Kevin Drum - March 2010

Plumbing Ever Further Depths

| Tue Mar. 23, 2010 11:42 PM EDT

Just when I thought Republicans had plumbed the final depths of playground-level obstruction, they somehow manage to take things to yet another level. There is, it turns out, a rule stating that Senate hearings can't go past 2 pm unless there's unanimous consent to continue them. This consent was routine until this week. Amanda Terkel reports:

Today, during a Senate Homeland Security Subcommittee hearing on transparency, Sen. Tom Carper (D-DE) announced that he had to stop the proceedings because of Republican blocks....The AP also reported today that Sen. Mark Udall (D-CO) had a hearing on the bark beetle canceled today “after Republicans angry over the passage of health insurance reform legislation blocked it by using an obscure Senate rule requiring a unanimous consent to hold hearings scheduled after 2 p.m.”

What's next? Complaints on Fox that Democrats are using all the good hangars in the cloakroom? A refusal to come to order until Spongebob is over? To call this behavior childish would be an insult to children everywhere. Are we really expected to take a party like this seriously?

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To Repeal or Not to Repeal

| Tue Mar. 23, 2010 5:47 PM EDT

A bunch of Republicans have already hopped on the bandwagon to cosponsor a bill to repeal healthcare reform, but if you look beyond the headlines the tide may be turning a bit on that front:

Mitch McConnell: Republicans are moving quickly from “repeal” the health care legislation to “repeal and replace” the measure President Obama signed into law Tuesday. Meeting with reporters after a private party strategy meeting, Senator Mitch McConnell of Kentucky, the Republican leader, took pains to say that Republicans will push not only to overturn the law, but that they intend to replace it with something else.

Scott Brown: Brown is keeping his options open in the wake of a Republican defeat...."I think that's a little premature," he said, when asked whether he would try to repeal the legislation. "I want to see what's going to be in play."

John Cornyn: "There is non-controversial stuff here like the preexisting conditions exclusion and those sorts of things," the Texas Republican said. "Now we are not interested in repealing that. And that is frankly a distraction."

Methinks Republicans are going to get tied up in knots pretty quickly over this. Democrats are obviously going to try to tar everyone opposed to the bill as opposed to every provision of the bill, and aside from the Jim DeMints of the world that's not something most Republicans will welcome. So they'll have to take a more defensive, nuanced stand, and that's a dangerous place to be. (Just ask any Democrat.) Which provisions do you want to keep? Which ones to you want to jettison? You need to keep the goodies if you don't want to piss off various interest groups and you need to keep the cost cutting measures if you don't want to be accused of fiscal profligacy. That might not leave a whole lot: maybe the individual mandate and some taxes. (If you remember that Kaiser poll from last January, even among Republicans there aren't very many other provisions that poll especially badly.) And neither of those is all that attractive either. Going after the individual mandate sends you down an endless rabbit hole of minutiae, and going after the taxes without also going after the popular stuff makes it hard to demagogue the deficit.

Now, I'm sure they'll figure this stuff out. A good tub thumping speech can mask a multitude of sins. But it's going to be harder than they think, while defending the bill is going to be easier than they hope. The shoes are on opposite feet all of a sudden.

Chart of the Day: Healthcare

| Tue Mar. 23, 2010 3:39 PM EDT

What a difference a victory makes. Now that healthcare reform has actually passed, public reaction has improved considerably. In a Gallup poll taken on Monday, 50% of the public is happy about its passage compared to 42% who aren't. In a direct question about whether passage of the bill was "a good thing or a bad thing," the response was 49%-40% calling it a good thing.

This shouldn't surprise anyone: support for the bill was always higher than most polls showed because the "opposition" included a lot of lefties whose objection was that the bill didn't go far enough. And of course, support for the bill also generally improved once people found out what was actually in it, something that happened a lot on Monday. My guess is that these numbers aren't going to change a lot over the next few months, but if Democrats play their cards right they could still improve a bit, especially among independents. And that might make November a lot less messy than it could have been.

