The Battle For Control Of Congress 2014

While the media is increasingly talking about the 2016 presidential election, we have a major election coming up for control of Congress later this year. At present it appears that it is unlikely for the Democrats to take control of the House, and they are now fighting to retain control of the Senate. Predictions that the Republicans will hold the House and possibly take the Senate are based upon historical trends and which Senate seats are up for reelection this year. Of course it is possible to see a break from past trends.

Among the trends causing people to predict this to be a good year for Republicans: minorities and young voters don’t vote as often in off-year elections, a president’s party generally does poorly in the sixth year of the president’s term, a president’s party does poorly when the president has low approval ratings, and a president’s party does poorly when the economy is having difficulties.

On top of this, the Democrats are defending Senate seats in several red states this year, giving the Republicans a chance to pick up some seats. Fortunately the situation is reversed in 2016 with more blue-state Republicans up for reelection. Based upon these fundamentals in a presidential election which is likely to already be more favorable to the party, a Democrat winning the White House should also see a pick up of several Senate seats.

The Republican Party has been working in other ways to pick up votes. They have made voter suppression a major part of their electoral strategy, along with continuing the Southern Strategy based upon racism and now xenophobia. On the other hand, their history of racism may backfire with the increase in minority voters, possibly turning some southern states blue in the near future. We saw this first in Virginia and to a lesser degree in North Carolina. In the future this could extend to Georgia, Texas, and additional states.

Republicans have an advantage in keeping control of the House as so many House districts are gerrymandered to protect the incumbent. In addition, Democrats tend to be more concentrated in urban areas, meaning that even if more people vote for Democrats than Republicans, the Republicans will win more seats by small margins while Democrats will win a smaller number with bigger majorities. More people voted for Democrats than Republicans in Congressional races in 2012 but the Republicans retained control of the House. It would probably take at least  a seven percent margin of victory for Democrats to take control of the House. Republican representation in the Senate is also exaggerated compared to their level of support due to lesser populated Republican states having the same number of Senators as more populated Democratic states.

There are some things which could throw off the fundamentals this year, but we cannot count on voters suddenly no longer being fooled by the GOP line. At present the Republicans receive far too many votes from low-information white voters. Over time the number of younger voters who receive their fake news from Jon Stewart will overtake the older voters who receive their fake news from Fox.

While Obama’s approval rating is low, Congress has an even lower approval rating. Typically in such situations people like their own Congressman even if they disapprove of Congress. This year polls show that many people also think their own Congressman should be thrown out. Based upon this, I wouldn’t be surprised if more incumbents than usual get upset, but that might not necessarily help the Democrats over Republicans. In addition, more people see the Republicans as being more responsible for gridlock, in contrast to a common false media narrative of treating each party as being equally responsible. Maybe they will surprise the pundits and throw the Republicans out.

Another factor influencing whether predictions based upon the fundamentals must occur is that any competent Democratic strategist is aware of every point here, and the party is doing far more than they did in 2010 to try to change this. They are working to increase turnout among Democratic voters this year. They  have a technological edge both in regards to get out the vote efforts and fund raising. It even appears that the same problems which are placing Republicans at a disadvantage with younger voters is also impacting their ability to recruit young tech savvy political operatives. Besides using their technological advantages over Republicans in getting out the vote efforts, they can  motivate Democratic voters with fear of the consequences of the Republicans taking control of the Senate. Tea Party extremism has led to an end to talk of a grand bargain. Democratic compromises on entitlement programs might have discouraged some voters on the left from turning out for Democrats.

I think Democrats will do better if they can successfully explain the advantages of their policies as opposed to Republican policies. Democratic economic policies turned around the economic collapse caused by Republican economic policies, even if the Republicans have managed to slow recovery with their obstructionist moves, decided upon from the start of Obama’s term. The deficit rolled up by George Bush has dropped considerably since Obama took office. The CBO  projects a deficit of $514 billion in 2014, representing three percent of the Gross Domestic Product. This is near the average level for the past forty years, and a vast improvement from 2009 when the deficit was at 10.1 percent of GDP.

Despite early IT problems, which the Obama administration does deserve criticism for, the Affordable Care Act has turned into a tremendous success on a policy level, both in terms of health care reform and its benefits for the economy. Both the Medicare Advantage plans under George Bush and the original Medicare program had early implementation problems which took a couple of years to solve. Of course Republicans will continue to spread unsubstantiated scare stories and it is possible Obama might never received the credit he deserves. Health care premiums will be remain high on the individual market as they were high before Obamacare. Insurance companies will continue to use restricted panels of physicians and hospitals as they did before Obamacare, leaving room for Republicans to blame the Affordable Care Act for problems unrelated to the law.

Other factors could come into play. The Tea Party might oust electable Republicans and replace them with extremist candidates which the Democrats can more easily beat. While doubtful, the Tea Party might force Congressional Republicans into a situation analogous to the government shut-down before the election which reduces public support for Republicans. While it is doubtful it will really alter that many votes, even the changes in the late night comedians could help the Democrats over the Republicans.

The easy prediction is now that the Republicans will keep control of the House and control of the Senate is up for grabs. Depending upon whether the factors discussed above alter the usual fundamentals, we still might wind up seeing the pundits talking about all the reasons they knew we would have a different outcome after the results are known.

