issue: Health Care

How Rising Health Costs Slow Wage Growth

Posted on by The Progressive Policy Institute

How Rising Health Costs Slow Wage GrowthMost Americans are painfully aware that their health care premiums are rising faster than other necessities of life. Many also know that their earnings are growing slowly or not at all, despite apparent increases in worker productivity. These problems have been widely reported, but are seldom linked.

Yet they are directly connected. The costs of health benefits has gotten so large in recent years, and has been growing so fast, that they are now contributing to the slowdown in workers’ pay and income growth. In economic terms, more of the productivity generated by each worker is being used to pay their health insurance premiums, so less gets paid out in wages.

This shift in compensation helps to explain a mystery that has puzzled economists for nearly a decade: Why have workers’ wages stagnated as their productivity has been increasing? In theory, the two are supposed to rise in tandem.

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Will Marshall on Wyden-Ryan Medicare Plan

Posted on by The Progressive Policy Institute

PPI President Will Marshall breaks down the merits of the Wyden-Ryan plan for Medicare reform in Politico:

An honest debate over Medicare’s future may be too much to hope for in an election year. But candidates should think twice before staking out positions that could tie their hands in next year’s unavoidable showdown over public debts and Medicare spending.

After all, 50 percent will win and actually have to govern. That’s why it’s a big mistake to allow the leading bipartisan proposal for Medicare reform — the Wyden-Ryan plan — to fall victim to election-year Medagoguery.

It’s the brainchild of Democratic Sen. Ron Wyden, a progressive Medicare champion who once led a Gray Panthers chapter in Oregon, and Rep. Paul Ryan (R-Wis.), chairman of the Budget Committee and darling of tea party conservatives. If this political odd couple can agree on a balanced way to slow the unsustainable growth of Medicare costs, there may be hope for real entitlement reform yet.

Read the full article here.

Welcome Back, Gang of Six

Posted on by The Progressive Policy Institute

Not a moment too soon, the Gang of Six has resurfaced in the U.S. Senate, breathing new life into hopes for a bipartisan “grand bargain” on deficit reduction.

Even if Eric Cantor were abducted by aliens, there’s no way that Congress could pass the Gang’s elaborate plan to solve the debt crisis before Aug. 2. But the Gang’s resurgence, with growing support from GOP Senators, adds to mounting public pressure on House Republicans to end their self-isolating intransigence on taxes.

Several weeks ago, the Gang looked moribund after a key member, Senator Tom Coburn (R-Okla.) went on walkabout. To their immense credit, however, Gang leaders Mark Warner (D-Va.) and Saxby Chambliss (R-Ga.) persevered, got Coburn back in the fold, and unveiled their new plan before 46 Republican and Democratic Senators this week. President Obama, who has stood strangely aloof from the Gang’s efforts to find common ground, pronounced the new package “consistent” with his views.

The new blueprint, like the original, is based on the Bowles-Simpson fiscal commission plan. It envisions two steps: First, an immediate, $500 billion “down payment” on deficit reduction; followed by more comprehensive reform. Altogether, the Gang calls for $3.7 trillion in debt reduction over the next decade. That’s about what budget experts say is necessary to first stabilize, then start shrinking, the national debt.

Another Gang leader, Sen. Kent Conrad (D-Mont.), said today there is talk on Capitol Hill of using the $500 billion cut to win a short-term extension of the debt limit. That could give lawmakers more time to hammer out a permanent solution to the fiscal crisis that includes both increased tax revenues and entitlement reform.

The Gang’s revised plan proposes deep cuts in Medicare and other health spending, while – sorry Rep. Ryan — apparently maintaining the structure of Medicare and Medicaid. It would achieve about $1 trillion in savings by capping domestic spending, including defense, over the next decade. These cuts are way beyond cosmetic.

The new plan also embraces the fiscal commission’s key proposal on tax reform. It would raise around $1 trillion over the next decade by closing tax loopholes, using the savings both to dramatically lower income and corporate tax rates, and reduce the deficit. Spared are tax credits for low-wage workers and families with children. More affluent taxpayers will welcome the Gang’s call to abolish the Alternative Minimum Tax.

The fiscal commission achieved a political breakthrough when Republicans Senators embraced tax reform, and some Democrats agreed to cut Social Security benefits for affluent retirees and raise the retirement age. Here the new blueprint disappoints. Basically it punts to the Senate Finance Committee, which is charged with drafting a plan to assure Social Security’s solvency over the next 75 years. The Gang also says efforts to reform Social Security should only take place “on a separate track – any savings from the programs must go toward solvency.” This may placate liberals, but could alienate conservatives who suspect Democrats aren’t really serious about entitlement reform.

The big question, of course, is whether the Gang’s plan could ever get through the House. For starters, it violates the Tea Party’s Prime Imperative — that revenues can be raised for no other purpose than cutting tax rates. Moreover, Ezra Klein reports that it also appears to assume the expiration of the Bush tax cuts for the wealthy. If House Republicans won’t yield on taxes, don’t expect House liberals to deal on entitlement reform.

Still, a lot depends on how the debt limit battle plays out. New polls show voters are more likely to see Republicans as standing in the way of compromise than Obama and the Democrats. If things get really ugly – if the federal government can’t pay salaries or mail benefit checks on Aug. 3 – such suspicions could quickly turn into a furious backlash.

In any case, the Gang’s initiative illuminates a growing rift between House and Senate Republicans, both on taxes and negotiating tactics. By saying, in effect, “Hell no” to balanced proposals to cut deficits, House Republicans are forfeiting a rare opportunity to get Democrats to swallow huge, multi-trillion-dollar cuts in federal spending. Apparently, real conservatives prefer big government to tax hikes.

On the other side, progressives aren’t likely to get a better offer than the one Warner and company are offering. No one knows this better than President Obama, who’s been beating his head against the wall of GOP recalcitrance for weeks. And that’s why, once the debt limit is raised, he ought to throw in with the Gang of Six.

Photo Credit: TalkMediaNews

Family Planning Fight Moves to States

Posted on by The Progressive Policy Institute

Back in April, House Republicans tried to kill funding for a couple of the right’s favorite bête noires: Planned Parenthood and the Title X federal grant program for family planning. Stymied by Senate Democrats, conservative culture warriors have moved on to what they see as more promising battlegrounds: states with GOP governors or legislatures.

