That All-Important CBO Score

The CBO score for the newest version of the Senate Finance Committee bill is in, and the word incrementalism comes to mind.

According to CBO and JCT’s assessment, enacting the Chairman’s mark, as amended, would result in a net reduction in federal budget deficits of $81 billion over the 2010–2019 period (see Table 1). The estimate includes a projected net cost of $518 billion over 10 years for the proposed expansions in insurance coverage. That net cost itself reflects a gross total of $829 billion in credits and subsidies provided through the exchanges, increased net outlays for Medicaid and the Children’s Health Insurance Program (CHIP), and tax credits for small employers; those costs are partly offset by $201 billion in revenues from the excise tax on high-premium insurance plans and $110 billion in net savings from other sources. The net cost of the coverage expansions would be more than offset by the combination of other spending changes that CBO estimates would save $404 billion over the 10 years and other provisions that JCT and CBO estimate would increase federal revenues by $196 billion over the same period [...]

By 2019, CBO and JCT estimate, the number of nonelderly people who are uninsured would be reduced by about 29 million, leaving about 25 million nonelderly residents uninsured (about one-third of whom would be unauthorized immigrants). Under the proposal, the share of legal nonelderly residents with insurance coverage would rise from about 83 percent currently to about 94 percent.

We have an $829 billion dollar paid-for bill that lowers the deficit over time, but leaves 25 million residents uninsured, 2/3 of them American citizens. The bill doesn't cover as many people because Senate amendments reduced the penalties for non-compliance with the mandate and increased the hardship exemption. Without a public option, I actually agree with that, but it narrows the risk pool, and insurance companies don't want that because they'll be forced to cover a higher ratio of sick people, in their opinion. They could all handle this by increasing the subsidies, but Obama basically put a cap on the bill at $900 billion, and the more conservative Finance Committee went even lower than that. There's also a "trigger" of sorts that will reduce subsidies to people by a fairly large amount:

In the aggregate, the Senate finance bill reduces the deficit. But there are a couple individual years when it increases it. The CBO thus estimates that "the failsafe provisions would require a reduction in exchange subsidies averaging about 15 percent during the years 2015 through 2018." That's a very bad thing, particularly in the first years of the plan. It means that, with no warning, subsidies will be cut by 15 percent, and insurance that families were able to afford the year before will become totally unaffordable. That needs to be changed.

That's not the only problem with the exchanges. An amendment in the Finance Committee basically eliminated all policy benefits to them:

In the bills that passed three House committees and the Senate Health, Education, Labor, and Pensions (HELP) Committee, the exchange would be a "prudent purchaser." In other words, it would have a staff that bargained with insurers to bring down premiums--and that made sure all plans lived up to strict guidelines for coverage and customer service. In effect, any insurer that wants to offer coverage through the exchanges has to get the equivalent of a "Good Housekeeping Seal of Approval" from the administrators. This is precisely how it works in Massachusetts.

By contrast, the Senate Finance bill envisions much weaker exchanges. Instead of choosing which plans to make available, the exchange administrators would, by law, have to accept any plan that meets a relatively minimal set of standards.

Jon Kingsdale, who runs the Massachusetts exchange, calls that a recipe for "policy disaster," as consumers faced a dizzying array of more expensive, less regulated choices. "It would be like telling your grocery store they have to offer every single kind of bread baked by every single bakery. ... The exchanges would be nothing more than an automated Yellow Pages."

Cappy McGarr, who ran an exchange that failed in Texas, says that the exchanges will fail if they don't attract a considerable market share. Making them user-unfriendly like this is a sure way to have people just run in the other direction. And firewalling them from employees of bigger businesses is another. Insurers outside the exchanges will only need to use good marketing to entice consumers into their web, especially if the exchanges are not designed well.

If Congress now creates new exchanges, as seems increasingly likely, it must prevent this phenomenon by setting two national rules: Insurers have to accept everyone and have to charge everyone the same rates regardless of health status.

Such rules would force insurers to spread risk. But enforcement would also be difficult. Every aspect of health insurance — from the rules for underwriting and setting premiums to the marketing of policies — would need to be monitored stringently to prevent companies from steering all bad risks to the exchanges.

It would be smarter for Congress to revisit the idea of creating a public plan that could provide an attractive choice for consumers and real competition for private insurers, to give them the incentive to offer good coverage at affordable prices.

Max Baucus trashed Ron Wyden's effort to design the exchanges better (there's now documented proof of this), significantly weakening them.

Igor Volsky has more. To me, it's no wonder that Republicans are starting to concede on this health care bill. Aside from the fact that they can't stop it, they know that Baucus-care isn't all that likely to work, which will help them in the long run.

...is this a good starting place? Maybe. I'm worried about its survivability. We've seen a lot of exchanges die off over the years, and while there will be some default position toward making this viable in the short-term, if for example Obama loses in 2012 I could easily see a repeal, given that the exchanges wouldn't even be in place by then.

Senate Finance Committee Final Vote Delayed

Any guesses as to why this is happening?

Early in the amendment process, the panel agreed not to hold a vote until a preliminary analysis on the legislation's cost-saving potential was available, and it appears as if the CBO will not complete its work until later in the week. That would touch off yet another delay--one that's likely to frustrate Democrats and liberal activists, who've grown impatient over the glacial pace of reform efforts.

Maybe everyone's waiting for the final CBO score. But I have a couple other theories. One is that the Committee needs some time for the White House to twist the arms of Democrats wary of approving the bill for various reasons. Jay Rockefeller and Ron Wyden are particularly upset about the fate of some of their amendments in the markup, and could take it out on the bill. If both of them refuse to support the bill, it won't pass, in all likelihood, unless Olympia Snowe votes for it.

Although Chairman Max Baucus (D-Mont.) said he has the votes to pass the 10-year, $900 billion bill out of the committee, Sens. Ron Wyden (D-Ore.) and John D. Rockefeller IV (D-W.Va.) remained undecided Sunday. If all 10 Republicans on the panel vote no, two Democratic defections would be enough to send Baucus and the Obama White House scrambling to regroup.

"More needs to be done to hold insurance companies accountable, to hold premiums down for the American people," Wyden said in an interview Sunday. "I want to continue these discussions."

Committee defeat of the bill is an unlikely scenario, but one that highlights the power every Senate Democrat -- and perhaps a few Republicans -- holds going forward in a process that could stretch beyond Thanksgiving.

I think Wyden and Rockefeller think they can improve the bill down the road. But the maximum leverage is right now, before the committee vote. So they're withholding their support until they can wring some concessions. Ultimately, Baucus will probably get his votes, but he'll need a little more time. Jon Cohn looks at the five key swing votes on the Committee - Rockefeller and Wyden, plus Bill Nelson, Blanche Lincoln and Olympia Snowe.

I have a guess that there may be another factor, however. Kent Conrad has made no secret of his disdain for the reconciliation possibility. If it did go that route, requiring only 50 votes, we may end up with a bill that, in some key parts, wouldn't even get Conrad's vote. So he's been trying to sabotage it for some time. The more the delays continue, the more that the deadline of October 15 for reconciliation comes into play. Before long, the Senate committees would have to begin that process. Conrad doesn't want that to happen. Neither does Baucus, in all likelihood, since it would lessen the power of his more centrist bill. And they've been delaying ever since. Given that there are so many issues that will need to be decided by the leadership when they merge the bills, the Finance Committee has probably already delayed the vote long enough to make reconciliation an impossibility. Mission accomplished.

Senate Finance Committee Post-Mortem

The Senate Finance Committee actually finished with their markup of the health care bill late last night. They will wait until the CBO submits a revised score based on the amendments, and then there will be a final vote next week. So, how did we do?

Well, we know that there will be no public option in the bill. Maria Cantwell's amendment for state-based purchasing pools between 133-200% of the poverty level passed. Most of the right-wing amendments, other than adding money for abstinence-only education (which I'm guessing will get stripped down the line), went nowhere. The Committee even voted down all the amendments attacking undocumented immigrants, including rolling back one that would have prevented legal immigrants from buying into the exchanges for five years, which would have been utterly senseless.

