December 19, 2009

The Senate Prepares to Keep America from Joining the Rest of the Civilized World

[Click on image to view at full size.]

A report today in the Washington Post indicates that, with the announced support of Nebraska Senator Ben Nelson, there are now enough votes to pass the Senate's version of a health care reform bill. If the bill is passed, the next step will be reconciliation with legislation that came out of the House in November, which promises to be interesting, to say the least.

HR 3962, the House's Affordable Health Care for America Act, is summarized as follows:
... It seeks to expand health care coverage to the approximately 40 million Americans who are currently uninsured by lowering the cost of health care and making the system more efficient. To that end, it includes a new government-run insurance plan (a.k.a. a public option) to compete with the private companies, a requirement that all Americans have health insurance, a ban on denying coverage because of a pre-existing condition and, to pay for it all, a surtax on individuals with incomes above $500,000.
The Senate version, however, is a different beast entirely.  Not only does it lack a public option, but it places even greater coverage restrictions on abortion procedures - which, despite whatever one's personal feelings might be, are perfectly legal - and mandates the purchase of coverage from private insurers.  Former Vermont governor, presidential candidate and Chairman of the Democratic National Committee Howard Dean eviscerated the bill in column last Thursday:
If I were a senator, I would not vote for the current health-care bill. Any measure that expands private insurers' monopoly over health care and transfers millions of taxpayer dollars to private corporations is not real health-care reform. Real reform would insert competition into insurance markets, force insurers to cut unnecessary administrative expenses and spend health-care dollars caring for people. Real reform would significantly lower costs, improve the delivery of health care and give all Americans a meaningful choice of coverage. The current Senate bill accomplishes none of these.

Real health-care reform is supposed to eliminate discrimination based on preexisting conditions. But the legislation allows insurance companies to charge older Americans up to three times as much as younger Americans, pricing them out of coverage. The bill was supposed to give Americans choices about what kind of system they wanted to enroll in. Instead, it fines Americans if they do not sign up with an insurance company, which may take up to 30 percent of your premium dollars and spend it on CEO salaries - in the range of $20 million a year - and on return on equity for the company's shareholders. Few Americans will see any benefit until 2014, by which time premiums are likely to have doubled. In short, the winners in this bill are insurance companies; the American taxpayer is about to be fleeced with a bailout in a situation that dwarfs even what happened at AIG.

From the very beginning of this debate, progressives have argued that a public option or a Medicare buy-in would restore competition and hold the private health insurance industry accountable. Progressives understood that a public plan would give Americans real choices about what kind of system they wanted to be in and how they wanted to spend their money. Yet Washington has decided, once again, that the American people cannot be trusted to choose for themselves. Your money goes to insurers, whether or not you want it to.
I reluctantly conclude that, as it stands, this bill would do more harm than good to the future of America.

I agree with Dr. Dean; the Senate bill is a giveaway to the insurance industry that does little to fundamentally alter the health insurance landscape.  And let's be entirely clear about whose fault this is: blame for this debacle should be placed not only on Senate Majority Leader Harry Reid, but President Obama, as well.

It was Senator Reid's decision to use rules for advancing this bill that require 60 votes to end debate, as opposed to a simple 51-vote majority, which he could have done, and which would have made people like Ben Nelson and Joe Lieberman - who have gutted this legislation - irrelevant.  The president, meanwhile, has failed to lead in this entire process, declaring in September that he would like to see a public option included, but then backing away from this stance mere weeks later, leaving Mr. Reid and the American people out on a limb while taking care to distance himself from any political fallout.

To be sure, real reform is not dead, but it will take unwavering leadership from the House of Representatives, and a full-court press on the White House to make it happen.  This isn't about passing a bill before Christmas so Mr. Obama can cross an item off of his to-do list; it's about helping real people, making our country stronger, and standing with the rest of the civilized world.  (See map above.)


jakub said...

can you find a source for the Iraq and Afghanistan comment? i tried searching for one and came up with nothing except this same map

PBI said...

Hi jakub,

Thanks for stopping by.

