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Wonkbook: How the GOP stopped worrying and learned to love ObamaCare

at 07:31 AM ET, 04/27/2011


(Spencer Platt - Getty Images)
I don’t get to start many arguments with “I’m old enough to remember when...” But I’m old enough to remember when the Republican Party didn’t like “ObamaCare.” Hated it, in fact. Thought it wouldn’t work, would diminish our freedoms, would never prove sustainable. And, to be fair, they still feel that way about the Affordable Care Act. Most days, the House votes to repeal it once before breakfast and twice before lunch.

But it turns out that their skepticism of ObamaCare melts away when you’re talking about applying it to seniors. In fact, it’s now the official Republican plan for the over-65 group. The Ryan budget, Boehner told ABC News, “transforms Medicare into a plan that’s very similar to the President’s own healthcare bill.” Sen. John Cornyn, head of the National Republican Senate Committee, made the same point a few weeks ago. “It’s exactly like Obamacare,” he said. “It is.” Which raises the question: is it? And if so, what exactly did Republicans hate about the Affordable Care Act?

The Ryan budget and the ACA mirror each other in one key way: they both use tightly regulated exchanges as the main venue for the purchase of insurance. The difference between them is that this is where the Ryan budget stops and where the Obama budget begins. The Ryan budget claims gigantic, and frankly unrealistic, savings from replacing Medicare with private insurance purchased on exchanges. The Congressional Budget Office says that insurance will be more expensive than traditional Medicare, not cheaper, and Ryan’s savings will come from shifting its cost onto seniors.

The ACA -- which claims less dramatic savings -- backs stronger exchanges up with a host of changes to how care is paid for and delivered, and how much of a tax break employers get for providing pricey plans, and the establishment of a new board capable of making continuous reforms to Medicare without Congress’s explicit approval, and an effort to develop mounds of new research on which treatments and drugs work best and plug them into electronic medical records to help us make more cost-effective care decisions, and so on. For a fuller comparison of the two plans approach to cost control, head here. The bottom line, however, is that the Ryan plan does far less and expects far more -- at least if it’s presuming to save money by doing anything but shifting costs -- while the Affordable Care Act does far more and assumes far less.

In some ways, the most appealing post-health-care reform compromise was not that the Affordable Care Act would be dismantled, but that it’d be extended to Medicaid and Medicare, where beneficiaries could then choose from the traditional government-run program or the insurance offered on the exchanges. The GOP is now engaged in the reverse of that play: take ObamaCare away from the uninsured who have nothing now, and impose it on seniors who have a system that’s working pretty well, even if it, like private insurance, is projected to cost too much in the coming years. That’s a hard sell. That Republicans are now saying that their idea isn’t as bad as you think, it’s only as bad as ObamaCare, tells you a lot about exactly how hard they’re finding it.

Five in the morning

1) The Treasury is already scrambling to avoid the debt limit, report Lori Montgomery and Brady Dennis: “Behind the scenes, Treasury Secretary Timothy F. Geithner has already begun juggling the books to conserve cash, draining a special account at the Federal Reserve. And with the debt forecast to hit the legal limit of $14.3 trillion in just a few weeks, he has a range of tools at his disposal, including borrowing money from a pension fund for federal workers. Geithner also has authority to pay investors first for interest they’re owed on the debt, according to a decades-old legal opinion. A growing number of conservatives argue that by making interest payments first, the government could avoid default and the Obama administration’s predictions of economic Armageddon.”

Jamelle Bouie rounds up GOP positions on the debt limit: http://bit.ly/eznZvT

2) Ben Bernanke will meet the press for the first time today, reports Neil Irwin: “On Wednesday afternoon, Ben S. Bernanke will step in front of a lectern in a space across the hall from the Federal Reserve cafeteria and make history: He will be the first Fed chairman to take routine, on-the-record questioning from the media. The advent of quarterly news conferences is the latest step in the Fed’s long (and slow) process of becoming more open about its monetary policy actions. As recently as 1994, the nation’s central bank didn’t even announce when it changed its interest rate target after policy meetings. Fed watchers had to intuit those moves based on financial market activity. The traditional model for the world’s central bankers -- the men behind the curtain, turning the dials of the money supply in private, neither seen nor heard -- has been upended around the world.”