On the other hand... the bill did delay and reduce financial penalties for those Americans who choose not to buy insurance, softening the stringency of the individual mandate (there are also lots of hardship exemptions). That's good politically in a sense, but does blunt the impact of the mandate, which will probably lead to higher costs with a smaller risk pool. I agree, however, that nobody should be forced to buy a plan they can't afford. Overall, this will help with the politics of the bill.

The real disappointment was the rejecting of Ron Wyden's Free Choice Act on a technicality.

About one in the morning, Wyden's Free Choice Act came before the committee. But it never came up for a vote.

Instead, Max Baucus effectively ruled it out of order. The reason? It didn't have a full CBO score. This came as a surprise to Wyden and his team, who'd gotten the amendment scored by the CBO, and had been in endless negotiations with Baucus, the White House, employers, and labor over the past week. If the score was in fact partial, as Baucus and Conrad claimed, you'd think someone might have mentioned it. No one did [...]

To understand the Free Choice Act, you need to understand that the exchanges are currently closed to businesses over 100 employees. In many states, they'll be closed to businesses over 50 employees (the Finance Committee's bill lets states choose their threshold, either 50 or 100). And in all states, they're closed to individuals who are offered "affordable" coverage by their employer. If I don't like the insurance The Washington Post is offering, or I feel I can get a better deal on the exchange, I am simply not allowed to go use the new network and take my pick from the many plans offered.

That's a real shame, that we continue to prop up a broken and inefficient delivery system of employer-based health care because nobody, neither business nor labor, wanted to risk messing with the status quo. As a result, the insured get less choices, businesses continue to bear a large health care burden, and nobody but insurers really win. It makes little sense for businesses to want to stay in the health care business and for labor to assume that they would keep their gold-plated health benefits at the expense of a broken system forever - which didn't hold in the case of the automakers. Jon Cohn has more.

Overall, the bill was improved by the markup, but remains flawed, particularly by the absence of a real public option, but also through the affordability questions, which were only slightly improved. There's still a long way to go to make this tolerable.

What's In A Name?

What's In A Name?

by dday

Harry Reid is now saying there will be a "public option" in any final health care bill. I'm sure nobody knows precisely what he means by that.

U.S. Sen. Harry Reid, D-Nev., said today there will be a "public option" in whatever health insurance reform bill comes out of Congress.

"We are going to have a public option before this bill goes to the president's desk," Reid said in a conference call with constituents, referring to some kind of government plan.

"I believe the public option is so vitally important to create a level playing field and prevent the insurance companies from taking advantage of us," he said.

Tom Harkin said almost exactly the same thing today - and he said that Republicans wouldn't be at the table when the two Senate bills get merged together.

Here's the good news about this. Reid is acknowledging that he absolutely cannot get away with having a final bill without something he can call a "public option." And progressives have done a good job of very specifically separating out triggers and co-ops as something that would not fit that definition. This is almost entirely due to grassroots activism. The public option would have been thrown out months ago if nobody was advocating for it from the bottom up. It was certainly not the intention of anyone in Washington to go into October with this issue still up for grabs. They were perfectly content to jettison it to protect insurance industry profits.

That said - there is no definition here for what public option means. And if you asked Sen. Reid point-blank, I'm sure he wouldn't give you a definition. He wants something that he can call a public option so the grassroots can be satisfied. What will that be? Probably not co-ops or triggers because they've been too well-defined by the grassroots. There are other alternatives coming in their place.

Tom Carper is pushing the idea of giving the states the ability to create a public option, which states could then link together for increased bargaining power. They wouldn't be able to use Medicare bargaining rates and they wouldn't have Medicare's provider network. And being state-based, they wouldn't have much leverage to gather the client base necessary to force a lot of competition with the private market. Of course, a lot of the "public options" out there offer weak, "level playing field" provisions similar to Carper's amendment. Jon Cohn says that actually, this is already in the bill:

One interesting question is whether the proposal is already redundant, thanks to an amendment that another member of the Finance committee, Ron Wyden, introduced that Chairman Max Baucus accepted before the hearings even began.

It's Wyden amendment C8, which appears on page two of the modified bill Baucus introduced formally for markup:

Amend Title I, Subtitle A to allow a State to be granted a waiver if the state applies to the Secretary to provide health care coverage that is at least as comprehensive as required under the Chairman’s Mark. States may seek a waiver through a process similar to Medicaid and CHIP. If the State submits a waiver to the Secretary, the Secretary must respond no later than 180 days and if the Secretary refuses to grant a waiver, the Secretary must notify the State and Congress about why the waiver was not granted. – Insert at the end of b)(1) ―and with citizen input through a referenda or similar means;‖ – In b)(2) strike ―a‖ and insert ―this‖ – Insert b)(4) ―the State submits a ten-year budget for the plan that is budget neutral to the Federal government.‖ – Insert at the beginning of c)(2) GRANTING OF WAIVER.— The Secretary shall approve the plan only if it meets criteria consistent with that of the America’s Healthy Future Act, including that it shall lower health care spending growth, improve the delivery system performance, provide affordable choices for all its citizens, expand protections against excessive out-of-pocket spending, provides coverage to the same number of uninsured and not increase the Federal deficit.

What does the gobbledygook mean? Wyden's staff says it's designed to encourage state experimentation. I haven't yet gotten an official reading from Finance Committee staff on their interpretation.

But my own reading, which I've run by a few analysts, is that it gives states the ability to implement coverage schemes that bolster coverage, control costs, and improve quality at least as well--and hopefully better than--the Senate Finance bill. That would include creating a public option. (You could even read it to allow a state-based single-payer plan.) So it's the Carper amendment, but without the restrictions.

Cohn notes that the HHS Secretary would have to rule, in the Wyden Amendment, on whether any state proposal met the proper criteria. Which means that, under a Republican Administration, you could see nothing helping people allowed to go through, or even scale-backs to benefits (though there is presumably a federal floor).

Still, maybe this is what Reid will determine as a "public option." Or maybe he'll dump Wyden's amendment and pick up the Carper idea and call that a public option. Or maybe Maria Cantwell's proposal, which allows states to negotiate on behalf of the uninsured below 200% of poverty level for a basic plan, will fit the bill, even though it sounds like a good policy but in no way a substitute for the public option.

The point is that all the activism and advocacy has gotten us far further than we would normally be in this debate. But there are still plenty of compromises out there that politicians will call "the public option" as an escape valve. It will be important to see these policies for what they are, instead of applying the name and being done with it.

Amendment Day

The Senate Finance Committee began marking up the Baucus health care bill this morning, and Part II of that hearing begins in just an hour or so. While the markup session is more a theater show than an actual horse trading session, lots of what has been going on behind the scenes will be revealed publicly over the next few days, in front of the White House and all the industry big hitters.

We know that the Republicans on the committee have given up trying to govern and are solely interested in scoring political points. Among their amendments are measures to reduce the excise tax “for any state with a name that begins with the letter ‘U’”. They have compiled 27 amendments designed to reduce affordability for regular Americans, dozens of amendments to protect industry from fees, one to change every instance of the word "fee" in the bill to "tax", and added the usual amendments around ACORN and czars. They are thoroughly unserious and have marginalized themselves from this debate.

That's proven by the fact that, based on the leaks so far, the movement is toward making the bill better from a liberal perspective than a conservative one. The affordability credits are expanding, new financing schemes are being debated, and Ron Wyden's Free Choice Act is picking up support amidst a decent CBO score:

Relative to the Chairman’s mark, the amendment as modeled would reduce the net impact on federal deficits by about $1 billion over 10 years. There would not be substantial effects on the total number of people with insurance coverage or the sources of that coverage, relative to the Chairman’s mark.