 

Measures to defund Planned Parenthood already have passed in North Carolina, Indiana, Kansas, and Wisconsin, and are pending in several other states. The states have different strategies for cutting Planned Parenthood out of the action. Mostly, they bar state governments from contracting with the organization for family planning services using federal Medicaid and Title X dollars. Planned Parenthood notes that some states are withholding federal grants specifically earmarked for the organization.

New Hampshire’s Executive Council recently voted to reject a $1.8 million contract with Planned Parenthood. Council Member Raymond Wieczorek explained, “I am opposed to abortion. I am opposed to providing condoms to someone. If you want to have a party, have a party but don’t ask me to pay for it.”

As Weiczorek’s comment makes clear, conservatives aren’t just aiming at their usual target, abortion, but at contraceptives as well. Scott Walker, Wisconsin’s Republican Governor boasted during his campaign of “trying to defund Planned Parenthood and make sure they didn’t have any money, not just for abortion, but any money for anything.”

The right’s jihad against Planned Parenthood and family planning is likely to cause the opposite of its intended effect. Making it harder for people to get access to contraception will result in more unintended pregnancies, some of which undoubtedly will end in abortion. And if such bans are not reversed, there’s a high risk of collateral damage to a cause Republicans presumably support: reducing the epidemic of teen and unplanned pregnancy in America.

With over 400,000 girls aged 15 to 19 giving birth each year, America’s teen pregnancy rate is among the highest of all industrialized countries. Nearly one-quarter of teen mothers go on welfare within three years of having a child, and according to the CDC, lack of access to contraceptives is a key factor contributing to high teen pregnancy rates, a problem that costs taxpayers nearly $11 billion a year.

As I wrote here, teen pregnancy also plays a large role in the nationwide dropout crisis—30 percent of girls who drop out of high school cite pregnancy or parenthood as a key reason they left school. The close connection between teen pregnancy and dropping out of school is another compelling reason not to cut funding for family planning programs.

Contraception, which Planned Parenthood and other family planning clinics provide at a low cost, significantly reduces unplanned pregnancy and in turn reduces the number of abortions. Studies show that easier access to birth control pills decreases abortion rates drastically. In fact, most of the decline in teen pregnancy rates in the U.S. is due to teens’ more consistent contraceptive use.

Republicans want to punish Planned Parenthood for providing legal abortions, even though abortion accounts for only 3 percent of its services. In addition to affordable contraception that prevents teen and unplanned pregnancy and abortions, Planned Parenthood also provides other vital health services for women, like cancer screening and prevention, STD testing and treatment, and prenatal care.

According to a Guttmacher Institute study, 1.94 million unintended pregnancies are prevented each year by services provided at family planning clinics. Of these averted pregnancies, 400,000 would have occurred among teens. Defunding Planned Parenthood would deal a huge blow to crucial efforts to prevent teen pregnancy, undermining clinics’ capacity to provide sex education and teen pregnancy prevention initiatives. The same study finds that 810,000 abortions were prevented by services provided at family planning clinics. Without these services, the abortion rate in the U.S. would be two-thirds higher than the current rate.

Planned Parenthood isn’t taking this lying down. The organization has already won lawsuits defending abortion rights in Kansas and South Dakota. In Indiana, it won a legal battle when a district judge blocked enforcement of the defunding measure. The Obama Administration has made it clear to Indiana that cutting off Medicaid funds to Planned Parenthood is illegal—the law says that Medicaid beneficiaries can choose any qualified healthcare provider they wish. Planned Parenthood is also suing over North Carolina’s budget provision that cuts the organization off from any federal and state funds.

 

Cutting the number of abortions ought to be a goal that unites progressives and conservatives. Instead of slashing funding for clinics that provide fundamental health services for young and low-income women, Republicans should put their focus on reducing the need for abortions. The GOP’s moral guardians may not like it, but this means encouraging responsibility through safe sex and contraceptive use and continuing to fund family planning programs that help prevent teen and unplanned pregnancy and abortion.

Photo Credit: WeNews

Will Marshall Tackles Democrat Entitlement Anger in Politico’s Arena

Posted on by The Progressive Policy Institute

PPI President Will Marshall today discussed the “Hill Democrats Entitlement Mentality” in a post for Politico’s Arena today.

“House liberals, on the other hand, want to use “protecting Medicare” as a cudgel against GOP opponents in next year’s elections. That’s understandable, but can Democrats really afford to torpedo prospects for long-term debt reduction to win a few marginal House districts?”

Read the full post here.

The Drop Out Crisis and Teen Pregnancy

Posted on by The Progressive Policy Institute

Graduation season is upon us, but the approximately 1.3 million high school students who dropped out this year won’t be hearing “Pomp and Circumstance.” These dropouts are disproportionately black and Hispanic, and overwhelmingly poor. Since failing to finish school contributes mightily to poverty and inequality in America, increasing high school graduation rates should be an urgent national priority.

Why do so many poor kids drop out? Some dwell on low expectations and a lack of motivation among kids who struggle to learn, get frustrated and eventually give up. But lately researchers have drawn attention to an under-appreciated reason that students drop out: pregnancy. Among dropouts, 30 percent of girls cite pregnancy or parenthood as a key reason they left school. According to the National Campaign to Prevent Teen and Unplanned Pregnancy, only 51 percent of teen moms earn a high school diploma compared to 89 percent of female students who did not give birth as a teen. The picture is even worse for the youngest mothers: just 38 percent of teen girls who have a child before they turn 18 have a high school diploma. For these teens, the task of balancing their education and a baby proved impossible.

Focusing on curbing the teen pregnancy problem will most certainly put a dent in the number of school dropouts. While teen pregnancy often causes students to drop out, being engaged in school can reduce instances of teen pregnancy. Teens who stay in school and are academically involved are less likely to get pregnant than their peers who aren’t as engaged. In other words, dropping out also increases the chances that a teen will get pregnant.

Unplanned pregnancy and childbearing are also implicated in the failure of many young women to finish their college education. Research shows that 61 percent of women who have children in community college don’t finish their degree, and less than two percent of teen mothers who have a baby before age 18 get a college degree by age 30.

