Next up in that line, unfortunately, is a rehashed form of a radical Balanced Budget Amendment, a plan that according to recent analyses would actually cost America 15 million jobs. But thanks to the conservative wing of the Democratic Party, the Republicans won’t be alone in their chase for a radical budget amendment that could help push the country back into the throes of recession.

Despite the fact that House Minority Whip Steny Hoyer (D-MD) said yesterday he would encourage his party to vote against the radical plan, Blue Dog Democrats endorsed the amendment on a press call today, Politico’s Marin Cogan reported on Twitter. ThinkProgress confirmed that endorsement with a spokesperson for Rep. Mike Ross (D-AR), the Blue Dog Coalition’s co-chair for communications. According to the Hill, Ross said on the call that Blue Dogs favored such an amendment “before balanced budget amendments were cool”:

“We were advancing a balanced budget amendment when balanced budget amendments weren’t cool,” a co-chairman of the coalition, Rep. Mike Ross (D-Ark.), told reporters on a conference call. [...]

“If any Blue Dog does not vote for it, I’d have to question how much they’re a Blue Dog,” [Blue Dog Rep. Jim] Matheson [D-UT] said.

It’s hard to overestimate the negative effects such an amendment would have on the country’s economy. In addition to destroying millions of jobs, it would force such massive spending cuts that House Republicans’ own budget would be unconstitutional. According to a recent study by Macroeconomic Advisers, enacting a BBA now would double the nation’s unemployment rate and cause the economy to shrink by 17 percent — a far cry from the 2 percent projected growth that would occur with no such amendment.

Unfortunately, according to another analysis by the Center on Budget and Policy Priorities, the consequences get worse. The draconian budget cuts caused by a Balanced Budget Amendment would forice lawmakers to gut Medicare, Medicaid, Social Security, and the Children’s Health Insurance Program (CHIP), among other programs, the analysis found:

“The constitutional balanced budget amendment that the House is expected to consider this week could force Congress to cut all programs by an average of 17.3 percent by 2018.

“If revenues are not raised (the House-passed budget resolution assumes no increase above current-policy levels) and all programs are cut by the same percentage, Social Security would be cut $184 billion in 2018 alone and almost $1.2 trillion through 2021; Medicare would be cut $117 billion in 2018 and about $750 billion through 2021; and Medicaid and the Children’s Health Insurance Program (CHIP) would be cut $80 billion in 2018 and about $500 billion through 2021.”

In order to preserve those programs, Congress would have to cut ridiculously deep into every other program. Yesterday, economists around the country warned Congress that enacting widespread budget cuts and other austerity measures now would have perilous consequences for the American economy, pushing the country to the brink of a second deep recession. Today, unfortunately, Blue Dog Democrats decided not only to ignore those warnings, but to endorse an even bigger, deeper austerity plan.

“As you consider tax reform, we urge you to include a temporary change to the tax code that allows businesses to repatriate money trapped overseas as part of reform or as a bridge to comprehensive reform,” stated a letter obtained by The Hill that was sent Wednesday to the congressional deficit-reduction committee…”We believe that bringing private-sector capital back to the U.S. will strengthen recovery efforts and help reduce the federal deficit,” they said.

Unfortunately for the Blue Dogs, the Joint Committee on Taxation found that a corporate tax repatriation holiday would cost nearly $80 billion, not result in deficit reduction. Unless they are counting on a sudden appearance of the tax fairy, the Blue Dogs are barking up the wrong tree.

The corporations supporting the holiday have a different rationale for pushing the tax break, claiming that nearly tax-free dollars will let them invest domestically and create jobs. But the last time that Congress approved a repatriation holiday, corporations used the money to enrich their executives, cutting hundreds of thousands of jobs.

Versions of a repatriation holiday are now floating around both the House and the Senate, but the fact remains: giving corporations that are sitting on record amounts of cash yet another tax break will do next to nothing to spur the struggling economy. Of course, that hasn’t stopped several Republican presidential hopefuls from supporting the idea. Tea Party Sen. Mike Lee (R-UT) this week proposed lowering the tax on repatriated money permanently.

A “Medicare-like” public option would negatively impact hospitals, doctors and patients…using Medicare’s below-market rates would seriously weaken the financial stability of our local hospitals and doctors.”

That argument was debunked repeatedly by MedPAC — which argued that Medicare rates are adequate and consistent with the efficient delivery of services — and relied heavily on insurance industry talking points. The industry feared that it would lose market share if forced to compete against a more efficient public plan. In March 2009, he industry’s chief lobbying arm, AHIP, provided lawmakers with this presentation, ‘What you should say when asked about the public option“:

You could end up not being able to see the doctor of your choice as the government plan would reimburse doctors so little for their services they stop accepting or dropping patients by the government plans.

