I guess because it sounds good, Barack Obama has promised to make health care reform “deficit neutral.” But as David Leonhardt explains, that doesn’t necessarily mean what you might think it would mean:
First, a little background: Congressional bills are typically based on a 10-year budget time frame. The Congressional Budget Office looks at the cost of the bill over the next 10 years (new spending and tax cuts) and the revenue it raises (spending cuts and tax increases). The difference between those two determines whether the bill adds to the deficit, reduces it or is “deficit neutral.”
This is a fundamentally arbitrary standard to meet, and policies with all kinds of different budget implications can meet the standard. To illustrate, the following is an example of a hypothetical initiative that scores as deficit neutral:
This, by contrast, scores as causing a deficit:
In the real world, of course, the second program leaves the country with a very small and manageable deficit. Something that it would be nice to fix, but could also be fixed easily. The first program, by contrast, actually implies a giant long-term deficit. You’ve picked a revenue source that’s totally inappropriate to the anticipated growth in costs. Or maybe you’ve designed a program whose cost growth is totally out of proportion to the among of money you’re prepared to spend on it. It just looks neutral because of the way the “window” works.
The coal industry lobbying outfit the American Coalition for Clean Coal Electricity (ACCCE) is pressing forward with an aggressive astroturfing campaign going after U.S. senators — despite the recent revelation that it was responsible for forged “grassroots” letters to lawmakers, attacking the American Clean Energy and Security Act:
Paid staff will both call people already on the group’s list and talk to other people at public events, asking them if they want information or T-shirts or would be interested in asking a question at a town hall meeting. “This is the purest form of grassroots,” Lucas said. “It’s facilitating constituents to talk one-on-one with members of Congress.
The new project will use 225,000 volunteers dubbed “America’s Power Army.” They will visit town hall meetings, fairs and other functions attended by members of Congress and ask misleading questions about energy policy.
ThinkProgress has discovered that ACCCE has subcontracted its astroturf operations to the Lincoln Strategy Group, a GOP-tied firm notorious for voter fraud. The LinkedIn profile for Lincoln Strategies staffer Courtney Forrester reveals that her employer is engaged in a massive effort to recruit supporters on behalf of the coal industry. Steve Gates, communications director for ACCCE, told ThinkProgress that Lincoln Strategy Group ran their grassroots campaign last year as well.
The new firm managing the “grassroots” campaign for the coal industry has a history that distinguishes it as being one of the most notorious voter fraud organizations in the country:
- In Oregon and Nevada, Lincoln Strategies — then known as Sproul and Associates — was investigated for destroying Democratic voter registration forms. The Bush-Cheney 2004 presidential campaign paid Sproul $7.4 million for campaign work. [CNN, 10/14/04; KGW News, 10/13/04; East Valley Tribune, 09/07/06]
- In Nevada, people who registered as Democrats with Lincoln Strategies — then known as Sproul and Associates — found their names absent from the voter registration rolls. [Reno Gazette-Journal, 10/29/04]
- During the 2006 midterm elections, Wal-Mart banned Lincoln Strategies for partisan voter registration efforts in Tennessee. The Republican National Committee had hired the firm. [Associated Press, 08/24/06]
- In Arizona, Lincoln Strategies employed a variety of deceptive tactics — including systematically lying about the bill — to push a ballot initiative to eviscerate the state’s clean elections law. [Salon, 10/21/04]
- Lincoln Strategies, then employed by the Republican Party, was behind efforts to place Ralph Nader on the ballot in states such as Arizona. [American Prospect, 06/25/04]
Even former Rep. Chris Cannon (R-UT), during a hearing on voter fraud, admitted that “the difference between ACORN and Sproul is that ACORN doesn’t throw away or change registration documents after they have been filled out.”
After the coal industry was caught red-handed stealing letterhead and forging fake letters in opposition to clean energy reform, they simply blamed their contractor — a firm with a long track-record of providing exact type of astroturfing they were caught doing. Now with the coal industry hiring a firm with a long history of fraud and possible criminal activity (the Bush administration declined to ever investigate Sproul and his Lincoln Strategy firm), it is clear the industry is interested in defeating clean energy with deceit and purchased support.
