Waiting for SCOTUS #wonkbook
You might not have noticed, but on Monday morning, pretty much every media outlet in Washington anxiously played a guessing game that they’re probably going to be playing a few times a week until the end of the month. That game is called: “Will the Supreme Court rule on health care today?”
The game is made interesting because, like clockwork, every Sunday night, rumors begins to spread that somebody, somewhere, heard from a highly placed source/cousin/friend/drunk person that the Supreme Court will rule the next morning. Everyone then goes on high alert. Editors send e-mails to reporters. Reporters send e-mails to sources. Sources send e-mails to their sources. Reporters send e-mails back to their editors. Somebody tweets. Then everybody tweets. Then nothing happens.
Thus far, the best and calmest guide to this process has been SCOTUS Blog, and here’s what they say: “we don't expect an opinion in health care until the bitter end of the month: the opinion is likely to be long and complicated, and the case wasn't argued until the end of March. But we have been wrong before and we could be wrong again.”
In other words, odds are the opinion will come at the very end of June. But the odds can be wrong. And so the game continues.
RCP Obama vs. Romney: Obama +1.4%; 7-day change: Obama -0.2%.
RCP Obama approval: 48.3%; 7-day change: +0.5%.
Top story: The big healthcare decision is coming... sometime
Anticipation is building for the Supreme Court's decision on the Affordable Care Act. "Anticipation is building for the Supreme Court’s decision on the healthcare reform law. The Obama administration has been guarded about the possibility that the court might strike down the law or its central provision, the individual mandate. But Health and Human Services Secretary Kathleen Sebelius acknowledged Thursday that 'we'll be ready for contingencies' if the law isn’t upheld, and President Obama has reportedly expressed concerns that he might have to revisit healthcare in a second term. Republicans, meanwhile, have said consistently that they will work to repeal the rest of the law if only the mandate is struck down...Speaker John Boehner (R-Ohio) was also quiet when asked whether Republicans would take immediate action to help people who might lose their health coverage because of the Supreme Court ruling...The court will issue its opinions by the end of month, though no one knows the exact date." Elise Viebeck in The Hill.
@petersuderman: Waiting for the health care ruling is like having to tune in every morning to see if the finale to your favorite show is airing today or not
Three health insurers plan to keep parts of the law no matter what happens. "UnitedHealth Group Inc. (UNH), Aetna Inc. (AET) and Humana Inc. plan to retain some benefits created by the U.S. health-care overhaul even if the Supreme Court strikes down the law. The exception: Those involving people with pre-existing illness. Customers of UnitedHealth, the largest U.S. health insurer, can keep children on plans until age 26, get free preventive care and won’t face lifetime benefit limits, the Minnetonka, Minnesota-based company said yesterday in a statement. The insurer also won’t rescind policies except for cases of fraud and will retain a simplified appeals process for denials. Aetna, the third-largest health insurer by market value, said today it would cover preventive services, let young adults stay on their parents’ plans and continue outside reviews of coverage denial appeals...Humana (HUM) said today it would maintain various coverage provisions, all of which match UnitedHealth’s pledge." Alex Wayne in Bloomberg.
The moves may ease pressure to reinstate parts of Obamacare if it's overturned. "Three of the big health insurance companies are about to give everyone some popular parts of 'Obamacare.' And even Republicans who hate the president’s health care plan couldn’t be happier...For Republicans the big hope is that the insurers’ moves will ease the pressure on Congress to step in if the law is struck down to preserve some of its most-popular features. House Republican leaders had quietly hatched a plan to preserve some aspects of the law -- including the provision allowing adult children to stay on their parents’ insurance -- but faced withering criticism from conservatives, who say it’s not the government’s place to decide. The moves by the insurers could take the onus off Republicans to step in with a legislative fix...The announcements show that the health insurers know there are parts of 'Obamacare' that the public likes -- and that the public won’t appreciate it if the Supreme Court takes them away." Joanne Kenen and Jonathan Allen in Politico.