And so, given all this, it is perhaps not surprising that today’s Politico Pulse reports that Erik Komendant, the policy director for the Blue Dog Coalition, has now accepted a job at AHIP as “VP for federal affairs.” After all, it’s like he was working for them already.

For the Blue Dog members, the repeal vote is peculiar since it suggests that their concerns about the deficit bear an inverse relationship to the conclusions of the Congressional Budget Office. That is, when the CBO found that health reform would reduce the deficit by $143 billion over 10 years, they registered their complaints about potential deficit increases. When it reported that repeal would increase the deficit $230 billion, they signaled their support for eliminating the law. Here is how they described their opposition to reform in March of 2010:

- MIKE ROSS: “Therefore, one of my concerns throughout this entire debate has been the impact this legislation will have on future deficits. After careful review and thoughtful analysis, I am unconvinced this bill will adequately address the long-term trend of rising health care costs that burden our government and every Arkansas family.” [Press Statement, 3/21/2010]

- MIKE McINTYRE: “We simply cannot afford to create a new federal bureaucracy that costs nearly $1 trillion when our national debt is $12 trillion and there is no plan in place to address it. I will not vote for it.” [Press Statement, 3/19/2010]

- DAN BOREN: “For the last 18 months I have said repeatedly that the focus of Congress should be on job creation and getting our economy moving again; not on creating a brand new entitlement program that we simply cannot afford.” [Press Statement, 3/22/2010]

I’ve called and emailed the offices of the po-repeal Democrats to ask why they’re voting for repeal in light of the CBO’s deficit projections. I will update the post as their responses come in.

Too liberal for House Democrats.

President Obama has proposed increasing the rates on capital gains and stock dividends back to 20 percent for those making $250,000 or more. Republicans, meanwhile, have opposed allowing the increase to occur. And now they’ve been joined by 47 House Democrats:

Forty-seven House Democrats have signed a letter to Speaker Nancy Pelosi urging that tax rates on capital gains and dividends be maintained at the current level of up to 15% for all earners…The letter from House Democrats argues that raising taxes on dividends and capital gains would be harmful to companies’ ability to grow and add jobs.

The rationale for having a lower capital gains and dividend rate is that it will encourage investment, as investors will want to take advantage of a lower rate. Under President Clinton, the capital gains rate was 20 percent, while dividends were treated as regular income, so Obama is proposing a tax policy even more deferential to these sorts of income than was in place in the 1990′s. Plus, as Citizens for Tax Justice pointed out, these House Democrats are to the right of President Reagan when it comes to investor income:

In 1986, President Ronald Reagan signed into law the Tax Reform Act that ended the tax preference for capital gains and taxed all types of income at the same rates. Conservatives have long complained about this Reagan tax reform, and have even incorrectly claimed that capital gains tax revenue actually fell as a result of it…Today, conservative critics of President Reagan have been joined by a group of House Democrats who also seem to feel that Reagan was not sufficiently devoted to tax preferences for the wealthy investor class.

Of course, Obama hasn’t proposed evening the rates between regular income and investment income either, but to think that wealthy investors need a capital gains rate 20 points below the top marginal income tax rate (currently 35 percent) in order to invest their money is silly. Do conservatives, and these House Democrats, really believe that the wealthy will squirrel away their money under the mattress if the capital gains rate goes back to the level at which it was under Clinton? In fact, business investment was stronger under President Clinton that it was under President Bush.

The overwhelming majority of capital gains go to the richest households. Keeping that rate so far below the rates applied to normal income is simply a giveaway to the wealthy that doesn’t boost the economy.

However, some of them are also claiming that a household earning $250,000 per year isn’t actually rich, once geographic differences are taken into account. “Where we come from, those people are living paycheck to paycheck,” said Rep. Michael McMahon (D-NY).

First, as Daniel Gross ably pointed out, “even if you look at the wealthiest metropolitan areas — Washington ($85,236), San Francisco ($76,068), Boston ($70,334), and New York ($63,957) — a quarter of a million dollars a year dwarfs the median income.” Not only that, but as a new report from Citizens for Tax Justice pointed out, two-thirds of the House Democrats who are looking to preserve the Bush tax cuts for the rich come from districts with a below average number of households making a quarter-million per year:

Of the 31 House Democrats who signed the letter in support of extending the Bush tax cuts for the rich, 22 represent districts where the share of taxpayers rich enough to pay higher taxes under Obama’s plan is less than the national average of 2.1 percent. Of those 31 House Democrats, 13 represent districts where less than 1 percent of taxpayers are rich enough to face higher taxes under Obama’s plan.

Even in McMahon’s district, just two percent of households earn that much. In total, there are only 30 districts (out of 436 in the country) where at least 5 percent of households would be affected by the expiring tax cuts. Just two of those districts are represented by House Democrats who signed the letter to Pelosi.

