“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
“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
“Our Democracy Is Dying”: For All Intents And Purposes, Our Government Is Merely The Handmaiden Of Corporations
In case anybody hasn’t noticed, democracy in America is dying now. This isn’t an overstatement; it’s a fact. Corporate interests dominate our politics so much at this point that our government, for all intents and purposes, is merely its handmaiden. Whatever Wall Street wants, Wall Street gets. Corporatism is the new order of the day. One political party stands for it; the other political party won’t stand against it.
The word inertia means the tendency of an object to move in whatever direction its been moving until and unless there’s the introduction of a counterforce, and the Democratic Party is simply not providing the necessary counterforce to the corporatist agenda so exalted by the Republicans. Such a possibility is undermined by Democrats with corporatist agendas of their own. Watch them trying to sideline Elizabeth Warren as I write this. It’s all gotten so terribly predictable.
Some people are pussyfooting around the word, but others are realizing it’s time to say it: we need a peaceful revolution in America. In the words of President John F. Kennedy, “Those who make peaceful revolution impossible make violent revolution inevitable.” The American people have simply got to stand up now. This isn’t the time for any of us to go mute – whether it’s those who feel there’s no point in saying anything, or those who feel there’s too big a risk in saying anything. And you know who you are.
The social revolution we need is comprised of two major categories: What we say No to, and what we say Yes to. In the American Revolution, with the Declaration of Independence we said no to what we would no longer accept (living under British rule). In ratifying the Constitution, we said yes to what we would do instead (form our own system of government). The template was genius then, and it’s genius now. Today, we need to say no to a situation in which our government is bought and paid for, and yes to a return to democracy. Nothing short of an historic, nothing namby-pamby-about-it, serious social movement will take us out of our free fall and set America back on the track to real liberty. Today, lobbyists – not the people – are in control. And that is not freedom.
The situation has shaken out – and thank you, Senators McConnell and Reid for adding to the disaster of Citizens United by upping the amount people can contribute to political parties; that really helps (not) – in such a way that nothing short of a Constitutional Amendment will stop the big money flowing into our political campaigns like poison into the veins of our democracy. The best bet now — given the resistance within both major parties to seriously taking down the dastardly “For Sale” sign posted on the front yard of our government — is for the people ourselves to call for a Constitutional Convention, state by state. And that’s what has started to happen.
If something inside you says, “That’s true,” then I hope you get active. We’re in serious straits now and things won’t get better by themselves. In denial about this? Go stand over there. Too cynical to think we can change things? Go stand over there. Too sedated to be upset yet? Go stand over there. An apologist for the system? Go stand over there. Ready to kick ass? Go to http://www.wolf-pac.com/ and express yourself big time. Work with that organization, or with any other you like. But this isn’t a time to sit on the sidelines. Our democracy is sick – it is really, really sick — and all of us are needed now to nourish it and make it well.
By: Marianne Williamson, The Blog, The Huffington Post, December 14, 2014
“A Future Cheney Could Do It All Again”: The U.S. Will Torture Again—And We’re All To Blame
Reliably enough, out came Dick Cheney to trash the Senate torture report and to say of the use of torture: “I’d do it again in a minute.” None of us doubt that he would. But the more interesting and challenging question is: Could he?
More precisely, could a future Cheney, after a future terrorist attack on the U.S. mainland, get away with it? Could a future administration set up the whole fraudulent and immoral apparatus—a Department of Justice defining torture so narrowly that it somehow magically doesn’t include sleep deprivation or rectal hydration or waterboarding, followed by a CIA and military saying “Hey, what’s the big deal? It’s all legal!”? (Even in his press conference Thursday, CIA chief John Brennan acknowledged that it all could happen again: “I defer to the policymakers,” he said, as to what might occur.)
People like me are supposed to say something like: No, we’re better than that. Alas, I say we are not better than that. It could happen again. Easily.
