Tag Archives: lobbyists

2011: Did Nothing Congress

‘tis the season for retrospectives. That is not intended to be anti-Christmas, but so many of us aren’t participating this year, I’d just like to move on.

In some ways, 2011 felt like 1979 – just a preamble to 1980. An election year. A first term, Nobel Prize winning Democrat in the White House. Lousy economy. Bailouts in the news. Religious fanatics, conspiring with the Republicans to hold the country hostage. All we need now is an aging, former liberal Democrat, union member, once divorced, actor turned racist, anti-abortion, anti-welfare, anti-protest, NRA member, governor and serial presidential candidate, to step forward and take credit for turning the economy around, while increasing the size of government and national debt. Enough of looking back to the past, let’s get to looking back to the present.

America held hostageStarting with the hostage situation.

The Democrats in the Senate, led by Harry Reid, have a small majority, 51 to 47. As we know from our civic lessons, all a majority in the Senate gets you is a better selection of offices  – it takes 60 votes to pass anything. Mitch McConnell, the Senate Minority Leader, stated early on, “The single most important thing we want to achieve is for President Obama to be a one-term president.” Using filibusters and secret holds, the Republicans have effectively shut down the Senate and any chance at ending the greatest depression since the invention of Prozac (aka: Bush’s Recession; Obama’s Economy; Why life sucks; Economic reality of the 99%). Time will tell if Republicans’ efforts to further destroy the American economy, combined with voter suppression and gerrymandering, will be enough to unseat this popular sitting president. We could, of course, just poll the “people” who will be doing most of the voting next year, corporate America, and we’d find out quickly how we are going to vote.

House Republicans of the 112th Congress are led by John Boehner and Eric Cantor and hold a solid majority, 242 to 192.

“The numbers: Republicans have introduced 44 bills on abortion, 99 on religion, 71 on family relationships, 36 on marriage, 67 on firearms/gun control, 522 on taxation, 445 on ‘government investigations,’ and zero on job creation.” – DailyKos

Politifact, don’t you just love them, corrected the DailyKos post, stating “In reality, then, six of these seven jobs-related categories included more bills than either abortion or marriage, and four of the seven included more bills than religion, family relationships or firearms.” (Author’s note: none of them passed.)

It is is little wonder that no polling company can find enough Americans who approve of Congress to cover the margin of error – currently about 5%.

“Congress is ending what may be its least productive year on record after government shutdown threats, the collapse of debt-reduction talks and little action to fix the worst U.S. economy since the Great Depression. Just 62 bills were signed into law through November this year, meaning that 2011 may fall short of the 88 laws enacted in 1995, the lowest number since the Congressional Record began keeping an annual tally in 1947.” – Bloomberg

“The latest Resume of Congressional Activity shows that from Jan. 5 through Nov. 30, 2011, the House of Representatives passed only 326 of the 4,191 bills introduced, the lowest number of bills passed in the last 10 non-election years. The Senate had its least productive year since 1995, passing only 368 of 2,336 bills introduced. “Bills” includes all forms of legislation, including bills, simple resolutions, joint resolutions and concurrent resolutions.” – Robert Longley

The combined annual expense to operate the House and Senate is about $5 billion. See if you think you got your money’s worth. Here’s everything they accomplished (bills passed both houses and were signed or expected to be signed by President Obama):