It’s also worth remembering that those making more than $250,000 would still receive a tax break on their income up to that amount, relative to where their tax rate was in the 1990′s. Under Obama’s plan, a millionaire will still pay roughly $6,300 less in taxes than they would if the entirety of the Bush tax cuts expire. So even the exceedingly few households represented by these lawmakers that would be affected if the Bush tax cuts expire would be keeping some of their tax breaks.

The House Democrats also asserted in their letter that the richest two percent of taxpayers are responsible for 25 percent of consumer spending. However, CTJ noted that these households account for 21 percent of total pretax cash income and “their share of total personal consumption is certainly not higher than their share of total income.” In all, this two percent of taxpayers is responsible for roughly 8 percent of consumer spending, CTJ estimated.

But a group of conservative Congressional Democrats are also making the same bogus argument. This week, a number of self-styled Blue Dogs sent a letter to Speaker of the House Nancy Pelosi (D-CA) saying that they opposed allowing the cuts for the wealthy to expire. One of the main drivers behind the effort — Rep. Jim Matheson (D-UT) — told the Washington Post’s Greg Sargent today that his rationale for making the push is to protect small businesses:

“I recognize $250,000 is a lot of money for an individual to make for an individual,” he said. “But we’re also talking about businesses. That’s not a lot of money for small businesses.” Asked how many people in his district fell into the above-$250,000 category, Matheson answered: “I don’t know the answer to that.”

Before getting to Matheson’s specific argument, let’s review: Fewer than two percent of small businesses and less than three percent of households with any business income at all would be affected if the Bush tax cuts for the rich expire.

Republicans concede that very few businesses would be affected, but then claim that half of small business income would be hit. But that statistic only matters if you’re concerned about a slight tax increase on Bechtel Corp., the Tribune Company, doctors, lawyers, and corporate CEO’s receiving a speaking fee on the side, all of whom fall under the GOP’s overly inclusive definition.

Matheson didn’t know how many households in his district would be affected if the Bush tax cuts for the rich expire, but according to the latest American Community Survey from the Census Bureau, the number is roughly 12,012. (The ACS survey cuts off at $200,000, not $250,000, so some of those 12,000 households would likely fall into the 28 percent marginal income tax bracket, and thus avoid a tax increase.)

The median household income in Matheson’s district is $55,000, while the median male full-time worker makes $46,000. Matheson’s favored extension would give a millionaire an annual tax cut of $128,832, or nearly three times what the median worker in his district earns in total.

Matheson is attempting to muddy the waters by making it sound like business revenues, not personal income, are what winds up on income tax filings. But that’s not how it works. As Matthew Yglesias has pointed out, “any small businessman who’s earning a middle class income isn’t paying in the top two brackets, just as any salaried employee who’s earning a middle class income isn’t paying in the top two brackets.” No matter how you slice it, extending the Bush tax cuts for the rich is spending $830 billion on the richest segment of the population.

“Pelosi is planning to include a government-run “public option” in the House version of the healthcare bill. She wants to model it on Medicare, with providers getting reimbursed on a scale pegged to Medicare rates,” Mike Soraghan writes. The original House bill allowed the public option to reimburse providers at five percent above Medicare rates:

Pelosi’s decision to abandon the agreement that was made with a group of Blue Dogs to get the bill out of committee would steer the healthcare legislation back to the left as she prepares for a floor vote. Pelosi is planning to include a government-run “public option” in the House version of the healthcare bill. She wants to model it on Medicare, with providers getting reimbursed on a scale pegged to Medicare rates….Blue Dog Democrats, many of whom represent rural districts where Medicare reimbursement rates are low, vehemently oppose tying the public option to Medicare.

The compromise initially “drew howls of protest from liberal members” who argued that a small just-established public option would be unable to negotiate lower reimbursement rates without relying on Medicare’s existing size and leverage. By reimbursing providers some percentage above Medicare rates, however, the public option could benefit from Medicare’s ability to negotiate with providers and pass on the savings to consumers, these critics argued.

Indeed, according to the Congressional Budget Office, a public option that reimburses providers at market rates would not lower premiums. In its analysis of the HELP committee bill the CBO concluded that “the public plan would pay providers of health care at rates comparable to privately negotiated rates—and thus was not projected to have premiums lower than those charged by private insurance plans in the exchanges.” As a result, that kind of public option does not “have a substantial effect on the cost or enrollment projections.”

Conversely, the House bill’s original public option “would be about 10 percent cheaper than a typical private plan offered in the exchanges,” the Congressional Budget Office concluded.

During a recent hearing before the Democratic Steering and Policy Committee Forum on Health Insurance Reform, Pelosi insisted that a robust public option would lower private premiums and hold insurers accountable. “[If reform does not include a public option], we will be passing the ‘Private Insurance Profit Perpetuation Act,’” Pelosi said. “We have no intention of doing that…We want the private sector to thrive — we don’t want our members to go into an exchange where they only have one choice, where there’s sole sourcing. But that the public option provides that competition.”

