Wednesday, March 27, 2013

Lawmakers of both parties in both houses of Congress are sticking it to our kids

Ah, such pious caring for our children and yet how many ways our lawmakers plan to stick it to them. Regardless of who prevails, it is inevitable our kids will feel some pain. Differing budgets passed by the Republican-dominated House and the Democratic-tilted Senate last week make that clear.

The GOP's approach as outlined in their budget makes it more difficult for many to succeed personally in the future, while it blocks any proposals to check the rising cost of health care, the main driver of future debt.

The Democrats, too, stick it to our children, though it can be argued it is a kinder, gentler approach that may not reduce the debt as much but it at least gives the next generations a fighting chance to improve their personal lots.

The GOP's single-minded goal is to make sure those who follow us are not impoverished by a federal government's debt load. Around that one argument they have rationalized a resolution to continue the recent across-the-board sequester budget cuts and included them in their budget. They propose to continue cuts of 8 percent from funding of what future generations will need to succeed: education, infrastructure, and research, and food and nutrition programs for the poor. The House's budget also protects the rich and corporate powerful from any higher taxes or cutting loopholes. Their budget was quickly voted down in the Senate.

Any possible reconciliation between the two or the role the White House plans to play will be known soon.

It is not that debt reduction is an unworthy goal. The hang-ups are timing, how much is necessary, and how it is done. Republican believe we should act as if it is a wolf at our doorsteps today to save the generations following them from being stuck with a choking debt. So, is the wolf of debt really at our doorstep? Not now, but it could be by 2030. Both liberal economists and more conservative ones agree on that, but how damaging it would be to economic growth is debatable.

However, if events, natural or concocted, slow our growth, that projection could change for the worse. Both the Congressional Budget Office and the Simpson-Bowles Debt Commission warned against cutting spending while the economy is still recovering from the Great Recession because it would slow growth and increase unemployment. The GOP is doing just what the experts warned against, setting it in stone just when it could be harmful.

How and how much are bones of contention. Democrats promote investments in education and infrastructure and the preservation of entitlements as we know them. They still resist changing the formula for Social Security raises ,though. For them, reducing the deficit less than the GOP proposes and increasing revenues at the expense of the wealthy would fund their agenda.

The Senate Democrat's budget version is also not realistic because Medicare costs are the driver of increasing debt, squeezing out spending on education, infrastructure, and research and development. To reduce Medicare costs, the GOP House approved a plan for future seniors to buy vouchers so they can purchase more expensive private insurance on their own with no guarantee the vouchers will keep pace with the cost of care.

The Democrat budget keeps Obamacare because it is the only proposal on the table that significantly tackles the cost of health care itself. Medicare will need more than general health care systemic savings. Restricting benefits per income level are still on the table.

At least Obamacare reduces use of expensive emergency rooms, provides preventative care for all, pays providers per outcome instead of per procedure, and streamlines records to reduce unnecessary tests. The GOP budget would repeal Obamacare and let health care costs for our kids continue to soar unchecked.
My column in the Sky Hi Daily News today


Wednesday, March 20, 2013


Last week Rep. Paul Ryan kicked off budget discussions by inserting a poison pill into any compromise with Democrats: making repeal of Obamacare part of budget negotiations.

With Democrats holding the Senate and the presidency, the GOP's attempt to repeal Obamacare is DOA.

The GOP has always argued for a status quo, which is neither free market, cheap, nor successful. Worse, last week House Budget Chair Ryan proposed keeping Obamacare's tax increases and ending Medicare Advantage while eliminating the benefits and cost savings of Obamacare.

With Ryan's plan, the uninsured would remain uninsured. The rest of us would still pay for insurance that continues to screw consumers with lifetime caps, no coverage of pre-existing conditions, and kids over 18 kicked off their parents' insurance.

Like a bad penny arguments for and against Obamacare keep turning up long after the Supreme Court upheld it and Congressional attempts to repeal it withstood more than 30 attempts.

The arguments the GOP has used against Obamacare are that it is government control that overturns the free market health care system and runs up the deficit so let the free market take care of the problem.