  • Extended the Small Business Act and the Small Business Investment Act through May 31, 2011, then through June 30, 2011 (separate bills).
  • Named eleven post offices and two courthouses, while designating another courthouse under construction (separate bills).
  • Extended the Patriot Act until December 8, 2011 and added authority for roving electronic surveillance.
  • Amended the Continuing Appropriations Act to keep the government open through March 18, 2011, then through April 15, 2011, then through September 30, 2011, then through October 1, 2011, then through October 4, 2011, then through November 18, 2011, then through September 30, 2012. They also had to pass it one other time to include certain agencies they left off other times. (All, of course, separate bills.) In doing so, they also funded disaster relief, import restrictions from Burma, limiting loan guarantees, giving the USPS a reprieve from having to make a $5.5 billion payment to their pension fund, and, of course, each time, waiting until the last moment and cutting some agencies for no particular reason other than a lobbyist didn’t tell them not to do so.
  • Extended the Surface Transportation Act that funds highway construction from the Highway Trust Fund through September 30, 2011, then through March 31,2012, while adding some things the money could be spent on as long as it wasn’t mass transit, plus, for some reason, added money so mostly rich people could fly on charter jets from “under served” airports underwritten by the government.
  • Extended the Airport and Airway Extension Act through April 1, 2011, then through June 30, 2011, then through July 31, 2011, then through September 16th, then through October 31, 2011, etc. (each separate bills)- in one of the bills, they also limited an amount for which a victim can sue should they be attacked by a terrorist when an airplane is involved.
  • Repealed the IRS code removing the requirement to report purchases or rents of $600 or more; and increase the health care tax credit for people less than 400% of the poverty line in 2013. Later, they repealed a 3% withholding requirement on certain payments to certain vendors for certain payments somehow indirectly related to healthcare.
  • Funded defense department spending through September 30, 2011, then again, but this time buried in a continuing resolution, then finally… (see last bullet)
  • Appointed three people and reappointed another to the Smithsonian Board of Regents (separate bills).
  • Changed the date when the Ronald Reagan Centennial Commission Act was to end to December 31, 2011.
  • Authorized appropriations for the CIA and other intelligence agencies through September 30, 2011.
  • Passed the Budget Control Act, which set up that crazy super committee to cut spending, but it didn’t, so spending will automatically be cut from defense and discretionary spending, but not Social Security or Medicare, after the next president takes office, unless Congress and the President change it first.
  • Restored GI Bill Fairness providing educational assistance for post 9/11 vets.
  • Amended the Consumer Product Safety Improvement Act to apply the limit on lead in children’s products, while giving it greater authority, it also provided greater discretion for future administrations could undo it.
  • Passed Patent “reform” changing the patent award to the “first to invent” instead of “first to file” as long as the “first to invent” did so within a year of the “first to file.”
  • Re-authorized spending to combat autism.
  • Amended Title IV of Social Security Act to allow spending on study and assistance for children born to methamphetamine or living in abusive foster care situations, plus some other stuff, minus some other stuff.
  • Extended block grants to states for temporary assistance of needy families and related programs through December 31, 2011.
  • Authorized Department of Veterans Affairs to lease some office space, required them to audit some programs and extended authority to provide some services for homeless and mentally ill vets.
  • Extended duty-free treatment for goods brought in from certain countries, while also allowing states to change their rules so they could recover overpayment from Medicare.
  • Approved the USA-Korea; USA-Colombia; and the USA-Panama free trade agreements.
  • Extended the Parole Commission.
  • Clarified the jurisdiction of the Interior Department over the Cragin Dam and reservoir; clarified the authority of the Forest Service regarding allowing ski areas and collection off fees; clarified the provisions related to litigation against Federal officers, agencies or courts; clarified the appeal time in civil actions to which US officers or employees are parties, and directed the Interior Department to allow a special break for a water project in Utah (separate bills).
  • Amended the Veteran’s Compensation Cost-of-Living Adjustment to be consistent with Social Security COLA.
  • Authorized the Department of Homeland Security, I kid you not, to create “Asia-Pacific Economic Cooperation Business Travel Cards” that pay travel expenses for businesses in Asia-Pacific under the belief that is good for US economic growth.
  • Amended the Peace Corps Volunteer Protection Act to require sexual assault risk-reduction and response training and allow the establishment of victims advocates.
  • Amended the Immigration and Nationality Act to allow spouses and children of active-duty service abroad in the Armed Forces to petition for permanent resident status and not be deported while their spouse or parent was fighting one of our wars.
  • Authorized a Gold Medal to honor the Montford Point (NC) Marines for their service during WWII.
  • Authorized the vessels competing in the 2011 America’s Cup to represent USA.
  • And finally, they betrayed every American by passing the National Defense Authorization Act for Fiscal 2012. Buried in the bill to fund our troops, defense contractors and the rest of the military industrial complex, our leaders conspired to find a way to deny all of us our rights to due process. Our President, any of our presidents can now abduct you, ship you off to Guantánamo, torture you and detain you without charge or trial “until the end of hostilities.” The hostilities have gone on for more than a decade and few politicians, and even fewer lobbyists want this undeclared war to ever end. The bill does, however, specifically declare war on us and every other suspicious person in the world, wherever they are. Our President and our future presidents are required, yes, required to use military force on anyone who is a part, has aided or associated with anyone who has made a belligerent act against the United States or any of its partners. Be careful you don’t dial a wrong number or a missile from a drone may find your front door. Why, 10 years in to an undeclared war on a tactic, do we need to give presidents more power? If the war were to save liberty, we have just surrendered. Should you have the audacity of hope that the Supreme Court will overturn this? There is no reason to hope. The Supremes have always looked the other way on war powers and, recently, undeclared war powers. The only audacious hope in this bill is for President Obama to end all hostilities – please pray for peace on earth. While you are at it, pray that our President doesn’t decide Occupy is supporting hostilities.

Here’s some of what they didn’t or haven’t passed for 2011:

  • Any aspect of President Obama’s Middle Class Tax Relief & Job Creation Initiative. Especially,  the Doc Fix, passed every year for more than a half a century, and will mean that doctors and medical providers will receive 27 percent less beginning January 1, 2011 and causing all kinds of problems for providers and their patients; and the extension of the last year’s payroll tax cut or President Obama’s version – the result is a tax increase on everyone in the US making below $106,800 have a tax increase. The House passed a version addressing these issues wrapped up with a bunch of toxic partisan riders; the Senate stripped out all the partisan junk, which they said publicly that they would, shorten the bill’s effect to two months, sent it back to the House and adjourned until January; now Boehner & Company is pitching a fit – stay tuned.
  • Any aspect of immigration reform.
  • Most of the 200 Dodd-Frank rules protecting us from another Wall Street collapse.
  • Doing anything to help the millions of Americans in foreclosure.
  • Doing anything to correct the problem that prevent student loans from being included in bankruptcy.
  • Voting on 80 Federal Judgeships vacancies with 43 pending nominations including some positions that have been vacant since January of 2009, or 77 political appointments that had cleared committee, but were still under secret hold by Republican Senators.
  • Closing any of the corporate tax loopholes given to the wealthiest corporations.
  • Any positive movement to stop or reverse the offshoring of American jobs.
  • Any positive reaction to the horrible events around the world that should have led to common sense gun laws.
  • Any positive reaction to the Fukishima meltdown which should have led to common sense nuclear regulation – we are still building ours in Georgia.
  • Any positive reaction to the Gulf Spill that would lead to common sense laws limiting offshore drilling.
  • Any movement on decriminalizing, medical or otherwise, marijuana, which if anything, is a gateway drug to the prison system.
  • Any movement on tax reform, campaign finance reform, or affirming that corporations are not and never have been people.
  • Any movement on anything to do with the greatest threat to us all: man-made global climate change.

