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“The Radicals Are Actually Gaining Ground”: Sorry, There’s No Evidence Big Business Has Abandoned The Tea Party Or GOP

The current conventional wisdom floating around the media, seemingly extrapolated largely from quotes to the press from businessmen and their surrogates, is that “Big Business [is] trying to unseat the Tea Party.” However, there’s no evidence that this is happening.

Remember the first time Tea Party House Republicans held a gun to the US economy, refusing to pay America’s debts unless Democrats accepted a wide-ranging set of demands, and as a result, business leaders promised to spend big to defeat hostage-taking radicals?

“We’ll get rid of you,” said Tom Donohue, president of the US Chamber of Commerce to the Tea Party lawmakers.

That was 2011, during the first debt ceiling stand-off. And the following election year, none of the threats materialized.

In 2012, the Chamber ended up spending millions in undisclosed business funds to help elect Todd Akin, Ann Marie Buerkle, Dean Heller, Connie Mack, Denny Rehberg and other lawmakers who supported taking the debt ceiling hostage. Political action committees for the largest corporate interests in America, including General Motors, Goldman Sachs, Deloitte, the American Bankers Association and Honeywell, gave several million in direct donations to Tea Party hostage-takers, helping many survive the election last year and repeat their antics this year.

Now, it seems big business is bluffing again and advancing a false narrative that they are flexing their political muscle against the Tea Party. The storyline, boosted by ThinkProgress, Bloomberg, National Journal and the Associated Press, among others, is that corporate America has lost influence with the GOP and is helping to defeat lawmakers who threatened to push America into default.

So far, the spin makes the business community appear moderate, though there is nothing backing it up. Despite making statements and sending letters voicing their concern, the Chamber has failed to spend a single penny in advocacy against the Tea Party hostage-takers. It hasn’t rescinded any of its so-called “Free Enterprise Awards,” either. (The award has been given to many Tea Party lawmakers, including repeat hostage-takers like Representatives Steve Scalise (R-LA), Tom Graves (R-GA), and Morgan Griffith (R-VA), who encouraged a debt default by comparing it to a second American Revolution.)

Contrast this with how the Chamber behaved in 2009, when Democrats controlled the House of Representatives. By November of that year, twelve months before the midterms, the Chamber launched an onslaught of attack advertisements against House Democrats who did not vote their way, after months of issue ads in targeted districts.

Then, after helping the Tea Party seize the House and several governors’ mansions during the midterms, business groups pumped funds into an effort to gerrymander the Tea Party into permanent rule. CitiGroup and the US Chamber—both of which now complain about flirting dangerously close to default—provided huge donations to the RSLC, the political committee devoted to gerrymandering seats to the House GOP and Tea Party caucus’ advantage.

Will we see a reversal? Next year, there are a handful of high-profile primary races in which establishment Republicans are challenging incumbents, but none of them are proof that there is a concerted effort by business to drive out the Tea Party. Representative Justin Amash (R-MI) is being challenged on social issues and for his outspoken views on foreign policy, not on the debt ceiling. Representative Kerry Bentivolio (R-MI) has been a target for a primary well before his vote to shut down the government, largely because he is seen as a political novice who doesn’t know how to raise money. Representative Walter Jones (R-NC) is facing an establishment challenge, once again, but because he is an outsider within the party for his persistent votes to regulate Wall Street and crack down on political corruption.

Finally, Representative Scott DesJarlais (R-TN) may lose his seat because of revelations that he pressured a patient with whom he was having an affair to seek an abortion—not for his vote over the debt ceiling.

In fact, in terms of primary challenges, it looks like well-heeled GOP interest groups will successfully oust Boehner Republicans to make way for additional Tea Party–style politicians. Politico reports that Republican Representatives Mike Simpson (R-ID), Pete Sessions (R-TX), Lamar Smith (R-TX) and Bill Shuster (R-PA) face challenges from the right next year. Challengers in these races are calling for more debt ceiling hostage-taking. The Club for Growth, a pro-government shut down group funded largely by wealthy investors and businessmen, is leading the charge.