The Court's interpretation of the Commerce Clause could have big implications. "All of Washington is breathlessly awaiting the Supreme Court's imminent decision on the Obama health care overhaul. Rumors circulate almost daily that the decision is ready for release. As usual, those rumors are perpetrated by people who know nothing, but the decision is expected by the end of this month...Constitutional scholars know there is much more at stake here than an individual election. Just how much is illustrated by the legal history of the Commerce Clause of the Constitution. It gives Congress the power to "regulate commerce ... among the several States," and it authorizes Congress to 'make all laws which shall be necessary and proper' for achieving that goal. The Founding Fathers' purpose was to put an end to the interstate rivalries that balkanized the country after the American Revolution. But the words of the Commerce Clause are pretty general, and it is the Supreme Court that for more than 200 years has interpreted what they mean." Nina Totenberg in NPR.
Jill Lepore on the Court's decision and judicial independence:"The Supreme Court has been deliberating in a temple of marble for three-quarters of a century. In March, it heard oral arguments about the Affordable Care Act. No one rode there in a horse and buggy. There was talk, from the bench, of heart transplants, and of a great many other matters unthinkable in 1789. Arguments lasted for three days. On the second day, the Solicitor General insisted that the purchase of health insurance is an economic activity. Much discussion followed about whether choosing not to buy health insurance is an economic activity, too, and one that Congress has the power to regulate...The ruling that the Supreme Court hands down this month will leave unanswered questions about the relationship between the judicial and the legislative branches of government, and also between the past and the present. The separation of law from politics for which the Revolution was fought has proved elusive."
Hospitals aren't waiting around for the healthcare verdict. "Giant aquariums now soothe pediatric patients at Maimonides Medical Center in Brooklyn. It has added welcome signs in 10 languages, a state-of-the-art cardiac operating room and programs to keep chronically ill adults safely at home. But as Pamela S. Brier, the chief executive, was walking to the main entrance last week, she spotted a rain-soaked plastic bag on the front steps. Millions of dollars in revenue now depend on improving patients’ perceptions of the hospital. 'I can’t stand it,' Ms. Brier muttered, and she darted over, her cream chiffon dress fluttering, to scoop up the litter herself...Maimonides is not waiting around for the verdict. Win, lose or draw in court, administrators said, the policies driving the federal health care law are already embedded in big cuts and new payment formulas that hospitals ignore at their peril. And even if the law is repealed after the next election, the economic pressure to care differently for more people at lower cost is irreversible." Nina Bernstein in The New York Times.
More are going without needed healthcare due to costs. "Health care costs are weighing on Americans' minds -- and sapping their budgets, according to a new survey that shows that within the last year, more than half of people needing medical care didn't get it because of the expense. Costs led 58 percent of people to put off or go without health care they needed in the previous 12 months, a increase from 50 percent last August, says a survey released Monday by the Henry J. Kaiser Family Foundation, a nonprofit research organization based in Menlo Park, Calif. Americans skipped doctor and dentist visits, didn't receive diagnostic tests, didn't take their medicines, cut pills in half or took other steps to save money that could make them less healthy, the survey found. Twenty-six percent of Americans reported they or a family member had difficulty paying medical bills, the same percentage as last August." Jeffrey Young in The Huffington Post.
COHN: Insurer changes don't mean we don't need the Affordable Care Act. "A major health insurer made some news over the weekend. UnitedHealth Group announced that it will keep in place some provisions of the law, regardless of how the Court rules...But these developments don't undermine the broader case for the Affordable Care Act...The really big changes in health care are the ones that come in 2014. That's when the law makes it possible for anybody, at any age, to get insurance regardless of pre-existing conditions. That's when the law makes it possible for people making up to four times the poverty line, or about $90,000 a year for a family of four, to get subsidies if they buy coverage on their own. That's when the law makes it possible for anybody making less than 133 percent of the poverty line, or around $30,000 a year for a family of four, to enroll in Medicaid...These changes will only happen if the law stays in place, because insurers can't provide them on their own." Jonathan Cohn in The New Republic.
