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Debt Ceiling: What Killed The Deal And What Might Make One Happen This Week

There are a lot of good articles running through what happened between Thursday night, when a deal seemed likely, and Friday evening, when the talks fell apart. New reports suggest that Boehner is trying to prepare a deal by tomorrow evening, to prevent the markets from dropping Monday. So here’s the short version of what just happened, and where we’re likely to be going:

On Tuesday, the Gang of Six proposed a deal that would raise tax revenues by $2 trillion — which showed there was support among Senate Republicans for a deal that raised taxes by about $2 trillion. On Thursday, congressional Democrats rebelled over reports that the deal Boehner and Obama were negotiating had only $800 billion in new revenue, and it wasn’t even clear how those would be achieved. That night, Obama called Boehner looking for about $400 billion more in revenue to have something he could sell to Democrats. That would have brought the deal from $800 billion in revenue to $1.2 trillion in revenue. He didn’t get a call back until the next day at 5:30 p.m. — by which point the call was unnecessary. Boehner had already told the media that he was leaving the talks.

Republicans are emphasizing that the White House went from asking for $800 billion in revenue to $1.2 trillion. The word you’re hearing from them is “reneged,” but the White House emphasizes that negotiations were ongoing, and both sides were asking for more as they tried to figure out what they could both agree on and pass through Congress. Boehner, for instance, wanted further cuts to Medicaid, a trigger that would repeal the individual mandate and the Independent Payment Advisory Board if the entitlement cuts didn’t come through, and a tighter cap on discretionary spending. “They make it seem like the president made some ultimatum on $1.2 trillion in revenue,” says a senior administration official. “He didn’t. He said, ‘If you can’t do this, let’s figure out what we can do.’ ”

The “what we can do” would probably have been to ratchet back the entitlement cuts. Or maybe another solution would have been found. It’s hard to say because Boehner didn’t come back with a counteroffer. He simply left the negotiations.

But let’s zoom out on where the negotiations left off. Spending cuts would have totaled about $3 trillion, with a bit less than a trillion dollars of that coming from entitlements and other forms of mandatory spending. Revenue increases — none of which would have come from raising marginal tax rates — would have been between $800 billion and $1.2 trillion. The package would have extended the unemployment insurance and payroll tax cut provisions passed in the 2010 tax deal. All in all, that’s about a trillion dollars less in revenues than the Simpson-Bowles/Gang of Six deals advocated, and about $2.6 trillion less in revenue than simply letting the Bush tax cuts expire in 2012.

There’s a question as to whether this was the very best deal Republicans could get or simply close to it. But it’s hard to believe that it was so bad that it ended the talks. What seems likelier is that Boehner spent some time between Thursday and Friday talking to his members and found that his party simply didn’t support a deal with the White House. For one thing, a deal would include some amount of revenue, and that was a hard sell under any circumstances. For another, letting the president look like a dealmaker would potentially dim the GOP’s chances of retaking the White House in 2012. As my colleague George Will put it Thursday, a deal “would enable President Obama to run away from his record and run as a debt-reducing centrist.”

And so Boehner walked. Fundamentally, this looks like the same calculation that ended the last round of talks over a 4 trillion deal. What’s different this time is Boehner’s plan B: The Speaker of the House appears to believe that a deal struck between congressional leadership would perhaps be easier to sell to his members. Since it’s hard to see Nancy Pelosi and Harry Reid making deeper concessions than Obama did, it’s hard to see why that would be true, save that the deal might not look like such a victory for the White House.

Perhaps taking the benefit for Obama off the table will be enough. I’m doubtful. It’s more likely that what we’re really doing now is wasting time until the markets plummet and Boehner’s members decide that a deal is better than no deal. And there’s a very good chance that the first major show of market concern could come tomorrow night, when the Asian markets open. Boehner is hoping to present a plan by then, but a plan is very different from a deal. A plan is something politicians can come up with. A deal, we’re increasingly finding, is something that we need the markets to force.