In a new cover story, BusinessWeek claims that the “health insurers have already won” the battle over health care reform. According to the magazine, their strategy has been to “quietly” focus on “shaping the views” of more conservative Democrats. Central to the health insurers’ strategy is to target the Blue Dog Coalition, which includes Rep. Jim Matheson (D-UT) and Rep. Mike Ross (D-AR):

Impressing fiscally conservative Democrats like Matheson, a leader of the House of Representatives’ Blue Dog Coalition, is at the heart of UnitedHealth’s strategy. It boils down to ensuring that whatever overhaul Congress passes this year will help rather than hurt huge insurance companies. [...]

Matheson, whose Blue Dogs command 52 votes in the House, can’t offer enough praise for UnitedHealth, the largest company of its kind. “The tried and true message of their advocacy,” he says, “is making sure the information they provide is accurate and considered.” [...]

Fifteen years after the insurance industry helped kill then-President Bill Clinton’s health-reform initiative, Ross is frustrating the Obama White House by opposing proposals for a government-run insurance concern that would compete with private-sector companies.

The article goes on to note that United Health’s massive lobbying operation, which has spent more than $3.4 million during the first half of 2009, has enlisted the help of a large array of Washington insiders. Its lobbying operation appears to be paying off:

The industry has already accomplished its main goal of at least curbing, and maybe blocking altogether, any new publicly administered insurance program that could grab market share from the corporations that dominate the business. UnitedHealth has distinguished itself by more deftly and aggressively feeding sophisticated pricing and actuarial data to information-starved congressional staff members. With its rivals, the carrier has also achieved a secondary aim of constraining the new benefits that will become available to tens of millions of people who are currently uninsured. That will make the new customers more lucrative to the industry.

As ThinkProgress has noted, the Blue Dog Coalition is awash in corporate cash. The health care industry was the top donor to Matheson’s 2008 campaign, giving him hundreds of thousands of dollars. The health industry was also the top donor to Ross, a former pharmaceutial executive whose negotiations recently forced the Energy and Commerce committee to weaken its health care bill.

Despite the health care industry’s intense lobbying effort on capitol hill, several polls show that the majority of the American people remain strongly in support of the choice of a public health insurance plan. As Matt Yglesias has noted, “So just keep in mind that when people talk about political obstacles to a robust public plan, they’re not talking about mass public opinion as an obstacle—they’re talking about the wealth and power of relatively narrow interests.”

Now, MoveOn is targeting Barrow and two other Blue Dog Democrats with a series of radio advertisements that will air in their districts starting Wednesday. Listen to the one directed at Rep. Barrow here:

President Obama, in a move that many progressives disagreed with, endorsed Barrow in his summer 2008 Democratic primary against progressive challenger Regina Thomas.

At the time, the Savannah Morning News noted that Barrow supported policies “such as the war in Iraq and President Bush’s tax cuts, which Obama and Thomas oppose.” Yet in a radio ad he cut in support of Barrow, Obama was insistent that Barrow would fight for his agenda:

OBAMA: He’s already standing up to the lobbyists and the Republicans who go right down the line with George Bush. Now we need him in Congress to help reduce gasoline prices, provide access to affordable health care for every American. … John’s not afraid to take a tough stand to do what’s right.

Listen here:

Not only has Barrow failed to provide support for health care reform, but he has also lined up with conservatives to oppose legislation pushing for a clean energy economy. In June, Barrow and other conservative Democrats succeeded in watering down climate change legislation that he ended up voting against anyway.

While it’s possible that Barrow is simply ideologically opposed to progressive legislation, he also has a financial incentive to continue to vote the way he does. A number of powerful corporate interests have invested in his campaigns. According to data from OpenSecrets, 60% of the PAC money recieved by Barrow during the 2008 election cycle was from business interests. Barrow has already collected $27,500 from the energy industry and $19,500 from the health care industry for his 2010 campaign, with generous contributions coming in from Exxon Mobil, Georgia Power, Merck & Co, and Monsanto.

Unfortunately, as large as this direct lobbying figure is, it represents probably a fraction of the total amount of money the oil and gas industry is pouring into the debate. Some of the money flows straight to candidates and to political action committees. Another huge, largely undisclosed portion goes to what is known as “outside lobbying” efforts — public relations and advertising firms which coordinate a pro-polluter propaganda campaign to influence public opinion. And finally much of the money goes to financing “think-tanks” to produce reports outside the realm of scientific consensus to legitimize skepticism of global warming.