BELLUCK: The Court's decision may matter less than you think."Experts on health care policy say the practical effect of the court’s decision will probably be less earth-shattering than some people think. If the court takes what many observers believe will be the most likely route and strikes down the individual mandate -- the requirement that virtually everyone purchase insurance -- many more currently uninsured people are still likely to receive health coverage, they say. Even if the law is struck down entirely -- which could happen if the court decides that the other provisions are too intertwined with the mandate -- many experts say that some changes the law has already set in motion will continue, probably more slowly, but possibly at a more urgent pace in reaction to the elimination of the federal law...And if the law is upheld? More people will get coverage, but significant problems in the health care system will remain." Pam Belluck in The New York Times.
REICH: The Supreme Court's unpopularity may save Obamacare."The public’s growing disdain of the Supreme Court increases the odds that a majority will uphold the constitutionality of Obamacare...Last week I was on a left-leaning radio talk show whose host suddenly went on a riff about how the Constitution doesn’t really give the Supreme Court the power to overturn laws for being unconstitutional, and it shouldn’t have that power. All this is deeply dangerous for the Court, and for our system of government...The immediate question is whether the Chief Justice, John Roberts, understands the tenuous position of the Court he now runs. If he does, he’ll do whatever he can to avoid another 5-4 split on the upcoming decision over the constitutionality of the Obama healthcare law. My guess is he’ll try to get Anthony Kennedy to join with him and with the four Democratic appointees to uphold the law’s constitutionality." Robert Reich in The Christian Science Monitor.
1) SEIB: There's a six trillion dollar difference between Obama and Romney. "What's the difference between President Barack Obama and Republican challenger Mitt Romney? More than $6 trillion...That $6 trillion represents the difference between the amount Messrs. Obama and Romney want the federal government to spend over the next decade. More specifically, it's the difference between spending an average of 22.5% of the country's gross domestic product, as Mr. Obama's budget calls for, and one that cuts it to 20%, as Mr. Romney seeks...When translated, that difference amounts to hundreds of billions of dollars annually. For instance, in 2016, the last full year of the next presidential term, the difference between the two plans would be more than $600 billion. That's about how much is scheduled to be spent on the entire Medicare program that year, and well more than the spending projected for all the discretionary nonsecurity programs that Congress appropriates annually." Gerald Seib in The Wall Street Journal.
2) KLEIN: Obama's got a pretty pro-business record. "The administration’s first act -- during the transition period after Obama was elected -- was lobbying congressional Democrats to release the second tranche of Troubled Assets Relief Program funding to save the financial industry. Later, it passed a health-care bill that not only abandoned the long-held liberal dream of single payer, but jettisoned even a public option. During financial reform, when the left was urging the administration to break up the biggest banks or at least pass a new Glass-Steagall measure, they went with a more incremental approach...After taxes, corporate profits amounted to 6.9 percent of GDP in 2010 -- the highest level since 1966. That speaks to the underlying reality of this recovery: Corporate taxes are near all-time lows and corporate profits are near all-time highs. That’s a mighty odd outcome for an administration that supposedly considers the existence of private businesses an unpleasant side effect of the government’s need for tax revenue, don’t you think?" Ezra Klein in The Washington Post.
3) YGLESIAS: Liberals need to care about monetary policy. "On monetary policy, by contrast, the difference between the Fed’s current posture and a change of course would be dramatic. Bernanke assured members of Congress that he stands at the ready to bolster the American economy if shocks from Europe or elsewhere slow us down. What the country needs, however, is to speed up, no matter what happens in Europe. A clear statement that the Federal Reserve thinks higher prices for rental housing and primary commodities would be a small price to pay for an end to mass unemployment is a necessary condition for avoiding years of sluggish growth. But the central bank is extremely unlikely to change direction when nobody’s pushing them to...Rapid recovery is all-but-impossible without cooperation from the central bank...Liberal inattention to monetary policy is baffling. If liberals can’t get monetary policy right, they can’t fix the economy and if they can’t fix the economy, the rest of their agenda will go down with it."Matthew Yglesias in Slate.
