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“Something Liberals Should Remember”: Obama Is Right: Elizabeth Warren Is “A Politician Like Everybody Else”

On Friday, President Barack Obama sat down with Yahoo’s Matt Bai to promote the Trans Pacific Partnership and delivered his sharpest rebuke yet to Senator Elizabeth Warren and other liberals who oppose the trade deal.

“The truth of the matter is that Elizabeth is, you know, a politician like everybody else,” he said in the interview, which was published Saturday. “And you know, she’s got a voice that she wants to get out there. And I understand that. And on most issues, she and I deeply agree. On this one, though, her arguments don’t stand the test of fact and scrutiny.”

Bai correctly interpreted these comments as some of the harshest words the president has used against his liberal allies. But, at the same time, they are rather innocuous: Warren is a politician and is susceptible to outside pressure like anyone else. Liberals should remember that.

When Warren speaks about former Secretary of State Hillary Clinton, she often references a battle over a financial regulatory bill in the late 1990s and early 2000s. A law professor at the time, Warren strongly opposed the bill. But the economic team in President Bill Clinton’s White House was divided on it. Warren met with Hillary Clinton, then the first lady, and convinced her to oppose the bill as well. Hillary then convinced her husband not to sign the legislation at the end of his presidency.

Yet just a few months later, Clinton, as a senator from New York, the financial capital of the world, reversed her position. The bill passed and President George W. Bush signed it. “There were a lot of people who voted for that bill who thought that there was going to be no political price to pay,” Warren told The New Yorker’s Ryan Lizza recently. Warren wants to make sure that doesn’t happen again.

The fact that Hillary, the first lady, and Hillary, the New York senator, had opposite opinions of the bill shouldn’t have surprised Warren that much. As first lady, Hillary had no constituents to worry about. But as a senator, Hillary suddenly had millions of constituents with jobs either directly or indirectly connected to the financial industry. It would be great if she—and all politicians for that matter—always voted on principle and were immune from lobbying pressure. But that isn’t the case.

That’s true for Warren as well. The medical device industry is one of the most important industries in Massachusetts, and Warren has gone to bat for the industry multiple times. For instance, she is one of the few Democrats that supports the repeal of the medical device tax, which is part of Obamacare. In February, she introduced a bill to require pharmaceutical companies that pay a penalty and break the law to reinvest a percentage of that penalty into the National Institute of Health. But it has a loophole: Medical device manufacturers are exempt from the requirement unless they make drugs as well.

If liberals want to see a politician who always votes with his conscience, they need to look no further than Hillary’s one current challenger, Vermont Senator Bernie Sanders. When Sanders announced his presidential run, Matt Taibbi, writing at Rolling Stone, explained:

Sanders genuinely, sincerely, does not care about optics. He is the rarest of Washington animals, a completely honest person. If he’s motivated by anything other than a desire to use his influence to protect people who can’t protect themselves, I’ve never seen it. Bernie Sanders is the kind of person who goes to bed at night thinking about how to increase the heating-oil aid program for the poor.

When Sanders sat down with ABC News’s George Stephanopoulos, the host noted that he “can hear the Republican attack ad right now: He wants America to look more like Scandinavia.” To which Sanders responded, “That’s right. That’s right. What’s wrong with that?” That is a politician who doesn’t care about his image.

It’s just about impossible to imagine Warren answering a question that way. She and her staff closely guard her image. For instance, she is notorious for not speaking to reporters in the U.S. Capitol, unlike most of her colleagues. It’s very rare that she strays off message.

That doesn’t mean that her votes and policy positions aren’t principled most of the time. I have no reason to believe that she is opposing the trade deal for political reasons. I think she and the president simply disagree on the issue. But as liberals criticize the TPP as a sop to big business and the U.S. Trade Representative for its corporate ties—both of which may be true—it’s worth remembering that Warren herself is not immune to pressure.

 

By: Danny Vinik, Staff Writer, The New Republic, May 11, 2015

May 12, 2015 Posted by | Elizabeth Warren, Hillary Clinton, Trans Pacific Partnership | , , , , , , | 3 Comments

“While The Rest Of The Country Suffers”: The Republican Congress Has Done Nothing But Help Big Business

On Thursday and Friday this week, House and Senate Republicans are at a joint retreat in Hershey, Pennsylvania, to listen to an array of speakers on different policy and political issues. This brief respite offers an opportunity to examine what the Republican priorities have been in the first 10 days of the 114th Congress, and it shows one clear winner: Big Business.

