time," Attorney General Eric Holder said.

The Obama administration is providing Medicare with an additional $200 million to fight fraud as part of its stimulus package, and billions of dollars to computerize medical records and upgrade networks, which should help Medicare catch more phony charges.

[I think $200 million is way, way too little. We’re talking about $60 billion that is going out the door to cheats, would $1 billion in fighting fraud be too much? Suppose we hired 300 inspectors to check up on medical equipment companies in South Florida, how much fraud might they prevent? How many crooks could they capture? How much would the extra cost of these 300 inspectors save us? For those of you who don’t want to have more government employees, suppose we spent $1 billion to contract out fraud investigations/inspections to private companies and gave them rewards for convictions?

Some people look at this fraud and say “Stop the program.” I look at it and say “Stop the fraud.” It’s a different take.

$850 BILLION PER YEAR IN HEALTHCARE WASTE

Medicare fraud may not be the only, or most expensive problem. According to Robert Kelley, vice president of health care analytics at Thomson Reuters, found actual waste in the U.S. healthcare system could be as high as $850 Billion per year

"The average U.S. hospital spends one-quarter of its budget on billing and administration, nearly twice the average in Canada," reads the report, citing dozens of other research papers. "American physicians spend nearly eight hours per week on paperwork and employ 1.66 clerical workers per doctor, far more than in Canada," it says, quoting a 2003 New England Journal of Medicine paper by Harvard University researcher Dr. Steffie Woolhandler.

Here are some of the study's key findings:
Unnecessary Care (40% of healthcare waste): Unwarranted treatment, such as the over-use of antibiotics and the use of diagnostic lab tests to protect against malpractice exposure, accounts for $250 billion to $325 billion in annual healthcare spending.

Fraud (19% of healthcare waste): Healthcare fraud costs $125 billion to $175 billion each year, manifesting itself in everything from fraudulent Medicare claims to kickbacks for referrals for unnecessary services.

Administrative Inefficiency (17% of healthcare waste): The large volume of redundant paperwork in the U.S healthcare system accounts for $100 billion to $150 billion in spending annually.

Healthcare Provider Errors (12% of healthcare waste): Medical mistakes account for $75 billion to $100 billion in unnecessary spending each year.

Preventable Conditions (6% of healthcare waste): Approximately $25 billion to $50 billion is spent annually on hospitalizations to address conditions such as uncontrolled diabetes, which are much less costly to treat when individuals receive timely access to outpatient care.

Lack of Care Coordination (6% of healthcare waste): Inefficient communication between providers, including lack of access to medical records when specialists intervene, leads to duplication of tests and inappropriate treatments that cost $25 billion to $50 billion annually.

See: http://thomsonreuters.com/content/press_room/tsh/waste_US_healthcare_system


http://www.msnbc.msn.com/id/33480141/ns/health-health_care/

Why do doctors prescribe the most expensive medication first?

I recently went to my doctor for suggestions on how to treat a sinus condition I’ve struggled with for some time. I explained that I had tried several over-the-counter remedies with little improvement. She checked me out and then pulled out some sample packs of pills and nasal spray and said I should try those for a couple of weeks and if they seemed to be working she would write a prescription. Well, I tried the drugs and they did seem to improve things. I was about to ask for a prescription but decided to check out the cost of the pills and spray first. They were over $90 each for a month’s supply. All I had to do was pocket out $200 a month and I could get relief. I called the doctor and told her I thought $200 a month was a little steep to treat a minor but annoying sinus condition. I asked her if there was an alternative treatment. She said there was no generic version of the drugs she had given me since they were new but there were different drugs which she called in to my phramacy. The cost of these drugs turned out to be about $12 each for a month’s supply. Around $25 per month vs. $200. Now, these drugs may not perform as well as the first ones. I’m just starting on them so I’ll find out. But, my question is why she didn’t suggest the cheaper alternative first. Couldn’t we save some money by starting with the cheapest treatment option first and then working our way up to more expensive treatments if the cheaper ones don’t work particularly when we are dealing with a non-life threatening condition?

I’ve come to the conclusion that doctors always prescribe the latest designer drug assuming that the patient has seen an ad on TV and won’t agree to accept anything less than the newest drug available. A doctor told me once that he had given up prescribing generic drugs since few of his patients would agree to take them. I also don’t really think doctors think about the cost of the drugs or maybe even know what they cost and patients usually never bother to check since many of them have a low drug co-pay. Relatedly, I recall calling around to various pharmacies asking what they charged for a particular drug since I was looking for the lowest cost. Most of the pharmacists told me they couldn’t tell me what the drug would cost until they went to fill the prescription and called it in to my insurance company and even that quote might change from day to day. It is all crazy. I don’t know how anyone can truly comparison shop for drugs or medical care. Take lab work. I had some routine lab work not long ago. When I got the invoice from the lab, it had billed my insurance company $209 for my lab work. The insurance company allowed $25. Now I can understand an insurance company being able to negotiate lower rates but that is an 88% reduction. Don’t get me wrong, I would rather pay $25 than $209. However, my question is what is the service really worth, $200 or $25? Who knows.