The Iraqi constitution guarantees universal health care, as I wrote about in The Demise of the Public Option Has Been Greatly Exaggerated. The full text of the Iraqi constitution was sourced at MSNBC, I believe, and that link, as well as one from a story at are in the post. The fact that the United States is entirely propping up the Iraqi regime means that we are funding their efforts to deploy universal health care.

The Afghanistan situation is much the same (although I don't believe that there is a guarantee of universal health care in that county's constitution) with U.S. funding making health care available, for free, to any Afghans who need it.


Grip said...

Hey PBI - Grip here.

I cannot verify this, but if Reid went with the "51 majority" rule at this point, doesn't it have a maximum term of only 10 years? I thought I read that somewhere. Therefore, this would have been a real political dung-pile knowing that it expires in 10 years, unless reconfirmed in 10 years - ala Bush's tax cuts. Or am I off base?

PBI said...

Hey Grip,

Happy holidays!

I don't believe there is a ten-year limit - or at least I have never come across anything that says there is one - but it certainly sounds plausible.

Even if it's true, I'd prefer to see it used instead of the ridiculous 60-vote set-up. I'd rather people get the public option for ten years and give everyone a chance to realize that it isn't the end of civilization. I have a high confidence level that it would be renewed, especially given the CBO scoring that indicates it would save money and reduce the deficit.


Grip said...

Dude - I hope you are not so naive that you believe the projections of the CBO will come true. The bill is what it is, but the CBO predictions will not become reality. Specifically, they are not allowed to call BS on 'assumptions' Reid gave them to score. In other words, by giving the perfect scenario assumptions, Reid was able to get the CBO report he needed to gain support for the 60 votes. Apparently, you are falling for the gimmick as well.

I'm cool with reform, but this particular brand smells to high heaven. NOR will the CBO predictions ever come true.
- There will be no reduction of Dr's pay.
- There will be no reduction in "wasteful" spending.
- etc...

Everyone just needs to be ready to pay more. But if the truth were ever said, it would never pass.

Net, ALL politicians are scum-sucking whores. (Sorry for the insult to the real scum sucking whores. You didn't really deserve that last comment.)


PBI said...


Not true. The CBO routinely provides a range of analysis and/or a confidence level based on their comfort with assumptions used in their modeling, and by law must base their forecasts on current law. I have had occasion to have a litle firsthand exposure to the CBO in a previous life, and they do their absolute best to remain non-partisan and provide the highest quality estimates and modeling they can. They are flatly not slave to assumptions provided by legislators. (If you want a good example of this, recall the horrendous scoring given by the CBO to the Kennedy/Dodd Affordable Health Choices Act back in June.)

Is there going to be error over long range projections? Absolutely – just like in the private sector – but the CBO remains one of the better predictors for performance available, and I will absolutely trust their numbers before I will take numbers from places like the American Enterprise Institute or the Heritage Foundation. I don’t expect them to be spot-on, just like I don’t expect my company’s 20-year projections to be, either, but they are a worthwhile tool for directional evaluation. It’s a funny thing about the CBO; you’ll see people holding its numbers in the highest esteem when they come out the way they want them to, and basically spitting on them when they don’t.

Be all of that as it may, the specific CBO scoring I was referencing was for a public health insurance option (which would have been possible coming out of the Senate with a simple 51-vote requirement) - not the mutated beast that has emerged from the Senate, and which is a giveaway to the insurance industry. As far as the Senate bill goes, I don’t like it either, and don’t support it. As long as we have to spend money on meeting the administrative requirements of multiple insurance companies AND providing profit margin, there will automatically be waste in the mix, and catering to the Liebermans and Nelsons of the world has left us with a mandate system coming out of the Senate that is no better than the one that’s been struggling in Massachusetts.

The Obama Administration and Harry Reid have messed this up big time, and the only person who has actually done a halfway decent job on health care reform legislation is – and this will make you choke, I’m sure – Nancy Pelosi. (Although she chose to allow the Stupak Amendment in in order to get her votes.) I’m hoping that the House remembers it’s co-equal with the Senate, and that they bring their spine to reconciliation.


I’m not “falling” for anything, Grip; you appear to have misconstrued my earlier comment.

Grip said...

