“71st Governor Of Virginia”: Governor “Ultrasound” Receives An Engraved Rolex From Influencial Donor
Just when it seemed the controversy surrounding Virginia Gov. Bob McDonnell (R) couldn’t get worse, it gets worse.
A prominent political donor purchased a Rolex watch for Virginia Gov. Robert F. McDonnell, according to two people with knowledge of the gift, and the governor did not disclose it in his annual financial filings.
The $6,500 luxury watch was provided by wealthy businessman Jonnie R. Williams Sr., the people said. He is the chief executive of dietary supplement manufacturer Star Scientific and the person who paid for catering at the wedding of the governor’s daughter.
Coincidentally, the governor’s Rolex, engraved with the inscription “71st Governor of Virginia,” arrived about two weeks after Williams met with a leading state health official about his products. The meeting was arranged by Maureen McDonnell, the governor’s wife.
And given the luxurious gifts Maureen McDonnell received from Williams, this isn’t a good development.
Indeed, in this case, the Washington Post reported that Virginia’s First Lady was the one who encouraged Williams to buy the Rolex for the governor — a recommendation she made “moments before the meeting she had arranged” with the state health official.
Making matters slightly worse, the governor’s office insisted months ago that neither McDonnell nor his wife ever “led an effort to lower health care costs in Virginia by encouraging the use of Anatabloc,” Williams’ product. What the statement neglected to mention is that what happened outside Virginia: “On June 1 — three days before [the governor’s daughter’s] wedding — Maureen McDonnell flew to Florida, where she touted the potential benefits of Anatabloc before a gathering of doctors and investors interested in learning more about its key chemical. There, one attendee said, she said she believed Anatabloc could be used to lower health costs.”
Remember when Bob McDonnell’s biggest problem was that he was “Governor Ultrasound”?
I don’t think this ongoing corruption controversy could get much worse, but then again, I’ve thought that before and been proven wrong.
By: Steve Benen, The Maddow Blog, June 27, 2013
“No Shedding Crocodile Tears Here”: Obamacare Critics Should Stop Using Young Men To Fuel Their Arguments
In January, one of Obamacare’s most controversial provisions will come into effect:
Every person in America will be required to either have health insurance or pay a penalty.
Overall, the effect will likely be a net positive: Because of subsidies, the cost of insurance will be kept down for many households, and in many states, a Medicaid expansion will help even more families pay for their health care. But while the outlook is great for millions of workers, things are going to be tougher for at least one group: healthy, financially secure men in their twenties.
So, guess which group Obamacare critics have focused on when they attack the effects of the program? I’ll give you three guesses, but you’ll probably only need one.
On Wednesday, New York magazine’s Jonathan Chait pointed out the surprising trend, noting that critics of the Affordable Care Act have almost universally cited the group in their attacks. Likening the move to an old-time patent medicine show (“You, sir – the healthy 25-year-old in front who has never been hospitalized or needed medication in his life! Step right up!”), he suggested that the attacks on Obamacare are, to put it mildly, skewed.
On the surface, targeting the law’s impact on healthy 25-year-old men seems like a masterstroke. After all, it’s hard to argue for the fairness of a system that charges healthy young people to pay for the health care needs of sickly older ones. The trouble is, today’s healthy 25-year-old male could easily become tomorrow’s hit-and-run victim, desperately in need of long-term medical care. And, barring that, today’s healthy 20-something will, with any luck, become a less-healthy 50-something, in need of an affordable method to cover his medications and regular doctor’s visits.
(Or, as happened to me when I was an uninsured man in my mid-20s, today’s healthy young 25-year-old could be tomorrow’s guy paying out-of-pocket for wisdom teeth extraction.)
Obamacare has numerous provisions that will extend coverage and make health insurance cheaper. Among other things, it will help cover the Medicare Part D coverage gap, will end exclusions for pre-existing conditions, and will require health care plans to cover preventative care.