Our health insurance/care system in this country is broken. The Democratic Party is trying to do something to fix it. The No/Nothing Party is trying to block any meaningful reform not because they think reform isn’t needed but because the leaders of the No/Nothings believe they can gain a political advantage from causing the Democrats and particularly Obama to fail. Well, if the Democrats fail to achieve meaningful reform, then the whole country loses. Healthcare costs will just keep going up and up and up and up………. If they do, blame the No/Nothings.

Health reform IS constitutional

You may have heard the argument that Congress has no power under the Constitution to require Amercians to purchase health insurance. They are wrong says Erwin Chemerinsky, dean and distinguished professor of law at the University of California, Irvine School of Law. Chemerinsky makes the following points:

Congress clearly [can compel people to purchase health insurance or pay a fine] under its power pursuant to Article I, Section 8 of the Constitution to regulate commerce among the states. The Supreme Court has held that this includes authority to regulate activities that have a substantial effect on interstate commerce…Under an unbroken line of precedents stretching back 70 years, Congress has the power to regulate activities that, taken cumulatively, have a substantial effect on interstate commerce. People not purchasing health insurance unquestionably has this effect.

Chemerinsky notes that health care expenditures have a strong impact on the nation’s economy consuming over 16% of gross domestic product. Additionally everyone will need medical care at some point which means that there is a potential cost to the system and Congress has the power to require everyone to be insured to cover that cost. Congress can justify this as an exercise of its power to tax and spend.

Congress can require the purchase of health insurance and then tax those who do not do so in order to pay their costs to the system. This is similar to Social Security taxes

Furthermore, says Chemerinsky, you have no consititutional right NOT to have insurance so health reform can health reform does not violate individual liberties or any constitutionally protected freedoms.

Finally, Chemerinsky notes that since the 19th century the Supreme Court has “consistently held that a tax cannot be challenged as an impermissible taking of private property for public use without just compensation.”

Sorry you folks who don’t like health reform, whatever you may have heard it IS constitutional.

http://www.politico.com/news/stories/1009/28620.html

We've heard it all before--long before

Nearly 100 years ago, the American Association for Labor Legislation, an association of progressive social scientists and economists, led an effort to enact compulsory health insurance at the state level. That effort met with determined opposition from medical practitioners, businesses, and assorted Conservative groups. It is remarkable how familiar the arguments of the opposition to reform were to those we hear today. Here is a sampling:

Compulsory health insurance “is autocratic and not democratic. It strikes at the root and foundation of the fundamental law of our land: life, liberty and the pursuit of happiness.”

“This legislation is an immediate institution of State socialism, and an abrogation of the rights of the individual to the control of his own life and property.”

Compulsory health insurance is “Un-American, Un-economic, Unfair, Un-Scientific and Un-scrupulous.”

Health insurance will “revolutionize the practice of medicine so that the physician will professionally cease to be an individualist and will be but a cog in a great medical machine.”

Health insurance will “imperil the advancement of medical research…all the great discoveries in medicine have resulted from individual effort. There is no initiative in bureaucratic medicine. Bring your health insurance and what incentive will a young man have to spend his time in research work? You will strike a blow at the very foundation of medicine.”

I am appalled by the “idea of caring for everybody in this world, whether they have been thrifty or not…No distinction is made in the bill between workmen. The dissolute, lazy and incompetent workman is grouped with the industrious, careful and temperate workman. The latter pays for the vices of the former.”

Compulsory health insurance will “bring about the result that all forms of insurance—life, casualty, fire and every other form—shall be carried solely by the government.”

This is only the entering wedge; if once a foothold is obtained it will mean attempts to have such State Insurance of all kinds.”

Filibuster and Cloture--Why it will take 60 votes to pass health reform

As the debate over health reform moves forward, you will hear a lot about the need for 60 votes in the Senate to pass reform due the threat of filibuster. Here is some background on filibuster and cloture (to cut off debate) from the historian of the Senate.

