“It’s Not Time To Move On”: When John Boehner Tells Darrell Issa, “It’s Time To Move On”, It Will Be A Great Day Indeed
New Jersey Gov. Chris Christie’s (R) bridge scandal grows more interesting every day, as new evidence emerges, new questions arise, and new developments unfold. We don’t yet know why the Christie administration engaged in this corruption, who else was involved, who might yet turn on whom, and when the next shoe might drop.
And with all this intrigue surrounding one of the GOP’s highest-profile figures, the nation’s highest-ranking Republican official made the funniest comment of his professional career.
House Speaker John Boehner (R-OH) on Thursday said that lawmakers and the media should move past the controversy surrounding New Jersey Gov. Chris Christie (R) and the lane closures on the George Washington Bridge last year, noting that the governor has “held people accountable.”
“It’s time to move on,” he said during a Thursday press conference. “I think the governor made clear that mistakes were made.”
Um, no. Actually, it’s not time to move on. Ordinarily, it’s time to move on when all of the relevant questions have been answered, not when all of the relevant questions remain unanswered.
(House Oversight Committee Chairman Darrell Issa recently vowed to spend 2014 working on the IRS “scandal,” Benghazi, and “Fast and Furious.” When Boehner tells Issa, “It’s time to move on,” it will be a great day, indeed.)
As for developments in the Garden State today, quite a bit has happened over the last few hours:
* 20 new subpoenas are going out.
* The Senate Transportation Committee received information from the Port Authority, and found “no evidence” to support the “traffic study” excuse still being touted by Christie last week.
* The state Assembly has begun its new legislative session by creating a special investigatory committee to oversee the probe into the scandal. As Rachel noted on the show last night, it will led in part by former federal prosecutor Reid Schar, who helped convict former Illinois Gov. Rod Blagojevich (D).
* The state Senate is also moving forward with its own investigation.
* The Christie administration has lawyered up.
* Bridget Kelly has lawyered up.
I’m at a bit of a loss as to how any fair-minded person could look at these developments, realize there are so many unresolved elements of this scandal, and conclude, “It’s time to move on.”
By: Steve Benen, The Maddow Blog, January 16, 2014
“Boy, How Things Have Changed”: We Will All Be Represented By Lobbyists Someday
Today, former Bush operative and tobacco lobbyist extraordinaire Ed Gillespie confirmed he is going to challenge Virginia Senator Mark Warner. This comes on the heels of news Monday that David Jolly, another lobbyist, had won the GOP primary in a special congressional election in Florida. And let’s not forget the victory of Terry McAuliffe, the Democratic lobbyist and second-worst candidate in the Virginia gubernatorial race.
Three examples makes it a trend. But what, if anything, does it herald for the future of American politics? Will Congress eventually be dominated by empty-eyed, gladhanding walking grins whose only skills are flattering the rich and powerful, and raising obscene amounts of money?
The short answer: Yes, so we might as well get used to it.
Congress was never a place where high idealism triumphed. On the contrary, for most of American history it has been dysfunctional, foolish, racist, in thrall to special interests, awash in money, and often stunningly corrupt. But, at the risk of romanticizing the past, it used to be a place that basically functioned, if you define “functioning” as “passing enough legislation to keep the country tottering along, usually after every other possibility was exhausted, and maybe even making things a little better for people every once in awhile.” It was exciting, for boring people at least, a place where ambitious strivers came for a career in political adventure and accomplishment.
But things have changed. Increasingly Congress has stopped doing anything at all, let alone anything positive, and became a place where not blowing up the world financial system for no reason is a success, and passing a budget like responsible countries do on a routine basis counts as a major accomplishment. And even then, everyone hates you for it anyway. Congress has rarely been well-liked, but it keeps setting new records in unpopularity—in November its approval rating was a record-low nine percent. Which only prompted one question: Who are these nine percent of people?