For tens of millions of people, these provisions, and others, will translate into lower medical costs, a previously unimaginable access to health care, and a generally improved quality of life. Given the huge potential benefits, maybe it’s time for Obamacare’s critics to stop shedding crocodile tears for the relatively small portion of the populace that is going to have to take one for the team — and, in the process, get insurance that may well make them safer and healthier.
By: Bruce Watson, Business Insider, Originally Published in DailyFinance, June 10, 2013
“GOP Opposition Is More About The Man”: The Obamacare Idea Conservatives Should Be Cheering But Aren’t
Obamacare hate is a full-time occupation on the right. But a story from Monday’s New York Times is a reminder that some pieces of the law should have conservatives celebrating, for the same reason they are leaving liberals like me a little queasy.
The story is about Obamacare’s “Cadillac Tax,” which isn’t really a tax so much as a convoluted attempt to undo an existing tax break. To simplify things a bit, the government today doesn’t treat employer health insurance as taxable income. That makes a dollar of insurance worth more than a dollar of wages, giving both employers and employees incentive to load up on insurance.
Most economists think that contributes to rising health care costs, since people with more insurance tend to spend more on medical care. The Cadillac tax would limit the value of the tax break, effectively reducing that incentive and, in theory, reducing health care costs for everybody over the long run. (The mechanism is complicated; read here if you want an explanation of how it works.)
In an ideal world, insurers and employers would respond to the Cadillac tax by finding more efficient ways to pay for care, so that workers would end up with the same access to and quality of medicine. They’d just pay a little less for it. One way to accomplish this would be to switch employees over to a smartly managed care insurance plan—think Kaiser Permanente, where the physicians and nurses coordinate with each other, focusing on the most effective treatments and long-term health of the patient.
In the real world, alas, employers frequently find it easier just to shift costs over to their employees. They change their plan benefits, so that workers pay more for each prescription, hospital visit, and the like. The Times story, by Reed Abelson, suggests employers are doing just that.
It’s difficult to pinpoint how much the Cadillac Tax is responsible for these shifts, given that employers were looking for ways to shift costs long before Obamacare came long. The tax doesn’t start to phase in until 2018. And the Congressional Budget Office, in its most recent revision of projections on Obamacare, said that it now expects fewer plans to hit the tax threshold when it first takes effect. Still, employers are certainly talking about the tax. (I’ve heard the same chatter.) If employers are reducing their coverage in response, then—as Matthew Yglesias notes—it’s working precisely as the economists predicted it would.
That doesn’t mean the change is popular. People don’t like to hear that they’ll have to pay more the next time they go to the doctor. Unions are particularly wary of the change, since many of their members fought hard for the generous financial protection that the Cadillac Tax will curb. But the real danger is for the chronically ill, who run up huge medical bills year after year—and for whom higher out-of-pocket expenses can be a real hardship. The Times article focuses on one such person—a woman with cystic fibrosis who said she had to drop out of school and take a second job, in order to pay the bills from her higher deductibles.
Liberals who support or at least tolerate the Cadillac Tax do so because the economists have convinced us it might truly reduce costs in the long run. We also know that other parts of Obamacare, like tax credits for purchasing insurance and guarantees of coverage for people with pre-existing conditions, will help the sick and the poor far more than the Cadillac tax will hurt them.Conservatives can’t stand this kind of spending and regulation, of course. But they should have no such hostility to the Cadillac tax.
On the contrary, writers like James Capretta and Robert Moffit have long called for reducing or eliminating the tax breaks for employer sponsored insurance. They subscribe to the same economic logic that compelled Obamacare’s architects to include the provision in the first place—that, without the favorable tax treatment, employers and insurers will be more thrifty. The only difference is that conservatives think the tax incentives are even more central to the cost issue than liberals do. And, unlike liberals, conservatives don’t seem particularly troubled by the implications for the chronically ill. Either that, or conservatives do a remarkably good job of disguising their anxiety.
The Cadillac Tax will not work as quickly or smoothly as conservatives would prefer. And that’s fair grounds for criticism. But surely the concept deserves a kind word or two somewhere on the right—unless, perhaps, opposition to Obamacare is less about what’s in the law and more about who signed it.
