“Republicans’ Little Act’s Of Vandalism”: The Secret Swipe At Obamacare — And You
Underscoring how much mischief can result when Congress acts in haste and in secret, hidden away in the year-end omnibus spending bill being acted on this week is an attack on a key provision of the Affordable Care Act long targeted by the GOP.
The provision involves risk corridors, which are designed to stabilize insurance premiums in the first few years of the law. The year-end spending bill quietly erodes funding for the provision.
Republicans have chosen to label the provision a “bailout” for insurance companies. I’ve labeled that position the most cynical attack on Obamacare, because those who advance it — notably Sen. Marco Rubio (R-FL) — obviously know it’s a lie. They know it’s actually a consumer protection feature, so calling it “corporate welfare,” as Timothy P. Carney did this week in the Washington Examiner, is a neat bit of disinformation. Adding to the cynicism, the same provision is an essential part of Medicare Part D, which the GOP enacted in 2003.
Here’s another sick irony: One of the raps on the risk corridor provision is that it was “buried deep” in administration explanations of the bill, as Rubio put it. But in fact, the ACA was extensively debated and available for scrutiny by any legislator who chose. The attack on the provision, however, actually is “buried deep” in the year-end spending bill: it’s on page 892 of the 1,603-page bill, which has barely been debated at all.
Let’s see how risk corridors work, and how they’re undermined by the spending bill.
It was well understood that health insurers would have difficulty pricing their plans in the individual market in the first years of the ACA, starting in 2014. Not only would some insurers be entering that market in volume for the first time, but the market itself would be dramatically altered by the flood of new customers and such ACA rules as the prohibition on exclusions for pre-existing conditions. Some insurers will end up setting their premiums too low, and therefore will have to pay out benefits higher than they expected; others will set their rates too high, and will capture a windfall.
Without a safety valve, these miscalculations could have an impact on premiums the following year, as insurers tried to adjust. So insurers that set prices more than 3 percent below a set target get a reimbursement from the government, and those that overprice by the same margin have to pay some of the windfall to the government. Importantly, the arrangement is temporary: it expires after 2016, by which time it’s assumed that insurers will know what they’re doing.
Obviously, this isn’t a “bailout,” since it protects underpricing insurers only on the margins, while also providing a check on profiteering. The Congressional Budget Office, moreover, has projected that over time, the risk-corridor program will produce an $8-billion profit for the government, because overpricing insurers will be paying back more than underpricing insurers collect.
Some smart conservatives acknowledge that risk corridors are a good idea. As Yevgeniy Feyman of the Manhattan Institute informed Forbes readers in January, “Any conservative reform plan for universal coverage will have to use similar methods of risk adjustment. … If you want insurers to participate more broadly in the individual market, you’ll need to offer a carrot to offset the unavoidable uncertainties.”
Nevertheless, Congressional Republicans couldn’t resist taking a swipe at this little-understood provision in the ACA, and Democrats weren’t sufficiently attentive, or caring, to call them out on it. The year-end spending bill forbids the Dept. of Health and Human Services to use any outside government funds to pay out adjustments to insurers. On the face of it, the government can only use surplus coming in from overcharging insurers for that purpose. (That’s the interpretation healthcare expert Tim Jost gives to Dylan Scott of Talking Points Memo.)
For the moment, that makes the provision little more than a symbolic swipe at Obamacare. But that could change, and the CBO projections could be wrong. In that event, the Republicans’ little act of vandalism could end up costing ordinary citizens money. Nice work, GOP. Extra points for pulling it off in the dark.
By: Michael Hiltzik, The Los Angeles Times (TNS); The National Memo, December 16, 2014
“Dick Cheney’s America Is An Ugly Place”: Foremost Champion Of Amoral Patriotism, Residing Well Beyond Good And Evil
I used to like Dick Cheney.
I can still remember watching him on NBC’s Meet the Press back in the early 1990s, when he was serving as defense secretary under President George H. W. Bush. Whether he was talking about the collapse of the Soviet Union or making the case for expelling Saddam Hussein’s army from Kuwait, Cheney was impressive. Unlike so many career politicians and Washington bureaucrats, he came off as charming, sober, smart, unflappable, and sincere.