“Using the filibuster to delay or block legislative action has a long history. The term filibuster -- from a Dutch word meaning "pirate" -- became popular in the 1850s, when it was applied to efforts to hold the Senate floor in order to prevent a vote on a bill.
In the early years of Congress, representatives as well as senators could filibuster. As the House of Representatives grew in numbers, however, revisions to the House rules limited debate. In the smaller Senate, unlimited debate continued on the grounds that any senator should have the right to speak as long as necessary on any issue.
In 1841, when the Democratic minority hoped to block a bank bill promoted by Kentucky Senator Henry Clay, he threatened to change Senate rules to allow the majority to close debate. Missouri Senator Thomas Hart Benton rebuked Clay for trying to stifle the Senate's right to unlimited debate.
Three quarters of a century later, in 1917, senators adopted a rule (Rule 22), at the urging President Woodrow Wilson, that allowed the Senate to end a debate with a two-thirds majority vote, a device known as "cloture." The new Senate rule was first put to the test in 1919, when the Senate invoked cloture to end a filibuster against the Treaty of Versailles. Even with the new cloture rule, filibusters remained an effective means to block legislation, since a two-thirds vote is difficult to obtain. Over the next five decades, the Senate occasionally tried to invoke cloture, but usually failed to gain the necessary two-thirds vote. Filibusters were particularly useful to Southern senators who sought to block civil rights legislation, including anti-lynching legislation, until cloture was invoked after a fifty-seven day filibuster against the Civil Right Act of 1964. In 1975, the Senate reduced the number of votes required for cloture from two-thirds to three-fifths, or sixty of the current one hundred senators.
Many Americans are familiar with the filibuster conducted by Jimmy Stewart, playing Senator Jefferson Smith in Frank Capra's film Mr. Smith Goes to Washington, but there have been some famous filibusters in the real-life Senate as well. During the 1930s, Senator Huey P. Long effectively used the filibuster against bills that he thought favored the rich over the poor. The Louisiana senator frustrated his colleagues while entertaining spectators with his recitations of Shakespeare and his reading of recipes for "pot-likkers." Long once held the Senate floor for fifteen hours. The record for the longest individual speech goes to South Carolina's J. Strom Thurmond who filibustered for 24 hours and 18 minutes against the Civil Rights Act of 1957.”

http://www.senate.gov/artandhistory/history/common/briefing/Filibuster_Cloture.htm

Pay cuts coming for Wall Street execs.

The Obama administration will order pay cuts of up to 90% from last year for the top executives of companies that received the most bailout assistance. For many of the executives, the cash they would have received will be replaced by stock that they will be restricted from selling immediately. And for the 25 best-paid executives, the total compensation, which includes bonuses, will drop, on average, by about 50 percent.
The companies are Citigroup, Bank of America, the American International Group, General Motors, Chrysler and the financing arms of the two automakers.

http://blogs.usatoday.com/ondeadline/2009/10/ap-90-pay-cuts-coming-for-execs-at-bailedout-firms.html

Another good idea--A tax credit to create jobs fast

The Economic Policy Institute has proposed a tax credit to businesses that the authors estimate would create 2.8 million new jobs in 2010 and an additional 2.3 million in 2011. Here is how it would work:

• The tax credit would equal 15% of additions to taxable payroll in 2010 and 10% in 2011.
• The tax credit would target businesses, non-profits, and even governments that add to payroll over the next two years;
• It would target a wide range of jobs across economic sectors and across all kinds of firms, regardless of size or current profitability;
• The credit would be based on the portion of wages subject to Social Security payroll taxes ($106,800 in 2009) and would not credit very high wage earners, including CEOs; and
• The credit would be temporary, only to be used when the labor market is weakest.
• Any firm receiving the credit would need to be in a trade or business. This requirement means that families who directly employ nannies, tutors, housekeepers, and gardeners would not be eligible, but companies that provide landscaping, cooking, child care, and home health services would be
• The credit could be implemented quickly since almost all U.S. employers currently file Form 941 to report their liabilities for Social Security and Medicare taxes and income taxes withheld for their employees. Adding a few lines to the form would allow a wage credit to be implemented relatively simply and quickly.

For more on this good idea, see:

http://www.epi.org/publications/entry/bp248/

Malpractice reform liberals and conservatives should like

It is rare but sometimes someone will come up with an idea that liberals and conservatives can both like. That may have happened with malpractice reform. Conservatives have argued for some time that the nation needs to cap malpractice awards as a way of reigning in health care costs. Liberals have opposed such restrictions fearing that patients would lose rights. Richard Umbdenstock, president of the American Hospital Association, says his group has come up with a plan for malpractice reform that both liberals and conservatives can like. Here is what the association proposes:

• Patients who've suffered an injury at the hands of a medical professional or institution could take their case to a local panel of experts appointed by state authorities.
• The patient wouldn't have to prove negligence, only that the doctor could have avoided the problem by following established guidelines for clinical practice. Doctors would be protected if they adhered to established standards which would get at the root cause of defensive medicine.
• If the experts find that a patient was harmed and the injury could have been avoided, the panel would offer compensation.
• Payments would not be open-ended, but based on a publicly available compensation schedule.
• A patient who disagrees with the local panel's ruling could appeal to a higher-level panel, and ultimately, to a court.
• Congress wouldn’t order states to adopt such reform but would provide financial grants to encourage states to adopt such practices.

The adminstration has set aside $25 million for pilot programs in malpractice reform. This might be one of them.How about that for an idea worth considering?

http://www.google.com/hostednews/ap/article/ALeqM5jD5clbhBYRpObw_SJYJl5Nt-tolAD9BF2OJ82

Fox news reports public option saves money

According to Fox News and other sources, the Congressional Budget Office (CBO), has estimated the cost of two-of-three House scenarios and pegged the cost of a health reform package that included a robust government-run insurance program at $871 billion, less than the initial $1 trillion projected price tag and under Obama’s $900 billion limit AND the CBO says the House bills don’t add a dime to the deficit over 10 years.