The outside lobbying campaign the industry has embraced this year is the most corrosive because it is based upon deception — and increasingly, hate. Koch Industries, the oil and gas behemoth, bankrolls the astroturf groups Americans for Prosperity and FreedomWorks. These groups were instrumental in orchestrating the anti-Obama tea party protests, where thousands gathered to display racist signs directed at the President, absurd calls for an impeachment, and more recently, protesters hanging Democratic leaders in effigy. In addition to the anti-Obama protests, these groups provide a useful front for industries as they hire dozens of field staff to spread misinformation about clean energy and bus people around the country to create the guise of public distrust of global warming. Koch has funneled its money not only to these astroturf efforts, but has been a prolific leader in all the aforementioned strategies that industries pursue (Charles Koch even founded the Cato Institute, a leader of global warming skepticism and has spent nearly $4 million in lobbying this year alone).

Although Koch has traditionally given mostly to Republicans, E&E notes that it is giving increasingly to Democrats. In 2009, Koch gave about 28 percent of its contributions to Democrats, compared to about 15 percent last year:

Sen. Max Baucus (D-MT): $5,000 [FEC, accessed 7/29/09]
Sen. Blanche Lincoln (D-AR): $10,000 [FEC, accessed 7/29/09]
Sen. Mark Pryor (D-AR): $2,000 [FEC, accessed 7/29/09]

Rep. Marion Berry (D-AR): $2,500 [FEC, accessed 7/29/09]
Rep. Dan Boren (D-OK): $3,000 [FEC, accessed 7/29/09]
Rep. Allen Boyd (D-FL): $6,500 [FEC, accessed 7/29/09]
Rep. Henry Cuellar (D-TX): $3,500 [FEC, accessed 7/29/09]
Rep. Charles Gonzalez (D-TX): $4,500 [FEC, accessed 7/29/09]
Rep. Gene Green (D-TX): $3,500 [FEC, accessed 7/29/09]
Rep. Charlie Melancon (D-LA): $2,500 [FEC, accessed 7/29/09]
Rep. Solomon Ortiz (D-TX): $1,000 [FEC, accessed 7/29/09]
Rep. Collin Peterson (D-MN): $6,500 [FEC, accessed 7/29/09]
Rep. Mike Ross (D-AR): $2,000 [FEC, accessed 7/29/09]
Rep. David Scott (D-GA): $1,000 [FEC, accessed 7/29/09]
Rep. Henry Teague (D-NM): $1,000 [FEC, accessed 7/29/09]

In accepting dirty energy Koch money, these lawmakers are legitimizing the financiers of the anti-Obama tea party effort.

Today, the Dogs and the Dems reached a compromise:

- Reimbursement rates for public plan should be no higher than market rates: Rather than reimbursing at five percent above Medicare rates, the new public option will now directly negotiate rates with providers.

- States can offer an insurance co-op alongside public plan: Presumably this state-based cooperative would act like any other not-for-profit insurer and will lack the market clout to drive bargains and lower costs.

- Premium cap goes from 11% of income to 12%: Loosening the affordability measures is certainly one way to bring down the cost of health reform, but it does little to help families purchase coverage.

- States must pay 7% of cost of additional Medicaid enrollments: States are already worried that the plan to expand Medicaid would leave them on the hook for financing the expansion after the five year grace period (for the first five years, the federal government funds the expansion, after that, the states would gradually assume half the cost.) This will likely stoke their concerns.

- Small business exemption for payroll up to $500,000; phases out at $750,000: The original language exempt businesses with a payroll of less than $250,000 and charged a penalty on a sliding scale.

- Cost of bill must come in at under $1 trillion: Most health reform advocates believe that is nearly impossible to provide everyone with affordable health care coverage under $1 trillion.

On the whole, these tweaks are rather minor. Most observers interpreted the hoopla surrounding the negotiations as a sign of serious trouble. If the outline above is correct, then the dogs came back with their tail somewhat between their legs.

Secondly, the agreement only reinforces the notion that Blue Dogs are more interested in ideological politics than lowering long-term health care spending. After all, if they really wanted to lower costs, they would support reform that includes a robust public option and generous affordability measures so that every American is part of the health care system and has access to needed care. After all, if the public plan pays bloated market rates (as this agreement states) it will fail to offer lower premiums within the Exchange, and would cause the government to spend more money on subsidies. Unfortunately, the Blue Dogs are trying to lower the costs by making insurance less affordable and undercutting a meaningful public option.

The big political problem with health care, I think, is that on the one hand pushing for major cost-savings is a more “moderate” policy goal than is just expanding coverage. But on the other hand, pushing for less reform is also more “moderate” than pushing for more reform. But the nature of the current health care system in the United States is that you achieve more savings by pushing more reform; by becoming less moderate and more radical. Thus, as Steven Pearlstein writes in today’s Washington Post if the Blue Dogs are really concerned that the draft House legislation doesn’t do enough to control cost growth they ought to be pushing for more outside-the-box ideas, not just carping around the margins:

A better vehicle would be the new government-run insurance option that has become a political must-have for House leaders and President Obama. In return for dropping their opposition to such a “public option,” the Blue Dogs could have insisted that it not be structured as a fee-for-service plan along the lines of Medicare but rather offer services through a network of high-quality, lower-cost hospitals and clinics that use teams of salaried doctors to provide coordinated care, along the lines of the Mayo and Cleveland clinics that Obama is always touting. In a competitive market, the success of such a government-run plan would force other insurers to follow suit.

