Wonkbook: Building a better health-care system

November 16, 2012

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Wonkbook's Number of the Day: $4.5 billion. That's the amount BP had just agreed to pay in fines penalizing the oil company for its 2010 rig explosion and oil spill in the Gulf of Mexico, according to a story by Clifford Krauss and John Schwartz in The New York Times. BP will also plead guilty to 14 criminal charges. For more on the BP suit and energy issues in general, see Wonkbook's "Energy" section below.

Top story: Building a better health-care system

Six out of every seven doctors agree: Our health-care system doesn’t work. "American doctors tend to be the highest paid in the world, with salaries that can double that of their counterparts outside the United States. That makes it all the more surprising that doctors here tend to have way lower rates of job satisfaction, according to new research from the Commonwealth Fund. The nonprofit surveyed primary care doctors in 10 industrialized countries. American doctors turned out to have the lowest rates of job satisfaction. When asked whether our health-care system worked well, about 15 percent agreed." Sarah Kliff in The Washington Post.

@jamespoulos: The medical cliff! MT @samsteinhp By rejecting the exchanges GOP govs are just inviting MORE federal govt control over health care

The deadline on health exchanges, a key component of the Affordable Care Act, however, just got pushed back one month. "The federal government extended the deadline Thursday for states to decide whether to implement a key piece of President Barack Obama's health overhaul after Republican state officials struggled to reach decisions. Hours ahead of a Friday deadline, the administration told states that they could take another month to declare if they will set up their own insurance exchanges, where people can shop for approved plans and apply for tax subsidies toward the cost of health-insurance premiums." Louise Radnofsky and Colleen McCain Nelson in The Wall Street Journal.

@afrakt: What does it mean for a state to partner w/ feds in a health ins exchange? Are roles defined?

On Medicaid expansion, a high-stakes game of chicken has emerged. "Most post-election health care coverage has focused on the exchanges, the insurance marketplaces each state will have by 2014. States need to decide by Friday whether they’ll run their exchange themselves or leave the task to the feds. We’ve spent less time looking at the Medicaid expansion, the part of the law that was supposed to extend insurance coverage to 17 million Americans -- until the Supreme Court made it optional. There, it seems, the states and the federal government are playing a high-stakes game of chicken." Sarah Kliff in The Washington Post.

@pourmecoffee: Obama screened Lincoln at White House. It's about the earlier owning people slavery not the making sure people have health care kind.

To implement reforms, regulations aplenty will start coming from HHS. "With the national health law’s political future now entrenched, a deluge of new rules is expected in the coming days and weeks as the Obama administration fleshes out the law’s complex components. Most of the anticipation so far has been focused on rules that determine how the new state-based insurance marketplaces called exchanges will operate. But also closely awaited are decisions about how the government will tax medical devices, allot the shrinking pool of money for hospitals that treat the uninsured, and determine how birth control insurance coverage can be guaranteed for employees of religious schools, universities and charities." Jordan Rau in Kaiser Health News.

@sarahkliff: Breaking! Bowing to GOP governors' demands, Obama administration will extend exchange deadline until Dec. 14.

Obamacare's heart, the exchanges, depends on the states. "Experts view the success of the exchanges as central to the effectiveness of Obamacare in helping those who currently lack health coverage. People will use the exchanges, which will be reachable online or by telephone, to research available health plans and also to find out whether they qualify for financial assistance or for Medicaid benefits. Yet as the original deadline approached, fewer than half of all states were on track to establish exchanges for their residents, according to the Henry J. Kaiser Family Foundation. The fear is that if the exchanges do not quickly take shape -- if disorganization reigns and the marketplaces sow frustration -- some of the uninsured may give up, and others may get lost in the bureaucratic shuffle." Jeffrey Young in The Huffington Post.

Top op-eds

KLEIN: From the 47% to ‘gifts’: Mitt Romney’s ugly vision of politics. "Romney’s political cosmology [is that t]he Democrats bribe the moochers with health care and green cards. The Republicans try to free the makers through tax cuts and deregulation. Politics isn’t a conflict between two reasonable perspectives on how to best encourage growth and high-living standards. It’s a kind of reverse-Marxist clash between those who produce and those who take, and the easiest way to tell one from the other is to see who they vote for." Ezra Klein in The Washington Post.

IRWIN: How the U.S., China, and the E.U. are all confronting their demons. "The world’s three biggest economies are all fighting deep-seated, long-term problems. But there is something remarkable about the United States, the European Union, and China in 2012. Each is trying to solve those problems on its own accord, without being forced into action by financial markets or domestic unrest...The question now is whether they can proceed with these longer-term fixes without that pressure. Will Xi, the new Chinese leader, be able to guide his nation through a years of weaker growth to end up with a more consumer-driven economy? Will the fiscal cliff be enough to make American leaders chart a path toward more sustainable public finances? Will Europe continue its long road of integration even as the ECB protects its nation from bond market pressures?" Neil Irwin in The Washington Post.

