Paul Ryan (R-WI) is taking significant criticism following his interview with Ezra Klein of the Washington Post, in which he said the following:
We need to do things to free up credit. We need regulatory forbearance there. Right now, the policymakers and regulators are doing opposite things. So you’re right that there’s a lot of capital parked out there, and we need to coax it out into the markets. I think literally that if we raised the federal funds rate by a point, it would help push money into the economy, as right now, the safest play is to stay with the federal money and federal paper.
Ryan is incorrect about the effect of raising the fed funds rate, as many have since pointed out. Paul Krugman, for instance, had this to say:
I don’t even know where to start with this. What does Ryan think the fed funds rate is? (It’s the rate at which banks lend each other money overnight, usually to help meet reserve requirements.) He obviously doesn’t know the the Fed funds rate basically equals the return on federal paper, so that raising that rate would make banks more, not less, likely to stay with that federal paper. I’m sure someone will try to come up with a reason why Ryan is being smart here, but the truth is that he’s stone-cold ignorant.
It started as a spark. A few Democratic Senators circulated a letter calling for passage of a public option through the reconciliation process. Soon after, a few more Senators signed the letter. And a few more after that. Soon, the letter had the signatures of 24 Senators, including 6 Senate committee chairmen and such notables as John Kerry, Pat Leahy, and Chuck Schumer. The spark was threatening to turn into a wildfire.
Senate Majority Leader Reid then punted to the White House, saying (as if he has no control over the process whatsoever) that “if a decision is made to use reconciliation to advance health care,” he would work to get the votes necessary to pass it.
The White House punted right back, claiming that whether the Senate pushes for a public option via reconciliation is “up to those who manage the amendments, and to Leader Reid.”
The only Democrat so far to claim the Senate doesn’t have the votes to pass a public option is Senator Rockefeller, ironically one of the public option’s chief proponents.
So why is it, with 24 Senators expressing support for the public option (they only need 50 to pass it via reconciliation), neither the White House, Harry Reid, nor Senator Rockefeller are willing to push for the public option? Timing.
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Sen. Tom Harkin (D-Iowa) told reporters today that the House, Senate and White House had reached a compromise on the differences between the House and Senate bills on January 15, and that the compromise language had been sent to the CBO for scoring. Just days later, however, before the CBO report could be finalized, Massachusetts elected Scott Brown in a special election for the Senate seat vacated by Senator Kennedy’s passing. Brown’s election killed all momentum the bill had behind it and many have since suggested health care reform is now dead.
Speaker Pelosi has been particularly vigilant in keeping the health care debate alive, with surprisingly little cooperation from the White House or her Senate counterparts- much to the chagrin of Democrats everywhere. Greg Sargent reports today, however, that the White House has now privately told Senate Democrats that Obama favors the “sidecar” option. That option would involve passing a reconciliation bill in the House and Senate which amends the Senate health care bill, and then enacting the reconciliation bill and the Senate bill into law. If true, this is the first real sign President Obama was serious when he told a townhall gathering that he “will not walk away from health care reform.” The next step, which must happen quickly, is for Obama himself to tell Senate Democrats to move forward with the sidecar option. Until that happens, progress in the Senate is unlikely.
Using reconciliation to amend the Senate health care bill certainly involves some parliamentary and political hurdles. As CongressMatters has noted, the parliamentary hurdles can be overcome. If Obama continues to advocate for real health care reform (and endorses the sidecar option), the political hurdles can be as well.
As temperatures cool, I want everyone to take another look at the plan we’ve proposed. There’s a reason why many doctors, nurses, and health care experts who know our system best consider this approach a vast improvement over the status quo. But if anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know. Here’s what I ask of Congress, though: Do not walk away from reform. Not now. Not when we are so close. Let us find a way to come together and finish the job for the American people.
“Let me know”? Seriously? What have we been doing the last twelve months? We’re going back to the drawing board?
Pass the damn bill.
1. CongressMatters explains how the “sidecar” option can work to pass health care reform.
2. Ezra Klein notes that the devil is in the details of Obama’s proposed spending freeze, but the freeze risks hurting the poor the most.
3. President Obama was selected for jury duty in Chicago. Apparently someone in Chicago didn’t think he might be busy.
4. The students and faculty at Seton Hall University School of Law have done a remarkable job of reconstructing the events that lead to the death of three detainees at the Guantanamo Bay detention facility. Their full report and findings can be found here.
5. The US law firm of Perkins Coie represented pro bono Salim Ahmed Hamdan, a Guantanamo Bay detainee whose case ultimately found its way to the US Supreme Court. The attorneys who worked on the case gave a video presentation of their experiences which can be viewed here.
6. At least one Republican Senator promises to use all procedural mechanisms available to stop the “sidecar” option. Why is it that using reconciliation to amend a bill is deemed “trickery” and “shenanigans” but using the filibuster to stop 59 Senators from passing legislation isn’t?
An acquaintance recently commented that Congress should require each Congressperson to sign an affidavit swearing that they read the full text of a bill before that Congressperson be permitted to vote on the bill. She was serious. I told her it was a bad idea. I was serious too.
