As featured on p. 218 of "Bloggers on the Bus," under the name "a MyDD blogger."

Saturday, September 19, 2009

Obama Gets Talks With Israel And Palestine

After George Mitchell left the Middle East without making headway on a deal between Israel and Palestine, nobody expected this report the next day:

Surprise announcement from the White House: President Obama will host a trilateral meeting on Tuesday with Israeli Prime Minister Benjamin Netanyahu and Palestinian Authority President Mahmoud Abbas. This meeting will be preceded by bilateral meetings between the president and the two leaders.

"These meetings will continue the efforts of President Obama, Secretary of State Hillary Clinton, and Special Envoy George Mitchell to lay the groundwork for the relaunch of negotiations, and to create a positive context for those negotiations so that they can succeed."

The meeting comes in the context of the Goldstone report alleging war crimes committed by both sides but particularly Israel in the Gaza war. That cannot go unmentioned in these talks, although the White House is signaling that they prefer to look forward and not backward. At least they're consistent.

We believe this report should be discussed within the Human Rights Council, and we look forward to participating in that discussion. We will approach discussions on the report keeping in mind the underlying causes of the tragic events in Gaza earlier this year – the lack of a peace agreement between the Israelis and the Palestinians, and the attacks by Hamas against innocent civilians.

Our focus right now, as I’ve said before, is to get all sides to take steps to re-launch Israeli-Palestinian negotiations so we can end this conflict and the humanitarian suffering it has caused. We will move forward in discussions of the report while keeping that overriding goal at the forefront. We hope efforts related to the Middle East at the Human Rights Council and other international bodies will look to the future and how we can support the goal of a two-state solution.

The Goldstone report does complicate efforts and it's useless to ignore them. It provides a catalyst for the same grievances, which I'm sure both sides will use. It's the last thing anyone needed. In this context, getting a trilateral meeting at all is major progress.

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"Respects The Corporate Form"

I missed this the other day.

In her maiden Supreme Court appearance last week, Justice Sonia Sotomayor made a provocative comment that probed the foundations of corporate law.

During arguments in a campaign-finance case, the court's majority conservatives seemed persuaded that corporations have broad First Amendment rights and that recent precedents upholding limits on corporate political spending should be overruled.

But Justice Sotomayor suggested the majority might have it all wrong -- and that instead the court should reconsider the 19th century rulings that first afforded corporations the same rights flesh-and-blood people have.

Judges "created corporations as persons, gave birth to corporations as persons," she said. "There could be an argument made that that was the court's error to start with...[imbuing] a creature of state law with human characteristics."

After a confirmation process that revealed little of her legal philosophy, the remark offered an early hint of the direction Justice Sotomayor might want to take the court.

"Progressives who think that corporations already have an unduly large influence on policy in the United States have to feel reassured that this was one of [her] first questions," said Douglas Kendall, president of the liberal Constitutional Accountability Center.

She may want to take whatever direction she wants now, but she's outvoted at the moment. Still, it is possible that the latest Supreme Court Justice understands that a corporate entity given human characteristics for purposes of law but out of the reach of legal culpability for so many of its actions represents a lack of fairness and twisted logic.

This whine is priceless:

"I don't want to draw too much from one comment," says Todd Gaziano, director of the Center for Legal and Judicial Studies at the conservative Heritage Foundation. But it "doesn't give me a lot of confidence that she respects the corporate form and the type of rights that it should be afforded."

Right, um, there is no corporate form. There are only corporations who have convinced enough conservative jurists over the years that they can claim personhood to protect their own wealth or strike down regulations but not when their companies break the law and those harmed seek accountability.

As I said, not the biggest or most meaningful shift now, but something to keep in mind as Sotomayor's career on the bench continues. The biggest area in which the Court has moved to the right in recent years is on the subject of corporate law, and someday we'll have to do something about that. Maybe Sotomayor can be the beginning of a new trend.

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The Not-About-Torture Torture Investigation

I hope that the self-serving call from past CIA Directors that members of the organization for which they served shouldn't be investigated for murder isn't the motivating factor for this odd article from anonymous DoJ sources assuring everyone that their investigation into CIA interrogation practices are limited:

The Justice Department's review of detainee abuse by the CIA will focus on a very small number of cases, including at least one in which an Afghan prisoner died at a secret facility, according to two sources briefed on the matter. . . .

Among the cases under review will be the death seven years ago of a young Afghan man, who was beaten and chained to a concrete floor without blankets, according to the sources. The man died in the cold night at a secret CIA facility north of Kabul, known as the Salt Pit. . . .

Although earlier reports indicated that [prosecutor John] Durham would look into 10 cases, a source said recently the number is much smaller. . . . A senior official who took part in the review confirmed that of two dozen referrals, the Salt Pit episode was one of two or three cases close to being considered for criminal indictment. . . .

Two other detainee cases were among those that drew significant law enforcement attention: the death by suffocation of Iraqi Gen. Abed Hamed Mowhoush in November 2003, after which an Army officer was convicted; and the death the same month of Manadel al-Jamadi at Abu Ghraib prison, in the custody of the CIA, where he was placed after being beaten by Navy SEALs.

While I agree that murder is a serious offense, the investigation was sold as a torture investigation, looking into serious violations of international conventions and federal statute. This is apparently even too much for these CIA Directors or many others in the establishment. But it doesn't keep with the mandate of an Attorney General whose country is a signatory to a convention that demands investigation and prosecution of torture. If true, this would be disturbing.

Of course, nobody should be prosecuted for torture or anything else because they've had it too tough already:

Of course, when all is said and done, there is little doubt that some CIA detainees were tortured. This is a stain on our nation's honor that should never be repeated. But the responsibility was so widely diffused, across such a large number of honorably motivated officials who tried (and sometimes failed) to stay within the law, that it makes no sense to seek to atone for the nation's sins by singling out individuals for bar discipline or other punishment.

This is especially true when those individuals have already suffered greatly from being trashed as "war criminals," picketed at public appearances, stalked by grandstanding Spanish judges, and otherwise harassed across the country and around the globe.

True, being picketed and called names is a heavy burden tantamount to imprisonment. I don't know how John Yoo and Jay Bybee go on in their lifetime-tenured positions.

What's more, these CIA Directors are actually asking for the President to illegally involve himself in the independent work of the Justice Department, a la Richard Nixon and the Saturday Night Massacre.

But what's most notable about this letter is that it is not addressed to the individual charged with making decisions about whether an individual should be prosecuted: namely, the Attorney General of the U.S. Instead, it is addressed to the President himself, and they "urge [him] to exercise [his] authority to reverse Attorney General's August 24 decision to re-open the criminal investigation of CIA interrogations." What so-called "authority" are they talking about?

We've now reached a point where former officials of the American government think the President of the United States should squelch murder investigations. Which probably means that they advised this to Presidents during their tenure.

Wait, look! ACORN!

If this Justice Department doesn't look into this, eventually someone else will. When you torture, main and murder people from all over the world, eventually the repercussions will trickle out. Putting a lid on it would be like putting one on boiling water.

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Not Quite

To be precise, I don't think Billo is endorsing the public option in this clip. In fact, he up and says that the public option "is done... it's not going to happen" right at the beginning. What O'Reilly is actually endorsing here is the exchanges, and the coverage subsidies that would allow people to buy insurance on the exchange. He's endorsing the architecture of the Obama health care plan. On the right that is seen as a government takeover, so if you judge it by their take, he endorsed a public option. But he didn't.

I'll take the endorsement of the exchanges, however. And I'm not surprised. It's fundamentally a Republican, free-market idea.

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Friday, September 18, 2009

Rockefeller And Wyden: Senate Finance Holdouts

Ezra Klein had two very good interviews today, with Sen. Jay Rockefeller and Sen. Ron Wyden, detailing their concerns with the Senate Finance bill and how they hope to change it. I know that people are getting bent out of shape about the emphasis on the Finance Committee bill when four other committees have jurisdiction, but right now, it's the only committee left to report something out, Wyden and Rockefeller sit on the committee so they represent the best hope for improving that version, and let's be honest, the White House is certainly using Baucus' bill as a framework, with the hope to at least just get it out of there. So it's important to take a look at their concerns.

Wyden, who like Rockefeller spent time at the White House this week, emphasized affordability concerns, like most other Democrats have. But Wyden also wants his proposal for Free Choice in the bill, allowing anyone to buy insurance off the exchange, not just those who don't get coverage through an employer. I thought he answered the concerns about the "end of the employer-based system" (you say that like it's a bad thing) pretty well:

Let me ask you about some of the concerns people have on this bill. One is that it will hasten the decline of the employer-based system. Young workers will leave quickly for cheap, catastrophic plans on the exchange. Workplaces will be left with older, sicker workers, and they won’t be able to continue offering health-care insurance.

