Compromise on Public Health Plan Option Within Reach?
AP reports on optimistic comments from WH:
President Barack Obama's top health care adviser said Wednesday a compromise is within reach on a government health plan for the middle class that wouldn't drive private insurers out of business.
Offering the option of government coverage to workers and their families has become one of the most contentious issues in the debate ... Nancy-Ann DeParle, director of the White House health reform office, said a public plan could be designed to address concerns about the federal government overreaching in its role.
"I'm actually very hopeful that we'll be able to reach an agreement on that, because it is part of the president's plan," DeParle said in a session with reporters at which she fielded repeated questions on the issue. "It's included because he wanted a mechanism to lower costs and to keep the private sector honest."...
...DeParle suggested one compromise might be that the public plan pays hospitals and doctors rates similar to what private insurers pay. That would address fears that government would use its muscle to pay rock-bottom prices for medical services, allowing the public plan to charge discounted premiums that private insurers couldn't compete with.
Even if the government plan paid private-market rates to doctors and hospitals, it could still cut costs, DeParle said. A government plan wouldn't have to turn a profit, and could also save on administrative expenses.
Health Care for America Now's Jason Rosenbaum reacts: "without getting into the policy argument over whether allowing the public health insurance option to bargain for rates is a good or bad thing (see Jacob Hacker for why it's a good thing), it's clear the ball is moving. We're no longer arguing over basic existential questions - the public plan will be part of the deal, the question now is just what kind of plan will it be. This means that our pressure is working, and with more pressure, we can make sure we get a robust public health insurance option..."
Change.org's Tim Foley on the made-up debate over Medicare rates: "You hear this objection to the public plan all the time – that because the government sets prices for Medicare and can change them at any time unilaterally and private insurance cannot, insurers won’t be able to compete ... Except this is has nothing to do with the public plan option as it’s been discussed by those in a position to make it happen. Jacob Hacker’s conception of the public plan is that it would negotiate rates with providers ... During the campaign, Obama said not one word about how the public option would set rates ... Ms. DeParle this morning went out of her way to suggest there are many options available..."
CQ reports the Senate will move on health care in June: "The Senate Finance Committee and Health, Education, Labor and Pensions Committee have solidified their plans to move separate health care overhaul bills that will eventually be combined on the floor, likely after markups that are targeted for early summer ... The Finance Committee is expected to mark up a bill in June, with the goal of floor action soon after. The HELP Committee has set a markup for around that time, but an aide would not reveal the exact date."
New Health Dialogue's Paul Testa notes Baucus plans three roundtables in April and May.
GoozNews on the need for strong regulation:
Citing the systemic risk to the financial system created by AIG and credit default swaps, the chief executive officer of Allstate in an op-ed in the New York Times calls for the federal government to regulate his industry ... This would, of course, include health insurance companies, which also are overseen by a hodgepodge of state laws, some of which fail miserably ...
...The debate over health care reform has so far focused on creating a public plan option to compete with insurers. But an equally important reform that must be included in the overall package is a strong national industry regulator that insists every insurer, whether public or private, meets stringent standards for comprehensive coverage, transparent pricing, no adverse selection and non-discrimination for pre-existing conditions.
Pelosi Previews Pecora Commission
Speaker Pelosi tells San Francisco audience she informed Treasury of plans for a grand investigation into financial crisis: "What I told the secretary this morning was what will happen on Monday, what I want to initiate is the equivalent of what happened in the 30's. They had something that was called the Pecora Commission. This was the commission that was formed when Franklin Roosevelt took office and they investigated what happened with the markets ... we need to have a clearer understanding as to how we got here and what the exposure is to the tax payer in all of this."
Time further reports on timing: "Pelosi's office clarified after the event that she didn't mean to specify Monday, just that she will work with the relevant members such as House Banking Committee Chairman Barney Frank, next week to launch such an effort."
SF Chronicle on possible scope: "Veteran political consultant Don Solem of San Francisco said that with economic issues continuing to be high on the lists of Americans' concerns, Pelosi's announcement is a savvy move ... Still Solem warned, to succeed 'this commission must be broad and comprehensive - and viewed as preventive. If there's fault-finding ... then it ought to move to the proper channels.'"
EARLIER OurFuture.org's Bob Borosage calls for Pecora Commission.
Will Banks Get More Bailout Money?
W. Post explores whether WH would need more money for bank bailouts after the stress tests:
...if the capital requirements of banks prove large, the government may need billions of dollars in federal aid back from strong financial firms, which have received that money within the past few months. The administration may even have to carve money from other rescue programs being funded from the $700 billion bailout program...
...Some senior officials say they worry that allowing strong banks to return their bailout funds would stigmatize the firms that couldn't, scaring off their investors. Treasury officials overseeing the rescue effort are willing to take that chance, believing that the risk of such bank runs has receded in recent months as the financial system has become more stable, a senior administration official said...