Seriously, to suggest this legislation will reduce the deficit is absurd. It may be the best available prediction, but NO sizable entitlement has come in under budget.

I am willing to bet a dinner for all of our classmates at John Thomas during our 20th Reunion that costs greatly exceeded the CBO prediction. What definition would you like for "greatly exceeded"?

You game?


grip said...

Oh - and yes, you are correct - I am not a big fan of the Speaker, nor any of the BS speading chumps we have elected.

PBI said...


"Under budget" and "reduce the deficit" are not synonymous; the program can come in over budget and still reduce the deficit.

That said, if your question is if, in 10 years, will the Senate bill come in under budget, I think I will need to wait until we get through reconciliation to see what comes out as the final product, but right now, I would be inclined to take that bet. Given the points you have made, you might consider that foolish, but Congress actually has a decent record of controlling certain aspects of health care costs. See here for a good article on the topic, the main points of which are:

1. Despite charges to the contrary, the health bills approved by the House and pending in the Senate contain a wide range of measures to reform the nation’s health care system and moderate the growth of health care costs over time, particularly in Medicare. The bills take most of the steps that we know enough about to pursue now in most of the areas that experts view as promising avenues for restraining health care spending.

2. The history of health legislation in recent decades demonstrates that, despite some critics’ charges, Congress has repeatedly adopted measures to produce considerable savings in Medicare and has let them take effect.

3. Critics complain that, under the House and Senate bills, total health care expenditures in the United States will rise in the near term, not fall. That’s no surprise, however, nor does it suggest something troubling about health reform. Providing insurance coverage for tens of millions of uninsured Americans will necessarily raise total health care spending in the short term. The real issues here are: (1) whether health reform includes provisions to cover the costs of these insurance expansions so that deficits and debt do not increase; and (2) whether health reform includes steps that begin to slow the rate of health cost growth so that total health spending is lower in the longer run than it otherwise would be. The House and Senate bills meet the first test, according to the Congressional Budget Office (CBO), and both bills also hold promise for the second test

4. Finally, critics complain that the CBO cost estimates showing that the bills would reduce the deficit are misleading and rest upon a gimmick — specifically, that neither the House nor the Senate bill includes a measure to permanently eliminate the Sustainable Growth Rate (SGR) mechanism. But that cost is neither part of, nor in any way a result of, health care reform — the federal government will incur this cost regardless of health care reform, not because of it. This fact is undeniable: if health reform legislation were to die tomorrow, the full SGR cost would remain. To be sure, it would be better if Congress offset the cost of cancelling the SGR cuts. But that issue is separate from the question of whether the health care reform bills themselves add to the deficit or not.

On a related note, if one wanted to really take a bite out of the deficit, there are two easy solutions:

1. Reduce defense/war spending
2. Eliminate tax cuts and/or raise taxes

These two factors are - far and away – the biggest contributors to the deficit. (See here.) But of course, while there is always money to spend (or lose by the pallette-full!) on war, as soon as we start talking about providing health coverage to all Americans, the deficit becomes a matter of primary importance. Just ask Orrin “it was standard practice not to pay for things” Hatch.

Take care,

Grip said...

Sorry for the delay in response.

My posed challenge was focused more on the promises of cost/reductions than anything else. SGR is a great example. So here is my point. First, I agree that these costs will happen with or without reform. BUT, the President and Congressional Leaders (via CBO - to my earlier comment) are using these 20% 'cuts' to PROVE their financial projections. This is completely disingenuous because no elected official has the stomach to go through with these cuts OR any other cuts they claim will pay for HALF of this bill (because they care about Lobbyists who can buy votes more than the voters themselves). Further, my argument is this bill would not have had a chance to pass without the 'CBO' gimmickery employed because the vast majority of people do not want what this will end up being. I believe we all want reform, but this solution will actually make things worse short, midrange AND long terms.

(Sidenote: if you already know there are billions of dollars in waste today, why wait for this legislation to stop it?)