4) THIESSEN: The public sector is doing fine. "It’s the public sector that’s doing fine. According to the Bureau of Labor Statistics, the unemployment rate for government workers last month was just 4.2 percent (up slightly from 3.9 percent a year ago). Compare that to private-sector industries such as construction (14.2 percent unemployment), leisure and hospitality services (9.7 percent), agriculture (9.5 percent), professional and business services (8.5 percent) and wholesale and retail trade (8.1 percent). As Andrew Biggs of the American Enterprise Institute points out, the public-sector unemployment rate 'is the lowest of any industry or class of worker, even including the growing energy industry.' If the rest of Americans enjoyed the same unemployment rate as government workers, Obama would be cruising to reelection...Obama and Reid may think 2.6 percent private-sector GDP growth is 'just fine,' but the 23 million Americans who are unemployed, underemployed or have quit looking for work don’t share their complacency." Marc Thiessen in The Washington Post.
5) STIGLITZ: Americans have a big choice on inequality. "America’s growing inequality is likely to play an important role in this election -- and rightly so. Americans see that something is happening to our society: We have become increasingly divided. We may all be in the same boat -- but some are traveling steerage and others first class...Economic inequality feeds into inequalities of political power, leading to still more economic inequality. The U.S. is headed down the path that so many dysfunctional societies have traveled -- divided societies in which the rich and poor live in different worlds. The rich residing in gated communities, with their own parks and schools. We know what happens to these societies. It’s not something to which we should aspire. There is an alternative. But will our politics allow it?...In other periods of our history, when inequalities and injustices grew to the breaking point, America changed course. The question is: Will we do so again?" Joseph Stiglitz in Politico.
Top long reads
Peter Orszag on the coming budget showdown: "By changing the discussion to a new tax proposal, it may be a bit easier to perpetuate a higher level of taxation on high-income families rather than continuing to debate the issue within the four corners of the Bush tax cuts. The tax cuts would be designed to avoid or minimize the fiscal contraction at the beginning of 2013, since the economy will remain too weak to handle a substantial fiscal tightening at that point. Ideally, however, even the middle- and lower-income tax cut within this strategy (the payroll tax holiday) would not be a permanent one, since over the medium term the federal government’s revenue base is inadequate for the tasks that have been assigned to it. So the significantly larger payroll-tax holiday could phase out as the labor market recovers. Middle- and lower-income families would be more severely affected by excessive reductions in existing government programs (like Medicare and Social Security) than a modest revenue increase to finance those programs."
Canadian pop interlude: Grimes plays "Genesis" live on Later with Jools Holland.
Got tips, additions, or comments? E-mail me.
Still to come: Americans' wealth takes a big hit; healthcare costs eat up state budgets; the NLRB appeals a ruling against a rule; ethanol is no longer booming; and a dog dances the merengue quite well.
Americans now have no more wealth than in early 90s. "The recent economic crisis left the median American family in 2010 with no more wealth than in the early 1990s, erasing almost two decades of accumulated prosperity, the Federal Reserve said Monday. A hypothetical family richer than half the nation’s families and poorer than the other half had a net worth of $77,300 in 2010, compared with $126,400 in 2007, the Fed said. The crash of housing prices directly accounted for three-quarters of the loss. Families’ income also continued to decline, a trend that predated the crisis but accelerated over the same period. Median family income fell to $45,800 in 2010 from $49,600 in 2007. All figures were adjusted for inflation. The new data comes from the Fed’s much-anticipated release on Monday of its Survey of Consumer Finances, a report issued every three years that is one of the broadest and deepest sources of information about the financial health of American families." Binyamin Appelbaum in The New York Times.
@BCAppelbaum: The most startling factoid from this new Survey of Consumer Finance? Median net worth back to levels last seen in early 1990s.
@BCAppelbaum: Also striking: The share of families saving anything in the previous year dropped 4.4 percentage points, even as total savings rose.
Cyprus will ask for a bailout for its banks. "Cyprus said that it urgently needed European financial aid to boost its banks' capital, a step that would make it the fifth euro-zone economy to seek help from the region's bailout funds. Cyprus Finance Minister Vassos Shiarly said that the country's need for an international bailout was 'exceptionally urgent' in order for it to recapitalize its banks, and that the issue would need to be resolved by the end of the month. According to several European officials, the size of any bailout would be unlikely to exceed €3 billion to €4 billion ($3.8 billion to $5 billion), a sum that wouldn't strain the resources of the euro zone's bailout funds. The economy of Cyprus--an island of 800,000 people--is 1/60th the size of the economy of Spain...Officials said Cyprus's government would probably seek funds along the model for loans to Spain, under which conditions will be placed on the country's banking sector but no new impositions will be placed on the way it manages its economy." Alkman Granitsas in The Wall Street Journal.
