Paying For Health Care Reform
NYT's David Leonhardt promotes a soda tax to help pay for health care reform: "...the debate over soda tax is a useful one, because it does a nice job of capturing some of the most serious problems with our current tax system. Not only has the system been failing to collect enough revenue to cover government expenses, but it is also complex in all the wrong ways."
Ezra Klein on Senate tax proposals: "The more important omission is any kind of tax that's not related to health care. There is no talk of a value-added tax, or a rise in the marginal tax rates. Some of President Barack Obama's revenue proposals are included in what's essentially an appendix, but that's about it. At the end of the day, the health care system will pay for health care reform. The final price tag may prove significant, but it represents a shift in spending rather than a rise in spending."
W. Post Steve Pearlstein fires a warning shot at CBO: "There is ... general agreement that it will cost $100 billion to $150 billion a year to provide the subsidies necessary to allow all Americans to afford a basic health plan. But the Congressional Budget Office, the official scorekeeper on these matters, has been reluctant to certify the major cost savings that might come from various proposals ... It is, of course, the CBO's job to be skeptical ... But it is also true that because nothing of this scale and complexity has been tried before, projecting the fiscal impact is next to impossible. This budgetary standoff will leave Congress with no choice but to try to finance its health-reform efforts by raising taxes or limiting payments to doctors and hospitals, possibly jeopardizing the entire project ... it is folly for them to put themselves in a political and procedural straitjacket. In all of history, no revolution was ever made by budget analysts. Health reform requires leaders with the foresight and confidence to take a leap into the unknown."
Health Care Blog's Roger Collier on the uncertainty of the overall price tag for reform.
"...as a new Commonwealth Fund poll confirms, Americans are significantly more satisfied with Medicare than private insurance..." reports Change.org's Tim Foley.
Robert Borosage on private insurance role in jacking up health care costs: "A new report released today by Health Care for America Now, a leading citizens' coalition pushing for comprehensive health care reform, put the industry claims in sharp relief ... after 400 mergers involving health insurers over the last 13 years, concentration has gone up in local markets across the country. The single largest provider of small group coverage (for small businesses, for example) controlled a median market share of 47% in 2008. The AMA says 94% of insurance markets in the US are highly concentrated. The result, of course, is soaring prices - with premiums up, on average, more than 87% over the past six years. Profits at 10 of the country's largest publicly traded health insurance companies in 2007 rose from $2.4 to 12.9 billion (428%) from 2000 to 2007. The CEOs of these companies in 2007 alone collected an average compensation of $11.9 million each. Nice work if you can get it."
Congressional Republicans have decided to confront Democratic plans to overhaul the health care system with policy proposals of their own and are developing at least two plans — one by conservatives and one by House moderates. A group of conservatives, led by Sens. Tom Coburn of Oklahoma and Richard M. Burr of North Carolina, will introduce legislation Wednesday. The bill would provide tax credits for people to buy health insurance, paid for by taxing employer-provided health benefits — a plan similar to Republican John McCain’s proposal during his presidential campaign last year ... Meanwhile, moderate Republicans in the House, led by Mark Steven Kirk of Illinois, are developing legislation that centers on passing a law guaranteeing that the government will never interfere with medical decisions made by doctors and patients.": CQ
Your Guide To Distortions on Health Care from Politifact
Climate Bill Process Grinds On
"By late Tuesday night, a divided House Energy and Commerce Committee had made little progress in marking up the major global warming legislation that Chairman Henry A. Waxman is hoping to push to a vote by week’s end. Over the course of a long day, the panel handled about a dozen amendments offered by both parties, as Republican members raised numerous questions and used procedural maneuvers to stall the bill (HR 2454), which they strongly oppose.": CQ
"Democrats scored a victory by early afternoon when former committee Chairman John Dingell’s (D-Mich.) amendment to create a clean energy bank and to further pave the way for nuclear power to be considered as an alternative energy source was adopted on a 51-6 vote ... Waxman said Tuesday he anticipates the amendment process to 'speed up' and stuck by his prediction that the committee will hold a vote to approve the bill and report it out of committee by Thursday ... Republicans were still bracing for Waxman to use a procedural tool to halt the amendment process early and force a vote on the entire bill.": The Hill
"...a new analysis of the current House proposal to curb greenhouse gas emissions finds that consumers would receive around $750 billion in direct and indirect handouts and subsidies through 2030 to offset the higher energy costs ... the program provides $227 billion to low income households, $90.6 billion to local gas companies, and nearly $20 billion to protect against increases in rising heating oil costs. The House bill seeks to avoid the pitfall faced by Europe, where regulators essentially gave the carbon allowances for free to power producers who pocketed the windfall but did not ease costs on consumers ... investments to clean energy would total $188 billion, forest protection and adaptation would get $124 billion.": NYT's Green Inc.
UAW backs House climate bill reports EnviroKnow. Grist's Peter Altman adds: "Support ... is coming in from a broad and diverse range of constituencies, including businesses, unions, elected officials, environmental groups, organizations representing low-income Americans and people of faith and coalitions combining some of those constituencies."