By: Jonathan Cohn, The New Republic, May 28, 2013
“The Incredible Shrinking Issue”: Lack Of Jobs, Not The Deficit, Is The Actual Scandal That Congress Should Be Trying To Grapple
Republicans gleeful over the recent slew of scandals afflicting the Obama administration – some imagined and some worthy of the name – should be thanking their lucky stars that they have new issues to wield as political cudgels. After all, their favorite of the last few years, the federal deficit, is getting smaller and smaller and smaller.
The Congressional Budget Office – Washington’s nonpartisan number crunchers – released new projections Tuesday showing that the deficit will fall to $642 billion this fiscal year, a 24 percent drop in its projection from just a few months ago. The improvement is primarily due to increasing revenue and fewer expected outlays to government-backed mortgage giants Fannie Mae and Freddie Mac.
If this holds, it will be the smallest the deficit has been since President Barack Obama took office. As a percentage of the economy, the deficit will have been cut by more than half over Obama’s first five years, from 10.1 percent in 2009 to 4 percent in 2013.
And the incredible shrinking deficit doesn’t stop there, falling to 2.1 percent of gross domestic product by 2015, which, as the New York Times David Leonhardt noted, is “a level many economists consider healthy.” (For comparison’s sake, the much-ballyhooed Simpson-Bowles budget plan called for a deficit in 2015 of 2.3 percent of GDP.) It’s also worth noting that the CBO assumes perpetual levels of both war spending in Afghanistan and aid for Hurricane Sandy victims, so the projections for future years will certainly be lower than they appear now.
This report is one more piece of evidence showing that the economic discussion that has gripped Washington recently is absurdly backwards. The short-term deficit is barely a problem, while the long-term issue for the nation’s finances remains, as everyone has known for years, spiraling health care costs (but there’s reason to believe they are also coming down).
What the dropping deficit has not done is spark the sort of economic growth or job creation that will bring down America’s still-too-high unemployment rate; lack of jobs, not the deficit, is the actual crisis with which Congress should be trying to grapple. In fact, as the Center on Budget and Policy Priorities’ Jared Bernstein notes, the deficit is coming down too fast considering the country’s current economic doldrums:
The deficit is falling quickly when it shouldn’t be and rising later when it shouldn’t be.
Certainly, if facts drove the day, this update would be a fire hose for the hair-on-fire austerity crowd re: the near-term deficit. The patient is checking out of the hospital while Drs Cantor, Ryan, and McConnell are still preparing for major surgery.
Considering that Republicans on the House Budget Committee claim that the CBO report “provided a fresh reminder of Washington’s out-of-control spending,” chances seem slim that those pushing austerity will change their tune anytime soon. So perhaps the silver lining in lawmakers focusing on what they see as today’s hottest “scandal-gate” is that it will distract them from doing any more to undermine the economic recovery or to cut a deficit that doesn’t need to be cut anymore.
By: Pat Garofalo, U. S. News and World Report, May 14, 2013
“Morning Joe’s Accuracy Deficit”: If It’s Way Too Early, It’s Just Flat Out Wrong
We’ve all played the game “telephone,” where a message gets distorted in the retelling, often so much so that the original sender has a hard time recognizing it when it comes back. Nowadays, “telephone” is played in the blogosphere, and that’s how I felt when I first learned that my views on reducing the federal budget deficit were portrayed as in sharp contrast to those of my famous Princeton colleague, Paul Krugman.
The story began when Krugman appeared as a guest on “Morning Joe” on January 28th. He locked horns with host Joe Scarborough and others over how urgent it is to reduce the deficit, with Krugman arguing that we have lots of time and Scarborough (and others) arguing that we need to act post haste. Krugman did not dispute the notion that we must eventually get ourselves off the explosive debt path on which we now find ourselves. But he insisted that, with the economy so weak and the markets so welcoming of U.S. Treasury debt, we can and should go slowly.
Scarborough, though cordial to his guest, was incredulous and even amused. He subsequently argued in POLITICO that Krugman’s view is extreme, dangerous, and — most germane to this note — shared by almost no one else. It certainly wasn’t the consensus view on “Morning Joe” that day.