3) Obama thinks he has John Boehner cornered on oil subsidies, reports Zachary Goldfarb: “President Obama urged Congress on Tuesday to take ‘immediate action’ to end tax subsidies for oil and gas companies, as he attempts to limit the political fallout of surging gas prices. A day before oil firms are set to begin reporting potentially record profits, Obama called on congressional leaders in both parties to roll back more than $4 billion ‘in unwarranted tax breaks,’ saying the money would be better spent on new technology that would reduce the cost of fueling the nation...In his letter to Congress, Obama seized on comments that House Speaker John A. Boehner (R-Ohio) made Monday. ‘Certainly I think it’s something we ought to be looking at,’ the speaker said in an interview with ABC News.”

4) John Boehner says he isn’t “wedded” to Paul Ryan’s Medicare plan, reports David Nather: “So maybe it wasn’t the best timing in the world: Even as House Republicans face tough questions at their town hall meetings about Rep. Paul Ryan’s budget plan, Speaker John Boehner has given an interview in which he said Ryan’s plan was an idea ‘worthy of consideration’ and that he wasn’t ‘wedded to it.’ Democrats and liberal groups said Boehner’s comments to ABC News, in an interview posted Tuesday afternoon, make it sound like he’s backpedaling from the House vote two weeks ago in which all but four Republicans voted for Ryan’s budget plan -- including the Medicare overhaul that’s raising so many questions at their town hall meetings.”

5) Public support for debt reduction is growing, report Jon Cohen and Peyton Craighill: “Americans increasingly see the budget deficit as a big problem that demands quick action, but a dwindling number thinks the U.S. will make significant deficit reductions over the next five years, according to a new poll by The Washington Post and the Pew Research Center. Just 31 percent now expect sizable deficit reductions in the coming five years, a 6 percentage point slide from a December Pew poll. While hopes have slipped over the five months of budget debates and furious dealmaking, 81 percent of Americans now call the deficit a major problem requiring immediate remedy, an 11-point jump. The slippage in optimism about the deficit since December is most pronounced among Democrats, although it’s dipped across party lines.”

Cover song interlude: Telekinesis plays “Like Dylan in the Movies” by Belle Sebastian.

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Still to come: Whether the Fed’s money-printing “worked” depends on what the word means; John Boehner argues that Paul Ryan’s budget would turn Medicare into Obamacare — and that’d be a good thing; Steven Pearlstein defends the administration’s stand for unions; the paper industry is an unlikely beneficiary of federal renewable energy subsidies; and a dog and a duckling have a bitter argument.

Economy

Whether the Fed’s money printing program worked depends on the meaning of the word “worked”, reports Neil Irwin: “The Fed has succeeded in preventing a spiral into deflation, or falling prices, and helped avert a dip back into recession (though how real that risk was last fall can never be known for sure). It may have even contributed to the strengthening in the job market in the past few months, and almost certainly contributed to a rally in the stock market. But the central bank, with its decision last November, also put its reputation on the line, essentially shouldering responsibility for getting the economy on track. In that sense, the Fed now owns the crummy economy in the public mind to a degree that it wouldn’t have had Chairman Ben S. Bernanke and his colleagues followed a more cautious path in setting monetary policy.”

Former top McCain economic adviser Douglas Holtz-Eakin wants a debt limit increase, pronto: http://bit.ly/e9BOLB

David Wessel explains how we got a debt limit: “Before 1917, Congress okayed specific loans -- such as the one to build the Panama Canal -- or specific types of lending. To give the U.S. Treasury more flexibility during World War I, Congress passed the Second Liberty Bond Act. It put aggregate limits on various types of Treasury borrowing and ‘that allowed the Treasury greater ability to respond to changing conditions and more flexibility in financial management,’ according to an authoritative account by the Congressional Research Service. For the two subsequent decades, Congress set separate limits for different types and maturities of debt. But in 1939, it stopped doing that, and created the aggregate limit on Treasury borrowing. Votes to raise the federal debt ceiling have been controversial, and occasionally incomprehensible, ever since.”