The nexus between getting pregnant and dropping out adds yet another example to the dismal catalog of social ills that stem from family breakdown and too-early childbearing. Within three years of having a child, about one-quarter of teen moms go on welfare. Children of teen mothers are more likely to suffer abuse, end up in prison, and drop out of high school. High school dropouts are also more likely to rely on welfare and have higher crime and incarceration rates.

While teen birth rates in the United States plummeted by 37 percent between 1991 and 2009, the dramatic decrease may have fed a premature sense of complacency about the issue. There was actually an uptick of teen pregnancies between 2005 and 2007, when the rate rose five percent. In any case, the teen pregnancy epidemic is far from over. In 2009, about 410,000 teen girls aged 15 to 19 gave birth with the majority being Hispanic or African-American. What’s more, America’s teen pregnancy rate is up to nine times higher than that of most developed nations.

Now some social analysts worry that funding for teen pregnancy prevention will be a casualty of budget-cutting fever in Washington. An especially frightening proposition given that teen pregnancy prevention is already dealing with a short stack. In 2010, Congress appropriated $110 million for evidence-based teen pregnancy prevention programs. Meanwhile, the U.S. spends, nationally, nearly $11 billion each year to remediate the social consequences of teen pregnancy.

Yet House Republicans tried to eliminate this modest $110 million investment for FY 2011.They also tried to cut funding entirely for Title X, which is instrumental in helping provide teens and low income women with contraceptives and reducing the number of unintended pregnancies, teen pregnancies, and abortions. If Republicans are really serious about reducing the deficit, they need to realize that investing in teen pregnancy prevention saves money over time and resist cutting this funding. Because of the overall decrease in teen pregnancy rates, taxpayers saved $8.4 billion in 2008 alone.

The school dropout crisis isn’t cheap either — if graduation rates don’t improve, dropouts will cost us $3 trillion over the next decade. Cutting funding for teen pregnancy prevention means more dropouts, which means losses in tax revenue and more spending on welfare, prison costs, and Medicaid, to name a few.

Progressives ought to “just say no” to GOP efforts to balance the budget on the backs of America’s most vulnerable families. In fact, we’ll save money over the long run by investing more in cost-effective teen pregnancy programs. The National Campaign to Prevent Teen and Unplanned Pregnancy has a list of such successful prevention programs here. Investing in them will pay double dividends, reducing both teen pregnancy and mitigating its related ills – including the drop out crisis.

Do We Need a Third Party to Fix Deficits?

Posted on by The Progressive Policy Institute

Republicans are crying foul over Democrats’ resort to “Mediscare” tactics to win an open House seat in New York. Democrats are chortling because they think the GOP’s heretofore unstoppable austerity offensive may have met its Stalingrad.

All this is diverting to aficionados of partisan thrust-and-parry in Washington. But the rest of the country may be less amused. By adhering to unbending, absolutist positions on Medicare and taxes, could Democrats and Republicans be cracking open the door to a serious third party challenge in 2012?

On Tuesday, Democrat Kathy Hochul won a traditionally Republican House seat in upstate New York in a special election. She relentlessly linked her GOP opponent to Rep. Paul Ryan’s plan for making deep cuts in Medicare while preserving the Bush tax cuts for the rich. Many Democrats now see this as the winning formula for next year’s elections.

Ryan complained yesterday that Democrats are “shamelessly demagoguing and distorting” his plan. It was hard to feel any sympathy for the earnest House Budget Commission chairman, however, since Republicans in 2010 spent millions on ads shamelessly blasting Democratic candidates for backing the proposed Medicare cuts in Obamacare. There’s actual double hypocrisy at work here, since Ryan’s Medicare proposal works through the same health exchanges Republicans find so objectionable in Obama’s plan.

Being called a demagogue by the party of death panels and death taxes is like being called ugly by a crab.

Nonetheless, Democrats need to resist the temptation to pay back their opponents in kind. They need to retain the flexibility to slow down Medicare’s cost growth, which as Bill Clinton said yesterday at the Peterson Foundation Fiscal Summit, is the sine qua non of any serious proposal to reduce federal deficits and debt.

Medicare spending is by far the biggest driver of federal spending growth. Together with Social Security, it represents nearly one-third of federal spending. According to the Social Security and Medicare Trustees, the government is slated to transfer over $3.4 trillion in general revenues to Medicare by 2020. This problem needs to be tackled now, even if it complicates Democrats’ ability to run on “Medagoguery” in 2012.

Meanwhile, “progressives” aren’t helping by running a ridiculously over-the-top ad showing a Ryan look-alike pitching a wheelchair-bound granny off a cliff. True progressives believe in solving the nation’s core dilemmas, not fetishizing the status quo. Cutting the nation’s debts down to manageable size will require both higher revenues and lower rates of entitlement spending growth.

If Democrats and Republicans can’t produce a fix along these lines, they practically invite the 2012 version of Ross Perot into the race.

Wingnut Watch: Conservatives Savage Romney’s Health Care, Huckabee Sits It Out

Posted on by The Progressive Policy Institute

Presidential politics was again the focus of Wingnut World last week, as conservative opinion-leaders took the opportunity to savage Mitt Romney for his adamant defense of the Massachusetts health reform plan, while mulling over the decision of controversial fellow-traveler Mike Huckabee to stay on the sidelines in 2012.

Romney took the calculated risk of delivering a self-hyped “major speech” on health reform at the University of Michigan, apparently in hopes that a definitive statement on the subject would flush out and eventually diminish conservative anger at him on the subject before Republicans actually begin voting next year. It certainly flushed out negative opinions on the Right. Even before the speech was delivered, Romney took a pounding from the editorial board of the Wall Street Journal, which rightly predicted he would refuse to back down on the wisdom of backing a state reform plan that included an individual insurance purchasing mandate and other features associated with “ObamaCare.” The title of the op-ed says it all: “Obama’s Running Mate.”

The speech itself was a hodge-podge of arguments and rationalizations. Romney alternated between what progressive health wonk Jonathan Cohn called an “inspiring” defense of his reasoning in signing the Massachusetts law, and less-than-compelling claims that the law had no implications for national health policy. The conservative commentariat has long since rejected as inadequate his “federalism defense” that “RomneyCare” was a system designed for Massachusetts only, which is unsurprising since the individual mandate is the specific target of a host of state lawsuits aimed at overturning ObamaCare. Moreover, the proto-candidate’s effort to change the subject to what he would propose as president after a theoretical repeal of national health reform legislation drew virtually no attention, probably because he simply endorsed every conventional conservative gimmick of recent years—a tax credit for the purchase of individual insurance policies, preemption of state regulation of private health insurance via interstate sales, and medical malpractice reform.