Christiane Amanpour and "This Week"

| Tue Mar. 23, 2010 3:13 PM EDT

This really is a bizarre rant by Tom Shales today against the choice of Christiane Amanpour to take over hosting duties on ABC's This Week. If Shales doesn't like Amanpour, that's fine. It's a free country. But a harsh attack ("it was a bad choice...considering how many others deserve it more than she does") requires a strong argument, and Shales' boils down to this:

  • Amanpour is a foreign affairs specialist, not someone who does "domestic politics and inside-the-Beltway palaver."
  • Some supporters of Israel think she isn't deferential enough toward Israel.
  • Conservatives think she's liberally biased.
  • ABC News insiders are unhappy that an outsider got the This Week job.

There's not much meat here. Insiders are always unhappy when an outsider gets a plum job. There are ideologues with an axe to grind against everyone. And perhaps This Week could do with a little more substance and a little less "inside-the-Beltway palaver"?

(And not to put this too finely, but it's not really as hard as Shales might think to bone up on domestic politics. It's not that complicated.)

Anyway, strange stuff. I don't know if I would have picked Amanpour either, but if I were arguing against it I'd at least try to come up with some colorable criticisms. This is just junior high school stuff.

Leverage and Financial Reform

| Tue Mar. 23, 2010 2:39 PM EDT

I haven't written too much yet about Chris Dodd's financial reform bill. There are two reasons for this. First, healthcare has been front and center for the past week and I just didn't want to spare the time to really dig into it. Second, based on what I read, I was pretty depressed about the whole thing.

But healthcare is (pretty much) a done deal now, so what about financial reform? Is Dodd's bill as bad as I thought? My tentative answer is yes even though it has some good things in it: a Consumer Financial Protection Bureau that has a reasonable amount of power and independence; regulation of derivatives; resolution authority for large banks; and streamlined bank supervision. None of these are as strong as they should be, but they're better than nothing.

But frankly, the whole thing is hardly worth doing unless it also contains some broad, deep, and mandatory limits on leverage. And as near as I can tell, that's almost entirely missing from the bill. Here's the summary description of the part of the bill that comes closest:

The Financial Stability Oversight Council

Expert Members: A 9 member council of federal financial regulators and an independent member will be Chaired by the Treasury Secretary and made up of regulators including: Federal Reserve Board, SEC, CFTC, OCC, FDIC, FHFA, the new Consumer Financial Protection Bureau. The council will have the sole job to identify and respond to emerging risks throughout the financial system.

Tough to Get Too Big: Makes recommendations to the Federal Reserve for increasingly strict rules for capital, leverage, liquidity, risk management and other requirements as companies grow in size and complexity, with significant requirements on companies that pose risks to the financial system.

Regulates Nonbank Financial Companies: Authorized to require, with a 2/3 vote, nonbank financial companies that would pose a risk to the financial stability of the US if they failed be regulated by the Federal Reserve. With this provision the next AIG would be regulated by the Federal Reserve.

Unless I'm badly mistaken — which is always a possibility — this is nearly meaningless. We get a new board that will "identify and respond" to systemic risk. They will "make recommendations" for higher capital requirements for big banks. And nonbank companies are left completely out of the picture unless two-thirds (!) of the board votes to put them under Fed regulation — which wouldn't necessarily lead to more stringent capital and leverage requirements anyway.

This is, I guess, not completely worthless. But it sure sounds pretty close. So here's a bleg for all the dedicated financial bloggers out there: am I wrong? Do these provisions have more teeth than I think? Or is leverage, for all intents and purposes, pretty much brushed under the carpet in Dodd's bill?