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The Success Of The Stimulus

Barack Obama’s economic stimulus was launched five years ago. Regardless of how successful it turned out to be, conservatives would attack it in order to try to avoid giving Obama credit for reversing the economic problems created by George Bush and Republican economic ideas. Michael Grunwald looked at the report from the Council of Economic Advisers on the success of the stimulus, finding that its report is consistent with other reports on economic improvement:

The main conclusion of the 70-page report — the White House gave me an advance draft — is that the Recovery Act increased U.S. GDP by roughly 2 to 2.5 percentage points from late 2009 through mid-2011, keeping us out of a double-dip recession. It added about 6 million “job years” (a full-time job for a full year) through the end of 2012. If you combine the Recovery Act with a series of follow-up measures, including unemployment-insurance extensions, small-business tax cuts and payroll tax cuts, the Administration’s fiscal stimulus produced a 2% to 3% increase in GDP in every quarter from late 2009 through 2012, and 9 million extra job years, according to the report.

The White House, of course, is not an objective source — Council of Economic Advisers chair Jason Furman, who oversaw the report, helped assemble the Recovery Act — but its estimates are in line with work by the nonpartisan Congressional Budget Office and a variety of private-sector analysts. Before Obama took office, it would have been a truism to assert that stimulus packages stimulate the economy: every 2008 presidential candidate proposed a stimulus, and Mitt Romney’s proposal was the most aggressive. In January 2009, House Republicans (including Paul Ryan) voted for a $715 billion stimulus bill that was almost as expansive as Obama’s. But even though the stimulus has been a partisan political football for the past five years, that truism still holds.

The report also estimates that the Recovery Act’s aid to victims of the Great Recession — in the form of expanded food stamps, earned-income tax credits, unemployment benefits and much more — directly prevented 5.3 million people from slipping below the poverty line. It also improved nearly 42,000 miles of roads, repaired over 2,700 bridges, funded 12,220 transit vehicles, improved more than 3,000 water projects and provided tax cuts to 160 million American workers.

My obsession with the stimulus has focused less on its short-term economic jolt than its long-term policy revolution: I wrote an article about it for TIME titled “How the Stimulus Is Changing America” and a book about it called The New New Deal. The Recovery Act jump-started clean energy in America, financing unprecedented investments in wind, solar, geothermal and other renewable sources of electricity. It advanced biofuels, electric vehicles and energy efficiency in every imaginable form. It helped fund the factories to build all that green stuff in the U.S., and research into the green technologies of tomorrow. It’s the reason U.S. wind production has increased 145% since 2008 and solar installations have increased more than 1,200%. The stimulus is also the reason the use of electronic medical records has more than doubled in doctors’ offices and almost quintupled in hospitals. It improved more than 110,000 miles of broadband infrastructure. It launched Race to the Top, the most ambitious national education reform in decades.

At a ceremony Thursday in the Mojave Desert, Energy Secretary Ernest Moniz dedicated the world’s largest solar plant, a billion-dollar stimulus project funded by the same loan program that financed the notorious Solyndra factory. It will be providing clean energy to 94,000 homes long after Solyndra has been forgotten. Unfortunately, the only long-term effect of the Recovery Act that’s gotten much attention has been its long-term effect on national deficits and debts. As the White House report makes clear, that effect is negligible. The overwhelming majority of the Recovery Act’s dollars have gone out the door; it’s no longer adding to the deficit. It did add about 0.1% to our 75-year debt projections, but allowing the economy to slip into a depression would have added a lot more debt.

Grunwald did warn of the political ramifications. As conservatives have convinced themselves that economic stimulus doesn’t work as a knee jerk reaction to anything proposed by Obama, politicians are likely to shy away from stimulus when needed in the future, following the European mistakes in promoting austerity. Such views in this country already led to the stimulus being significantly smaller than it should have been, especially in light of continuing problems with unemployment.

.Stimulus

Steve Benen has more facts and tables on the benefits of the stimulus, such as the table above on the effect of the stimulus on GDP.

Think Progress cited several Republicans who attacked Obama on the stimulus and then took credit for its benefits.

Cross posted at The Moderate Voice

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House Votes To Increase Debt Ceiling

The House passed a clean bill increasing the debt ceiling today, showing that the Democrats have learned their lesson to refuse to negotiate with terrorists. The bill extending the debt ceiling until March 2015 passed by a margin of House voted 221-201, with the support of only 28 Republicans.

Initially Republicans had hoped to tie their vote to some concessions, such as elimination of the risk corridors form the Affordable Care Act. Their argument for this fell apart when the Congressional Budget Office reported that the risk corridors will wind up saving the government eight billion dollars. It would hardly make sense to tie a measure to the vote on the debt ceiling which would lead to an increase in the deficit.

Democrats have learned that if they give into Republican demands, they will insist upon further concessions with each vote on the budget or debt ceiling, further harming the economy. The full Republican caucus would never vote for something as basic as paying our bills (a concept that previous Republican presidents such as Ronald Reagan had no problem with). The only way that the bill would pass would be if John Boehner allowed a vote of the entire House, leading to passage primarily with Democratic votes.

By allowing the bill to go to a vote of the entire House, Speaker Boehner showed that he understood how damaging it would be to the country and/or the Republican Party to once again play chicken with defaulting on the debt. The vote also showed how few sane Republicans there are, with 199 voting against, however I suspect that some of them understood the damage which would result from defaulting but voted against the increase to appease their constituents. One danger of gerrymandering Congressional districts to keep incumbents safe is that even sane Republican Congressmen would find it safer to vote as extremists out of fear of a Tea Party challenge.