Only time will tell if Team Romney is right that hostility to RomneyCare will burn itself out, much as John McCain’s many past heresies against conservative orthodoxy were ultimately forgiven in 2008, leaving Republican elites to focus on his superior “electability.” But Romney’s not off to a very good start. Among his tormenters after the speech were the editors of National Review, who gave him a crucial endorsement in 2008. After rejecting Romney’s federalism argument that an individual mandate was acceptable at the state level, his one-time fans at NR made this brutal assessment of the political thinking behind the speech:

We understand that Romney does not feel that he can flip-flop on what he had touted as his signature accomplishment in office. But if there is one thing we would expect a successful businessman to know, it is when to walk away from a failed investment.

This is in synch with the advice Romney has been receiving from Sen. Jim DeMint of SC, another key 2008 supporter who is vastly more influential today.

Later in the week, conservative chattering class attention was diverted to Romney’s 2008 nemesis, Mike Huckabee, who stage-managed an announcement of non-candidacy on his Fox show Saturday after touching off an orgy of confused speculation about his plans by issuing a variety of mixed signals.

His Saturday show was quite a spectacle. It included a derisive panel discussion of Romney’s health care speech, a bizarre interview with right-wing rocker Ted Nugent—who discussed his proposal to unleash the Navy Seals to “secure” U.S. borders with mega-violence—who then took the stage to perform “Cat Scratch Fever” with Huck on bass, followed by a videotaped benediction from Donald Trump. Near the end of the show, Huckabee faced the cameras and detailed all the reasons he should run for president, before divulging that God had persuaded him otherwise via prayer.

For all the hype and the alleged divine intervention, Huck’s decision was precisely what the conventional wisdom had long predicted, mainly because of his palpable reluctance to give up the Fox show and a new-found personal wealth to go trudging through the pot-luck dinner circuit of Iowa once again. At fifty-five, Huckabee is also young enough to consider running in 2016 or even later.

Assessments of the impact on the 2012 race of Huckabee’s non-candidacy have been mixed, but there’s a general consensus that it provides an opening for other outspoken social conservative in Iowa, while limiting the southerners in the field to the not-very-southern Newt Gingrich and African-American Herman Cain. In both respects, this could be very good news for smart-money favorite Tim Pawlenty, who is by all accounts out-organizing his rivals in Iowa and is clearly acceptable to the Christian Right and can now seriously contemplate a breakthrough in southern states beginning with South Carolina.

Speaking of Tim Pawlenty and South Carolina, a fascinating subplot in the presidential contest has been unfolding after Gov. Nikki Haley demanded that all the candidates side with her in attacks on the National Labor Relations Board, which has at least temporarily stopped the relocation of jobs by Boeing from Washington to SC in the wake of disputes with the machinists union. Haley, it should be noted, has trumped the usual conservative bashing of public-sector unions by arguing that private-sector unionism is incompatible with economic growth (she appointed a “management” labor attorney as her state labor department chief with the explicit mission of keeping unions out of the state to the maximum extent possible). Pawlenty won the race to first kiss Haley’s ring on the Boeing issue, though the other candidates are quickly following. This helps reinforce the impression that Pawlenty’s strategy—ironically, much like Mitt Romney’s in 2008—is to supplement his “moderate-governor-of-a-blue-state” background with an effort to do whatever he is told by conservative activists. He hasn’t turned them down yet.

One Cheer For the Ryan Plan

Posted on by The Progressive Policy Institute

As progressives pounce on Rep. Paul Ryan’s new budget proposal, they should also give the man a little credit. The plan he unveiled today is a daring attempt to define an actual conservative governing philosophy. That’s a big improvement on the reactionary and crotchety anti-government platitudes served up by the Tea Party.

And while progressives will rightly reject Ryan’s overall plan as draconian and unfair, they ought to keep an open mind about some of its most audacious elements, especially his ideas for controlling public health care spending.

For better or worse, the House Budget Committee Chairman has produced a coherent vision for limited government. It would sharply cut domestic spending, returning it to 2008 levels, reduce federal deficits by more than $4 trillion over the next decade, and hold federal spending below 20 percent of gross domestic product. It would further roll back the state and buttress “individual responsibility” by repealing Obamacare.

Ryan embraces President Obama’s Fiscal Commission proposal to cut tax expenditures and use the proceeds to bring the top individual and corporate income tax rate down to 25 percent. But unlike the commission’s approach, which commits a chunk of the savings to deficit reduction, Ryan makes his revenue neutral in obeisance to the Prime Ideological Imperative of today’s GOP: taxes must never, on any account, be raised.

Ryan’s most controversial proposals are also his most intriguing. In what he describes as a continuation of the bipartisan welfare reforms of the 1990s, he would convert Medicaid, which provides health insurance to poor families, into a block grant. Currently its costs are shared by the federal and state governments. As critics like Ezra Klein point out, a block grant is a device to limit federal health spending, shifting costs to states and individuals. It’s true that a block grant alone doesn’t constitute “reform” of Medicaid. But in tandem with reforms in health care delivery, especially efforts to move from fee-for-service to capitated “accountable care organizations,” a block grant could dampen inflationary pressures and protect taxpayers against the automatic and unsustainable growth of public health care spending.

Similarly, Ryan proposes to control Medicare costs by replacing open-ended subsidies with a “premium support” model. Under this approach – essentially a voucher, despite Ryan’s denials – Washington would give Medicare recipients a set amount (varying according to income and health status) they could use to buy insurance from competing private plans. Although Republicans wrongly assume that competition alone will drive down health costs – again, changing incentives to focus medical spending on the value rather than the volume of care is the key — premium support at least puts a governor on the engine of mandatory public health care spending, the main driver of America’s debt crisis.

Some liberals undoubtedly will see it as a plot to destroy Medicare. But recall that a bipartisan Medicare reform commission President Bill Clinton created in 1998 came close to embracing premium support. It’s also been endorsed by leading Democrats, including former CBO chief Alice Rivlin, and is part of the Rivlin-Domenici deficit reduction plan. In fact, as part of a more comprehensive strategy to contain health care costs, a Medicaid block grant and premium support for Medicare could serve a progressive purpose, by preventing rapid entitlement spending growth from squeezing vital public investments in children and families, scientific research, infrastructure and a clean environment.

