Ultimately, credit is due to health care reformers who stayed in the fight

Now, the political fight that matters is the next one.

Steven Pearlstein's column in today's Washington Post ("Finally in reach, health-care reform could help mend Washington, too") speaks my mind. The column also outlines some things that had not occurred to me, as well, but Pearlstein's central argument, that the imminent passage of the health care bill in Congress is both a positive, important step and nowhere near the frightening government takeover depicted by opponents, is a point worth echoing.

Passage of the bill, Pearlstein says, "would finally have the United States join the rest of the industrialized world in offering health insurance to all its citizens." The qualifiers implicit in his statement, like health insurance, not health care, and offering, not providing, are a good, if inexact, indication of how far health care reform in this country has to go, but this baby-step compromise is huge, nonetheless.

But regarding that point, Pearlstein makes a further helpful, albeit, disputable observation:

"Over the past year, anyone following the health-care drama has been tempted to question the judgment and leadership of President Obama, his staff and the Democratic leaders in Congress. Should they succeed this weekend, however, there is no disputing that it will be a remarkable political achievement, the result of a combination of focus, determination and flexibility not seen since the early Reagan years."

Of course, there is more than one way to frame what has happened so far. So, yes, Steven, there might be some "disputing." But Pearlstein's perspective is useful. Close up, and even at a distance, the whole process has been ugly. But Republicans in Congress did deliberately set out to sabotage the process. At no time did they seem to be proceeding as though they believed that all Americans should be covered and that there is a way to get to that goal.

In such an environment, it was easy for conservative hunters to harass the pack, picking out the lame and the old and the weak. It was savage politics, but when Democrats explained that Republicans were simply the "party of no," Democrats looked like whiners and, with a little bit of this for Louisiana and a little bit of that for Nebraska, also looked like opportunists. Sometimes Obama looked weak, sometimes he looked like he was merely stylin,' but there was no way to pass this bill without some Democratic cleverness, without some presidential resolve, without solidarity among the vast majority of Democrats. The fact of the bill's passage will demonstrate that those qualities were also a factor in the long process, even if it will take a team of historians a generation to identify precisely who brought those characteristics to the fight.

There is also this to say about the fights that come next: The bill's passing will come as a relief to many who are not prepared at this time to acknowledge that feeling. But they are voters who will show up at the polls in November and will not punish Democrats for the long legislative agony. They will care much more about the economy and who is working and who is not. And they will want to know, what their representative did with his or her summer. Did they roll up their sleeves and get back to work on other pressing matters, like education and financial reform? Or did they slink away to lick wounds from a battle that's over, leaving the field to others?

Now is the time for all good legislators to press forward.

Health Care Reform Lurking

But Not Good Enough?

The Washington Post ran seven articles on health care, one on the front page, in an 18-page first section today. The coverage added up to more than 10 percent of the paper's first section. Hurricane Katrina may have been the last time that coverage of a single issue was so dominant in the Post, though I suppose I should check back issues to see if Michael Jackson's death might have made a similar footprint.

But the Post's focus is right on and the effort demands attention. In "Health Insurance Industry Spins Data in Fight Against Public Plan" writer David Hilzenrath says the industry is "cherry-pick[ing] the facts."

Citing an industry spokesperson who says the vast majority "of Americans are satisfied with their existing health coverage," Hilzenrath makes the editorially sound observation that the same poll shows that respondents also support "the creation of a public [health insurance] plan." Fetching additional data from another source, Hilzenrath observes that the public's apparent affection for their existing health insurance ought to be taken with a grain of salt. He writes:

"Those who described their health as "excellent" -- people who presumably had relatively little experience pursuing medical care or submitting claims -- were almost twice as likely as those in good, fair or poor health to rate their private health insurance as excellent."

In other words, if your health is good, and you're not relying on your insurance to keep you healthy, then you may not know if health care needs reforming (though one day, you will).. The percentage of those expressing approval for their existing insurance plans would also be lower if the 16 percent of Americans who don't have coverage were counted as at least neutral on the matter. Regardless, health insurers are likely the most powerful interest group at work on health care reform these days. And one reform, mandatory coverage, is naturally backed by health insurers.

The Post's front-page story "Like Car Insurance, Health Coverage May Be Mandated," explores the experience of mandated coverage in Massachusetts. In 2007, somewhere near 600,000 state residents, about 16 percent of the population, had no coverage. The state's health care reform required individuals to get coverage or pay a penalty, and required most employers to provide a coverage option or contribute to the overall cost. A year later, only three percent of residents were without coverage. Of that group about half paid the penalty rather than buy coverage, and "71,000 residents were exempted [from penalties] because they did not meet the minimum income levels."

A mandate will certainly benefit health insurers. If four out of every five Americans with no current coverage were to buy even $2,500 worth of health insurance (way below the current average premium), it would mean $80 billion a year in new revenue for the industry.

