You're now on the archive server. Commenting has been disabled.
CBO Scores Own Goal
After a fashion, one has to feel sorry for the Congressional Budget Office. Except not really. Though the organization is supposed to be "non-partisan," it faces a dilemma that much resembles that of the Federal Reserve. It is intended, by design, to occasionally throw itself in front of moving freight trains and, despite whatever manic political momentum has built into velocity and pure mass of pages, occasionally stop them cold in the face of intense pressure, public and private. It has singularly failed in this mission since about 2001, and has, in the last few years, become merely a rubber stamp regularly gamed to extract its endorsement to flaunt in the satirical play that is the courting of public opinion.
Of course, to the advocates of a given piece of favored legislation, any CBO action that would appear to delay, defray or dismay the latest pet project of the day's political class looks partisan. So if it is going to do the time anyhow, might not a CBO be tempted to engage in a bit of "jury nullification" on occasion? After all, legislators think nothing at all of shamelessly and openly gaming the CBO to suit their purposes. In fact, one might even go so far to say that the machinations that accompany the Patient Protection and Affordable Care Act have quite literally jumped the firebreak that once defined the limits of decorum and good taste with respect to the increasingly common practice of CBO gaming. Just this month, the Congress of the United States has so substantially exceeded these already permissive bounds that a full rendering of the new and expansive contours of legislative limits, even if they faced the active resistance of the CBO in full force, are beyond alarming to contemplate.
Moreover, despite the fact that members of Congress are, in theory, duty bound to oppose legislation they have reason to believe unconstitutional, this author is unaware of even a single legislator that seems willing to stand on this principal when it happens to violate party lines. While it may seem trivial to point out, this particular duty is enshrined directly in the Constitution itself...
The Senators and Representatives before mentioned, and the Members of the several State Legislatures, and all executive and judicial Officers, both of the United States and of the several States, shall be bound by Oath or Affirmation, to support this.1
...and codified in the United States Code to require the following oath of office of all incoming members of Congress:
I, [Scum Sucking Fraud], do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter. So help me God.”2
5 U.S.C. § 3333 requires members of Congress to sign an affidavit that they have taken the oath of office. Penalties for violating the oath of office are, however, vague in the absence of an oath taker who actively "advocates the overthrow of our constitutional form of government...."3
Given all this theater, what actual duty, one wonders, actually extends to a Congressperson tempted to support a piece of legislation they have not had the time to skim, much less read on any level that would permit them to make even a vaguely educated assessment of the statute's potential constitutionality?
What if aides were to call to the attentions of this morally complex (and therefore fictitious) Congressperson, provisions of the legislation that are blatantly unconstitutional on their face? What does it say about the (d)evolution of the meaning of this oath that evoking it in this context is more likely to provoke sad, knowing smiles, than expressions of shock?
Normally, such musings would be beyond the purview of Zero Hedge. Given, however, the immense implications the Patient Protection and Affordable Care Act has on markets and the economy, as well as upcoming votes on the national debt ceiling (scheduled for December 24, in line with the Patient Protection and Affordable Care Act as it happens- merry christmas!) it certainly must also have implications for sovereign debt, the share prices of a number of publicly traded insurers with significant exposure to health care markets and equity markets generally. It seems willfully blind not to speculate on the fate of legislation due to pass in the last moments of 2009.
Accordingly, Zero Hedge offers the following prediction:
Before 2014, when the major "reforms" of this sprawling mass of squirming regulatory orgasms are due to kick in, what remains of this legislation in the wake of court battles, nullification and outright overturns, will be a hollow shell of the bill's former, shining Byzantine glory.
The Congressional Budget Office
Try to imagine for a moment, an "independent agency" tasked with "scoring" legislation and calling itself "non-partisan." It is fairly easy to see that even the slightest subjective authority in any sort of scoring would be immediately labeled "partisan" by a bill's proponents. The only way to sustain the appearance of "neutrality" would be to enumerate a number of strict guidelines that defined quite carefully the nature of the test, the criteria of its grading and the presentation of its results.
These guidelines will be recognized today as the scoring rules binding the Congressional Budget Office. Of course, bright line rules are quite open to gaming (just ask any financial regulator) but in order to maintain the appearance of "neutrality" the Congressional Budget Office cannot but be beset by rules. The exceptional (for government) Congressional Budget Office Director's Blog contemplates thusly:
Scorekeeping rules were set forth by the Congress in the conference report for the Balanced Budget Act of 1997 and are updated occasionally upon agreement by the full group of “scorekeepers,” a group that consists of the House and Senate Committees on the Budget, the Congressional Budget Office, and the Office of Management and Budget. The purpose of these rules is to ensure consistent treatment of spending authority, appropriations, and outlays across programs and over time.
Uh, yeah so... no they aren't.
If this language sounds a bit stilted it is partly because, at least for an "independent agency," the CBO leadership is surprisingly beholden to the whims of political foible. The Director of the Congressional Budget Office is jointly appointed by the Speaker of the House of Representatives and the President Pro Tempore of the Senate. One might be tempted to think that a structure providing for a four year term and no term limits would provide Directors some insulation from the fickle sway of party politics. In this case, one would need to be ignorant of the ability of either House of Congress to dismiss any CBO director by simple majority resolution. It should surprise no one that there have been three CBO directors in the past six years. (Six if one includes acting Directors). Since the formation of the CBO in 1975 only two CBO directors (Alice M. Rivlin and Robert D. Reischauer) have served multiple terms, and none have managed that feat again since Reischauer left office in 1995.
Reischauer's departure actually bears some exploring. Let us set the way-back-machine to, say, 1994. Interestingly, the country (well some of it) was again gripped by the frantic, perhaps even manic urge to pass some form, any form, of socialized medicine.
The siren song that had frustrated even Theodore Roosevelt had captured the imagination (again) of an emboldened administration. The job looked like such a shoe-in, in fact, that it apparently seemed safe to put the First Lady on the case instead of distracting the President from his busy schedule. But, you know, Teddy never had to cope with the CBO, and PACs had learned from Ronald Reagan's first "Harry and Louise" ad recorded back in 1961 (a must hear for would be Reagan wonks- back then it was Operation Coffee Cup, instead of Tea Parties).
Given that this was the largest and most complex bill the CBO had ever analyzed, the office took the job quite seriously. That meant delays. Delays that irritated both Congress and the Administration. Serious sand-after-sex-on-the-beach level irritation, in fact. The New York Times breathlessly outlined the conflict, starting with:
There are moments in this final phase of the health care struggle when people yearn, just a little, for the old leap-of-faith days of policy-making. Before the Congressional Budget Office was tallying up the costs, the risks and the impact on the deficit of every good intention.
They wern't kidding. Anyone bold enough to stand in front of a determined Congress with a "Stop" sign was asking for trouble.
Lawmakers look to the budget office as an arbiter in a terrifyingly complicated, fiercely partisan debate. But the C.B.O. has also become a target as the effort to pass a health care bill comes dangerously close to running out of time -- and as more and more of what is left is spent "waiting for C.B.O. estimates." Has the budget office become the latest institution to be overwhelmed by the health care struggle?
[...]
At that moment, Mr. Reischauer and his staff were responsible for analyzing three thick health care plans in the House and the principal Republican plan in the Senate. House Democratic leaders had just announced that they might have to put off debate and floor action on health care until after Labor Day -- a move that dismayed many advocates of health care restructuring -- because they had yet to receive the necessary estimates from the C.B.O.
The Times piece goes on to quote Reischauer on his worst fears:
I guess my worst nightmare would be that some poorly thought-out plan is passed, and the American people would greet that plan with tremendous dissatisfaction, and it's repealed two years from now.