On Social Security, Rep. Ryan disappointingly punts, proving no bolder than the White House. And as certified fiscal hawk David Walker points out, the Ryan plan does not include substantial savings in defense spending, and raises not a penny in new revenues to help the nation whittle down its enormous debts.

In other words, it’s an unbalanced plan, morally and politically, that gives the Pentagon and the wealthy a pass, and concentrates the pain of deficit reduction on middle and low-income families. The Fiscal Commission’s approach, broadly endorsed by 32 Republican and 32 Democrats Senators – if not yet by Obama himself – is infinitely preferable as a starting point for a serious debate.

Nonetheless, the Ryan plan puts conservatives’ ideological cards on the table and helps clarify the trade offs that must be made to strike a bipartisan deal. And it contains some ideas for ensuring that public budgets aren’t swamped by runaway health costs – ideas that progressives ought not to reject out of hand.

Wingnut Watch: The House Conservative Budget Revolt is (Almost) All About Healthcare

Posted on by The Progressive Policy Institute

In a fairly predictable development, the Republican Party and the conservative movement are showing some signs of division over strategy and tactics, if not much in the way of ideological diversity.  The latest indication of underlying fissures was the loss of 54 House Republicans in the vote to enact a second short-term continuing appropriations resolution.

Many observers will likely attribute those “no” votes to a Tea Party-bred determination to maximize budget cuts and intimidate Democrats, and there’s some truth to that.  But the real story is that much of the angst on the Right about budget and appropriations negotiations isn’t about levels of spending, or even the size of government, but about the ideological hobby-horses embedded in the earlier House-passed appropriations bill (H.R. 1) that the Senate quickly rejected.

Two of the ringleaders of the House conservative revolt on spending, the hardy duo of Michele Bachmann of MN and Steve King of IA, sent out an encyclical explaining their vote in advance.  They swore perpetual opposition to any appropriations measure that did not “defund” last year’s health reform legislation—not just money appropriated to implement it, but mandatory spending (e.g., through Medicaid and Medicare) required by it.  Bachmann and King, then, don’t even think the radical appropriations bill passed earlier by the House went far enough, because it did not accomplish their ideological goals.

Overlapping with the “ObamaCare” obsession on the Right has been the fear that House Republicans won’t follow through with the assault on family planning services and other cultural targets encompassed in the original House-passed appropriations bill.   Cultural conservative groups have been rattling sabers about this from the very beginning of the appropriations struggle, as noted by People for the American Way:

Religious Right anti-choice activists are continuing to draw a line in the sand, and dozens of them – including Tony Perkins, Tom Minnery, Penny Nance, Phyllis Schlafly, Charmaine Yoest, Richard Land, Marjorie Dannenfelser, Andrea Lafferty, and Bob Vander Plaats – have signed on to a new letter to Speaker Boehner and Rep. Eric Cantor to ostensibly thank them for supporting efforts to defund Planned Parenthood and remind them that this issue is “non-negotiable.”

Certainly some GOP pols are taking such threats seriously.  As Politico’s David Catanese explained, the more ambitious among them largely joined the rebels:

A breakdown of Tuesday’s vote on a three-week budget bill to keep the government operating shows that a slew of House members considering promotions to a statewide office in 2012 bucked their parties.

The fascinating floor count reveals the complicated and risky political implications across the country surrounding a vote that temporarily avoids a shutdown.

Nine Republicans currently running or seriously considering Senate or gubernatorial bids bucked House leadership and voted “no.”

They include Missouri Rep. Todd Akin, Utah Rep. Jason Chaffetz, Ohio Rep. Jim Jordan, Florida Rep. Connie Mack, New Mexico Rep. Steve Pearce — all who have been mentioned as potential Senate candidates, as well as Arizona Rep. Jeff Flake, Nevada Rep. Dean Heller and Montana Rep. Denny Rehberg, who have each announced bids for the upper chamber.

Indiana Rep. Mike Pence, also a “no” vote, is likely to run for governor.

This dynamic should be duly noted by those who persistently think Republicans facing tough electoral competition wish to “move to the center” and cooperate with Democrats.  Even if that were the case, Republicans have to survive primary competition, and many now have become convinced by the 2010 results that harsh conservatism awakens a conservative majority in the general electorate.

In any event, as House Republicans, Senate Democrats and the White House struggle towards some sort of compromise on FY 2011 appropriations, it will be important to remember that numbers aren’t everything in this fight.  Many conservative activists view this as an ideal opportunity to grind axes and settle old scores, and a full-fledged revolt could ensue if Republican leaders sacrifice their pet causes in pursuit of an agreement .

Speaking of the views of conservative activists, Public Policy Polling has a new national survey of self-identified Republicans out, and it’s interesting in several respects.

First of all, the poll breaks out Republicans into the 69 percent who are regular viewers of Fox News, and the 31 percent who are not.   The non-Fox viewers are rather notably less conservative, and certainly less supportive of conservative pols, than their Fox-watching counterparts.  For example, Newt Gingrich’s favorable-unfavorable ratio among Fox-watching Republicans is 59-24.  But it’s 31-49 among non-Fox-watching Republicans.  That’s a very big swing.

The poll also shows exactly how big a problem Mitt Romney faces on his health policy problem.  Asked if they would “willing to vote for someone who supported a bill at the state level mandating that voters have health insurance for President,” fully 61 percent said no, while only 17 percent said yes. The very idea of a mandate, even without reference to Obama’s health reform initiative, attracts considerable hostility.  And there’s no way around the fact that Romney has supported and still supports a mandate.

But perhaps the most striking number in the PPP survey is that one-fourth of self-identified Republicans think that the community organizing group ACORN is going to steal the 2012 election for Barack Obama.  ACORN, of course, went out of business nearly a year ago.  It takes a special kind of determination to believe that this never-more-than-marginal group somehow represents a threat to democracy from the grave.

Romney Agonistes

Posted on by The Progressive Policy Institute

It’s not exactly Sophie’s choice, but you have to admit there’s something a little poignant about Mitt Romney’s dilemma. To win the GOP nomination for president, he’s being forced by Tea Party types to distance himself from his greatest public achievement – making Massachusetts the first state in the union to achieve universal health care.