By: Ezra Klein, Columnist, The Washington Post, July 23, 2011

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July 24, 2011 Posted by | Congress, Conservatives, Consumers, Debt Ceiling, Deficits, Democrats, Economic Recovery, Economy, Elections, Federal Budget, GOP, Government, Government Shut Down, Ideologues, Ideology, Individual Mandate, Lawmakers, Media, Medicaid, Politics, President Obama, Press, Public, Pundits, Republicans, Right Wing, Tax Increases, Taxes, Voters | , , , , , , , , , , , , , , , , , | Leave a comment

On Debt Impasse, GOP Full Of Contradictions

Sen. Mitch McConnell has a clever plan to resolve the federal debt impasse. Congressional Republicans would invite President Barack Obama to raise the debt ceiling on his own, and then they would excoriate him for doing so.

Hmm. Just a bit contradictory?

Meanwhile, the impasse arose because congressional Republicans thunder against government red ink, yet refuse to raise revenue by ending tax breaks that help Warren Buffett pay a lower tax rate than his receptionist (which he agrees is preposterous). Another contradiction? Of course.

McConnell’s plan – a pragmatic way to avert a catastrophic default – may be torpedoed by more extremist House Republicans, such as Michele Bachmann. They seem to fear that ending tax loopholes for billionaire fund managers would damage a fragile economy. Yet they seem to think that this invalid of an economy would be unperturbed by the risk of a default on our debts.

A contra- . . . yes, you got it!

What about this one? Republicans have historically been more focused on national security threats than Democrats. Yet what would do more damage to America’s national security than a default that might halt paychecks for American military families?

This game of “spot the contradiction” is just too easy with extremist Republicans; it’s like spotting snowflakes in a blizzard. Congressional Republicans have taken a sensible and important concern – alarm about long-term debt levels, a genuine problem – and turned it into a brittle and urgent ideology.

Politicians in both parties have historically been irresponsible with money, but President Bill Clinton changed that. He imposed a stunning fiscal discipline and set the United States on a course of budget surpluses, job growth and diminishing federal debt – until the Republicans took over in 2001.

In the Bush years, Republicans proved themselves reckless both on the spending side (unfunded wars and a prescription drug benefit) and on the revenue side (the Bush tax cuts). Their view then was, as former Treasury Secretary Paul O’Neill quoted Vice President Dick Cheney as saying, “Reagan proved deficits don’t matter.”

It may seem odd that Republicans were so blithe about debt in the Bush years, yet now insist on addressing the problem in the middle of a downturn – even though basic economics dictates that a downturn is the one time when red ink is advisable. Well, just another of those contradictions.

Then there’s the rise of health care costs, a huge burden on our economy. It’s pretty clear what doesn’t work: the existing, dysfunctional system. A forthcoming book on health care by Paul Starr, “Remedy and Reaction,” notes that in 1970 the United States spent a smaller fraction of income on health care than Denmark and the same share as Canada.

Today, in dollar terms, we spend 21/2 times the average per capita of other rich countries.

When congressional Republicans do talk about health care, they have one useful suggestion – tort reform – and it was foolish for Democrats (in bed with trial lawyers) to stiff them on it. But research suggests that curbing malpractice suits, while helpful, would reduce health costs only modestly.

Beyond that, the serious Republican idea is to dismantle Medicare in its present form. That would indeed reduce government spending but would increase private spending by even more, according to the CBO.

The Obama health care plan could have done better on cost control, but it does promote evidence-based medicine, so that less money is squandered on expensive procedures that don’t work. And the Independent Payment Advisory Board will recommend steps to curb excess spending in Medicare.

Yet congressional Republicans are trying to kill the Obama health plan. Yes, of course: another contradiction.

A final puzzle concerns not just the Republican Party but us as a nation. For all their flaws, congressional Republicans have been stunningly successful in framing the national debate. Instead of discussing a jobs program to deal with the worst downturn in 70 years, we’re debating spending cuts – and most voters say in polls that they’re against raising the debt ceiling. I fear that instead of banishing contradictions, we as a nation may be embracing them.

By: Nicholas Kristof, Columnist, The New York Times, Published in the Milwaukee Journal Sentinel, July 14, 2011

July 18, 2011 Posted by | Affordable Care Act, Budget, Congress, Conservatives, Debt Ceiling, Deficits, Economic Recovery, Economy, GOP, Government, Government Shut Down, Health Care Costs, Ideologues, Ideology, Jobs, Medicare, Middle Class, National Security, Politics, President Obama, Republicans, Right Wing, Tax Loopholes, Taxes | , , , , , , , , , , , , , , | Leave a comment

GOP Returns To ‘Death Panels’ Narrative In Desperate Effort To Change The Medicare Story

Republican Member of Congress, Phil Gingrey (GA), has decided that the moment has arrived to get back on offense in the debate for the future of Medicare.