See the following sources

http://www.foxnews.com/politics/2009/10/20/house-receives-preliminary-cbo-estimates-health-care-reform/?test=latestnews

http://www.washingtonpost.com/wp-dyn/content/article/2009/10/16/AR2009101603602.html

Deficits don't matter that much--Part 3

Some of you have pointed out that Federal Reserve Chairman Ben Bernanke called Monday for the United States to whittle down its record-high budget deficits. See http://www.washingtonpost.com/wp-dyn/content/article/2009/10/19/AR2009101901234.html?wprss=rss_business/economy

True. However that doesn't make my argument and the argument of those economists I cited in an earlier post less true.

No one disagrees that efforts must be made to bring down the deficit at some time. The question is when. Bernake said in his remarks: "Unwinding the stimulative policies introduced during the crisis will require careful judgment." The economists I cited simply believe that it is too soon to focus on the deficit and that what we need is a second stimulus since the first one was not big enough. They are concerned that we still have not done enough to stimulate the economy and, in particular, to create jobs and that shifting focus too soon to deficit reduction would derail the recovery and throw the country back into a deep recession or even depression. It's an issue of timing not whether deficit reduction is ever the right thing to do. Also, I don't think anyone likes deficits. However they are necessary sometimes. For example, few people would argue that we should not have run up a deficit during World War II. Likewise when we were on the verge of another great depression it would not have been smart to do nothing simply out of fear of increasing the deficit. On the other hand, running up huge deficits to fight unnecessary and even counter-productive wars while simultaneously giving tax breaks to the rich as the Republicans did under GW was stupid.

Great News! Growing support for a public option

There is growing support for the public option. 57 percent of all Americans now favor a public insurance option, while 40 percent oppose it. Support has risen since mid-August, when a bare majority, 52 percent, said they favored it. (In a June Post-ABC poll, support was 62 percent.)

If a public plan were run by the states and available only to those who lack affordable private options, support for it jumps to 76 percent. Under those circumstances, even a majority of Republicans, 56 percent, would be in favor of it, about double their level of support without such a limitation.

See: http://www.washingtonpost.com/wp-dyn/content/article/2009/10/19/AR2009101902451.html?nav=rss_email/components

What do you think? Should we have a government health insurance plan to compete with private insurance or not? What if the plan was run by the state governments, would you support it then?

Take our poll in the box to the left.

More on why the deficit doesn’t matter in this economy.

Economist Paul Krugman provided further explanation as to why the concern for budget deficits in today’s economy just doesn’t make sense at a September 30 meeting at the Economic Policy Institute. Actually, says Krugman, we are spending too little to stimulate the economy, not too much and “the notion that we’re going to pay a heavy price (for deficit spending today) is wrong.” He went on to argue that that investments made today to help create jobs and strengthen the social safety net would be good for the economy both now and in the future.

Click on the link below to see a video with Krugman’s remarks as well as those of others on the panel. Scroll down and click on the Krugman Jump Point to see just the Krugman presentation.

At the same meeting, Economist J. Bradford Delong said the deficit scare is because many people are “unable to distinguish between short-term deficits that are good in a recession and long-term structural deficits that are bad in a generational context.” His talk follows that of Krugman.

http://richmedia.epi.org/presentations/?code_name=robust_recovery

You can download a pdf transcript by clicking on the link under “Supplemental Downloads” on that page.

The $6,000 per year gift to wage earners making $150,000

How much are federal tax subsidies for employer-provided health insurance worth to wage earners? Answer: a nice chunk of change. The Kaiser Foundation looked at the tax benefits to families earning $40,000, $80,000, $120,000 and $150,000 as of 2006 using the following assumptions:

• the family has four members, two of which are working spouses and two are dependent children;
• the family has only wage income;
• wages are equally divided between the spouses;
• one spouse receives a family health insurance policy valued at $11,500 through his or her employer;
• the employer contributes $10,000 toward the cost of the policy and the family contribution of $1,500 is paid through a Section 125 plan;
• the family does not itemize deductions;
• the family lives in California and pays California state tax.

Here is how much each family saves in federal and state taxes:

$40,000 = $3,695

$80,000 = $4,925

$120,000 = $5,705

$150,000 = $6,049

It’s a nice tax gift if you can get it.

Read the study at: http://www.kff.org/insurance/upload/7779.pdf

Deficits don't matter that much

Everyone worries about what health care reform might do to the deficit. Obama insists that any reform not add one dime to the deficit. But, “DO DEFICITS REALLY MATTER THAT MUCH?”