While Boehner allowed the bill to come before a vote of the entire House, there is no guarantee that he will do so on future bills, especially when the consequences are less dire. Shutting down the government in October led to a drop in Republican support in the polls, showing that to some degree public pressure can influence the Republicans, but Boehner will be under other pressures from the right to limit his ability to repeatedly bring measures before the full House. Greg Sargent believes that the era of Republican debt limit extortion is dead while Talking Points Memo cautions that the Tea Party Ain’t Over yet.

Imagine if we lived in a country where we had majority rule and a minority party was unable to repeatedly impose its will upon the rest of the country. While a certain degree of roadblocks on government are needed to prevent the “tyranny of the majority,” our current system is being abused, leading to a tyranny of the minority.

Cross posted at The Moderate Voice

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The Past Week In Conservative Stupidity

Over a year ago Bobby Jindal warned that Republicans “must stop being the stupid party.” They have not been doing particularly well at following his advice. To extrapolate this to the conservative movement, this week provided two more examples of what can only be labeled as stupidity dominating conservative conversation–the intentional misinterpretation of the Congressional Budget Office report on the Affordable Care Act and reaction to Olympic coverage from Russia.

This is not to say that all conservatives believe these things or are stupid. However, the prevalence of stupidity does seem to have increased tremendously in the conservative movement and Republican Party in recent years. Even ignoring the easy targets such as Sarah Palin and Michele Bachmann, the caliber of conservative discourse generally seen today is far different from what came from past conservatives such as William F. Buckely, Jr., who also fought to keep the Birchers and other predecessors of today’s Tea Party out of the GOP. Barry Goldwater might have many views which liberals find objectionable, but he also warned about what would happen if the religious right took control of the Republican Party. Even Ronald Reagan was not so foolish as to oppose any tax increase or to prevent increases in the debt ceiling to allow the Unites States to honor its debts.

It is understandable that some conservatives might have been misled by the initial headlines on the report from the non-partisan Congressional Budget Office. Many journalists, overly influenced by conservative arguments and lacking adequate understanding of health care policy, initially were inaccurate in their coverage. Once the report was more fully evaluated, it was clear that the CBO report actually showed that there is no evidence of an increase in unemployment due to the Affordable Care Act as Republicans had been predicting would occur.  Instead the portions of the report on employment showed that Obamacare was projected to be successful in one of its goals--saving people from the “insurance trap.”

Until the Affordable Care Act came into effect many people continued in jobs they did not want because they would be unable to obtain health insurance if they left their current job. Under the Affordable Care Act, health insurance is no longer tied to employment. Now people are free to retire at an earlier age if they desire, instead of waiting until age 65 when they qualify for Medicare. They are also free to leave large corporations to work for small businesses, or perhaps even start a business of their own. The Robert Wood Johnson Foundation wrote about projections for an increase in entrepreneurship and self-employment last May. The CBO report confirms that they were correct. This can help boost the economy.

While an initial mistake regarding this might have been unintentional, there has subsequently been many corrections. Glenn Kessler of The Washington Post,  corrected errors in reporting in writing, “No, CBO did not say Obamacare will kill 2 million jobs”.  Kessler concluded with saying, “we award Three Pinocchios to anyone who deliberately gets this wrong.” Factcheck.org also corrected the misconceptions.

As some people leave jobs they no longer want or need, their jobs can open up for others. In testimony before the House Budget Committee, CBO Director Douglas Elmendorf confirmed that the CBO report suggests the Affordable Care Act will reduce unemployment. Even Paul Ryan corrected fellow Republicans on this point. Besides reducing unemployment, the CBO report showed that, while Republicans had been demanding an end to the risk corridors in order to agree to an increase in the debt limit, the risk corridors actually wind up saving the government eight billion dollars. The CBO projects a deficit of $514 billion in 2014, representing three percent of the Gross Domestic Product. This is down from 2009 when deficit was at 10.1 percent of GDP, and more in line with the average size of the deficit compared to GDP over the past forty years.

Conservatives are rarely willing to give up on their criticism of the Affordable Care Act even when contradicted by the facts. They continue to repeat fallacious arguments about death panels or their false claim that Obamacare constitutes a government takeover of health care. Finding that those who received cancellation notices from insurance companies generally received better coverage at a lower price under the Affordable Care Act did not end their claims of people supposedly losing their insurance under Obamacare.

Conservatives remain unwilling to give up the argument about people leaving their jobs, spinning it to suggest that the Affordable Care Act encourages people to be lazy parasites on society instead of working, ignoring the actual types of people this is likely to affect. Conservatives have been presenting “horror stories” of people allegedly harmed by the Affordable Care Act which typically turn out to be untrue once the details are examined. Finally we are seeing newspaper reports emphasizing the positive aspect of freeing people from the “insurance trap.”