On to politics.

Relax, I’m not going to review the Republican circus, though I truly believe it would have been more fun and there would have been better candidates if Fox had sponsored it as, “American Political Idol” complete with Simon and toll-free numbers for weekly voting.

Ending on a more positive note, here are just a few of good things that occurred in 2011:

  • We didn’t invade Iran.
  • Occupy Wall Street for protesting “social and economic inequality, high unemployment, greed, as well as corruption, and the undue influence of corporations” (wikipedia) which has spread to hundreds of cities around the world.
  • Our troops have officially come home from Iraq – a serious reason to cheer – leaving only about 17,000-20,000 State Department personnel and their private and well-armed security forces.
  • Osama Bin Laden and Muammar Gaddafi are no longer justification for war. Even Kim Jong Il is gone. They’ll have to find a new boogieman.
  • We no longer have to pretend Pakistan is our good friend, but have been reminded that every nation with nuclear capacity should be.
  • We haven’t caused serious harm to the “Arab Spring.”
  • Teapublicans were unsuccessful at shutting down our government or forcing us into default and causing a worldwide financial meltdown beyond our imagination – at least, so far.
  • We haven’t yet approved the Keystone XL pipeline.
  • The multi-trillion dollar bailouts have worked their magic as CEO pay finally shoots up another 36.5% last year.
  • Foreclosures have actually slowed down some in some states.
  • Some of the 13+ million long-term unemployed have joined the 10+ million who already stopped going to the unemployment office causing the unemployment rate to drop way down to 8.6% – look for more to stop looking next year as five million will lose their unemployment benefits and the rate could fall to 6 or 7% by election date.
  • The Euro hasn’t failed, yet, but has slipped enough against the dollar to make those in the 1% get to save big time on their next European vacation. Stay tuned, what Germany couldn’t do in war, they may soon do by banking.
  • Sara Palin, Jeb Bush nor Haley Barbour have yet announced their candidacy.

Happy holidays.

 

Update December 23, 2011; 8:51 AM EST: After wasted expensive days of politcal banter, threats, encouragements, puppeted talking points, invented distortions, face-saving attempts and the like, it appears that the Boehner (not pronounced boner) is going to allow the House to vote on the Senate bill authorizing a two month extension of unemployment benefits, the payroll tax cut and the docfix. The bill also would require President Obama and the State Department to make a decision on whether to authorize the Keystone XL pipeline, which is unlikely to be authorized, as the required studies by the EPA and the State Department will not have been completed in two months, but should allow the electioneering Republicans to point at the President as a job killer when, as expected and likely required by law, he rejects permitting. As an aside, there has been a majority willing to vote for this measure for some time. Boehner, however, did not want the bill passed by Democrats and reasoned Republicans who would split from the Teapublican caucus. This story will be updated again, once the bill passes or fails – or, when the author returns from holiday travel.

We are only represented by pollsters

John Boehner with fingers in his earsYou share your Congressperson with 705,761 neighbors1. How could they possibly represent you?

Article I, Section 2 of the US Constitution states that “The Number of Representatives shall not exceed one for every thirty Thousand2” Clearly, the founding fathers, felt that 30,000 was a pretty good number. Power, true to its nature, was something our Congresses seldom wished to share. Once the House got to 435 members, they kept it that way. Had they stayed with the intent of our fore parents, the next House session would convene with 10,233 members. Wouldn’t that be cool?

The districts would be way too small to require huge campaign spending – now averaging $1,362,239 per winner3. Anyone with a good facebook following could run. Party affiliation wouldn’t have the clout and new political parties could spring up in your block or your college dorm. Candidates would be forced to speak to the mob – and pander to the mob. Instead of representing big bizness, they would have to represent you and your bizness. Candidates would have to address local issues. With an average of only 22,500 of voting age and not in prison in each district, your vote would matter again. Minorities wouldn’t necessarily be minorities in their districts. The House of Representatives could look and sound like us, rather than them. Your representative wouldn’t have to be rich or a career brown-noser to run. And, it would be so much harder for a just say no do nothing Congress to get away with it. Isn’t it pretty to think so?

Other than the obvious out-and-out bribery, lobbyists are represented by the House of Representatives because they know your Congressperson. Lobbyists buy your representatives and their staff meals, take them on trips, pay them to speak at their corporate outings and just hang out with them at the club. We don’t get to do that, because once they go to DC, they only come back for weekends – and they don’t want to hang out with us.