What’s more, the stupendous sums needed for a modern campaign, driven by Citizens United and the unintended consequences of the McCain-Feingold campaign finance reform law, have turned our representatives’ daily lives into one of endless begging for money. After the election, Ryan Grim and Sabrina Siddiqui wrote about the grim experience awaiting newly elected congressmen:
The daily schedule prescribed by the Democratic leadership contemplates a nine or 10-hour day while in Washington. Of that, four hours are to be spent in “call time” and another hour is blocked off for “strategic outreach,” which includes fundraisers and press work. An hour is walled off to “recharge,” and three to four hours are designated for the actual work of being a member of Congress — hearings, votes, and meetings with constituents. If the constituents are donors, all the better…It is considered poor form in Congress — borderline self-indulgent — for a freshman to sit at length in congressional hearings when the time could instead be spent raising money…
“What’s my experience with it? You might as well be putting bamboo shoots under my fingernails,” said Rep. John Larson (D-Conn.), a high-ranking Democrat.
Terry McAuliffe might not be terribly principled. But one thing he can do better than all but a handful of living humans is raise money—thanks to his utter shamelessness. Consider the time he, by his own admission, left his wife and literally newborn son in the car to raise money for the Democrats:
We got to the dinner and by then Dorothy was in tears, and I left her with Justin and went inside. Little Peter was sleeping peacefully and Dorothy just sat there and poor Justin didn’t say a word. He was mortified. I was inside maybe fifteen minutes, said a few nice things about Marty, and hurried back out to the car. I felt bad for Dorothy, but it was a million bucks for the Democratic Party and by the time we got home and the kids had their new little brother in their arms, Dorothy was all smiles and we were one big happy family again. Nobody ever said life with me was easy.
If the lobbyist-turned-politician trend continues, how much will it actually change on the Hill? After all, parties are getting better and better at enforcing ideological discipline. Devoid of any principle except their own advancement, lobbyists will serve as little more than a precisely calibrated measurement of the political influence of various interest groups and pressure groups. So to the extent that the country is well-served by actual ideological competition, lobbyist-politicians will be a reasonable proxy.
That’s the sunniest interpretation imaginable, anyway. Realistically, more lobbyist-politicians means more looted taxpayer cash stuffing plutocrats’ pockets. These brave new politicians won’t, by themselves, destroy the republic, but a Congress dominated by these money vacuums will probably be hell for the American people. Just wait until a grinning President McAuliffe signs the Chinese Lead-Based Toy Deregulation Act of 2024.
By: Ryan Cooper, The New Republic, January 16, 2014
“Obamacare’s a ‘Bailout’ Now?”: Conservative Critics Are Getting Desperate
Conservatives used to say Obamacare is socialized medicine. Now they say it is a “government bailout” of insurers.
The new claim is just as misleading and cynical as the old one.
The latest conservative playing thing is a pair of previously obscure Obamacare features: “reinsurance” and “risk corridors.” Their mechanisms are a bit complicated to explain. (Read here if you want the details.) What matters is their shared purpose, which is to reimburse insurance companies that end up taking heavy losses—say, because the new marketplaces don’t attract enough young, healthy subscribers. Remember, insurers depend on premiums from people in good health to subsidize the costs of the sick. Without the right mix, the premiums insurers collect won’t be sufficient to cover the cost of clams. They’ll lose money, raise premiums in the future, drop out of the market altogether, or some combination of the three. In short, bad stuff will happen.
To Obamacare supporters, reinsurance and risk corridors are tools for stabilizing the insurance market and easing the transition from the old system to the new. (That’s why I’ve been calling them “shock absorbers.”) But the provisions started attracting scrutiny from the right in the fall, when policy watchers like David Freddoso of Conservative Intelligence Briefing first wrote about it. Now reinsurance and risk corridors are getting more sustained attention from the Weekly Standard, Fox News, and the conservative movement writ large. Republican Senator Marco Rubio has sponsored a bill to repeal the risk corridors. “Why should taxpayers have to bail out health insurance companies in the increasingly likely event that ObamaCare leaves them with financial losses?” Rubio wrote this week, in an op-ed for the Fox website. “This is government favoritism and corporate cronyism at its worst, and it’s taxpayers that will pay the price unless we stop it.” Insurers are sufficiently spooked that, as Buzzfeed’s Kate Nocera has reported, they are undertaking a lobbying campaign to keep the provisions in place.
The bailout analogy is potent. And it’s certainly accurate to say that, under Obamacare, some insurers may collect payments from the government to help offset losses. But the analogy breaks down after that.