What free market? I know a free market when I see it. Our family imports and distributes an over the counter pharmaceutical in a market with 2,000 competitors. Consumers have the opportunity to buy it if they like the product and the price. Not so with health care. A very small handful of insurers control the market across state boundaries through their wholly owned subsidiaries and they are not subject to anti-trust laws. Those employed by small businesses or self-employed have a choice of either buying unaffordable insurance or going without. Their physician, insurer, or ambulance choose hospitals for them — hardly free markets at work.

The Obamacare exchanges from which the uninsured get their affordable policies are comprised of private insurers openly competing against one another that offer required minimum benefits and more. Subscribers get access to a freer private sector market than we have now.

The GOP's newest approach speculates most employers will stop providing insurance, opting to pay the fine instead, even though the Congressional Budget Office predicts that will not happen to any significant extent. This would be expensive, Republicans claim, because the exchanges subsidize the insurance policies. That point is deceptive. Consumers using exchanges will pay per their income levels and employed consumers would be less likely to get subsidies than the unemployed.

Cheap? Our costs per-capita are two and a half times more than any other industrialized country. The U.S. ranks in the bottom 40s in the list of any measure of outcome when compared to the rest of the industrialized world, mostly because the lack of access to health care of so many drags down the average. Why? Those who have insurance get preventative care; the rest who rely on high priced emergency rooms do not.

Private health providers get away with markups that are many times what even the government Medicare and Medicaid reimburses, per an investigative report in Time Magazine, March 4. One reason Medicare Advantage was scrapped was that insurers charged 12 percent more than government spends doing it itself.

Our system now pays providers fees for each service. The more tests given; the more re-admissions into hospitals, the more providers get paid. Outdated record-keeping cannot keep track of duplicative tests. Obamacare reduces charity care costs shifts by providing health insurance for the 30 million uninsured, changing the payment basis, and modernizing record keeping. The Congressional Budget Office estimates a $700 billion-plus savings to Medicare over 10 years and still Obamacare is deficit neutral.  It is these kinds of savings to the health care system Ryan's budget would eliminate.

This is my column that appeared in the Sky Hi Daily News today.

Wednesday, March 13, 2013

We are like rats in a lab of the Great Austerity Experiment (aka sequester)

We John Q Public citizens ought to feel like a rat in an economists’ laboratory experiment waiting  to see if  the Great Austerity Experiment  will hurt us enough  to be replaced by a Grand Bargain. Movement toward  eventual compromise is  showing  some shoots of green, but freeze warnings have been issued, too.
 Right leaning  economists tell  us that the sequester (austerity) is not so large since  cuts  are only 2.5%  of the budget yet it   will grow  our economy because it begins to reduce the deficit now.  That 2.5% is deceptive  because so much of the budget is exempted.   Cuts  are closer to   13   % of  the military budget and    8  % of programs affecting the poor, education, and  science, and  national parks .   Economists and the independent Congressional Budget Office  predict that  the sequester’s austerity approach  in the midst of recovery from the Great Recession  will increase  unemployment  to  9% and our growth will fall to 1%.  Even the much cited Simpson Bowles debt reduction commission warned against making budget cuts while the economy was recovering from the recession.
 Last week  hope sprouted . The GOP  stopped  threatening what  Peggy Noonan,  Wall Street Journal columnist, has called “government by freakout”.    We have been leaping off cliffs into some scary abyss  every month since November  and we were still facing government shut down and the reincarnation of the 2011 debt ceiling debate later this spring  .   There were even whispers   of  reviving  a Grand  Bargain later in the summer after the Great Austerity Experiment  plays out.
The President   kindled  the thaw.  Responding to criticism that he had not reached out enough and that is why the GOP claimed they would not compromise,  Pres. Obama  called their bluff and invited to dinner  some  rank and file senators.    He even invited Rep. Paul Ryan, the GOP’s  Tea Party policy wonk, to lunch. Ryan recently resurrected his proposal to voucherize Medicare.  Obama’s  outreach continues into this week and next , attending both party caucuses in the House and Senate.  The last time he visited a GOP conclave was in his first term, when  the same  Rep.  Ryan belligerently challenged the president’s math  and the GOP dug  in deeper as the  party of  no.  It is a wonder the President wants to try that approach again.
Some say the GOP won because  they forced the President to talk with them.  On the other hand,  they may have lost this particular  excuse not  to compromise.    The monkey  of being uncooperative  has settled once again on   the GOP’s  back,  leaving them   vulnerable to being  blamed for  continued gridlock.
The Senate is where  a Grand Bargain can take root, but the Republican  House is where all good attempts go to die. John Boehner,  GOP House Speaker  issued a freeze warning for any signs of a compromise  spring. .    He  commented on revenue raising by closing tax loopholes  (called tax hikes by the GOP) when he retorted, “If the President continues to insist on tax hikes, then I don’t think we are going to get very far”
 There are a few Republican Senators who have indicated a willingness to raise more revenue in return for more cuts and  if the Administration bends on some on entitlements.  Those are essential  elements of a Grand Bargain.   Even Simpson-Bowles deficit  reduction commission  concluded you just cannot reduce the deficit  without more revenue and changing eligibility ages for Medicare and Social Security. There are   less  traumatic ways to revamp such entitlements  than what Ryan  or Simpson-Bowles  propose.  The extent  of trauma  can also  be reduced by increasing revenue, too.  
Meanwhile, we rats in the lab of the Great  Austerity Experiment will be the first to know   if austerity  timed in a recovery will  cause  us enough pain and anger to thaw House members .
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This is a version of my column that ran in the today

