Kevin Drum

Healthcare Ping Pong?

| Mon Dec. 21, 2009 7:52 PM EST

Should ping pong become the new liberal sport? That is, should the House just skip the conference committee on healthcare reform entirely and simply vote on the bill produced by the Senate?  This is, for some reason, known as ping-ponging, even though it doesn't really involve any kind of back and forth.  In fact, the whole point is to eliminate the back and forth. But whatever.  Is this a good idea?

I suppose institutional pride will prevent the House from agreeing to do this, but at this point I wonder just what they're likely to gain from a conference report? On abortion, the Senate bill is already better less atrocious than the House bill, its mandate penalty is smaller, and its defined benefit packages are more flexible.

The House bill has several advantages of its own, but among the big ticket items the public option is DOA and the others (somewhat wider coverage and more generous Medicaid expansion) would increase the price of the bill and are pretty clearly unacceptable to the centrist bloc in the Senate.  That leaves the funding mechanisms: an excise tax on high-cost healthcare plans and a higher payroll tax on the wealthy in the Senate bill vs. higher income taxes on the wealthy in the House bill.

The excise tax has a sound policy justification, but a big chunk of the liberal constituency dislikes it anyway and I could certainly see a compromise here: raise the limit on the excise tax so it hits only the very richest plans and then combine it with a smaller income tax hike.  Maybe that's worth going to conference for.  But it's hard to see any other substantial improvements that are likely to come out of it.

So: go to conference and risk another month of squabbling and possible defections?  Or take the imperfect Senate bill and get it passed for certain within a few days of returning from recess? Seems like a close call to me, but ping ponging doesn't look like a bad option at this point.

UPDATE: More here on some of the procedural issues.  Turns out that ping pong might be more likely than we think thanks to yet more Republican obstruction.

UPDATE: 2: Austin Frakt points out another drawback of avoiding a conference committee: there would be no chance to fix the Senate's terrible "free rider" employer mandate.

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The Aging of Science

| Mon Dec. 21, 2009 2:57 PM EST

Via Alex Tabarrok, here's sort of an interesting chart showing the age of NIH grant recipients over time.  In a way, it visually understates just how much recipients have gotten older.  In 1970, 61% of grants were given to researchers who were 35 or younger.  In 1980 that fell to 29%, in 1990 to 9%, in 2000 to 4% and in 2007 to 3%. That's a huge drop, and 35 isn't exactly spring chicken age, either.  Make of this what you will.

Tweet!

| Mon Dec. 21, 2009 1:59 PM EST

The latest tweet from @motherjones:

BREAKING: @kdrum embraces Twitter. Follow him immediately. http://bit.ly/59QyTP

Now that's breaking news!  Where's Drudge's red siren when you need it?

But it's true.  I'm giving Twitter a second try.  So far today I've insulted Richard Cohen and dissed partial RSS feeds.  On Saturday I insulted Pat Toomey and the Club for Growth and on Sunday I insulted some people from North Carolina.  Not bad, eh?  I'll never be another Ashton Kutcher, but I imagine I'll end up tweeting a dozen times a day or so.  If you're interested, I'm at http://twitter.com/kdrum.

The Public Option

| Mon Dec. 21, 2009 1:34 PM EST

Earlier this year I sat next to Jane Hamsher on a plane for an hour or so and we chatted about healthcare. No surprise what the main topic was: she was making the case for an uncompromising stand in favor of a public option, and I was arguing that insurance reform and subsidy levels were more central.  Also unsurprisingly, neither one of us changed our mind.

The demise of the public option, combined with the individual mandate, is at the core of the liberal dislike of the current Senate bill.  Jane summarizes the problem here in her list of ten reasons to oppose the bill:

1) Forces you to pay up to 8% of your income to private insurance corporations — whether you want to or not....3) Many will be forced to buy poor-quality insurance they can’t afford to use, with $11,900 in annual out-of-pocket expenses over and above their annual premiums.

This is hard to argue with.  It's one thing to say that big profits for pharmaceutical companies are valuable because they fund future research, but insurance companies? I think Tyler Cowen is the only person I've seen even trying to make a case that private insurance adds anything much to the healthcare pie, and even he didn't make much of a sustained effort.  Insurers are basically just middlemen, and they add virtually nothing to either the quality or availability of healthcare.

But I still think this needs to be unpacked a little.  First: there's nothing wrong per se with taxpayer money going to private companies.  It happens all the time.  And what's the difference between (a) paying money in taxes that then gets paid out to private companies and (b) being required to pay money directly to the same private companies?  Nothing, really.