Bailouts typically start with companies taking egregiously irresponsible actions and end with the government forking over mind-boggling sums of money to save them. Think of the savings and loans institutions misleading the public about the state of their finances in the 1980s—or the financial industry making those bad home loans and risky investments a decade ago. Each of those involved grievous management errors, frequently skirting the limits of legality. The federal outlays to save those banks were in the hundreds of billions of dollars.
With Obamacare, the situation is different. Projecting future insurance costs inevitably involves a little guesswork. With a brand new program like Obamacare, it inevitably involves a lot of guesswork. Even the smartest, most responsible actuaries might not get the numbers right, for reasons Sy Mukherjee of ThinkProgress explains:
Insurance companies were sort of shooting in the dark when they set premiums for Obamacare’s first year. They had to approximate how many people would enroll, how old the customers would be, how sick they would be, how much insurers would have to pay out in claims — but the whole enterprise was, ultimately, a series of educated guesses.
Will the guesses prove wrong? Humana officials told investors last week that the risk pools look a little worse than they had anticipated. But, as Sarah Kliff of the Washington Post just reported, officials at Wellpoint say their risk pools seem ok while the CEO of Aetna described the demographics as “better than I thought they would have been.”
Truth is, no insurer will be sure about its beneficiaries for many months, until the open enrollment period ends and the newly insured have a few months in which to file claims. That makes it impossible to know what kinds of losses, if any, insurers will take. But even if the losses are significant, the taxpayers won’t be in for another Wall Street-style bailout.
For one thing, the reinsurance money comes from the insurers themselves, who pay a tax on each beneficiary. It’s basically a transfer of funds, from all carriers to those companies inside the Obamacare marketplaces that end up with unusually unhealthy members. In this sense, it’s an insurance policy for the insurers—and one they more or less finance on their own.
The payouts from risk corridors are a little different, in the sense that those dollars come directly from government funds and have no actual limit. But the risk corridors also build up government funds—in effect, by claiming some of the profits from insurers who reap unexpected windfalls. The Congressional Budget Office, in its overall cost estimates for the Affordable Care Act, assumed that the inflow and outlfow would be roughly the same, so that the risk corridor program as a whole would be budget neutral. Even if CBO’s prediction is wrong, and the government ends up spending more than it raises, the difference is likely to be modest. The formula for payouts calls merely for government to share in high losses or gains, not to take them on completely. It’s enough to protect the insurers, the thinking goes, but not enough to cause a massive outlay. Meanwhile, lower-than-expected premiums are likely to save the government much more money than the risk corridors would ever pay out.
Conservatives might object to reinsurance and risk corridors on principle, regardless of amounts involved. That would be a perfectly legitimate argument, except for one thing: Reinsurance and risk corridors are already a feature of some government programs, most prominent among them Medicare Part D. The reinsurance and risk corridors in Obamacare and Medicare Part D are remarkably similar, except that Obamacare’s are temporary and Medicare Part D’s are permanent—which is to say, they are still part of the program.
What’s that? You haven’t heard Republicans attacking Medicare Part D as an insurer bailout? Maybe that’s because of one other, obvious difference between Part D and the Affordable Care Act. Only one of them was signed into law by a guy named Barack Obama.
Update: The Rubio bill would repeal only the risk corridors. Originally, I wrote that it would repeal both provisions. My apologies for the error.
By: Jonathan Cohn, The New Republic, January 16, 2014
“There’s Always Bitcoin”: Your Credit Card Has A Dangerous Flaw That The Banks Refuse To Fix
Hackers stole payment records on as many as 110 million customer accounts from Target over the holiday shopping season, in one of the largest data security breaches in history. The company has struggled to regain customers’ trust, with noticeable drop-offs in sales since they disclosed the breach on December 19. And Target is not alone in what looks like an identity theft epidemic. Neiman Marcus announced a similar hack of payment records, and at least three more major retailers could come forward in the next several weeks. As more and more customers have reported fraudulent charges, Congress has begun to ask questions about why this happened.