That sounds strangely familiar. And yet, this time, the CBO seems to be entirely absent in any paragraph containing the world "delay." It's almost like they had their analysis almost ready. 2200 pages of reading and they issue scoring in days. Nice work! More on this later.
Back then, for her part, Hillary Clinton complained that President Franklin D. Roosevelt "didn't have to carry around actuarial tables and then have arguments with people on television."
Ah, yes! How wonderful it must have been to wield the sort of unbridled power that FDR enjoyed. Free of fiscal restraint (or transparency). Unchecked blank checkbooks. Back when men were men, high courts were filled with old men needful of forcible retirement and national budgets were annual leaps of faith. I'm feeling nostalgic. Aren't you?
In 1994 the CBO was having none of it. In February of that year, Reischauer's CBO published "An Analysis of the Administration's Health Proposal." (A quick glance at the cover page suggests a bit more flash was expected of the CBO 15 years ago). Among other findings the report uses a section wonderfully entitled "How CBO's Estimates Compare with Those of the Administration" to state:
In its budget for fiscal year 1995, the Administration estimates that its health proposal would reduce the deficit by $38 billion in 2000 and by a cumulative total of $59 billion over the 1995-2000 period. (The Administration has not provided estimates for later years.) In contrast, CBO estimates that the proposal would increase the deficit by $10 billion in 2000 and by a total of $74 billion over the six-year period. The two estimates are virtually the same in 1995 but differ by growing amounts after that year. CBO's estimate exceeds the Administration's by about $50 billion in 2000.
More interestingly, the report honed in on an obscure accounting area, the inclusion (or non-inclusion) of the "Health Alliances" in HillaryCare as Federal Budgetary items:
In administering the proposed program, regional alliances, corporate alliances, and state single-payer plans (if any) would operate primarily as agents of the federal government. Therefore, CBO believes that the financial transactions of the health alliances should be included in the federal government's accounts and that the premium payments should be shown as governmental receipts rather than as offsets to spending.
Anticipating the conflict this would no doubt fuel, the report added:
The President and the Congress should ultimately resolve the debate over the proposal's budgetary treatment through legislation.
We, perhaps naively, read this more like "You want those Alliances off budget? Well, what does your mother (Congress) say?"
Faced with the rather large delta between Administration figures and the CBO ($50 billion was once a lot of money, you know) and the corrosive effects of the Harry and Louise ads, Mom was, perhaps unsurprisingly, no longer particularly inclined to indulgence.
Watching the "shoe-in" melt away in front of their very eyes, the Clinton Administration was not amused. Not... one... bit.
Reischauer, who had just been re-appointed on November 27, 19931 after Clinton took office (the second and the last CBO director ever to be reappointed for a second term), found himself unceremoniously ejected mid-term his reappointment scuttled in 1995. Said the New York Times of the removal:
Although Mr. Reischauer was hired and paid by a Democratic-run Congress, only last year his budget office dealt a severe blow to the keystone of President Clinton's legislative program -- an overhaul of the health care system -- by concluding that it would cost the Government far more than the White House had estimated.
Reischauer might not recognize the restricted CBO of 2009. A number of changes to the scoring rules were made in 1997, including modifications to the bodies and procedures required to change the rules. Nor, we suspect, would CBO officials of that era have imagined the degree to which the agency's ability to check spending (or even expose it) has been mitigated. Legislators are well prepared for the slings and arrows of outrageous fiscal CBO restraint today. The already pliable "scorekeeping" rules are, it would seem, made to be bent, if not broken.
Generally, scorekeeping rules focus the CBO on the first decade of fiscal effects. It is a bit of a departure for the CBO to cast its penetrating gaze beyond that veil. Having done so with the present bill, the CBO has a bit of explaining to do to avoid the ire of its legislative masters:
Although CBO does not generally provide cost estimates beyond the 10-year budget projection period (2010 through 2019 currently), many Members have requested CBO analyses of the long-term impact of broad changes in the nation’s health care and health insurance systems. A detailed year-by-year projection, like those that CBO prepares for the 10-year budget window, would not be meaningful because the uncertainties involved are simply too great. CBO has therefore developed a rough outlook for the decade following the 10-year budget window.
One can almost feel the inner conflict paining the CBO here, as it explains the limitations of its highly structured calculations in vague pleadings carefully buried near the end of a section. The CBO has become keenly aware of the need to provide proper sound-bytes for legislators to sell their project with during prime time, even while hedging its bets with closing sentences no reporter will copy-paste. To wit:
Based on the longer-term extrapolation, CBO expects that inflation-adjusted Medicare spending per beneficiary would increase at an average annual rate of less than 2 percent during the next two decades under the legislation—about half of the roughly 4 percent annual growth rate of the past two decades. It is unclear whether such a reduction in the growth rate could be achieved, and if so, whether it would be accomplished through greater efficiencies in the delivery of health care or would reduce access to care or diminish the quality of care.
If this doesn't make somewhat obvious the CBO's anxiety, its reaction to a particular class of gaming, and the total acquiescence of those issues might illuminate the matter more directly.
Remember the off-budget Health Care Alliance conflict? You didn't think it was gone, did you? Back in May of 2009, the CBO literally wrote an instruction manual describing exactly would keep "Federal Mandates" off budget:
To the extent that firms or individuals would be purchasing insurance from the government or via some entities acting on behalf of the government, the cash flows to and from the government (or such entities) should appear in the budget. But the budgetary treatment of purchases of insurance from private companies is more complicated. At its root, the key consideration is whether the proposal would be making health insurance an essentially governmental program, tightly controlled by the federal government with little choice available to those who offer and buy health insurance—or whether the system would provide significant flexibility in terms of the types, prices, and number of private-sector sellers of insurance available to people.
Want to avoid on-budget treatment? Simple:
1. Don't require purchase from the government or "via some entities acting on behalf of the government."
2. Keep the proposal from "making health insurance essentially a governmental program."
2a. To avoid triggering (2) above, keep insurer Medical Loss Ratio requirements in the law below 80 to 85 percent.
The "Medical Loss Ratios" in (2)(a) are effectively margin limits on insurers. An 80% Medical Loss Ratio would imply that an insurer spends $0.80 per $1.00 of premiums to pay out customers' medical claims. The remaining $0.20 would, one assumes, be the maximum the firm could dedicate to administrative costs, salaries, and anything else that doesn't end up in the claims bucket. Effectively, this is a limit on profit margins. This rather arbitrary ratio emerged in a suspiciously timely (December 13th) memo from the CBO which states:
Taking those differences into account, CBO has determined that setting minimum MLRs under the PPACA at 80 percent or lower for the individual and small-group markets or at 85 percent or lower for the large-group market would not cause CBO to consider transactions in those markets as part of the federal budget. Apparently, if the Federal government dictates your permitted profits and administrative expenses, but keeps those requirements under a nice round number or two, all is right with the world.
Constructing a complex structure that muddles these two issues sufficiently will force the CBO to treat a wide swath of spending as "off budget" for the public relations press that will follow. Does the CBO seem to have made matters suspiciously easy? Well, after their rather brusque May 2009 report, it didn't seem so. But this MLR issue has many people quite suspicious. Take Michael Cannon, for instance:
The problem is that crafting the private-sector mandates such that they fall just a hair short of CBO's definition does not reduce those mandates' cost, nor does it make those mandates any less binding. But it dramatically reduces the apparent cost of the legislation.
[...]
The MLR memo is the smoking gun: it shows that this is what they've been doing with CBO all along. Proposals that would result in a complete cost estimate are dropped. Because we can't let the public see how much this thing really costs.
What impact does this sort of hair splitting have? Cannon again:
It's the reason we're all talking about an $848 billion Reid bill, rather than a $2.1 trillion Reid bill.