Cato’s Daniel Mitchell reaches a truly puzzling conclusion about the source of a traffic jam in Washington, DC. In a kind of public choice analysis gone mad, he apparently thinks that the government seeks to maximize profits, whereas private corporations are wholly benevolent in their motives:
But when I made the right turn, I discovered why traffic was so snarled on 15th Street. There was a cop standing in the middle of Constitution Avenue waiting to snare drivers turning right from the center lane. Along with many other drivers that day, I got caught and lost another 10 minutes waiting for a ticket. But the $25 ticket is not what got me so irritated. It was the fact that thousands of commuters had to deal with horrible traffic (not only because people like me suddenly got stopped and traffic behind us also had to stop, but also because people in the right-turn-only lane also could not move with the cop blocking traffic) because some bureaucrat from the National Park Police found an easy way to fill his ticket quota.
If the private sector operated the roads (permit me to engage in some libertarian fantasizing), this would never happen. Because of a desire to please drivers (customers), the folks in charge of the road would have made right turns an option from the center lane. But when government sees a bottleneck, the reaction of politicians and bureaucrats is to figure out how to fleece people for more money — not to make travel safer and quicker.
This is ludicrous. The private sector seeks to maximize profits. If a private sector firm owned the streets of Washington, DC it would exercise its monopoly power “to fleece people for more money.” This is pretty basic. That’s what private firms are there for.
The larger issue is that whether publicly owned or privately owned, the smart thing to do with crowded roads is to charge a fee for the right to drive on them. That would generate revenue, and I wouldn’t call it “fleecing” people since it would result in reduced congestion, a smoother flow of traffic, and a more pleasant experience for the citizens slash paying customers. Of course at the moment we have very little congestion pricing in the United States because of political opposition. And since private road owners would want to engage in congestion pricing, the exact same political impediments stand between sensible public management of roads and their privatization. But if the road was publicly managed, and featured a congestion charge, then the revenue could be used to reduce the overall tax burden or else to increase the quality of the alternative forms of transportation offered.
Earlier today, Fox News publicized the time and location of “gladiatorial” town halls hosted by Democrats — but not Republicans. With “heated” and increasingly confrontational town halls now dominating news coverage, Washington correspondent James Rosen announced he had “obtained a large Excel spreadsheet showing the schedule of town halls for Democratic members of Congress.” Rosen reported the time and location of several town halls, including those for Sen. Claire McCaskill (D-MO) and Sen. Arlen Specter (D-PA). To explain why Fox wasn’t reporting on town halls hosted by Republicans, Rosen assured viewers that if he “had the spreadsheet for the Republican members,” he would “share” that as well:
Media Matters for America’s Jamison Foser was able to turn up a list of Republican town halls with a quick Google search: “Well, I like to help FOX out when I can, so here’s a list of town halls that includes Republicans.”
Now that they* have shut down his original popular blog Prometheus, I don’t read his new obscure blog, cleverly named “Roger Pielke Jr.’s Blog.” As an aside, I’m guessing Pielke’s gonna follow up his book, The Honest Broker, with one titled Roger Pielke’s book. But I digress.
So it wasn’t until googlealerts pinged me this morning that I learned about Pielke’s July 31 plea to his readers to “Please Read Climate Progress.”
Notwithstanding my dislike of the “political terrorists” line of attack against health reform opponents, it really is worth emphasizing the extent to which the opposition rhetoric is being dominated by grossly irresponsible slanders.
Brian Beutler points out this video of a speaker at an Americans for Prosperity rally comparing health reform to the Holocaust:
Patients First is a project of Americans for Prosperity–one of the key conservative interests groups helping to organize the town hall protests we’ve been covering. The speaker repeats the debunked conservative canard that Democratic health care reform will mandate physician assisted suicide. “Adolf Hitler issued six million end of life orders–he called his program the final solution. I kind of wonder what we’re going to call ours.”