The CBO doesn't think lots of people would use Wyden's alternative, which would allow anyone to go into the exchange even if their employer offered health care. But this gives people an option, and sets the stage for an eventual move away from the employer system without a firewall propping it up. If it can show itself to be able to survive, it can prosper. If not, if the premiums go up and the employer-offered insurance gets worse, people have a safety valve. Max Baucus said this morning to Wyden, "I especially appreciate your comments about choice and competition if you don't want to be stuck with what your employer gives you. We're going to get into some ideas for how to do that."

I would like to see more counter-attacks along the lines of removing the anti-trust exemption for health insurers, to keep them in line with the policy. Dallasdoc has some great ideas. But the cantankerous nature of Republicans has actually moved the ball toward the only ones on the playing field, and Baucus-care is slowly, but surely, improving. Hopefully that will continue down the line.

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.

It's The Affordability, Stupid

Jon Cohn found a document from the Senate Finance Committee showing the impact of the Baucus health care bill on the middle class:

Total medical expenses, including premiums and out-of-pocket expenses, would be no more than 20 percent of annual income for most of the people profiled in the document. For the poor, it'd be dramatically less. That's the (relatively) good news.

And the bad news? These figures are all for people in average health. But people end up paying a lot more in out-of-pocket expenses when they have a serious medical issue--whether it's because of an accident, an acute illness, or a chronic disease. According to my back-of-the-envelope calculations, a family of four making $42,000 a year could owe $9,000 a year in medical expenses if it hit the maximum in out-of-pocket expenses--which is pegged, in the Finance legislation, to deductible levels in Health Savings Accounts. That's easy to do when one family member gets in an accident, has an acute medical problem, or is dealing with a chronic disease.

A family of four making $78,000 a year could owe $23,000--nearly a third of its income--if it had a member with high medical bills.

The committee analysis (and mine) includes a ton of assumptions--chief among them, that the families are buying the "silver" option, the benchmark plan on which federal subsidies are based. In other words, these figures are not precise, particularly since we don't even have an actual bill yet. And, in case you were wondering, families staring at such huge medical expenses would probably fall under the "hardship" waiver, exempting them from the requirement to purchase insurance. (In other words, neither Baucus nor any other sane member of Congress is going to force people to shell out money for insurance that leaves them so exposed to costs.)

On that last point, if families are exempted from buying insurance under the hardship waiver, then 1) the program will be far less universal than necessary, 2) the smaller risk pool will lead to higher premium prices from insurers, 3) most people WANT to be covered by insurance, and under this plan their only option would be to purchase unaffordable insurance that would still not shield them from potential bankruptcy in the event of an illness.

All of this is to say that the real problem here is the final cost of the bill. Already we've seen it drop from $1.3 trillion over ten years to $880 billion, with some Senators agitating for less. And not for any reason, mind you, other than to make the bill more "moderate". But that lowered cost means a cap on subsidies which will be insufficient for most.

At least some Democrats are aware of the deficiencies, and the fact that Baucus tailored his bill to attend to all of the concerns of a GOP who won't vote for it, instead of a Democratic Party who may. Even at this point, the Axis of Grassley and Enzi aren't satisfied, and are offering wildly contradictory proposals, like asking the Feds to bear the full cost of Medicaid expansion instead of part going to the states (I don't disagree) and also wanting to eliminate the tax on insurance companies that would pay for, among other things, Medicaid expansion. By contrast, Democrats are extremely concerned about the subsidies, which would lead to a package that people hate or cannot use.

Even within his own party, Baucus confronted a fresh wave of concern about affordability. Sen. Ron Wyden (D-Ore.) declared himself dissatisfied with the chairman's plan, which, like other congressional reform proposals, would require every American to buy health insurance by 2013.

"Additional steps are going to have to be taken to make coverage more affordable," Wyden said, "and my sense is that will be a concern to members on both sides of the aisle."

Charlie Rangel is sounding similar concerns on the cost. And The Hill reports that Democrats on the Senate Finance Committee will push this with amendments.

Near the top of the list for the panel’s Democrats is worry that health insurance subsidies will not be sufficiently generous nor available to enough people despite the fact that the bill would legally require most people to obtain coverage. Beyond premiums, some Democrats are concerned that Baucus’s proposal would not do enough to protect middle-class families from high healthcare expenses.

"It's very clear, at this point in the debate, the flashpoint is all about affordability,” said Sen. Ron Wyden (D-Ore.). “I personally think there’s a lot of heavy lifting left to do on the affordability issue.”

The healthcare bills already approved by three House committees and another Senate committee offer more generous subsidies – but at a higher cost to taxpayers.

“We’re doing our very best to make an insurance requirement as affordable as we possibly can, recognizing that we’re trying to get this bill under $900 billion total,” said Baucus, who has been courting Republican support for his measure in an attempt to guarantee that a healthcare bill can achieve the 60 votes or more needed to avoid a Senate filibuster.

“I’m going to work even harder to address any legitimate affordability concerns. I knew they were there,” Baucus said.

I just don't believe that the guy who created a bill which represents a gift to the insurance industry is all that concerned about "legitimate" affordability concerns. But in the end, the bill can't work unless people can afford coverage. That would obliterate everything the bill is trying to do.

Affordability And Open Exchanges

I've read a lot of the more skeptical commentary about the President's speech last night, but the person who seems to have crystallized my thoughts about it is Ron Wyden, who sits on the Senate Finance Committee. He agrees, as everyone should, that the President gave the cause of reform a big boost last night by making an exceptional case for why we need to do this. But he hones in on the two areas, in terms of the specific policy, where the bills on offer clearly need to improve:

Wyden believes the proposal wouldn't allow nearly as many people as it should to choose to enter so-called health insurance exchanges, if they're unhappy with the insurance their employers provide.

"Only people who are unemployed and uninsured and work at very small businesses would be allowed choice and competition in the exchanges," Wyden noted "Anybody who works at a mid-size business who doesn't like what they have, a government bureaucrat steps in and says you don't have choices.

Separately, Wyden is concerned that the proposal--which Obama said would cost $900 billion--might not be able to provide generous enough subsidies for middle class uninsured people who will, under the terms of the plan, be required to buy health insurance.

"If you have a family making $65,000 a year and they're paying $8300, $8400 for their premiums and copayments and deductibles...that's going to be another area that you're going to have to hone in on," Wyden added.

Wyden was also critical of the funding mechanism of taxing insurance companies, which he thinks wouldn't hit them at all, but hit consumers. I agree that it will not hit insurers, because it's not designed to do that. It's designed to essentially limit the employer deduction by encouraging insurers not to hand out policies that cost more than $21,000 a year for the individual. Wyden ought to know this, since his Wyden-Bennett proposal attacks the employer deduction directly by phasing it out. If the work-around insurance tax is the best we can do to get at that employer deduction, I'll take it.

On the other two points, Wyden is on the money. Affordability is a major problem in the bill, with or without a public option. $900 billion is not likely to cover it, especially considering that some of that money will have to fund these high-risk pools that have now been included. It's not just that people don't want to tithe 10-20% of their income to private companies - they don't want to tithe that to anyone. So the coverage subsidies have to be strengthened, and revenue raised to pay for it. This is problematic because of all the deals and sacred cows protecting various pots of money. But a bill that passes but doesn't work will be a political nightmare.

The other point is that Obama is telling a white lie when he says "Everyone should have the same choice as members of Congress have." If you get insurance through an employer, you simply don't have that choice, and this protects a busted, inefficient insurance delivery system. Wyden's Free Choice Act would break the firewall on the exchanges and allow employees the option of using them. His framing of a "government bureaucrat" keeping you from accessing the exchange plays to right-wing arguments, but it's undeniably effective.

Plenty of people are focused on the public option (although opening the exchanges would be the only thing that could make the public option viable), so these will be my main concerns over the next several weeks - making the subsidies affordable, opening the exchanges, and making sure the regulatory apparatus for insurance companies is actually workable. The provision encouraging employers to only hire people with rich families has got to go as well. Basically, the less of the Baucus document and the more of HR 3200, along with the additional tweaks mentioned above, the better.