If someone sold you a house, or a car, or a mutual fund this way, we would put them in jail.
Proponents of the bill, however, are not fearful of imprisonment. They don't even seem fearful of voter retribution. It almost seems as if they are sacrifice flying the legislation to advance Congressional baserunners that aren't even standing on deck yet. Perhaps they believe that passing a bill that will struggle through the courts (poorly) for some time will force their opponents ("Republicans" we suppose?) to wear the forehead brand of the "party that killed healthcare reform in the courts." Or, better, the "party that repealed healthcare reform."
Then again, once the bill is passed it is easy to just ignore the CBO. In the end it is the Office of Management and Budget (hereinafter the "OMB") a Cabinet office (and therefore entirely beholden to the current Administration) that dictates the treatment of budgetary items after laws are passed. The CBO numbers become meaningless quite quickly after signing. Lost and forgotten. Does anyone remember, for instance, SarbOx's numbers?
Now that we consider it, why is it that $100 billion in AIG payments, the result of gaming regulatory rules governing insurance and derivatives, causes near riotous outrage, while gaming the CBO to the tune of $1.2 trillion is met with "job well done"s before passing the issue quietly into the night?
Finally, there is the question of why, given the serious constitutional issues it faces, this bill is even being proposed.
We aren't sure one even has to delve into language in the bill that purports to make it unrepealable...
...it shall not be in order in the senate or the house of representatives to consider any bill, resolution, amendment, or conference report that would repeal or otherwise change this subsection.
...to wonder after its legality. If legal, one wonders why the Senate didn't think of this years ago.
It is common to hear that, given the fact that many states mandate financial responsibility as a pre-requisite to driving an automobile, a Federal Mandate to purchase health insurance is as American as apple pie. This is an awful and abusive analogy.
Setting aside for a moment what should be obvious distinctions between state power and federal power, the possession of a license to operate a motor vehicle is, like it or not, a privilege afforded by states to residents, not a right. States do not, for example, require residents with no desire to drive to, nonetheless, acquire insurance. Nor can States require of residents proof of insurance (or even a license) when residents confine themselves to private roads. The scope of regulation is confined to public operation of a vehicle on public roads. Use of public roads is a privilege. Simply waking up in the morning, however, is not something governments ought to be able to regulate.
Interestingly, the law does not actually regulate an activity- a key component of the Commerce Clause authority which the bill, of necessity, must invoke. Instead, it regulates an anti-activity. The act of not buying health insurance. It is easy to make light of this distinction. It is also quite foolish. This sort of "negative regulation" is incredibly dangerous. Moreover, the law itself mandates that individuals enter into a required contractual relationship with a private company. Even State automobile insurance requirements permit individuals to post a cash bond to meet their financial responsibility requirements (i.e. to self-insure). No such exception exists in the present legislation. In fact, given the price control and "community rating" aspects of the bill, it is entirely obvious that the statute would require many individuals (particularly healthy 20somethings like your humble author) to enter into overpriced insurance contracts to subsidize other citizens.
In short, Federal mandates of this kind not only have no precedent, they would seem to fly in the face of the most basic notions of freedom of contract.
We hope that you are shocked at the lengths Congress will go to to deceive the public with respect to every facet of this bill from cost to deficit impact, from tax burden to effect and efficacy (or lack thereof), and that you will recoil to see how they have gamed the system to pass a brutally complex mass of legislation that surely remains (and will remain) unread by the very barons of democracy who will vote on it in your name.
While we are at it, allow us to welcome to the new way. This having worked famously, expect more of the same.
»
- 5840 reads
- Printer-friendly version
- Send to friend
Wow. Marla's on fire these last few days. Beware her poison pen, indeed.
Congress will continue raising the debt ceiling because they can. Until we elect officials who understand that they work for us, nothing will change. Judgemental, self-righteous thugs have hijacked Congress and it is our job to send these folks packing.
There have been many recent threads relating to deflation, and I'd like to offer my view. First, if you have capital, you don't care about inflation and deflation. During periods of deflation, the rich use cash to purchase assets at distressed prices and take advantage of weak employment by cutting jobs, increasing productivity, and raising profits. During periods of inflation, the rich sell assets at inflated prices and purchase jumbo certificates of deposit and such. It is misleading to state deflation favors the rich or that inflation favors the rich.
Deflation, on the other hand, does negatively impact the poor and middle class. If you are middle class and thrifty, returns on interest are nil, and assets decline in value. If you are middle class and overextended, you risk unemployment or pay cuts, and find it difficult to pay back debt.
People get so hung up on inflation and deflation rather than what is really happening to the economy. When the economy begins to cool, purchasing power naturally begins to contract as people pay down debt and increase saving. For the past 20 years, the Fed and Congress have enabled citizens and private businesses to continue borrowing by keeping interest rates artificially low. Once real wages stopped growing, the only option for so-called growth was to increase demand and increase asset prices via debt fueled by low interest rates.
The result was not economic growth, but rather artificially induced asset and commodity inflation. Purchasing power and business expansion were kept on life support via cheap credit until the debt load became unsustainable. The economic 'growth' of the last 20 years is being wiped out because it never existed. Sooner or later the average price of a home will reach 2-3x family income, and commodity prices (non-OPEC) will return to slightly above cost of production.
Bernanke can print money until hell freezes over, but it does not matter. For the past two decade, there never was the private capital and purchasing power available to provide economic growth. Once real wages topped, real economic growth was not sustainable.
It's all about purchasing power, and purchasing power is all about wages. Extending unemployment benefits ad infinitum and providing health care for all does nothing to address the problem. The United States must manufacture its way out of this mess, and any legislation passed that hinders business does nothing but hamstring the recovery.
Washington, if you are listening, the SMBs and small financial institutions are the capillaries of this economy. Stop rewarding corruption. Even the playing field, and stop bailing out business based on campaign contributions and kick-backs. End this self-righteous punishment mentality. Rather than punishing companies and corporations that emit CO2, reward companies that reduce emissions. Rather than holding up mining and logging ventures via permits, allow companies to design a green business plan. Above all, remember for whom you work.
They know who they work for, the people who have the money that they will need for re-election. With that money they will run advertisements to convence the rest of us to vote for them. The really honest people that are running will have no money and you will never hear of them.
If you care about this country, here's the guy who can get us back on track:
http://johnsonforamerica.com/
He looks fine, except for the small government and deregulation part. Hey - lets allow unrestricted cds trades by banks, and 500-1 leverage! Deregulation sucks.
Let 'em do whatever they want. Then they go belly up. No bailout. No FDIC. No TBTF. Burned customers will then refuse to be led along with a string of lies. The free market doesn't work when people expect to be protected in their investments without knowing anything about them. Swim on your own or die.
Seriously! Her keyboard must have some sort of Nomex coating, she's just been killing it (in a very good way) recently, damn.
Interesting take on CBO that flames out when it becomes evident the writer does not want to "pay" to support someone else's access to Health Care.
You could've had a vastly more simple, far, far less costly and far more fair single-payer system, but opted to make it an utterly silly issue of "freedom".
Twenty-somethings need to learn a few somethings before they pop off on things of critical importance.
So speaks the old geezer in us all. Forcing someone to subsidize the cost of living for someone else is socialism. Forcing someone to pay a state mandated tax, to accrue a 'service' that they as likely as not won't need and what's worse is intentionally overpriced to benefit the cronies of the law makers (insurance companies, unions and the like) is straight forward fascism.
Interesting that you criticise the author's choice to insert such a 'pop off,' but then do nothing but pop off yourself - in no way related to the CBO. Thus guaranteeing that you'll have a stream of comments popping off to your socialist spewing.
I don't want to "pay" to support someone else's access to health care either. Health care is not a "right" any more than owning a car is a "right." What's so hard to understand?