Here’s an answer: The United States has one of the worst payment systems in the entire world, inviting fraud and increasing hassles for anyone who wants to exchange money. In this case, a simple credit protection available on virtually all payment cards outside the U.S. could have dramatically narrowed the scope of the Target breach. It hasn’t happened here, mainly because banks don’t want to spend the money to upgrade the system, writing off the hassle and expense of your identity fraud as a cost of doing business.
Almost alone among developed nations, U.S. credit and debit cards have a magnetic stripe that contains all the financial information necessary to make a purchase. Once information gets stolen from a merchant, it can be encoded into a magnetic stripe and used with a new card. Smart cards in Europe and elsewhere encrypt that data and store it on a microchip, which is much tougher to replicate. More important, the cards also require a personal identification number (PIN) to work. This “chip-and-PIN” system introduces a second authentication, forcing thieves to have both pieces of information to successfully use the card. It’s a combination of advanced technology and simple common sense.
Chip-and-PIN would not have prevented hackers from stealing payment information from Target’s databases, but would have made it more difficult to use the records. Because of this, says Georgetown law professor Adam Levitin, would-be identity thieves would have a lower incentive to steal the data in the first place. “Like Willie Sutton says, bank robbers go where the money is,” he said. “Fraud will always find the weakest link. Now that the rest of world has gone to chip-and-PIN, we’re the weakest link.” Nearly half of all card losses in 2012 occurred in the U.S., according to the trade journal the Nilson Report.
Though 130 countries around the world have phased out their magnetic stripe cards (which you may have noticed if you’ve tried to use a credit card overseas), the U.S. has lagged behind, with both merchants and banks assigning the blame to each other. Retailers need new card readers to handle chip-and-PIN cards, and they can be costly; it’s why only 10 percent of U.S. merchants have upgraded. The merchants don’t want to spend the money until they know banks will issue chip-and-PIN cards. And the banks don’t want to spend money on the more expensive cards until merchants install the card readers. So both sides are effectively telling the other to go first. With no regulatory mandates for anyone, this standoff could continue for years, with consumers paying the price.
“This is different than it has worked everywhere in the world,” said Adam Levitin. “Elsewhere, issuers and merchants have moved in lockstep.”
Some analysts place the blame squarely on banks, arguing that merchants eat the majority of the fraud costs, giving banks no incentive to upgrade. In addition, blogger and author Yves Smith notes that the banks sell the card reader equipment to the merchants, and they have inflated the price. “The impediment is almost assuredly the price point the banks have set,” Smith writes.
Credit card networks like Visa and MasterCard introduced the Payment Card Industry (PCI) Security Standards, which are supposed to provide more anti-fraud controls. But that effectively tries to band-aid an inherently insecure magnetic stripe system. More recently, the card networks proposed a shift in liability rules that they hope will nudge banks and merchants toward upgrading. By October 2015, if the merchant has a chip reader and the card has a traditional magnetic stripe, the bank will be liable for any fraud. Likewise, if a chip-and-PIN card is presented to a merchant with no chip reader, the merchant will be liable. In other words, both sides will be penalized for not upgrading to the chip-and-PIN system.
But again, this is voluntary. And in the meantime, both merchants and issuers manage to absorb the costs of fraudulent purchases (which total around five cents per $100 charged, according to the industry). They consider this cheaper than the costs of upgrading. In fact, one facet of the current system is a profit center for the banks. When a fraud transaction goes through, merchants reverse it through something called a charge-back. Merchants must pay the same fee to reverse a charge that they do to swipe one through, along with additional fees. “The retailers say, ‘we’re having to pay to not be paid,’” Adam Levitin said.
This reluctance to upgrade in the U.S. has led to a general creakiness in the payment system. Most U.S. retailers don’t even have real-time authorization capabilities, making it more difficult to detect fraud at the point of sale. The Automated Clearing House (ACH) system can take days to process transactions, wasting time and increasing costs for customers. Banks have outdated processing systems and have been similarly reluctant to upgrade them. Says Levitin, “We’re still using horse and buggies.”
Meanwhile, other countries have leapt past the U.S. In Kenya, the M-Pesa system allows consumers to pay for virtually anything by mobile phone. It has become widely adopted by merchants, making the African nation a world leader in mobile money. Mobile transactions over M-Pesa hit $19.6 billion in 2013. (Attempts to create mobile payment systems in the U.S. are in the startup phase, with entrepreneurs literally going from one business to the next to find retailers willing to use it.)