To mask this abject act of self-repudiation, Romney is attacking Obamacare with unwonted ideological zeal. “Obamacare is bad law constitutionally, bad policy and it is bad for America’s families,” he assured a group of New Hampshire Republicans over the weekend. Ladling on the conservative boilerplate, he added, “The federal government isn’t the answer for running health care any more than it’s the answer for running Amtrak or the Post Office.”

The problem for Romney – as his presidential rivals gleefully keep reminding conservatives — is that Romneycare is the policy template for Obamacare. It has the same basic architecture: a menu of competing private health care options (“exchanges” in the federal law, the “Connector” in Massachusetts), public subsidies for those who need them, and an individual mandate requiring all adults to buy medical coverage. The biggest difference between the two approaches, ironically, is that Obamacare is a lot tougher on containing health care costs than the Massachusetts law.

Nationally, about 15 percent of Americans (roughly 45 million) lack basic health care coverage. Thanks to Romneycare, it’s less than three percent in Massachusetts. Romney says he’s proud of that accomplishment, but Massachusetts may have to file a paternity suit to get him to own up to the individual mandate.

Romney’s disingenuous attempts to disavow the obvious similarities between his approach and the President’s aren’t doing much for his reputation for intellectual honesty. Given conservatives’ fanatical loathing for the President’s bill – “Repealing Obamacare is the driving motivation of my life,” avers Minnesota Republican and Tea Party pin-up Rep. Michele Bachmann – Romney evidently feels the bill he hammered out with Massachusetts Democrats poses an existential threat to his candidacy.

So the GOP front-runner is seeking refuge in federalism: “One thing I would never do is to usurp the constitutional power of states with a one-size-fits-all federal takeover,” he said in New Hampshire. Let me get this straight: it’s OK for states to adopt a “socialist” approach to universal coverage, including the heartily despised individual mandate, as long as it’s not foisted on them by Washington?

Maybe Romney will find a way to persuade conservatives to forgive him for governing effectively in a deep-died blue state. But at what cost? Let’s face it, Romney is basically a pragmatic problem-solver, not a right-wing ideologue. Pretending to be otherwise will cast further doubt on his authenticity as a candidate, even if it’s the only way to run in today’s radicalized Republican Party.

Can the Republicans Really Pull Off $100 Billion in Cuts?

Posted on by The Progressive Policy Institute

Well, that was quick. Rather than risk a mutiny, House Republican leaders have agreed to now cut $100 billion from the $1.1 trillion federal budget, rather than their original plan of a mere $40 billion. The question is: Can they pull it off? And if they do, will they come to regret it?

Yesterday, I predicted a coming Republican crack-up based on the premise that the Young Turks of the Tea Party are out to take a stand (gosh darnit!) against big government, but it’s a stand that’s not compatible with the continued electoral success of the Republican Party. And the spending cuts are a perfect example.

Say Republican leaders are indeed serious about  cutting $100 billion. Where will they cut? A new Pew poll found only two federal programs in which more respondents favored a decrease in spending than an increase: Global poverty assistance (45 percent for a decrease, 21 percent for an increase) and Unemployment assistance (28 percent for a decrease, 27 percent for an increase). Neither of these are big ticket items.

The only other area that is close to even is Defense (30 percent for a decrease, 31 percent for an increase). Defense accounts for about half of discretionary spending. But I’m guessing a good percentage of those 31 percent who want to increase the military are solid Republican base voters.

So here’s the hard reality: There is some serious bloodlust going around Washington about cutting the budget, in part because there is some serious bloodlust about cutting the budget in the Tea Party base. But when it comes down to the actual programs that will get cut, the picture changes.

You see, many voters are symbolic conservatives in that they like to say they are for things like small government and fiscal discipline. But when it comes to specific government programs, well, why would you go and cut my well-deserved Medicare benefits when you could be cutting federal salaries or aid to the poor? In fact, with the exception of federal pay and foreign aid or aid to the poor, it’s hard to find a single government program or funding source that any majority would support cutting.

Democrats, of course, know this, and are just waiting for Republicans to go wild with their proposed cuts – especially Senate Democrats, who will play the role of putting the pieces back together.

In the end, there are two likely scenarios. In one, Republican leaders hold to the Tea Party line, but play right into Democrats’ hands, demanding harsh cuts — and in the process they awaken all kinds of anxious voters who are now suddenly worried about protecting the programs that benefit them. In the other, Republicans compromise, but alienate the Tea Party contingent, leading to an internecine battle. Either way, it’s not gonna be a pretty scene for the GOP.

False Start

Posted on by The Progressive Policy Institute

House Republicans start work today on their first big initiative – repealing President Obama’s health care reform. That the new GOP majority has made its top priority a purely symbolic and, let’s face it, vengeful act speaks volumes. Don’t expect the 112th Congress to be a model of legislative decorum and bipartisan comity.

Sobered like everyone else by the Tucson tragedy, Republicans have promised a “thoughtful” debate. But the sophomoric title of their bill – “Repealing the Job-Killing Health Care Law Act” – gives the game away. Even Speaker John Boehner, supposedly the adult among the new class of conservative enfants terribles, can’t refrain from calling the Accountable Care Act “job crushing” and “job destroying” on his website.

In fact, while the new health care law has some flaws, wholesale destruction of jobs is probably not one of them. Although no one can credibly predict the net employment effects of this highly complex reform, it seems likely that adding 30 million new paying customers to health insurance markets would increase demand for medical services.

In any case, House leaders know they can’t undo the President’s health reform in toto, but nonetheless feel they have to give their militant cadres a chance to get animosity to Obamacare out of their system. Once the House passes the repeal bill, probably tomorrow, it will die in the Democratic Senate. Then Republicans will get down to the more serious business of trying to pick apart the Accountable Care Act piecemeal.

In GOP eyes, the ripest targets include the requirement that everyone buy health insurance, a new long-term care insurance program, and taxes on insurance companies. While few Democrats want to undo the party’s historic achievement in finally getting most Americans covered, some will likely join GOP efforts to kill or amend these provisions.