And after comparing Democratic health care reform efforts to the murderous regimes of Hitler, Stalin, and Pol Pot, the speaker advises his audience to “go to offices of members of Congress and put the fear of god in them.”
And this is more than just an overblown analogy; the right is seriously trying to convince people that Barack Obama will be euthanizing their grandparents. It’s a vile smear and it’s antithetical to having any sort of real conversation about health care. It’s also, intellectually speaking, totally nuts.
The right’s position amounts to “if the government guaranteed the provision of health care to everyone, cost considerations would force it to draw some limits around what it’s prepared to provide, therefore to avoid ‘rationing’ it should provide nothing.” Nevermind that a ration of no health care at all is the worst possible ration.
Earlier today, the Bureau of Labor Statistics released data showing that the unemployment rate unexpectedly fell to 9.4 percent in July, and “businesses cut a much-less-severe 247,000 jobs from their payrolls.” As the New York Times’ David Leonhardt notes, “given what was expected,” the jobs report is “very good news.”
Though the New York Times reports today that an analysis of the stimulus plan offered by economists “suggests that the punch from increased government spending has helped the economy begin to bottom out faster than it would have otherwise,” some conservatives are using today’s jobs report to claim that President Obama’s plan failed. “Today’s unemployment report is yet another reminder that more spending, taxing, and borrowing does not mean more jobs for the American people,” said House Minority Leader John Boehner (R-OH). “Instead of rewriting history on their ‘stimulus’ promises, Washington Democrats should abandon their job-killing agenda.”
Boehner’s number two, Rep. Eric Cantor (R-VA), released a similar statement saying that “jobs lost undermines administration claims of stimulus success.” On Fox News this morning, the Wall Street Journal’s Stephen Moore said that, despite the report, he is “ready to declare the economic stimulus plan a failure.” Watch it:
As the Wonk Room’s Pat Garofalo points out, while this is by no means a “good” report overall, “declaring the stimulus a failure at this junction is to ignore the effect that it has already had.” “The signs of the stimulus are there,” Allen L. Sinai, chief economist at Decision Economics, told the New York Times. “Government — federal, state and local — is helping take the economy from recession to recovery. I think it’s the primary contributor.” This graph, from a report by the Council of Economic Advisers, shows the impact on job loss that the stimulus has had:
Garofalo concludes that “to be sure, the economy is still in a very weak state, and it remains the case that finding a new job is extremely challenging for those who have lost theirs. But that’s precisely why the stimulus dollars need to keep flowing into the economy, boosting demand and stimulating spending as the economy starts to slowly turn around.”
Update
On Dennis Miller’s radio show today, Rep. Mike Pence (R-IN), declared, “that stimulus bill, so-called stimulus bill that despite the fact that unemployment, you know, dropped a little tiny bit today, it’s still at historic levels. You know, the stimulus bill isn’t working.”
Tyler Cowen’s attempted characterization of American progressive politics involves at several points basically the claim that American progressives want to make the United States more “like Europe.” There’s clearly an extent to which that’s true, but I do think it should be resisted to some extent. Progressives normally talk about issues where we’d like to see things changed, and some of us like to cite positive examples from abroad to demonstrate that we’re not just making things up, but there are lots of things that we do better in the United States.
So notwithstanding the fact that I think that “like in Europe” taxes should be higher, defense spending lower, and public services more generous, there’s lots to like about the USA. The American treatment of free speech as a much more absolute right comes to mind, as does the greater degree to which our system tends to afford rights to criminal defendants. Many European countries have unduly severe restrictions on when shops can be open. For all the problems with our agricultural policies, they’re better than Europe’s. We treat debtors and bankrupts better. Encouraging a robust civil society through the tax code has a lot of advantages over everything being state- or corporate-run. Probably most important of all, we both handle “diversity” better and have more of it; our greater openness to immigration is enormously significant.