While conservative columnists such as Ross Douthat fear that Obamacare will lead to a “strong work disincentive while looking at a population of childless, able-bodied, mostly working-class adults,” these are not the type of people I am seeing as benefiting by freedom from the “insurance trap.” If the health care debate is turning into one of anecdotal cases, I’m thinking of an affluent friend who, because of health history, cannot obtain insurance on the individual market so his wife has been working full time in a job purely for the health insurance, even though they have no need for the income beyond the benefits. I have a patient who was left without insurance when her husband retired in his early sixties and then struggled to pay her medical bills. As of January she finally has comprehensive coverage she can afford. These are the types of people who are benefiting from the supposed disincentive to work under Obamacare.

In theory there is a risk that “able-bodied, mostly working-class adults” might have less incentive to work, but I hardly think that providing affordable health care is enough to do this on a widespread level. Far more able-bodied adults are not working because jobs are not available. Besides making more jobs available, the Affordable Care Act can help relieve this problem in another way. In addition to freeing people to retire in their early sixties or leave jobs held solely for the insurance, people will be able to start small businesses without losing health insurance. In Republican-speak, this should also be beneficial to the economy due to making more “job creators.” The Robert Wood Johnson Foundation wrote about projections for an increase in entrepreneurship and self-employment last May. The CBO report confirms that they were correct, and to a greater degree than previously projected.

Conservatives were wrong about this argument, and now appear stupid, and dishonest, when they continue to repeat the same mistakes. I spent more space on this first example than intended, but in retrospect this is an important point which deserves repeated explanations as long as conservatives are claiming that this positive aspect of the Affordable Care Act is somehow undesirable.

The second example is bizarre outrage from the right wing over the video below which comes from NBC’s coverage of the Olympic games:

Their objection is to this line: “The empire that ascended to affirm a colossal footprint; the revolution that birthed one of modern history’s pivotal experiments.”

This is being spun by right wing bloggers as praise for Communism, including by FoxMarco Rubio, along with other conservatives commenting, does not appear to understand what pivotal means. The word refers to points which are critical or vitally important. The Russian Revolution was a pivotal point in their history, along with the history of the world. Similarly, Hitler’s rise to power was a pivotal moment. Both 9/11 and Katrina were pivotal moments during the Bush years.  The computer problems during the first month of the exchanges has unfortunately become a pivotal moment for the Obama administration. The word pivotal says nothing about whether the events were good or bad.

This was one line in a video narrated by Peter Dinklage as introduction to NBC’s sports coverage of the Olympics. If this was a political documentary we would expect information on the horrors of communism. This is unnecessary, and probably out of place, in sports coverage, especially if they desire to be polite and avoid criticism of the host country over a political system which has been overthrown (even if the current regime is repeating many of the same mistakes as under Communism).

I suspect this is outrage is partially motivated by the desire of conservatives to falsely paint liberals as socialists or Communists, such as with the absurd claims that a moderate such as Barack Obama is a socialist. To the conservative mind, the mainstream media represents liberals, especially when they fail to differentiate the evening commentary shows on MSNBC from the rest of NBC. There are rare examples, such as the absurd argument I noted a couple of weeks ago at Salon to nationalize the news media, but putting aside such outliers, there no meaningful interest in Marxist-style socialism or Communism on the left. In contrast, I would think that today’s Republicans would love modern Russia. Between its homophobia and substitution of a plutocracy for a working market economy, Russia has become an example of the end-result of the Republican platform.

Cross posted at The Moderate Voice

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Democratic Strategy For 2014: Get Out The Vote But Don’t Ignore The Message

This should be a bad year for Democrats if we go by historical trends. The party holding the presidency typically loses Congressional seats in their sixth year. It makes matters worse when their are economic problems, even if many people do realize that they are primarily due to a combination of problems created by the Bush administration and problems perpetuated by Republican actions to hinder economic recovery in Congress.

Making matters worse, the Democrats have to defend Senate seats in red states, including states where incumbent Democrats are not running for reelection. Democrats do worse in off year elections, when young voters and minorities are less likely to vote compared to presidential elections. Republicans also have a huge advantage in a system where small Republican states receive as many Senators as far larger Democratic states. Their advantage extends to the house. Between gerrymandering and the higher concentration of Democrats in cities. Republican will still control Congress unless Democrats receive about seven percent more votes.

On top of this, Republicans see voter suppression as a valid electoral strategy.

Democrats did much better in 2008 and 2012 than in 2010. They also expect to do much better in 2016, including picking up several Senate seats due to the playing field being reversed with Republicans being forced to defend Senate seats in blue states. The Democrats see the solution as making 2014 more like 2012. Their strategy:

The Democrats’ plan to hold on to their narrow Senate majority goes by the name “Bannock Street project.” It runs through 10 states, includes a $60 million investment and requires more than 4,000 paid staff members. And the effort will need all of that — and perhaps more — to achieve its goal, which is nothing short of changing the character of the electorate in a midterm cycle.

The Democratic Senatorial Campaign Committee is preparing its largest and most data-driven ground game yet, relying on an aggressive combination of voter registration, get-out-the-vote and persuasion efforts.

They hope to make the 2014 midterm election more closely resemble a presidential election year, when more traditional Democratic constituencies — single women, minorities and young voters — turn out to vote in higher numbers, said Guy Cecil, the committee’s executive director.

A campaign based upon getting out the vote isn’t terribly exciting, but it is a realization that this is how elections are won in this polarized era. There aren’t very many swing voters, but there can be huge differences between which party does better in getting their supporters out to vote.