The only way we are represented in Congress is by pollsters. Makes me want to be a bit nicer to them were they to call, but they can’t. Like 26.6% of American households4, I don’t have a landline phone anymore, just my cellphone. In general, little polling is conducted district by district anyway. Most of what my Congressperson knows is what everyone with a landline telephone is thinking, not me and certainly not my neighbors.

In fairness, some Congresspeople have their staff report what people are pissed off about who call their office, email or fax.  Seldom are those reports broken down by voters in their district and none of them account for the wacko robofax, emails or tweets they get from sponsored activism.

We could get together district by district and hire a lobbyist to represent us. Someone who we choose and pay to tell our Congressperson what we are thinking. But that is what we pay our Congressperson to do.

Then there’s that problem with what our representatives are actually doing anyway. Being qualified to serve, no longer requires experience in the complicated machinations of government. No longer do our representatives need an understanding of law, lawmaking and constitutional issues; foreign policy; navigating the bureaucracy; civil service; the workings of the Treasury, or even the difference between the Treasury and the Federal Reserve. No longer do we seek representatives who are curious, smart, resourceful, schooled in history, well-read or well-traveled. Those are skills unnecessary in service to we the people.

These days, Congress is run by professional staffers and lobbyists. The staffers control their schedule, write their speeches and tell them what side of each issue they should be on. Staffers working with lobbyists write all the legislation. If you need something done, best go straight to a staffer, though unelected, there’s a much better chance they’ll represent your issue. That is, if your issue is something that will generate campaign contributions.

1Population based on 2010 Census and after redistricting is completed.
2Slaves were counted as three-fifths of one person.
3 Campaign Finance Institute – By the way, it cost $7,500,0052 per Senate winner. If you took the NY Senate race out of the average, it only averaged $4,737,365 per winner.
4 CDC Survey

The Elephant in the Room

Elephant in the roomWe’ve all heard the mind-numbing numbers:  $14 trillion of national debt that will grow to $20 trillion by 2010, but is it real?

Technically, and by the political definition, yes. It is the cumulative difference between actual revenues and spending. But by any reasonable accounting standard, our definition of national debt is hoax. More precisely, it is a political hoax within a hoax.

Almost two-thirds of the national debt is owed to us – mostly to our own government and its agencies. So when the pundits of doom talk about the impending explosion of interest on the national debt, one should smirk, a bit. We have systematically plundered Social Security, Civil Service and Military retirement funds (and other trusts) – like corporate America, we are never going to pay our pensions back, we’re going to change the rules. The Federal Reserve has purchased trillions of our national debt (quantitative easing) – in effect, it has already been paid by devaluing our currency. We have also allowed “banks” to go to the Fed money window for trillions of dollars at almost no cost that they have turned around and used to buy huge amounts of our debt making incredible profits – paying them back is little more than accounting.

Only about one-third of our national debt is owned by American and overseas investors. Were the Fed sponsored debt already paid with imaginary dollars subtracted from the $14 trillion, we owe far less than than the 76% to GDP ratio we hear so often. It would be more like 25% – an amount that would rank us among the most solvent countries in the world.

How did we get in this situation? You know. The Bush, now Obama, tax cuts for the rich when combined with the unfunded wars, the bailout of Wall Street and the stimulus bill, total almost all of it. To their credit, the Dems, in passing the “Affordable” Health Care Act and losing the mid-terms, will save a couple of trillion in the next decade, but we trillions on the table as bribes to health insurance companies and big pharma to get the bill passed. The surplus to debt happened in less than ten years. It could be undone in less than 151.

Except… for the non-debt debt – the elephant2 in the room – our unfunded liabilities. It would take, perhaps, $100 trillion to fully fund our pension and veterans obligations while continuing to fund Medicaid and other off-the-book obligations. A $38 billion cut, which almost forced a government shutdown, is stomping on ants while the elephants are jumping over the wall. Silly politics. Televised sport and nothing else. Look for the reruns to begin airing in a few days.

The only responsible way to address the real debt, is to get politicians out of our accounting and health care3. Treat Social Security, Disability and Medicare as tax financed programs – without a cap, not pretend trust funds. Require all tax cuts, breaks and subsidies have a sunset provision that forces a new and separate vote to continue. Stop treating earned and unearned income differently. Plug the loopholes. Send all corporate lobbyists to Guantanamo subject to military tribunals. Pass legislation limiting political contributions so they can only be made by individuals. Require competitive bidding for all government contracts. Give the states access to the Fed money window. Get out of the wars, slash the Pentagon, NSA/CIA budgets, require a two-thirds vote in Congress to wage war and support the UN to be the world’s peace keeper. Pass immigration reform to get the 20 million here undocumented, to pay legal taxes and Social Security and have access to better paying jobs. Create a Roosevelt-like works program that offers an alternative to long-term unemployment. Require two years of community or military service for our young people and offer college as a reward. Invest in a national system of medical clinics, private or public, to implement much of Medicaid. Do something. Don’t just cut something. The systems, political, economic and accounting, are unsustainable and broken.