The answer seems simple and obvious—of course deficts matter. However, the truth is that the answer to the question “Do deficits matter?” is neither simple nor obvious. Economists disagree, if not over whether deficits matter at all (most agree that they do at least to some extent) but over whether all deficits matter and just how damaging they are to the national economy. The answer seems to be “economists disagree” and “it depends.”

Reportedly Dick Cheney when he was V.P. didn’t think deficts being run up by the Bush administration mattered. In late 2002, he summoned the Bush administration's economic team to his office to discuss another round of tax cuts to stimulate the economy. Then-Treasury Secretary Paul H. O'Neill pleaded that the government -- already running a $158 billion deficit -- was careering toward a fiscal crisis. But by O'Neill's account of the meeting, Cheney silenced him by saying "Reagan proved deficits don't matter." [Cheney now says he didn’t say what O’neill reported.]

Was Cheney right? Do deficits NOT matter? Here is a quote from an article by Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University.

“If the spending that creates deficits supports your party’s programs, fiscal irresponsibility doesn’t matter. Republicans don’t mind deficit spending if the trade-off is tax cuts and more money for the military. Democrats tolerate deficits when they buy goodies for union workers and allow other increases in domestic outlays.

But can you blame politicians for flipflopping on the issue? Economists—even free market ones—can’t agree on whether deficits matter either.” Interesting article. Read it at: http://www.reason.com/news/show/132625.html

Here is another article from a Harvard economists Laurence Ball and N. Gregory Mankiw that discusses the deficit issue and conditions under which deficits do and do not matter. This quote:

Numerical results suggest that the effects of budget deficits are moderate in size. Moreover, since there are winners as well as losers, it is not obvious that deficits are undesirable overall. These conclusions suggest that popular concerns about budget deficits are overblown, at least when the national debt is at its current U.S. level relative to national income.

The author suggest a way to protect your children should budget defictis matter:

Suppose you are worried about the effects of deficits on your children, and aren’t confident that Bill Clinton and Newt Gingrich will take care of the problem by balancing the budget. You can eliminate your worries simply by saving and leaving a larger bequest to your children, so that they can bear the burden of future taxes without reducing their consumption.

Some economists—advocates of Ricardian equivalence—claim that people do in fact behave this way. If this were true, private behavior would fully offset the effects of public dissaving. Although we doubt that most people are so far-sighted, some people probably do act this way, and anyone could. Deficits give you the chance to consume more at the expense of your children, but they do not require it. Indeed, if you are forward looking and care about your children, deficits can benefit your family. You can insulate yourself from the effects of tax shifting through a larger bequest. And, since you are accumulating more capital than the typical family, you and your children are among the winners from deficit-induced changes in factor prices. That is, you benefit from the higher rates of return that deficits cause.

To read this article go to: http://www.economics.harvard.edu/faculty/mankiw/files/whatdobudgetdeficitsdo.pdf

And here is another article this time from the Federal Reserve Bank of Cleveland

“The empirical evidence and theoretical arguments outlined above suggest that government budget deficits may be unrelated to interest rates or real exchange rates and that they pose no direct threat to our economic well-being. This does not mean, however, that governments' fiscal actions have no bearing on a country's ability to grow and prosper. The relationship is substantially more complicated than generally acknowledged, and depends on the relative size of government and on the types of spending and taxation programs inherent in the budget.”

To read this article go to: http://www.clevelandfed.org/Research/commentary/1993/0615.pdf

And, here is another article from the International Monetary Fund on the deficit issue. It was written by Atish Ghosh, Division Chief and Uma Ramakrishnan, a Senior Economist in the IMF's Policy Development and Review Department.

“A common complaint about economics is that the answer to any question is, "It all depends." It is true that economic theory tells us that whether a deficit is good or bad depends on the factors giving rise to that deficit, but economic theory also tells us what to look for in assessing the desirability of a deficit.

If the deficit reflects an excess of imports over exports, it may be indicative of competitiveness problems, but because the current account deficit also implies an excess of investment over savings, it could equally be pointing to a highly productive, growing economy. If the deficit reflects low savings rather than high investment, it could be caused by reckless fiscal policy or a consumption binge. Or it could reflect perfectly sensible intertemporal trade, perhaps because of a temporary shock or shifting demographics. Without knowing which of these is at play, it makes little sense to talk of a deficit being "good" or "bad": deficits reflect underlying economic trends, which may be desirable or undesirable for a country at a particular point in time.”

To read the article go to: http://imf.org/external/pubs/ft/fandd/2006/12/basics.htm

How the insurance companies defeat co-ops

Some have proposed co-ops as a substitute for a public option in health care reform. The only problem is that they don't work. It is too easy for insurance companies to drive them out of business. Consider what happened in Texas.