But the fact that you believe that the government should be your nanny has nothing to do with the obvious politization of all things government that is pointed out here. Which is exactly why the government should not be involved in banking, car manufacturing, health care, etc.
I think that is fine -- but the problem is that you pay for others access to health care already. Medicare/Medicade are socialized health care. You also pay for it when people without access to health care clog emergency rooms in hospitals.
And yes, most people in the United Sates do believe that the government should be a 'nanny.' That is why we have things like public schools, the FDA, the department of commerce.
Supporting the system as it is is makes you no different than a union employee. Both of you claim that because of your superior bargaining power you deserve more than a citizen who lacks such powers.
You mistake me for someone who likes public schools, the department of commerce, the FDA, the SEC, the FED, and any number of politicized bureaucracies. I don't support the system as it is except by force of law.
As for paying for everyone's healthcare, I agree. So answer me this: If we are already paying for everyone's healthcare through existing socialist entities like Medicare/Medicaid and emergency rooms for the unisured, why do we need to spend another 1.8 trillion? Seems to me that the cost shoulds be a lot less just to sign everyone up with insurance. If you really thought about this, you would see that the whole thing is just a money and power grab.
Yes, how dare they show opposition to the notion of paying for someone else's bills. It's almost as if this uppity 20-something believes this nation was founded on the principles of individual responsibility and a government with a duty to preserve the private property of the citizenry. Who's teaching these kids these days?!
Freedom *is* silly. And isn't that old saying "lies, damn lies, and accounting"? Of course accounting shouldn't be merely an honest, result-blind application of math, but should be an entirely politicized experience much like journalism.
Ron Paul always votes with reference to constitutionality. Only one of the stinking lot. Ron Paul for President - 2012!
+1
+2012
I will be absolutely amazed if our infrastructure is still intact by then. Amazed.
Ron Paul for President of Texas in 2012 would be sweet - I'd move there for that. Although the Fedz don't like it when taxpayers decide to break off en masse.
Paul/Singer 2012?
Well done. This should be required reading by every voter.
a lot of words (good words by the way) to say that Douglas W. Elmendorf, the eighth Director of CBO has a resume that includes these snippets:
Couldn't come up with an example of a more captured fellow. Any private experience in there, at all? (Private but not subject to any audit or inspection doesn't count...)
(see below - there is a better example)
Healthcare is the hot thing right now for elected officials. The president is popular, he likes healthcare, and a lot of people like healthcare, so they have to pass healthcare. All other factors not related to getting re-elected are moot. The more it costs the better, since it will create more government debt and help battle deflation by increasing the money supply. The CBO employs people so they serve a purpose (for the people that work there) as well. It all makes perfect sense.
Except this tidbit:
Other than the possible non-constitutional nature of it, which isn't anything new, there is the question of why would they care? It would be good to know who pushed for this language in the bill and why. My guess is that they want to create another permanent fed-like branch of "independent within the government" for the business of health. Make the fusing of public and private interests permanent via another extraconstitutional branch of the government for yet another special privileged group.
Or maybe it is the only way that those who have labored oh so hard to write this 2000 page monster are willing to allow this bill to be passed. They don't want their baby to be killed but some dumb voters worried about "spending" and "inflation".
Anyways, excellent article and insight into how the shitshow machine works.
Those words alone make the whole bill Unconstitutional. It subverts the whole amendment process, which by the way are repealable and in fact tries to make it part of the existing Constitutional law.
These bastards need to be exposed for there tyrannical ways and booted from office.
Thank you for this Marla, great work.
your line of questioning assumes that people in congress actually wrote this bill...i mean who the hell can pull together 2200 pages all well thought out (in terms of structutre of the document) complete with references to past legislation and citings in a matter of weeks...
I mean thats totally a non-superhuman act, am I right...
I cant believe people go for this shit...not that it hasnt been this way all along repubs and dems alike, its just people have had their eyes opened...
They know that psycologically people are in the denial phase (that the congress and executive branch is/has been corrupt) and the next stage is acceptance and thus revolt (non violent hopefully)....so they must act as quicly as possible...
Agreed on all counts.
It's well know that when "special interests" come calling, they come calling with "sample" legislation on paper and (helpfully) on dozens of CD-ROMs in multiple formats.
Revolt (at least non-violent) is not in the cards. If the average Joe has not put his foot down by now, how willing will s/he be when things get worse. And it will get worse. As long as the entertainment pipeline is working, the masses will stand/sit transfixed in front of the boob tube.
Circuses and bread! A tried and true method of pacification.
Now be quiet, the 2010 season of "24" and "American Idol" are just around the corner and I'm not even done viewing the last 3 seasons on DVD.
NETFLIX AND FOOD STAMPS, BITCHES!
The mailman's here!
They got the idea for that one from Paulson's original TARP proposal. Something like give me the money, I'm god and will spend it how I like and you can't question my decisions...ever!
and then we have this impartial entry - of interest his page on (http://images.nictusa.com/cgi-bin/fecimg/?28991568670) has been deleted but this one is still active:
Elmendorf, Douglas William Mr
BETHESDA, MD 20817 Brookings Institute/Economist
$1,000 OBAMA FOR AMERICA - DEMOCRAT
http://www.campaignmoney.com/finance.asp?pg=2&type=in&criteria=elmendorf...
Wow, excellent article, Marla. My hatred of the scum sucking frauds in CONgress has been validated once again.
and deep capture continues with this end of year special feature on Bloomberg
U.S. Taxpayer Burden Eases to $8.2 Trillion Congress and the Obama administration are taking a bigger role in the rescue of the economy from the Federal Reserve, shifting the strategy to stimulus spending from central bank lending.OT: Tyler/ZH picked up on BlackListedNews.com
http://www.blacklistednews.com/news-6792-0-13-13--.html
YEEEEEAAAAAAAAAHHH!!!
Meet the new way!
Same as the old way!
Exellent post Marla
Thank You.
The msm is force feeding Tiger Woods to the masses right now. If Tiger is a lie and Climate change is a fraud. Then nothing is real it's all a lie. As soon as the all the guilty victim liberals get over their shock and outrage sets in. Barry and his merry band of fascists is going under the microscope. Guilty victims always have to blame somebody. Without Tiger as the moral bench mark and saving the earth from AGW as a cause. Algore and Barry look down right evil. When utopia is ruined and fantasy's are destroyed. The Constitution becomes the rule of law.
Can I pick my jail now or do I have to get in the lottery? I think I'd rather spend the rest of my healthy life in the south.
maybe rent free in the caribbean at the soon to be club gitmo....after they move the prisoners on to US soil, open relations with cuba, shut down the entire base and turn it into a resortn to be developed by a big democratic donor....
"We hope that you are shocked at the lengths Congress will go to to deceive the public...."
Sadly I shocked that I'm so far beyond shocked at the lengths Congress, corporations and various administration critters will go to deceive me and any other person who actually takes the time to be informed.
The average person, while understanding there is corruption and self dealing, stays safely within their own cocoon of denial with regard to the depths of said corruption etc. Buy avoiding knowing the details, they can say they "know" while not knowing.
Now that is shocking.
The greatest conspiracy ever foisted on the American public is that there is no such thing possible as conspiracy.
Only the conspiricies Glenn Beck speaks of are true
/not
GB is paid to confuse and jostle, and ultimately coddle.
Yea though I sometimes think he just wants the old not so blatant corrupt system back.
more corruption >>> more GB blabbing >>> more $$$ for GB
The only way to put GB out of business is to make Ron Paul supreme dictator.
Wait, did I just say that?
It would take anyone about thirty seconds in the criminal justice system to realize that a "conspiracy" is nothing more than an agreement to forward a crime. For this reason, most economic crimes of any complexity usually have more than one player. The term has now been twisted (probably by the very criminals committing them) to come to mean some kind of fringe unproven theory.