That just doesn’t make sense, either from an economic standpoint or the nature of American life. First, companies will continue to see good benefits as a recruitment tool. It remains a primary way to attract young, talented workers. Second, as we look at this in terms of who would leave, I don’t get the sense that young, healthy workers will be the first to traipse off. Are they really going to be the ones to fill out the forms and contact the exchanges and all that? I think the most likely to go shopping are middle-class people who are pinched right now. We’ve also put into the bill safety valves for any worst-case scenario: after-the-fact risk adjustment that will review who stayed and who left and make adjustments based on that fact.

If what we’re saying is that we can’t find a sweet spot between blowing everything up in 15 minutes and telling people that you can’t improve your situation and have more choices, we’re not doing our job. And I think this is that sweet spot.

Wyden also spoke strongly against the "free rider" position, and said he is working with the Center for Budget and Policy Priorities to improve it.

Rockefeller, who has become the stand-in for liberals on health care in the Senate, has a whole different set of concerns, while still keying on affordability.

There are a number of big things. The Children's Health Insurance Program is put into the exchange. That's like putting it into a farmer's market. It loses its defined benefits. And children need defined benefits.

Obviously the public option. I feel very strongly about that as a discipline on the private health insurance market. The public health insurance option doesn't have to make a dime. It doesn't have to make Wall Street happy or shareholders happy. It just has to sell a product at cost. That will put pressure on private insurance companies to bring down their premiums. What's the alternative? My staff has done extensive research on co-ops and everyone says they can't do health insurance. The best health care co-op exists in the state of Washington, and both of Washington's senators are adamantly for a public option. That ought to tell you something.

Another issue is that 46 percent of the American people have health insurance from fairly large companies that self-insure. And they're not included in the regulations. They have to have protection from preexisting conditions and lifetime caps and rescissions too. People hear that the regulations in the bill don't apply to these companies and they think it's not possible. But it's true. And it's almost half of the insurance market!

Another piece is the MedPAC proposal. if you really want to be honest about it, eight to 10 percent of the members of Congress understand health care. At maximum. I chaired the intelligence committee, and health care makes it look like riding on a tricycle it's so complicated. So what you have is lobbyists picking on congressmen who don't know health-care reform, and they say, you know what, you could get a lot more jobs in your state if you only put more money into oxygen or a certain medical device. If you're going to do Medicare right, understanding that the trust fund is going to go downhill in 2016, you can't have Congress making these decisions. You need professionals.

My understanding is that MedPAC is in the Baucus bill, but I could be wrong. The self-insurance thing is something I discovered only recently. Large conglomerates like Disney and GE run their own insurance companies, essentially, contracting out to a health insurer to do the billing, at a fixed rate. So the profit that an insurance company could make off of insuring the employees of a large company is actually going to that large company themselves. They are running a small profit center off of their own employees. And that seems insane to me. So Rockefeller is right to bring this up.

Rockefeller did offer this bit of optimism, though.

What's the mood in the Democratic Caucus like right now?

There's very hot discussion. At the second-to-last meeting with Baucus, Democrats really let loose at Baucus. When you're getting close to the time you need to vote, public policy takes on a new type of intensity. Baucus, to his credit, had another meeting last night, and it was the best meeting we've ever had with the chairman. He told me they'd make sure CHIP is preserved. He knows he needs our votes. That's why I said I wouldn't vote for the bill. Democrats need leverage.

Rockefeller added that Olympia Snowe is getting hammered by Republican leadership for her dalliances with supporting the bill. Maybe that's why she laid down a subtle hint that "the party left me" and maybe she'd be better off elsewhere.

The fact that some Democrats are getting louder about what they would and would not accept is extremely healthy for this process. Maria Cantwell said yesterday that she wouldn't vote for a bill without a public option, and like Rockefeller and Wyden she's on the Finance Committee. Ultimately, progressives should encourage those who want to bring the bill back to the center of the Democratic caucus and away from being a Republican-lite bill.

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Ryan Grim has been all over the story of Big Pharma's deal with the White House and Max Baucus, and despite the denials from everyone, Grim notes that the language in Baucus' draft matches the terms of the deal.

In August, the Huffington Post published a memo that outlined exactly what each side was going to do for the other. And Big Pharma was getting a lot more than they were giving up.

Pharmaceutical Research and Manufacturers of America senior vice president Ken Johnson said that the outline "is simply not accurate." White House spokesman Reid Cherlin concurred: "This memo isn't accurate and does not reflect the agreement with the drug companies."

But now that the bill is out, let's fact check those denials.

1) The memo said that PhRMA would "[a]gree to increase of Medicaid rebate from 15.1 - 23.1%".
The finance bill, on page 56, increases the Medicaid rebates for patented drugs from 15.1 to 23.1 percent.

2) The memo said that the parties had agreed "to get FOBs done." FOBs refer to follow-on biologic drugs - vaccines and other drugs made from living cells that are the fastest growing field of pharmaceutical research.

PhRMA wants extended patent protections from generic biologic drug makers. A finance committee aide said that the Baucus bill doesn't address biologics, leaving that to the Senate health committee's bill. The health committee bill gives drug makers 12 years of market exclusivity -- five more than the White House proposed -- and allows a 12-year extension with a minor tweak to the drug. The protection is worth billions to drug makers and is entirely unnecessary to encourage research, according to the Federal Trade Commission, which recommended zero years of market exclusivity.

"Already biologics take up at least 30% of Medicare part B spending and this proposal has been rolled into the overall health care reform bill, which is meant create cost savings, which it will not do," Jane Andrews, a medical student at the Johns Hopkins University and a member of Universities Allied for Essential Medicines, wrote in an e-mail to HuffPost. "It's simply a giveaway to BIO/PhRMA from Congress supported by the American Association of Universities."

Check (more or less.)

There are more, just go read. Baucus actually doubled the fee on the industry, from $1.2 billion a year to $2.3 billion, but the rest pretty much matches up. No importation of drugs from Canada, no negotiating with drugmakers for cheaper prices on prescription drugs, no shift of drugs into Medicare Part D.

There's no denying that this deal has been made, and the consequences are also clear. Right now, Democrats are worried about the coverage subsidies in the bill, believing they don't make health care affordable enough. One reason for the constraint is that these deals artificially limit the amount of money that can be wrung from inside the system. Because it's an article of faith that you cannot say the word "taxes" in Washington, as a result poor people who can't afford health insurance may pay the price for deals with Big Pharma, a kind of tax on the lower classes.

I hope avoiding the Harry and Louise ads were worth it. Fortunately, no groups on the right managed to make any headway attacking the overall plan.

I'm sorry, "death panels"? Never heard of it.

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Tom Campbell's Kind-Of-Interesting But Just-A-Mask-For-Friedmanism Health Care Proposal

Tom Campbell, among all the Republicans in the gubernatorial field, has at least been willing to lay out detailed plans for how he would fix the state. Typically this manifests itself as the same old Hooverism. But his health care plan at least gets points for creativity.

GOP gubernatorial hopeful Tom Campbell released a unique health care proposal Thursday that would redistribute $42 billion in federal and state funds already spent on health care in California to buy private health coverage for everyone in the state who's "involuntarily" uninsured.

Under the former congressman's plan, the funds would cover an estimated 2 million such people in addition to the 7.6 million already receiving public health coverage under the state Medi-Cal and Healthy Families programs.

"The astounding conclusion," Campbell writes in his proposal, "is that, using only the money already being spent by the federal and state governments for health care in California, we could buy free market health insurance currently available and cover all involuntarily uninsured in California, and still have more than $700 per person left over!"

Instead of dedicating funds to services for the poor or children, Campbell would split the state into regions, and allow insurers to bid against one another to cover everyone in that region who earned below a certain level, along with everyone denied coverage for a pre-existing condition. Insurers wouldn't bid on price, but quality of coverage - the money would be fixed, and insurers would bid against each other based on what they would cover and at what rate.

I'm wondering why any insurer would bid for this right. They deny people with pre-existing conditions because they are more likely to use health care, increasing their medical loss ratio. And the poor are more likely to need health care treatment based on lifestyle and environment. And the kicker to Campbell's plan is, if nobody bids, the status quo would remain in place for that geographical area. So basically, Campbell is touting a big plan that would do... nothing. And he wouldn't embark on it if the federal government enacts their own plan.