So the big question isn't whether the individual mandate is inherently offensive, it's whether a public option improves it much.  And this is where I have a hard time accepting the argument that we should go ballistic over its demise.  Here's the CBO on the various factors that would affect the cost of premiums if a public option were part of the healthcare bill:

Those factors would reduce the premiums of private plans in the exchanges to a small degree, but the effect on the average premium in the exchanges would be offset by the higher premium of the public plan itself. On balance, therefore, the provisions regarding a public plan would not have a substantial effect on the average premiums paid in the exchanges.

Roughly speaking, CBO says that less healthy people would probably choose the public option.  This decreases costs in the private sector but increases them in the public. Net overall effect: nada.  It just moves people around a bit.

Now, my own guess is that if the public option were more robust, and grew over time, it would have a larger effect thanks to administrative efficiencies.  But reality being what it is, I doubt that those efficiencies would amount to much more than 5%.  That's about $500 for a $10,000 policy.

That's not nothing, but it's not much, either.  And it's dwarfed by things like the size of the subsidies and future efforts to rein in healthcare costs.  I'd cheer getting rid of insurance companies, but the cost savings from doing so would be a one-time thing that would get eaten up within a couple of years or so.  It's bending the growth curve of healthcare that's more important, and insurance has very little to do with that. It mostly depends on reforming the provider side and the delivery systems, which can happen within either a public or a private system.

So I guess we come back to where we started: I'd love to have a public option in the Senate bill, but the ground-level benefits seem pretty modest. I just can't see deep-sixing the whole package over it.  Better to pass it now and work on tightening the insurance reforms and expanding the subsidies in the future.  And maybe adding a public option someday too.

Chart of the Day: The $14 Trillion Bailout

| Mon Dec. 21, 2009 12:11 PM EST

This comes from Nomi Prins, and it's part of the package of bailout stories in the new issue of the magazine (available at newsstands now!).  Click to see the whole chart, which adds up programs from both the Treasury and the Fed.  The eventual cost to taxpayers of these programs will be less than $14 trillion, of course, but make no mistake: the value to the banking industry was the whole enchilada.  And despite the much ballyhooed repayment of a fraction of the TARP funds, they're still using most of it.

Kamikaze Democrats?

| Mon Dec. 21, 2009 11:58 AM EST

I see a meme developing among conservative-ish opponents of healthcare reform:

Megan McArdle: "Democrats are on a political suicide mission; I'm not a particularly accurate prognosticator, but I think this makes it very likely that in 2010 they will lost several seats in the Senate — enough to make it damn hard to pass any more of their signature legislation — and will lose the house outright."

Sean Trende: "I don't think they're close to finding their Grail.  I think the better analogy is probably that they're close to their Moby Dick. And we all know what happens to Captain Ahab once he finally harpoons his white whale."

Ross Douthat: "Public opinion has turned dramatically against the bill, and every swing-state Democrat who votes for it is courting political suicide."

Sounds grim! And Trende in particular marshals plenty of wonky, district level evidence to support this view. But I'm going to repeat what I said over the weekend: the Feiler Faster thesis is largely true, and healthcare will be mostly forgotten within a few months.  This bill affects a relatively small number of people; the people who are affected are almost all benefitting from it; and nothing much is going to happen until 2014 anyway.  The tea partiers will stay mad, but they weren't going to vote for Democrats in 2010 regardless.  Moderates and independents, I think, will end up voting on other issues.

Which isn't to say that Dems are going to do well in 2010.  The economy still sucks, after all, and there's additional difficult legislation coming down the pike.  What's more, although I doubt that healthcare reform is a suicide run, it's also true that it doesn't really offer enough short-term benefits to give people much reason to vote for Democrats.

Still, I think the effect will be moderate at most.  The big wild card, though, will be the Jane Hamsher wing of the liberal movement.  If, even after healthcare passes, they decide to keep campaigning against it, that could do some real damage. We'll have to wait and see about that, though.

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Quote of the Day: Kamikaze Republicans

| Mon Dec. 21, 2009 11:31 AM EST

From John McCain, on the Senate healthcare bill:

We will fight until the last vote. We must do everything.

Well, OK.  I guess symbolically they feel like they need to do this.  Frankly, though, now that the first procedural vote has been taken and it's obvious that Democrats really do have 60 votes to pass the thing, you'd think Republicans might decide that sitting around the Senate until 2 am every day through Christmas Eve isn't such a great way to make a pointless point after all.  Don't they have families they'd rather be with? Why torture themselves?

The 60-Vote Conundrum

| Sun Dec. 20, 2009 6:30 PM EST

James Fallows wants more public awareness about the modern-day corruption of the filibuster:

In a discussion with Guy Raz this afternoon on Weekend All Things Considered [...] we touched on a point that I think needs to be elevated from a background/insider's issue to absolutely first-tier consideration in mainstream political discourse. It has to do with the distorting and destructive effect of the Senate's modern "60 votes to get anything done" system of operation.