If the cuts don't happen, but the entitlements are now law, the only option is to increase 'revenue' (taxes) on EVERY taxpayer... including (and especially) those who make less than $250K/yr. I am mostly frustrated by the naive voters who desparately wanted to believe he was different. Hell, I wanted to believe as well. Unfortunately my skepticism was well founded. The middle class, many of whom their votes were secured from the repeated promise that the President would not raise, 'not even a single dime', in additional taxes/fees/expenses, was duped. Yet, we are the ones who always take it in the arse! Many of his 'moderate' promises seemed to be the drawing point for disillusioned Republicans and Independents who chose to give him a chance. As President, he is not acting on his own promises (left or right) and continues to violate that false trust he garnered for the election. And you can't say we should have known, because so little was known about him before the election. Net, the MODERATE approach was his mandate that got him elected, not the left agenda. This is where a lot of the 'anger' across America was spawned, especially over the summer - in case you needed a clue. "Faux News" may have fueled the flames, but the fire was born out of Congress's and this President's failure to give a rat's ass about 'non-lobby supported' middle America. And, yes, we were also upset with Bush's crap, which is why we were 'disillusioned Republicans and Independents'. However, quadrupling the problem that Bush started is NOT what we believed would happen. The mere mass of increase was enough to get the silent majority to not be so silent anymore.

Sorry for the bloviating. (thought you'd like that one.) BUT let me try this again...

I will bet you a John Thomas Dinner at our 20th that the requisite cuts in Medicare/SGR/et al that the CBO used to project the financial soundness of this bill will never come to pass, thus forcing either huge increases in taxes (or fees or cost of service) OR the rationing of care that is available today to make this new entitlement 'affordable'.

(Of course this is all predicated on the bill becoming law.)

PBI said...


I agree with some of your points, but disagree with others.

I concur that Obama was elected as a moderate, but given the wide-ranging support for health care reform and even single payer (see, as but one example, here), the idea that health care reform is some sort of leftwing, fringe policy is hard to support. There is an awful lot of whinging (I will see your "bloviation" and raise you a "whinging"!) about Obama's Far Left Agenda; what, specifically, is that supposed to be? Most of the examples that are trotted out, such as TARP, were Bush Administration initiatives. Is the complaint that he hasn't ended those? I'm not being obtuse - I genuinely don't understand what "Obama's Far Left Agenda" is supposed to be.

Additionally PolitiFact's non-partisan evaluation of the president's performance contradicts your assertion that he is not keeping his promises. That's not to say in any way that he couldn't be doing better - leadership on health care, Gitmo and other things come to mind - but he is clearly not acting counter to his campaign promises in the main. (Although he DID flat-out lie that he hadn't campaigned on a public health insurance option.)

Also, I'm not sure what you mean by "quadrupling the problem". If you are referring to the deficit, he very clearly has done no such thing, as even the mavens at the very conservative CATO Institute recognize. (See here and here.) If you mean the problem of lobbyists in Washington, I agree that it remains a tremendous problem, but at WORST under Obama it is only as bad as it was under his predecessor, whose administration took the art of the kleptocratic revolving door with K Street to unprecedented heights.

I think your statement that "This is completely disingenuous because no elected official has the stomach to go through with these cuts OR any other cuts they claim will pay for HALF of this bill" is overbroad, per the link in my last comment. Congress actually has a reasonably successful track record in this policy area. Further, the idea that we don't need legislation to drive reform is pretty hard for me to swallow; waste and expanding health care costs have been a known issue for DECADES, and the private sector hasn't solved the problem. (Not to mention that the quality of our care compared to the rest of the industrialized world has been plummeting along any number of metrics. See here.)

All of that said, as I mentioned in an earlier comment, I don't like the Senate bill, but SOMETHING needs to come out of the Senate in order for reconciliation with the House bill to occur. (The House bill certainly isn't perfect either, but if the Senate version can be moved closer to it, that may be a win.)

With regard to the specifics of your wager, I need some additional clarification: Are you contending that the specifics of the SGR cuts and other ephemera used to pass the Senate bill are of paramount importance, or will you be satisfied if the final form of health care reform ends up at least deficit-neutral? (I ask because there are a lot of things left to happen in the legislation's evolution.) Second, are you suggesting that care is not rationed today, or do you have some specific level of rationing that would trigger the payoff in this bet?