 

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1 By going back to historically low top rates, getting the hell out of the wars, requiring those too big to succeed without taxpayer funds to fail and getting people back to work. Duh.
2 Yes, it is ironic that the elephant is the symbol of the GOP.
3 I know, I know, I know, you are thinking, what the hell does he want to go and write about this for? Ignorance is bliss. Leave it to Nobel prize winning economists and people running for office to make this stuff up. Just couldn’t help myself.

Incredibly high fictitious cost of health care

Health care reform doesn’t go into effect for 3 more years, so why is it costing really really big businesses so much right now? In the last month, company after company has announced quarterly earnings and included huge accounting charges for health care costs.

Companies announcing charge offs for health care costs
“Why? For what? And should we be scared shitless?” Glad you asked. First off, except for exercising their Supreme Court given right to paid free speech, which resulted in hundreds of millions of dollars being spent on lobbyists to fight the health care reform bill, it hasn’t cost big business a nickel. Nothing. Nada.

Here’s what has happened. Way back in 2003, under Bush/Cheney, the brain trust in charge of our government at the time, decided to add a prescription drug benefit to those on Medicare. You probably wondered at the time, “what the hell do Republicans care about seniors?” Me, too. I knew they were having a difficult time squandering the Clinton budget surpluses so they could begin starving the states, so the states, in turn, could begin starving the poor. Plus, Bush Inc. had already paid off the campaign money they’d gotten from the super rich, the oil cartels, defense contractors and Wall Street. But they still owed big health insurance, big pharma and big business and thought they might be able to buy some senior votes in Florida, so they hatched this scheme: establish a huge new subsidy to create a private for profit prescription drug insurance plan industry to buy hundreds of billions of dollars of pharmaceuticals at non-negotiable retail and provide a tax subsidy to big business to help them get rid of workers at or nearing retirement age (Medicare Part D) – a real win-win. Even got Ted Kennedy to vote for it. Except for the donut hole, a diabolical stroke of campaign genius that must have Lee Atwater wish he could have come back from hell to enjoy it. But I digress.

The 2009 law gave big business a 28% tax deduction on retiree, or early retiree drug benefits, but it was more than just another corporate tax loophole. It was a tax-free treatment of the government subsidy to pay for companies providing the equivalent of Medicare Part D – the law gave them a subsidy and let them also deduct it from their taxes. Technically, accountants, lawyers and Adam’s house cat* refer to this as “double-dipping.” Republicans and the Chambers of Commerce refer to this as “pro-business.” When the new health care reform law goes into effect in three years, the subsidy will continue, but the tax deduction big business got for spending the subsidy will end.

snake oil“Then the tax deduction was worth billions of dollars?” you might ask. No, not by a long shot. In fact, the loss of the deduction will have almost no affect at all on company valuation or profit, but they’d like us to think it does. The explanation of how they came up with such extravagant numbers and why now, is a wee bit technical. Here goes: accounting rules require companies to recognize the present value today of future cash costs for as long as they offer the drug benefits and make this adjustment by writing down the deferred tax asset balances. Another way of saying it would be, they can pick any number they want and they can do whenever they want. These announcements are big businesses’ way of attempting to influence the off-year elections with the hope that the next Congress will give them back the deduction, which they don’t really use, doesn’t have any impact on jobs, but they are greedy and like to have more of whatever they want than they would ever need and don’t mind scaring the bejesus out of us as sport.

“But these tax deductions were real, so there’s a real cost to the companies’ investors, right?” In most cases, no. Big companies don’t pay taxes in America . That’s why we have those island governments just off our shores. According to the GAO’s most recent data (why it is so old, I have no idea, but I’m guessing that it has something to with providing political cover to those who write tax law), shows that two-thirds of US corporations paid no federal income taxes from 1996 through 2005 (those include the Clinton boom years) and 94% paid less than 5%.

So tomorrow when you read, “Company X earnings down due to health care reform costs,” just smirk and turn (or click) the page.

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*A variation of “Adam’s off ox.” The form commonly used is ‘not to know one from Adam’s off ox,’ meaning to have not the slightest information about the person indicated. The saying in any form, however, is another of the numerous ones commonly heard but of which no printed record has been found. But in 1848 the author of a book on ‘Nantucketisms’ recorded a saying then in use on that island, ‘Poor as God’s off ox,’ which, he said, meant very poor. It is possible that on the mainland ‘Adam’ was used as a euphemistic substitute. The off ox, in a yoke of oxen, is the one on the right of the team. Because it is the farthest from the driver it cannot be so well seen and may therefore get the worst of the footing. It is for that reason that ‘off ox’ has been used figuratively to designate a clumsy or awkward person.” From “A Hog on Ice” by Charles Earle Funk (1948, Harper & Row).

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Note: the post was edited on 4/23/10 to correct a stupid error of fact in paragraph 3. The original post, referred to “George Herbert Walker Bush” which was fortunately caught by alert reader/writer/commenter, Cliff Green.

Health Care: When You'll Get Yours

Updated 3/19/201o to include the House Reconciliation Bill & CBO estimate.

The Democrats say it is going to pass – maybe this week. For those of you who haven’t had a chance to read all 2,009 pages (depending on which version you count) of the Senate’s Patient Protection and Affordable Care Act (AKA: HR 3590) and or even the 74 page summary – and, the 153 page House Reconciliation Act of 2010 (AKA: HR 4872), I thought you might like to know what’s in it for you. And when.