Today? Well, I’ll give him this: He still seems sincere.
Some day I hope some psychologically gifted writer will turn his attention to Dick Cheney and explore just what the hell happened to him after the Sept. 11 attacks. Something about the trauma of that day — perhaps it was the act of being physically carried by the Secret Service into the Presidential Emergency Operations Center under the White House — flipped a switch in his mind, turning him into America’s foremost champion of amoral patriotism.
The man interviewed on Meet the Press this past Sunday resides completely beyond good and evil. Despite the manifest failure of the CIA’s “enhanced interrogation techniques” to generate actionable intelligence, he has no regrets whatsoever. (“I’d do it again in a minute.”) He expresses nothing but contempt for the Senate intelligence committee’s 6,000-page report, based on 6 million pages of documents, meticulously cataloging forms of treatment that virtually every legal authority in the world and every totalitarian government in history would recognize as torture. Waterboarding, “rectal feeding,” confining a prisoner in a box for a week and a half, dangling others by their arms from an overhead bar for 22 hours at a time, making prisoners stand on broken bones, freezing prisoners nearly to death — none of it, according to Cheney, amounts to torture.
What does constitute torture? For Cheney, it’s “what 19 guys armed with airline tickets and box cutters did to 3,000 Americans on 9/11.” (Maybe our military response to the events of that day should have been christened “The Global War on Torture.”)
Perhaps most stunning of all was Cheney’s response to Chuck Todd’s question about 26 people who, according to the Senate report, were “wrongfully detained” by the CIA at its overseas black sites. The imprisonment and torture of innocent people? “I have no problem as long as we achieve our objective.” The end justifies any means. Got it.
Cheney’s hardly the first person to defend such a position. Machiavelli advocated a version of it in The Prince. It’s been favored by some of the most ruthless nationalists and totalitarians in modern history. And it’s expressed in Book 1 of Plato’s Republic by the character Polemarchus (the name means “leader in battle”), who defines justice as helping friends (fellow citizens) and harming enemies (anyone who poses a threat to the political community). This is what patriotism looks like when it’s cut off from any notion of a higher morality that could limit or rein it in. All that counts is whether an action benefits the political community. Other considerations, moral and otherwise, are irrelevant.
The problem with this view, which Socrates soon gets Polemarchus to see, is that amoral patriotism is indistinguishable from collective selfishness. It turns the political community into a gang of robbers, a crime syndicate like the Mafia, that seeks to advance its own interests while screwing over everyone else. If such behavior is wrong for an individual criminal, then it must also be wrong for a collective.
But this judgment presumes the existence of a standard of right and wrong that transcends the political community. Just as an individual act of criminality is wrong because it violates the community’s laws, so certain political acts appear worthy of being condemned because they seem to violate an idea of the good that overrides the politically based distinction between friends and enemies.
There are many such standards. In the Republic, Plato’s Socrates nudges Polemarchus toward the view that true justice is helping friends who are good and harming no one. Then there are the Hebrew Bible’s commandments and other divine laws, Jesus Christ’s insistence on loving one’s enemies, categorical moral imperatives, and the modern appeal to human dignity and rights — all of these universal ideals serve to expand our moral horizons beyond the narrow confines of a particular political community and restrict what can be legitimately done to defend it against internal and external threats.
Against these efforts to place moral limits on politics stand those, like the former vice president, who claim that public safety depends upon decoupling political life from all such restrictions. Friends and enemies, us and them, with us or against us, my country right or wrong — it doesn’t matter which dichotomous terms are used. All of them emphasize an unbridgeable moral gulf separating the political community from those who would do it harm. And that gulf permits just about anything. Even torture. Even the torture of innocents. Even redefining torture out of existence in order to exonerate the perpetrators. Everything goes, as long as friends are helped and enemies are harmed.
That’s what Dick Cheney — along with a distressingly large number of Americans — understands by patriotism: a willingness to do just about anything to advance the interests of the United States and decimate its enemies.
Just like a lawless individual.
Just like a gang of robbers.
By: Damon Linker, The Week, December 16, 2014
“To Hell With The Independents”: Ted Cruz’s Presidential Campaign Plan Is Terrible
Almost immediately after Senator Ted Cruz arrived in Washington in 2012, it became clear that he intended to run for president in 2016. Now, with primary season rapidly approaching, the details of how a Cruz campaign might look are coming into sharper focus.