Really, that interesting, if impossible (try getting a federal waiver to set it up and face Congressmembers with interests in protecting SCHIP and Medicaid), proposal is a cover for Campbell's apparent agenda - to permit the interstate sale of insurance and to bring up the canard of tort reform as a panacea. Medical malpractice is an insignificant percentage of total health care costs and states which have embarked on major medmal reform, like Texas, have seen no change in health inflation. As for the interstate sale of insurance, you can do it now - only you're responsible to comply with the laws of the state in which you sell. This proposal would allow insurers to only be responsible to the regulations of the state where they are based. Tom Campbell wants to do for the health insurance industry what this kind of proposal did for the credit card industry - send all insurance companies to a small state with no regulation, and gut all state-based regulation in the process, leaving California's insurance customers at the mercy of the laws of South Dakota or Mississippi.

To his credit, Campbell wants to remove the anti-trust exemption on the insurance industry. But really, that's a means to an end here. However, there is a point of consensus between conservatives and liberals to do away with the McCarran-Ferguson Act, that offers that anti-trust exemption. Bills to this effect were just introduced in Congress. If Campbell wants to talk them up to the California GOP delegation, go ahead.

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Keep An Eye On This

As much of the content of the traditional media rankles many of us, the editorial decisions should as well. Dozens of potentially game-changing stories go unreported while the Umbrage Brigade on cable talk about what Joe Wilson said about Jimmy Carter or whether Michelle Obama is overstepping her boundaries by talking about health care (I caught that one today). Meanwhile, the biggest financial crisis in 70 years just happened, and even people who consider themselves well-informed don't understand the entire story. The Congress enacted the Financial Crisis Inquiry Commission (some are calling it the new Pecora Commission, given its similarity to the Depression-era commission of that name led by chief investigator Ferdinand Pecora), headed by former California Treasurer and gubernatorial candidate Phil Angelides, and they held their first public session yesterday. The meeting was introductory in nature, but Tim Fernholz came away with a few thoughts.

• Given the membership [PDF], I worried that the committee would be beset with partisan bickering and/or clashing ideologies, like the Congressional Oversight Panel. The COP, appointed by Congress to provide oversight of the bank rescues, is regularly undermined by dissents from Representative Jeb Hensarling, whose deeply conservative economic views preclude almost any reasonable discussion about regulation and finance. But though some tensions showed, I though the conservative New Pecora commissioners seemed open-minded; former Bush administration economic official Keith Hennessey and McCain economic adviser Douglas Holtz-Eakin made productive comments, though Peter Wallison, a more doctrinaire conservative than either of the other two, seemed to have his mind made up about the financial crisis, essentially blaming Fannie Mae and Freddie Mac right from the outset. He may be the poison pill on this committee.

• Most surprising was Vice-Chairman Bill Thomas, a former Republican Congressman and Committee Chair. Thomas seemed to agree broadly with Chairman Phil Angelides goals of non-partisan fact-finding, and went out of his way to compliment the views of every member of the commission. He even singled out Commissioner Brooksley Born, who strongly advocated regulating derivatives during the Clinton administration, telling her that the crisis would have been much more manageable had her advice been acted on. Later, asked by a reporter if the issue of regulating markets would divide the committee, Thomas stepped forward to say that he thought regulatory reform was inevitable and that making it work correctly was critical. Though it is easy for him to say that now, Thomas' early impressions are much less doctrinaire than had been anticipated.

• One concern: There is no liberal economist on the committee, while there are three conservative economic thinkers in Hennessey, Holtz-Eakin and Wallison. The Democratic appointees have regulatory, legal, political and private business experience, but no specific economic expertise.

• Early in the week, the New Pecora Commission announced the appointment of Thomas Greene as its Executive Director. Greene, a lawyer, has done complex investigatory work both in Washington, D.C. and in California, coordinating anti-trust and securities investigations in a variety of venues. The appointment is critical; recall that the Pecora Commission was named after it's executive director, Ferdinand Pecora, not the members of congress who constituted the actual committee. And more talent is coming: As Greene hung around after the hearing, several different people, including several lawyers, approached him about working for the commission.

The FCIC will hold hearings and issue regular reports between now and December 2010. This needs to be watched. We all have a sense that the banksters turned Wall Street into their private gambling hall and took huge risks, secure in the knowledge that they could get the government to bail them out if things went awry. Currently there have been no prosecutions of the major players in the scandal, no accountability to any degree, and a year later, Wall Street appears to be going back to their same old ways, entirely at our expense. Michael Hirsh believes that this commission offers one last chance to make the record public, and use it as a lever to change the system. He's not optimistic, however. The ideological shadings of the commission and Angelides' wariness of using the subpoena power he's been given worry him (I actually think Angelides can be a lot tougher than Hirsh or anyone gives him credit for). But he offers a glimmer of hope.

Still, Angelides and his team may yet surprise us. It's happened before. The history of "blue ribbon" commissions like this one is rich and storied in Washington; one of them, in 1942, was led by an obscure senator from Missouri who was also seen as a political hack at the time. His name was Harry Truman, and he turned his commission on defense malfeasance into a ticket into the White House and the history books [...]

What we do need, however, is a parade of witnesses who will provide what's been missing so far in this crisis—a prominent outlet for public outrage. In the last nine months, the Obama administration and the grandees in Congress have been designing solutions without much input from the outside, often using experts from Wall Street (especially "Government Sachs"). It's pretty much been a closed system. Even Paul Volcker, considered perhaps the greatest Federal Reserve chairman in history (now that the Alan Greenspan era looks much worse retrospectively), has been all but ignored by the president he is advising. Volcker has been making a series of speeches around the country calling for sensible changes to the structure of Wall Street that the administration and Congress are not yet considering. He wants federally guaranteed bank deposits to be cordoned off from heavy risk-taking and proprietary trading. Volcker wants banks, in other words, to be barred from behaving like hedge funds. "Extensive participation in the impersonal, transaction-oriented capital market does not seem to me an intrinsic part of commercial banking," Volcker told a corporate group Wednesday in Los Angeles. He should be invited to Washington to say the same thing.

I can remember a time when commissions like these, from the Pecora Commission to the Truman Commission to Watergate to Iran-Contra to even the 9-11 Commission, were major public news, followed intensely by the media. You'd think that a similarly designed commission tasked with uncovering the greatest loss of wealth in world history would generated more than a few words on the cable news crawl. But we have to make this important, too. The FCIC may fall into partisan bickering, or it may create some powerful narratives about the criminal enterprise on Wall Street. But none of it will matter if nobody pays any attention.

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The 1979 Iranian Revolution Started In 1978

That's all you have to remember when reading about another sparking of protests in Tehran.

Tens of thousands of green-clad protesters chanted and carried banners through the heart of Tehran and other Iranian cities on Friday, defying tear gas and truncheons as they turned large swaths of a government-organized anti-Israel march into the largest opposition rally in two months [...]

Conservatives had warned against using the annual pro-Palestinian march as an excuse for renewed protests against Mr. Ahmadinejad, whose election plunged Iran into its worst internal crisis in three decades.

But the protesters turned out anyway, often walking alongside larger groups of state-sanctioned marchers bearing huge banners denouncing Israel. The protesters even flouted the day’s official message, chanting “No to Gaza and Lebanon, my life is for Iran.” And when government men shouted “death to Israel” through loudspeakers, protesters derisively chanted “death to Russia” in response. Many opposition supporters are angry about Russia’s quick acceptance of Mr. Ahmadinejad’s electoral victory.

Opposition leaders Mir Hussein Moussavi, Mehdi Karroubi, and Muhammad Khatami joined the crowds in Tehran, drawing appreciative cheers and chants of support. Later, Basij militia members tried to attack Mr. Khatami and Mr. Karroubi, but defenders fought them back, opposition Web sites reported [...]

There were reports of similar demonstrations and clashes in other cities Friday, including Isfahan, Tabriz, Yazd, and Shiraz, where protesters skirmished with Basij militia men, and freed a group of fellow protesters who were being arrested, opposition Web sites reported.

Meanwhile, Ahmadinejad called the Holocaust a lie, which is basically the closer in his comedy set. It's a bit upsetting that the White House even bothered to respond to this, as Iran is being squeezed internally to support a less belligerent approach to foreign policy. The October negotiations with the West on the nuclear question and other issues have been called a window of opportunity by the top Iranian envoy. Clearly the cracks in the ruling regime's legitimacy is pushing them to accept something broadly agreeable to their increasingly alienated public. I don't know if it will work. But that's driving the new approach. Ahmadinejad's a pleasant comic, but he's the opening act, not the headliner.

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Affordability Changes On The Way?

A bunch of Senate moderates praised Max Baucus for his health care bill yesterday, leading many to believe that Baucus-care wasn't totally dead. But there was an important caveat - the letter says, "While we each have outstanding concerns we wish to see addressed, Senator Baucus has taken an important and critical step forward with this legislation." It looks like the major concern is affordability. Olympia Snowe, one of those moderates, expressed as much in today's New York Times as well as the Washington Post.