+30 seconds
Once an entity was granted, by popular mandate I might add, a legal monopoly over territory, taxes & trade, it became a natural target for those who sought to utilize such control & power for their own personal benefit.
The Framers thought they had engineered a sufficient degree of balance of power, but sadly, they were greatly mistaken. Almost 225 years later, we can fully see the results & extent of their self-deception.
But, the beauty of something that bases its entire existence on unsustainable practices is, well, that it's unsustainable. We have finally reached the inflection point where available resources are being consumed to satisfy current appetites, rather than be invested in future endeavors which might employ/feed many.
Thus, as the very seed corn of our national sustenance is being eaten away without nary a thought for the future, nature's scorecard is silently recording these actions with due prejudice.
Unless some miracle advance is made in energy optimization and/or economic efficiency, there is simply no way that leviathan can continue to maintain its current position in the world, much less engage in further expansion at the expense of free men.
In reality, it's future resources (via credit) which are being consumed to satisfy current appetites.
Well done Marla...
I am so cynical at this point, I am not surprised at all. It seems our politicians have become so corrupt and are rotting our political system.
The average age of an empire before it decays is about........ 200 years?
speed is progress
.
When I was a teenager, 40-plus years ago, we would joke that the government would one day tax you to breath. That day is here. We already have the world's most expensive "health care". Now we will also have the world's only "health care" that puts us in jail if we don't give it money.
One of many unintended consquences of this bill will be that people won't want to come here anymore. This may grind legal immigration to a halt. Illegals will love it; nothing changes at all for them. They stay off grid, so they don't have to pay, and they, protected by our laws, get to walk into any emergency room in the country for free if necessary.
In the future the only people who'll want to come to the U.S. are those who want to bilk the system. Hardworking, enterprising young people will find their home country more appealing.
Awesome, awesome post. The fiscal fraud that is this bill is much worse than I originally thought.
Thank You, Marla. This is a great piece of work.
P.S. The individual mandate is undeniably unconstitutional. You're one hundred percent correct. It's interesting, to say the very least, when a President brazenly commits an unconstitutional act. He's said on camera many times that he's frustrated by what the Constitution won't allow him to do. I guess he's just decided to give it whirl and see what happens.
Marla, wowww! As a follower of this travesty, we are in the deep muddy from here on out. The sad thing is that those forcing us to bear the burden will not be subject to its provision! They are EXEMPT. If this is sooo good for us, then?????
Second, the bill is like a chinese bureaucracy from the last Manchurian dynasty.
This effort will not be televised, I was wrong and it was all bought and paid for by our money behind closed doors. It will be hard to repeal as well, since there are provisons that binding unto death. Trust me on this. It is in concrete. Woe be US.
Yes. The first thing they did was write an exemption for themselves and their staffs.
Why the media isn't demanding they answer for this provision... well, we know why. That should be the lead question of any 'interview' or presser held by a member who voted for this.
“the United States is going to be saddled with the first stage of socialized medicine. All the Democrats have to do now is bide their time… The result is going to be the bankruptcy of the Federal government… The health care law is going to be very expensive. Individuals are going to wind up paying fines or paying to enroll in insurance programs that are expensive and which individuals don't want to buy today…”
Dr. Keynes's Health Care Prescription | Gary North 12/23/09
Quotes:
…The Senate's bill is a major breakthrough for the Democrats. Hillary Clinton, back in 1993, attempted to get such a piece of legislation signed by her husband.
…something in the range of 30 million people will be given health insurance by the new bill, it is going to be very difficult for the Republicans to get this law repealed.
…The bills are now coming due so fast, and in such large numbers, that the only thing that can keep the game going is the expansion of the money supply by the Federal Reserve System. The FED has been expanding the monetary base since mid-June at a rate of 77% per annum.
…The monetary slowdown from December 2008 to June 2009 is now over. The FED doubled the monetary base in two months in September and October 2008. Now it is moving back into a full-scale policy of monetary expansion. We have never seen anything like this in the history of the FED, not even in World War II…
…The money that flows into health care will not overflow into all other segments of the economy. It will flow out of them into health care. Health care will expand at the expense of the rest of the economy.
…The recipients will be poorer people – not the truly destitute, who already have access to free hospital care by Federal law..
… This is Keynesianism with a vengeance….
…Some proposed beneficiaries: illegal immigrants, or people with very low paying jobs, or unemployed people.
…The assumption is…that businesses pay enormous amounts of money to the health care sector, and yet the health care sector will not drain productive capital out of the other sectors.. This is the essence of the futility and error of Keynesianism.
…Investors in stocks assume that there really are free lunches. These lunches are made available, in effect free of charge, by the Federal government and by businesses that are operating under the terms the Federal government has established for them.
…The effect of the health care law will be to increase unemployment.
…The expenses are going to be imposed immediately, but the Senate bill is not going to provide complete coverage for four years.
… the bill will be high, and much higher than projected by the official estimate. Medicare vastly outran the promised maximum promoted by President Johnson in 1965.
This is always the price of Keynesianism.
http://www.lewrockwell.com/north/north794.html
Gary is Great. Great!
Very interesting post, Marla. Underlying every policy spat over the last few years is the idea that the CBO is supposed to serve as a cock-blocker on every spending bill Congress burps out (military, domestic, what have you) so that these hell-bent-for-leather glory hounds and press whores are compelled to slow down and use common sense as to whether their intentions are fiscally responsible for this country, and thus avoid negative publicity. Unfortunately, without Ron Paul-types running it who despise government spending in most of its current forms, the whole process becomes just another victim of the spoils system.
The individual mandate will end up before SCOTUS. The crafters of this legislation, including Obama, don't have a legal leg to stand.
This bill will be bogged down in the courts for years before it ever starts...if at all.
As will campaign reform legislation.
"...
Watching the "shoe-in" melt away in front of their very eyes, the Clinton Administration was not amused. Not... one... bit.
Reischauer, who had just been re-appointed in 1993 after Clinton took office (the second and the last CBO director ever to be reappointed for a second term), found himself unceremoniously ejected mid-term in 1995.
... "
Sorry to be a stickler for details Marla, but Reischauer was appointed to his last term in January 1991, not 1993. Not only wasn't he "unceremoniously ejected mid-term" but in fact he stayed on for nearly two months after his second term had ended, until the next appointee could take over.
posted by Anonymous
on Wed, 12/23/2009 - 06:13
#172479
"Ron Paul always votes with reference to constitutionality. Only one of the stinking lot. Ron Paul for President - 2012!"
He also endorsed a rather blatant Theocrat (Chuck Baldwin) for President in 2008. I'm not sure how "constitutional" Theocracy is, but I'm sure some people would like it.
Ah, indeed! You are mostly correct. He was actually reappointed in November 1991. The error, of course, was mine originally. Corrected in original. (Thank you!)
Thank you as well for the correction that his reappointment was in November 1991 and not January. However, with regard to your revision which now states "... Reischauer ... found his reappointment scuttled in 1995. ...", don't you think it's more than a little bit disingenuous to say that given that Reischauer had already served two terms and a third term would have been unprecedented?! Do you also think that Ronald Reagan "scuttled" the reappointments of Alice Rivlin and Rudolph Penner, or that George W. Bush "scuttled" the reappointment of Dan Crippen, given that the above have also at one time or another produced economic analysis that disappointed their respective presidents? If so, then why haven't you said as much in your discussion of the CBO? If not, then why the difference?
Also, isn't it worth mentioning in your article that the changes to the scoring rules in 1997 were made by a REPUBLICAN led House and Senate? Are there any particular scoring rules changes made in 1997 that you have a problem with, or is it simply a belief that ANY changes must have been BAD changes?
