David Sanger's story in today's NYT about the Obama administration's unsuccessful back-channel efforts to get Iran to agree to a nuclear deal finishes with this telling--and not unrelated--detail:
Mr. Obama is reported to have sent Ayatollah Khamenei two private letters this year, but he received only one response, mostly a litany of past grievances.
One of the most revealing moments in Saturday's debate over health care reform was when Rep. Anthony Weiner of New York took the floor. Weiner is a rising star in the Democratic Party, having quickly established himself as an unusually engaging speaker. But, in this case, it was Weiner's effective use of a prop that stood apart.
The prop was the handbook for the Federal Employees Health Benefits Plan, or FEHBP--which is, very roughly speaking, a model for how a reformed health care system might work. Once a year, millions of federal workers, including members of Congress, pick one of the many private insurance options available through FEHBP. They can pick plans without worrying that an insurer will deny coverage or charge them more for a pre-existing condition. And, for the most part, they can carry coverage with the peace of mind that it will be there when they need it.
Weiner had brought the handbook in order to make a point. Opponents of health care reform have spent a lot of time complaining about the complexity of health care legislation, in many cases waving around the huge piles of paper it takes to print the full bills. It's a misleading argument: The bills are long in part because the government uses large type and wide margins to print them. And after the experience of the Bush administration, when the president and his allies frequently made policy without thinking through all of the implications, one could plausibly argue that legislative complexity is actually the product of due diligence. This is one-sixth of the economy we're talking about, after all.
But Weiner's broader argument was that legislation matters less than the reality it creates. "There's been a lot of talk about how big the bill is," he said. "Here's what it's all about. This is what members of Congress get."
He's absolutely right.
Though comparatively less divisive than abortion debate roiling the House this weekend, the immigration issue in the health-care bill also has yet to be settled. The controversy is over whether to prohibit unauthorized immigrants from purchasing insurance that’s available through the new insurance exchanges. The Senate Finance bill includes such a prohibition, and conservatives have been pushing to include a similar one in the House bill.
Jacob S. Hacker is the Stanley B. Resor Professor of Political Science at Yale University, author of The Great Risk Shift: The New Economic Insecurity and the Decline of the American Dream, and an occasional contributor to The Treatment.
Diane Archer is the director of the Health Care Project at the Institute for America's Future and the founder and past president of the Medicare Rights Center.
How short memories are in Washington. A few weeks ago, when it looked possible that Nancy Pelosi could marshal enough Democratic support to create a “robust” public insurance option with rates tied to Medicare’s, everyone was talking about the big savings and reduced premiums that a series of estimates by the CBO showed this option could create. Then, the concern was that the public insurance plan would put private insurers out of business by using the government’s bargaining power to drive too hard a bargain with providers, creating an “un-level” playing field.
Now, however, the punditocracy is abuzz about the latest CBO estimates that show that the public plan eventually embraced by Pelosi--one that would negotiate rates with providers, rather than base them on Medicare’s--might actually charge higher premiums than the average private plan. No matter that the CBO estimates clearly state that the higher projected premiums reflect its expectation that the public plan will disproportionately enroll less healthy Americans--which might be seen as a virtue, since these are folks private insurance tends to serve most poorly. And no matter that a subsequent CBO letter to the House stated that even a public plan with negotiated rates would still place “downward pressure on the premiums of private plans.” Suddenly, in the commentariat, the public plan isn’t a fearsome predator. It’s a complacent kitten. Initially not worth having because it would be too strong, it’s now, according to critics, not worth having because it would be too weak.
In truth, both the initial fears and current dismissals are overblown. The CBO’s declining estimates of savings certainly make a strong case for having the public plan use modified Medicare rates, as we have long argued. It’s a shame the House will not be considering a bill that shows how substantially a public plan can contribute to freeing up federal dollars to help Americans afford coverage. But we should keep in mind that the prime argument for the public plan has never been about a particular payment formula. It has been that a public insurance plan is vital as an institutional check on private plans, its role evolving to reflect the emerging weaknesses (or strengths) of regulated private competition. Put simply, health reform is much more likely to succeed with a public health insurance option, even one with negotiated rates, than if private insurers are left to run the show.
Paul Krugman wants lawmakers to create a modern version of the Works Progress Administration, an important New Deal-era agency which put millions of people to work on public infrastructure projects:
A question I’m occasionally asked at public events is, why aren’t we creating jobs with a WPA-type program? It’s a very good question. ...
Over a decade ago, I trundled my good-natured family across miles of southern Switzerland to see every building I could by Peter Zumthor, who is this year's winner of the Pritzker Prize. Then as now, most of Zumthor's work was off the beaten track, not only literally but metaphorically, little known to the general public although admired by professionals. What drew me to make the trek to his work was what, from pictures, appeared to be its conceptual rigor, its unabashed monumentality, and an attention to detail so fanatical that every threshold, corner, and joint seemed to become an opportunity to rethink the way hands make buildings.