Senator Olympia J. Snowe, Republican of Maine, voiced the same concern. In an interview with The New York Times and CNBC, Ms. Snowe said that for her to support the bill, “there would have to be more subsidies” for low- and middle-income people and that she was trying to figure out how to pay for them.

Ms. Snowe said “the time has come” to pass comprehensive health legislation. But she added that it was important to get the policy and the details right, because they would affect every American.

Max Baucus has signaled an openness to work on the affordability issue.

Specifically, Baucus is talking to Democratic members of his committee about addressing one of their chief complaints about the bill — that it won't do enough to make insurance affordable to the middle class. That's a crucial question, because the legislation would, for the first time, impose a requirement that virtually everyone have some kind of coverage or face a fine. Under Baucus' bill, the government would provide some help-giving subsidies to help those earning up to three times the poverty level (in other words, a family of four making as much as $66,000 a year) buy insurance and setting caps on their out-of-pocket expenses.

But many in his party say that help doesn't go far enough — especially in comparison with the version that the House is working on, which would provide assistance for those earning up to 400% of the poverty level (or a family of four making $88,000). "We're working to address that concern," Baucus said, adding that one idea "very much on the table" is to increase the refundable tax credits for those purchasing insurance. That, however, would likely increase the overall price tax for the measure, which in its current form would cost $774 billion over the next decade, according to estimates by the Congressional Budget Office.

Karen Tumulty gets at the main point here. Snowe has talked a lot about affordability, and wants to expand coverage subsidies. But she doesn't want to spend any more money on the bill, which in order to raise the subsidies, you would have to do. From the other side of this, Democrats and Republicans want to shrink the tax on high-end insurance policies which, under current health inflation, would quickly hit more average-sized policies. But of course, that's how the bill is paid for in the Baucus plan.

Senators of both parties said Thursday that they would seek significant changes in a Democratic proposal to tax generous high-cost health insurance policies.

The tax, proposed as a way to help finance coverage of the uninsured, would be levied on insurance companies. But the senators said they worried that it would be passed on to individual policyholders, families and employers who buy insurance for their workers.

Senator John Kerry, Democrat of Massachusetts, who first proposed the insurance tax, said Mr. Baucus had set the thresholds too low. As a result, Mr. Kerry said, “working folks with a lower level of income will get dragged in,” and the tax could affect union members who have sacrificed pay raises to get health benefits.

Mr. Kerry said the threshold for family coverage should be at least $24,000.

So those inclined to vote for health care want more subsidies in the bill and less taxes on insurers. And I want a pony. But the President laid down a marker of not adding to the deficit, and so in order to do both those things, you need to find another revenue source.

Fortunately, there are several. Just repealing the Bush tax cuts a year early and applying that to health care would save $135 billion dollars. Or using the initial Obama Administration idea of lowering the charitable deduction rate to 28% from 35% would capture something like $300 billion. Or the House's surtax on the wealthy would add even more. There are plenty of options; but will there be the political will?

There's definitely the will to increase the subsidies. The White House is assuring liberal members of that, although not about the public option. The question is, will that be enough to satisfy progressives, particularly in the House? Paul Krugman asks that today.

It would be disastrous if health care goes the way of the economic stimulus plan, earlier this year. As you may recall, that plan — which was clearly too weak even as originally proposed — was made even weaker to win the support of three Republican senators. If the same thing happens to health reform, progressives should and will walk away.

But maybe things will go the other way, and Mr. Baucus (and the White House) will, for once, actually listen to progressive concerns, making the bill stronger.

Even if the Baucus plan gets better, rather than worse, what emerges won’t be legislation reformers can love. Will it nonetheless be legislation that passes the threshold of acceptability, legislation they can vote for? We’ll see.


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45,000 Die Each Year From A Lack Of Health Insurance - The Fierce Urgency Of Now

The Harvard Medical School released a study yesterday that I dare you to read without your heart breaking.

Nearly 45,000 people die in the United States each year -- one every 12 minutes -- in large part because they lack health insurance and can not get good care, Harvard Medical School researchers found in an analysis released on Thursday.

"We're losing more Americans every day because of inaction ... than drunk driving and homicide combined," Dr. David Himmelstein, a co-author of the study and an associate professor of medicine at Harvard, said in an interview with Reuters.

Overall, researchers said American adults age 64 and younger who lack health insurance have a 40 percent higher risk of death than those who have coverage.

This is well up from a 2002 estimate showing 18,000 preventable deaths per year from a lack of health insurance. And the increase is directly related to the increase of the uninsured, as well as the scaling back of public hospitals or free clinics or access to care, particularly for those in poor areas. Diabetes and heart disease are two of the most common preventable diseases among this class of the uninsured. As one of the professors in the study puts it, "it's completely a no-brainer that people who can't get health care are going to die more from the kinds of things that health care is supposed to prevent,"

If anything, we're going to see this get worse, if nothing changes. Jobless rates are expected to remain high for years, according to the OECD. With the rapid job loss in this Great Recession, nobody expects as rapid a return. And that means more people dropping off the health insurance rolls. In addition, employers will raise costs and lower coverage, if they even keep it. And for every new member of the ranks of the uninsured, the chances increase exponentially for a preventable death.

The need for fundamental health care reform isn't just a statistical issue, or about budgets, or bending cost curves. It's a matter of life and death.

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The latest unemployment figures from the Bureau of Labor Statistics:

Fourteen states and the District of Columbia reported jobless rates of at least 10.0 percent in August. Michigan continued to have the highest unemployment rate among the states, 15.2 percent. Nevada recorded the next highest rate, 13.2 percent, followed by Rhode Island, 12.8 percent, and California and Oregon, 12.2 percent each. The rates in California, Nevada, and Rhode Island set new series highs.

So much for that canard that businesses are flocking to Nevada, considering it has a higher unemployment rate than we do. Nonetheless, California is in deep trouble, with a loss of 741,000 jobs over the last year, an increase of 4.6% in the jobless rate since last August.

And there are no economic recovery plans in the works. I guess we're supposed to sit and wait until things get better.

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The People's House

One of the more persistent problems with our democracy is the distance between politicians and the people. This is exacerbated by the gradual increase of the constituency, since the House of Representatives has not been expanded in almost 100 years. In the Senate it's far worse, as equal protection laws are violated on a daily basis, with my representation in California equaling the representation of Wyoming, despite this state having 74 times as many people in it. This problem of unequal representation exists in the House as well, and a group of lawyers have organized a challenge to the status quo, calling for an expansion of the House to address these inequities.

The most populous district in America right now, according to the latest Census data, is Nevada’s 3rd District, where 960,000 people are represented in the House by just one member. All of Montana’s 958,000 people likewise have just one vote in the House. By contrast, 523,000 in Wyoming get the same voting power, as do the 527,000 in one of Rhode Island’s two districts and the 531,000 in the other.

That 400,000-person disparity between top and bottom has generated a federal court challenge that is set to be filed Thursday in Mississippi, charging that the system effectively disenfranchises people in certain states. The lawsuit asks the courts to order the House to fix the problem by increasing its size from 435 seats to at least 932, or perhaps as many as 1,761. That way, the plaintiffs argue, every state can have districts that are close to parity.

“When you look at the data, those are pretty wide disparities,” said Scott Scharpen, a former health care financial consultant from California who has organized the court challenge. “As an American looking at it objectively, how can we continue with a system where certain voters’ voting power is substantially smaller than others’?”

No incumbent will really want to change a system that dilutes their own power. They won't even sign off on giving DC voting rights in the House and expanding the body to 437 (there's an extra member for Utah in that compromise measure). But for decades, this was standard practice, with the House expanding from 65 members to 435. Other countries have governing bodies of up to 600 members despite having smaller countries. Our Congressional districts hold 700,000 people on average, which is just incredibly unwieldy. This would also rejigger the Electoral College in Presidential elections, as each state gets electoral votes based on their number of Representatives. Adding seats to shrink Congressional districts would dilute the inequity of the Senate in those elections and move us closer to a one-person, one-vote standard there.

Really we should have a unicameral legislature and a national popular vote for President, but those are a way off. The Supreme Court has never weighed in on mandating additional House members, and given the current makeup, not much good may come of that either. But it's time to build a political coalition for these changes. The bigger a Congressional district gets, the further removed that member of Congress gets from the people. It leads to Blue Dogs who don't vote their districts but can fake it using campaign contributions from corporate interests. It makes it harder for challengers to raise their profile. If you want to spark something TRULY populist, contra the teabaggers, it would be to expand the House of Representatives.