Here’s the reality: the large political action committee and trade associations that control much of corporate America’s campaign spending decisions will help the Tea Party and House GOP win re-election next year.

Big business political operatives lean Republican, and will stick with the party even if Republicans disrupt the economy for political reasons. Over the years, congressional Republicans waged a multifaceted effort to place partisans in their party in charge of the most influential lobby groups within the Beltway.

In the nineties, a mid-career John Boenher helped oust US Chamber president Richard Lesher—a moderate who sided with Democrats at times—to pave the way for Tom Donohue, a known GOP loyalist. During the George W. Bush era, Rick Santorum, Tom DeLay, Grover Norquist, Ed Gillespie and others created the “K Street Project” to install GOP operatives into key business lobbying positions.

Tom Perriello, a former one-term House Democrat from Virginia who was one of the first to be targeted by the US Chamber in attack ads aired a year before his re-election, says business leaders are too cozy with the GOP. Now the leader of the Center for American Progress Action Fund, he tells me that he’s “disappointed but not particularly surprised in the business community’s failure to force the Republicans to act reasonably on the CR, default or immigration, for that matter.… there seems to remain a broad cultural and political aversion [among lobbyists] to do anything that seems to help the Democrats and President Obama in particular.”

Still, Perriello thinks a change could be on the horizon. Many traditionally Republican business groups in Virginia have sat out the gubernatorial race, partially out of disgust for Ken Cuccinelli’s Tea Party extremism. Even GOP corporate lobbyists like John Feehery have been vocal in calling for the business community to do more to challenge the Tea Party.

But right now, it’s too early to say if 2014 will be any different than the last few congressional elections. The evidence suggests in fact that radicals are gaining ground within the GOP while facing little accountability. When it comes to taking on the Tea Party, business leaders have a lot of bark and no bite.

 

By: Lee Fang, The Nation, October 30, 2013

November 4, 2013 Posted by | GOP, Tea Party | , , , , , , , | Leave a comment

“A Demographic Death Spiral”: Immigration Reform Is Just One Of Many Reasons Why Hispanics Hate The GOP

In June, as the U.S. Senate debated comprehensive immigration reform, Senator Lindsey Graham (R-SC) voiced a commonly held theme among mainstream Republicans: After getting blown out among Hispanic and Latino voters in the 2012 elections, the GOP needed to get onboard with immigration reform, or face certain doom as America’s fastest growing minority continues to add more and more Democratic votes to the electorate.

“[I]f we don’t pass immigration reform, if we don’t get it off the table in a reasonable, practical way, it doesn’t matter who you run in 2016,” Graham told NBC’s David Gregory at the time. “We’re in a demographic death spiral as a party and the only way we can get back in good graces with the Hispanic community in my view is pass comprehensive immigration reform. If you don’t do that, it really doesn’t matter who we run in my view.”

At the time, I disputed Senator Graham’s claim that immigration reform could get the GOP “back in good graces with the Hispanic community,” arguing that it was just one of many issues on which Hispanic voters fundamentally disagree with the Republican Party:

According to a wide-ranging Pew Research study from April 2012, Hispanics are politically predisposed to the Democratic Party. The study found that 30 percent of Hispanics describe themselves as “liberal,” compared to just 21 percent of the general population. Only 32 percent describe themselves as “conservative,” compared to 34 percent of the population at large.

Furthermore, Hispanics clearly favor a Democratic vision of government. When asked whether they would prefer a bigger government providing more services or a smaller government providing fewer services, they chose big government by a staggering 75 to 19 percent margin. By contrast, the general population favors a smaller government by a 48 to 41 percent.

In short: Partnering with Democrats on comprehensive immigration reform certainly wouldn’t hurt the Republican Party among Hispanic voters, but it would fall far short of being the political game changer that Republicans like Graham hope. At the end of the day, there is just too much distance between the GOP’s priorities and those of the Hispanic community to imagine a major political shift.