Wednesday, March 6, 2013

Hastert rule: why it is so difficult for DC to reach compromises

Did you ever wonder why the Republicans in the House of Representatives refuse to compromise or even to negotiate on the big issues? The culprit is mostly an obscure rule invoked by the GOP caucus in the House of Representatives since the days of Speaker Newt Gingrich and named after his successor, Dennis Hastert.

The rule: The Speaker should not allow a vote by the entire House on a bill unless a majority of the majority party caucus supports it. This rule is not in the Constitution; it is a rule practiced solely by Republicans. When Democrats have been in the majority of the House, they have never invoked a similar doctrine.

The result recently has been to allow Tea Party ideologically driven members be the tail that wags the entire House. The Hastert rule prevents moderate Republicans who are a minority of the House GOP from joining with Democrats, the minority in the House, to form a coalition of a majority of the whole by depriving them of an opportunity to vote on bills that the majority of GOP members don't approve. The House Speaker John Boehner (R-Ohio) does have the power to ignore the rule, but he rarely uses it.

Between 2010 and the 2012 November election, the Republicans were in the majority in the House and the Hastert rule held fast. However, the November election was a shock to many in the GOP. They lost the women and Hispanic vote, and consequentially the race for the White House. There are those in the GOP who believe that if they are ever to regain the presidency, they are going to have to pass legislation that will appeal to those important blocks.

Speaker Boehner has broken the Hastert rule three times recently, however, no doubt fearing backlash against the party that could hurt in the 2014 elections if he did not. Deals to avert automatic tax increases at the beginning of the year and a relief package for states hit by Hurricane Sandy were allowed to come to the floor for a vote without approval of a majority of GOP. Both bills passed the House largely with the support of Democratic votes.

Last week, the Violence Against Women Act passed the House without the vote of the majority of Republican members because Boehner permitted the bill to come to the floor for a vote. This allowed a minority of Republican members to join with Democrats to form a majority of the whole House and pass the bill.

Exit polls after the November election and others taken last week revealed that an impressive majority of voters wanted budget cuts and deficit reduction to be balanced … more revenue generation as well as cuts. Nonetheless, we went over the sequester cliff. Why no compromise could be reached that reflected the voters' will on the sequester is the GOP's single-minded dedication to a principle accepted by more than Tea Party members: Absolutely no deal will be struck that includes even closing tax loopholes to raise revenue. Speaker Boehner dared not break the Hastert rule over this issue and risk his speakership. Any Republican in a heavily GOP safe district would also have faced a primary if they, too, voted for the approach favored by voters nationwide. There is no profile in courage in this Congress.

The only way to crack the stone wall of the Tea Party is if the sequester creates so much voter/supporter/business community outrage over the results that any hope of re-election of a significant number of Republicans in 2014 is put in jeopardy. The Democrats believe it will happen and the Republicans are gambling it will not. Who wins that gamble will soon be known as the full impact of the cuts will be felt over the next several months.
This was my column today in the Sky Hi Daily News

For more, visit