Republicans and the Axis

| Tue Mar. 23, 2010 1:27 PM EDT

Jonathan Bernstein on whether Republicans are really going to base this fall's campaign on repeal of healthcare reform:

Will they explicitly call for repeal? My guess is [they] will feel heavy pressure (self-inflicted or otherwise) to follow whatever Rush & Co. say, and there's certainly competition among the talk show hosts to be the most rejectionist at all. And in a campaign context, it's even easier to call for repeal, followed by passing simple common sense steps to eliminate pre-existing conditions, etc. than it was in a legislative context; there's no threat of them having to submit an actual proposal, or having it scored by CBO. Certainly, Republican activists and primary voters believe that the new law is incredibly unpopular (and will probably continue to believe that regardless of polling), and so they will not believe that a "repeal" position is dangerous in a general election. So, all in all, I do think the odds are good that many GOP candidates will run on repeal in 2010, and probably in the 2012 presidential nomination process as well.

I pretty much agree. Not only are Republicans genuinely opposed to the bill, but Jonathan is right about the effect of Fox and talk radio egging them on. And I wouldn't be surprised if that produces a backlash. It's one thing to campaign against the bill — it might even be a winning strategy among right and center-right voters — but the Drudge/Fox/Rush axis is going to force conservative candidates into ever shriller and more baroque denunciations (see, for example, Mitt Romney claiming that "President Obama has betrayed his oath to the nation"), and that might not wear so well even out in the fabled heartland. That's especially true when it turns out that the fabric of the nation doesn't collapse the way it was supposed to on the day after the bill was signed.

Generally speaking, the D/F/R axis isn't that visible outside its direct audience. That's a good thing for Republicans since the stuff they spout really doesn't go over well with anyone outside the true believer base. But if Republican candidates feel like they have to toe the axis line, suddenly it's going to be a lot more visible — and it might turn off a lot of people. We'll see.

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Healthcare and the Supreme Court

| Tue Mar. 23, 2010 11:39 AM EDT

A reader writes:

Of all the potential legal challenges to HCR out there, Ken Cuccinelli's planned lawsuit seems to me to potentially be the most viable. Assuming this issue gets to the U.S. Supreme Court, I wouldn't be a bit surprised if the (Republican majority) Roberts Court agreed with Cuccinelli. If that happens, what, exactly, is the Democrats' back-up plan?

I'm not sure what the best response to this is. Cuccinelli's suit argues that the individual mandate in the healthcare bill is unconstitutional: “We contend that if a person decides not to buy health insurance, that person — by definition — is not engaging in commerce, and therefore, is not subject to a federal mandate.” The argument here is that if it's not commerce, then it's not interstate commerce. And if it's not interstate commerce, then Congress has no constitutional authority to regulate it.

I'm not a lawyer, but this seems like the ultimate Hail Mary to me. There's longstanding precedent — hated by conservatives, but only slightly rolled back even by the Rehnquist court — that the interstate commerce clause gives Congress extremely wide power to regulate activity that affects interstate commerce in almost any way, and there's simply no question that the individual mandate is inextricably tied up with interstate commerce. The insurance industry and the medical industry are practically textbook definitions of interstate enterprises, and allowing healthy people to opt out of healthcare coverage has a very direct effect on that business. Frankly, even for an activist conservative court, this seems like a pretty open-and-shut case.

What's more, the penalties for not buying insurance are tax penalties, and if anything, Congress has even wider scope in the tax area than in the commerce area. The Supreme Court has frequently ruled that Congress can pass tax laws that essentially force people to do things that Congress doesn't have the direct power to require.

Bottom line, then: I'm not sure Democrats need a Plan B. But here's the thing: if the Supreme Court decided to overturn decades of precedent and strike down the mandate even though Kevin Drum says they shouldn't (hard to imagine, I know), the insurance industry will go ballistic. If they're required to cover all comers, even those with expensive pre-existing conditions, then they have to have a mandate in order to get all the healthy people into the insurance pool too. So they would argue very persuasively that unless Congress figures out a fix, they'll drive private insurers out of business in short order. And that, in turn, will almost certainly be enough incentive for both Democrats and Republicans to find a way to enforce a mandate by other means. If necessary, there are ways to rewrite the rules so that people aren't literally required to get insurance, but are incentivized so strongly that nearly everyone will do it. As an example, Congress might pass a law making state Medicaid funding dependent on states passing laws requiring residents to buy insurance. Dependent funding is something Congress does routinely, and states don't have any constitutional issues when it comes to requiring residents to buy insurance. They all do it with auto insurance and Massachusetts does it with health insurance. Or, via Ezra Klein, Congress could do something like this. There are plenty of possibilities.