In an interview with The New Yorker's Elizabeth Kolbert, Al Gore made an interesting point I hadn't seen elsewhere (it's that last paragraph there):
Nukes, nukes, and … nukes. These days, when it comes to energy and climate change, that seems to be all Republicans want to talk about. Throughout last week's hearings on the Senate climate bill, Lamar Alexander kept interjecting that a massive ramp-up of nuclear power was the only real solution to global warming, bringing up the subject at every turn. For many of his colleagues, it's one of the few energy ideas that piques any interest at all.
While Congress slogs through the final months of the health reform debate, the American people remain focused on the economy. With good reason: We’re in a very deep hole, and it’s not clear how we’re going to get out.
More competition among insurers isn't always a good thing. (Austin Frakt, Incidental Economist)
Dealing with Medicare is usually easier (or at least less difficult) than dealing with private insurers. (Joe Paduda, Managed Care Matters)
As if we needed more reminding, the country has a huge gap between costs required for transportation needs and the funding sources to pay for them. The shutdown of the San Francisco Bay Bridge last week due to faulty repairs earlier this year at least had the miraculous silver lining that there were no deaths from falling structural steel onto the crowded road way.
The Washington Post reported Friday that the conversion of the Tyson’s Corner--the country’s largest suburban-based commercial center with 46 million square feet of traffic-strangled office and retail--into a 100 million square foot walkable urban place will cost $15 billion in transportation improvements. That is a huge sum even for extremely wealthy Fairfax County, equaling over $40,000 per household to be spent in only 1.2 percent of the county’s land area.
Where will that money come from? That is the question as we debate the reauthorization and hoped-for reform of the federal transportation bill. This is particularly vexing since the Highway Trust Fund is on life-support, being bailed out twice in the last two years as gas tax revenues continue to fall.
The Washington Post article went down the line of usual suspects; increased gas taxes, shift to a vehicle miles driven tax, tax increment financing ,and ended with the private property owners taxing themselves.
During the Bush years, a fellow at the Kennedy School of Government was writing a book called Savin’ it! on abstinence education in the public schools. As part of his research, he contacted then-Attorney General John Ashcroft with a request for personal testimony. His letter noted:
The book’s fourth chapter, ”Role Modelin’ It!” will feature the personal stories of abstinence heroes for our nation’s young people to emulate …I would very much appreciate if you could share your abstinence story. I can tell by your passionate advocacy that you will have a lot to offer this book… I hope you will find the time to inspire the next generation of sex-free leaders.
I don’t know whether the author ever completed this monograph, though he did complete another book soon after.
My next health policy book will include a similar chapter on what you might call budget abstinence heroes: Men and women will proclaim the virtues of fiscal conservatism, and then actually resist the temptation to mess around in the fine print when the adults aren’t looking.
German philosopher Martin Heidegger gets a lot of bad press. And for good reason. He was an enthusiastic supporter of the Nazis, he did and said and wrote some nasty things before and after serving as the rector of Freiburg University from 1933-1934, and though he eventually distanced himself from his earlier enthusiasm for Hitler, he seems never to have ceased believing that there was an "inner truth and greatness" (those are Heidegger's own words, spoken in a lecture from 1935) to the National Socialist movement. That sounds bad, and it is.
House Speaker Nancy Pelosi just released the health care reform bill she will introduce on the floor, in hopes of a final vote in the next week to ten days. You can read the text here. And while it will take a while to wade through all of the details--and uncover the inevitable surprises--we already have a pretty good idea of the basics, based on published reports and several House sources.
Like the bills that passed three House committees in the summer, this one will cover more people--and provide them with more protection--than the emerging counterpart in the Senate.
It will also include a stronger public insurance option, but one that is not as strong as it could be. In particular, the public plan will have to negotiate payment rates with providers in just the way private insurers do. This is in lieu of tying the plan's rates to Medicare. Although Pelosi and her allies tried, they were ultimately unable to round up the votes for that strong a measure.
(Note that, as in the Senate, the public option would be available only to individuals without access to employer-sponsored insurance. If you want to do something about that, though, you'll have to talk to Ron Wyden.)
For all of the talk about a public plan, the primary imperative for architects of the House plan was to change the bottom line. The original House bill paid for itself over the course of ten years, but in a way that began generating deficits in year eleven. It also included an adjustment to physician fees--what's come to be known as the "doc fix"--worth some $240 billion over ten years, that lacked financing of its own and pushed the bill's entire price tag to well over $1 trillion.