I understand your point, but no, I don't think it disingenuous given that his reappointment was considered expected before this. The larger issue is that the CBO, once it became obvious that it represented a force of resistance for the legislature, was marginalized. Reischauer was the first CBO Director to resist Congress so openly, using his view of the potential politics (rather than just cold-hard numbers) to guide his execution of the office. He was the first to so directly sink such an important (and complex) piece of legislation. Even the New York Times (certainly sympathetic to the party Reischauer was affiliated with) blamed him in large part for the death of health care.
Who cares? This isn't about party politics except as they indict both parties. Neither group has been particularly benign for CBO independence. Your mistake is viewing my position as anti-democrat. I'm anti-bullshit. Democrats just happen to have more market share in it right now.
The larger point of the article, and perhaps I explained this poorly, is how the CBO never had a chance this time around. Congress had seen that trick before and was more than ready for it. Did you hear ONE complaint about the CBO this time around? Sure Republicans clamped down in 1997. Wouldn't you after watching what the CBO could do to the other party and, therefore, potentially your programs? (This time by expressing concern over the fiscal impact of tax cuts maybe?) In fact, exactly this happened. Look what happened to Reischauer's replacement:
and
No more CBO meddling after that. CBO directors have been pretty tame since. Tight leash and all that. That office is worse than useless now. It conveys the false impression of competence or relevance and is used shamelessly as a PR tool.
Your logic is screwy.
Quant Hedge Funds Poised To Benefit From High-Frequency Trading: http://www.finalternatives.com/node/10055
The White House privately anticipates health care talks to slip into February — past President Barack Obama’s first State of the Union address — and then plans to make a “very hard pivot” to a new jobs bill, according to senior administration officials.
Obama has been told that disputes over abortion and the tight schedule are highly likely to delay a final deal, a blow to the president, who had hoped to trumpet a health care victory in his big speech to the nation. But he has also been told that House Democratic leaders seem inclined, at least for now, to largely accept the compromise worked out in the Senate, virtually ensuring he will eventually get a deal.
http://www.politico.com/news/stories/1209/30925.html
CBO: You can’t spend the same dollars twicehttp://hotair.com/archives/2009/12/23/cbo-you-cant-spend-the-same-dollar...
It may well just be a head fake. Bear with me on this.
Much in the way "global warming" was a cover for global governance, I've had the nagging suspicion all along that the so called "health care crisis" was cover for a financial/governance/debt crisis that's even worse than we Zero Hedge fans can conceive of. Every time a debt payment comes do they have to do something illegal and/or drastic to keep the Rothschild Repo Man at bay. Without solving the financial crisis, ain't gonna be no govmint, forget healthcare. Things are that bad.
There is a very high stakes game of turn-the-screws and kick-the-can going on behind the scenes, bankster factions with irreconcilable differences over how this sheep farm ought to be managed. This wouldn't be the Obama Administration's first head-fake (the first being his election).
I've been going through a lot of virtual popcorn watching it all go down, treating one crisis as an allegory for another. Try it: Any time Obama or a Congresscritter speechifies about health care replace the word "health" with "debt." It all fits.
Duh. "Every time a debt payment comes DUE . . ."
Sorry: My Firefox browser hides half of what I'm typing.
IMO, the main similarity between the Congressional Budget Office and the Federal Reserve System is that they are both non-governmental. IE, they both serve the needs of the investment-banking cartel. It is only a pretense that FedRes officials are appointed by government officials. And similarly, it is only a pretense that the CBO in any way serves American citizens; only occasionally acting as if it is a serious watchdog on federal expenditures.
But in the end, like the AMA and AARP and the leadership of both political parties, it marches to the tune of the corporate rulers. When the chips are down, it will deliver. Case in point: the healthcare bills on their way to law "are not going to cost the American people." Yeah. Right. Did the CBO say this is going to break the American people, the economy; that the bill is outrageous? No.
With the loss of representative government, even Barney Frank is not a government official.
Elmendorf’s fingerprints have been all over universal health care since 1993 when he began working for the CBO office, joining full-time in 1994 as a principal analyst on health-care issues--all the way to the Brookings’ group known as the Hamilton Project where he replaced Jason Furman as director in 2008 when Furman left to join the Obama campaign.
How involved is the Hamilton Project in health care largesse? A Brookings’ news article on Health Care Reform June 09,2009 –featuring a picture of Peter Orszag and Robert Rubin at THP/ECHCR event--reported: “The American Recovery and Reinvestment Act of 2009 invested $1.1 billion in federal initiatives to begin the important and necessary work of comparative effectiveness research (CER), a key building block in health care reform. A forum hosted by The Hamilton Project and the Engelberg Center for Health Care Reform addressed many of the key questions surrounding CER, and featured remarks from Sen. Max Baucus (D-Mont.) and Office of Management and Budget Director Peter Orszag… Orszag (formerly head of CBO) says health care reform is complicated and should address two primary needs: to provide coverage for more people and to do so in a more efficient and cost effective manner." Read More
http://www.brookings.edu/projects/hamiltonproject.aspx
Robert E. Rubin is a member of the Hamilton Project Advisory Council.
Matt Taibbi has pointed out that the four ways to be connected to Bob Rubin are "through Goldman Sachs, the Clinton administration, Citigroup and, finally, the Hamilton Project."
Thank you for shedding light on this $1 tri legislation. The detailed write-up (not forgetting hours of scrutiny over the actual bill) must have been, for lack of better expression, a gargantuan effort.
Certain aspects are indeed troubling. Like the fact that coverage is mandatory, for instance. So should one purchase from a commercial entity, say, AIG? Or opt for a basic plan offered by the government?
The enormous revenues that commercial insurers stand to make from this will undoubtedly lift them out of any bad debts leftover from this current crisis; however, unless regulatory oversight is improved in tandem to curb possible malinvestments, any future threat of insolvency in such entities will certainly compel the Fed to come to their rescue. Or buy insurance from a 'financially-challenged' government.
Well, maybe there still are generous employers to be found, which would seem the wisest choice.
And yes, legislations which include non-repeal clauses such as the one cited are indeed suspect (furthermore, a self-exempt clause which someone mentioned earlier). In most legal systems, insurance coverage is usually mandated only on those activities which carry intrinsic third-party liabilities; unless the US govt considers its citizenry as a collective liability, which in view of projected deficits, may not be far from the truth.
"What does it say about the (d)evolution of the meaning of this oath that evoking it in this context is more likely to provoke sad, knowing smiles, than expressions of shock?"
...Ummm, it means our republic is in decline.
"Rule of law?!??... WE are the law!" They say
Which is fine... until they no longer have POWER.
Then watch how they shed tears lamenting the "rule of law!"
Thanks for this, Marla -- I've been trying to understand what's going on with the CBO for a while now.
You also have an amazing talent for making dry topic lively and readable.
Hi Marla,
You obviously have studied some US Con Law in your time. I salute you. However, as a student of Con Law you should be a bit less disingenuous with the fine posters here who are not as well educated on the constitution as you are.
1) The Commerce Clause. Commerce Clause jurisprudence makes it pretty clear that these days all that the federal government has to say is the two magic words -- Commerce Clause -- to conjure up legislative power. Sure Lopez made us all believe for a brief moment that maybe, just maybe, the Supreme Court would finally go out and draw a line in the sand for the federal government. But no, Gonzales took care of that little problem quite handsomely.
2) The right to "freedom of contract" has been extinguished in the last financial collapse, during the 30s. It sounds nice on paper and in real life but dont confuse the fine readers. It may be a philosophical right or a political goal, but in these United States the power of the state, since 1937 easily extinguished the freedom to contract.