Levitin argues that America’s previous position as a payments system leader led to its slow pace in keeping up with new technologies. “The reason we’ve lagged behind is because we were ahead,” he said. “Everyone else had to upgrade, while our card system networks were making money. Kenya just didn’t have a regular banking infrastructure. The alternative to M-Pesa is paying in cattle.” Similarly, Europe upgraded to chip-and-PIN because credit card authorization was typically done through phone lines, and 10 years ago, European telecom costs were fairly expensive. “Our technology was not bad enough to upgrade,” Levitin says.
Congress is highly unlikely to get involved in an argument between banking lobbyists and retailer lobbyists. They learned their lesson when trying to legislate “swipe fees,” what banks charge retailers to process credit and debit card transactions. The result was a knock-down, drag-out affair that took months to negotiate.
But the Target breach, and the reputational risk to the big box store, has both merchants and banks rethinking the consequences of maintaining a substandard old system. Mallory Duncan, general counsel for the National Retail Federation, said this week at the trade group’s annual convention that they now encourage members to upgrade to chip-and-PIN card readers, saying “The technology that exists in cards out there is 20th-century technology and we’ve got 21st-century hackers.” And banks have responded to complaints by gradually distributing dual-use cards with magnetic strips and chip-and-PIN technology, mostly to frequent foreign travelers. U.S. Bank expects all its customers to have the cards by next year.
So there’s a chance that the U.S., like a lumbering giant, will finally make the move to more secure payment systems. Failing that, there’s always Bitcoin.
By: David Dayen, The New Republic, January 16, 2016
“We Need Gun Control To Stop More Than Criminals”: Gun Violence Isn’t Only Committed By Classic Criminals
Opponents of any kind of gun restrictions argue that they are meaningless, since criminals by definition don’t follow the law, and therefore won’t allow gun laws to hamstring their criminal behavior. That’s true. But gun violence isn’t only committed by classic criminals, as recent gun-related tragedies show.
There’s the 12-year-old who apparently took a shotgun out of a musical instrument case and shot and injured two classmates at a middle school in New Mexico. His behavior would make him a criminal (and what is a 12-year-old doing with a gun?). But most likely, his classmates and teachers did not see him as your basic law-breaker. He was, the Los Angeles Times reports, a bright but distant boy. He was able to get a gun because his family is a gun family, enjoying hunting. Are they criminals? It doesn’t sound like it. The boy simply had easy access to a gun, without which he would not have been able to do the damage he has done. We don’t yet know the circumstances of the origin of the gun used, but could the tragedy have been averted had there been mandatory safety stopgaps – either on the weapon itself, or with a requirement that the guns be kept in a locked structure?
A man in Florida, meanwhile, shot and killed a fellow movie-goer after said viewer refused to stop texting. The annoyance of the shooter is more than understandable – and many of us might have no problem with grabbing a phone from a theater-goer, throwing it on the floor and stomping on it – but the fact that this man felt he could shoot and kill someone for behaving so boorishly is alarming. Is he a criminal? It didn’t sound like it, based on evidence from before the shooting. In fact, he was a retired police office with a spotless record. And early reports indicate he thought he was being threatened (turns out the “threat” may have just been thrown popcorn). The point is he had a gun, had it with him in a movie theater, and could not have killed someone if he had not had the weapon with him. If people were not allowed to carry concealed weapons into the theater, this particular tragedy may not have happened.
On Wednesday night, a gunman opened fire at an Indiana grocery store, killing two people with a semi-automatic weapon before police shot and killed the gunman. That offender may well have been a classic criminal before the episode. We may never know, as he can’t tell us his back-story. If he was a troubled person (and his behavior suggests that he was), would a simple background check have kept him from getting such a gun?
Ban guns and only criminals will have guns, we are told. Put restrictions on gun ownership, or require people to undergo background checks first, and we will only make it harder for law-abiding citizens to get guns for protection, gun rights advocates say. They are right on both counts. But it would still prevent a great many murders.
By: Susan Milligan, Washington Whispers, U.S. News and World Report, January 16, 2014
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