...Even if companies begin returning taxpayer money, some analysts and officials say the government may not have enough firepower to accomplish all the goals of the bailout effort, which include buying banks' toxic assets, stabilizing the banking system, reviving consumer lending and helping struggling homeowners and small businesses. Senior administration officials have said it is likely they may need to ask Congress for more money, but they say such a request probably wouldn't come anytime soon.
Stress test results expected in early May, reports USA Today: "'We expect the stress test to demonstrate that the 19 banks are all well capitalized even under the stress test's worst-case scenario,' says Scott Talbott, senior vice president at the Financial Services Roundtable, which represents the largest financial institutions. ... 'If they come out and say all the banks are fine, no one's going to believe the test,' says Christopher Whalen, managing director at analysis firm Institutional Risk Analytics."
The Stash reviews positives and pitfalls in releasing stress test results.
CNN/Money.com's Paul R. La Monica pushes for payback: "Other banks that are willing and able to pay back TARP money should be allowed to follow the lead of Goldman, TCF and several other smaller banks that have already returned funds to the Treasury. It's time to recognize that the banking industry has real winners and losers instead of shielding the losers from that fact."
The Big Money unveils the TARP-o-Meter: "we’ll use the TARP-o-Meter to display just how much money publicly funded banks have returned to Treasury coffers. So far, only a handful of smaller banks that received TARP money have paid back their debts, totaling a meager $353 million, about .0005 percent of the $700 billion allocated for the bad-asset-gobbling government program."
W. Post reports lending drops more. Treasury says, coulda been worse:
Lending by the nation's largest banks fell 6 percent in February from the previous month, continuing a downward trend that began in October with the financial crisis, according to data published yesterday by the Treasury Department. The 21 banks in the survey have received more than $211 billion in federal funding to support new lending with the aim of stimulating the economy. The money has not accomplished its purpose...
...The only increases were in mortgage lending. Government efforts to hold down interest rates on mortgage loans have driven a refinancing boom...
... Initially, the government said its goal was to increase lending, but it has since retreated to the more modest goal of limiting the decline. Yesterday, the Treasury said it was succeeding by this measure because, it asserted, banks would have made even fewer loans without federal aid ... The Treasury also said the decline in lending was due in large part to economic weakness and diminished demand, factors beyond the control of banks.
Senate Estate Tax Cut Draws More Notice
The Big Money's Charles Wallace notes the vanishing populism in the upper chamber: "Was it only last month that members of Congress tapped a vein of populist outrage to try to tax all those bonuses awarded to executives of Wall Street firms that received taxpayer bailouts? Now, a few short weeks later, the Senate has adopted an amendment that would give a tiny handful of superrich Americans a special tax break that would save them millions of dollars. Where is the outrage when you need it?"
Jackson Free Press' Adam Lynch calls out Mississippi senators: "Daddy Warbucks can now leave you a couple of mansions and a handful of yachts that you don’t have to pay any taxes for if they stay under the $10 million mark. It was a very generous move considering a 2006 Responsible Wealth report estimating that only 20 Mississippi families qualified to take advantage of this particular tax loophole. Neither Cochran nor Wicker returned calls, which is a pity. Their reasoning would have been interesting considering the nation’s overall trend toward poverty by the middle class."
Click here to tell your Senators: No Estate Tax Bailouts For Multi-Millionaires
Optimism Grows For Carbon Cap
Boxer aides optimistic on carbon cap following expected EPA ruling. ABC:
Rumors of cap-and-trade's death have been greatly exaggerated, according to Sen. Barabara Boxer, D-Calif., the chair of the Senate's Environment and Public Works Committee. Why the optimism?
The Environmental Protection Agency is poised to issue a finding that greenhouse gases are pollutants that could endanger human health and welfare. The EPA's endangerment finding will open the door for the Obama administration to regulate greenhouse-gas emissions under the 1970 Clean Air Act.
Although the president would prefer not to tackle this issue through his administration's regulatory power, aides to Boxer are hoping that the threat of EPA regulation can be used as a hammer to persuade moderate senators of both parties to get behind cap-and-trade legislation. "What it says to the senators on the fence is that it's not really a question of whether regulation is happening. It's a question of how it will happen," a senior aide to Boxer told ABC News.
Science Progress' Chris Mooney optimistic as well: "The more the Obama Environmental Protection Agency indicates that it’s simply going to regulate greenhouse gases on its own if Congress doesn’t move, the more Congress will feel pressured: After all, many fossil fuel companies won’t simply want to be left at EPA’s mercy. And thus far, EPA has moved rapidly indeed."
TNR' Brad Plumer: "So it looks like either this week or next, the EPA will finally issue its long-awaited finding that greenhouse-gas emissions endanger public health ... The finding clears the way for the agency to begin regulating emissions under the Clean Air Act, although it's still unclear what rules will emerge. Odds are the EPA will grapple with vehicle emissions first ... After that, the EPA could turn its eye toward carbon regulations for stationary sources like power plants, though there's no fixed timeline for this, and no one knows what shape those rules will take ... new greenhouse-gas rules would take years to finalize ... For the time being, then, the finding will mostly put pressure on Congress to pass its own greenhouse-gas rules instead..."