There are some really important things in the combined bill including, according to the CBO, covering an estimated 95% of our citizens – 32 million more than have insurance right now. It corrects many wrongs too long overlooked. It is a good start. Better than nothing, but miles short of wonderful. It isn’t a pretty read. It is filled with technical issues. Way too much of it is really about Medicare, Medicaid, tax policy and deals struck with vested interests (private and public interests) to get the bill passed. Way too little of it is about making health care affordable and keeping it that way for people in the middle who trying to stay there.

It is an improvement on the status quo. It will lay important groundwork for modernizing our system and making it more fair. It will reduce the deficit (while CBO estimates it will cost $940B over 10 years, it would yield a net reduction of our deficit of $138B and reduce it $1.2T over 20 years). It will save lives. And it will take years, as is typical, for it to be interpreted by our bureaucracy into policy and then by lawyers and accountants into loopholes. It is not – not even close to a government takeover – if anything, it is just the opposite – giving private industry yet another shot to heal itself.

What it may do best will also cause the most political damage to the courageous men and women who worked and vote for it: most of the bill is phased in over four years to minimize cost, allow for industry to prepare, and should it be necessary, to provide time for our politicians to fix obvious problems – but it will probably be too late to save those who will have to fall on the sword during the next election cycle for our future.

The clear winners include: seniors (prescription donut hole and no cost preventative care – note: more is expected to come from reconciliation); those over 55 being forced to accept early retirement; those disabled who need care and their families; the working poor and uninsured; all those under 26, students and especially children (OK, and their parents); small business (insurance choices and tax credits); the health insurance industry and providers (30+ million new paying customers – note: physicians and hospitals did not do as well as insurance and pharma, but I suspect, most will be relieved/happy for their patients); software developers, tech support, data managers, etc.; state governments (healthier citizens, few unfunded mandates and a dramatic reshaping of indigent care – note: reconciliation is expected to provide more help to the states on mandated Medicare changes); deficit hawks (saves taxpayer money and sets framework for future changes); and millions of patient advocates, volunteers, social workers, community health clinics and civic organizations who tirelessly help those less fortunate.

The losers: those making over $250,000 a year (.09% wage tax and 3.8% investment income tax, plus some minor changes in deductions) and especially senior health insurance executives or those with exotic medical and compensation plans; lawyers (fewer bankruptcies); and copier companies, copy paper producers and related products. Mostly the losers are those who can’t wait until 2014 – and probably the Democrats.

Was Going To Happen This Year No Matter What

  • Private health care insurance companies will immediately raise rates as high as possible – they would have whether the bill passed or not. Witness: Anthem of California’s rate hike of up to 39%. Get ready, if being ready helps. It will be ugly. There is almost nothing stopping them now or ever. They are bulletproof. A win-win-win. Without competition the market just can’t correct it, and what competition there will be, is years away.
  • Tens of thousands of employers will react to these rate hikes by either raising employee health care costs or quit providing coverage – they would have whether the bill passed or not. Good luck.
  • Millions of individuals will drop their coverage because they can’t afford it (the Robert Wood Johnson research puts the number expected to join the uninsured in the next 10 years at 18.2 million, bringing the total to 67.6 million without insurance) and play the American version of Russian Roulette betting they will survive long enough for the bill to phase in subsidies and benefits. Most would have dropped their coverage anyway. They will blame it on the economy, the private insurance companies and Washington. They should.
  • States, faced with insurmountable budget shortfalls, will cut reimbursement rates to doctors and hospitals, which will cause thousands of providers to drop Medicaid resulting in hundreds of thousands of people going without any health care (your neighbors will be among them), many of whom will die.
  • The midterm elections will be held before almost anything tangibly good in the bill changes anything. There may be hell to pay.
  • The next presidential election will be held before almost anything tangibly good in the bill changes anything, but after the taxes, fees and requirements go into effect. There may be hell to pay.

Immediate (within 90 days)