House Republicans began 2015 by immediately trying to roll back or delay a number of regulations in the Dodd-Frank regulatory reform law. Just a day into the new Congress, the House voted on a fast-track bill that would have watered down and rolled back a number of important regulations. In fact, the legislation, officially titled the Promoting Job Creation and Reducing Small Business Burdens Act, was the combination of 11 bills that would, among other things, delay the Volcker Act for years and weaken derivative regulations. The bill was brought up under suspension of the rules and thus required a two-thirds majority to pass. It fell short of that goal, with 276 legislators voting for it and 146 against. It was an unexpected victory for progressives after 44 Democrats changed their votes, after voting for a similar bill in the 113th Congress.

But Republicans were not to be denied. They brought up the bill under the normal rules where a two-thirds majority was not required. On Wednesday, it passed, 271-154. It’s not clear if the Senate would take it up, or if Democrats would have enough votes to filibuster it. But Wall Street received another gift in the Terrorism Risk Insurance Act, which expired at the end of 2014 and allows the federal government to backstop commercial insurance companies in the case of a terrorist attack. Even if you think terrorism risk insurance should be the government’s prerogative, it undoubtedly benefits large corporations, insurers, and real estate companies. Wall Street’s real victory, though, was the inclusion of a provision to roll back another, albeit smaller, component of Dodd-Frank. President Barack Obama signed it on Monday.

In other words, Wall Street is a fan of the new Republican Congress. Other industries are, too. Republicans have also focused on energy regulations, most notably approving the Keystone XL pipeline. Last Friday, the House passed a bill to approve the pipeline. The Senate voted to allow debate on the bill and will likely take a final vote on it next week, when it is expected to receive more than the 60 votes necessary to overcome a filibuster. The question is whether Congress has the two-thirds votes necessary to overturn Obama’s veto.

The House also took a whack at Obamacare by passing a bill that would change the definition of a full-time worker from 30 hours to 40 hours for purposes of the employer mandate. The Congressional Budget Office estimated that the bill would increase the deficit by $53.2 billion over the next decade, much of it from employers no longer having to pay a penalty for not offering health insurance for employees who work between 30-40 hours. The Senate is also readying a bill to repeal the medical device tax, which a new report this week estimated would cost 47-1,200 jobs, in total.

It wasn’t hard to predict that the new Republican Senate’s top priority would be helping Big Business. Partially, that’s because enough Democrats have been eager to support these bills and overcome filibusters in the Senate (such as on the Keystone pipeline or medical device tax). Utah Senator Mike Lee explained this in November in The Federalist:

[T]he easiest bipartisan measures to pass are almost always bills that directly benefit Big Business, and thus appeal to the corporatist establishments of both parties. In 2015, this “low-hanging fruit” we’ll hear about will be items like corporate tax reform, Obamacare’s medical device tax, patent reform, and perhaps the Keystone XL pipeline approval.

As it happens, these are all good ideas that I support. But if that’s as far as Republicans go, we will regret it. The GOP’s biggest branding problem is that Americans think we’re the party of Big Business and The Rich. If our “Show-We-Can-Govern” agenda can be fairly attacked as giving Big Business what it wantswhile the rest of the country sufferswe will only reinforce that unpopular image.

Lee’s worries were prescient. The 114th Congress has only just begun, of course, so Republicans have plenty of time to put forward an agenda focused on the middle class. Senate Majority Leader Mitch McConnell could support other moderate Republicans in crafting a compromise to increase the minimum wage. The GOP could make an expansion of the Earned Income Tax Credit a priority. Lee and Florida Senator Marco Rubio have proposed a number of other policies that are focused on the middle class.

But right now, there are few signs that Republicans are going to do anything like that.

 

By: Danny Vinik, The New Republic, January 15, 2015

January 17, 2015 Posted by | Big Business, Congress, Republicans | , , , , , , , , | Leave a comment

“Cloaked In Secrecy”: The Myth Of The Medical-Device Tax

In the last few days of negotiations in Congress, repeal of the Affordable Care Act’s tax on medical devices emerged as a key Republican demand. The medical-device industry waged an intense lobbying campaign — even garnering the support of many Democrats who favored the law — arguing that the tax would stifle innovation and increase health care costs.

This argument is doubly disingenuous. Not only can the medical-device industry easily afford the tax without compromising innovation, but the industry’s enormous profits are a result of anticompetitive practices that themselves drive up medical-device costs unnecessarily. The tax is a distraction from reforms to the industry that are urgently needed to lower health care costs.

The medical-device industry faces virtually no price competition. Because of confidentiality agreements that manufacturers require hospitals to sign, the prices of the devices are cloaked in secrecy. This lack of transparency impedes hospitals from sharing price information and thus knowing whether they are getting a good deal.