MOORE: Why low tax rates are good for everyone. " The country needs an economy that will create more of the 'millionaires and billionaires' that Mr. Obama loves to excoriate, not more taxes from those who already exist. Total taxes paid by millionaires fell by almost $100 billion between 2007 and 2010, the last year with statistics available from the Internal Revenue Service. The drop resulted not from too-low tax rates, but from the severe recession and an anemic recovery since 2009 that thinned the ranks of the wealthy...Over the past century, lower rates have shifted the tax burden onto high-income earners and away from the middle class while maintaining the tax code's progressivity." Stephen Moore in The Wall Street Journal.

WOODRUFF: The conservative case for marijuana legalization. "Much ink has been spilt in describing the precise nature of the soul-searching the GOP is undergoing in the wake of getting totally shellacked last Tuesday. There are a plethora of suggestions -- of varying degrees of helpfulness -- as to how the Republican party can re-brand and re-orient itself; ranging from capitulating on taxes to deciding that gay marriage isn’t a hill to die on. But there’s one easy ideological maneuver that Republicans could make that would simultaneously burnish their stance as the party of freedom and expand their base while alienating the president from his...Congressional Republicans and conservative leaders could get on the weed bandwagon...This isn’t really a drug-legalization issue; it’s a states’ rights issue and a limited-powers issue. All conservatives have to agree on is that the federal government might have better things to do." Betsy Woodruff in National Review.

KRUGMAN: Life, death, and deficits. "America’s political landscape is infested with many zombie ideas -- beliefs about policy that have been repeatedly refuted with evidence and analysis but refuse to die...[R]ight now the most dangerous zombie is probably the claim that rising life expectancy justifies a rise in both the Social Security retirement age and the age of eligibility for Medicare...First of all, you need to understand that while life expectancy at birth has gone up a lot, that’s not relevant to this issue; what matters is life expectancy for those at or near retirement age." Paul Krugman in The New York Times.

Cute animals interlude: Prarie dogs kissing each other goodbye.

Got tips, additions, or comments? E-mail me.

Economy

Hurricane Sandy's aftereffects: higher jobless claims. "Sandy, the storm that pulverized the Northeast late last month, drove a surge in new claims for jobless benefits last week and hurt factory activity in the mid-Atlantic region in November, signs it could deal a substantial blow to economic growth in the fourth quarter. Initial claims for state unemployment benefits rose 78,000 to a seasonally adjusted 439,000, the highest level since April 2011, the Labor Department said on Thursday." Reuters.

Wonkblog explains: The "this is a weak recovery" graph.

Senate confirms Gruenberg and Hoenig as FDIC leaders. "The U.S. Senate on Thursday confirmed Martin J. Gruenberg as chairman and Thomas Hoenig as vice chair of the Federal Deposit Insurance Corp...Gruenberg and Hoenig were confirmed to six-year terms on the FDIC’s board of directors in March, but the Senate refrained from finalizing their leadership roles." Danielle Douglas in The Washington Post.

The Fed sees hurdles to the housing rebound. "The housing market, despite nascent signs of revival, is still plagued by tight credit, underwater borrowers and overdue loans, Federal Reserve Chairman Ben Bernanke said in a speech Thursday that expressed a great deal of caution about the progress of the U.S. economic recovery. The comments were notable because the Fed in September launched a program to buy $40 billion per month of mortgage-backed securities, a plan designed in part to ease mortgage lending to support a housing rebound." Jon Hilsenrath in The Wall Street Journal.

Foreclosure rate falls, but the process is dragging longer and longer. "The Mortgage Bankers Association said Thursday that 4.1% of mortgage loans on one-to-four-unit homes -- about 1.9 million households -- were in the foreclosure process at the end of the third quarter, down from 4.4% a year earlier and the lowest level in 3 1/2 years. The national average, however, masks big differences between the states. Among the 12 states with foreclosure rates that exceed the national average, 11 of them require banks to take back properties by going to court." Nick Timiraos in The Wall Street Journal.

Kirk said to be leaving job as U.S. Trade Rep. ".S. Trade Representative and former two-term Dallas mayor Ron Kirk has let the White House know that he intends to leave Washington and head back to Dallas. The U.S. Trade Representative, a cabinet-rank position, is the point person for coordinating and implementing U.S. trade policy and for conducting international trade negotiations with individual countries and multilateral institutions." Al Kamen in The Washington Post.

Worst political ads interlude: Todd Akin's 'legitimate rape' apology ad.

