“A Gaping Wound In The Republican Psyche”: Obamacare Is No Longer Doomed, It Will Become A Scandal
Obamacare — actual, real, Obamacare, with doctors and cards and everything — has been operational for nearly a week now. It has been … extremely boring. It does not look like Stalinist collectivization. There aren’t even any beheadings. It looks like regular medical insurance, except several million more people now have it than before.
How conservatives will respond next to this mundane new world has become the subject of combative speculation. Greg Sargent predicts Republicans will soon come to terms with the law and begin negotiating for incremental improvements. On the right, Conn Carroll angrily replies that the law’s demise remains “inevitable” and liberals will turn against the law, citing Michael Moore as a harbinger of pro-single-payer liberals who will help Republicans dismantle Obamacare, somehow.
I predict a slightly different outcome than either. Obamacare will neither collapse, nor will Republicans accept its legitimacy, but the nature of their opposition will instead slowly morph. Gleeful predictions of imminent collapse will give way to bitter recriminations at the nefarious tactics used to make the law work. Obamacare will cease to be the something certain to destroy Obama and become something Obama has gotten away with.
In recent weeks, it has begun to dawn on some conservatives that the actuarial death spiral they confidently predicted for years — in which the young and healthy shun the exchanges, leading to sicker and costlier patients and rising prices, in turn driving out the remaining healthy customers — may not actually transpire. It won’t for several reasons, one of them being a set of protections embedded in the law itself called risk corridors and reinsurance, which compensate insurance companies that wind up with a sicker customer base in the first three years of the law’s operation, thus preventing a death spiral.
Republicans, having just learned of these provisions, demand that they be abolished, to hasten the death spirals. Repentant immigration reformer Marco Rubio is at the forefront with a bill to strike them from the law. Obviously Obama would never sign such a bill, but Charles Krauthammer offers a solution: demand he sign it or else refuse to lift the debt ceiling. The program is “a huge government bailout,” argues Krauthammer. This is true in the sense that any cost overrun by a defense contractor is also a huge government bailout — which is to say, it’s not true.
But it feels true, and that is the important thing. The premise that Republicans will seek to alter Obamacare in conservative-friendly ways assumes that the policy design of health-care law is their primary motivating force. Everything about the history of Republican health-care thought suggests the opposite. Just five years ago, Mitt Romney was running on a platform of taking his Massachusetts plan, with its individual mandate, national, provoking only the mildest grumbling on the right.
Obamacare is a gaping wound in the Republican psyche, representing not only the rise of a majority moocher class but a potential symbol of a successful Obama presidency. Health-care reform, George F. Will has ludicrously if representatively declared, amounts to Obama’s “single” achievement. If it lives, it will vindicate his presidency as a liberal Reagan, rather than the reprise of Jimmy Carter (or George W. Bush) Republicans wish him to be.
If and when the law melds into the national fabric, the proximate Republican response will not be to adapt their policy ideas to it, but to denounce it as a kind of stolen law. You can see this spirit creeping out not only in Rubio’s proposal but elsewhere. Eleven Republican attorneys general have denounced Obama’s various administrative maneuvers to make the law functional as illegal. “It was powerful corporate America, with its influential lobbyists, that got an additional year to meet the insurance mandate — when individuals did not,” complains The Wall Street Journal columnist Kimberly Strassel, “It was the unions that got a reprieve from a health-insurance tax — when individuals and small businesses were left to pick up the tab.” The hapless Obamacare is slowly giving way to the devious Obamacare.
In the very long run, Obamacare may become a thing, like Social Security and Medicare, that Republicans initially predict will destroy the fabric of capitalism but eventually accept and then finally swear up and down they will not harm. In the shorter term, it will remain a bloody shirt. Obamacare will be Benghazi or the IRS scandal writ large.
By: Jonathan Chait, Daily Intelligencier, New York Magazine, January 5, 2014
“Maine, The Way Life Should Not Be”: Senate Candidate Has Been “Jailed Repeatedly”
The last few election cycles have offered campaign watchers quite a motley crew of far-right Senate candidates. The cast of characters – Angle, Mourdock, Akin, Buck, O’Donnell, et al – doesn’t include any winners, but it does feature some candidates who are tough to forget.
Will the 2014 cycle offer similarly memorable conservatives? It’s too soon to say, though Erick Bennett, who’s taking on Sen. Susan Collins in a Republican primary in Maine, appears well worth watching. Amanda Marcotte explained why.
Bennett was convicted of domestic violence in 2003 after attacking his wife, who has since divorced him. While this sort of thing traditionally turns voters off, Bennett is employing an unusual strategy by wielding his conviction as evidence that you should vote for him in Maine’s Republican primary.
“The fact that I have been jailed repeatedly for not agreeing to admit to something I didn’t do should speak to the fact of how much guts and integrity I have,” he exclaimed to the press, trying to convince them that his lying ex-wife set him up for reasons unknown. “If I go to D.C., I’m going to have that same integrity in doing what I say, and saying what I do, when it comes to protecting people’s rights, as well as their pocketbooks.”