That’s especially true of the individual mandate. It is opposed by a majority of voters, and 20 states are challenging its constitutionality in the courts. Yet, as Republicans well know, it’s also the linchpin of reform. At the heart of Obamacare is a deal in which insurance companies agree to stop cherry picking healthy customers and denying affordable coverage to people with “preexisting conditions” in exchange for adding most of the uninsured to their customer base. The deal unravels without the mandate, because then only the sickest people would take advantage of the new law, driving up premiums for everyone. Democrats tempted to oppose the mandate should keep that in mind.

As House Republicans lash the mandate as an infringement on freedom that should stink in the nostrils of all liberty-loving Americans, a little history is in order. One reason we have an individual mandate is that Republicans have opposed alternative ways to extend coverage for all Americans. They successfully blocked President Clinton’s employer mandate in 1994. And of course, they vehemently object to a national health care system that insures everyone (and taxes them to pay for it) whether they want it or not.

In reality, no truly voluntary health scheme can get around the adverse selection problem. The individual mandate is an imperfect solution, but the right question is, compared to what? The “alternatives” advanced by the GOP last during the great debate over Obamacare did not even pretend to cover most of the uninsured.

As Jill Lawrence reports in Politics Daily, health policy analysts are thinking creatively about different ways to induce people to seek health insurance. But the last thing House Republicans want to do is to improve Obamacare. Their goal is evisceration.

That’s too bad, because the nation could use a serious debate about refinements in the $1 trillion Accountable Care Act. The new long-term health care benefit incorporated in the bill (the Class Act) does need a second look from budget-conscious lawmakers. It’s especially important that the Act’s rather weak cost containment provisions be strengthened. And there will be plenty of adjustments to be made as this enormous bill is implemented between now and 2014, when its main provisions fully kick in.

In short, a party serious about governing would seize the opportunity to make fundamental improvements in the 2010 health reform law. In embracing a rollback strategy instead, House Republicans have gotten off on the wrong foot.

Framing the Fiscal Battle

Posted on by The Progressive Policy Institute

Republicans are convinced they have a mandate to cut government down to size. That’s hard to do when you only control one House of Congress, and harder still when your fiscal plans are fraught with internal contradictions.

It’s not even clear, for instance, what Republicans really want to accomplish. Senator-elect Kelly Ayotte, delivering the GOP’s weekly address Jan. 1, said that “Job one is to stop wasteful Washington spending.” At the same time, she said that “Congress must get serious about meaningful debt reduction.”

So which is it—cut public spending or cut public deficits? That’s a distinction with a difference, especially to investors worried about the basic soundness of the U.S. economy. To them, deficits are simply the arithmetic result of government spending too much, taxing too little or both, as is clearly the case today. Last month, Republicans struck a deal with President Obama on a tax cut package that will add $950 billion to the nation’s debts. Key GOP House leaders have made it clear they will oppose any tax hikes to solve the budget crisis, which they pretend is purely a matter of overspending.

Ayotte seemed closer to the mark in saying Republicans come to Washington to “make government smaller, not bigger.” In practice, however, that ideological goal may not be compatible with what the public seems to want. Independent voters especially have focused on narrowing the enormous deficits that force America to get deeper and deeper in hock to Chinese and other foreign lenders.

And if Republicans are serious about taking taxes off the table, they’ll have to make even deeper cuts in public spending—including Social Security, Medicare and Medicaid—to close our yawning budget gaps. It will be interesting to see which GOP bravos are willing to walk that plank. Thus far, House Republicans are proposing only cosmetic cuts, like trimming the House budget by $25 million. It’s a good idea for the House to discipline its own spending, but in a $3 trillion budget, that’s chump change.

Meanwhile, the GOP is planning to vitiate budget caps imposed by the previous Congress. Under the caps, any new spending or tax cuts would have to be offset by equivalent spending cuts or tax hikes. Republicans would eliminate the later requirement, so that tax cuts too would trigger deeper spending cuts. This of course is a formula for a deepening fiscal crisis and intensifying polarization between the two parties. And House Republicans will take a run at repealing Obamacare, which would certainly reduce federal spending but actually increase future budget gaps. In any event, it’s not happening

Some of the more fervid Tea Party types are even threatening to vote against raising the debt ceiling in March if Democrats don’t agree to new spending cuts. If they are serious, this could mean America would default on its debts for the first time in history. It would be, as Obama’s chief economic adviser, Austan Goolsbee, said yesterday, an act of political insanity, the equivalent of taking yourself hostage and threatening to shoot.

Finally, there’s the crucial question of timing. Incoming House Budget Committee Chairman Paul Ryan reportedly is planning a package or rescissions aimed at cutting about 21 percent from 2011 spending Congress approved last year. The aim is to return domestic spending to its 2008 level, before Obama took office.

The risk is that withdrawing a significant chunk of fiscal stimulus could abort an economic recovery that at last seems to be getting traction. There’s no question that Americans want to restore fiscal discipline in Washington, but what they want even more is for the economy to grow and unemployment to start falling.

Goolsbee hinted that Obama’s next budget also will contain some spending cuts. But the GOP’s ideological zeal to cut government gives Obama an opportunity to offer a more pragmatic approach that puts jobs growth first, while taking balanced and gradual steps to put the federal government on a fiscally sustainable course.

Progressives do need to get serious about getting federal spending under control. But by framing the coming fiscal battles as a choice between a more robust economy and a smaller government, they can speak directly to Americans’ number one priority and thereby regain the political initiative.

Economy is the Problem, Not Obama

Posted on by The Progressive Policy Institute

The punditocracy apparently cannot resist the tendency to personalize political trends and developments.  It has turned the midterm election into a political melodrama starring Barack Obama as the redeemer-President who inspired such soaring hopes in 2008, yet unaccountably failed to transform America in his first two years.

The saga of Obama agonistes may be more interesting, but public angst about the economy is what is really driving today’s election.

Sure, the president’s approval ratings are down (though not as low as Ronald Reagan’s or Bill Clinton’s at the same juncture). The public believes that the administration’s policies have failed to revive the economy, even while plunging the nation deeper in debt and, in the case of health care, expanding government’s reach.

But if unemployment were, at say, seven percent and trending downward, voters probably would see things in a more optimistic light. What’s oppressing the electorate is not the specter of big government, it’s the hangover from the 2007-2009 economic crisis, the worst to hit America since the Great Depression.