Four months later, this divide is more clear than ever. Not only has the Republican Party failed to move the ball forward on immigration reform — allowing it to languish in the House as the latest victim of the fictional “Hastert Rule” — but it has continued to take positions on other issues that are certain to keep pushing Hispanic voters away from the GOP.

The Republican-driven government shutdown, for example, had a disproportionately negative impact on Hispanic and Latino families. According to Leticia Miranda, senior policy advisor for the National Council of La Raza, 37 percent of children in Head Start programs and 42 percent of Women, Infants and Children (WIC) program participants are Latino. Additionally, about 24 percent of the federal employees who faced furloughs during the crisis were Hispanic. A few positive gestures on immigration won’t erase the damage the Republican Party did to these families.

Additionally, the Affordable Care Act — which Republicans vainly hoped to kill by shutting down the government — is actually quite popular within the Hispanic community. In September, a Pew Research survey found that 61 percent of Hispanic-Americans support the health care law — well above the 42 percent approval rating that the law held in the poll among the general population. This makes sense, considering that Hispanics are the most underinsured demographic in the nation, and some 10 million Hispanics could gain coverage under the law. Don’t expect them to forget that the Republican Party shut down the government in an effort to stop that from happening.

These are just two of several issues — including education and gun reform – on which polls find Hispanics siding strongly with Democratic governing priorities over the GOP’s. Ultimately, even if Republicans do shift their position and sign on to a comprehensive immigration reform deal, they cannot expect to rapidly gain support among the Hispanic community. At least not unless they fundamentally change a platform that has been specifically tailored to attract voters with a completely different set of values.

 

By: Henry Decker, The National Memo, October 31, 2013

November 4, 2013 Posted by | GOP, Immigration Reform | , , , , , , , | Leave a comment

“Ricocheting Around The Conservative Media”: How A Wildly Misleading Obamacare Horror Story Is Born

Far too many breathless news stories about insurance plans being “canceled” or people facing “sticker shock” fail to convey even the most basic context: this is almost exclusively a phenomenon of the individual insurance market, which covers between 5 to 6 percent of the population.

Some of those people – mostly younger, healthier people who, because they’re in the top third of the income distribution aren’t eligible for subsidies – will have to pay higher premiums for more comprehensive coverage, even if they don’t want to. This can cause real economic hardship, and that’s a legitimate issue.

But it’s still an issue that will affect only a small slice of the population. Jonathan Gruber, a health care expert at MIT, estimates that around half of those six percent won’t experience any real change. “They have to buy new plans, but they will be pretty similar to what they had before,” he told Ryan Lizza. “It will essentially be relabeling.”

Gruber adds that most of those plans being canceled run afoul of a provision of the law banning any policy that requires people to pay more than $6,000 per year in health care expenses – plans that may lead to medical bankruptcies, the number one type of bankruptcy in the US.

That leaves about three percent of Americans who may face that tough situation where they have to pay more for coverage they may not want.

That’s not the impression you’d get from most media sources, and certainly not from the law’s ideological foes. Avik Roy, for example – a conservative columnist for Forbes who has not exactly distinguished himself for his honesty in the debates over Obamacare – has a piece today that’s remarkable both for its mendacity and its alarmism.

Roy’s headline is, “Obama Officials in 2010: 93 Million Americans Will be Unable to Keep Their Health Plans Under Obamacare.” And his claim rests on a very simple bait-and-switch…

“The [administration’s] mid-range estimate is that 66 percent of small employer plans and 45 percent of large employer plans will relinquish their grandfather status by the end of 2013,” wrote the administration on page 34,552 of the Register. All in all, more than half of employer-sponsored plans will lose their “grandfather status” and get canceled.

Note that “…and get canceled” are Roy’s words, not those of the Obama administration in 2010. And those words are completely misleading – falsely suggesting that tens of millions of people will feel a real impact like that three percent discussed above.