Health Care

CDC: Smoking bans skyrocket in large U.S. cities. "Smoking bans have exploded in large U.S. cities over the last decade, according to a review by the Centers for Disease Control and Prevention (CDC). Laws that prohibit smoking in bars, restaurants and workplaces now exist in 30 of the 50 largest U.S. cities, up from one such ban in 2000, the CDC found...About one-third of the largest U.S. cities are now covered by local comprehensive smoke-free laws and a similar number are covered by state smoke-free laws, according to the CDC." Elise Viebeck in The Hill.

The austerity crisis

Today, congressional leaders come back to the negotiating table. "When congressional leaders meet at the White House to open budget talks Friday, it will be a reunion of sorts for President Barack Obama and Republican House Speaker John Boehner, who spent weeks in mid-2011 pursuing in vain a grand budget bargain. The problems are familiar, but much has changed in the intervening 16 months, and the atmosphere today seems somewhat more conducive to deal-making." Janet Hook and Carol E. Lee in The Wall Street Journal.

The Senate's "Plan B". "The bipartisan Gang of Six is still at it, drafting legislation based on the recommendations of Obama’s fiscal commission, known as Bowles-Simpson. The Senate Finance Committee met Thursday to discuss how to proceed...There are good reasons to pursue a Senate-first approach, chief among them the broad recognition among Republicans in the Senate that any deal must include actual tax increases. Not tax increases through economic growth, as Boehner and his troops keeps saying, but, as Graham said, 'real revenue.'" Lori Montgomery and Zachary A. Goldfarb in The Washington Post.

Introductory explainer: What is the "fiscal cliff"? If we go over this so-called cliff, what happens? etc., etc..

Obama's plan raises less in revenues than Bowles-Simpson does. " Simpson-Bowles is sometimes said to include $1.2 trillion in revenue increases over 10 years. That, however, is relative to a 'current law' baseline where all the Bush tax cuts are allowed to expire, and the Alternative Minimum Tax is not patched. Relative to 'current policy,' or the tax code currently in effect, Simpson-Bowles raises $2.7 trillion to Obama’s $1.6 trillion." Dylan Matthews in The Washington Post.

How to cut the charitable deduction without hurting charities. "If Congress is to raise significant revenue by cutting deductions, they’re probably going to have to cut back on popular provisions like the exemption for employer-provided health insurance or the deduction for mortgage interest. Many of those provisions are viewed skeptically by policy experts...That said, there are other big tax breaks that could be worth preserving on policy grounds. Chief among them is the charitable deduction, which functions as a big subsidy for nonprofits, from actual social-service charities to arts organizations to religious groups...The Tax Policy Center estimates that merely changing the deduction to a refundable credit could reduce charitable giving by as much as 10.8 percent." Dylan Matthews in The Washington Post.

Interview: Sen. Kent Conrad (D-ND): 'No way to get the revenue necessary without significant changes on capital gains and dividends'.

Obama allies press Republican lawmakers to accept higher taxes. "White House aides and allies are turning parts of President Obama’s reelection machinery into an outside-the-Beltway campaign to pressure Republican lawmakers to accept higher taxes on wealthier Americans, according to people familiar with the planning. As of Thursday, at least 100 Obama campaign staff members had been recruited into the effort, hired by various state-level liberal activist groups after being connected by the Washington-based Common Purpose Project, an outside organization closely aligned with the White House." Peter Wallsten in The Washington Post.

In ‘fiscal cliff’ talks, Boehner must deal with tough GOP caucus as well as Obama. "Boehner (R-Ohio) still has the same problem that has dogged him since the day he became speaker two years ago: a caucus that does not necessarily believe in the kind of grand compromise a deal will require...Boehner has indicated a fresh willingness to include new tax money in an agreement, but how far he wants to go is unclear even to his own wary members. Many Republican lawmakers, meanwhile, continue to say that projected revenue from economic growth is the only kind of higher tax collection they will support." Rosalind S. Helderman and David A. Fahrenthold in The Washington Post.

Expletives interlude: A DEFCON monitor of the level of swearing on Twitter (SFW, we promise).

Fin reg

SEC says credit rating agencies are deficient. "U.S. securities regulators said Thursday that the credit-ratings industry still struggles to meet its own standards, adequately oversee analysts and document its ratings decisions, despite more than four years of heightened scrutiny for its role in the financial crisis...In its second-annual report on the nine credit-rating firms registered with the agency, the SEC repeated many of the complaints found in its 2011 review." Jeannette Neuman in The Wall Street Journal.

Read: The SEC's 2012 report on credit-rating firms (PDF).