We're Here, We're Progressive, Get Used To It

House progressives have really tried to throw their weight around on the deal put together between Henry Waxman and the Blue Dogs. They probably should get the full list of co-signers before releasing it, but still, this represents a rare step for the Progressive Caucus in taking a stand against compromise after compromise with the conservative wing of the party. I hear they got 53 members to add their names to this:

We write to voice our opposition to the negotiated health care reform agreement under consideration in the Energy and Commerce Committee.

We regard the agreement reached by Chairman Waxman and several Blue Dog members of the Committee as fundamentally unacceptable. This agreement is not a step forward toward a good health care bill, but a large step backwards. Any bill that does not provide, at a minimum, for a public option with reimbursement rates based on Medicare rates - not negotiated rates - is unacceptable. It would ensure higher costs for the public plan, and would do nothing to achieve the goal of "keeping insurance companies honest," and their rates down.

To offset the increased costs incurred by adopting the provisions advocated by the Blue Dog members of the Committee, the agreement would reduce subsidies to low- and middle-income families, requiring them to pay a larger portion of their income for insurance premiums, and would impose an unfunded mandate on the states to pay for what were to have been Federal costs.

In short, this agreement will result in the public, both as insurance purchasers and as taxpayers, paying ever higher rates to insurance companies.

We simply cannot vote for such a proposal.

At issue seems to be the reimbursement rates for the public option, which seems odd to me, because the Medicare +5% rates in the House Tri-Committee bill only exist for the first three years, and the negotiated rates from the Health and Human Services Secretary will presumably be improved over that of private industry. I agree about the lower coverage subsidies, but again, we're talking about 1% on those between 300 and 400% of the federal poverty level, which is not determinative. Finally, looping back to the public option, I agree that bargaining rates are important, but even if they are restored, the fact that relatively few people can access it because it's firewalled for people who get health insurance from their employers seems to be a MUCH bigger problem.

If you're interested in covering people, the primary questions are the subsidies, the employer mandate and the individual mandate. If you're interested in reforming the system, the primary question is the strength of the Health Insurance Exchanges. And if you're interested in the public plan? It's the Health Insurance Exchanges. Again.

In all the bills we've seen, the public option is on the exchange. It is only available to those who are able to buy into the exchange. But most Americans can't buy into the exchange. They're not allowed. To make this very clear, imagine that the House and the Senate both pass Henry Waxman's proposal tomorrow. Liberals would celebrate. That's got a good, strong public plan. And I can't use it. Not even if I want to pay for it out-of-pocket. I work at a large employer and thus I am not allowed to buy into the exchange.

A strong public plan on a weak exchange will fail because it won't attain sufficient market share. It's as simple as that. Conversely, even a weak public plan on a strong exchange could thrive, because it would have access to a lot of customers. Focusing on the public plan and ignoring the rules of the exchange is like focusing on engine power but ignoring whether people can buy the car.

And the one remedy for this problem, the Free Choice Act, which would give employees the choice to take employer coverage or use that money on the insurance exchange, is being pushed by Ron Wyden but virtually nobody else, certainly not House progressives or the larger progressive activist community.

(Now, I will say that Matt Yglesias' contention that the exchanges aren't the most important part of reform, but the insurance regulations are, when things like rescission and pre-existing conditions don't apply to the employer market either, is a little weird. An exchange that has all of those consumer protections on the insurance industry AND is available to anyone who wants to buy in would be a game-changer, particularly with a public plan providing competition inside the exchange.)

So, if progressives are vowing not to vote for deals that don't even contain the kinds of reforms they'd want, what's going on here? I think Ezra Klein has it right.

House liberals are afraid of the dynamic in which good bills face Blue Dog opposition in the final mile and are aggressively watered down. Senate liberals are afraid of the same. And throwing this final compromise with the Blue Dogs into doubt is a show of strength. After all, House liberals feel they've already compromised plenty: Coming down from single-payer is a compromise. Cordoning the public plan off on the Health Insurance Exchange is a compromise. The whole bill is one big compromise, and every subsequent iteration is a compromise stacked atop a compromise placed upon a compromise. At some point, the compromises have to stop. Or, better yet, they have to go in the other direction.

Yep. This is not about the specifics of the bill as much as it is about changing the general dynamic. It shows me that progressive lawmakers are learning from the mood of the grassroots, who have been demanding this for a while. Furthermore, they can add that, if health care goes down, the people on the front lines will be the ones who wouldn't deliver what the people wanted and are in the kind of districts most likely to flip to Republicans. I'm sure that progressives are mindful that a half a loaf bill will open them up to challenges from the left, too.

Forward Movement By Staying In DC

Ron Wyden just said on Andrea Mitchell that he would be prepared to put off the August recess to get health care done. The President would not commit to that in his conference call with bloggers, but I think it's a good idea. The House doesn't want to vote before the Senate. I think that's clear. The Blue Dogs, who are meeting with the President today, don't want to take a tough vote that they might not have to take, depending on the Senate Finance Committee's proposals. At the same time, I think even Democrats who are essentially conservative understand that their days are numbered if nothing passes. The reason Jim DeMint's quote about "Obama's Waterloo" is so powerful, the reason that internal GOP memos calling on Republicans to "engage in every activity" to slow down a bill, with the concurrent notion that it would sink the Democratic agenda and the Democratic President, is because it's fundamentally correct. Certainly the President knows that, that's why he's using it as a rallying cry. And the lesson of 1994 is that, with an unpopular President, the first group to pay the price in midterm elections are the same moderate Democrats resisting passage.

There's another former congressman who was frequently associated with the centrists and who learned this lesson rather well. Before Rahm Emmanuel was Barack Obama's chief of staff, he was in Congress trying to get guys like Minnick elected. In September of 2007, he gave an interview to Politico on the lessons he learned from 1994. “You’ve got to have a plan for universal coverage," Emmanuel said. "But you also have to have some product at the end of the process you can deliver.” You may not win, in other words. But you cannot fail to pass a bill.

Emmanuel has carried that lesson with him into the Obama White House. "The only thing that's not negotiable is success," he likes to say. The worst outcome for the party -- in part because it's the worst outcome for its marginal members -- is defeat. Voters punish defeat. That's what happened to Minnick's Democratic predecessor in Idaho's First District, Larry LaRocco. LaRocco captured the seat in 1990 only to lose it in 1994, the last time Democrats failed to sign a health-care reform bill. It's possible, of course, that LaRocco would have lost his seat with or without health-care reform. But it's evidence that a bill not passing was not a great outcome for Idaho's lonely Democratic congressman. If you're a centrist in a district that doesn't like Democrats and events turn your constituents further against your party, your odds of survival are very poor.

This may mean that Democrats get a bill that isn't particularly good, which would eventually bite back at them as well, but over a longer time horizon and with the ability to tweak in the interim.

The best way to make everyone happy is to push back the deadline but keep everyone in Washington to work on it. It shows that Congress is diligent and willing to work out the details. If everyone's worried about reaction in the districts (which I think is a bit unfounded) during the recess, don't have one! Stay on schedule by continuing to work.

Not Enough To Argue For The Public Option

The House Ways and Means Committee as well as the Education and Labor Committee have passed health care reform bills this week, which have largely the same form as the Tri-Committee bill released earlier. Both of the committee votes lost Democrats, but their numerical advantages allowed them to still pass the legislation. In the Energy and Commerce Committee, Blue Dogs hold higher numbers, and so some compromises may be needed to pass the bill. That markup will end sometime next week.

The focus now, thanks to the CBO head Doug Elmendorf's testimony in the Senate Budget Committee, is on cost control. Elmendorf claims that the current legislation would not bend the cost curve on health care to a sufficient degree to protect the federal budget. The White House has distributed language on strengthening MedPAC, the board that recommends how Medicare pays for certain services. If Medicare gets used as a way to make medical delivery more efficient, that could ripple through the rest of the system, and the White House proposal would allow those recommendations to go into law immediately, though Congress would have the power to vote down any recommendation. It's similar to Tom Daschle's old proposal of a Federal Reserve for health care. Elmendorf himself wants to revisit the employer deduction for health benefits, but as long as advocacy groups paid by unions continue to protect union interests, there will be no momentum for it in Democratic circles. I'm fairly upset with union opposition on this score.