That an insurance plan is “grandfathered” only means that it has been in existence, with minimal changes in benefits or cost-sharing, since before the law was enacted. Roy would have his readers believe that all these plans will be “canceled,” but most group plans lose their grandfathered status by coming into compliance or through other changes that are routine in our insurance system and always have been. All grandfathered plans will lose their status over time, meaning for the most part that, as Gruber put it, they’ll be ‘relabelled.’ Nobody will notice these “cancellations.”

In fact, large-employer plans don’t even have to conform to those coverage requirements (they do have to follow certain other rules). And the share of workers in grandfathered plans has been shrinking for several years – from 56 percent in 2011 to 36 percent this year – yet we only started hearing about this as an issue in the past few weeks.

In the small-group market, some plans may need to add a missing benefit – maybe pediatric dental and vision care, for example – and premiums will rise accordingly, but that’s a far cry from Roy’s spin.

The reality, according to a 2012 study by the Urban Institute, is that “95 percent of those with some type of insurance coverage (employer, nongroup, public) without reform will have the same type of coverage under the ACA .” Maybe a different plan name, but the same type of coverage.

Yet one can be certain that Roy’s claim that 93 million Americans will be harmed when their insurance policies are “canceled,” while misleading on its face, will be ricocheting around the conservative media, taken as prime evidence that Obamacare is ruining millions of lives when, as Jonathan Gruber puts it, 97 percent of Americans are either untouched by the law or are clearly winners.

 

By: Joshua Holand, Moyers and Company, Bill Moyers Blog, October 31, 2013

November 4, 2013 Posted by | Affordable Care Act, Conservatives, Obamacare | , , , , , | Leave a comment

“What If We Just Called It NixonCare?”: Republicans Have No Business Being Upset About Obamacare

House Majority Leader Eric Cantor says Republicans will seek to delay a requirement of the 2010 Affordable Care Act that all Americans obtain health insurance or face a tax penalty. “With so many unanswered questions and the problems arising around this rollout, it doesn’t make any sense to impose this one percent mandate tax on the American people,” Cantor said last week.

While Republicans plot new ways to sabotage the Affordable Care Act, it’s easy to forget that for years they’ve been arguing that any comprehensive health insurance system be designed exactly like the one that officially began October 1st, glitches and all.

For as many years Democrats tried to graft healthcare onto Social Security and Medicare and pay for it through the payroll tax. But Republicans countered that any system must be based on private insurance and paid for with a combination of subsidies for low-income purchasers and a requirement that the younger and healthier sign up.

Not surprisingly, private health insurers cheered on the Republicans while doing whatever they could to block Democrats from creating a public insurance system.

In February 1974, Republican President Richard Nixon proposed, in essence, today’s Affordable Care Act. Under Nixon’s plan all but the smallest employers would provide insurance to their workers or pay a penalty, an expanded Medicaid-type program would insure the poor and subsidies would be provided to low-income individuals and small employers. Sound familiar?

Private insurers were delighted with the Nixon plan but Democrats preferred a system based on Social Security and Medicare and the two sides failed to agree.

Thirty years later a Republican governor, Mitt Romney, made Nixon’s plan the law in Massachusetts. Private insurers couldn’t have been happier although many Democrats in the state had hoped for a public system.

When today’s Republicans rage against the individual mandate in the Affordable Care Act, it’s useful to recall this was their idea as well.

In 1989, Stuart M. Butler of the conservative Heritage Foundation came up with a plan that would “mandate all households to obtain adequate insurance.”

Insurance companies loved Butler’s plan so much it found its way into several bills introduced by Republican lawmakers in 1993. Among the supporters were Senators Orrin Hatch (R-UT) and Charles Grassley (R-IA). Both now oppose the mandate under the Affordable Care Act. Newt Gingrich, who became Speaker of the House in 1995, was also a big proponent.