That’s a good idea! Pearlstein concludes:

The problem with the Blue Dogs is that they tend to confuse centrism with splitting the difference between the warring camps, or making policy by choosing one from Column A and one from Column B. The more effective centrists use their political leverage to create a Column C.

Maybe that’s the problem, or maybe the problem is that the Blue Dogs are busy raking in health care, financial services, and energy sector corporate cash. After all, in addition to difference-splitting or column-grabbing, one thing you can do with your pivotal position in a legislature is block reform in exchange for money from interested parties. You hear a lot about Blue Dogs coming from “conservative rural districts” but it’s not as if major financial services firms are wildly popular among rural conservative voters.

Fun with congressional procedure as House Republicans find a way to bring legislative action to a halt in order to clear room in the schedule for Representative John Boehner (R-OH) to make it to a “beach party” fundraiser at Cantina Marina down by the Southwest Waterfront:

C-SPAN viewers who tuned in to watch the late-running House votes at around 6:30 p.m. were treated to an odd sight. Rep. Darrell Issa (R-Calif.) insisted that the clerk read an unusually long 55-page motion to recommit aloud — a process that took an excruciating 40 minutes, halting House business.

Squirmy Democrats began wondering what was going on. Soon an aide pulled up a blog post reporting that Minority Leader John Boehner (R-Ohio) had scheduled a 6 p.m. “Beach Party” fundraiser — at $250-$5,000 a head — at DC’s waterfront Cantina Marina.

Boehner’s spokesman denies that the scheduling of a massive procedural delay at the exact same time as the fundraiser had anything to do with the fundraiser. Rather, “We forced the reading of the MTR to protest the un-democratic rules the Democratic Leadership is insisting on for the appropriations process, which do not allow Republicans the opportunity to step in the way of their out-of-control spending spree.” But protest or no, the fact remains that they could have organized this stunt at all kinds of different times, but instead they scheduled the protest to coincide with the fundraiser.

The Sunlight Foundation’s Political Party Time website is a pretty neat resource. You can read about how the fact that the House Energy and Commerce Committee’s “Blue Dog” Democrats insisted on slowing down the markup process didn’t just make it more likely that tens of millions of Americans will lack adequate health insurance for years to come, it also prevented Blue Dog members from needing to work nights this week thus freeing up valuable opportunities to rake in special interest cash at fundraising parties.

So far this year, the political action committee attached to the fiscally conservative House Democratic voting bloc is on track to shatter all its fundraising records, raising more in the first six months of 2009 — more than $1.1 million — than it did in the entire 2003-04 fundraising cycle.

Nearly 54 percent of the Blue Dog PAC’s haul this year comes from the energy, financial services and health care industries, up from 45 percent in 2004, according to analysis of CQ MoneyLine data by the Center for Public Integrity.

Former Rep. Charlie Stenholm (D-TX) told Politico that the reason for the corporate cash influx is an obvious attempt to influence Blue Dogs’ policy views. “I mean, what other conclusion could you come to?” he said with a laugh. “And that’s something that the Blue Dogs have sought. They want to be in that position, to have influence.”

One thing that’s clear from reading today’s news is that Representative Mike Ross (D-AR) is very upset about the House health care bill and is planning to lead a bloc of Blue Dog Dems on the Energy & Commerce Committee to vote against it unless major changes happen. It’s also clear that said bloc is in fact large enough to join with the Republicans and kill reform. What’s not at all clear is what exactly Ross’ objections are. CNN’s report says Ross “didn’t give details on changes the Blue Dogs want.” Politico’s report, likewise, has no information about what Ross actually wants to see happen. He just says there should be “drastic changes.”

Fortunately, thanks to the internet I can sit here in DC and read Arkansas News’ coverage where they have more actual information about Rep Ross’s moment in the sun. Apparently these are the key bullets:

— The cost of health care reform, both for the explosion in the deficit they fear and the dearth of real savings for consumers they also fear.

— Whether to have a public plan and if so, how to design it. The Blue Dogs prefer it as a trigger if cost-reduction targets aren’t met and they do not want a reimbursement schedule like Medicare’s, which is less for rural areas. Actually, they want to change the Medicare schedule. The bill as written gives them a study commission, probably a mere brush-off. Is there a contradiction in the Blue Dogs, worrying about costs and then trying to jack up Medicare? Sure.

— Employer mandates, either to provide health care to employees or pay a fee. The Blue Dogs like the exemption for small businesses. But they don’t think it goes high enough in terms of payroll and employees. They want to expand it.

— And there’s the whole respect thing, with the Blue Dogs tired of being forced left by Pelosi while the Senate goes a more moderate way.