As Fallows notes, this is a topic that's well known among bloggers and political types, but almost completely unknown among the general public.  They still think of filibusters as occasional dramatic events from Mr. Smith Goes to Washington or the civil rights era, not as an institutionalized 60-vote supermajority required for all legislation.

If you want to read more details about this, click the link.  But I assume most of you already know the basic story. So instead, think about this: is it possible to elevate the filibuster into the public discourse?  If so, how?

In one sense, it should be easy: most people don't know about the 60-vote requirement and would instinctively be offended by the idea that you can no longer pass routine legislation with a simple majority.  On the other hand, most people also don't really care.  Plus, one party or the other is always out of power at any given time, so there's always a substantial minority of partisans who are motivated to argue that keeping the majority from running roughshod over everything we hold dear is a sacred principle of the Republic.

So what would it take to get people to care? One answer: a high-profile supporter.  If Sarah Palin suddenly tweeted that the filibuster is a threat to democracy, for example, everyone would start talking about it.  But who else is a plausible candidate for this?  The president, of course, but he's not going to.  Anyone else?

Another answer: a popular, high-profile issue that gets blocked repeatedly by a 40-vote minority. Unfortunately, genuinely popular, high-profile issues generally don't get filibustered.  That's why Supreme Court vacancies are filled pretty quickly but appellate court vacancies aren't.  So it's not clear what issue would fit the bill here.

And a third answer: some kind of fabulously effective grass roots campaign.  That seems pretty unlikely to me, though.  Any other thoughts?

All Hail Pat Toomey

| Sun Dec. 20, 2009 5:29 PM EST

Paul Krugman:

I haven’t seen anyone point this out; but it occurs to me that we all owe thanks to the Club for Growth. If they hadn’t targeted Arlen Specter, he wouldn’t have switched parties, the Democrats wouldn’t have 60 seats, and the world might look very different.

C'mon Paul, you gotta get on the Twitter bandwagon!

Why 2014?

| Sun Dec. 20, 2009 5:11 PM EST

Josh Marshall mentions something about the healthcare bill that bugs me too: why wait to implement it until 2014?

2010 doesn't worry me that much....But why go into 2012 without many of the benefits of the legislation actually going into effect? I tend to think that even a resurgent GOP will probably have a harder time repealing this stuff than people might think. But you could certainly have health care reform repealed in 2013 before much of it even goes into effect.

....I know stuff like this can't just be done on a few months notice. Health care is a huge part of the nation's economy. And you need frameworks of predictability, planning and transition to put such big changes into place. But four or five years seems way, waaay too long.

My impression is that some of the delays are there because it makes the budgetary accounting work better in terms of deficit neutrality. And I know the Dems would likely lose critical support without being able to show that the overall bill actually lowers the deficit. But if that's the main reason, I suspect the legislative authors may be too clever by half since they may be slitting the bill's and perhaps their own throats in the process.

I'm pretty sure the 2014 date is mostly due to budget finagling.  This stuff can't be done overnight, but I'll bet most of it could be implemented within 12 months, and it could certainly be implemented within 24.

So how big a problem is it that nothing is going to happen until 2014 instead?  My first order guess is: not much.  In fact, I think everyone will be surprised at just how fast healthcare reform fades from the public discourse once it's passed.  Climate legislation will takes its place as conservative enemy #1, new celebrity scandals will distract the apolitical, and within a few months everyone not intimately associated with it will barely even remember it happened.  After all, the plain fact is that as important as it is, healthcare reform affects a pretty small chunk of the population either for good (better coverage) or ill (higher taxes).  Around 15-20% tops.

Still, sooner would be better.  It's easier to demagogue healthcare reform as long as the supposed disasters to come are still speculative, and it's easier to keep around the longer it's had to work.  I'm more interested in 2016 than I am in 2010 or 2012, and it would be nice if healthcare reform had had a nice long time by then to start working and really become part of the legislative fabric.  Three years is a short enough time that it could still be in some danger of repeal (or semi-repeal) when1 Republicans regain control of the presidency in 2016.

Overall, though, it's probably not too big a worry.  Conservatives are right about one thing: entitlement programs virtually never get eliminated once they've become law. Plus the last paragraph of this post is pretty compelling.  I'd prefer 2012 to 2014, but I imagine that healthcare reform is pretty safe regardless.2

1Yes, I think they'll win in 2016.

2Assuming it actually passes in the first place, of course.

UPDATE: More here from Austin Frakt on the potential pitfalls awaiting healthcare reform after it passes.