But there is one legitimate reform that could lower costs for both individuals and the government, increase competition in the marketplace, and provide the best coverage at the best cost for everyone. That would be Ron Wyden's Free Choice Act, and it's what I think progressives ought to really push at this point.

There are two major problems with the proposals being considered in Congress. The first is that they do not do enough to cut costs, because they do not do enough to change the fundamental nature of the employer-based health-care system [...] The second is that the bill does not offer obvious benefits to an insured worker. You can argue that it changes the system around them: There are subsidies if they lose their job and regulations to protect them from the excesses of private insurers. But though the health-care system might be different, it will not, for most people, feel different. And that has made it hard to explain to people why this is something they should pay for. You can tell the insured worker what he gets if his circumstances change. You cannot tell him what he gets if his circumstances do not change.

Enter Wyden. The Free Choice Act is not a health-care-reform bill. It is best understood as a reform of the health-care-reform bill. In particular, it reforms the nature of the Health Insurance Exchange. Under the bills being considered right now, the exchange will be limited to the uninsured, the self-employed and small businesses. Maybe it will be expanded over time. Maybe not. In addition, it is barricaded by what's called a "firewall." The firewall essentially bars individuals from entering the exchange so long as their employers offer them a basic level of health-care coverage.

The Free Choice Act starts by setting the rules for the exchange: Within five years the exchange is open to all employers. More importantly, it's open to all people. The firewall is extinguished. But as the late, great, Billy Mays would say, that's not all!

The key component of the Free Choice Act is called "cash-out." Under the Free Choice Act, if I decide that I don't like any of the health-care coverage options being offered by my employer and would prefer to choose from the many options being offered on the Health Insurance Exchange, my employer has to give me a voucher that covers 65 to 70 percent of the cost of the lowest level of exchange plan. (That is the average portion that an employer pays of his employee's health insurance premiums.) I can take that voucher and, along with whatever money I want to throw in, choose a plan on the exchange.

We keep hearing the mantra of "if you like what you have, you can keep it." Wyden's reform preserves that. But it also opens up the health insurance exchange to everyone, and forces both insurers and the public option into real competition. The public option would not be walled off simply to those who don't have insurance from their employer or certain small businesses. It would have the opportunity to get market share to compete with private insurers. And for the first time, insurers across regions would compete with one another, as the companies inside the exchange would be able to entice workers who get insurance through their employers. All of this could actually change the dynamic in the insurance market and force competition on price and quality, rather than the current competition among insurers, which is "who can pay for the least amount of health care." It gives individuals the freedom to choose without stripping them of their bargaining power - in fact, it empowers them more. And it strengthens the public option, by opening the market to potentially tens of millions more consumers.

The employer-based system is nice for some, but it really delivers health care inefficiently, and Wyden's Free Choice Act would allow over time for an alternative to emerge that maintains the economies of scale to allow that alternative to compete. And this would save money, as it encourages cost effectiveness since everyone is competing on price.

Wyden talks about his idea here:

What we tried to do in this proposal is show the sweet spot between blowing the employer-based system to pieces and, on the other hand, simply saying that we will not try to improve it. The president's promise that we will be sensitive to not changing what people have is not incompatible with being able to choose some better.

When you tell people they can have access to a full menu of choices like members of Congress have, that's out of the park in terms of positive reaction. But if you're a congressperson and you're with Blue Cross one year and then all of a sudden you decide you want to go with Aetna, your transition is seamless. Someone in the private sector wouldn't even get that choice. We're trying to give it to them.

The biggest problem with health care reform right now is that we're grafting onto a system that doesn't work. Wyden actually finds a way to do that while also transforming the system. It's not enough to just argue for a public option that is as highly regulated and firewalled as what exists in the current House and Senate options. If you want actual health care reform, I think you need to echo Wyden's call for free choice.

...Dennis Kucinich also passed an amendment in the Education and Labor Committee permitting states to move forward with single-payer programs if they so choose. Which I think is fine, but given the economic predicament in which states find themselves right now, I can't see any one of them being able to do it for a while.

...From the Department of Bad Timing, just as I praise Wyden, he signs on to President Nelson and Collins' letter to delay health care reform. I have no idea why Wyden is in that coalition, but maybe this Free Choice Act has something to do with it.

As for delay itself, I'll associate myself with the remarks of The President of the United States.

The Panetta Saga

So now Joe Biden is acknowledging a mistake in the transition not informing the Senate Intelligence Committee chair about the choice of Leon Panetta for CIA Director, which was probably leaked, because there's no reason to intentionally antagonize the Committee Chair who will direct the confirmation hearings. I guess Obama talked it over with Feinstein, and apologized. Other committee members, including Ron Wyden, were consulted beforehand, suggesting that Obama really did want a break with the capitulationist elements of the Senate Democrats. Scott Horton considers this a plus.

So why would the Obama team, which has been so careful and thoughtful in approaching the nominations process, have failed even to consult the two Democratic senators who have the most to say about intelligence? I don’t think this was accidental. I read something else into it. The bottom line is that Jay Rockefeller was an abject failure when it came to intelligence oversight. His term as ranking member and then chair of the Senate intelligence committee was one in which Congress generally, and the Senate in particular, failed to live up to their Constitutional mandate. The intelligence community was steered by the Bush Administration into a series of criminal escapades. Effective congressional oversight would have exposed these failings and brought them to heel. But the Rockefeller-Feinstein record was little short of disastrous. I’m delighted that the Obama team didn’t consult them.

Feinstein, for her part, has commented further, saying that she understands the desire for a break with the past, but that she also wants the same guy working in Bush's CIA to stay on.

"I understand their thinking" in choosing Panetta, Feinstein explained, describing herself as "very respectful of the president's authority ... this is the man [Obama has chosen]."

I asked Feinstein whether her reticence about Panetta's lack of ties to the CIA would be mitigated by having Steven Kappes, her preferred choice for CIA director, stay on as the agency's No 2. "I believe very strongly" that Kappes should stay, Feinstein said, adding that Panetta's standing would be "very much enhanced" were Kappes to stay his deputy.

The entire point of the Panetta pick would be undermined by a #2 like Kappes. That would be a huge mistake IMO. And the idea that a CIA Director needs "experience" in intelligence matters flies in the face of history. Several good leaders at CIA had no intel experience whatsoever.

Meanwhile, Russ Feingold loves the Panetta pick.

I am pleased by reports of the nomination of Leon Panetta to be the next CIA Director. These reports indicate that President-elect Obama recognizes the need for fresh leadership for the intelligence community. Leon Panetta has a long and distinguished career in public service and there are few people of whom I have a higher opinion. He has been a strong voice opposing the interrogation practices authorized by the Bush Administration and he is well-equipped to restore our national security, which has been undermined by the current administration's policies. I look forward to closely examining his record, hearing his plans for protecting our nation against al Qaeda and other threats, and learning how he will help restore the rule of law after years of lawlessness that have undermined our national security.

This whole thing could be as simple as courtliness and some random fights in California (maybe going back to when Panetta and Jane Harman, who was up for the job, ran against one another for Governor in 1998). But the insistence on Kappes suggests this is a body-burying effort.

...Ezra Klein scores an interview with Sen. Wyden, who says that DiFi is about to introduce legislation to "end torture and close Guantanamo." Well, we shall see, but everyone trying to get to the left of one another on this issue is a good thing.

FISA Fix

I heard Russ Feingold on Democracy Now this morning and he vowed to filibuster the FISA bill, but it was kind of a weak admission with the acknowledgement that he wouldn't be able to sustain it.

AMY GOODMAN: Senator Feingold, will you filibuster this bill?

