Wonkbook: Berwick to CMS (and a comment); DOJ files against Arizona

Ezra Klein
Wednesday, July 7, 2010; 7:27 AM

Obama will use a recess appointment to appoint Donald Berwick, head of the Institute for Healthcare Improvement, to run Medicare and Medicaid after he ran into Republican opposition in the Senate. I tend to keep these Wonkbook intros pretty dry, but indulge me a quick comment on this.

I know my way around the health-care policy community fairly well. And whatever you could say about Berwick, he's not got a reputation as a liberal. Or, for that matter, a conservative. Rather, he's known as a zealot when it comes to quality improvement. As an issue, quality -- as compared to cost and access -- is quite young, and Berwick is frequently credited with securing its place in the discussion, and saving many lives in the process.

The quote that gave Berwick trouble was his admission that "the decision is not whether or not we will ration care ¿ the decision is whether we will ration with our eyes open." Only in our highly charged political discourse is this anything but a bland statement of fact. Compare it to Paul Ryan's comment to me: "Rationing happens today! The question is who will do it?" And Berwick was always clear that the patient's will should come first: "On the whole, I prefer that we take the risk of overuse along with the burden of giving real meaning to the phrase 'a fully informed patient,'" he told Health Affairs last year.

Feelings remain raw around health-care reform, but unless and until Republicans actually repeal it, and unless and until we find some way to ease the pressure Medicaid and Medicare are placing on the budget, we need not just good people running CMS, but great people. And that's true for more than just CMS: The financial reform bill is regulator-driven, and in the Minerals Management Agency, we've seen what happens when important posts are allowed to erode under bad leadership. A world in which the two parties treat all nominees as one more skirmish in their long war is a world in which the the best people will refuse nomination, and the government will be denied the talent it needs to carry out its most difficult tasks -- and that will be true both for traditional liberal priorities like expanding access to health care and traditionally conservative priorities like reforming entitlements.

That's my piece. Welcome to Wonkbook.

Top Stories

White House spokesman Dan Pfeiffer announced in a blog post that President Obama will recess-appoint Donald Berwick to run the Centers for Medicare and Medicaid Services: "Many Republicans in Congress have made it clear in recent weeks that they were going to stall the nomination as long as they could, solely to score political points. But with the agency facing new responsibilities to protect seniors' care under the Affordable Care Act, there's no time to waste with Washington game-playing. That's why tomorrow the President will use a recess appointment to put Dr. Berwick at the agency's helm and provide strong leadership for the Medicare program without delay."

Why the post matters: http://bit.ly/cvwnr3

House Ways and Means health subcommittee chair Peter Stark on the appointment: "Dr. Berwick is one of the nation's leading experts on how to improve the quality of health care, and a recess appointment in this case is warranted."

The Department of Justice filed its lawsuit against Arizona's immigraiton law, report Jerry Markon and Michael Shear: "Although the lawsuit cites potential 'detention and harassment' of U.S. citizens and immigrants who do not carry identification documents, it declines to make a legal argument that the law would lead to racial profiling. But a senior Justice Department official, speaking on the condition of anonymity, said that if the law takes effect, 'we will monitor it very, very closely, and if we become aware of any racial profiling or civil rights violations, that's something that we would take action on.'"

The EPA is unveiled new restrictions on power plant emissions of sulfur dioxide and nitrogen oxide, report Mark Peters and Tennille Tracy: "The emissions plan is one of several new regulations the Obama administration has advanced to curb pollution from coal-fired power plants. The EPA is working on tougher national standards for smog, first-time rules on coal-ash waste and new limits on mercury emissions. The EPA has proposed a different set of rules to use the Clean Air Act for the first time to curb carbon-dioxide emissions linked to climate change."

Art of seduction interlude: Every pickup line from Mad Men.

Still to come: The mystery of the 3.6 million missing workers; the administration is pushing to reinstate the deepwater drilling moratorium; unemployment benefits could artificially inflate unemployment numbers; unions, not corporations, are spending the most in the wake of Citizens United; and Israeli soldiers dance to Ke$ha.

Economy/ FinReg

The unemployment rate may be artificially inflated because of unemployment benefits, reports Sara Murray: "The government's unemployment rate counts only workers who say they're looking for work. To qualify for benefits, a person has to say he or she is looking for work. When benefits were less generous - or simply unavailable - more jobless workers indicated that they had given up looking, and thus weren't officially counted as unemployed. Michael Feroli, a J.P. Morgan Chase Bank economist, says this phenomenon may have boosted the reported unemployment rate by 1.5 percentage points."

You should also read Murray on the economic debate about unemployment insurance: http://bit.ly/a9xal3

The June drop in the unemployment rate was evidence not a labor-market recovery, but of a new class of "missing workers," reports Annie Lowrey: "Increases in the size of the United States' population mean the labor force should have expanded by around 3.5 million workers during the 30 months between the start of the recession and last month. Instead, it has lost 128,000 people. Those 3.6 million ¿ the ones who didn't enter the workforce and the ones who left it ¿ make up a class of "missing workers," people who in better economic times would be producing goods and services, and contributing to the United States economy. Now, they do not even show up in the official counts of the unemployed and employed."

Ruth Marcus argues we can't balance the budget just by raising taxes on the rich: http://bit.ly/aT8Zkb

Sam's Club will start offering small business loans of up to $25,000, reports Mae Anderson: "Sam's Club says 15 percent of its business members reported they were denied a loan in a November survey. That's up from 12 percent in April 2009. The program will focus on minority-, female- and veteran-owned businesses. Sam's Club members who apply for a small-business loan during the pilot will receive $100 off the application fee, a 20 percent discount and a discount on interest rates."