The press should hold Bernanke accountable for high unemployment, writes David Leonhardt: “Mr. Bernanke believes the Fed ‘retains considerable power’ to reduce unemployment faster, despite the fact that its benchmark interest rate is zero, as he’s said before. Yet he has been hesitant to use that power. He is in a tough spot, to be fair. Several other voting members of the Fed’s monetary policy committee -- and some prominent members of Congress -- oppose aggressive action, because they worry it will set off inflation. But these critics always worry about inflation. They have been wrong again and again over the last two years. More important, they don’t have enough power to keep Mr. Bernanke from pursuing the policy he thinks is best. So the Fed’s decision to permit high unemployment for an extended period rests on his shoulders.”

Central banks have little to be proud of in their handling of the crisis, writes Simon Johnson: “The real cost of the crisis is not measured by the profit-and-loss statement of any central bank--or by whether or not the Troubled Asset Relief Program (TARP), run by the Treasury Department, made or lost money on its various activities. The cost is 8 million jobs in the United States alone, with employment falling 6 percent from its peak and--in a major departure from other post-1945 recessions--remaining 5 percent below that peak today, 31 months after the crisis broke in earnest. The cost is also the increase in net federal government debt held by the private sector--the most accurate measure of true government indebtedness.”

Throwing a press conference doesn’t mean the Fed’s more open, writes Annie Lowrey: “Expect nonanswers, for the most part: The new openness goes only so far. The Federal Reserve is planning on having Bernanke make only a brief opening statement, to avoid contradicting the FOMC report. He does plan to take questions from the crowd--unlike at his previous press conferences, when a moderator picked the queries. But he won’t step off message. The central bank is preparing furiously for the meeting with reporters, so Bernanke can assiduously avoid rattling markets or making news. The press conference itself is meant to be the news, helping to soften the bank’s battered reputation among the public, more than it is supposed to provide new information to financial markets. So expect a new, more open tone. Just don’t expect a lot more openness.”

Nature is crazy interlude: A colony of fire ants forms a living raft to avoid being pushed under water.

Health Care

John Boehner admitted that Paul Ryan’s budget turns Medicare into Obamacare, reports Brian Beutler: “Another top Republican has admitted what few members of his own party will admit. In fact, it’s the toppest-Republican. According to Speaker John Boehner, the House Republican budget, which passed on April 15, ‘transforms Medicare into a plan that’s very similar to the President’s own healthcare bill.’ That’s from an interview with ABC’s Jon Karl. Boehner joins Sen. John Cornyn (R-TX) as one of the few high-profile elected Republicans who will admit that the GOP’s Medicare privatization plan is similar in many key respects to the health care law they have spent the last two years demonizing...By contrast, Boehner’s second-in-command, House Majority Leader Eric Cantor denied the similarities.”

What if Medicare required a living will? “What if, to be eligible for Medicare, you had to give someone power of attorney and sign a living will? You could tell your attorney, and write in your will, that you want every possible measure employed to keep you alive. You could say cost is no object, and neither is pain or quality of life. You could make whatever choice, and offer whatever instructions, you want. You just have to do it. You have to make the decision. Right now, of course, heroic measures are the default. The simple act of making that choice would cut costs, as I suspect many, many people would prefer something besides maximal treatment, and would ensure fewer people suffered needlessly because their health deteriorated before they made their wishes clear. “

States and hospitals are doing battle over Medicaid costs, reports Phil Galewitz: “On the fourth floor of the Capitol, lobbyists for the HMO and nursing home industries are huddling over bills vastly expanding managed care for Florida’s three million Medicaid recipients. The nursing home representative wants to make sure that none of the facilities he represents is excluded from HMO contracts to provide long-term care. The HMO representative has no problem with that. ‘It’s the hospitals we are worried about,’ she said...Florida hospitals want to set up their own managed-care networks for Medicaid patients, under more favorable financial terms from the state. Lobbying battles like this one are being fought across the country as more than a dozen governors try to contain the cost of Medicaid, the state-federal program for the poor and disabled, by requiring more people to go into managed care plans.”