  • Those uninsured who have pre-existing conditions, will have access to a national high risk insurance pool (using private providers or via state high risk pools) with financial assistance (limits out-of-pocket costs for coverage through the pool to $5,950 for individuals and $11,900 for families annually – up to $5B in total subsidies). This is temporary and will be transitioned to exchanges in 2014.
  • Will bar preexisiting conditions on children’s coverage.
  • Will create a new reinsurance program to make coverage more affordable for early retirees (55+) – basically, a subsidy for employee-based plans to continue coverage by paying up to 80% of the cost until Medicare.
  • Gradually closes the Medicare prescription drug gap (Part D “Donut Hole”) until it is eliminated in 2020. Effected seniors will receive a $250 rebate in 2010.
  • Increases the adoption tax credit by $1,000 (begins in 2009) and extends them through 2011 (one of those unrelated to health care bones tossed to the anti-women’s right to choose lobby, before the Senate caved totally).
  • Small business (up to 35%) and small nonprofit tax credit (up to 25%) on employer’s contribution to health insurance for employees.
  • A two-year tax credit (2009 & 2010 – capped at $1B) to encourage investment in therapies that prevent, diagnose and treat acute and chronic diseases. This was an attempt to win support of doctors, hospitals and equipment manufacturers.
  • Tax relief for health professionals with state loan repayments – doesn’t affect you and me, but will give tax help to some physicians in underserved areas.
  • Provides funds to build new and expand existing community health centers, and expands funding for scholarships and loan repayments for primary care practitioners working in underserved areas – some of this is new money, most is refunding existing programs.
  • Expands low-interest student loan programs and scholarships for health students and professionals.
  • Excludes the value Indian tribal health benefits from gross income.
  • Requires creation of a web site that will identify affordable coverage by state, tax credits, and other information of interest to small business.
  • Requires another crackdown and more screening on fraud and waste.
  • Creates another council to promote health policies.
  • Provides money to Health & Human Services (HHS) to figure out and quantitatively measure just how wonderful this program is. Or isn’t.
  • Extends payment protections for rural providers who don’t do enough business to make it on their own, but help a lot of people who couldn’t get help otherwise.
  • Creates a private, non-profit institute to identify “national priorities” and compare the effectiveness of health treatments, which is an attempt to create political cover when facing lobbyists who don’t want their pet projects cut.
  • Finally allows states the option of covering parents and childless adults up to 133% of the poverty level (in some states, not typically Southern, it is felt that the poverty level is too low and their least fortunate citizens a more humane program).
  • Establishes standards and community assessments for new nonprofit hospitals which should give some political cover for local government when facing neighborhood activists in cahoots with real estate developers, bond companies, etc.
  • Gives Blue Cross a special tax deduction as long as this non-profit don’t profit by more than 15%, which was designed to get a couple of votes in the Senate. (Note: this will likely be removed in the reconciliation bill.)
  • Imposes a 10% tax on indoor tanning services because their lobby was not as effective as the cosmetic surgery lobby.
  • Codifies and clarifies economic substance doctrine and penalities (again, not health care, allowable, important).
  • Appropriates $500M a year (2010-2014) for the Community College and Career Training Grant program; creates mandatory funding of Pell Grants, funds College Access Challenge Grants and funding for Historically Black Colleges & Universities; and reforms student loans, limits interest rates and reduces income-based repayment amounts (again, not health care, allowable, important).

Six Months After Enactment (and Beginning with Your Insurance Plan Year)

  • Prohibits rescissions (practice of rescinding coverage when a person gets sick as a way to avoid covering costs) – we all should count down the days and hope we aren’t on the rescind list.
  • Eliminates lifetime and restricts “unreasonable” annual limits.
  • Requires first dollar coverage (generally, no deductible) for preventative care.
  • Allows dependent coverage until age 26.
  • Requires creation of an “effective” appeals process for coverage determination and claims and awards grants to states in order to establish consumer assistance programs in response to complaints (boy, that’s going to work in Georgia).

2011 (lower your expectations)

  • Provides a free, annual wellness visit and no-cost sharing preventive services for Medicare beneficiaries.
  • Begins a 50% discount on brand name drugs for seniors in the Medicare prescription drug gap (Part D “Donut Hole”).
  • Creates incentives for states to cover evidence-based preventative services without cost-sharing for Medicare beneficiaries.
  • Requires Medicare coverage of tobacco cessation services for pregnant women (I’m guessing that this isn’t limited to pregnant women over 65).
  • All health plans must file annual reports showing share of premiums going for care and, should their accountants really screw up, they must provide consumer rebates for excessive medical loss ratios.
  • Provides a 10% Medicare bonus payment to primary care physicians and general surgeons (which they would have done anyway so that they don’t have to actually raise reimbursement rates – permanently raising would make it look as if Medicare was in trouble).
  • Establishes a “Center for Medicare & Medicaid Innovation,” which will attempt to create methods to reduce costs while enhancing care and which sounds like such a great idea, but makes every cynic snicker.
  • Provide several important policy changes related to education slots to increase doctors, nurses and care providers, but they are so tediously complicated I suggest you Bing or Google for the details).
  • Ditto on tax code changes related to standard language, small business cafeteria plans and other technical issues which would only pain you to know at this point, unless you are planning to raid your HSA, which you’d better do before the end of 2010. Oh yeah, your W-2’s will now show the value of your health benefit.
  • Begins the transition away from Medicare Advantage – that famously popular program where we, the taxpayers, give insurance companies 15% more to privately manage Medicare which they used to expand benefits by charging recipients even more. Wonderfully conceived experiment.
  • Imposes a non-deductible $2.3B fee (split based on market share) on big pharma in return for “supporting” this bill and our government agreeing not to negotiate prices or re-import drugs for Medicare or Medicaid which would, of course, bring prices way down for individuals who will have to wait four years to see benefit.

October 1, 2011

  • Allows states to offer home and community based services rather than institutional care to disabled individuals through Medicaid.

2012 (lower your expectations even more)

  • Implement payment reforms to gain efficiencies and improve quality.
  • Incentivize quality hospital outcomes and penalize hospitals with the highest readmission rates.