David Roberts at OurFuture.org grapples with political reality and bill's shortcomings: "Those who have turned against the bill think there will be one chance to do this; they cite the Clean Air Act to show how crappy compromises get cemented in place in legislation and become very, very difficult to reopen. They're worried that if a weak bill is put in place, by the time the country seriously revisits it it could well be too late. It blows the one chance. The bill's supporters think history is on their side. They see the most important goals as establishing a long-term declining cap on carbon dioxide (the 2030 and 2050 targets remain strong in Waxman-Markey), getting a carbon trading system up and running, and above all shifting off the status quo trajectory ... Who's right? It depends on what time of day you ask me."
Watthead's Teryn Norris laments increased reliance on offsets.
Ezra Klein defends cap-and-trade from Wall Street parallel: "'If you liked what credit default swaps did to our economy,' writes energy executive David Sokal, "you're going to love cap-and-trade.' But that's nonsense. Credit default swaps created the illusion of lowered risk in the financial markets which led to highly leveraged bets between large banks and investors. Sokal's argument against cap and trade is that it overtaxes consumers and misunderstands the economic incentives of public utilities. They both might be problems. But they're not the same problem. They're not even similar. And Sokal doesn't really try to argue otherwise. He's just tarring cap and trade by associating it with Wall Street."
Drew Westen, Celinda Lake and George Lakoff discuss the best framing for the climate debate.
Republicans try new tack: attacking the bill as favoring big business reports Politico.
"...Americans United for Change unveiled a new TV ad today that seeks to put pressure on Republicans to support President Obama’s energy plan." reports Grist.org
"Not all the highway improvement projects states plan to pay for with federal stimulus money involve widening roads, fixing bridges or repaving highways. Nearly half the states plan to use some of their new funds to pay for high-tech gadgets that will reduce congestion, help the environment and create jobs quickly. At least 22 states have told the federal government they want to make their roads “smarter” by installing traffic cameras, creating express toll lanes, improving traffic signals and alerting drivers about accidents or delays ahead...": Stateline
Credit Card, Mortgage Bills Pass
"The new law would protect consumers from sudden increases in interest rates, but companies are saying that they'll be more selective in issuing cards ... Consumer groups have a more immediate concern: Most of the bill's provisions won't go into effect for nine months, giving card issuers time to hike interest rates...": McClatchy
"Congress on Tuesday sent the president legislation that encourages banks to spare homeowners from foreclosure, after the industry helped scuttle a tougher measure that would have forced lenders to reduce monthly payments of owners in bankruptcy ... The bill would expand an existing $300 billion program that encourages lenders to write down an individual's mortgage if the homeowner agrees to pay an insurance premium. The program, set to expire in 2011, would swap out a homeowner's high-interest rate for a 30-year fixed loan backed by the Federal Housing Administration.": USA Today
TARP Paybacks May Start Soon
"The Federal Reserve said Tuesday that approval for big banks seeking to repay bailout money could start in early June ... Treasury spokesman Andrew Williams said the department would have a 'robust process' for valuing the warrants, but he did not provide details on how that would work. Treasury's total warrant holdings were worth more than $5 billion, a value that fluctuates along with the underlying prices of the banks' stock and other factors, he added. Some financial experts say pricing the warrants at anything less than their market value amounts to a massive giveaway to the banks at taxpayers' expense. In addition, by selling the warrants now instead of waiting a few years, the government risks missing out on the upside once the financial crisis subsides and bank stocks recover.": AP
"Rumors and leaks about prospective repayment plans seem to emerge almost daily. Some observers say banks may be trying to force the government’s hand into allowing the repayments.": NYT
WH Considers Financial Regulatory Reforms
"The Obama administration is actively discussing the creation of a regulatory commission that would have broad authority to protect consumers who use financial products as varied as mortgages, credit cards and mutual funds, according to several sources familiar with the matter ... [In 2007, Elizabeth] Warren proposed creating a new commission modeled on the Consumer Product Safety Commission, which protects buyers of products such as bicycles and baby cribs ... In March, Sen. Richard J. Durbin (D-Ill.) introduced legislation to create a commission like the one that Warren had described.": W. Post
"The Obama administration may call for stripping the Securities and Exchange Commission of some of its powers under a regulatory reorganization that could be unveiled as soon as next week" reports Bloomberg.
The Future of Autos
"GM warns no progress yet in talks with UAW, Treasury" as May 27 deadline looms: Marketwatch
NYT looks at move towards "industrial policy" on autos. Dean Baker responds, "The article implies that industrial policy is somehow alien to the United States. In fact, the United States has long had implicit industrial policy."
Can Specter Craft Labor Law Compromise?
"The Senate’s newest Democrat expressed optimism today that he could possibly work out a compromise this year with the primary sponsor of legislation easing union organizing rules.": CQ
Politico: "Some Democratic aides working on the issue wonder whether Specter’s desire to find a compromise will wane if he doesn’t face a primary challenger. Currently, Specter is running unopposed in the primary, but Democratic Rep. Joe Sestak hasn’t ruled out making a run for the seat.
Terrance Heath contributed to the making of this Breakfast