SEN. RUSS FEINGOLD: We are going to resist this bill. We are going to make sure that the procedural votes are gone through. In other words, a filibuster is requiring sixty votes to proceed to the bill, sixty votes to get cloture on the legislation. We will also—Senator Dodd and I and others will be taking some time to talk about this on the floor. We’re not just going to let it be rubberstamped.

AMY GOODMAN: Would you filibuster, though?

SEN. RUSS FEINGOLD: That’s what I just described.

He's saying that they only have the power to delay and not derail the bill. They could put a hold on it, stretching out the process until the July 4 break, which would be the smart thing to do. But there aren't 40 votes for a filibuster and it's unlikely they can be found.

Dodd and Feingold will offer an amendment to strip immunity and oppose cloture, but that will probably fail as well (especially because it would need 50 or potentially 60 votes to pass, more than a filibuster). Harry Reid will cosponsor the Dodd-Feingold amendment (and bring it to a sure failed vote and do nothing to stop the train from changring down the track). Ron Wyden will also oppose cloture, but I can't count to 40 on this one. Not that we shouldn't keep trying, but I want to be realistic. Nancy Pelosi welcomes more debate on the bill, which is why she gave it a solid hour in the House.

The fix is in, and I'm quite disheartened about it, and until I see different on the floor of the Senate, I'm assuming this abomination will become law.

...you really have to love Arlen Specter, who's trying to set some kind of record for vociferously opposing a bill and then voting for it:

“It is totally insufficient to confer immunity merely because the companies received written requests from the government saying the program was legal. While it is true that the standard of review has been changed from “abuse of discretion” to “substantial evidence” in this bill, the real question is “substantial evidence” of what? Only that the President authorized the program and the government sent written requests to the companies assuring them it was legal. The court is not required to find that the requests were lawful, or that the surveillance itself was constitutional.

“The provision that the legislation will be the exclusive means for the government to wiretap is meaningless because that specific limitation is in the 1978 Act and it didn’t stop the government from conducting the warrantless Terrorist Surveillance Program with the telephone companies’ assistance. The bill leaves the President with his position that his Article II powers as commander in chief cannot be limited by statute. That is a sound constitutional argument, but only the courts can ultimately decide that issue, and this bill dodges the issue by limiting judicial review [...]

“The Senate now has the opportunity to provide for judicial review by amending the House Foreign Intelligence Surveillance Act bill to authorize the U.S. District Courts to determine the constitutionality of the administration’s program before granting immunity to the telephone companies.

“The case for that determination has an important extra dimension beyond separation of powers. It involves a repugnant factor; namely, that the government had instigated and maintained for many years a secret practice, the scope of which is unknown to the public and known only to some members of Congress. It smacks of Star Chamber proceedings from old England. Now the administration insists on retroactive immunity and the House has complied. It is time the Senate stood up and earned its reputation as the “world’s greatest deliberative body” and at least demonstrate some courage, if not a full profile, by insisting on judicial review.

“In offering an amendment for judicial review, I am mindful of the importance of what the telephone companies have been doing on the war against terrorism from my classified briefings. It is a difficult decision to vote for retroactive immunity if my amendment fails, but I will do so, just as I voted for it when my substitution amendment failed because I conclude that the threat of terrorism and the other important provisions in the House bill outweigh the invasion of privacy.

Shorter Specter: "I care about the Constitution, but not SO much as to hold up a bill." He's truly hilarious.

Health Care and the Creative Class

Frontline did an excellent health care documentary exploring systems around the world. It made the case for single-payer, or at least a comprehensive system that's far preferable to the patchwork quilt we have in America, parts of which already exist here (Medicare, the VA, even the employer-based system). But I think that this ad touting Sen. Ron Wyden's Healthy Americans Act has the potential to make a far more lasting impact, simply because... it's funny, and that humor is a Trojan horse to lucidly explaining the idea that you are a slave to a job you can't leave for fear of losing your health insurance.



Other than the fact that the latte dispenser might not have health insurance from her employer to begin with, this is a key concept that Americans can grasp. Ezra Klein explains further:

What Wyden's video does is take aim at the weaknesses of employer-based health care: You may have it now, but if you lose your job, you can't keep it. in other words, your boss owns your health care. Which means you may have to stay in a job you hate, sucking up to managers you loathe, doing work you despise, all because Jenny needs braces. Far better, says Wyden, to have a world in which you own your insurance, a world in which you can keep it no matter the professional path you choose, and a world in which a fool supervisor doesn't control your access to your medical care. That's a world where employees have a whole lot more bargaining power, and can focus their energies on bettering their job rather than keeping their insurance. But it's also a world that's different than this one, and that scares people. The fight Wyden's picking isn't an easy one, but it's very worthy. And the video, I have to say, is surprisingly funny.

As the creative class matures and works on all of these separate issues, there is a lot of potential there to upset assumptions and really look at issues like this in a different way. Severing the employer-based system and replacing it with a model like Wyden's, which regulates markets so that individuals (who get the money that flowed into health benefits into their paychecks) can choose a plan with basic coverage at a set price, is going to take a lot of idea formation like this. Kudos to Wyden for moving the ball forward.

Wyden Steps It Up

It's mostly FISA for me today.

On the floor of the Senate, Ron Wyden today stepped up on two fronts. He first emphasized that the secret documents that include the legal justifications made by the Office of Legal Counsel for warrantless surveillance have only been offered for view by members of the Intelligence Committee and a few of the members of the leadership and not the full Senate. It is nearly impossible to get a full sense of this program, how the President and the executive branch sees their responsibilities under the law, and why they feel the telecom industry should be immunized from any illegal conduct, without seeing those documents. Senator Reid has actually asked the Administration to let all Senators see those documents, and Wyden went even further.

First, Wyden engaged in a dialogue with Senator Dodd about how the Senator from Connecticut, a 26-year member of the body and a senior member of the Foreign Relations Committee, is barred from viewing the documents. Next, he referred to Senator Whitehouse's discussion of the legal opinions and the implications they had for executive power. By allowing this legislation to go through without full disclosure of what the executive branch feels are its responsibilities under the law, we essentially allow their arguments to go unchallenged and give them the imprimatur of the Congress.

The second thing that Wyden discussed was his amendment in the Intelligence Committee, which was passed on a bipartisan basis, that would safeguard those Americans traveling overseas from being subject to warrantless surveillance. This was considered a poison pill from the standpoint of the Administration, but it's actually a very simple provision that would extend civil liberties and basic Constitutional rights to every American no matter their geographic space. Wyden explains it here:

Under current law, before conducting surveillance on an American citizen within the United States, the government must establish probable cause before a criminal court for law enforcement cases, or before the Foreign Intelligence Surveillance Court for intelligence cases. This means that the U.S. government needs a court-approved warrant to deliberately tap the phone conversations of an American living in Medford, Ore., or in Arlington. This protection, however, is not extended to Americans outside the country. If the U.S. government wants to deliberately tap the phone conversations of those same Americans on business in India or serving their country in Iraq, the attorney general can personally approve the surveillance by making his own, unilateral determination of probable cause.

During the Senate intelligence committee's consideration of legislation that would revise FISA, I offered an amendment that would require the government to secure a warrant from the FISA court before targeting an American overseas. This amendment, which was co-sponsored by Sens. Russ Feingold (D-Wis.) and Sheldon Whitehouse (D-R.I.), was approved by the committee on a bipartisan vote. Since then it has been upheld by the Senate Judiciary Committee, and I look forward to its consideration by the full Senate this week.

According to Wyden today, the chairs of the Intelligence Committee have come to him and suggested that there may be some unintended consequences as a result of this common-sense amendment. They are trying to work this out in a manager's amendment off the floor. But Wyden made clear that, if the result of that amendment doesn't meet with his approval, he will block unanimous consent on the bill.

So now this is the SECOND potential hold being put on this bill. It's clear that Wyden understands that his amendment represents a roadblock to signage for the President, and that the scheme will be to strip it out. He has now thrown down the gauntlet and announced his intention to block the bill if that takes its course. Of course, Harry Reid only honors the holds that the President likes, so it's unclear what effect this will have, or if a compromise will be reached and it will not come to that. However, adding an additional Senator's hold to the bill complicates the chances of it getting out of the Senate that much more.