That’s a lot of stuff, to say nothing of the fact that non-policy attributes of the United States, like it being really large, have a lot of good policy-relevant features. It’s relatively easy in this country to just go someplace else and “start over,” we’re not dominated by a single hegemonic city, people aren’t especially under pressure to conform, etc.
Yesterday, the Washington Post reported that the Senate Finance Committee was considering replacing the public health insurance option with “a network of co-ops.” Proponents believe that a truly consumer-drive health plan that elects a board of directors and hires a CEO could reduce costs for its members and champion delivery system innovations that improve care quality and efficiency.
But experience tells a different story. In reality, co-ops have a hard time attracting enrollees. Small businesses or individuals enroll in co-ops because they “offer substantial choice among well-known health plans,” or allow for greater control over the kind of insurance available, or provide cheaper coverage. To attract a wide array of health plans and secure bargain rates, co-ops must enroll a large pool of healthy individuals to cover the costs of sicker applicants. To attract these applicants, a co-op has to “offer substantial choice among well-known health plans” and lower premiums. In other words, it’s the classic “chicken-or-egg” dilemma: without enough applicants, co-ops can’t offer affordable coverage and without affordable rates, co-ops can’t attract enrollees.
The co-ops that do survive, like the Group Health Cooperative in Washington State, lack the inherent advantages of a real public option, and operate like just another health insurer. It’s unlikely that state-based or regional co-op health plans would have the market clout or purchasing power to lower costs or improve the delivery of care. Without the advantage of size, the different state co-ops would not be able to negotiate significantly lower prices with providers (they would have to compete with private insurers) or change reimbursement practices. In sum, they would act like private insurers. (Conversely, a national public option that has access to Medicare’s provider base, can achieve greater efficiencies.)
At a recent Alliance for Health Care Reform event, health care economist Uwe Reinhardt facetiously recalled a “nightmare” in which member-owned and operated co-ops became for-profit companies. As he reminded his audience, “you are all too young, but I’m old enough to remember, there were such co-ops once, they were called Blue Cross. They were owned by the members and so on and so forth and most of them went for-profit.” Watch it:
Indeed, as Jonathan Cohn recalls in SICK: The Until Story of America’s Health Care Crisis And The People Who Pay The Price, the early Blue Cross co-op-like plans of the 1930s “pledged themselves to a public purpose: bringing health insurance to large numbers of people.” They based their premiums on “a community rate: every subscriber, regardless of age, sex, or medical condition, paid the same monthly amount…Many insurers also practiced some form of ‘guaranteed issue,’ giving coverage to anybody who agreed to pay their premiums.” This community model worked, as long as the insurer covered large groups of people, in which the healthy subsidized the costs of the sick.
By the 1950s, commercial insurers arrived on the scene. But unlike the Blues, “commercial insurers don’t have a mandate to serve the public good — or to fill hospital bends. Their goal was to make money. And the most obvious way to do that was to target groups of relatively healthy subscribers.” Rather than charging everyone the same premiums, private insurers “offered to insure these people at rates that more closely reflected their own health status, then adjusted rates year after year according to how that status changed. This method of pricing insurance, known as experience rating, allowed commercial insurers to undercut the prices the Blues were offering.”
Ultimately, as private insurers began to attract more and more healthy Americans and “enrollment in commercial insurance surged past enrollment in Blue Cross during the 1950s, the Blues finally began a slow retreat from their founding principles…By 1968, Odin Anderson, one of the country’s leading experts on health insurance, declared that “the community rate concept is, for all practical purposes, dead.”
As Cohn concludes, “except for the name and the logo, Blue Cross is a wholly different enterprise from what it was in the 1930s and the 1940s. In 1986, Congress took away the tax breaks for Blue Cross, following a finding by the IRS that the plans were no longer very different form their commercial counterparts. This prompted many of the plans to convert to for-profit status outright.”
The coal industry lobbying outfit the American Coalition for Clean Coal Electricity (ACCCE) is pressing forward with an aggressive astroturfing campaign 