Romney’s heathcare plan in Massachusetts included the same mandate to purchase private insurance. “We got the idea of an individual mandate from [Newt Gingrich] and [Newt] got it from the Heritage Foundation,” said Romney, who thought the mandate “essential for bringing the health care costs down for everyone and getting everyone the health insurance they need.”

Now that the essential Republican plan for healthcare is being implemented nationally, health insurance companies are jubilant.

Last week, after the giant insurer Wellpoint raised its earnings estimates, CEO Joseph Swedish pointed to “the long-term membership growth opportunity through exchanges.” Other major health plans are equally bullish. “The emergence of public exchanges, private exchanges, Medicaid expansions … have the potential to create new opportunities for us to grow and serve in new ways,” UnitedHealth Group CEO Stephen J. Hemsley effused.

So why are today’s Republicans so upset with an Act they designed and their patrons adore? Because it’s the signature achievement of the Obama administration.

There’s a deep irony to all this. Had Democrats stuck to the original Democratic vision and built comprehensive health insurance on Social Security and Medicare, it would have been cheaper, simpler and more widely accepted by the public. And Republicans would be hollering anyway.

 

By: Robert Reich, The Robert Reich Blog, October 29, 2013

November 4, 2013 Posted by | Affordable Care Act, Obamacare, Republicans | , , , , , , | Leave a comment

“Happiness Today, Bankruptcy Tomorrow”: Why Letting Everyone Keep Their Health-Care Plan Is A Terrible Idea

The current furor over President Obama’s broken “keep your plan” promise confusingly melds together two very different claims. The first is a simple question of accuracy and honesty: Obama made a promise about his legislation, the promise has not come true, and a certain level of abuse is deserved. (Karl Rove huffs, “This is a serious breach of trust with the American people.” And you know that Karl Rove takes breaches of presidential trust with the utmost seriousness.)

The justifiable scrutiny of Obama’s veracity has melded seamlessly into a second and very different claim: That Obama’s broken promise is not merely a violation of trust, a fair enough charge, but an act of unfairness to those who have lost their plans.

The health-care debate has suddenly come to focus almost obsessively on the alleged victims of Obamacare, who have lost their cheap individual insurance. Here’s Matthew Fleischer mourning the loss of his bare-bones plan in the Los Angeles Times; here’s David Frum doing the same for the Daily Beast. Mary Landrieu, a vulnerable red-state Democrat, is introducing legislation to ensure that nobody can lose their individual health-care plan.

The idea underlying this notion, while facially appealing, is in fact misguided and morally perverse. No decent health-care reform can keep in place every currently existing private plan.

The New York Times has a helpful graphic displaying the structure of the insurance market:

The left and top-right squares show the four fifths of Americans who get coverage through the government. Those on the left who get covered through their employer get tax-subsidized insurance, and those in the top right get insured by the government directly. Obamacare leaves that structure in place (though it has a series of mechanisms designed to hold down their cost inflation).

The main coverage provisions affect the people in the bottom right quadrant. Most of that quadrant lacks any insurance at all, which points to the dysfunctionality of buying individual insurance before Obamacare. Some of them — 5 percent of the population — have a health-insurance plan. Health-care reforms have always thought of the people within that segment as being essentially the same group of people. Those are mainly healthy, non-poor people who have been skimmed out of the insurance pool, leaving behind those too poor, or too likely to need medical care.

Obamacare is designed to pool the bottom-right quadrant into risk pools, somewhat like the people on the left and the upper right. The poorest of the uninsured are eligible for Medicaid, though a Republican Supreme Court and Republican state governments collectively decided to leave them uninsured. The rest have coverage through the new health exchanges. By design, those exchanges prevent insurers from skimming out the healthy and excluding the sick. Some of the 5 percenters will get less expensive health care, mainly because they qualify for tax credits. Others think they will have to pay higher costs but, upon inspection, will be getting cheaper coverage on the exchanges.

But some other portion — an as-yet-undefined fraction of the 5 percent — will actually be paying higher insurance premiums in the exchanges, and their complaints are echoing across the land. Should we feel concerned for their plight? No, we should not, for three reasons.