In fact, let’s go further. Cheney is a figure of horror and ridicule these days (although by no means to everyone—to the Fox News audience to which he spoke the above words Wednesday, he’s oracular). But can we honestly say that back in 2002, 2003, 2004, he wasn’t carrying out the people’s will? We get the government we deserve, de Tocqueville said. And in the Bush-Cheney regime, we got exactly that.
There exist four mechanisms in our democracy by which the state can be compelled to live up to what we call, rather farcically in a gruesome week like this one, “our ideals.” There is the will of the people; the resolve of the political class; the courage of the media; and the authority of the courts. With regard to our torture regime, all four failed, and failed completely.
The people were, in theory, against torture. I have on my screen here a study from Reed College (PDF) that asserts that from 2001 to 2009, majorities of public opinion consistently opposed torture, by averages of about 55 to 40 percent. That may be, in the abstract. But were Americans ever so worked up about the practice that they demanded it not be undertaken in their name? Never.
In fact, for most of the Bush era, the opposite was the truth. I remember very clearly the public mood after the 9/11 attacks. There was appropriate anger and shock and sorrow. But it bled into other less honorable manifestations, a paradoxical combination of, on the one hand, a lust for revenge in any form among a certain segment of the populace, and on the other hand a tremulous fear among a different segment that sanctioned anything being done in its name. Too many people reverted to a childlike state, and they wanted a daddy-protector. And no, this wasn’t understandable under the circumstances.
As for the political class, I doubt I need to give you a very hard sell on its failure. It was thoroughgoing and bipartisan. The timorous Democrats, with a few noble exceptions like Robert Byrd, largely bought into the global war on terror. The Republicans, well, you know about them. The foreign-policy establishment of Washington and to some extent New York lined up behind the administration on nearly every important question. The urge among this class is always to swim with the tide: In 2003, when the Council on Foreign Relations was casting about for a new leader, it settled on Richard Haass, who had been in Bush’s State Department. He has said since that he was 60-40 against the war, but one would have been hard pressed to know that then, back when his boss, Colin Powell, was warning us about those weapons of mass destruction that didn’t exist. On the torture question, this class was outraged when it was easy to be outraged, like when the Abu Ghraib story broke, but the outrage was never sustained.
Among the media, there were to be sure many brave journalists—Jane Mayer, Robin Wright, many others—who broke story after story about torture. We’re in their debt. But their great work was more than balanced out by the equivocation caucus—well, we can’t really be sure it’s torture. And then there was the segment of the media that actively cheered it all on. More broadly, the media as a whole were afraid to break ranks. I have had a number of conversations with prominent media people—in TV and radio, names you’d know—who, by way of trying to defend their lack of zeal and confrontation in those post-9/11 days, tried to explain how many furious emails they got when a report diverged modestly from the accepted line.
And the legal system? Again, there were some courageous judges who tried. A Virginia federal judge named Gerald Bruce Lee ruled in 2009 that four Abu Ghraib detainees could sue CACI, the private military contractor in Iraq. But overall the legal system has done little to say “this was against the law.” Much of the fault for that, of course, lies with Barack Obama, who chose early on not to seek prosecutions of Bush administration officials. And even now, in the wake of this report, what is your level of confidence that anyone will be prosecuted as a result of the release of this report? I thought so.
Failures top to bottom. Now, one would like to say that we as a society have learned the lessons of these failures and would not permit this to happen again. Don’t count on it. If there is another terrorist attack on the U.S. mainland, the odds are strong that we will reenact this grim tragedy from start to finish, if a neoconservative regime happens to be ensconced in the White House. The people would respond with the same fear, which would give license to the same behavior, and the political class and the media and the courts would probably go along.
So yes, it’s a moral horror that Cheney says he’d do it all again. But it’s also all too likely that a future Cheney could do it all again. That’s the far greater moral horror, and the one we don’t want to face, because it implicates us.
By: Michael Tomasky, The Daily Beast, December 12, 2014
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