In a Monday feature on National Review Online, Eliana Johnson reports that Cruz would run as far to the right as possible, while trying to win over some unlikely constituencies to put him over the top:
To hell with the independents. That’s not usually the animating principle of a presidential campaign, but for Ted Cruz’s, it just might be.
His strategists aren’t planning to make a big play for so-called independent voters in the general election if Cruz wins the Republican nomination. According to several of the senator’s top advisors, Cruz sees a path to victory that relies instead on increasing conservative turnout; attracting votes from groups — including Jews, Hispanics, and millennials — that have tended to favor Democrats; and, in the words of one Cruz strategist, “not getting killed with independents.”
Johnson goes on to explain that Cruz and his advisors see chasing moderate voters as a waste of time, and consider driving up turnout among the GOP’s conservative base as the party’s best path to victory. Along the way, they hope that Cruz’s “populist and pugnacious conservatism will persuade some millennials and traditionally Democratic voters, including Jews, Hispanics, blue-collar voters, and women.”
This is a tremendous miscalculation. If Cruz does follow this path on his White House bid, he is doomed to fail.
Despite what Cruz and his advisors appear to believe, the conservative base just isn’t big enough to carry a presidential election. It’s no coincidence that the most conservative candidates poll the worst in early surveys of the 2016 campaign; the “true conservatives” that Cruz is counting on are a minority in the U.S. Furthermore, they are clustered in states that Mitt Romney — whom Cruz believes to be so moderate that he “actually French-kissed Barack Obama” — won easily in the 2012 presidential election.
Republican presidential candidates have no path to 270 electoral votes without winning swing states like Florida, Ohio, Colorado, or Wisconsin. Those states just don’t have enough Tea Partiers for Cruz to win them with base voters alone. And there’s no better way to push those states’ persuadable moderates into the Democratic column — and drive out the Democratic base — than by catering to the fringe.
That, of course, is why Cruz is going to pursue the other constituencies mentioned by National Review. But his odds of persuading those Democrats are long.
Although Republicans made some inroads with Jewish voters in the 2014 midterms, they still backed Democratic candidates 66 to 33 percent. And there are few signs that Cruz’s plan to run to the right would entice them to turn red. According to a post-election survey from the liberal nonprofit J Street, just 19 percent of Jewish voters identify as “conservative.” Furthermore, when asked what issues are most important to them, the economy, health care, and Social Security and Medicare took the top three spots. Israel — the issue on which Cruz has centered his outreach to the Jewish community — placed 10th. And while the poll didn’t ask Jewish voters for their opinion of Cruz, it did ask them about likely Democratic nominee Hillary Clinton. With a 61 to 31 percent favorability rating, she is the most popular politician in the country among the constituency.
Like Jewish voters, Hispanic voters broadly support Democratic candidates and policies. And Cruz’s plan to win their support is ludicrously unrealistic for one specific reason: immigration.
Hispanic voters strongly support comprehensive immigration reform. Cruz vehemently opposes it. They also overwhelmingly back President Obama’s executive action shielding millions of undocumented immigrants from deportation. And they decisively oppose Cruz-championed plans to fight the move with a lawsuit or a government funding fight.
Mitt Romney managed to win just 27 percent of the Hispanic vote in the 2012 election. After Cruz rallies the base by taking a position far to the right of Romney’s “self-deportation” disaster, he would struggle to match even that meager figure.
Female voters also seem unlikely to respond well to Cruz’s quest to win their support while driving up conservative turnout. The GOP did narrow the gender gap in 2014, cutting it to just 4 points (down from 11 percent in 2012). But the Republicans who rebutted Democratic “war on women” attacks best did so by changing or obfuscating their controversial opinions on women’s health issues. Does that really sound like Ted Cruz, the unapologetic conservative who shares a platform with Todd Akin, and fought the Violence Against Women Act to the bitter end?
Cruz’s run-to-the-right strategy has a very legitimate chance of carrying him through what appears to be a wide-open GOP primary. But Republicans who actually want to reclaim the White House should hope that he fails. Because Ted Cruz playing the role of a modern-day Barry Goldwater is Hillary Clinton’s dream matchup in the general election, and would almost guarantee four more years of a Democratic president.