Of course you have to ask - what enshrines the power of being the final arbiter of the Consitution in the Supreme Court? Certainly that power isn't IN the Consititution. If there are no limits to Federal Power - why even have a Constitution? Why not say: "do whatever you want?"
Sorry - obviously I'm an amateur and not "as well educated on the constitution" as you are.
Marbury v. Madison and the jurisprudence emanating from it has enshrined the Supreme Court as the final arbiter of the Constitution. So has the legislative laziness of successive Congresses.
As to the second question, why even have a constitution?
Your second question is obviously meant as a polemic than a real question but ok.
We have a constitution because for various historical reasons the various former British colonies felt like having one. And they also felt like having a court. This slowly enshrined itself, over the course of more than 100 years, as the arbiter of federal law. And since the only people who oppose its current position are usually angry radicals, upset about a particular pet issue of theirs, be they slaves or the commerce clause or abortion, they are not taken seriously by the vast majority of citizenry that was, is, and will be born to find a form of government that they find in generally agreeable and thus never bother to question those hazy areas of constitutional law that have evolved over the years and have been ignored by a legislature that has, from the very beginning, been concerned mainly with being re-elected and getting as much pork as possible to ensure further re-election.
I think everyone on here who is truly intellectually honest will recognize that they are not the first nor the last subgroup of American citizens who are pissed of about how the federal government has evolved and expanded its powers. But just like the preceding malcontents, you have to realize that simply wishing to say "do whatever you want" does not work in the face of general acceptance of the federal government by the majority of voters.
This is not the first time the US government has been utterly captured by selfish interests of a minority.
If you dont like it, feel free to do it the way blacks clawed into respectability. By founding organizations that file law suits that, combined with reasonable public support, overturn previous federal law.
Oh - I see... so the Supreme Court (and related "jurisprudence") decided that the Supreme Court is the final arbiter. What a shocker!
From what part of the Constitution, the supreme law of the land, did the Supreme Court derive this power?
"From what part of the Constitution, the supreme law of the land, did the Supreme Court derive this power?"
Article III clauses 1 and 2. This is basic stuff.
To Anon, #173052 on U.S. Con Law...thoughts on this? http://spectator.org/blog/2009/12/22/conservative-leaders-against-t.
They blow up the Commerce Clause thing pretty convincingly.
A beautiful piece. Thank you Marla.
"Who cares? This isn't about party politics except as they indict both parties. Neither group has been particularly benign for CBO independence. Your mistake is viewing my position as anti-democrat. I'm anti-bullshit. Democrats just happen to have more market share in it right now."
Bravo and I'm sorry
If you were to put another C into the title of the bill it would be short hand PPCACA or PP-CACA. Too bad. That would have been funny. :)
"...it shall not be in order in the senate or the house of representatives to consider any bill, resolution, amendment, or conference report that would repeal or otherwise change this subsection."
Very disturbing provision. But what are the odds that the House will agree with it and include it in the final bill?
Dear Marla,
*FAP FAP FAP*
Love,
Mob Barley
:)
Everybody, keep in mind that Section 1801 of the original Medicare Bill in 1965 contained this provision:
``Nothing in this title shall be construed to authorize any federal officer or employee to exercise any supervision or control over the practice of medicine....''(PL 89-97)How long did this provision last? Now there are over 100,000 pages of Medicare regulations. Many with criminal penalties such as fines and even felony charges and jail time for failure to follow often contradictory regulations.
The take home message is that THEY know that all they have to do is get SOMETHING passed. Then they can change it to mean whatever they want it to later.
Our congresscritters will continue to dishonor their oath to the Constitution as long as we continue to let them. WE were supposed to be the enforcement arm of the Constitution.
“I apprehend no danger to our country from a foreign foe. Our destruction, should it come at all, will be from another quarter. From the inattention of the people to the concerns of their government, from their carelessness and negligence, I must confess that I do apprehend some danger. I fear that they may place too implicit a confidence in their public servants, and fail properly to scrutinize their conduct; that in this way they may be made the dupes of designing men, and become the instruments of their own undoing.”
Daniel Webster [June 1, 1837]Here's a great article from Peter Schiff on the matter:
http://www.321gold.com/editorials/schiff/schiff122309.html
"As business owners undergo the yearly ritual of passing through eye-popping health insurance premium increases to their employees, it's easy to understand why any attempt at health insurance reform would be met with some degree of hope. Unfortunately, President Obama and his Democratic allies in Congress are about to take a very bad system and make it unimaginably worse.
While ramming their new legislation through Congress, the Democrats have taken great pains to point out that they do not intend to "socialize medicine." But make no mistake, that's where we're headed. Even if some naïve centrists believe that their efforts have denied the Left a total victory, the practical implications of the current legislation sow the seeds for complete capitulation.
This first round of reform could be labeled as the 'neutron bomb' of the insurance industry: it leaves some of the private apparatus standing, but it irradiates whatever remains of the industry's market viability.
The bill's centerpiece is a clause prohibiting insurers from denying coverage based on a pre-existing medical condition. However noble and marketable an idea, this proscription removes the very basis upon which any insurance model operates profitably.
A system of insurance requires that premiums be collected from a pool of low-risk people so that funds are available in case a high-risk event befalls a particular person. In that way, premiums can be low and coverage can be widely available, even if the benefits offered are hypothetically unlimited.
For example, homeowners buy fire insurance even though their houses are very unlikely to burn down. Recognizing that a fire could wipe them out financially, most homeowners endure the cost of coverage even if they never expect to collect. The same model applies to health insurance in a free market.
However, the health care bill removes the need for healthy individuals to carry insurance. Knowing that they could always find coverage if it were eventually needed, people would simply forgo paying expensive premiums while they are healthy, and then sign on when they need it. But insurance companies cannot survive if all of their policyholders are filing claims!
Correctly anticipating this incentive, the Senate bill imposes an annual fine which gradually escalates to $750 for those who fail to buy coverage. So what? I would gladly pay $750 in order to avoid the $8,000 per year I pay now for personal health insurance. Currently, I'm relatively healthy for a 46 year old and I don't anticipate making a big claim. But if I do, under the new rules I can always get 'insurance' after the fact. Heck, if I can stay healthy for the next couple of decades, I'll save a fortune. Think about how much easier the decision would be if I were 20 years younger! Since most people are capable of figuring this out, the entire insurance industry would collapse under such a system.
There can be no question that $750 annual maximum penalty is a mere placeholder. It is the camel's nose under the tent. When the non-discrimination provision kicks in, the only way these companies could remain solvent would be for Congress to raise the fine to the point where the penalty is greater than the gain of skipping coverage.
For me, that would have to be roughly $8,000 per year. Introducing such a fine right now would have surely killed the bill. So, the wily wonks in Washington have chosen to move slower, knowing that once the first step is taken, the second becomes inevitable.
However, there is another, more devious possibility. Perhaps our elected officials actually intend to bite the hands that feed them. They could double-cross insurance companies by not raising the fine in five years, thereby forcing the industry into bankruptcy as millions of healthy people opt-out. During the ensuing 'insurance crisis,' our courageous leaders could ride to the rescue with a nationalized, single-payer system.
The real tragedy is that the current bill does nothing to restrain the forces that are propelling healthcare costs into the stratosphere, namely: regulatory bans of insurance competition, the out-of-control medical malpractice industry, federal programs and subsidies, and a tax code that favors a third-party payment system - which alienates the patient from the cost of his care.
To consider that many in Washington have the nerve to market this multi-trillion dollar monstrosity as a "deficit reduction bill" is to realize that our representatives have lost all touch with reality. For those keeping score, the government made similarly rosy projections in the mid-1960's when Medicare was first introduced. The inflation-adjusted cost of that program already exceeds the original estimate by a factor of ten. That's probably where we are headed this time around."
nice with the snowperson on your logo - what happened to the roll of Benjamins - (did they melt?) - gold is better or perhaps some Treasurys
The author analysis of the constitutionality of the bill is flawed.