It’s not just lingering unemployment (9.6 percent). Americans lost roughly $11 trillion in net worth in those years, including about $4 trillion in home equity.  Though stock prices rebounded somewhat, foreclosures continue apace and sales of new homes are at a 50-year low. Hammered by this “negative wealth effect,” U.S. households are shedding debt instead of spending, which depresses economic demand.

Our big banks still carry hundreds of billions of troubled loans on their books, and small businesses still have difficulty getting loans. U.S. businesses are keeping payrolls lean to cut costs, while sitting on nearly $2 trillion in retained earnings.

The federal government, meanwhile, seems to have exhausted the usual countercyclical remedies. With the national debt swelling rapidly, there’s little appetite in Washington for another dollop of stimulative spending (and will be even less if Republicans take over the House). The Federal Reserve says it’s ready for another round of “quantitative easing” – aka, printing money – but interest rates are already near zero.

The truth is, an economic downturn triggered by a financial crisis is much deeper and prolonged than an ordinary recession. No wonder voters are in a sour mood. They are lashing out at the party in power because the real culprits – the Republicans who were asleep at the switch as the housing and financial bubbles formed – aren’t around anymore to catch the blame. That’s not fair, but politics seldom is.

And while conventional wisdom pillories Obama for pushing health care or financial regulatory reform rather than spending every waking hour focusing obsessively on jobs, it’s not clear that would have made much of a difference.

The supposedly awesome powers of the presidency don’t include any magic levers for creating private sector jobs or dramatically speeding up recovery.  In 1982, unemployment was even higher – 10.4 percent – on Election Day. Rather than promise instant relief, Reagan said the pain was necessary to wring inflation out of the economy and lay a stronger foundation for future growth.  He urged Americans to “stay the course” and ride out the downturn.  Republicans lost 26 House seats that year, but the economy eventually sprang back to life and propelled Reagan to a thumping reelection.

So Obama is right to stay calm, rather than running around the country trying to do something that doesn’t come naturally to him – emoting and feeling peoples’ pain. Instead, he should be crafting a new and more compelling economic narrative focused on unleashing American entrepreneurship and innovation.  Forget Paul Krugman; Obama’s challenge is not to press for more stimulus or whine about economic inequality or posture as an anti-business populist, it’s to propose structural changes that will assure a broader, more robust economic recovery. These include an infrastructure bank, a new clean energy roadmap, pro-growth regulatory and tax reform (including corporate taxes), and a credible plan to restore fiscal stability once the economy regains strength.

Such a plan also is the best way to assure Democrats’ political recovery from the drubbing they will take today.

Government-Run Healthcare

Posted on by The Progressive Policy Institute

This post is the third in a series about the Progressive Military

The wounds from the healthcare debate in America are still fresh.  There are many in the GOP Congressional minority that would see the healthcare bill repealed, and there has been much scare-mongering about a government-run healthcare system – that patients will be lost in the bureaucracy, they’ll lose control over their health decisions, the quality of care will suffer, and the costs will be tremendous.

If the Veterans Administration healthcare system is an example, those fears are overblown. The military’s government-run healthcare system is not just good in the field, it’s good at home as well and shows that government can do healthcare.

I was a customer of 100% government-run healthcare for eight years.  I visited the emergency room, received all my shots and checkups, got my wisdom teeth pulled, and received my prescribed medication all without being killed or turned away by some bureaucrat.  I received the same level of care everywhere, whether in Missouri, Washington, Germany, or Iraq.  And not just me, my family as well.  I’m not alone.  There are over 1.4 million Americans on active duty in the U.S. military.  If you include their family members, retirees, and those receiving Veterans Administration benefits, the number swells to over 9 million Americans already actively receiving government healthcare.

Active duty troops and their families use the 532 active military medical facilities nationwide and enroll in TRICARE, which is the military’s government-run healthcare system.  Reservists called to active duty over 30 days are covered as well.  For retirees, TRICARE fills the gap for what Medicare doesn’t cover.  CHAMPVA gives the same coverage to family members of disabled or deceased service members no longer serving and gives them access to Veterans Administration hospitals.  The Veterans Administration system (VA) coverage has changed from serving only troops with service-connected disabilities to serving all veterans based upon need.  There are over 24 million Americans eligible for VA medical benefits at over 1000 facilities nationwide, 9 million of which are over 65.

It’s a well-known fact that the traumas caused on the battlefields in Iraq and Afghanistan lead, by necessity, to innovations in trauma care.  As an Iraq war veteran, I saw this in action personally with our combat medics, especially when they patched me up after suicide car-bomber hit my vehicle head-on.   The military health system also develops medical technology, techniques, and procedures that can be used in the civilian world.

The Army’s National Trauma Institute, in cooperation with several universities, collects data from wounded soldiers to identify what can be done to improve their first-response treatment and will help not only on the battlefield, but in civilian hospitals as well.  The military is making an exemplary push to digitize medical records in order to make them easier to search through and transfer between locations, not to mention saving money.  This idea was picked up in the new healthcare legislation.

The uniformity of the military medical system also pays dividends in health safety against epidemics and pandemics, as exhibited by the fast and nearly-comprehensive immunization rate of soldiers against H1N1.  Achieving such rates quickly among the civilian population would be improbable.  I and many other soldiers are also vaccinated against diseases many in the civilian population are not anymore, namely small pox and anthrax.  Our troops also get the flu shot at the beginning of every flu season.  The military was the first to test the effectiveness of flu nasal-spray vaccinations compared with shots to reduce the use and cost of needles.  This is done not just for their health, but also to save the system from having to pay more money for sick sailors and airmen later.

The military is devoted to preventing disease, illness, and injury not only because it they take troops off the field, but they also cost the system money.  The U.S. Army Public Health Command and similar organizations in the other services are devoted exclusively to this mission.

If you contrast a system that has an interest in seeing that you to stay healthy because it saves them (the government) money with a system that makes money when you are sick, (insurance companies, HMOs) one can see that a pinch of prevention is worth a pound of cure.  A similar government system implemented nationwide would save people money, improve their health, and save lives.  If universal government-run healthcare is good enough for the troops, it’s good enough for us all.

It’s true the system is not perfect. There have been scandals surrounding military healthcare, such as the living conditions for recovering troops at Walter Reed Medical Center and veterans groups (some of which I am a member of) constantly push for improvements to the VA system.  But in general the quality of military healthcare is very good, and proof that government-run healthcare can indeed work.

Photo credit: US Army Africa