Besides, a high tech get out the vote campaign and an old fashioned campaign to try to sway voters are not mutually exclusive. I do hope that the Democrats also think about better ways to get out their message as the Republicans often win by doing a better job here. Sure the Republican message is pure lies, claiming to be the party of small government while supporting increased government intrusion in the lives of individuals, and primarily using big government to redistribute wealth to the top one tenth of one percent.

Democrats need a coherent message, but they often fail because they are afraid of alienating some voters by saying what they believe in. I suspect that this cowardice turns off even more voters, along with reducing the motivation of their supporters to turn out. Once again, a campaign based upon promoting ideas and one based upon voter turnout are not mutually exclusive. They can be complimentary.

Rather than shying away from social issues, Democrats need to campaign as the party which supports keeping government out of our personal lives and out of the bedroom.

Rather than running away from the Affordable Car e Act, Democrats need to stress its benefits. Beyond all the millions who are assisted by the ability to obtain affordable health coverage, there are the two million people who are freed from the “insurance trap” which forces them to work in jobs they do not otherwise want or need in order to obtain health insurance. As the non-partisan Congressional Budget Office has shown, the Affordable Care Act will help reduce unemployment, decease the deficit, and strengthen the economy. Besides, we saw what happened to the Democrats when they tried running away from Obamacare in 2010.

In recent years Democrats have taken national security away from Republicans as an issue. If the Republicans want to run on their debunked conspiracy theories about Benghazi, it might be time for Democrats to remind voters of the very real failings of Republicans on 9/11, from ignoring warnings before the attack to invading the wrong country in retaliation. We saw how that turned out. It is also time for Democrats to take additional issues from the Republicans.

Challenge voters who support Republicans based upon misinformation. If they are concerned about the deficit, point out how much the deficit has dropped under Obama (as it previously dropped under Bill Clinton). Repeatedly we see polls in which voters support liberal positions but identify themselves as conservatives. They say the oppose Obamacare but also support most of the individual components of the Affordable Care Act. The only way to fight the misinformation spread by Fox is for Democrats to clearly say what they believe in and defend their positions.

Democrats are planning to run on income inequality. That is fine, but they better make sure that they make it clear that the reason is that the extreme concentration of wealth in the hands of the top one tenth of one percent is a major cause of crippling the economy and keeping down the middle class. Failure to make this connection just plays into Republican memes.

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CBO Director States Affordable Care Act Will Reduce Unemployment; Paul Ryan Corrects Republican Misinformation

There has been a lot of false information spread on the CBO report, initially primarily from reporters not understanding the details of health care policy followed by conservative media intentionally promoting the incorrect interpretation of the report. As I discussed here and here, the report from the non-partisan Congressional Budget Office demonstrates the economic success of the Affordable Care Act, but some in the media were misled by debunked conservative talking points and initially reported inaccurately on the report. In testimony before the House Budget Committee CBO Director Douglas Elmendorf confirmed that his report suggests the Affordable Care Act will reduce unemployment. Video above.

While it has primarily been Republicans spreading false information on the report and Democrats, as in the exchange above, working to set the record straight. There is at least one exception. Paul Ryan has corrected his fellow Republicans:

At least one Republican is setting the record straight on what the Congressional Budget Office actually said this week about Obamacare and its effect on jobs.

House Budget Chair Paul Ryan (R-WI) explained in a Wednesday hearing with CBO director Doug Elmendorf that the health care reform law wouldn’t cost the U.S. economy more than 2 million jobs, as many of his colleagues alleged, but that Americans would choose to work less.

“I want to make sure we accurately understand what it is you are saying,” Ryan said, before leading Elmendorf through a series of questions to explain the report and its findings.

Ryan and Elmendorf combined to explain that Obamacare would lead to a decrease in the number of hours worked by up to 2 percent in 2024. Most of that drop, the CBO said, would be the result of Americans choosing not to work, for various reasons, but not because employers would want to hire fewer workers on account of the law. Translate those lost hours into full-time employment and it equals up to 2.5 million jobs by 2024. But that’s not the same as jobs being cut.

“Just to understand, it is not that employers are laying people off,” Ryan said.

“That is right,” Elmendorf said.

For the moment I’ll ignore the ridiculous stuff he also said and give him credit for the point where he does get it right.

The Affordable Care Act helps millions of people (including myself, having to buy insurance on the individual market), many people I know personally (such as affluent friends whose spouses have had to work in jobs they otherwise don’t need purely so that they could obtain health insurance), and many patients who previously could not obtain insurance coverage.  The right wing media in return repeatedly reports “horror stories” which turn out to be incorrect on closer examination–just like their reports on the CBO report are incorrect.

Beyond all these (and additional) benefits related to health care, the Affordable Care Act will reduce unemployment, boost the economy, and reduce the deficit. The conservative argument for repeal makes no sense, which is why Republicans are starting to back away from this ridiculous position.

How can anyone support a position which will cause misery for millions of people, increase unemployment, harm the economy, and increase the deficit?

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The CBO Report On The Success Of The Affordable Care Act

The Congressional Budget Office report released yesterday showed that the Affordable Care Act is getting off to a tremendous success despite the early computer problems in the exchanges. The report showed that millions of additional people are receiving coverage, the law results in a reduction in the deficit, and frees workers from the “insurance trap.”