No rational person who doesn't work for a health insurer wants to create a new revenue stream for companies primarily responsible for the way we ration health care, but a mandate could dramatically reduce a variety of health care costs, including uncompensated emergency and hospital care. The amount of possible savings is unclear, but it's probably on the order of more than $100 billion each year. Several websites provide data that suggest the savings could be much higher. (Here and here are two of those sites.)

Op-ed pieces by Michael Gerson (a former Bush II speechwriter), "Health Care's Sensible Center," and Harold Meyerson (the only mainstream columnist I know of who identifies himself as a socialist), "The Can't-Do Blue Dogs," take apparently opposite positions on how much compromising Democrats ought to be doing on the road to getting health care done. But both writers are clear that the debate is largely between various positions within the Democratic party.

In my view, Gerson makes two big errors in his column. The first is discounting what President Obama might accomplish in the upcoming month. Obama may be too wounded politically by the continuing recession, growing unemployment and "trillions of dollars in stimulus and bailouts" to provide good leadership, Gerson writes. He also quotes William Galston of the Brookings Institution, who told Gerson that Congressional opposition to "boosting taxes on the rich" eliminates that option, but if Obama does enter the political fray with a specific list of reform requirements, taxing households with annual incomes of, say, $350,000 or more, ought to be completely doable. A reform bill promoted by House Speaker Nancy Pelosi envisions raising more than half a trillion dollars from such a tax (see the details here).

On this point, Meyerson is clear. Taxes ought to (and probably would) be paid, if not for "the Blue Dogs' ... deference to wealth." But even though I am anxious to see Obama weigh in on the subject, Steven Pearlstein ("Imperfect Health Reform Still Beats the Status Quo") sees Obama as "boxed in" and "lashed to the mast" of predicted deficits in both health care and federal spending. But so far, Obama's commitment to not raising taxes has been limited to individuals making less than $250,000 per year. To most of us, such an income threshold seems to go way beyond the middle-class, but it still leaves the president free to endorse tax revenues like those advocated by Pelosi.

For me, no analysis of this issue would be complete without checking on what Dean Baker, co-director for the Center on Economic and Policy Research (CEPR), has to say. Accordingly, here's "Taxing Health Insurance Premiums and Subsidizing Health Care Providers," which ran yesterday on truthout. Taxing the health benefits of working people won't do, Dean writes, but changing the drug patent system and relaxing immigration rules limiting entry of qualified medical doctors would cut $200-300 billion in annual health care costs.

The problem with all of this, as Ruth Marcus writes in "The F-22 Model for Medicare," is that current health care arrangements have always worked pretty good for insurers, providers and the shrinking numbers of workers with employer-provided health coverage. This creates both a powerful lobby for the status quo and another group of voters who simply have not supported dramatic reform. To Marcus, this sounds uncomfortably close to the experience with the endlessly funded F-22 fighter jet.
The lineup of powerful members of Congress who fought to maintain production of the F-22 despite the opposition of President Bush, President Obama, Sen. McCain and several secretaries of defense kept the program going. But just yesterday, Congress finally pulled the plug on the F-22.

On the way to a final optimistic note, Marcus advocates another reform not mentioned in the other articles, improvements to MedPAC or the Medicare Payment Advisory Commission, advocated in some form by the Obama administration and some members of Congress. Establishing "a MedPAC on steroids" would create huge Medicare savings and, in the process, reduce health care costs overall. "Because Medicare is the 800-pound gorilla of health care, its reimbursement policies also drive payment arrangements between private insurers and providers," she writes.

And, speaking of the F-22 and other good ways to save tens, maybe hundreds, of billions of dollars in military expenditures, lets give Marcus the last word.

"The politics of health care make the F-22 fight look simple. It won't be easy to expand coverage in a way that controls costs.

But maybe, just maybe, the naysayers are premature."

GM and Chrysler

A Different Model?

I've criticized Washington Post columnist Steven Pearlstein in the past (check out "Letter to the Washington Post, #7" and "No Bailout"), so it's probably only fair to acknowledge when Pearlstein may have gotten it right. In particular, the federal investment in GM could turn out to be a very positive intervention in the long run.

In his Post column today (read it here), Pearlstein argues, as he has in the past, that GM and Chrysler and their suppliers are too big to fail. This could be just a rationale for a bad bailout. But I think Pearlstein is correct when he says that the government's investments in Chrysler and GM aren't bailouts, at all, but a massive intervention aimed at protecting jobs and pensions and manufacturing capacity.

Pearlstein points out that the intervention wasn't mandated, the Obama administration elected to intervene. In the process, original shareholders have been wiped out, or nearly so. The management teams that presided over the collapse of the two companies have been dismissed. "Bankers and bondholders who had the bad judgement, or the bad luck, to lend money to these companies" will get only pennies on the dollar.