On my previous beat, I felt an obligation to talk down any good piece of polling data, so I figured I'd extend the tradition to my economics coverage...
Here's my concern with the impressive-looking GDP growth number of 3.5 percent: It reflects a lot of one-off boosts to growth and masks trends that are likely to get worse. Consider this one-sentence summary from the Bureau of Economic Analysis:
The upturn in real GDP in the third quarter primarily reflected upturns in PCE [personal consumption expenditures], in private inventory investment, in exports, and in residential fixed investment and a smaller decrease in nonresidential fixed investment that were partly offset by an upturn in imports, a downturn in state and local government spending, and a deceleration in federal government spending.
Let's take a few of those categories individually. Personal consumption did rise by a healthy 3.4 percent after dropping 0.9 percent in the second quarter (contributing about 2.4 percentage points to GDP growth). But a huge part of that was "cash for clunkers." Likewise, housing perked up by 23.4 percent after falling by 23.3 percent in the second quarter, but a big chunk of that was people racing to beat the deadline for the first-time homebuyers tax credit. (The credit doesn't expire until November 30, but you have to close by then to qualify, which typically meant purchasing the house by the end of September to be safe.)
Consider, also, government spending. State and local government expenditures decreased by 1.1 percent after rising 3.9 percent in the second quarter, which suggests that local governments are pretty hard up and will be a drag on the economy going forward. While the Obama administration and congressional Dems are likely to extend parts of the stimulus--unemployment benefits, COBRA, the homebuyers tax credit--my understanding is that additional aid to states is a political non-starter, even though it would provide a huge bang for the buck.
The big market paradox of the past few months has been the differing signals coming out of the stock and U.S. Treasury markets. Stock prices have been roaring since early March, up over 50%. That should be a strong signal that economic conditions are on the upswing.
Over the last year, Japan’s long economic doldrums have been used as a cautionary lesson for stimulus spending in Washington policy circles. While there is little doubt that Japan has overspent on public works projects, it is also clear that Japan invested mainly in the same old projects: dams, roads, and airports. Today’s release of the smart grid stimulus grants shows that the United States does not have to repeat the Japanese experience.
Announced by President Obama during a visit to a solar energy facility in Arcadia, Fla., the grants consist of $ 3.4 billion for smart grid projects, spread across 49 states and the territory of Guam. This is three quarters of the amount announced initially in the stimulus package. The money will go directly to private companies, utilities, or equipment manufacturing. The private sector guarantees an additional $ 4.7 billion to finance 100 projects aimed at demand management and technological update of the electricity grid.
A quick look at the spatial distribution of the grants shows that most of funds will go to companies located in the top 100 metros. Two-thirds of the projects and 85 percent of the funds will be managed from these areas. They will invest most of the money in crosscutting systems, a combination of demand response programs, smart grid technologies, and appliances. A quarter of all the money will be spent on smart meters projects. The utilities in the top 100 metros will also spend $148 million on improved reliability of transmission lines.
After a weekend of furious activity, Democratic leaders in the Senate think they are close to getting the votes they need in order to pass an "opt-out" version of the public option.
But they feel like President Obama could be doing more to help them, with one senior staffer telling TNR on Sunday that the leadership would like, but has yet to receive, a clear "signal" of support for their effort.
The White House, for its part, says President Obama supports a strong public option, as he always has--and that, as one senior administration official puts it, the president will support the Senate leadership in "whichever way" it chooses to go on this particular question.
Read those statements carefully and you'll see they don't actually contradict each other. Instead, they offer a pretty good picture of where the public option debate is at the beginning of a week that could quite possibly decide its fate.
For those just tuning in, the underlying issue here is whether to create a government-run insurance program into which people could enroll voluntarily and that might, ideally, provide more affordable coverage while providing the private insurance industry with much-needed competition. As recently as two or three weeks ago, many observers (this writer included) thought the idea was more or less dead politically.
When the financial history of this era is told, it is possible that it will be seen as the bailout of not just the banks, Fannie Mae, and Freddie Mac, it will also to some extent be seen as the bailout of sprawl. The low density, single family houses on the fringe of American metropolitan areas have experienced high rates of foreclosures and substantial price declines, and we’re still looking for a bottom in many regions of the country.
Jacob S. Hacker is the Stanley B. Resor Professor of Political Science at Yale University. An expert on the politics of U.S. health and social policy, he is author, coauthor, or editor of numerous books and articles, both scholarly and popular, including The Great Risk Shift: The New Economic Insecurity and the Decline of the American Dream (2006; paperback, January 2008) and Health At Risk: America’s Ailing Health System and How to Heal It (2008).