According to a report in the Bangor Daily News, Bennett also told reporters this week that his domestic-violence conviction has helped encourage him to pursue a “pro-family” agenda.
I’ve met many campaign aides over the years who’ve boasted that just about anything in a candidate’s background is survivable with the right spin. But this Republican Senate candidate appears to be testing the limits of this thesis.
When was the last time anyone saw a credible statewide candidate argue that being “jailed repeatedly” is proof of his “integrity”?
By: Steve Benen, The Maddow Blog, January 3, 2014
“America’s Rich Hit The Jackpot”: The Year of the Great Redistribution
One of the worst epithets that can be leveled at a politician these days is to call him a “redistributionist.” Yet 2013 marked one of the biggest redistributions in recent American history. It was a redistribution upward, from average working people to the owners of America.
The stock market ended 2013 at an all-time high — giving stockholders their biggest annual gain in almost two decades. Most Americans didn’t share in those gains, however, because most people haven’t been able to save enough to invest in the stock market. More than two-thirds of Americans live from paycheck to paycheck.
Even if you include the value of IRA’s, most shares of stock are owned by the very wealthy. The richest 1 percent of Americans owns 35 percent of the value of American-owned shares. The richest 10 percent owns over 80 percent. So in the bull market of 2013, America’s rich hit the jackpot.
What does this have to do with redistribution? Some might argue the stock market is just a giant casino. Since it’s owned mostly by the wealthy, a rise in stock prices simply reflects a transfer of wealth from some of the rich (who cashed in their shares too early) to others of the rich (who bought shares early enough and held on to them long enough to reap the big gains).
But this neglects the fact that stock prices track corporate profits. The relationship isn’t exact, and price-earnings ratios move up and down in the short term. Yet over the slightly longer term, share prices do correlate with profits. And 2013 was a banner year for profits.
Where did those profits come from? Here’s where redistribution comes in. American corporations didn’t make most of their money from increased sales (although their foreign sales did increase). They made their big bucks mostly by reducing their costs — especially their biggest single cost: wages.
They push wages down because most workers no longer have any bargaining power when it comes to determining pay. The continuing high rate of unemployment — including a record number of long-term jobless, and a large number who have given up looking for work altogether — has allowed employers to set the terms.
For years, the bargaining power of American workers has also been eroding due to ever-more efficient means of outsourcing abroad, new computer software that can replace almost any routine job, and an ongoing shift of full-time to part-time and contract work. And unions have been decimated. In the 1950s, over a third of private-sector workers were members of labor unions. Now, fewer than 7 percent are unionized.
All this helps explain why corporate profits have been increasing throughout this recovery (they grew over 18 percent in 2013 alone) while wages have been dropping. Corporate earnings now represent the largest share of the gross domestic product — and wages the smallest share of GDP — than at any time since records have been kept.
Hence, the Great Redistribution.
Some might say this doesn’t really amount to a “redistribution” as we normally define that term, because government isn’t redistributing anything. By this view, the declining wages, higher profits, and the surging bull market simply reflect the workings of the free market.
But this overlooks the fact that government sets the rules of the game. Federal and state budgets have been cut, for example — thereby reducing overall demand and keeping unemployment higher than otherwise. Congress has repeatedly rejected tax incentives designed to encourage more hiring. States have adopted “right-to-work” laws that undercut unions. And so on.
If all this weren’t enough, the tax system is rigged in favor of the owners of wealth, and against people whose income comes from wages. Wealth is taxed at a lower rate than labor.
Capital gains, dividends, and debt all get favorable treatment in the tax code – which is why Mitt Romney, Warren Buffet, and other billionaires and multimillionaires continue to pay around 12 percent of their income in taxes each year, while most of the rest of us pay at least twice that rate.
Among the biggest winners are top executives and Wall Street traders whose year-end bonuses are tied to the stock market, and hedge-fund and private-equity managers whose special “carried interest” tax loophole allows their income to be treated as capital gains. The wild bull market of 2013 has given them all fabulous after-tax windfalls.
America has been redistributing upward for some time – after all, “trickle-down” economics turned out to be trickle up — but we outdid ourselves in 2013. At a time of record inequality and decreasing mobility, America conducted a Great Redistribution upward.
By: Robert Reich, The Robert Reich Blog, January 4, 2014
“Worsening Inequality”: 900 Rich People Won’t Pay Into Social Security For The Rest Of The Year
While almost all working Americans will pay into Social Security through their paychecks throughout the year, the 900 wealthiest people in the country won’t. That’s because the highest-earning 0.0001 percent of the U.S. — many of them corporate CEOs — made $117,000 in the first two days of the year, which is the maximum annual income that is subject to Social Security taxes under federal law.
It’s tough to say for certain who will be a part of this group in 2014, since the most recent available data on Americans’ earnings is from 2012. In that year, 894 individuals nationwide made enough to qualify for membership in this club, according to the Los Angeles Times. Economist Teresa Ghilarducci came up with the calculation, and points out that Forbes data on top earners enables analysts and the public to see some of the members of this group. There were nearly 70 corporate CEOs who made enough to qualify in 2012, including the top officers at companies like Philip Morris, NewsCorp, Starbucks, ComCast, and Pfizer.