When Scarborough speaks, people listen. So controversy quickly erupted in the blogosphere. In POLITICO on February 15th, Scarborough invoked me as being on his side of the debate — which was news to me. While there are nuances of difference between my views on the budget issue and Krugman’s, and notable differences in rhetorical style, our positions are broadly similar. I’m probably a tad more hawkish than my colleague, but there’s not much distance showing between us.
So why had Scarborough declared me a deficit hawk?, I wondered when someone informed me of the alleged schism within the Princeton economics department. Here’s the answer.
In my new book, “After the Music Stopped” (Penguin Press, 2013), which was published a few days before the Scarborough-Krugman debate, I argued that there is not just one, but actually three distinct deficit problems, each with its own solution.
PROBLEM 1: In the very short run, meaning right now, we probably have too much deficit reduction. The U.S. economy could actually use some fiscal stimulus (to wit, larger deficits) today, rather than more fiscal contraction, because unemployment is still so high. Doesn’t that sound like Krugman?
PROBLEM 2: Over the coming decade, however — which is the focus of Simpson-Bowles, the so-called grand bargain, and most other plans — we do need to bring the deficit down, I argued. And, indeed, Problems 1 and 2 should be linked: by joining together some modest stimulus now with perhaps ten times as much deficit reduction over the ten-year budget window. In Washington-speak, we would thus “pay for” the stimulus ten times over. Furthermore, I argued, we could accomplish that without undue pain and suffering.
PROBLEM 3: The real budget crunch comes well down the line — a decade or two or three from now. The problem is simple to diagnose — healthcare costs are projected to soar — and it looks massive. By the way, that doesn’t mean we shouldn’t start addressing the healthcare cost problem now.
An excerpt from my book, making these points, was published in The Atlantic on January 25th — three days before the “Morning Joe” show. Interestingly, The Atlantic entitled the excerpt: “How to Worry About the Deficit: (1) Don’t; (2) Wait a Few Years; (3) Then Worry About Healthcare Costs.” A bit long as headlines go, and maybe a bit misleading, but it did capture the three separate deficit issues.
Apparently the article caught Scarborough’s eye. In that POLITICO article, he cited me as among the anti-Krugmans, claiming I was “particularly supportive of the “Morning Joe” panel’s view.” Why? Because I had warned of “truly horrific problems” ahead and “even shared [the] conclusion that the coming Medicare crisis will be so great that Democrats won’t be able to tax their way out of it.”
Well, I did say those things, but they referred to Problem 3, the long-run explosion of healthcare costs, not to Problem 2, the ten-year budget. Here’s the actual quotation about taxing our way out of the exploding healthcare costs (from “After the Music Stopped,” p. 404):
“The government can cover no more than a small fraction of the projected deficits by raising taxes. Sorry, Democrats, but the Republicans are right on this one. Americans are used to federal taxes running about 18.5 percent of GDP; they will not allow them to rise to 32 percent of GDP. Never mind that a number of European countries do so; we won’t.”
Krugman subsequently noted in his blog (on February 16) that his position is “not so different” from mine.
I don’t blog, so the purpose of this missive is simple: Can we please end the mini-debate right here? While there may be some small differences between Krugman’s position on reducing the deficit and my own, they are pretty small. Had I been on “Morning Joe” that day, the debate surely would have been two against four, not one against four. Furthermore, Krugman and I are not occupying some obscure corner of the policy debate, where only weirdos live. A large number of economists are on our side. Others, of course, are closer to the Scarborough camp.
The more important question is the substantive issue of the day: Should we be going for more fiscal austerity right now, or not? Those of us who say “not” urge you to consider some pertinent facts: the unemployment rate remains sky high; fiscal austerity has failed in Europe, where it is harming growth; the U.S. Treasury can still borrow at super-low interest rates; and we have already made serious progress on the ten-year budget problem. Now make up your own minds.
By: Alan S. Blinder, Opinion Contributor; Professor of Economics and Public Affairs, Princeton; Former Vice Chairman of the Federal Reserve, Politico, March 4, 2013
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