CFTC appeals court decision to halt derivatives rules. "The Commodity Futures Trading Commission (CFTC) has decided to appeal a court ruling that halted its efforts to implement new restrictions on derivatives trading. By a 3-2 vote, the commission agreed to challenge a district court ruling that vacated the regulator's efforts to implement a portion of the Dodd-Frank financial reform law setting limits on the amount of positions a trader could hold in various commodities. These position limits are aimed at curbing speculative trading in commodities markets." Simon Johnson in The Hill.

The armed forces in the post-Petraeus era

Defense Secretary Leon Panetta orders military-ethics review. "Defense Secretary Leon Panetta has ordered the Joint Chiefs of Staff to review military ethics training in the wake of a series of investigations that involve high-ranking military officers' conduct, the Pentagon announced Thursday...In a memo to Gen. Martin Dempsey, the chairman of the Joint Chiefs of Staff, Mr. Panetta said the ethical controversies undercut the standing of the military. Mr. Panetta said that rather than just complying with rules and regulations, senior officers have to 'exercise sound judgment in their stewardship of government resources and in their personal conduct.'" Julian E. Barnes and James Hookway in The Wall Street Journal.

The defense authorization bill is stuck somewhere. "Senate Majority Leader Harry Reid (D-Nev.) said his Republican colleagues won’t “take yes for an answer” when it comes to taking up the Defense Authorization Act. Reid said Republicans have been demanding that the Senate take up the defense bill that funds and sets the agenda for the U.S. military, and now that he’s agreed they have a problem...Republicans have complained that Reid isn’t allowing an open amendment process, but Reid said he would allow open amendments to the defense authorization because Senate Armed Service Committee leaders, Sens. Carl Levin (D-Mich.) and John McCain (R-Ariz.) agreed to wade through and table all the non-germane amendments offered." Ramsey Cox in The Hill.

The postal service

$15.9 billion loss this year. "The U.S. Postal Service on Thursday reported a record annual loss of $15.9 billion in the past fiscal year, prompting renewed calls for Congress to pass legislation to help...The agency has reached a $15 billion borrowing limit. The fiscal year’s loss is more than three times the $5.1 billion loss reported last year, the Postal Service said." Lisa Rein in The Washington Post.

Energy

BP is guilty. "BP, the British oil company, said on Thursday that it had agreed to pay $4.5 billion in fines and other penalties and to plead guilty to 14 criminal charges related to the rig explosion two years ago that killed 11 people and caused a giant oil spill in the Gulf of Mexico. In a rare instance of seeking to hold individuals accountable for company misdeeds, the Justice Department also filed criminal charges against three BP employees in connection with the accident." Clifford Krauss and John Schwartz in The New York Times.

An energy compromise? Lawmakers are optimistic. "After two years of gridlock and endless campaigning, lawmakers from both parties are optimistic that the winds are finally favorable for progress on energy legislation...Areas of potential agreement include boosting energy research and development, modernizing the electric grid and addressing the nation's booming natural gas production." Andrew Restuccia in Politico.

A "third path" on drilling royalties? "Sen. Ron Wyden (D-Ore.) believes lawmakers will be able to find broad support for a 'third path' and push through an agreement on awarding drilling royalties to Gulf Coast states in the next Congress...Wyden's optimism is good news for Sen. Mary Landrieu (D-La.), who plans to forge ahead with a royalties bill next Congress, after her most recent one floundered in 2011." Zack Colman in The Hill.

5-year wind credit phaseout proposed. "Congress should extend a wind power tax credit for one year as a bridge to an eventual phaseout, Sen. Lisa Murkowski (R-Alaska), the Senate Committee on Energy and Natural Resources’s ranking member, said Thursday...Murkowski suggested Congress should extend the 2.2 cent per kilowatt-hour credit for wind power production so long as tax reform discussions next year lead to a plan for its gradual end." Zack Colman in The Hill.

A carbon tax has received an unusual amount of attention... "limate change is suddenly a hot topic again. The issue is resurfacing in talks about a once radical idea: a possible carbon tax. On Tuesday, a conservative think tank held discussions about it while a more liberal think tank released a paper on it. And the Congressional Budget Office issued a 19-page report on the different ways to make a carbon tax less burdensome on lower income people." Seth Borenstein in The Associated Press.

...But the House GOP leaders just went anti-carbon tax. "The entire House GOP leadership team has registered its opposition to climate legislation that raises revenue, underscoring the long odds that taxing carbon emissions has in negotiations on the fiscal cliff...They include Speaker John Boehner (R-Ohio), Majority Leader Eric Cantor (R-Va.) and Whip Kevin McCarthy (R-Calif.), who all retained their leadership posts. But it also includes the lower ranks of the leadership squad, including new Republican Conference Chairwoman Rep. Cathy McMorris Rodgers (Wash.), National Republican Congressional Committee Chairman Greg Walden (Ore.) and others." Ben German in The Hill.

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