@ObsoleteDogma: Wait, so you're telling me the Spanish bank bailout DIDN'T solve everything???
Spain's bailout won't come with no strings attached. "Spain must submit to close scrutiny of its financial sector by European institutions and the International Monetary Fund as a condition for any bailout, European officials said Monday, countering Madrid's suggestions that the country could escape the tough oversight other rescue recipients have faced. While the timing, amount and other details of a €100 billion ($125 billion) rescue for Spain's beleaguered banking sector remain unclear, European officials stressed that any aid would come with strings attached. 'Whoever gives money, never gives it for free,' European Commission Vice President Joaquín Almunia said, adding that the EU's executive branch would play a central role in monitoring the bank-restructuring plans. 'There are people coming here [to Spain] to make sure the money will be properly used,' he said. Any loans would also be subject to Spain's hitting previously agreed macroeconomic targets." David Roman, Jonathan House, and Vanessa Mock in The Wall Street Journal.
Italy could be the next shoe to drop. "Concerns grew on Monday that Italy could be the next victim of Europe’s financial infection, leading nervous investors to sell Italian stocks and bonds and damping euphoria over a weekend deal to bail out Spain’s banks. Italian officials privately expressed concern that the 100 billion euros, or $125 billion, that Europe pledged to Spanish banks might not stop the troubles from spreading...The main fear is that Italy cannot grow its way out of a recession fast enough to pay a mountainous national debt. Other concerns include the fact that Italy, with the third-largest euro zone economy after those of Germany and France, will have to shoulder a large portion of the bailout bill even as it grapples with its own sharp economic downturn. Because Italy does not have enough economic growth to generate the money itself, the government will probably have to borrow it at high interest rates, adding to an already heavy debt load." Liz Alderman and Elisabetta Povoledo in The New York Times.
Some banks want to use intangible assets to ease capital requirements. "Several US banks want to tap the value of the intellectual property holdings of their borrowers as a way of trimming their capital requirements, which are to be made tougher under Basel III rules. Under the terms of many loans, banks have the right to seize a borrower’s patents and trademarks as part of a foreclosure proceeding. But these intangible assets cannot generally be counted towards the loan’s security for regulatory capital assets because they are considered too difficult to value. Now some banks - faced with tougher safety rules that begin to take effect in January - are exploring whether they can use the assets to reduce their estimates of expected losses in case of a default, in turn reducing the risk weight of the loan and overall capital requirements. The banks seek deals in which an insurer agrees to buy a borrower’s intellectual property...for a fixed price in case of default. That price could then be counted against the expected losses."Brooke Masters in The Financial Times.
J.P. Morgan was alerted to the risky practices that led to its losses. "Some top J.P. Morgan Chase & Co. executives and directors were alerted to risky practices by a team of London-based traders two years before that group's botched bets cost the bank more than $2 billion, according to people familiar with the situation. Interviews with more than a dozen current and former members of the bank's Chief Investment Office, the unit responsible for the losses, indicate that discussions about reining in London traders started as early as 2010. Certain directors were briefed then on a foreign-exchange-options bet that went bad, and were told that the trader responsible wouldn't be allowed to go overboard in the future, one of these people said...The concerns dating back to 2010 show that J.P. Morgan had an opportunity to avoid the bungled trades, which over time could cost the bank as much as $5 billion." Dan Fitzpatrick, Gregory Zuckerman, and Joann Lublin in The Wall Street Journal.
Slightly frightening Tumblr interlude: Nicholas Cage Cats.