The service sector is growing slowly: http://bit.ly/cE7O6y

And it isn't generating many jobs either: http://bit.ly/c2OnJv

Economic optimists are relying high business spending to fuel a recovery, writes Kathleen Madigan: "While I think recent data point to GDP growth slipping closer to 2%, the underlying assumptions of the 3%-plus optimists aren't off the wall. Their projections, as well as those of some Federal Reserve officials, rely significantly on the business sector to step up as a growth leader, which will require company executives to look beyond the current uncertainty and start spending some of their accumulated cash. Swiss Re, Deutsche Bank and Morgan Stanley all belong in the camp of plus-3% growth in the second half."

Even state capitals are getting economically squeezed due to state cutbacks: http://bit.ly/9t6m71

David Leonhardt proposes five steps Congress can take to kick the economy in gear: "The Senate will hold confirmation hearings for three new Fed governors, all of whom have the potential to make it a more balanced institution. It couldn't hurt if a few senators used those hearings to review some basic facts: inflation has been zero lately, inflation expectations are tame, 15 million Americans remain unemployed and job growth has slowed in recent months."

Indie video interlude: Cults' "Oh My God".


The Obama administration is pushing an appeals court to reinstate the deepwater drilling moratorium, report Stephen Power and Ann Zimmermann: "In a filing with the U.S. Court of Appeals for the Fifth Circuit, Justice Department officials said a six-month suspension of drilling in more than 500 feet of water is in the "long-term public interest of the nation," and is needed to give the Interior Department time to develop and implement new regulations to prevent another spill. The filing was in response to a federal judge's decision in June to block the moratorium, saying the Interior Department had trivialized the economic impact of the temporary ban."

Solar carports in parking lots are picking up steam: http://bit.ly/aULwnl

Fannie and Freddie's regulator are sinking an Obama-backed energy efficiency program, reports Nick Timiraos: "The Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, suggested the mortgage finance titans should avoid participating in the program or should tighten their lending standards where the initiative moves forward."

Europe is excelling at adopting renewable energy, writes Jeffrey Kluger: "According to a new report from the European Commission's Joint Research Center (JRC), fully 62% of new electrical capacity installed in the European Union in 2009 came from renewables--meaning that nearly 20% of all electricity consumed by the continent is now clean and green. Of the 62% that was newly installed, 37.1% was wind power, 21% was photovoltaics, 2.1% was biomass, 1.4% was hydropower, and .4% was concentrated solar power--solar electricity produced not from panels, but from collected sunlight that boils a fluid which in turn drives a zero-emissions turbine."

Climate change is making heat waves like the current one in DC more likely: http://bit.ly/cQgLj8

To fix the climate, we need to fix the US Senate, argues Alan Durning: "The absurdly exaggerated influence of small states in the U.S. Senate, plus the historically accidental supermajority rules under which the Senate operates, militate against sweeping reform there in any area of public policy. When the reform in question would target the petroleum and coal industries, which are political goliaths in Alaska, Montana, Wyoming, and many other small-population states, the prospects shrink further."

Public diplomacy interlude: Israeli Defense Forces troops dance to "Tik Tok".

Domestic Policy

Unions, not corporations, are spending the most in the first post-Citizens United election cycle, reports T.W. Farnam: "Several large corporate-backed groups have yet to fully open their war chests for campaign ads. The conservative group American Crossroads raised $8.5 million in June, said its president, Steven Law. 'Donors who are from the center-right side of the spectrum are going to close the gap this year,' he said. 'There's both an opportunity in this election cycle to achieve real progress and a large sense of concern in the direction of Washington.'"

State insurance commissioners are resisting a proposal to allow the HHS secretary to stop rate hikes, reports Gloria Park: "Illinois Insurance Director Michael McRaith said he does not have authority to approve or deny rates in Illinois's exclusively for-profit health insurance market. McRaith added that although he prefers state regulation to federal regulation, federal oversight would be better than none to protect consumers. 'While I do think and will continue to think that state oversight of rates is the most appropriate vehicle for rate regulation, our objective is to assure that consumers receive value in exchange for their premium dollars.'"

The recession has led to stricter immigration policies across developed countries, reports Emmeline Zhao: "As a result, Ireland, Spain, the U.S. and the U.K. -- among others -- adopted policies that would limit immigrants' access to the labor force. The Troubled Asset Relief Program in the U.S. discouraged banks receiving stimulus funding from hiring foreign workers, and an executive order this year created stricter regulations for foreign farm workers. Ireland discontinued work permit issuance to immigrants for low-paid positions in 2009 and created stricter rules for work permit renewals. The U.K. increased salary and education standards for non-EU high-skilled workers and passed stricter citizenship requirements."

Arizona Gov. Jan Brewer is facing criticism from neighboring governors after canceling a border states' meeting with the Mexican president: http://nyti.ms/cfWHqP

Brian Palmer explains how it got so hard to fire teachers: "Until the early 20th century, teachers had few protections. According to anecdote, they were fired for flunking the children of powerful parents, holding unpopular views, or simply getting old....The National Education Association began pushing for tenure in 1887, as a means of ensuring that employment decisions were based on merit rather than politics. Tenure also protected minority teachers in an era of weak civil rights law. But even then, school administrators worried that such a system might destroy 'the important incentive to effort which makes retention in service depend upon usefulness and ability.'"

Research suggests that starting school later can improve students' results: http://bit.ly/a41I6J

Closing credits: Wonkbook compiled with the help of Dylan Matthews.

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