Even worse, manufacturers often maintain personal relationships (sometimes involving financial payments like consulting fees) with physicians who choose the medical devices that their hospitals purchase, creating a conflict of interest. Physicians often don’t even know the costs of the devices, and individual physicians often choose devices on their own, which weakens a hospital’s ability to bargain for volume discounts.

Such anticompetitive practices help generate a wide variation in the prices of medical devices — and contribute to higher prices in general. For example, the Government Accountability Office found that prices for cardiac implantable medical devices in the United States vary by several thousand dollars. And even the lowest-priced devices in the United States are expensive compared with those in other developed countries. According to the consulting firm McKinsey & Company, the United States spends about 50 percent more than expected on the top five medical devices, compared with Europe and Japan. McKinsey calculates that this amounts to $26 billion in excessive spending each year. Medicare, private health insurers and patients end up paying these inflated prices.

Excessive prices fuel enormous profits — profits that dwarf both the medical-device tax and the industry’s investments in research and development. Consider the device division of Johnson & Johnson, which in 2012 had an operating profit of $7.2 billion. By the company’s own estimate, the device tax would amount to at most $300 million, and its investment in research and development amounts to only $1.7 billion.

There are several ways policy makers could lower device costs. The first step would be to end the anticompetitive practices that prevent hospitals from getting the best deals. Senator Charles E. Grassley, Republican of Iowa, has sponsored legislation that would foster transparency by posting online price information for implantable medical devices.

In addition, instead of simply paying hospitals based in part on what they have spent on devices, Medicare should force manufacturers to compete for business based on a product’s price and quality.

Medicare should also pay hospitals a single lump sum for all of the associated costs of a given procedure (like a hip replacement). This approach, known as “bundling” the costs, would create incentives for hospitals to lower device costs. Savings should be shared with the physicians, so that their incentives are aligned with the hospital’s.

Bundling has been used successfully in pilot programs. Under Medicare’s Acute Care Episode Program — which bundled payments for cardiac and orthopedic procedures — physicians worked together to choose high-quality, cost-effective devices. Baptist Health System in Texas, which participated in the program, used clinical evidence to choose devices and negotiated lower prices for both Medicare and non-Medicare patients.

States could adopt similar payment reforms for private insurance and their Medicaid programs. In Arkansas, the Medicaid program and private payers — including Walmart — have collaborated to adopt bundled payments for several procedures, including hip and knee replacements.

To complement these efforts, the new Patient-Centered Outcomes Research Institute, a nongovernmental body created by the Affordable Care Act, should pay for research that compares the effectiveness of devices so physicians can make informed choices. (Three years into its existence, the institute has initiated few, if any, studies of medical devices.) Medicare or the Food and Drug Administration should also require the use of registries that track when devices fail.

Currently, medical-device manufacturers allocate only a sliver of profits to research and development and often focus on “tweaks” to existing devices, without providing any evidence that they are of better quality. Competitive pressures from public and private payers would provide incentives for the industry to become more innovative, producing technologies that actually lowered costs and offered truly advanced breakthroughs.

Instead of using its clout to lobby against the device tax — which helped foment opposition to the Affordable Care Act — the medical-device industry needs to share the responsibility of lowering costs for patients, businesses and taxpayers.

 

By: Topher Spiro, Op-Ed Contributor, The New York Times, October 16, 2013

October 17, 2013 Posted by | Big Business, Health Care Costs | , , , , , , , | 1 Comment

“It’s Still Extortion For The Sake Of Extortion”: Republicans Are Fighting For The Future Blackmail

We have two interesting theories today about what’s happening in the House. One is from Neil Irwin, who posits that it’s all about a sunk costs fallacy — Republicans are mistakenly continuing to ask for things they can’t get because that’s the only way to justify what they’ve already given up by following their current strategy. The other theory, well-articulated by Greg Sargent, Jonathan Chait and Danny Vinik, is that Republicans are still fighting for the principle of extortion.

I strongly agree with the latter theory — way back in May, I argued that radical Republicans were fighting over the principle of extortion for the sake of extortion:

[I]t’s not really about Republicans demanding debt reduction and using the best leverage they have available to get it. Nor is it about Republicans demanding tax reform — their other possible demand — and using the best leverage they have to get it.

No, it’s the other way around. The House crazy caucus is demanding not debt reduction, not spending cuts, not budget balancing, but blackmail itself. That’s really the demand: The speaker and House Republican leaders absolutely must use the debt limit as extortion. What should they use it to get? Apparently, that’s pretty much up for grabs, as long as it seems really, really, big — which probably comes down to meaning that the Democrats really, really don’t like it.