As closed-door discussions continue in the Senate, the idea of triggering the public health insurance option is once again on the table. Advocates of the trigger cast it as a compromise that will attract the support of the small number of conservative Democrats who have expressed reservations about the public option, as well as Republican Olympia Snowe, who has proposed a trigger. But to be a compromise between public plan skeptics and the majority of Senators who support a public plan because it is central to ensuring affordable coverage while limiting the budgetary costs of reform, a trigger must have some prospect of working—and a trigger inserted into the two Senate bills now being merged would not.
This is the second installment of our new feature: Curbside Consult. For the uninitiated, curbside consults are a venerable medical tradition, whereby a doctor seeks informal advice from an experienced colleague in treating a patient with a complex condition. In covering or understanding complex health and social policies, we need sometimes help too.
Today’s interview is with Katherine Swartz, PhD. She is Professor of Health Economics and Policy at the Harvard School of Public Health. Author of Reinsuring Health: Why More Middle-Class People Are Uninsured and What Government Can Do, she has researched state efforts to cover the uninsured and to help people with costly conditions who fare poorly in the private health insurance market.
Swartz is a particular expert in the economics of high-risk pools (HRPs--sorry for the acronym) and reinsurance. If you follow health reform, you’ve probably heard these terms thrown around without a lot of discussion of what these terms actually mean.
To put it simply, HRPs are special insurance plans for people who couldn't get coverage on their own, because of costly pre-existing medical conditions. Reinsurance is probably best explained as "insurance for the insurers." It's a special fund that reimburses insurers for the super-high claims of catastrophic medical expenses. The idea is that this spreads the burden of those expenses as widely as possible, while removing (at least partly) the incentive insurers have to avoid risky beneficiaries.
Both parties propose HRPs and reinsurance to address the immediate and long-term challenges in financing care for people with costly conditions. President Obama mentioned HRPs in his address before Congress to offer quick help to people facing the dual challenges of uninsurance and serious illness. Such provisions are contained in the Baucus bill and in recently-proposed Republican amendments. The Bush administration made modest investments in HRPs. Senator McCain’s 2008 health plan made heavy use of them, as do current Republican proposals presented in the House.
If you've been following the trials of the auto industry this last year, then you already know GM's management team, led by former CEO Rick Wagoner, left a lot to be desired. But, even so, Wagoner comes off as unbelievably lame in Steve Rattner's account of his time as Obama's auto guru. To wit:
At GM's Renaissance Center headquarters, the top brass were sequestered on the uppermost floor, behind locked and guarded glass doors. Executives housed on that floor had elevator cards that allowed them to descend to their private garage without stopping at any of the intervening floors (no mixing with the drones).
In my relatively few interactions with chairman and CEO Rick Wagoner, I found him to be likable, dedicated, and generally knowledgeable. But Rick set a tone of "friendly arrogance" that seemed to permeate the organization.
Certainly Rick and his team seemed to believe that virtually all of their problems could be laid at the feet of some combination of the financial crisis, oil prices, the yen-dollar exchange rate, and the UAW. ...
As we continued our rather awkward conversation [about his ouster], Rick suddenly asked, "Are you going to fire Ron Gettelfinger too?" Startled by the reference to the UAW head, I replied, "I'm not in charge of firing Ron Gettelfinger," and Rick soon left to brief his board on our decision.
How bout a little personal responsibility? After all, as Rattner notes, "any management team that had burned through $21 billion of cash in a year and another $13 billion in the first quarter of 2009 could not be allowed to continue."
The question is whether Wagoner's successor, Fritz Henderson, is really up to the job of changing GM's culture. He was, of course, part of the same management team that made a habit of shuttling directly from the executive suite to the garage and back. (No word on whether or not that's changed.) Also, you get the impression from Rattner's account and others that the auto task force would have liked to hire an outsider, but thought there was a limit to the amount of change the company could withstand. My favorite indicator that Henderson was far from the ideal choice comes from this Times piece:
Bernard Kerik, former New York City Policy Commissioner, Interim 
Interior Minister of Iraq, and nominee for Secretary of Homeland Security, will now be serving time in a Westchester County prison.
This move by the Vatican to woo unhappy Anglicans by letting Anglican priests join the Catholic clergy even if married is just another sign of the Church's private recognition of how empty some of its traditions have become.
Thursday October 8, 6:30 a.m., the phone rings. I pick up sleepily. "My family! My family! Magda … my family!" I hear sobbing and low, sad groans on the other end. It is our babysitter, Maricel, originally from the Philippines, where two typhoons--"Ondoy" and "Pepeng," as they are known locally--have caused floods that, over the last few weeks, have killed hundreds, left hundreds of thousands homeless, and inflicted damage estimated in the hundreds of millions of dollars.