At a press conference earlier this week, Gingrey returned to one of the GOP’s favorite ‘boogeymen’ in an effort to make us forget just how much we hate the Republican approach to reforming Medicare. He went after the fifteen-member panel of medical experts established by the Affordable Care Act who go by the name the Independent Payment Advisory Board (IPAB).

According to Gingrey-

“Democrats like to picture us as pushing grandmother over the cliff or throwing someone under the bus. In either one of those scenarios, at least the senior has a chance to survive.

But under this IPAB we described that the Democrats put in Obamacare, where a bunch of bureaucrats decide whether you get care, such as continuing on dialysis or cancer chemotherapy, I guarantee you when you withdraw that the patient is going to die. It’s rationing.” (Via Politico)

Wow…that does sound scary! In fact, it sounds an awful lot like a …..Death Panel.

Thank goodness that absolutely nothing Gingrey said at his press conference beyond “My name is Phil Gingrey” has even the slightest connection to the truth.

Like it or not, here are the facts –

In order to keep Medicare spending under control, the Affordable Care Act, aka “Obamacare”, established specific target growth rates for the government program that cares for our seniors.

To ensure that these targets are met, the reform law created the IPAB for the purpose of monitoring the growth of Medicare spending and to make recommendations to cut the same in those years where it looks like we are going to blow past the targets – and only in those years.

So, if the growth in Medicare costs is staying within the boundaries set by law, the IPAB has no authority to propose any changes whatsoever.

Why was it necessary to create this panel of experts?

Prior to creation of the IPAB, it was left to Congress to make decisions about who and what should be covered by Medicare.

While Congress has long had their own board of experts to rely on (“Medipac”), the profound influence of special interests combined with a general lack of understanding of the world of medicine – and the economics that rule that world – made it fairly obvious that Congress was not the best place to get the job done.

If you doubt this, simply look at how poorly Congress has managed the growth in Medicare costs to date. And before you blame this on whichever president you would like to put in the crosshairs, you should be very clear that it is, indeed, the job of Congress to make these decisions and manage this policy.

The IPAB was created to solve this problem.

As noted earlier, the board has no statutory impact whatsoever on Medicare payment rates and policy during the years when the spending targets are being met. Their powers only come into play in those years where Medicare actuarial reports suggest we are spending too much money per the restrictions established by Obamacare.

During those years when the board is required to come up with proposals to get spending under control, they will provide these proposals to the DHHS who must then implement them – unless Congress takes it upon itself to come up with their own proposals and pass them into law.

Thus, Congress retains the absolute ability and opportunity to effectuate its own program to bring Medicare costs back in line with the targets any time they wish. Maybe it was me, but I don’t recall Gingrey pointing out this little detail. And there is something else that Representative Gingrey forgot to mention during his tirade. There is an entire list of policy items contained in the ACA that are specifically prohibited to the IPAB.

And what would you imagine is at the top of that list?

The Board is legally barred from proposing anything that will ration health care, restrict benefits or modify the eligibility criteria for beneficiaries.

What’s more, until 2020, the IPAB may not come up with proposals that place the rates being charged by primary hospitals and hospice programs in their sights. This prohibition was the result of the ACA already putting the moves on these organizations when it comes to what the government pays them. Thus, it seemed fair to give them some breathing room for the next eight years or so.

As a result of these inconvenient truths, it is rather difficult to concoct the scenario where Gingrey and friends see this insidious opportunity for the board to ration our health care.

The only argument I can imagine is to suggest that the board could recommend reducing the sums paid to physicians who provide Medicare services to patients. Were this to occur, more physicians might decide to drop out of Medicare, creating a longer waiting period for patients needing to see a doctor.

Of course, even this is not rationing.

Further, the SGR issue is about to become a thing of the past as Congress moves toward reaching a permanent solution to the problem created by an outdated formula that puts physicians in a position of taking major pay cuts from Medicare each year.