But Pearlstein points out "any fair analysis would also show that the net present value of wage, benefit and job-security concessions agreed to by the United Auto Workers amounts to tens of billions of dollars." In exchange, some autoworkers will keep their jobs. Pensions will be cut, but will survive. And the union, its members and related organizations will own about one-eighth of GM and, I suppose, a similar share of Chrysler. The UAW will have to find a way to make this ownership share pay off, not a sure thing, but maybe a way to pressure the still giant auto companies to operate in the interests of all stakeholders in the future rather than in the interests of a privileged few.

And though I wish to give Pearlstein as strong an "attaboy" as possible for his column, his closing sentence opens up a whole new can of worms. "If President Obama can get most of our troops out of Iraq by the end of 2010, he ought to be able to get our money out of Detroit by then, as well," Pearlstein wrote.

I don't know about that analogy, Steven. First of all, I'm hoping that the U.S. investment in GM is not based on the same lies and deceptions that framed and covered the U.S. attack on Iraq. Second, we ought to be looking for some actual success story as a result of the GM investment, not a laying waste to the company. Finally, the troops in Iraq are, in significant numbers, moving to Afghanistan. Here's hoping that there are far better uses for the GM cash when we finally get it back.

Letter to the Washington Post, #7

So many people wanting to be heard. So little opportunity. Daily newspapers need to get energy from anywhere they can. I'm doing my part. Every week or so, I send them a little note. If they don't publish it, I get to work on my consecutive streak of unpublished letters. If they do publish one, I'll wait another week and start another streak.

Pearlstein's Anti-union Whine

Wow! Did Steven Pearlstein just take a job with some union-busting consulting firm? In “A Sacred Cow in the Cockpit (March 21),” Pearlstein takes a dispute over seniority between some airlines and their pilots and turns it into a principal reason why the airline industry can’t maintain stability and manage a profit.

Unionized pilots “haven’t fully accepted the reality of a deregulated marketplace where the interests of consumers come before those of employees,” Pearlstein says. This means, I guess, that as a consumer who feels overcharged for crowded, late (or cancelled), no-frills flights, I ought to be blaming pilots.

Sorry, I’m not buying it. The airlines begged for deregulation because they thought it meant less competition and more profit. Consumers and unionized employees alike got shafted in the process.


Jeff Epton
807 Taylor St., NE
Washington, DC 20017

202 506-7470

No Bailouts

The National Lawyers’ Guild used to have a T-shirt that quoted Shakespeare: “The first thing we do is kill all the lawyers.” It was a pointed tongue-in-cheek comment about the way some lawyers use the law to block social justice and change. Unfortunately, what was first a social observation, and later a leftist insight into the way entrenched interests use the law, has become a club with which to bash all lawyers.

Regardless, the recent moves by the Fed to protect banks against their own bad investment decisions put me in mind of the Shakespeare quote. As the current recession gathers momentum, what we need is a priority list for government action. Maybe lead the list off with, “the first thing we do is, we don’t bailout business.”

One of the Fed’s moves involves loaning investment banks up to $200 billion and allows banks to secure the loans by pledging securities they hold. Supposedly, the banks’ pledged collateral will be their most highly rated, mortgage-backed securities. AAA-rated, we are told.

On the news of the Fed’s move, the Dow-Jones average of industrial stocks achieved its largest single-day increase in five years. Despite appearances, the Washington Post’s Steven Pearlstein says this isn’t just a “bailout for Wall Street (A Bailout. For Everyone, Post, March 12).” Pearlstein says the move will help us all.

"…it is also a bailout…meant to prevent a financial and economic meltdown that drags everyone down with it,” Pearlstein writes, though he leaves out the specific ways in which working families will benefit.

For a different perspective on bailouts check Dean Baker’s book, “The Conservative Nanny State.” Baker, who is co-director of the Center for Economic and Policy Research (CEPR), argues that the government, contrary to popular belief, repeatedly uses its power to help banks and other businesses avoid the consequences of risk.

“…in a market economy lenders take risks when they make a loan [or buy mortgage-backed securities]. They should, in principle, understand this fact. Certainly, the highly compensated corporate executives that manage large banks and other financial institutions should understand that they take risks when they make their loans [or investments],” Baker writes.

That it is necessary for Baker to make the point at all, in a chapter about bankruptcy, suggests that corporations operating in our “free market” economy understand perfectly well that a government bailout is always a good possibility. The message cloaking the substantial benefits of these corporate bailout policies has been consistent since the phrase “what’s good for General Motors is good for America,” entered the vernacular. Pearlstein’s comments are merely the latest refinement.

But it seems more than possible that AAA-rated securities might not be that good, at all. That’s been the experience recently as even security-rating services have come under fire for their practices. That means the Fed’s decision has put the government in the position of guaranteeing $200 billion in investments that might be liquidated for less sometime in the future.

If jobs are at stake here, then for $200 billion the government could extend unemployment benefits, expand food stamp programs and begin investing in different jobs, like new and rebuilt mass transit, bridge repair and renewable energy. But the first thing we do is, we don’t bailout business.