By: Henry Decker, The National Memo, December 15, 2014
“Heads We Win, Tails The Taxpayers Lose”: Wall Street’s Revenge; Dodd-Frank Damaged In The Budget Bill
On Wall Street, 2010 was the year of “Obama rage,” in which financial tycoons went ballistic over the president’s suggestion that some bankers helped cause the financial crisis. They were also, of course, angry about the Dodd-Frank financial reform, which placed some limits on their wheeling and dealing.
The Masters of the Universe, it turns out, are a bunch of whiners. But they’re whiners with war chests, and now they’ve bought themselves a Congress.
Before I get to specifics, a word about the changing politics of high finance.
Most interest groups have stable political loyalties. For example, the coal industry always gives the vast bulk of its political contributions to Republicans, while teachers’ unions do the same for Democrats. You might have expected Wall Street to favor the G.O.P., which is always eager to cut taxes on the rich. In fact, however, the securities and investment industry — perhaps affected by New York’s social liberalism, perhaps recognizing the tendency of stocks to do much better when Democrats hold the White House — has historically split its support more or less equally between the two parties.
But that all changed with the onset of Obama rage. Wall Street overwhelmingly backed Mitt Romney in 2012, and invested heavily in Republicans once again this year. And the first payoff to that investment has already been realized. Last week Congress passed a bill to maintain funding for the U.S. government into next year, and included in that bill was a rollback of one provision of the 2010 financial reform.
In itself, this rollback is significant but not a fatal blow to reform. But it’s utterly indefensible. The incoming congressional majority has revealed its agenda — and it’s all about rewarding bad actors.
So, about that provision. One of the goals of financial reform was to stop banks from taking big risks with depositors’ money. Why? Well, bank deposits are insured against loss, and this creates a well-known problem of “moral hazard”: If banks are free to gamble, they can play a game of heads we win, tails the taxpayers lose. That’s what happened after savings-and-loan institutions were deregulated in the 1980s, and promptly ran wild.
Dodd-Frank tried to limit this kind of moral hazard in various ways, including a rule barring insured institutions from dealing in exotic securities, the kind that played such a big role in the financial crisis. And that’s the rule that has just been rolled back.
Now, this isn’t the death of financial reform. In fact, I’d argue that regulating insured banks is something of a sideshow, since the 2008 crisis was brought on mainly by uninsured institutions like Lehman Brothers and A.I.G. The really important parts of reform involve consumer protection and the enhanced ability of regulators both to police the actions of “systemically important” financial institutions (which needn’t be conventional banks) and to take such institutions into receivership at times of crisis.
But what Congress did is still outrageous — and both sides of the ideological divide should agree. After all, even if you believe (in defiance of the lessons of history) that financial institutions can be trusted to police themselves, even if you believe the grotesquely false narrative that bleeding-heart liberals caused the financial crisis by pressuring banks to lend to poor people, especially minority borrowers, you should be against letting Wall Street play games with government-guaranteed funds. What just went down isn’t about free-market economics; it’s pure crony capitalism.
And sure enough, Citigroup literally wrote the deregulation language that was inserted into the funding bill.
Again, in itself last week’s action wasn’t decisive. But it was clearly the first skirmish in a war to roll back much if not all of the financial reform. And if you want to know who stands where in this coming war, follow the money: Wall Street is giving mainly to Republicans for a reason.
It’s true that most of the political headlines these past few days have been about Democratic division, with Senator Elizabeth Warren urging rejection of a funding bill the White House wanted passed. But this was mainly a divide about tactics, with few Democrats actually believing that undoing Dodd-Frank is a good idea.
Meanwhile, it’s hard to find Republicans expressing major reservations about undoing reform. You sometimes hear claims that the Tea Party is as opposed to bailing out bankers as it is to aiding the poor, but there’s no sign that this alleged hostility to Wall Street is having any influence at all on Republican priorities.
So the people who brought the economy to its knees are seeking the chance to do it all over again. And they have powerful allies, who are doing all they can to make Wall Street’s dream come true.
By: Paul Krugman, Op-Ed Columnist, The New York Times, December 15, 2014
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