Once the physician payment issue is resolved, it becomes hard to see where the IPAB is going to exercise this health rationing Gingrey so fervently fears.

What should disturb each and every American is not only that Gingrey is willing to flat out lie in order to feather his political nest, he is using that lie to pull our attention away from the true health care rationers in our system – the private insurance companies.

Think this is a liberal red herring designed to distract you from the evil government plan to kill grandma?

Ask your physician about the hoops he or she must jump through to gain insurance company approval to do the job you hire them to do. Ask them how much of their time and money is wasted arguing with health insurance company representatives whose sole job is to turn down a requested procedure so that they will not have to pay for the same. Take a look at some of your statements from your insurer and see where they’ve denied payment on any number of technicalities resulting from a contract you signed that you could not possibly understand.

This is the true rationing problem in the United States today.

Still, polls continue to show that many Americans are deeply displeased with Obamacare.

I continue to believe that this is the direct result of so many of us not understanding what the legislation does – and does not – do.

But there is one thing we should all be able to understand.

If the opponents of health care reform and the current approach to Medicare are continuously left to base their arguments solely on lies, should it not occur to us all that maybe the law is better than what we’ve been led believe?

If not, why the lies instead of criticism based on the truth?

By: Rick Ungar, The Policy Page, Forbes, June 24,  2011

June 25, 2011 Posted by | Affordable Care Act, Congress, Conservatives, Death Panels, Democrats, GOP, Government, Health Care, Health Care Costs, Health Reform, Ideologues, Lawmakers, Medicare, Politics, Republicans, Right Wing | , , , , , | Leave a comment

Paul Ryan Supported Payment Advisory Boards Before He Was Against Them

During his series of 19 town halls in Wisconsin several weeks ago, Rep. Paul Ryan (R-WI) repeatedly criticized President Obama’s Independent Payment Advisory Board (IPAB) for “rationing” care to seniors, cutting Medicare, and denying care to current retirees. The IPAB is a 15-member  commissionthat would make recommendations for lowering Medicare spending to Congress if costs increase beyond a certain point. The reductions would go into effect unless Congress acts to stop them.

“[Obama’s] new health care law…puts a board in charge of cutting costs in Medicare,” Ryan told retirees at one town hall in Kenosha, Wisconsin in late April, arguing that the IPAB would “automatically put price controls in Medicare” and “diminish the quality of care for seniors.”

But as the Incidental Economist’s Don Taylor reports this morning, Ryan has previously introduced legislation that included a very similar board to control health care spending. In 2009, Ryan introduced the Patients’ Choice Act (PCA) which “proposed changing the tax treatment of private health insurance and providing everyone with a refundable tax credit with which to purchase insurance in exchanges” but also sought to establish “two governmental bodies to broadly apply cost effectiveness research in order to develop guidelines to govern the practice of, and payment for, medical care.” Taylor writes that “the bodies proposed in the PCA had more teeth, including provisions to allow for penalties for physicians who did not follow the guidelines, than does the Independent Payment Advisory Board (IPAB) that was passed as part of the Affordable Care Act.” Both the Health Services Commission and Forum for Quality and Effectiveness in Health Care was tasked with developing guidelines and standards for improving health quality and transparency and were afforded what the bill called “enforcement authority”:

(b) ENFORCEMENT AUTHORITY.—The Commissioners, in consultation with the Secretary of Health and Human Services, have the authority to make recommendations to the Secretary to enforce compliance of health care providers with the guidelines, standards, performance measures, and review criteria adopted under subsection(a). Such recommendations may include the following, with respect to a health care provider who is not in compliance with such guidelines, standards, measures, and criteria: (1) Exclusion from participation in Federal health care programs (as defined in section 1128B(f) of the Social Security Act (42 U.S.C.1320a–7b(f))).(2) Imposition of a civil money penalty on such provider

Like the IPAB, Ryan’s board is insulated from Congress and would have allowed true health care cost experts — the Forum for Quality and Effectiveness in Health Care even included 15 individuals, just like the IPAB although they do not appear to require Senate confirmation — to improve the cost effectiveness of the health care system. As Taylor observed back in 2009 when the board was first introduced, “any such effort will undoubtedly be called rationing by those wanting to kill it, and quality improvement and cost-effectiveness by those arguing for it. Whatever we call it, we must begin to look at inflation in the health care system generally and in Medicare in particular.” Little did we know that Ryan would be on both sides of that debate.