The Supreme Court looks likely to give a thumbs-up to a pharma marketing technique, reports Robert Barnes: “Several Supreme Court justices strongly suggested during oral arguments Tuesday that Vermont’s attempt to restrict the use of drug prescription records for marketing purposes violates corporate free-speech rights. Vermont’s law is aimed at so-called data miners, companies that buy prescription records from pharmacies -- minus patient identifying information -- and sell them. The most lucrative sales are to drug companies, which use the information to target doctors to try to persuade them to order drugs other than the ones they are currently prescribing...Chief Justice John G. Roberts Jr., who along with Justice Antonin Scalia was one of [Vermont’s] most persistent questioners, said the state was stacking the deck against the drug manufacturers.”

Health care vouchers are a bad way to cut costs, writes Mark Thoma: “Our experience with HMOs in the 1990s shows that insurance companies are not very good at controlling health care costs within this type of a system. At first, it looked as though HMOs would be the answer to the health care cost control problem, but in the end the promise was not realized...Thus, it’s not the vouchers per se that are the problem; it’s the implicit reliance upon insurance companies to enforce cost control that comes with them... The solution - and it’s in the Affordable Care Act - is for people with the necessary knowledge about medical services and a commitment to the public interest to do what HMOs did in the 1990s, decide which procedures should and should not be covered by Medicare.”

Domestic Policy

The administration’s crackdown on Boeing is well-justified, writes Steven Pearlstein: “The answer, I would suggest, is to be found not in the case law but in the clear and unambiguous words of the National Labor Relations Act and the history behind it. In a 1993 law review article, New York University law professor Cynthia Estlund wrote that in passing the act, Congress sought to restrain corporate power and tilt the economic playing field in favor of workers. The idea was to outlaw union-avoidance strategies that, while economically rational for any one firm, would be economically harmful for the nation as a whole if widely adopted. Today, we may find all that quaintly -- or menacingly -- socialistic, but it is still the law of the land, one that Lafe Solomon and his NLRB colleagues have a duty to enforce.”

Interspecies argument interlude: A dog and a duckling have it out.

Energy

The paper industry has found a creative way to use alternative energy subsidies, reports Steven Mufson: “The paper industry -- which in 2009 raked in billions of dollars in federal subsidies originally intended to promote alternative highway fuels -- is now using a different biofuel tax credit to cut its tax bills for 2010 and beyond by hundreds of millions of dollars more. The heart of the issue is the tax treatment of a substance called ‘black liquor,’ a byproduct of the wood-pulping process at paper mills. The companies have burned black liquor to generate power since the 1930s. It was not the intent of Congress to reward that behavior, but the industry and its accountants persuaded the Internal Revenue Service to allow black liquor to count as an alternative fuel in 2009. Under that program, the paper industry received more federal money than almost any industry outside the auto sector.”

We can’t raise the gas tax high enough to reduce our oil dependence, writes Jim Manzi: “You don’t need a lot of fancy econometrics to reach the basic conclusion that we could double the price of oil, and we’d still be carefully examining succession issues in Saudi Arabia. For example, it’s simple to observe that even really large, sustained price swings haven’t prevented amazingly steady growth in U.S. gasoline usage for more than half a century. Yes, people react to prices, but it’s hard to imagine that we could today impose a price high enough to get out of the structural problems of global warming (to the extent that you accept that) or our dependence on unstable regimes for oil.”

Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews and Michelle Williams.

 
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