In other words, they’re concerned that the bill (a) costs too much overall and (b) will increase the deficit. And their proposed solutions to this are to (a) increase the cost of the bill by neutering the public plan and (b) decrease the quantity of revenue by fiddling with the employer mandate. Under the circumstances, it’s no wonder that Ross didn’t want to go into detail with CNN about how he’d propose changing the bill. Maybe Harry Potter knows a spell that could untie this mess of contradictions.

The health reform debate would be a lot simpler if the kind of center-of-center politicians inclined to worry about spending too much money were also inclined to support the kind of government intervention into the health care system that’s likely to reduce health care costs. But instead, the left finds itself needing to argue both sides of the issue against forces of the status quo who both object to the cost of giving people health care and object to cost-saving measures like a robust public plan. And the House Blue Dog Caucus is no exception judging by their latest letter on health reform. As Igor Volsky explains “the letter contains an inherent contradiction”

[T]he Blue Dogs want to find more savings within the system — they’re asking for Delivery System Reforms and “maximizing the value of our health care dollar” — but they’re also asking the bill to spend more on rural health and physician reimbursement. And, they are reluctant to support any legislation that moves us towards that goal, causes providers to lose revenue or regulates the system to improve efficiency.

Consider their objection to a “Medicare-like” public option that reimburses providers 5 to 10 percent above Medicare rates. According to MedPAC, Medicare rates are adequate and consistent with the efficient delivery of services. In fact, over-payments by private insurers to health-care providers drives up overall costs. “Hospitals which didn’t rely on high payment rates from private insurers ‘are able, in fact, to control their costs and reduce their costs when they need to’ and ‘combine low costs with quality,’” Glenn Hackbarth, the chairman of MedPAC, said during recent testimony in front of the House Ways and Means Committee. Moreover, if the public plan pays bloated market rates, it will fail to offer lower premiums within the Exchange, and would cause the government to spend more money on subsidies.

You don’t save money by magic. You save money by spending less money. You can do that by just letting a large and growing number of people go without adequate health care. Or else you can do that by spending less money on overpayments, inefficient processes, and unnecessary treatments. But you can’t do that without taking a bite out of someone’s bottom line. The Blue Dogs seem to be looking for a free lunch, or else just grasping at straws for reasons to object to the bill.

To her credit, I saw Lorretta Sanchez (D-CA) talking about this on MSNBC earlier. She’s a Blue Dog but she explained that she didn’t sign the letter specifically because she sees the public option that the letter objects to as a big part of the solution to the cost issues. That’s a correct and coherent stance, the rest of the caucus might want to listen to her.

- Deficit Neutrality: “Paying for care reform must start with finding savings within the current delivery system and maximizing the value of our health care dollar before we ask the public to pay more.”

- Delivery System Reform: “The discussion draft fails to include adequate structural changes that will succeed in lowering costs and increasing value.”

- Rural Health: “We must not fail to address the underlying problems and inequities that plague rural providers.”

- Public Option: “A Medicare-like” public option would negatively impact hospitals, doctors and patients…using Medicare’s below-market rates would seriously weaken the financial stability of our local hospitals and doctors.”

Democrats have already committed themselves to fully funding health care reform and the President has identified $632 billion worth of savings from within the system. Rahm Emanuel, who visited the Capitol twice this week to discuss health care proposals with House Democrats, has said Obama would prefer that money to pay for the legislation come from within the health care system — as he argued in a letter to Sens. Baucus and Kennedy — and OMB Director Peter Orszag is urging lawmakers to include “further cuts in the Medicare and Medicaid payments that hospitals receive for treating the uninsured. In fact, according to a CBO estimate of the Tri Committee bill, the draft would save some $500 billion from Medicare cuts.

More importantly, the letter contains an inherent contradiction: the Blue Dogs want to find more savings within the system — they’re asking for Delivery System Reforms and “maximizing the value of our health care dollar” — but they’re also asking the bill to spend more on rural health and physician reimbursement. And they are reluctant to support any legislation that moves us towards that goal, causes providers to lose revenue, or regulates the system to improve efficiency.

Consider their objection to a “Medicare-like” public option that reimburses providers 5 to 10 percent above Medicare rates. According to MedPAC, Medicare rates are adequate and consistent with the efficient delivery of services. In fact, over-payments by private insurers to health-care providers drives up overall costs. “Hospitals which didn’t rely on high payment rates from private insurers ‘are able, in fact, to control their costs and reduce their costs when they need to’ and ‘combine low costs with quality,’” Glenn Hackbarth, the chairman of MedPAC, said during recent testimony in front of the House Ways and Means Committee. Moreover, if the public plan pays bloated market rates, it will fail to offer lower premiums within the Exchange, and would cause the government to spend more money on subsidies.