First, a great many of the people who are happy with their individual health-insurance plan are happy only because they are unaware of its actual value. This sounds patronizing, but it also happens to be demonstrably true. Even highly educated consumers within this market were frequently snookered by insurance plans that turned out to leave them exposed to surprise costs — they incur a sudden high medical cost and discover their plan does not actually cover them. The fine print is a game of wits between insurer and customer that the insurer always wins. A large share of the people telling us now they’re happy with their individual insurance simply haven’t been exposed to a negative surprise. The handful of reporters who closely followed the individual-insurance market before last week are all watching the eulogies for the lost individual plans and having their brains explode.

Second, it is true that some people actually are getting decent individual health insurance, and have to pay more under Obamacare. Before, insurers could charge them a rate based on their individual likelihood of needing medical care, and some people are lucky enough to present a very low actuarial health risk. Now those people will have to pay a rate averaging in the cost of others who are less medically fortunate.

Have those healthy 5 percenters who do have decent insurance “lost” under Obamacare? In the very immediate sense, yes. That is what Obamacare advocate Jon Gruber is getting at when he concedes that 3 percent of Americans will be worse off under the new law. They’ll be paying higher rates in 2014 than they would have.

Yet this takes an oddly narrow view of their self-interest. You may pose a low actuarial risk today, but you cannot be certain your luck will continue for the rest of your life (or until you qualify for Medicare). Even people living the healthiest lifestyles suffer illnesses and accidents, or marry people who have a uterus. Those who are paying a higher rate are getting something for their money: a guarantee that some future misfortune won’t lock them out of the market. You might call such a guarantee “insurance.”

So some of the 5 percenters are wrong, some of them are short-sighted, but they have identified a basic moral principle: Why is it fair to steal from them, the healthy, and give to others, who are sick? If they have truly mastered the fine print of the individual insurance market and want to gamble on remaining a good actuarial risk forever, should they be permitted to keep their winnings? Having drilled down through the practical arguments, here we get to the final reason, the moral bedrock of the issue.

Their objection has an intuitive, libertarian appeal that obscures the fact that the vast majority of insured Americans already submit to this form of redistribution. Indeed, they’re submitting to a much more stringent form of this redistribution. The exchanges are allowed to charge older people up to three times the premium they charge the young. But in the employer system, they’re not allowed to charge older people any higher rate at all. The shift from healthy to sick in the employer insurance pool is massive. Adrianna McIntyre, a 24-year-old wonk prodigy, notes that her employer-based coverage charges her more than three times the rate she could get in the new exchanges.

People accept this transfer from the healthy to the sick because it is the only way to make medical care affordable to the sick. This is a simple mathematical truism. If your medical care costs more than you can afford to pay, the difference must be borne by those whose medical care costs less than they can afford to pay. There are any number of ways to handle this transfer. One is taxes, and Obamacare does use taxes to make insurance more affordable for many of its recipients. There are other potential methods — conservatives like to tout high-risk pools, at least in the abstract — but none escape the basic math.

The healthy 5 percenters do recognize that Obamacare carries out this transfer. Fleischer complains he is “being taken advantage of.” Frum, writing in the same spirit, complains that he must pay $200 more now that insurers can no longer reward him for his excellent health:

That $200 a month differential seems to be the cost of community rating: I had to answer a bunch of questions about my health before qualifying for my prior plan; the new plan will be issued, no questions asked. Presumably somewhere there is a D.C. resident who smokes or who has some pre-existing condition who will receive a corresponding $200 a month windfall.

The complainers are right. But they won’t quite face up to the full implications of their complaint. If you believe the healthy are entitled to keep the financial benefits of their good health, then you must also believe the sick must be denied medical care. Should that principle be the foundation of our health-care system?

 

By: Jonathan Chait, New York Magazine, November 1, 2013

November 4, 2013 Posted by | Affordable Care Act, Health Insurance Companies, Obamacare | , , , , , , | Leave a comment

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