Grist's Peter Barnes notes House Energy cmte and Ways & Means cmte are moving on two separate climate bills, but argues that's OK.
WH will unveil high-speed rail plan today. Reuters: "The Obama administration is expected to unveil its plans on Thursday for accelerating development of high-speed rail ... White House and transportation officials have spent the past several weeks weighing plans for developing at least six high-speed corridors."
Stimulus stimulating Superfund waste cleanups. AP: "Environmental Protection Agency Administrator Lisa Jackson on Wednesday singled out 50 sites, in 28 states, that will share $582 million in newly approved federal stimulus money to continue cleanup operations. ... Officials do not know how many new jobs the funding would generate at the water dredging facility, but say about 100 ancillary jobs could be created in surrounding neighborhoods. Half of those are expected to go to residents of the area. The funding announced by Jackson is aimed at creating jobs for clean-up contractors, soil excavation companies, hazardous waste disposal facilities and labs that test samples to detect contamination."
Foreclosures Spike. Housing Effort Launches
Foreclosures spike as moratoriums lift. USA Today: "The number of homeowners facing foreclosure surged in March as lenders lifted temporary moratoriums and resumed legal actions against delinquent mortgage payers ... 46% more than a year ago and 17% above February's total...
Bloomberg adds: "'Foreclosures haven’t peaked yet,' David Olson, president of the mortgage research firm Wholesale Access in Columbia, Maryland, said in an interview. 'We’re catching up with what’s been delayed, and those foreclosures will have to be cleared.' ... President Barack Obama’s housing-rescue plan is intended to help as many as 9 million homeowners near default refinance into cheaper loans. About 7.6 million mortgage holders don’t qualify because they owe too much more on their mortgages than their homes are worth ... Falling home prices and rising unemployment will contribute to further increases in defaults as more homeowners find themselves owing more than their houses are worth, said mortgage consultant David Lykken."
Barry Ritholtz: "So much for the vaunted bottom in Real Estate — and the broader economy."
CNN/Money.com: "The Obama administration's loan modification program is finally underway. ... Several major servicers, including JPMorgan Chase and Wells Fargo, said they began modifying loans under the government initiative earlier this month. CitiMortgage signed up for the program on Monday and will start processing applications soon ... The modification plan calls for the servicer to reduce interest rates so that the monthly obligation is no more than 38% of a borrower's pre-tax income, and then the government would kick in money to bring payments down to 31% of income. Servicers can also reduce the loan balance to achieve these affordability levels. The government will share in the cost, up to the amount the servicer would have received if it had reduced the interest rates."
Getting Behind, Demanding More, Military Spending Reform
American Prospect's Matt Yglesias takes a positive view of Pentagon budget moves: "...even if the ambitions of Gates' budget reforms are modest, progressives would still do well to hope something very much like it passes. As small as his proposed changes are relative to the scale of what we probably need over the long term, they are sweeping relative to the scale of what's generally assumed to be politically possible ... , Gates' shifts in priorities stand a good chance of being gutted in Congress. And if they are, the vast majority of Congress members will simply relearn the lesson that efforts to rein in Pentagon spending are fruitless, and the entire country is forever at the mercy of a small circle of industry executives, high-ranking officers, and influential members of key committees."
National Priorities Project's Daniel McLeod and Barb Chalfonte take the negative view, in OurFuture.org: "According to the report, Where Do Your Tax Dollars Go?, just released by the National Priorities Project, the median income family will be paying about $4,450 in federal taxes this year on their 2008 income ... Just what are we paying for? Let's peruse the three biggest ticket items. For starters, military-related spending is the 800lb gorilla in the room, gobbling about 40¢ of each tax dollar ... Even as glimmers of light break through the budgetary clouds with news of Secretary Gates cutting elements of Cold War spending, the Obama administration will still preside over the largest military budget in U.S. history."
No Good Reason To Prop Up Private Student Lenders
NYT editorial board sides with WH over private student lenders:
The [private lender] subsidy was created at a time when lenders weren’t interested in the student business and was intended to keep loan money flowing through tough economic times. But that did not happen during the credit crunch, when the federal government had to inject liquidity into the system by buying outstanding loans.
The direct-loan program suffered no such disruption. In addition to being more reliable, direct lending is also less expensive. Equally important, according to the Congressional Budget Office, the country would save $94 billion over the next decade by switching completely to direct lending.
This would not in fact “grow government,” as conservatives in Congress have already begun to charge. The loans would be handled through colleges, just the way Pell Grants are now. The loans would then be serviced and collected by private companies that are already competing for this lucrative business.
Terrance Heath contributed to the making of this Breakfast.