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There has been some discussion on Capitol Hill and in the media about whether Congress has the constitutional authority to mandate that Americans purchase health insurance. By way of background, the individual mandate would require every American to purchase health insurance. Those who fail to purchase health insurance would be fined. It appears that the mandate will make its way into the final draft of the Senate bill (and for good reason- see Ezra Klein’s comments on why it needs to be included). Congress will need to articulate in the bill the provision of the Constitution which grants Congress power to impose a mandate.
Congress would almost certainly justify the mandate as within its powers under one of two possible areas: 1) its authority to regulate interstate commerce; or 2) its authority to tax.
The League of Ordinary Gentlemen has a nice post up discussing why the Commerce Clause of the Constitution may provide Congress with sufficient authority to impose a mandate.
The analysis with respect to the Commerce Clause is complicated and, while I agree with the Ordinary Gentlemen that the courts are likely to uphold a mandate as being within Congress’ powers under the Commerce Clause (if that is how Congress wants to justify the mandate), it may be simpler to impose the mandate pursuant to Congress’ power to tax.
Americans are used to taxes being imposed on certain items they would purchase (cigarettes, gasoline, etc.). People are free not to purchase those products and thereby avoid the tax. A mandate takes the opposite position- that Congress can “tax” you if you fail to purchase something (in this case health insurance). Can they do that?
The short answer is likely yes, although it may depend on how the tax is structured. Congress is, in effect, already taxing Americans for failing to purchase certain items (in a roundabout way). Take the mortgage interest deduction, for example. All wage earning Americans are taxed on their income. Of that group, those who have a mortgage (and who itemize) receive a tax deduction. Those who don’t have a mortgage do not receive the deduction. If they rent, they are out of luck. In essence, they are taxed for failing to purchase a home. Is that qualitatively different than taxing someone for failing to purchase health insurance (which, by the way, has a much stronger economic rationale than the mortgage interest deduction)?
1. Ezra Klein discusses 5 significant cost controls which shouldn’t be forgotten in discussing the merits of the current Senate health care bill.
2. Finally- a step towards an intelligent conversation on health care by those whose positions differ sharply.
3. A powerful story on heroism in Russia by a young lawyer fighting for the truth and for his country.
4. Sarah Palin is being accosted by tomato-throwing bandits, and Paul Krugman has some good advice.
I’ll point out at the outset that I have yet to find a person of any age stay as abreast of the healthcare reform process as Mr. Ezra Klein. Anyone seeking to understand the minutia of the problem can find no better guide that Mr. Klein’s frequent and user-friendly summaries. A recent post, however, raises an interesting point which I haven’t seen adequately addressed by anyone. In summary, the post discusses the vilification of the health insurance industry primarily as a function of the incentives in place for market participants – i.e., insurance companies seeking to maximize profits attempt to insure as many (low-cost) healthy customers as possible while avoiding the (high-cost) chronically ill. Compare this to the providers (hospitals, doctors, clinics, etc.) who seek to treat as many people as possible due to the incentives of healing people and getting paid on a fee for service basis. Providers have little (relative) incentive to contain costs and contributes to the inflation in healthcare prices at rates above other industries. The current paradigm emphasizes coverage at the provider level and cost concerns at the insurance level. Reform proposals attempt to expand coverage at the provider level and are less specific about cost controls.
Mr. Klein suggests the facially non-controversial change of making providers accountable for their results – rewarding positive results and punishing negative results. This begs the question, if we start compensating providers on results will they start to adjust their service along risk lines? Will doctors begin to refuse to treat patients whose condition undermines their long-term viability? Anedoctal evidence (with the usual caveats) states that surgeons refuse to conduct surgery on high-risk patients for fear it will hurt their success rate [On this point, if anyone has actual evidence supporting or disputing that conclusion I would be very interested in seeing it]. How do reformers address this issue?
State of Health Care Reform
President Obama is receiving a significant amount of criticism for being too “hands off” in governance. His leadership style with respect to health care in his first year largely involved speaking in generalities on the topic and leaving the details and messy process to Congress for resolution. When the process would start to collapse, he would once again deliver a powerful, albeit unspecific, speech on health care, and urge Congress to get back to work. Time and again they did. In the end, health care reform hasn’t yet passed, but whatever you may think of Obama’s leadership in the first year, he came closer to shepherding comprehensive health care reform to passage than any president who has ever tried.
Now granted, “close” isn’t much consolation in politics, especially to the tens of thousands of people who will die because they do not have health insurance in the United States. So why does “close” matter? Because if we were close to finalizing health care reform two weeks ago, there is no good reason we can’t still be close today- and finished tomorrow. To understand what Obama can do to finalize the bill, we need to first understand who the obstacles are.
The House of Representatives has been particularly responsive to Obama’s calls to action- and not just on health care either. Of course, the House doesn’t have to deal with the filibuster or the nonsensical Senate tradition of the “hold” which permits one single Senator to block debate or passage of a bill indefinitely (or at least until the Majority Leader grows weary of the hold). At every step of the health care reform process last year, the House was ahead of the Senate. The House Energy and Commerce Committee passed a draft bill in August while Sen. Baucus’ committee toiled on. The House then passed its full bill in November while the Senate remained stuck in negotiations. The nation’s attention turned to the Senate and, rather than rise to the occasion, the Senate had to deal publicly with the ego of Joe Lieberman, the special interest demands of Senator Nelson and Landrieu, and procedural votes taking place in the late hours of night or in the early morning on Christmas Eve. The public reacted to the messy Senate process about as one would expect- negatively.
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