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It's really not worth spending one minute on Orly Taitz, the Queen of all Birthers. But it's certainly the most amusing part of the right-wing freak show out there right now. After being told by a federal judge that she would face sanctions if she ever darkened his courtroom again with frivolous lawsuits, Taitz suggested that the judge be tried for treason. As a result:

Now, in response to Taitz's comments to TPM calling the judge corrupt and suggesting he should be tried for treason, a fellow member of the California bar has filed a formal complaint against Taitz.

"I respectfully request that you investigate Ms. Taitz's conduct and impose an appropriate sanction. She is an embarrassment to the profession," writes Subodh Chandra, who practices in Ohio and is also an inactive member of the California bar.

Read Chandra's full complaint right here. Chandra was a Democratic candidate for Attorney General of Ohio in 2006 and a delegate to the Democratic National Convention last year.

This really needs to end with her disbarred so she can go back to being a real estate agent and beautician, or whatever her eight other jobs were. Crazy person.

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One Step Closer To 60

Yesterday the Massachusetts House passed a bill that would allow Deval Patrick to appoint a temporary successor for Ted Kennedy until the outcome of a special election in January. The bill now moves to the State Senate, where Democrats have an enormous advantage as well. Republicans could hold up the bill through some procedural maneuvers, but they cannot stop it. The expectation would be that final passage could happen by the middle of next week. This would obviously be a huge boost to Democrats to have a consistent voting partner and a 60-vote majority in the Senate once again.

Regardless of the appointment process, there will be a special election, with a primary in December and a general election in January. With some of the big names on the Republican side begging off the race, the winner of the Democratic primary is highly likely to win the general. Right now the field on the Democratic side includes Attorney General Martha Coakley, Rep. Michael Capuano, and co-owner of the Celtics Stephen Pagliuca. Coakley, a statewide officer, has higher name recognition and thus a big lead. But Capuano is a pretty strong progressive.

By contrast, her main rival, MA-8 congressman Mike Capuano, has a ten year record on national issues. Basically it’s a record of being really, really liberal. He’s member 18.5 in the 111th House, he was 30.5 in the 110th House, 40.5 in the 109th, 10 in the 108th, and 8 in the 107th—firmly on the left side of the Democratic caucus. He’s the former mayor of Somerville, a dense walkable urban area, who likes to talk about mass transit, he’s pushing from the left on Afghanistan and Iraq, he favors single payer health care but says he won’t “let the perfect be the enemy of the good.”

Capuano, recognizing that he needs to introduce himself to voters outside his district, has already put up an ad on statewide TV, and it's striking how hard he pushes his progressive credentials.

A Senator from Massachusetts needs to be as far to the left as possible - there aren't many states out there as blue, if any. Capuano looks pretty good to me; Coakley may be great, but she needs to reveal herself on the issues she hasn't faced as Attorney General.

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The Continued Defense Of The Indefensible

Timm Herdt was on a conference call yesterday with a top official from the Department of Corrections, and that official acknowledged that the plan due to federal judges by midnight today on prison reduction will not meet the goal:

Gov. Arnold Schwarzenegger on Friday will submit to a panel of three federal judges a plan that would reduce the inmate population at California’s overcrowded prisons by substantially less than what the court has ordered, a move that a top prison administrator acknowledged will place state officials at risk of being held in contempt.

Although the final plan will not be submitted until late Friday, administration officials have briefed other parties involved in the court proceedings on its major elements. They said exact projections of how much the prison population will be reduced have not yet been calculated, but the reduction would not lower the population to the court’s standard of 137.5 percent of the prison system’s design capacity.

“This plan will not meet the court’s requirements,” said Lee Seale, deputy chief of staff of the Department of Corrections and Rehabilitation, in a conference call Wednesday with legislative staff members. “I certainly don’t think this panel will be thrilled by this plan. I think we recognize we may be held in contempt.”

Under the plan the state will submit, they will get to around 27,000 prisoner reduction. The judges want something close to 44,000.

The question is how the three-judge panel will react. They may mandate a release of enough prisoners to get to that number, at which point the state will challenge the ruling and throw it to the US Supreme Court. This is precisely was Tough on Crime member emeritus George Runner wants.

Sen. George Runner, R-Lancaster, who has intervened in the court case in the hope of preventing a judicial mandate to lower the prison population, believes the administration is taking exactly the right approach.

“I would like to see the state plan be as easily rejected as possible,” Runner said.

If the administration submitted a plan that came close to meeting the court’s order, Runner said, that could lead to a negotiated compromise. This way, he said, the court will be forced to propose its own plan — one that would set up a showdown before the U.S. Supreme Court.

Where Runner would pitch the "I'm right because I say so" defense. And with this Supreme Court, who knows, that may work.

We don't know when the appeal would come in the process. The Governor's office seem to think that they can appeal the initial ruling as soon as they offer their alternative plan, while others believe that they'd have to wait for the three-judge panel to issue a final order with the full reductions. At some point, everyone agrees, an appeal is allowable. Kevin Yamamura has more.

I don't want to put this entirely on the Governor, though he's clearly dragging his feet. The Assembly forced the weak proposal you'll see from the Governor today by scaling back the reform plan that would have come closer to the judge's goal of reducing the population by 44,000 prisoners. But the Governor didn't actually have to follow the Assembly in submitting their plan. They could have come up with one of their own making, putting pressure on the Legislature to conform it. They chose not to stand behind their own plan and do so. So while there's plenty of blame to go around, I think the Governor needs to own this one, although he and everyone else want to take the blame off themselves.

By the end of the week, it will be apparent what all the posturing accomplished: nothing. That may suit lawmakers just fine -- they can blame the coming prison reforms on the federal courts rather than taking heat from voters for being insufficiently hard on criminals. But the episode is further evidence that if California's prison system is a national disgrace, its Legislature is a national laughingstock.

Perhaps it's not surprising that, in this environment, Schwarzenegger seems to be taking on the characteristics of a dictator. On Tuesday, he rejected the Legislature's plan to promote renewable energy and said he'd impose his own by executive fiat. He's on surer legal ground when it comes to the prisons because his actions will be backed by the federal court. But it's dismaying to watch the state's democratic procedures break down so thoroughly.

As long as he now appears to be king of California, we humbly beseech our lord and Terminator to finally do the right thing by the prisons. His proposal to the court should be modeled on the one approved by the Senate and include a commission to review the unsustainable determinate sentencing system. Meanwhile, it's time to drop the appeal to the U.S. Supreme Court of the federal court order so we can get on with the business of fixing the prisons and out of the habit of defending the indefensible.

But that's not going to happen. Seeing the Department of Corrections reduce the very rehabilitation programs by $250 million, that even the Assembly plan used as a means to let inmates out for completing them, show how the mission of corrections has been completely lost in this. What the state is fighting by appealing the judge's order is their privilege to let people die in jail needlessly in violation of the Constitution. Today, they will continue to assert that privilege.

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Thursday, September 17, 2009

Pre-Beck Beck


(h/t MBH)

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David Broder's War

Dean Broder uncorks a rich defense of the People's Republic of China today, arguing that a trade war would ensue if the Obama Administration moves forward with tariffs on tire imports.

Many in business fear that this is the opening round in what could become a much larger and more dangerous trade war.

For now, the Chinese have threatened only minor retaliation, a cutback in imports of auto and chicken parts from the United States. But both sides have plenty of other, larger weapons they could deploy [...]

The danger is that once you strike the first blow against foreign competitors, you can't tell what will happen next. Obama has taken that risk, so fingers are crossed.

Oh noes, trade war! Except, no, China's consumer base offers little possibility for China to have the room to engage in retaliatory strikes.

Chinese consumers who buy $608 billion of goods from overseas are diminishing the prospects of a trade war with the U.S.

China’s imports, up 68 percent in five years, now amount to almost one-third of gross domestic product, according to World Bank data. The nation’s demand for foreign products is a boon for American companies, which exported $351 billion to China in the past five years.

U.S. President Barack Obama’s 35 percent tariff on tires from China spurred a Chinese investigation into prices of U.S. poultry and car products. Dangers of further escalation may be mitigated by the increasing benefit China provides the world economy. Poised to surpass Japan as No. 2 in GDP, its purchasing power is a lure to firms seeking new customers.

“As China depends more on domestic demand, its rise won’t be seen by the rest of the world to be as big a threat as some view it now,” said Shen Minggao, a former consultant to the World Bank who is chief economist in Hong Kong for the Greater China region at Citigroup Inc., the third-largest U.S. bank.

In fact, with respect to the one threat the PRC made, to look into "dumping" of chicken parts, the Chinese have such an appetite for chicken feet that they would practically revolt if the government tried to cut off imports.