The report also turned out to be both a test of the understanding of health care policy by reporters and of the dishonesty of conservative news sources. Health care policy is quite complicated and it is not unusual for reporters to make mistakes in the coverage of a report such as this. Many misunderstood the predictions of people leaving the work force leading to some rather untrue headlines yesterday. Needless to say, the conservative media continues to make the same false claims, ignoring the actual meaning of the CBO report, and will continue to spread this misinformation.

I was pleased to see  Glenn Kessler of The Washington Post, who has made some major mistakes on health care policy coverage in the past, got it right on this one.  His fact-checker article was entitled “No, CBO did not say Obamacare will kill 2 million jobs”. I think it helped that he specifically wrote about what the CBO report really said, as opposed to getting into the more complicated details of health care policy. Kessler concluded with saying, “we award Three Pinocchios to anyone who deliberately gets this wrong.”

The word deliberately is important as unfortunately some people are going to be misled by the initial incorrect headlines and by the conservative media which will continue to make this false claim.  The reduction in employment described in the report is one of the positive aspects of the Affordable Care Act. Up until now, many people continued in jobs they did not want because they would be unable to obtain health insurance if they left their jobs.  I know affluent people whose spouses work purely for the health insurance as this was the only way they could obtain this. This change frees people in their 60′s to retire early if they choose. People who would prefer to change jobs will be able to do so without losing their insurance. People will also be able to start small businesses without losing health insurance, which will also probably turn out to be beneficial to the economy. The Robert Wood Johnson Foundation wrote about projections for an increase in entrepreneurship and self-employment last May. The CBO report confirms that they were correct.

On a related issue, the ability to keep affordable health insurance after losing a job means that people who develop a serious illness and become too sick to continue working will no longer lose their insurance. This was a common cause of bankruptcy in the past.

The New York Times looked at the benefits described by the CBO in an editorial today:

The report estimated that — thanks to an increase in insurance coverage under the act and the availability of subsidies to help pay the premiums — many workers who felt obliged to stay in a job that provided health benefits would now be able to leave those jobs or choose to work fewer hours than they otherwise would have. In other words, the report is about the choices workers can make when they are no longer tethered to an employer because of health benefits. The cumulative effect on the labor supply is the equivalent of 2.5 million fewer full-time workers by 2024.

Some workers may have had a pre-existing condition and will now be able to leave work because insurers must accept all applicants without regard to health status and charge premiums unrelated to health status. Some may have felt they needed to keep working to pay for health insurance, but now new government subsidies will help pay premiums, making it more possible for them to leave their jobs.

The report clearly stated that health reform would not produce an increase in unemployment (workers unable to find jobs) or underemployment (part-time workers who would prefer to work more hours per week). It also found “no compelling evidence” that, as of now, part-time employment has increased as a result of the reform law, a frequent claim of critics. Whether that will hold up after a mandate that requires employers to provide coverage, which was delayed until 2015, kicks in is uncertain.

The report also verified that millions more people will be covered by health insurance due to the Affordable Care Act:

Given the rocky start, 14 million additional Americans covered by insurance through the exchanges and Medicaid is sound progress; and the budget office projects a sharp increase in enrollment in 2015 and 2016 and a bigger net reduction in the number of uninsured. Its projections for subsequent years remain essentially unchanged. In 2017, it predicts 12 million more in Medicaid and 24 million more in private coverage through the exchanges.

Update: CBO Director States Affordable Care Act Will Reduce Unemployment; Paul Ryan Corrects Republican Misinformation

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CBO Report Shows Affordable Care Act Frees Employees From Working Or Losing Employer-Based Insurance

The Congressional Budget Office has a report out today which is creating a lot of attention, largely due to a misleading but sensational headline in publications such as The Hill regarding decreased employment attributed to the Affordable Care Act.  They predict that there will be two million fewer full time workers by 2017. The question of employers hiring less due to the law is controversial, with evidence so far not showing the reduced hiring some have predicted. The key factor here, as described by The Wall Street Journal, is that “the jobs figures largely represent Americans who will choose not to work rather than those who will lose their jobs or have their workweeks reduced because of the law.”

In other words, this solves a major problem we have faced in the past–people being forced to work beyond when they otherwise desired because they would not be able to obtain insurance if they lost their insurance through their employer. People in their 60′s would have the ability they previously did not have of retiring before they qualified for Medicare at age 65.

Another factor might be that some people will have an economic incentive to work less. One aspect of the Affordable Care Act which should be fixed is the rapid manner in which the subsidies end once the income threshold is reached. People making just over the levels which qualify them for subsidies would be economically better off by working less and bringing their incomes below the threshold. The subsidies should be phased out more gradually to eliminate this problem.

The prediction of  two million fewer workers by 2017 also has to be taken with a grain of salt. There are aspects of the Affordable Care Act which will likely lead to economic improvement but which cannot be scored by the CBO. Some people will leave the job market, but it is also possible that many people, no longer needing insurance through their employer, will take advantage of this to start or work for small businesses. As the Affordable Care Act reduces the burden of providing health care to companies now providing it, these companies might be able to expand more  than expected. Improvements in the health of employees who obtain health care coverage could lead to improved productivity. Decreases in health care costs as a result of the Affordable Care Act should provide additional economic benefits.