The Republican arguments about this bill are absurd, claiming that as long as the Attorney General writes a note that something is legal, then it is (apparently Congress has no role), claiming that legal counsels for major corporations shouldn't be expected to know US law, etc., etc. But I think the biggest news of the day so far is Wyden's attacking the bill from a completely different angle, seemingly with the knowledge that a bipartisan amendment passed by both the Intelligence and the Judiciary Committees is about to be stripped out of the final bill.

Ending The Bush Dog Majority

DiFi's paean to the guy who won't say waterboarding is torture is one of the more depressing things I have read as a Democrat. The worst part is clearly this dross:

I believe that Judge Mukasey is the best nominee we are going to get from this administration and that voting him down would only perpetuate acting and recess appointments, allowing the White House to avoid the transparency that confirmation hearings provide and to diminish effective oversight by Congress.

How could oversight consisting of rubber-stamping a nominee because he's "not as bad as Alberto Gonzales," which is like saying "he's not as bad an actor as Mr. T," be construed in ANY way as effective? Who cares if there's a confirmation hearing if the revelations that come out of them are dismissed?

Feinstein then says that waterboarding is already banned by the military under the Army Field Manual, and the Congress should quickly pass a bill putting non-military interrogation under the Field Manual too, and then that will be that. First of all, waterboarding already violates international law and at least three domestic laws, no matter what agency is carrying it out. And of course, Feinstein has no understanding of basic Constitutional measures like the veto, nor any hope of internalizing basic political strategy. (The excerpt below refers to a Fred Hiatt editorial that advocates the same thing as DiFi. In fact, I'm not convinced that Fred Hiatt and DiFi aren't the same person.)

That's not to say it would not also be a good thing to enact the Biden bill, which would specifically require all United States personnel, including the CIA, to use only interrogation techniques authorized by the Army Field Manual. That would be yet another step that would help prevent the Bush Administration from violating the current bans on torture by doing things such as implausibly characterizing its torture as "not torture."

HOWEVER . . .

1. Whether or not the Biden bill ever becomes law, it remains the case that the torture is, in fact, unlawful -- and that the Senate and the Congress have voted repeatedly for actual laws and treaties (the supreme Law of the Land) that say so.

and,

2. Just in case the Washington Post has forgotten about yet another legal text, it's worth reminding Fred Hiatt that although the Senate's vote to confirm Judge Mukasey would effectively make him the Attorney General, the Senate does not have the power to "pass" the Biden bill. That would require President Bush's signature, as well (or supermajority votes of both chambers) -- and President Bush won't sign such a bill, precisely because he wants to be able to keep violating the longstanding legal prohibitions on torture and cruel treatment.

What the Post might have written that might have made some sense: "Because Judge Mukasey and the Bush Administration do not seem to understand that the techniques they refuse to disclaim are torture and cruel treatment that are already unlawful several times over, the Senate should tell President Bush that it will confirm Judge Mukasey if and only if -- and after -- the President signs the Biden bill."

It's called leverage, and it doesn't take a wizard to see its possibilities. But far too many Democrats are so consumed by fear that the part of their brain that thinks strategically has shut down. Well, that's partly true. It's either that or they really aren't interested in Democratic Party principles, just in using the voter lists. This has been made clear by Bush Dogs' unwillingness to pay their DCCC dues because one Democrat, who holds no official position within the party leadership, had the temerity to suggest that they maybe should be primaried if they hold no respect for their constituents or the party message. This is what's killing the party right now, although not nearly in the same numbers as it has the Republicans. We need a party willing to fight special interests and understand their role in opposing the President, not one that gets fat off special interest money and overrides Congressional rules to stab progressives in the back.

Former Colorado parks director Lyle Laverty's confirmation to a top post in the U.S. Interior Department was pushed through the Senate on Monday while a member blocking the vote was home tending to his wife and newborn twins.

Sen. Ron Wyden, D-Ore., for seven months had opposed Laverty's confirmation as assistant secretary for fish and wildlife and parks, demanding that Interior Secretary Dirk Kempthorne address ethical lapses within the department.

On Friday, Wyden's wife gave birth to twins, and the senator was in Oregon on paternity leave Monday when Senate Majority Leader Harry Reid, D-Nev., scheduled the vote.

"I am fuming," said Scott Silver, co-founder of Wild Wilderness, an Oregon forest advocacy group. "If an effort was made to go around Wyden, knowing that he was with his wife in the hospital just becoming a father of twins, that is truly shameful."

Right now progressives are either shut out or outvoted in the leadership, and are undermined in the rank and file by Bush Dogs and nervous Nellies. We need aggressive challenges to those who refuse to stand up for Democratic values or oppose Bush. We also need respected progressives to step up and join the fray; I'm glad to see Tom Udall reconsidering the Senate race in New Mexico, with the blessing of the DSCC. But those opportunities are rare. What's more common is Bush Dogs in reliably Democratic seats where proud progressives like Donna Edwards should be sitting. Nancy Pelosi actually held a fundraiser for her opponent in MD-04, corrupt incumbent Al Wynn. But the "counter-fundraiser" online raised as much money. And EMILY'S List endorsed Edwards, along with Progressive Maryland, a great state-based grassroots organization. The only way to rescue me from my despair over these sniveling cowards that pass for our Democratic majority is the hope that people like Donna Edwards can start chipping away at them, and in some way restore the party inch by inch. It's going to be a long road.

The Principles At Stake In FISA

I think it's important to note that the FISA bill which came out of the Senate Intelligence Committee would draw a Presidential veto because of Ron Wyden's amendment requiring a FISA warrant to wiretap Americans overseas. So as much as I admire Chris Dodd's principled stand on telecom immunity, even if he relented and the SSCI version of the bill became pre-eminent, it would be vetoed. Not to mention the fact that Wyden's amendment is I feel crucial, otherwise Americans abroad could be randomly targeted at the whim of the Attorney General:

One amendment, which we offered along with Senator Whitehouse, ensures that whenever the government wants to target an American overseas, the FISA Court – and not just the Attorney General – must determine that there is probable cause that the American is an agent of a foreign power. Americans’ rights should not diminish when they cross the border, nor should the extent of those rights be subject to the whim of the executive branch without the checks and balances provided by the court.

All this does is add a layer of judicial review to determining who is an agent of a foreign power. It's a move the Founders would have pulled to ensure that no one branch predominate. But this is an Administration that literally believes the courts and the Congress have no role in many aspects of government. I'm glad Dodd is out there fighting, because telecom immunity is simply wrong. But this is an amendment worth fighting for as well.

Studs Terkel, himself a subject of government-encouraged blacklisting at one time, wrote an incredible essay for the New York Times on the subject yesterday:

In 1978, with broad public support, Congress passed the Foreign Intelligence Surveillance Act, which placed national security investigations, including wiretapping, under a system of warrants approved by a special court. The law was not perfect, but as a result of its enactment and a series of subsequent federal laws, a generation of Americans has come to adulthood protected by a legal structure and a social compact making clear that government will not engage in unbridled, dragnet seizure of electronic communications.

The Bush administration, however, tore apart that carefully devised legal structure and social compact. To make matters worse, after its intrusive programs were exposed, the White House and the Senate Intelligence Committee proposed a bill that legitimized blanket wiretapping without individual warrants. The legislation directly conflicts with the Fourth Amendment of the Constitution, requiring the government to obtain a warrant before reading the e-mail messages or listening to the telephone calls of its citizens, and to state with particularity where it intends to search and what it expects to find.

Compounding these wrongs, Congress is moving in a haphazard fashion to provide a “get out of jail free card” to the telephone companies that violated the rights of their subscribers. Some in Congress argue that this law-breaking is forgivable because it was done to help the government in a time of crisis. But it’s impossible for Congress to know the motivations of these companies or to know how the government will use the private information it received from them.