They get to live the year free from Social Security taxes because the law says that only the first $117,000 earned in a year can be taxed to fund the retirement program that kept more than 15 million people out of poverty in 2011. Democrats have pushed to raise the cap in recent years from $106,800 in 2009 to the current level. Eliminating the cap entirely could make the program solvent for the next 75 years without cutting a dime from anyone’s benefits — and doing so wouldn’t touch the earnings of 94.2 percent of all American workers.
Despite that option, most of the debates around Social Security in recent years have focused on cutting the program rather than increasing its revenue stream. Yet Americans are facing a retirement crisis. Companies’ shifts from pensions to investment plans for retirees has undermined the financial security of working people while enriching the financial services industry and worsening inequality. For non-white workers who are far less likely to have access to even those paltry 401(k) plans, the picture is even bleaker. Overall more than half of all Americans are projected to see a steep drop in their standard of living upon retirement. There is a $6.6 trillion gap between what working Americans have saved and what they ought to have saved to retire well.
In the face of all of this, Sen. Elizabeth Warren (D-MA) and others have proposed increasing Social Security benefits rather than cutting them.
By: Alan Pyke, Think Progress, January 3, 2014
“Wage Boost Could Pay Democrats Dividends”: Republicans Blocking An Increase In The Federal Minimum Wage Do So At Their Own Peril
American liberalism and the Democratic Party — two partially overlapping but by no means identical institutions — have set themselves an unusually clear agenda for 2014: reducing economic inequality and boosting workers’ incomes. These are causes they can fight for on multiple fronts.
Raising the minimum wage should offer the course of least resistance. Although congressional Republicans may persist in blocking an increase in the federal minimum wage, they do so at their own peril. Raising the wage is one of the few issues in U.S. politics that commands across-the-board public support. A CBS News poll in November found that even 57 percent of Republicans support such an increase.
Democrats have concluded that they can turn Republican legislators’ opposition to raising the wage into an electoral issue by using state ballot measures. As states are free to set their own minimum-wage standards — though the rates take effect only when they exceed the federal minimum — Democrats are working to put wage-increase initiatives before voters in states that will have contested House and Senate races in 2014, including Arkansas, Alaska, South Dakota and New Mexico. Such ballot measures have proved an effective way to increase turnout of low-income and minority voters, which can translate into more ballots cast for Democratic candidates.
(Although economic libertarians object to the minimum wage on theoretical grounds, a look at the states that have refused to enact minimum-pay statutes suggests that the real opposition to the minimum wage is rooted in something else. Those states are Alabama, Louisiana, Mississippi, South Carolina and Tennessee — places where persistent racism and the heritage of slavery seem to me a far more likely cause of opposition to the minimum wage than any ideological infatuation with the works of Ayn Rand.)
Most efforts to raise the minimum wage this year are likely to come in blue states and cities. The recent leftward movement of U.S. cities, symbolized by the landslide election of Bill de Blasio as New York’s mayor, is an underappreciated factor in U.S. politics. Twenty years ago, six of the country’s dozen largest cities had Republican mayors. Today, none do, even when those cities — including Houston, Dallas and Phoenix — are nestled in red states. The transformation of major U.S. cities is rooted in demographics, as immigrants and young professionals — both preponderantly liberal constituencies — have clustered in urban areas.
In some states, cities have the power to raise the minimum wage above the state level. That’s how San Francisco was able to set its wage level above California’s and why Seattle is likely this year to raise its minimum wage well above that in the rest of Washington. New York City lacks that power, though it’s probable that de Blasio will try to persuade legislators in Albany that his city — one of the least affordable on the planet — should be given that freedom.
Whether they can raise their minimum wage or not, the nation’s ever-bluer cities have a range of other options to increase incomes. They could require developers that receive municipal tax breaks or other assistance to pay their employees a living wage above the minimum wage. They could enact paid sick leave or paid family leave requirements. They could reduce the local cost of living by requiring developers of luxury housing to build affordable housing as well.
At the federal level, too, Democrats can do more than battle for a higher minimum wage. They could call for an increase to the earned-income tax credit, an idea much loved by some conservatives (Ronald Reagan especially) that provides a federal supplement to the income of workers who fall below the poverty threshold. They could refuse to vote for the Trans-Pacific Partnership — a trade pact being negotiated with Pacific Rim nations, including such notably low-wage countries as Vietnam — or for the “fast-track” authority that would likely guarantee TPP passage unless the Congressional Budget Office can demonstrate that the measure won’t lower the wages of U.S. workers.
The ongoing efforts of fast-food workers and Wal-Mart employees to win higher pay will continue to remind both the public and legislators that millions of adults earn poverty-level wages in today’s United States. With the near-elimination of collective bargaining from the private sector, it will largely be up to Democrats in Congress, state legislatures and city halls to provide the wage boosts that unions once secured. That would help millions of Americans in their pocketbooks — and some Democratic candidates at the polls.
By: Harold Meyerson, Opinion Writer, The Washington Post, January 2, 2014
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