The fact that China has demand and not just supply means that there is an equilibrium where trade laws can actually be enforced. That's all that's been done in this respect, and Dean Broder is just trying to protect the neoliberal consensus by arguing otherwise.

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Yacht Party Hijackers

George Skelton finds a nut:

The two-thirds rule is not used merely to protect taxpayers from politicians trying to reach deeper into their pockets. It's used by special interests -- mainly big business -- to game the system; a tool handy for legislative leverage, or extortion. If you don't give us what we want, we'll withhold the votes needed for the two-thirds.

It's about buying and selling. Last Friday, at the all-night windup of this year's regular legislative session, Democrats weren't in a buying mood.

This is what happened, according to Democrats, and Republicans aren't exactly denying it: The Senate GOP blocked more than 20 bills requiring a two-thirds vote because Democrats wouldn't cave on three unrelated demands.

This has been true for years if not decades. The 2/3 rule does not protect tax increases, it's a tool for the Yacht Party to hijack the process. In this case, the GOP wanted to create a forced market for Intuit, makers of TurboTax; to increase the corporate tax breaks from the Februrary budget deal, in particular to help Chevron; and to make Roy Ashburn a lead author on a Democratic bill. See if you can find the word "tax increase" in there. But because the Democrats didn't much feel like giving out even more corporate welfare or fattening the pockets of Intuit, the Yacht Party revolted. And they knocked down 20 bills, including one that would keep domestic violence shelters open throughout the state (which is nothing more than homicide prevention) by shifting available funds, and another to allow the Treasurer more leeway to renegotiate with banks and save the state $850 million dollars.

These and the other bills, again, did not involve tax increases. They were taken up under urgency requirements (so the policy takes effect immediately) or other factors, like changes to the budget, which necessitate a 2/3 vote. And the Yacht Party routinely takes advantage of this, mainly out of spite and an attempt to leverage their votes to reward their corporate backers.

Ashburn candidly defends blocking the legislation: "This was an opportunity for Republicans to have some leverage." Concerning the merits of measures buried in the fallout: "The subject matter of bills at that point was secondary to what the [GOP] caucus had decided to do with them."

This is a pretty startling admission. But not one anybody wasn't aware of before now.

Skelton has deciphered the problem pretty clearly, and Democrats are well-positioned to highlight it and show the disaster of governance ushered in by the onerous 2/3 rules.

Will they?

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Hitting The Insurance Industry Where It Hurts

John Conyers and some allies on the House Judiciary Committee have come up with a fabulous way to get the insurance industry in line - by threatening to remove their anti-trust exemption.

Many people don't know that the insurance industry, under the McCarran-Ferguson Act of 1945, has a broad anti-trust exemption that facilitates regional monopolies. The Act allows states to regulate the insurance business instead of the federal government, but also allows that, as long as the state regulates the industry, federal anti-trust laws would not apply.

As a result of this exemption, states have seen markets for health insurance where one or two companies predominate. In the state of Maine, Wellpoint controls 71% of the market. In North Dakota, Blue Cross controls 90%. Using the Herfindahl/Hirschman Index, a metric for market concentration, a 2007 study by the AMA found almost every health insurance market in the United States is highly concentrated.

This edition of the study analyzed 313 MSAs. This compares with 292 metropolitan areas in the 2005 study, 84 in the 2003 study, 70 in the 2002 study, and 40 in the 2001 study.

In terms of market concentration (HHI), the study found the following:

In the combined HMO/PPO product market, 96 percent (299) of the MSAs are highly concentrated (HHI>1,800), applying the 1997 Merger Guidelines.
In the HMO product market, 99 percent (309) of the MSAs are highly concentrated (HHI>1,800), applying the 1997 Merger Guidelines.
In the PPO product market, 100 percent (313) of the MSAs are highly concentrated (HHI>1,800), applying the 1997 Merger Guidelines.

Here's the AMA study. Paul Rosenberg has a lot more on this.

The point is that the concentration of the health insurance market among regional monopolies leads to higher costs for consumers, almost by definition. What the legislation by Conyers (D-MI), Hank Johnson (D-GA) and Diana DeGette (D-CO) would do is end that anti-trust exemption for health insurers, allowing for enforcement in all of these highly concentrated markets. The Senate has companion legislation:

“This legislation would specifically prohibit price fixing, bid rigging, and market allocation in the health insurance industry,” said Conyers. “These pernicious practices are detrimental to competition and result in higher prices for consumers. Conduct that is unlawful throughout the country should not be allowed for insurance companies under antitrust exemption. The House Judiciary Committee held extensive hearings on the effects of the insurance industry’s antitrust exemption throughout the 1980s and early 1990s. It became clear then that policyholders and the economy in general would benefit from eliminating this exemption.

“The legislation we introduced today is intended to root out unlawful activity in an industry grown complacent by decades of protection from antitrust oversight. In doing so, we aim to make health insurance more affordable to more Americans. I want to thank my friend Senator Leahy for his leadership on the bill and for working with the House on this joint introduction.”

Many of the actions taken by the insurance industry over the years simply violate federal law. Repealing their anti-trust exemption would force the industry to end their criminal ways or face punishment. As a companion to insurance regulations designed to lower prices for consumers, but perhaps without the kind of enforcement necessary to maintain it, I couldn't think of anything better. And if nothing else, this legislation is a powerful whip to keep the industry in line as they try to extract more perks from the health care bill. Combine this with the multiple investigations into industry practices from Dennis Kucinich, Henry Waxman and others, and you have real pressure on the industry for the first time in a while.

Good for John Conyers.

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Imagining The Paul Volcker Treasury Department

Paul Volcker was pretty heavily involved with the Obama transition team, and certainly had the ear of the Administration at some point. I don't know the status of that now. But hopefully they pick up on this article in the Wall Street Journal:

Former Federal Reserve Chairman Paul Volcker on Wednesday said banks should operate in a much less risky fashion, including not making trading bets with their own capital, comments that could provoke intensified debates over the future of financial regulation.

Mr. Volcker, who currently is chairman of the White House's Economic Recovery Advisory Board, suggested banks should be restricted to trading on their client's behalf instead of making bets with their own money through internal units that often act like hedge funds.

"Extensive participation in the impersonal, transaction-oriented capital market does not seem to me an intrinsic part of commercial banking," he said in a speech to the Association for Corporate Growth in Los Angeles [...]

Mr. Volcker said banks should be banned from "sponsoring and capitalizing" hedge funds and private-equity firms, which are largely unregulated. He also said "particularly strict supervision, with strong capital and collateral requirements, should be directed toward limiting proprietary securities and derivatives trading."

He also said collateral and leverage restrictions against the largest nonbank financial institutions "may be needed."

That's because it isn't, it's just become a growth center for banks that can operate like a casino and get the government to bail them out if things go wrong.

Volcker is basically advocating a similar version of the reforms that came out of the Great Depression. Then, banks were separated into commercial and investment entities under the Glass-Steagall Act, and bank holding companies could not own other financial firms. That came out of the Pecora Commission recommendations, which dug up so much of Wall Street's corrupt practices that the necessity of reform could not be refuted.

In a Volcker Treasury Department, instead of Tim Geithner, we would have a chance to make these the starting points for reform, and invigorate the modern-day Financial Crisis Inquiry Commission, or Angelides Commission, to dig deep and look into what the financial firms did to nearly destroy the economy. The banksters would be fending off the cries for reform instead of using their lobbying arms to channel them in business-friendly ways.

Now wouldn't that be nice?

...Matt Taibbi says that Volcker was basically beached after the campaign along with a lot of the other more progressively minded economic advisers. It sounds pretty right.

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Everyone Hates Baucus

Boy, Max Baucus (R-MT) sure knows how to make friends and influence people, doesn't he? He bends over backwards to please Republicans and they spurn his bill. In the process he alienates Democrats, who now... hate the concessions made in his bill and don't understand their purpose, given that it brought no Republicans along. He had to stand alone to announce his bill because nobody wants to be associated with him. Not even Kent Conrad, his best bud because he included his industry-sponsored weak co-op plan, wouldn't take the dais with him. He's become such the public face for Democratic incompetence that his very name leads to boos at Democratic events:

Workers are chanting "bullshit!" at the mere mention of Baucus' name at labor events. Health care advocacy groups use his name as a punchline, if not an obscenity. He's literally gone from the most important man in the room on health care to a potentially irrelevant one.

A dealmaker needs credibility and respect on both sides, and Baucus has lost it. The Democrats on his committee don't trust his instincts or his core commitments or his legislative skill. Nor do the Democrats outside his committee. They feel he gave away too much in return for not just too little, but nothing at all. That means the Republicans on his committee have further reason to distrust his ability to make a deal, because restive Democrats are going to want to change his bill. Meanwhile, House Democrats are enraged that he left them to suffer through August, and have little interest in passing a bipartisan compromise that doesn't come with any Republican votes [...]