Healthcare costs are eating up recovering state revenues. "State revenues are finally returning to pre-recession levels, but the growing cost of providing health care for the poor is leaving most governments in dire fiscal straits, according to a report to be released Tuesday...The problem is that many states are contending with costs that are rising even faster, as help from the federal government dwindles. Total spending has returned to levels seen before the recession. The biggest culprit has been Medicaid. State spending on the joint federal-state health-care program for the poor surged by 20 percent this year, following a rise of 23 percent in fiscal 2011...Jumps in Medicaid spending have doubled the pace of growth in education spending over the past decade, the report said. Overall, Medicaid accounted for 17.4 percent of state general-fund spending last year, making it the second-largest category of spending, behind K-12 education at 35 percent."Michael Fletcher in The Washington Post.
Romney's education plan is a split from Bush's policies."'Voucher' is a fighting word in education, so it may be understandable that when Mitt Romney speaks about improving the nation’s schools, he never uses that term. Nonetheless, as president, Mr. Romney would seek to overhaul the federal government’s largest programs for kindergarten through 12th grade into a voucherlike system...His plans, presented in a recent speech at the U.S. Chamber of Commerce, represent a broad overhaul of current policy, one that reverses a quarter-century trend, under Republican and Democratic presidents, of concentrating responsibility for school quality at the federal level...His proposals are the clearest sign yet that Republicans have executed an about-face from the education policies of President George W. Bush, whose signature domestic initiative, the No Child Left Behind law of 2002, required uniform state testing and imposed penalties on schools that failed to progress." Trip Gabriel in The New York Times.
The NLRB appealed a ruling against a union organizing rule. "The National Labor Relations Board on Monday asked a federal judge to reconsider its decision to strike down a rule speeding union-organizing elections. Judge James Boasberg of the U.S. District Court for the District of Columbia struck down the rule last month. He said the board lacked a quorum because one of its three members at the time didn't cast a ballot. That member, Republican Brian Hayes, therefore did not 'show up' for the virtual vote conducted through the board's electronic voting system, the judge said. Judge Boasberg said at the time that his ruling might have been different had Mr. Hayes acknowledged the vote was occurring or had the board contacted Mr. Hayes about his inaction. The board, through its counsel, is now arguing that Mr. Hayes was present in the electronic voting room and says it can prove it by showing he logged on to the system the agency tracks." Melanie Trottman inThe Wall Street Journal.
Dogs dancing really well interlude: Carrie the golden retriever dances the merengue at Bonnaroo.
The ethanol boom is stalled. "America's ethanol boom is stalling, and the effects are starting to spread across a Farm Belt that had grown accustomed to soaring growth. Annual U.S. production of ethanol more than tripled from 2005 to 2011, driving up crop prices and pumping money into rural communities from Nebraska to North Dakota. Now, ethanol demand is topping out. The amount used in gasoline is near federal mandates, and gasoline consumption is declining. After 15 straight years of growth, ethanol production this year will fall slightly and will be roughly flat next year, according to the U.S. Energy Information Administration's May forecast. Updated output numbers will be released Tuesday...U.S. plants now face excess capacity, producing less than 14 billion gallons of ethanol a year, compared to capacity of 14.7 billion gallons, according to the Renewable Fuels Association, an ethanol trade association." Mark Peters in The Wall Street Journal.
A battery maker is claiming a breakthrough. "On Tuesday, A123 Systems will unveil a new battery technology that the company says is a breakthrough in the industry. The advance uses a new chemistry that could permit the creation of a simpler, lighter, longer-lasting battery pack that does not require a system to cool or heat it. The success or failure of the new technology may well determine the fate of A123. It will also render an early verdict on Mr. Obama’s broader push to promote electric cars and build a domestic industry to develop and manufacture advanced batteries to run them. The president’s prediction of a million electric cars on the road by 2015 seems unattainable...So far this year, combined sales of the Chevrolet Volt plug-in hybrid and Nissan Leaf electric car total less than 10,000 vehicles...Yet the major automakers remain committed to electric vehicles so far, and G.M. has given A123 the contract to supply batteries for the Chevrolet Spark, an all-electric minicar due next year." Bill Vlasic and Matthew Wald in The New York Times.
@Amy_NJ: EPA will be busy in coming days, weeks: Soot standard by Friday, final boiler rule by June 20 & court rulings on CSAPR & GHG expected soon.
Wonkbook is compiled and produced with help from Karl Singer and Sarah Halzack.