And it is not as though the telecommunications companies did not know that their actions were illegal. Judge Vaughn Walker of federal district court in San Francisco, appointed by President George H. W. Bush, noted that in an opinion in one of the immunity provision lawsuits the “very action in question has previously been held unlawful.”

I have observed and written about American life for some time. In truth, nothing much surprises me anymore. But I always feel uplifted by this: Given the facts and an opportunity to act, the body politic generally does the right thing. By revealing the truth in a public forum, the American people will have the facts to play their historic, heroic role in putting our nation back on the path toward freedom. That is why we deserve our day in court.

This is a really simple issue. If we allow the federal government to spy indiscriminately on Americans, to use "basket warrants" to suck up a whole bunch of data and figure out what to use it for later, to allow telecom companies who have massive legal staffs to assist in illegality with no cost, we have switched places with the Soviets.

Wiretapping Update: Hold, What Hold?

Chris Dodd's noble action yesterday doesn't squash the telecom immunity bill entirely, but it's supposed to slow it down and make it such a pain in the ass that nobody in their right mind would push it forward. Harry Reid is not in his right mind.

Tim Starks of Congressional Quarterly reports that Senate Majority Leader Harry Reid (D-NV) plans to bring the Senate’s surveillance bill up for floor debate in mid-November. That’s despite the hold that Sen. Chris Dodd (D-CT) plans to place on the measure — something first reported by Election Central’s Greg Sargent.

I’m a bit confused here. This just doesn’t happen. So I chatted with someone I know with extensive Hill experience, who said:

“I can’t think of one time when Harry Reid went around his own. It’s just not normal for a leader to do that to his own side. Sometimes you’ll go around Republicans, sometimes they’ll use holds to be “spoilers,” but that happens to the other guy. You just don’t do it to one of your own.”

Indeed, the bill passed out of the Intelligence Committee, with only Ron Wyden and Russ Feingold opposed. Wyden did manage to place a poison pill in there:

An amendment by Sen. Ron Wyden (D-Ore.), who opposed the bill for its inclusion of telecom immunity, requires the government to obtain a warrant when targeting an American overseas for surveillance.

Last night, White House spokesman Tony Fratto said: "We have strong concerns about that amendment. We certainly could not accept it."

Bond called the provision "problematic" and said that if it is not modified, passage could be difficult.

Jeez, it's almost like that those on the side of the rule of law are in the minority again. Putting poison pills in our own bills to knock them down? Unbelievable.

I have to hand it to Dodd again. He's fighting the good fight here, and he's the perfect person to take this on. One reason, besides the bully pulpit of running for President, is that he has already announced that he will not seek a run for re-election to the Senate. So the prospects of retaliation mean less to him. Still, this takes a lot of guts, which Barack Obama, who put out a nice little press release but hasn't gone to the same lengths, doesn't have in the same way. Obama did put a hold on the nomination of Hans von Spakovsky, which was huge, but look at the countervailing interests here. Opposing a Bush appointee is different from opposing Bush, the Republicans, and powerful telecom companies all at once.

And I'm as puzzled as Atrios about the idea of immunizing any party from breaking laws, given that there's legislation preventing ex post facto laws from being enacted.

UPDATE: If you want to know why Democratic leaders would be pushing to give telecom companies a free hand to break American law, this is a handy blog post.

Top Verizon executives, including CEO Ivan Seidenberg and President Dennis Strigl, wrote personal checks to (Senate Intelligence Committee Chair Jay) Rockefeller totaling $23,500 in March, 2007. Prior to that apparently coordinated flurry of 29 donations, only one of those executives had ever donated to Rockefeller (at least while working for Verizon).

In fact, prior to 2007, contributions to Rockefeller from company executives at AT&T and Verizon were mostly non-existent.
But that changed around the same time that the companies began lobbying Congress to grant them retroactive immunity from lawsuits seeking billions for their alleged participation in secret, warrantless surveillance programs that targeted Americans.

The Spring '07 checks represent 86 percent of money donated to Rockefeller by Verizon employees since at least 2001.

There are times when I really hate how perverted our political system has become.

UPDATE II: Dodd now vows to filibuster the bill.

Are you willing to go to the mat to restore the Constitution?

Just last night, we heard there are plans to disregard Senator Dodd's intention to place a hold on a FISA bill that includes amnesty for telecommunications companies.

That would be a pretty extraordinary move, but Chris Dodd has pledged to stop this horrible bill any way he can.

So if the hold is not honored, he is prepared to go to the Senate floor and filibuster.

Rolling back the Bush Administration assault on the rule of law has been a major focus of Chris Dodd's work in the Senate -- and it's also a centerpiece in his campaign for President.

Obama's Plan for Not-Universal Health Care

Barack Obama unveiled a health care plan today, and the most misleading part of the AP story is the title, which claims that it's a universal plan. Ezra Klein explains that it's not.

Mandates: I want to be very clear on this point. Obama's plan is not a universal plan. After it is implemented, it will not have 100 percent of the population covered. It will increase coverage by forcing some employers to begin offering insurance, but it is not particularly heavy-handed even there. This is a plan that makes universality possible -- that is budgeted for 100 percent coverage -- but does not use a government or individual mandate to force global buy-in.

This is why a lot of us think that Obama is wary of transformational change, while willing to attempt to take incremental steps. There is no individual mandate, and considering that this doesn't get rid of the insurance companies that's probably a good thing. But without some mechanism for insuring universal coverage, you're not going to add to the risk pool, which is the best way to reduce health care costs. Obama's plan tries to create the conditions for universal coverage - by offering reform in the insurance system to make it more affordable, requiring employers to pay a little more, and setting up a parallel government-based system (The National Health Insurance Exchange) to take care of the unemployed or self-employed.

The thinking goes like this: You need to get the system set up for universality before you actually demand it -- lest you find coverage remains too expensive, or too inaccessible, for some. So the hope is that by reforming the system, you'll be able to create universality softly, by just making coverage accessible and cheap. If not, the Obama campaign swears up and down that they're committed to 100 percent coverage, and if that means a second round of coverage-increasing policies in a few years, so be it. I don't particularly understand the thinking here, but the end result is this: The Obama plan will not bring us to 100 percent coverage in the short-term. It just won't. But it will take us much further along the road, ensure full coverage for all children, and create a system in which mandates could be more easily added later on.

This is more like a "double-payer" option. It preserves the current broken health care system while trying to regulate it. And then it sets up a second system, a public one, that targets specific groups of people:

The Public Option: Unlike in the Hacker or Edwards plans, the public option is not a general purpose insurer. Major companies cannot choose between insuring their employees on the private market and buying into the national program. Rather it is an insurer of specific groups, in the way Medicaid covers many of the poor, or SCHIP is targeted at children. In this case, it's looking at small businesses, the self-employed, the unemployed, and those employed by companies who don't offer insurance.

All of these programs (even the Edwards one, which I essentially like) are very complicated because they seek to preserve the current system and build upon it, instead of very easily saying "everybody gets health insurance paid through taxes" and end it at that. This is pragmatic, because removing an enormous industry from the United States is unlikely. I like the Edwards plan better because it uses a free market model to put the private and public plans in competition with one another, and my belief is that will bring about the end of the for-profit insurance industry because people could choose a plan that values health instead of profit. Hillary's plan is probably the worst of all of these, because it focuses on incremental things to make the current health care system more affordable, like a "prevention initiative" and changes to the medical malpractice system. As a caveat, she claims that it's just the beginning of a rollout, so comparing her plan to the comprehensive ones of Obama and Edwards is a bit unfair. But nobody's being truly bold and favoring a full single-payer system. I think that's actually almost too bold to be done at the federal level, at least at first, which is why I support the efforts of Sheila Kuehl to make SB 840 a reality in California, where it can be a model for the nation.

So to sum up, Obama's plan is not as good as Edwards', better than Clinton's (so far). And Ron Wyden, who has his own plan in the Congress, criticized it. Nobody wants to be truly bold, however, and go after the system as a whole.