Even within his committee, it's not obvious he can secure the votes of the liberals, and if he does, he almost certainly sacrifices Snowe. That means the White House and the Senate leadership are going to play the primary role in both offering concessions and guaranteeing their preservation in the process. The bill remains in Max Baucus's committee, but at this point, it's largely out of his hands.

That's a good thing, on balance, for supporters of real health reform. The media still acts as if Baucus' bill is the final bill, but that's not quite the case. His bill would require substantial changes before he could even get a majority of the vote in the Senate. And there are plenty of areas for improvement:

Subsidies. The Baucus bill is simply not affordable. Forget everything else about health care - if the coverage isn't affordable for Americans to buy into it, the reforms won't work. It won't be universal, shrinking the risk pool, and insurers will want to deny coverage or care to maximize profits in that lower risk pool. The Center for Budget and Policy Priorities tells you pretty much what you need to know. This amounts to a $140 billion dollar tax on the middle class.

One reason the Baucus bill is “cheaper” than the House bill is that it has lower subsidies. For illustration, let’s assume that the whole $140 billion difference is due to lower subsidies. Relative to the House bill, then, the Baucus bill costs the government $140 billion less; but it costs middle-income people exactly $140 billion more, since they have to buy health insurance. The difference is that in the House bill, the money comes from taxes on the very rich; in the Baucus bill, it comes out of the pockets of the middle-class people who are getting smaller subsidies. Put another way, the Baucus bill is the House bill, plus a $140 billion tax on people making around $40-80,000 per year. That’ s not only stupid policy; it’s stupid politics.

Bad Employer Incentives. The lack of an employer mandate, replaced with a terrible "free rider" policy, is completely unacceptable. Whether you believe that it incentivizes employers to not hire low-income workers, or that it incentivizes large employers to keep wages down so they can push their employees off onto Medicaid, employers have clear, giant loopholes that they can exploit to make life for their workers objectively worse.

No public option. The co-ops are crap. Almost worse than useless. Everyone knows it. The CBO admits it and they've been practically writing the bill with Baucus.

"Liberal Democrats fumed that Baucus had dropped the idea of a government-run insurance plan to compete with private insurance companies in favor of a national network of member-run cooperatives -- an alternative the CBO said seems "unlikely to establish a significant market presence in many areas of the country."

There is no mechanism for competition with the private insurance industry, which the President has viewed as a fundamental principle.

Now, the Baucus bill does do a couple OK things. It raises a decent amount of revenue through excise taxes on industry, a back-door way to cap the employer deduction. It reduces the deficit. And it provides for a gradual shift away from employer coverage and toward the exchanges, although that shift could happen quicker, similar to what Ron Wyden is proposing.

The fact that the President spoke with Jay Rockefeller, the leading critic of the Baucus bill and its co-ops, as well as Wyden and Bob Bennett, who hold the bill that would move away from the employer-based system, tells me that he's actually looking to improve the Baucus draft down the road in the process. As Matt Yglesias said today, this is tailor-made for the conference committee process:

Viewed optimistically, this is what conference committee is for. Each version of the legislation is audacious along one axis—committing major funds to affordability in the House, trying to take a serious whack at cost growth in Baucus—and a conference committee could meld them into a bill that does both. You could imagine a productive meeting that produces the kind of result I’m talking about that lets Mike Ross walk out and say he added tough cost controls to the bill, while Jay Rockefeller gets to walk out and say he beefed up affordability, and then Max Baucus and Henry Waxman get to congratulate each other on being masters of legislative compromise. Alternatively, of course, the whole thing could fall apart. But ultimately my point would be that both version of the legislation have strong points that could be combined into some very good legislation indeed.

Absolutely, though admittedly we don't live in a perfect world. For example, you could add back in the President's shift on charitable deductions from 35% to the 28% it was in the Reagan Administration, which would impact pretty much nobody and save $350 billion over 10 years, plow that into subsidies, and call it a day. The bill would remain fully paid for and everybody would be happy.

Ezra has some further thoughts on this. I would just add that the President knows he owns this bill, so regardless of whether or not it would make the insurance industry mad, he needs to get this right so it works for people.

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SAFRA Passes House

SAFRA, the student loan bill to end the privatization of loans already backed by the government, passed the House just now by a vote of 253-171. 6 Republicans (Buchanan, Cao, Johson (IL), Petri, Platts, Ros-Lehtinen) voted yes; 4 Democrats (Boyd, Herseth Sandlin, McMahon, Kanjorski) voted no. Considering that Stephanie Herseth-Sandlin is from the wholly owned banking state of South Dakota, that's impressive party unity, probably because it's indefensible not to be for this bill. As Gail Collins explains today:

It would simplify the federally guaranteed loan system, save an estimated $87 billion over 10 years and use that money to increase aid to low-income students, improve community colleges and raise standards for early childhood education.

Let us stop here and recall how the current loan system works:

1) Federal government provides private banks with capital.

2) Federal government pays private banks a subsidy to lend that capital to students.

3) Federal government guarantees said loans so the banks don't have any risk.

And now, the proposed reform:

1) The federal government makes the loans.

Wow. You really do wonder why nobody came up with this idea before.

Given all of the other profit centers that the banking industry has opened up, and the clear logic of the bill, maybe they figured they can't stop this one. If it runs into trouble in the Senate, it could easily move through reconciliation since the whole point of it is to end wasteful subsidies to the private lending market, which expand the deficit. I think there will be 50 votes for this, as Pell Grants are popular, the private loan market serves no purpose whatsoever, and another part of the bill offers challenge grants for early childhood education, another broadly popular priority.

So I believe we are going to see this change in higher education. And millions of college-age students, many of whom supported Barack Obama in record numbers, will recognize this almost immediately in higher Pell grants, cheaper loans and simpler forms. Savvy play, as well as a good policy.

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Why We Need Hearings On Insurance Industry Practices

Some weak-kneed Democrats aren't so keen on seeing Henry Waxman grill the insurance industry over their immoral policies of denying care. They probably don't want to jeopardize their campaign contributions. But Waxman and others aren't listening to them, and will move forward.

“It’s completely fair to talk about profits and reserves and compensation and how they make their decisions,” said Rep. Jan Schakowsky (D-Ill.), a leader of the Progressive Caucus. “Let them come and make their case.” [...]

Regardless, Waxman and the House Energy and Commerce Committee appear to be heading forward.

Rep. Bart Stupak (D-Mich.), chairman of the Investigations subcommittee, said Tuesday that most of the nation’s 52 largest insurance companies met Monday’s deadline to submit documents on their profits and compensation to executives and board members. He also said a hearing is being put together.

“We will be doing hearings on different aspects of the insurance industry, including this,” Stupak said. “I hope that by the end of this week we’ll have a schedule set … I’d like to do another one of these, at least one or two, this month.” [...] “Blue Cross Blue Shield, which is the insurer of last resort in Michigan, they’re raising their rates 22 to 40 percent,” Stupak said. “How do you justify that when inflation is basically zero? Where is the money going? Is it going for healthcare? Or executive compensation?”

“I think it’s part of the mix, in that our committee needs to look at it,” said Rep. Gene Green (D-Texas). “I remember a quote from Sen. [Charles] Schumer [D-N.Y.] sometime this year … he said that some of those healthcare CEOs’ packages would even make Exxon-Mobil blush.”

Just so it's clear, here are the types of policies that Blue Dog Dems would rather not have discussed publicly in Congress in the middle of a debate over health insurance reform:

• The South Carolina Supreme Court ordered Assurant to pay 10 million dollars for rescinding the policy of a 17 year-old after he tested positive for HIV.

• Several insurance companies in the individual market consider pregnancy optional and don't cover maternity care. What's more, others refuse to cover any woman who has had a Caesarian section, considering it a "pre-existing condition".

That's really the tip of the iceberg. The stories of runaway profits, lavish lifestyles for CEOs and denials of care causing suffering and death have been chronicled over and over at Sick For Profit. The public ought to know about them, at least as much as they think they do about death panels, and if Congress can find a way to raise attention, all the better.

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The Persistent Presence Of Immigration Reform

The health care debate has predictably highlighted the open wound that is our failed immigration policy. As long as we have 10-12 million undocumented workers in this country, no matter their real benefit to the US economy (thank immigrants for the sustained finances of the Social Security system, or at least pay them back when you get your check), then every domestic policy will be interrupted with someone saying "will any of this money do to illegals?" It's common to scapegoat the alien other in times of economic stress, particularly when the policy that would bring clarity to their status sits unfinished. Luis Gutierrez has ended his silence on the inequities for the immigrant community in the health care bill, blasting the Administration for bending over backwards to please xenophobes.