Thus, as Pelosi said yesterday, “squeeze out what you can from the system — savings, savings, savings. … Otherwise the bill is endless.” In this case, the Blue Dogs are slowing down an effort that implements their principles for reform.

My big problem is that they are mixing climate change together with energy independence. I don’t think that is smart.

In fact, it is Peterson, like other skeptics of action on climate change, who is not being “smart.” Reforming our broken energy policy requires recognition that the entire lifecycle of energy use matters. As Vice President Al Gore has explained, our energy and climate crises are “linked by a common thread – our dangerous over-reliance on carbon-based fuels.”

Closely aligned with the interests of his corporate agriculture contributors, Peterson is attempting to subvert Waxman-Markey, to replace our policy of fossil fuel subsidies without regulation with one of agriculture subsidies without regulation.

Like other attempts to outlaw science, Peterson wants to forbid the federal government from even recognizing agricultural pollution. By replacing petroleum, biofuels have the potential to dramatically reduce global warming pollution. But scientists have found biofuels can also worsen global warming by encouraging farmers to cut down the diversity-rich tropical forests that soak up carbon dioxide. Similarly, farmers may be able to trap more carbon in soil and plants through changes in agricultural practices, allowing them to sell billions of dollars of “offsets” in a carbon cap-and-trade market. But poorly regulated offsets are little more than worthless subsidies.

Following the law, the Environmental Protection Agency is taking steps to consider the global warming consequences of biofuel production as it develops new renewable fuels standards. Similarly, Waxman-Markey would put the EPA Administrator and an independent scientific board in charge of devising the rules for agricultural offsets to maintain their integrity. Peterson’s response? Forbid the government from using science to guide its green-farm policy:

A lot of us on the Committee do not want the EPA near our farms. And, I don’t think you are going to get any type of a bill through Congress, whatever the administration wants, that is going to have that system, for whatever it is worth.

At Grist, Tom Philpott debunks Peterson’s apologia for Big Ag:

The current version of Waxman-Markey contains almost no language on agriculture. (As I’ve written before, agriculture is exempt from any cap on greenhouse-gas emissions.) But farming projects would still be eligible for offsets through an offsets-review board that the legislation would set up within the EPA. Big Ag isn’t content with that arrangement. In the coming days, the game will be to insert specific language around ag offsets into the legislation –and promote a certification process developed by Big Ag itself.

In short, Peterson is playing a high-stakes game of chicken with our planet and farmers’s own livelihoods in order to force Congressional leadership to allow agricultural giants like Monsanto and Archer Daniels Midland to rewrite this critical climate and clean energy legislation to their benefit. For weeks, Peterson has threatened to block Waxman-Markey if his demands on behalf of industrial agriculture are not met. And right now it looks like he’s going to win.

Yesterday, the House Blue Dog bloc came out with a statement on the idea of a public option in health care reform. It’s supportive but not really, as per these bullet points from Igor Volsky:

— The plan would not disrupt the ability of families to keep their health care coverage and see their doctor.

- Medicare payment rates should not be used as the basis for reimbursement.

- The public health care option would be financially stable, and that it be employed only in the absence of adequate competition and cost containment.

So the first point here is basically a red herring, but the Blue Dogs are welcome to this “concession” since nobody’s proposing anything different. The third point actually contains two different points. The point about financial stability, if I understand it, is a solid fiscal conservative argument that the public option should need to be able to float on its own bottom and finance itself out of the same premiums and subsidies that private plans work with, rather than tapping extra tax dollars. The second half of point three is this trigger business.

But it’s really point two that’s sort of at the core here. A big part of the appeal of the public plan is precisely that it would use Medicare payment rates or else Medicare-esque rates. The idea is that this would produce a plan that’s cheaper. At that point, in order to stay in business private insurance companies would either need to find ways to get costs down to Medicare-esque levels or else find ways to deliver a demonstrably higher level of quality. Now insurance companies don’t like this idea. Not, I should say, because they’re possessed by evil spirits. But because a big part of what businessmen do in the political arena is try to get the government to shelter them from competition. What progressives are pushing for in this case is for the government to create additional competition. Insurance firms don’t want that. And what the Blue Dogs are talking about here is a way to cripple the public plan’s ability to compete effectively.

There are some arguments out there for doing this on the merits. But it’s important to keep in mind that those most certainly aren’t fiscal conservative argument. If you want to expand access to affordable health care, but you’re also concerned about deficits, then clearly the best way to expand access is to ensure the existence of a low-cost public option using Medicare reimbursement rates. Both the trigger mechanism and the prohibition on using Medicare rates are “moderate” ideas, but they’re not ideas that promote the coal of fiscal austerity. They do the reverse. Which is fine. Politicians don’t need to make austerity priority number one at all times. But this reality ought to be an important part of the context as this debate plays out. Blue Dogs are basically saying they want to put aside one of our best available tools for cost control, while progressive members are fighting for measures that will keep total outlays in check.