First, the author states that the law does not regulate an activity. I assume that she is talking solely about the individual mandate requirement, and not other elements of the bill. I don't follow how requiring an individual to purchase insurance is not an economic activity or action.
Putting that aside, the commerce clause does not just regulate interstate economic activity, it also allows congress to pass laws that will have a substantial impact on interstate economic activity. Now, whether the health care bill is good or bad can be debated, but all the people who are decrying its potential passage often raise the negative economic impact it will have on people's ability to receive insurance.
I suggest people take the time to actually read the cases of precedent. Certainly you are free to disagree with prior decisions that were made, but it is wrong to suggest that under current law congress doesn't have the authority. Several cases that people should read include Raich, Perez, Lopez, and Morrison. All of these are enlightening and after being read should allow for a more reasonable debate than blanket statements about abrogation of freedom of contract, socialism, and barons of democracy.
"I don't follow how requiring an individual to purchase insurance is not an economic activity or action"
Then it is only because you don't want to see it. I think the flaw is in your analysis of her analysis.
Very amateurish... very much: "Oh, oh here professor! Call on me!"
"First, the author states that the law does not regulate an activity. I assume that she is talking solely about the individual mandate requirement, and not other elements of the bill. I don't follow how requiring an individual to purchase insurance is not an economic activity or action."
This law penalizes me, up to and including incarceration, for NOT buying (in my case) overpriced insurance. I wake up in the morning. I haven't bought insurance. Fine. Jail. Period. Non-activity. Regulated. This is not complicated, Anonymous. Wake up.
That kind of mandate is totally unprecedented. Requiring a citizen to buy something from companies selected by government and at prices fixed by the government is a shocking development. If insurance, why not cars? By your argument Congress could require everyone to buy a Buick from General Motors for $45,500- your definition of "economic activity or action" easily fits that bill, and this is why it's bullshit.
Welcome to... well, I was about to say "China" but even they don't mandate automobile purchases.
Also, don't think that just because you cite (incorrectly) 4 cases that we believe you have even the slightest legal qualifications. It's obvious you are way over your head.
I love it when Marla lays the smackdown!
Well, I read it the first time it was posted and fwiw, got lost and was totally disinterested. Coming back seeing so many kudos posts I re-read it.
Well, you can't say these guys don't know what they are doing. They are "getting health care done", chaling up a Big W.............now, it's all on someone else's back because if the CBO properly priced universal health care I guess in no uncertain terms it would have to say...BANKRUPT...and thus the gig would be up.
So, you kill two birds with one stone, chalk a W, and get continuous campaign contributions.
This is a total Hope Strategy, do you really think people with a combined income of 60k will buy it. Hell No Way, they will hope they don't get sick, and if they do they will go to the government as usual because that is all they can do.
TOTAL SHOW TUNE
SICKENING
Oh Marla, you are the most intelligent woman I've ever not known personally, and it irks me. Oft you set my lips to smile with your dry sardonic humor. I'm fairly sure you would work on Nietzsche's behalf in any philosophical argument, and I quite the contrary, just on hard headed Arian principle not to mention deep seated , if somewhat fanciful and child like conviction. Agree with you that all is not well I most certainly do, but surely we could make it all more tolerable personally with a mutual Chateau Lafitte and a cozy camp fire
from which we could observe the lack of global warming, our bodies ensconced in shawl like down comforters scavenged from some dilapidated house now devoid of children s laughter , a monument to the financial mismanagement of our 'world leadership'.
Truthfully, I am disturbed by the notion you will join the Sith. I know you're intelligence makes you prone to thrust heart into dirt in favor of 'conceptual salvation'.
Conceptual salvation can only be that, a concept.
Follow your heart!
-MobBarley
Okay so let me get this straight. What passes for intelligent conversation on this site is when someone says without any knowledge that someone else doesn't have any legal qualifications.
Have you even read the cases? Do you know how precedent has evolved when interpreting the commerce clause? Do you know why some acts of Congress have been interpreted as unconstitutional under the commerce clause while others have not?
Do you know how the supreme court looks at the overall congressional legislation vs. pieces of the legislation. Somehow I doubt it. The cases that I posted, are to give readers and you, because you don't know what you are talking about, background information on how the Supreme Court looks at acts of Congress under the commerce clause.
So why don't you do a little homework on constitutional law before crying bullshit, casting aspersions, and making dumb comments about China. You guys sometimes have good articles, but too many times you make accusations and assumptions which aren't backed up by facts.
Epic Fail.
To write about Reischaeur not being reappointed without mentioning what happened in the 1994 congressional elections suggests that the writer has no clue about what took place in the early 90s. If the writer is so hugely ignorant of the change in Congress in 1995, then I have to question the accuracy of everything else in the essay.
Your critique depends on the assumption that I believe that the party controlling Congress when Reischaeur was invited to leave was relevant to this discussion. I don't really believe it was. The point, in case I didn't explain well (which is entirely possible) is that no one wanted a CBO that was actually going to do its job. if you are trying to make the case that Reischaeur was booted because the GOP picked up 54 seats in the house and Newt wanted to toss the Democratic CBO director then you have to explain four things:
1. No matter what party he's from, if you are going to boot just for partisan reasons, why would you toss the guy who had just played a major role in gutting the Democratic party's most significant policy initiative in decades?
2. If it's pure partisanship, how do you explain the short term of Reischaeur's successor, handpicked by Newt? (Other than that she simply didn't play ball?)
3. How do you explain the repeated measures by BOTH parties since 1995 to systematically marginalize the CBO?
4. Even the New York Times blamed the guys activism for his sacking.
The answer, of course, is that this isn't a partisan issue. It about how the CBO is used and gamed to manipulate and twist budget math so that citizens in the U.S. can be told with a straight face that a massively expensive bill isn't going to bankrupt the country (within the next 10 years). It is for show. It is a joke no matter which party uses it.
Get your head out of the partisan sand. Both red and blue states are going to suffer if (when) the U.S. defaults.
It is you who have to explain things. Your the one with your head in the partisan sands -- it is you who tried to tie Reischeauer's departure to the Clinton Administration, not I.
Your questions to me are silly.
1. If you are the new Republican leadership, you don't reappoint Reischauer becuase he is a Democratic appointee, regardless of what he concluded about the healthcare plan. They arent going to keep him around as thanks for "gutting the Democratic party's most significant policy initiative in decades" when he doesnt suit their agenda going forward.
2. What other explanation is necessary? She didnt play ball -- didnt deliver the results the Repubs wanted.
3. Is explanation necessary?
4. Not in the article you cited. Maybe you need to take a reading comprehension class.
No, actually it was the New York Times.
Meaning that he would have been canned no matter who was in power. Democrats because he blew their sexy program up. Repubs because, in your scenario, he's not a Democrat. You make my case for me even in this speculative hypothetical. The party in power was irrelevant. Discussing it was irrelevant.
Again, you make my case. After 1994-5 the CBO was seen as a threat, minimized by both parties. Talking about the Republican revolution as the reason is just partisan crap.
Yes, if you want to make the case I should have been talking about the Republican revolution when discussing Congress' gelding of the CBO and that therefore my piece on the uselessness of the CBO was a "Fail." Both parties hated the CBO after 1995. Talking about one or the other is pointless.
Uh... ok? If you say so. You prefer Bob Woodward? Pick up "The Agenda." Clinton HATED Reischauer. He gutted the budget before health care even came up.
Do your own homework. Hating the CBO was a bipartisan passtime in 1994, 1995, 1996 or 1997.