In 1993, the Texas legislature created the Texas Insurance Purchasing Alliance to help small business ban together to purchase health insurance for their workers. Essentially this was a co-op like is being proposed under some health care plans as an alternative to the public option. Intially the Texas program worked. Sixty-three percent of the small businesses that participated were able to offer health insurance to their employees for the first time. The others already offered coverage but found the alliance cheaper. Six years later the Texas progam failed. Private insurers drove the Alliance out of business by cherry picking. Private insurance companies aggressively courted small businesses with younger and healthier workers offering them cheaper rates than they could get in the Alliance. The Alliance was left with small businesses with older and sicker employees. Eventually, the Alliance had to raise its premiums to a point that participation no longer was affordable for most small businesses. Co-ops in Florida, North Carolina and California also failed because of cherry-picking by insurers.

No wonder insurance companies aren't worried about state co-ops.

See http://www.nytimes.com/2009/10/06/opinion/06mcgarr.html

Americans support public option by margin of 61% to 34%

A new Quinnipiac University poll released October 8, 2009 shows that Americans favor a public option by a margin of 61% to 34%.

Plus,

Voters disapprove 64 - 25 percent of the way Republicans in Congress are doing their job, with 42 percent of Republican voters disapproving;

Only 29 percent think Republicans on Capitol Hill are acting in good faith;

Voters trust Obama more than Republicans 47 - 31 percent to handle health care;

Voters 53 - 25 percent have an unfavorable opinion of the Republican Party.

See:

http://www.quinnipiac.edu/x1295.xml?ReleaseID=1382

Americans Support Baucus Bill with Malpractice Reform, Elimination of an Individual Mandate, and addition of a Public Option

Zogby polled 2,232 Americans to determine their support for the Senate Finance Committee (Baucus) bill on September 28-30. Respondents were first asked to read a summary of the bill. They were then asked if they supported the bill as outlined. Only 27% supported the bill as written with 59% opposed.

Then respondents were asked what they would add. Here is how support changed.

Add Malpractice Reform—Support increases to 44%. Opposition drops to 46%.

Delete the Individual Mandate—Support increases to 42%. Opposition drops to 48%.

Add Public Option—Support increases to 40%. Opposition drops to 53%.

Then, respondents were asked their support if two or all three of these changes were made.

Add Malpractice Reform AND Delete Individual Mandate—Support increases to 49%. Opposition drops to 44%.

Add Malpractice Reform AND Add a Public Option—Support increases to 55%. Opposition drops to 41%.

Delete Individual Mandate and Add a Public Option—Support increases to 51%. Opposition drops to 44%.

Make all three changes—Add Malpractice, Delete the Individual Mandate AND Add a Public Option—Support increases to 57%. Opposition drops to 41%.

See http://www.zogby.com/news/ReadNews.cfm?ID=1753 for more information.

The Opt-Out Option

Demos may have hit on a way to get a robust public option and give cover to the Blue Dog Democrats. The idea is to allow states such as ultra-conservative, Republican Georgia to Opt-Out—in other words deny their citizens the opportunity to participate in an evil, socialistic low-cost public plan. Repub states could just say no and enjoy having their citizens get their coverage from high-priced private insurance. Let’s see how that might work. New York, Mass and virtually every other state decides NOT to opt-out. The Georgia legislature votes to opt-out. Voters in Georgia start hearing from their friends and relatives in opt-in states that not only is the public option idea a pretty good and cheap option, the private insurers in their states have found tons of cost savings and premiums for private insurance plans have come down to nearly the level of the public option and they still get good medical care. Georgia voters start thinking about why they are being left out and having to pay much higher prices for their insurance. Who did this to them? Republicans start taking on some heat. Suddenly the Repub legislators have a second thought. Maybe opting-out is not such a smart political move after all. Could happen.

http://www.huffingtonpost.com/2009/10/08/schumer-opt-out-public-op_n_313946.html

Baucus Senate health bill REDUCES deficit $81 billion

The Congressional Budget Office says the Senate Finance Committee Health Care Plan would cost $829 billion over the next ten years but REDUCE the deficit by $81 billion. The percentage of legal non-elderly residents with insurance would increase from 83% today to 94% in 2019. However 25 million Americans would still be uninsured. About 1/3 of the uninsured would be illegal immigrants.

Read the CBO report here:

http://media.washingtonpost.com/wp-srv/politics/documents/CBO_Baucus_letter.pdf?sid=ST2009100704101

Are we almost there to health care reform? What history tells us.

In his excellent book, Politics and Policy: The Eisenhower, Kennedy and Johnson Years, James Sundquest examines significant legislation passed between 1953 and 1966, including the passage of Medicare. He defines steps or stages that the policymaking process had to pass through for laws to be passed addressing major social problems. I think it is instructive to examine where the current debate over health care reform stands in regard to Sundquest’s stages.

First, says Sundquest activists seeking change must establish that a problem exists and that it can not be solved without national action, that the states and local governments can not or are not adequately addressing the issue. I think it is clear that the health care debate has passed through this stage. Most Americans, Democrat, Republican and Independent have come to the conclusion that we have a health care or at least health insurance problem and that some national action probably is necessary although there is no consensus on the nature of that action.