As a consequence of the problems with the roll out of the Affordable Care Act, the CBO projects that six million people will sign up in private health plans through the exchanges this year, down from their previous projection of seven million. Most likely the number will increase in subsequent years, and it remains possible that increases in last-minute enrollment might lead to higher figures for this year. Another factor of concern is that some people are not signing up through the exchanges due to false information and a campaign from the right wing advocating that people refuse to sign up.

The report also shows that, while Republicans are demanding an end to the risk corridors in order to agree to an increase in the debt limit, the CBO found that the risk corridors actually wind up saving the government eight billion dollars. It is ironic that this Republican demand (actually more about politics than improving the deficit) would lead to a higher deficit.

We are no longer hearing about trillion dollar deficits. The CBO  projects a deficit of $514 billion in 2014, representing three percent of the Gross Domestic Product. This is near the average level for the past forty years, and a vast improvement from 2009 when deficit was at 10.1 percent of GDP. The CBO predicts a further reduction in 2015 to $478 billion, or 2.6 percent of GDP. They do project increases in the deficit after 2015 primarily due to weaknesses in the economy. It would seem that at present government policy should be to place greater emphasis on stimulating the economy as opposed  to concentrating on short term decreases in the deficit, as more Americans now support.

Update: The Fact Checker at The Washington Post says “No, CBO did not say Obamacare will kill 2 million job.” He awarded three Pinocchios to those, such as many media organizations which reported on the CBO report incorrectly, intentionally make this claim.

Update II: The CBO Report On The Success Of The Affordable Care Act

Update III: CBO Director States Affordable Care Act Will Reduce Unemployment; Paul Ryan Corrects Republican Misinformation

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Republicans Threatening To Tie Raising Debt Ceiling To Eliminating Risk Corridors From Affordable Care Act

The Affordable Care Act was written so that, despite noisy protests based purely upon partisanship, it would be a win-win situation. Consumers benefit from new protections against abuses from insurance companies and more affordable coverage. Insurance companies benefit from increased profits from increased customers. There are potential business risks in a new situation, and while insurance companies should profit from increased business, insurance companies do have challenges in developing initial premiums when they cannot be certain as to the makeup of the new purchasers of insurance. The Affordable Care Act does include protections for insurance companies, and ironically it is now the Republicans who are playing politics and talking about repealing these aspects of the law.

House Republicans are considering attaching a provision that would prevent a “bailout” of insurance companies under ObamaCare to a one-year increase in the debt limit.The Republican conference met behind closed doors Friday on the final day of their annual retreat to hash out a plan for raising the debt limit, which the Treasury Department says must happen within a month to avoid a first-ever default.

The House Republican leadership has not settled on a plan, but an idea that gained support during the meeting, according to a person in the room, was to repeal the so-called “risk corridors” provision in the healthcare law, which Republicans have labeled a potential bailout of insurance companies.

Conservatives have mentioned the risk corridors provisions repeatedly in recent weeks in connection with the debt limit, as Republicans seek legislation that could win some Democratic support.

The party has largely abandoned hopes of gaining a major concession from Democrats in exchange for raising the debt limit now that President Obama has vowed never to negotiate over the issue again.

Kaiser Health News has summarized three portions of the Affordable Care Act which provide protection to insurance companies:

–Risk adjustment redistributes money from insurers that cover people who tend to be healthier to plans whose enrollees are sicker. Non-grandfathered plans in the individual and small group insurance markets – including those not participating in the law’s online marketplaces, or exchanges – must participate. Insurers who have more low-risk enrollees contribute to the fund, which then makes payments to insurers with more high-risk enrollees.Eligible insurers are compared based on the average financial risk of their enrollees, according to an analysis from the Kaiser Family Foundation. The program, which has no sunset date, is financed by insurers’ payments. (KHN is an editorially independent program of the Foundation).

–The reinsurance program is a temporary provision that builds on the risk adjustment provision to compensate insurers who have enrollees with especially high claims. Since sick people need health insurance, they have the greatest incentive to enroll and could, in the early years of the law’s implementation, make up a larger amount of the “risk pool,” according to the American Academy of Actuaries.

Individual, small group and large group health plans, as well as self-funded plans, will contribute to the program, which lasts through 2016. They pay a $63 tax assessed on nearly every health insurance enrollee for 2014 (the Department of Health and Human Services has proposed a rate of $44 per person in 2015).  The money collected is then used to help insurers in the individual market with high-cost cases that reach beyond a catastrophic cap. The fund would reimburse insurers for 80 percent of costs for claims between $60,000 and $250,000 per person, although HHS has proposed some changes to the program. Without the reinsurance tax, individual market premiums would be about 10 to 15 percent higher, according to HHS.

–Risk corridors – that’s the provision getting the most attention these days – limit plans’ losses and gains. Actual claims are compared to the claims insurers anticipated when they set their premiums.  If claims are below specific target amounts, they return part of that money to the government. If claims exceed specific target amounts, HHS reimburses the insurer for some of the money.

The risk corridors program, like the reinsurance program, is scheduled to be a temporary measure and sunset in 2016. But insurers could pressure lawmakers to extend the program.

The Republicans want to be able to say that they forced the repeal of part of the Affordable Care Act despite Obama’s insistence he will not negotiate on the debt ceiling. My suspicion is that they will settle for any part of the law, and feel that Democrats might be least likely to fight over a part which can be called a bail out to insurance companies.