 

By: Igor Volsky, Think Progress, May 13, 2011

June 1, 2011 Posted by | Affordable Care Act, CMS, Congress, Conservatives, Consumers, GOP, Government, Health Care, Health Care Costs, Health Reform, Ideologues, Ideology, Medicaid, Medicare, Politics, President Obama, Rep Paul Ryan, Republicans, Wisconsin | , , , , , , , , , , , | Leave a comment

Health Care Hypocrisy: How Paul Ryan And House Republicans Are Contradicting Themselves Over Medicare

In the debate over the House Republicans’ budget plan championed by Representative Paul Ryan, it’s been remarkable to watch the contortions and contradictions in the GOP on the issue of health care. The cornerstone of the Republican critique of the Affordable Care Act over the past year or so has been that it would lead to rationing. While Republicans initially manufactured lies about this issue—anyone remember death panels?—they eventually focused on one provision in the bill that was focused on cutting costs: the Independent Payment Advisory Board (IPAB). As specified in the legislation, the IPAB is a 15-member board of medical experts who are appointed by the president, confirmed by the Senate, and tasked with cutting costs in the Medicare system, unless Congress acts to alter the proposal or discontinue automatic implementation. The legislation also specifies that a goal of such cost-cutting should be to actually improve access for beneficiaries. At a time when rising health care costs are a concern for families’ pocketbooks and the federal budget, the IPAB was a means to maintain public oversight of Medicare but insulate it from the normal politics of congressional decision-making, thus helping ensure that best medicine was the driver of cost reductions.

Republicans, however, viciously attacked the IPAB as being a bunch of unelected bureaucrats making decisions to cut costs at the expense of the quality of care seniors would receive. The rhetoric became quite heated: Congressman Phil Roe went so far as to call the IPAB the “real death panel.” Other Republicans, like Representative John Fleming, likened the IPAB to communism, saying, “It will take you back to the old Soviet Union, that’s the way they did things—with a central planning committee that set prices, targeted costs.”

Now, more than a year after health care reform passed, Paul Ryan, facing stiff opposition to his plan to end Medicare as we know it, has taken to attacking the IPAB as a way to rebut his critics. He’s arguing that, while his plan would keep Medicare the same for current beneficiaries, the IPAB “puts a board in charge of cutting costs in Medicare” that will “automatically put price controls in Medicare” and “diminish the quality of care seniors receive.” It’s this sort of dishonest vitriol that has led to 73 House Republicans, as well as some Democrats, to cosponsor legislation to eliminate the IPAB.

What’s fascinating about the posture of these cosponsors is that it runs into direct conflict to the vote the House took mere days ago on the overall Ryan budget, which passed thanks to broad Republican support. Indeed, the budget, which the co-sponsors voted for, changes Medicare into a voucher program in which seniors can only choose from among private insurance options, eliminating the public insurance that is currently at the heart of Medicare. In other words, rather than public officials, elected or unelected, making decisions as to what is covered in Medicare, the Republicans just voted to more or less privatize the program. So, , after all of their complaining about how the IPAB moved too far away from public accountability, they’ve just proposed eliminating all such accountability, insisting instead that private insurance companies know best.

Would Americans really feel better with insurance companies deciding whether they or their parents get the care they need? Probably not. The truth is that Republicans are not actually worried about accountability or giving Americans more health care options. They are not even worried about cutting costs: Medicare has a much lower cost per beneficiary than private health care now, so it makes no sense to privatize it in order to lower costs. What they are worried about is public health care; they can’t stand it—and are even willing to contradict themselves and hand people’s health over to unelected, private insurers to defeat it.

By: Neera Tanden, Chief Operating Officer, Center for American Progress, April 30, 2011

May 1, 2011 Posted by | Affordable Care Act, Conservatives, Death Panels, Federal Budget, GOP, Health Care, Health Care Costs, Health Reform, Insurance Companies, Medicare, Middle Class, Politics, Public Health, Rep Paul Ryan, Republicans, Right Wing, Seniors, Uninsured | , , , , , , , , , , | Leave a comment

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