“What is the administration’s answer?” asked Gutierrez. “To give him exactly what he said from this hatred. Because now, the administration has told us that if we’re going to have reform of our health care system … all those that go to the private sector in order to get their health care, that they will verify them. They will verify Social Security; they will verify their status in the United States of America.”

“So, and remember, we’re not talking about government health care, we’re talking about everybody is going to be required to get health care insurance,” said Gutierrez. “And so as we go to this big store, right, where everybody is required. And this exchange, the health care exchange, where if you don’t have health care you are required to go purchase it. When you go and attempt to purchase it, what does the administration say? The administration says, ‘You will have to prove that you are legally in the United States and have a Social Security number and a right to that.’”

I've said repeatedly how prohibiting immigrants from even purchasing health insurance with their own money will push them into ERs, the most expensive form of care for taxpayers who end up covering it. So this spite-based policy just costs us all money in the long run. Not only that, even LEGAL immigrants are blocked from receiving tax credits to which they are entitled. This is just the politics of fear and spite, and until we get comprehensive reform, it will continue. Here's Gutierrez - who's fairly close to the Administration - on that point:

There is no legislative issue that is not impacted by immigration reform, and until we enact a comprehensive solution, each and every legislative proposal to this Congress will be obstructed by fear, hate and bigotry against the most vulnerable among us. The White House has said it stands for comprehensive immigration reform; but you cannot say you want to bring people out of the shadows and then deny them non-government access to health care that they can use their own dollars to purchase.

This use of immigrants as a scapegoat for any domestic policy comes from an unscrupulous mainstreaming of far-right nativism, expressed most evidently by Lou Dobbs. This week Dobbs is broadcasting from the conference of a known hate group founded by a white nationalist. Media Matters and other groups have started a campaign to remove him at His hatefulness needs to stop.

Roberto Lavato has more.

...President Obama actually spoke to this tonight:

Now, as you know, there's been a little controversy about who exactly will be covered under reform. I want to be clear: If someone is here illegally, they won't be covered under this plan. That's a commitment I've made. But I also want to make this clear: Even though I do not believe we can extend coverage to those who are here illegally, I also don't simply believe we can simply ignore the fact that our immigration system is broken. (Applause.) That's why I strongly support making sure folks who are here legally have access to affordable, quality health insurance under this plan, just like everybody else. (Applause.) And we certainly should not let this debate on health care -- one so essential to Hispanic Americans and all Americans -- get sidetracked by those looking to exploit divisions and kill reform at any cost. That's what they always try to do.

If anything, this debate underscores the necessity of passing comprehensive immigration reform and resolving the issue of 12 million undocumented people living and working in this country once and for all. That's what I've said from the start. That's what I say tonight. (Applause.)

True, but not really speaking to the issue of denying people the ability to buy something.

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When Faced With A Parliament, Act Like A Parliament

Ron Brownstein has been unusually perceptive of late, but this isn't quite right.

America is steadily moving away from the ramshackle coalitions that historically defined our parties and toward a quasi-parliamentary system that demands lockstep partisan loyalty. It is revealing that Obama is facing nearly unanimous Republican opposition on health care just four years after President Bush couldn't persuade a single congressional Democrat to back his comparably ambitious Social Security restructuring.

Bush couldn't persuade many Republicans either. Republicans held the majority in 2005 when he tried to privatize Social Security, and they never even brought a bill through a committee. In this case, votes will be held on the floor of both houses on health care.

The truth is that one side acts like a Parliament while much of the other thinks we still live in the days of bipartisan consensus. Both parties have different visions of how to govern, and despite that giving Villagers the willies, it's OK and expected. But if you have one side bending over backwards to work together, and the other side unyielding, the debate necessarily tips in favor of that unyielding side, as a matter of basic physics.

Brownstein does acknowledge this to an extent:

Today, these centrifugal forces most affect the Republican Party. The Right has more leverage to discipline legislators because conservative voters constitute a larger share of the GOP coalition than liberals do of the Democratic Party. The Right's partisan communications network also remains more ferocious than the Left's.

The GOP's homogenization has been accelerated, moreover, by its losses in swing areas since 2006. Far fewer congressional Republicans than Democrats must worry most about moderate public opinion. Fully 31 of the 40 Republican senators, for example, were elected from the 18 ruby-red states that twice backed Bush and also opposed Obama. Just four Republican senators were elected by states that voted Democratic in at least two of the past three presidential elections. (Not coincidentally, those four include Maine's Olympia Snowe and Susan Collins, Obama's best GOP prospects on health care.) By contrast, 22 of the 59 Democratic senators were elected by states that voted Republican in at least two of the past three presidential elections.

But again, this is truly wrong:

Party-line governing is intrinsically flawed. Any bill that must pass solely with votes from the majority party can't realistically incorporate ideas that divide the party. And that fact of life rules out half the tools in our policy toolbox. Though medical-malpractice reform would advance Obama's cost-control goals, for instance, it's impractical to include it in legislation that must pass solely with Democratic votes. Legislation is more balanced when both parties shape it.

The entire Rube Goldberg formation of health care reform, the likes of which we see in all the Democratic bills, are fundamentally Republican ideas. They basically mirror a bill by Republican Senator John Chafee from 1994. The same on climate change and its market-based cap and trade formation. Democrats have very liberally borrowed from the bipartisan "policy toolbox," often to a fault. They haven't added ideas like privatizing everything (yet) or handing out cash to industry (only in part) or forcing poor people to live on cat food, but those are not what I would call the sharpest tools in the shed.

Because of the rump Southern faction taking over the GOP, and because of... well, people like Ron Brownstein, telling us that bipartisanship conquers all and hippies must be punched in the face repeatedly, the trajectory on all these issues has moved sharply to the right over the past few decades, such that a bill like Max Baucus', a virtual handout to the health industry (who love it), can be described on the right - and taken seriously by the media - as a government takeover of health care.

You need look no further to see how Democrats deal with these issues than Jeffrey Toobin's article in this week's New Yorker on the Obama Administration's judicial nominees:

The Obama Administration wanted to send a message with the President’s first nomination to a federal court. “There was a real conscious decision to use that first appointment to say, ‘This is a new way of doing things. This is a post-partisan choice,’ ” one White House official involved in the process told me. “Our strategy was to show that our judges could get Republican support.” So on March 17th President Obama nominated David Hamilton, the chief federal district-court judge in Indianapolis, to the Seventh Circuit court of appeals. Hamilton had been vetted with care. After fifteen years of service on the trial bench, he had won the highest rating from the American Bar Association; Richard Lugar, the senior senator from Indiana and a leading Republican, was supportive; and Hamilton’s status as a nephew of Lee Hamilton, a well-respected former local congressman, gave him deep connections. The hope was that Hamilton’s appointment would begin a profound and rapid change in the confirmation process and in the federal judiciary itself [...]

But then, as the first White House official put it, “Hamilton blew up.” Conservatives seized on a 2005 case, in which Hamilton ruled to strike down the daily invocation at the Indiana legislature because its repeated references to Jesus Christ violated the establishment clause of the First Amendment. Hamilton had also ruled to invalidate a part of Indiana’s abortion law that required women to make two visits to a doctor before undergoing the procedure. In June, Hamilton was approved by the Judiciary Committee on a straight party-line vote, twelve to seven, but his nomination has not yet been brought to the Senate floor. Some Republicans have already vowed a filibuster. (Republican threats of extended debate on nominees can stop the Democratic majority from bringing any of them up for votes.)

“The reaction to Hamilton certainly has given people pause here,” the second White House official said. “If they are going to stop David Hamilton, then who won’t they stop?”

The answer, of course, is that they will try to stop everyone and everything, if only to gum up the works and force the majority to move more slowly on its priorities. The new Republican Party comes up from the mold of the college Republicans, taught early to use every dirty trick, every strategy, not to govern but to beat your opponent. They may have poisoned American politics and taken it completely away from the high-mindedness where Villagers like to think it has always been (it hasn't), but there's really only one way to deal with that. Brownstein concludes:

But with Republicans operating as a parliamentary party of opposition, Democrats will have to pass health care reform virtually, if not entirely, alone. That leaves them with a binary choice: Democrats can either fragment into stalemate or function as a parliamentary majority party by unifying enough to advance their agenda. The choice would seem straightforward. If one side in a firefight is operating with military cohesion and the other devolves into ragged, undirected units, it's not hard to predict which will suffer more casualties.

That's just an obvious sentiment, though from the looks of things, one with which Democrats have not yet reconciled themselves.

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