Health corridors are commonly used when using private insurance plans to expand health care coverage. They are a part of the Swiss health care plan which uses private insurance companies to provide universal coverage. They are also a part of the Medicare D plans established under George Bush. It is possible that the risk corridors might not be necessary. Data from the first insurance company to release information on sales in the exchanges show that WellPoint is doing better than expected. Until we have data from more insurance companies it will be difficult to see if there would be a negative impact to eliminating the risk corridors. This protection against losses allow insurance companies to offer lower premiums than they might otherwise offer, both saving money for consumers and reducing subsidies which would need to be paid.

These protections  might help solve another problem which the individual market has faced. Many markets have had a limited choice of insurance plans, often with a single plan dominating a market. Increasing competition would provide greater choice in the exchanges and probably lead to lower premiums. Insurance companies have become experts at cherry picking customers. Even though they can no longer can deny coverage to individuals, larger companies already established in an area would be at an advantage in marketing to healthier customers, making it riskier for new companies to enter an unfamiliar market. These measures protect insurance companies from loses if they wind up with a sicker pool than other companies, making it easier for companies to enter new markets and offer more choices.

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The 2014 State Of The Union Address

Boehner SOTU

The State of the Union address (transcript here) was rather modest, considering the limitations Obama faces in dealing with Congressional Republicans who have had the policy of opposing Obama’s agenda on political grounds since the day he took office. The few policy proposals had already been released, such as an executive order regarding the minimum wage at companies receiving government contacts. There were a few moments during the speech worth noting. He began with what was basically a defense of his record on the economy:

The lowest unemployment rate in over five years. A rebounding housing market. A manufacturing sector that’s adding jobs for the first time since the 1990s. More oil produced at home than we buy from the rest of the world – the first time that’s happened in nearly twenty years. Our deficits – cut by more than half. And for the first time in over a decade, business leaders around the world have declared that China is no longer the world’s number one place to invest; America is.

That’s why I believe this can be a breakthrough year for America.

Of course, in what is essentially a disproof of trickle-down economics, he recognized that problems remain:

Today, after four years of economic growth, corporate profits and stock prices have rarely been higher, and those at the top have never done better. But average wages have barely budged. Inequality has deepened. Upward mobility has stalled. The cold, hard fact is that even in the midst of recovery, too many Americans are working more than ever just to get by; let alone to get ahead. And too many still aren’t working at all.

This sure makes the right wing claims that Obama is a socialist sound ridiculous. Plus there is his support for small business:

Let’s do more to help the entrepreneurs and small business owners who create most new jobs in America. Over the past five years, my administration has made more loans to small business owners than any other.

While it may or may not be wise, I always wish that Democrats would do more to directly take on the absurd positions held by many Republicans. Unfortunately I’m not sure that showing Republican denial of science would be politically successful in a country with such vast scientific illiteracy. At least we did get this:

But the debate is settled. Climate change is a fact.

He is right about climate change, but the debate is only settled in terms of the scientific knowledge. Climate change is a fact. So is evolution. And the earth is round. Try to convince the Republicans.

Obama also defended his record on health care:

Already, because of the Affordable Care Act, more than three million Americans under age 26 have gained coverage under their parents’ plans.

More than nine million Americans have signed up for private health insurance or Medicaid coverage.

And here’s another number: zero. Because of this law, no American can ever again be dropped or denied coverage for a preexisting condition like asthma, back pain, or cancer. No woman can ever be charged more just because she’s a woman. And we did all this while adding years to Medicare’s finances, keeping Medicare premiums flat, and lowering prescription costs for millions of seniors.

Obama said little about the problems caused by Republican obstructionism, but did mention the “forty-something votes to repeal a law that’s already helping millions of Americans.” I believe the exact number is forty-seven votes to repeal the Affordable Care Act.

Among the lines which got the most attention of the night, when discussing equal pay for equal work:

It is time to do away with workplace policies that belong in a “Mad Men” episode.

The official Republican response was rather empty, and there were also two Tea Party responses. The bulk of the opposition I saw to Obama on line (and in an op-ed by Ted Cruz)  has been to the use of executive orders, ignoring how much fewer he has used than his predecessors. Where were all the conservatives now complaining about Executive power during the Bush years, when Bush went far further than Obama is contemplating?  I doubt their complaints will receive much sympathy from swing voters (the few who exist). As I pointed out recently, voters are realizing that the Republicans are responsible for gridlock, even if the media often overlooks this in their efforts at appearing objective by treating both parties equally when they are not mirror images of each other.

sotu_ideology2

All in all, the address was liberal but hardly ground-breaking. The Monkey Cage has compared every SOTU address since 1986 based upon ideology. This year’s speech was placed around the middle of previous addresses from Obama and Bill Clinton. What I really found interesting about this chart was how far the Republicans moved to the right under Bush. State of the Union addresses are hardly an exact measurement of the ideology of a president, but it is interesting that Ronald Reagan and George H. W. Bush are far closer to the two Democratic presidents compared to George W. Bush. George W. Bush Started out comparable to the previous Republican presidents in his first speech, then moved significantly to the right. Maybe this was the result of 9/11.

If nothing else, I was happy that it wasn’t Mitt Romney giving the speech. I’m imagining Mitt Romney spending the evening going up and down in his car elevator. I couldn’t resist staring with the above picture which captures John Boehner, even if he isn’t orange enough. I did feel that his green tie did clash with his orange face.

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