2013 (chances are, this won’t be your year either)

  • Begin paying Medicare physicians based on value instead of volume to promote quality of care.
  • Requires that Medicaid payment rates for primary care services be no less than 100% of the Medicare rates.
  • Mandatory adoption of electronic filing and information exchange (expect everyone to miss that deadline) and establish a pilot program of payment bundling and provider cooperation/coordination designed to save money, and, of course, improve care.
  • Increase the itemize deduction threshold for medical expenses from 7.5% to 10% of adjusted gross income for eligibility.
  • Add a .09% hospital insurance wage tax and a 3.8% investment tax on people making more than $200,000 individuals/$250,000 family.
  • Limits the deductibility of executive (all officers, employees, board members and contract workers) compensation of insurance companies to $500,000 each per year.
  • Sets $2,500 cap on over-the-counter medications for flexible spending accounts (FSAs).
  • Creates excise tax on medical device manufacturers of 2.9% (exempts Class I medical devices, eyeglasses, contact lenses, hearing aids, and any device of a type that is generally purchased by the public at retail for individual use) to raise $2B ($3B in 2012 and beyond).

2014 (finally and outrageous to believe that some of these weren’t done in year one)

  • Insurance companies are prohibited from discriminating based on health status, preexisting conditions, and gender. They still will be able to discriminate based on age, geography, family size and tobacco use, but they are limited to discriminating on rates of no more than three times their lowest rate.
  • Annual limits are eliminated.
  • Insurance companies will be prohibited from dropping coverage of those participating in a clinical trial or denying coverage for routine care.
  • Health exchanges are established in each state (yes, state) to enable people to comparison shop, enroll and determine if tax credits for financial assistance will be available.
  • A multi-state option (really national) will be available offered by private insurance companies and, at least one non-profit.
  • Health care premium tax credits will be available for those above Medicaid eligibility and below 400% of the poverty line (currently $43,320 for individual; $88,200 for a family of four – Alaska and Hawaii are higher). These credits will be for premium and cost sharing expenses and is what will enable most of the uninsured to afford coverage. What does all of this mean? If your income is above the poverty line, but less than 133%, you’ll have to pay 2% of the cost and the tax credit will pay 98%. The scale slides up to 400% of the poverty line and indexed year to year, but basically your share would be: 133% up to 150% – 3.0%; 150% up to 200% – 4.0%; 200% up to 250% – 6.3%; 250% up to 300% – 8.05%; 300% up to 400% – 9.5%.
  • Almost everyone is required to have health insurance or pay a penalty (2014: $95; 2015: $325; 2016: $695 or 2% (increasing to 2.5% in 2016) of income up to national average cap). Families will pay half the amount for children. The only exception is if affordable insurance is not available. Sounds onerous, but they are doing this because it wouldn’t be fair to the insurance companies for an individual to purposely not have insurance, get sick knowing they can get coverage by buying a policy only when they need it – plus, they made a deal with the insurance companies to do this in return for insurance companies agreeing to pay a fee to help offset the costs of the bills.
  • No one receiving a tax credit to buy insurance would be allowed to use it for a policy with abortion coverage. States can ban abortion coverage in plans offered through the exchange. Exceptions would be made cases of rape, incest and danger to the life of the mother.
  • Employers are not required to provide coverage. However, employers with 50+ employees (companies with fewer than 50 employees are except), who do not offer coverage, and have workers who are subsidized by the government, must pay a fee to subsidize those workers – $2,000 annually for each full-time employee (there is no penalty for the first 30 employees, plus, there are a few other caveats based on waiting periods, etc. Bing it). Part-time workers are included in the calculations (two part-time workers equals one full-time worker).
  • The small business tax credit will continue.
  • Workers who qualify for an affordability exemption to the requirement to have coverage, but not for tax credits, can take their employer contribution and join an exchange plan.
  • Medicaid eligibility will increase to 133% of poverty. Childless adults will be included for the first time. For new enrollees, the federal government share will be 100% in 2014, 2015, and 2016; 95% in 2017; 94% in 2018; 93% in 2019; and 90% thereafter (funding the state mandate).
  • Medicare advantage will be eliminated by competitive bidding.
  • Impose fees providers (health insurance companies): $2B ($8B in 2014; $11.3B in 2015 & 2016; $13.9B 2017 and $14.3B after that).
  • There will be more reporting requirements for many providers to measure quality of care as a pathway toward value-based purchasing.

2018

  • Impose the Cadillac excise tax of 40% on employee plans costing more than $10,200 for individuals and $29,327 for families of four (indexed for high cost states, high risk professions and for the elderly).

2020

  • Medicare Part D (prescription drug plan) increases to a 75% discount on brand name drugs for seniors and completely eliminates the “Donut Hole.”

That’s it. Hard to believe, isn’t it? Seemingly, our entire government has spent a year developing that? Every news channel, newspaper and most blogs have spent a year reporting and debating that? Republicans could spin endlessly for a year that this, often in the same sentence, would turn us into Nazi Germany or Stalin’s Russia? Hundreds of millions spent lobbying against that? Democrats could trade all the hope and power that comes once in a generation, for this? Yes.

If it weren’t passed now, we’d just have to go through this again some day not soon enough.

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Acknowledgements:
Information, reference and documents used in this story include those from:

And others too numerous to mention. Thank you.