Second, says Sundquest, the positions of proponents and opponents must crystalize, arguments and even facts must become frozen, and the debate must become repetitive. We’ve reached that stage also. The arguments pro and con about health care reform have become fairly clearly defined with Democrats holding one view and Republicans another. You don’t see many proponents or opponents of health care switching sides anymore.

Third, says Sundquest, national interest groups must be formed to organize local support, condut research, feed information to political sponsors, create publicity, lobby key congressmen and senators, and so on. Again, this has happened with regard to the health care debate with some of it orchestrated by the White House.

Fourth, says Sundquest, the opposition becomes divided. A significant element of conservative opinion yields to the facts that point to national action as essential to the solution of the problem. Again, that seems to have happened or is beginning to happen. We’re seeing prominent conservatives coming out in favor of some kind of health care reform. Few Republicans, even as they oppose Democratic solutions, argue any longer that health care isn’t a national issue.

Fifth, says Sundquest, opponents discover that they can not succeed just by opposing. Indeed their efforts to oppose backfire in the sense that they create awareness of the problem. Additionally, their warnings of the danger of side effects that might follow national action to remedy the problem come to be seen as speculative whereas the problem activist are seeking to remedy becomes increasingly seen as real. At that point, opponents come to the realization that they may have made a tactical error and should have joined in recognizing the problem and working out a solution early on. At a late date, opponents scrabble to offer an alternative solution only to find that proponents who once might have been open to compromise no longer are interested or see the necessity to compromise. I think we are just entering this stage. After making some headway in turning Americans against health care reform during July and August, conservatives have seen some of their gains disappear recently. Supporters of health care legislation haven’t recouped their loses but they may have turned a corner particularly with key groups such as those over 65.

So where are we? By my count we are four fifths of the way there. As they say, four out of five ain’t bad.

Are we going to see health care reform. If we consider, Sundquest’s stages, it appears that we are well on the way to the passage of major legislation. However, proponents of reform still must navigate the final process of bringing a bill to the floor of the House and Senate, securing a presidential signature, and surviving the inevitable court challenges. As political scientist V.O. Key said for things to get done in Washington, “the obstructions of the Constitutional mechanism must be overcome.” See one of my other posts about that issue.

Economists Alex Tabarrok and Paul Krugman on the need for a public option

Economist, Alex Tabarrok of George Mason University has this to say about why the public option is desirable, maybe necessary to avoid sharp increases in health insurance premiums.

"The major proposals would require insurance companies to take all customers regardless of pre-existing conditions, offer guaranteed renewability and no dropping of coverage for the ill, impose no annual or lifetime caps, and offer coverage of preventative care with no-cost share, among other requirements. Finally, if insurance companies must take all customers regardless of pre-existing conditions it is obvious that sooner or later and probably sooner the government will require that everyone purchase health insurance.

In short, insurance reform will mean that everyone will be required to buy a product that will be tightly regulated and more homogeneous. Both of these factors will increase the market power of insurance firms. Since escape via non-purchase will no longer be a potential response to higher prices, mandatory purchase will reduce the elasticity of demand giving firms an incentive to increase prices. Moreover, in oligopolistic markets, a more homogeneous product can increase the ability of firms to collude.

I believe that health insurance reform will increase the market power of insurance firms and drive up prices. In this scenario, the public option at least has a raison d'etre, although whether it actually fulfills its purpose is an open question.

It's true that mandatory purchase doesn't necessarily lead to market power, auto insurance is quite competitive. Nevertheless, given the potential of insurance reform to increase the market power of insurance firms the search for some disciplining device like the public option is reasonable. Other useful reforms would be to have a single, national regulator of insurance - rather than the 50 we have now, allow an optional federal charter (as we do for banks) or (my preferred approach) move to a competitive federalist system for insurance similar to that for corporate charters."

http://www.marginalrevolution.com/marginalrevolution/2009/08/a-defense-of-the-public-option.html

Economist Paul Krugman says this about the the importance of a public option and why co-ops will not work.

"One purpose of the public option is to save money. Experience with Medicare suggests that a government-run plan would have lower costs than private insurers; in addition, it would introduce more competition and keep premiums down.

And let’s be clear: the supposed alternative, nonprofit co-ops, is a sham. That’s not just my opinion; it’s what the market says: stocks of health insurance companies soared on news that the Gang of Six senators trying to negotiate a bipartisan approach to health reform were dropping the public plan. Clearly, investors believe that co-ops would offer little real competition to private insurers."

http://www.nytimes.com/2009/08/21/opinion/21krugman.html?_r=2&adxnnl=1&partner=rssnyt&emc=rss&adxnnlx=1250870531-bZ0Vn5c0kwGrwMqFt5mLdA

The truth about the Public Option

Do yourself and your loved ones a big, big favor. Watch this video and learn the truth about the public option.

http://www.commondreams.org/video/2009/09/11

Rating the Obama Presidency and Chances of Health Care Reform

In the October 22, 2009 issue of The New York Review, Elizabeth Drew provides an assessment of the Obama presidency to date, particularly as Obama’s strengths and weaknesses are revealed in his handling of health care reform. Here are some of her points with my additional elaboration and interpretation, some of which Drew might well reject. You will want to read her article yourself at http://www.nybooks.com/articles/23183 .