It shows up all the time. For example, today Speaker John Boehner has pulled a delay of the medical-device tax from his latest attempt to put together a package, because the radicals weren’t happy with it. Yes, they have a plausible reason. But my guess is that Democrats have indicated they really wouldn’t mind eliminating that tax, and so it’s no longer a ransom worth asking; asking for something the Democrats only mildly oppose (or don’t oppose at all) misses the whole point of why they’re doing what they’re doing. “Extortion for the sake of extortion” certainly seems to fit with the wild GOP swings from Obamacare, to spending, to contraception, to who knows next as the next reason for the shutdown and debt limit threat.

The reason all of this matters, still, is because if it’s just a sunk costs error then the costs for Democrats in bailing them out are limited to whatever it is they give up.

However, if it’s extortion, then any perceived success establishes an incentive for future use.

The key, by the way, is perceived success. So it matters a lot whether Republicans believe that they actually are getting something whenever the final deal happens — much more than whether, in some objective sense, they actually did get anything.

It’s hard to read exactly who is thinking what while these things are going on. But if it really is extortion for the sake of extortion, at least for the radicals, then there’s a very strong incentive to Democrats to hang very tough.

 

By: Jonathan Bernstein, The Washington Post, October 15, 2013

October 16, 2013 Posted by | Debt Ceiling, GOP, Government Shut Down | , , , , , , | Leave a comment

“Way Off Base”: Busting Zombie Obamacare Myths

The Republican effort to defund or delay health care reform at any cost has kept alive many misconceptions and false claims about the Affordable Care Act. This roundup of Center on Budget and Policy Priorities’ work on issues related to health reform and the federal government shutdown provides a large dose of reality.

A delay in the individual mandate is neither harmless nor fair: Let’s start with the big one: that a one-year delay in the individual mandate requiring everyone to acquire health insurance as long as it is affordable is harmless and fair because the Obama administration delayed for a year the requirement that large employers provide health insurance or pay a penalty. I discussed some flaws in that argument in an earlier post on this blog.

In CBPP’s shutdown roundup, Edwin Park reiterates why a delay in the individual mandate is neither harmless nor fair. It’s not harmless because it would cause 11 million more Americans to remain uninsured in 2014 and result in higher premiums in the individual market for many others, according to the Congressional Budget Office. It also would disrupt the new health insurance exchanges and likely delay the availability of coverage through the exchanges.

It’s also not fair to equate delay of the individual mandate to a delay in the employer requirement. Park highlights an Urban Institute analysis which showed that the employer delay would have only a small effect on the coverage gains expected under the ACA and which concluded that it would “be dangerously wrong” to assume a similarly small effect from a delay of the individual mandate. Similarly, CBO estimates that delaying the employer requirement would increase the number of uninsured by less than 500,000 – a far cry from the estimated 11 million increase from delaying the individual mandate.

The ACA will not likely cause a significant shift to part-time work: The employer responsibility provision whose implementation was delayed until 2015 requires larger employers (those with at least 50 full-time-equivalent workers) to offer health coverage to their full-time employees (those working 30 or more hours a week) or pay a penalty. Critics claim that we could already see a shift to part-time work in the data before the announced delay. Some have argued that the cutoff for defining full-time work should go from 30 hours a week to 40.

In CBPP’s shutdown roundup, Paul Van de Water shows that data this year provides scant evidence of a significant shift toward part-time work and that there’s every reason to believe that the ultimate effect will be small as a share of total employment. Van de Water shows, however, that raising the threshold from 30 to 40 hours a week would expose a significant number of workers to a reduction in hours.

Medical device manufacturers are unlikely to lose from the ACA despite a tax: A strong lobbying effort is underway to repeal the ACA’s 2.3 percent tax on certain medical devices such as coronary stents, artificial knees and hips, cardiac pacemakers, irradiation equipment and imaging technology. In the CBPP roundup, Paul Van de Water explains why that tax, which helps pay for extending health coverage to millions of uninsured Americans, is sound and the arguments against it are not.

First, the tax does not apply to wheelchairs, eyeglasses and other devices that the public generally buys at retail and for individual use. Second, the tax is levied on equipment that manufacturers will likely see a boost in revenue from due to the increase in health coverage afforded by the ACA. As Van de Water points out, a study by Wells Fargo Securities finds that health reform will increase device sales by 1.5 percent in 2014 and by 3.6 percent cumulatively through 2022 – enough to offset the tax.

Finally, this is a highly profitable industry, and the stock prices of the top device manufacturers have generally outperformed market averages since the tax was introduced this year.

The ACA is a major piece of legislation with many interrelated moving parts, and there will be some glitches along the way as it’s implemented. But the criticisms we’re hearing in the current budget fight are way off base.

 

By: Chad Stone, U. S. News and World Report, October 4, 2013

October 5, 2013 Posted by | Affordable Care Act, Individual Mandate | , , , , , | 1 Comment

   

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