It is clear now, and has been for some time, that the Republicans have zero interest in any bi-partisan approach to any policies. There one goal is to defeat Obama regardless of the consequences to the country.

The species of politician known as “moderate Republican” is nearly extinct.

Race is now an issue.

Obama’s search for consensus, desire to listen to all sides, refusal to take firm positions, cautiousness, and desire to please has been taken by his opponents as a sign of weakness they can exploit.

People who have medical insurance now have no interest in helping their fellow Americans who don’t have insurance if it means they have to shoulder any additional financial burden. Essentially the message to the uninsured and underinsured is “you’re on your own buddy; don’t look to us to help.”

Forget the cost projections when it comes to health care reform. The fact is no one can project what doing health care reform (or not doing it) might cost. Drew cites Joseph Califano, Johnson’s advisor: “It’s preposterous, “ Califano told Drew, “to project ten-year costs. When we passed Medicare no one foresaw MRIs, CT scans, transplants, or the explosion of life expectancy. And now we’re on the verge of a revolution in neurology and in genetics, stem cell research, and multiple transplants.” The future might be one in which everyone will be healthier and that chronic diseases will be easier and less expensive to treat and cure. It also might be one in which life expectancy increases dramatically and the demand for cutting edge medical care skyrockets causing an historic spike in costs. No one knows which of these scenarios might play out.

Any talk of getting savings from Medicare to pay for covering the uninsured scares the hell out of Medicare recipients who are not prepared to suffer the slightest decrease in their benefits to help out those who are uninsured or underinsured.

You can not cover forty-five million more people and cut costs, at least in the short term.

In spite of all of the Republican and conservative talk show orchestrated yelling and screaming at town hall meetings about a “government takeover of health care,” “death panels,” and so on, support for health care reform actually stopped trending downward as it had been before August and went back up in September. The Repubs and Cons lost that battle.

At least two of the Republicans—Grassley of Iowa and Enzi of Wyoming—now admit that their real reason for negotiating with Max Baucus on the Senate Finance Committee heath plan was to delay, delay, delay. They never had any attention of reaching a bi-partisan agreement. It makes Baucus look pretty naïve.

The co-op idea is a red herring. There is very little chance that co-ops will ever be established across the country and even if they are they will be too small to offer large insurance companies any real competition.

Some kind of health care reform will likely pass but with support from only one Republican, Senator Snowe and her support is not at all certain. Democrats will pass health care reform even if they have to go the route of “reconciliation” for the simple reason that losing the battle for health care reform this time would be devastating not only to Obama but to Democrats in general. For a number of Democrats the choice will be voting for health care reform and perhaps being defeated versus not voting for health care reform and definitely being defeated.

If Obama gets a health care reform bill to sign, even if it falls far short of what he wants and the country needs, he will have achieved an historic victory and one that has eluded all of his predecessors. It will be an achievement that will define his presidency and secure him a place in history as the president that achieved something that such men as Roosevelt, Truman, Kennedy, Johnson, and Clinton combined could not.

One final thought that Drew did not discuss. If Obama pulls health care reform off, the Sarah Palin wing of the Republican Party will turn on the Republican leadership with a vengeance. They hate Obama and will blame the current Republican leadership for failing to bring him down. If that happens, the party will splinter and the ultra nutty right wing conspiracy theory bigots will take over completely. The party might just move so far out of the main stream that only a small fraction of the country would want to be associated with it. The party might just fade into obscurity. Wouldn’t that be great?

How can we create more jobs, faster?

The stimulus has helped to save and create jobs. The only problem is that the stimulus was too little and is being implemented on a timetable that is too slow to have short term impact. We need a second stimulus, perhaps larger that the first one. This time we need to go back to what worked with the New Deal. We need a new Civil Works Administration (CWA) and new Works Progress Administration (WPA). Created in November 1933, the CWA put over 4 million people to work making highway repairs, laying sewer lines, improving airports and schools, providing 50,000 new teachers to help keep rural schools open. The WPA helped some 9 million people through tough times and left behind buildings, bridges, roads, airports, schools and park facilities still in use today. Both of these programs were criticized but they were brought online quickly and put people back to work right away. Roosevelt’s programs didn't end the Depression but they cut the unemployment rate from nearly 25% in 1933 to about 10% in 1940 (counting the unemployed as a percentage of the total civilian labor force.) We could use something like that now.

See: http://edgeofthewest.wordpress.com/2008/10/10/very-short-reading-list-unemployment-in-the-1930s/

Get busy Democrats. You are running out of time to start bringing unemployment down. Roosevelt cut unemployment by about 3% in a year and more than 5% in two years.