So I don't think this is a big problem. It's basically a campaign issue for Republicans, who want to demonstrate to their base that they're fighting like hell against healthcare reform. It helps keep the issue alive and it helps keep the tea partiers engaged. It's sort of in the same league as their eternal promises to support a constitutional amendment to ban abortion. It's a crowd pleaser, but there's really no chance of ever pulling it off.

Republicans Lose Again

| Tue Mar. 23, 2010 1:53 AM EDT

So how is that Republican challenge to the healthcare reconciliation rider going? The one that says it violates reconciliation rules because it affects Social Security? Not so well:

Senate Republicans Monday afternoon argued to [Senate Parliamentarian Alan] Frumin that a provision of the reconciliation package approved by the House violated Section 310g of the Budget Act....Frumin heard arguments from Democratic and GOP Senate staff, and he ultimately ruled in favor of the Democrats. The Republicans argued that a provision dealing with the excise tax on “Cadillac” insurance plans impacted Social Security. The Budget Act does not permit reconciliation legislation to affect Social Security.

....“One down, many more to go,” a GOP aide said Monday evening.

That was quick. Republicans may have "many more to go," but if they're all as laughable as this one they'd better get used to rejection.

Getting to Yes on Climate Change

| Tue Mar. 23, 2010 1:14 AM EDT

In an open letter to Sens. Kerry, Graham, and Lieberman, Dave Roberts notes that putting a price on carbon has obviously run into a lot of resistance. But carbon pricing is essential to any serious effort to reduce carbon emissions. So how do we thread this needle?

There is a way. It begins by changing the way we think about carbon pricing. For at least the next five to ten years, no politically palatable price on carbon is going to serve as a primary driver of change. Anything that can pass simply won't be high enough and its effects will be too diffuse. The main goal with your bill should be to establish a framework whereby a carbon price is implemented and steadily raised. The initial price can be low — low enough to avoid the kind of political backlash that has poisoned previous efforts — and phase in over time so affected industries have time to prepare. At least in the short term, we should think of carbon pricing as a funding mechanism for clean energy policies. It's a form of responsible budgeting, nothing more, nothing less.

....In exchange for reducing the role of carbon pricing, you should push to strengthen and expand the clean energy and efficiency provisions in your bill. Without a substantial price on carbon those policies will have to be that much more robust if they are to meet the goal President Obama promised in Copenhagen: 17 percent from 2005 levels by 2020.

Actually, this isn't really an "exchange." It's more like two pieces of a puzzle fitting neatly together.

The price of carbon created by a cap depends on how much carbon emitters are required to cut. If they have to cut a lot, the price is high. If they only have to cut a little, the price is low. And as many, many people have pointed out already, there's a lot of low-hanging fruit available on the carbon front. This stuff is mostly within the realm of the efficiency and clean energy provisions that Dave talks about, and it has a lot of potential to reduce carbon considerably all on its own. If these provisions are implemented, a carbon cap would most likely require only a small additional carbon reduction, which means that a cap that moved steadily toward a 17% reduction over the next decade would probably produce a pretty modest price for carbon. It's only in the decade after that, when the cuts become larger, that the declining cap would start to produce a really significant carbon price.

Of course, this all depends on those other provisions having some teeth, but that's quite doable: the public generally favors efficiency and clean energy standards, so toughening those up would be relatively popular and would help keep the price of carbon modest. If the revenue generated by the cap is used to fund those efficiency and clean energy programs, and if it's sold as both a climate measure and a national security measure, it could be a pretty popular piece of legislation.

Now, this might all be pie in the sky. If Republicans keep up their united front of objecting to anything and everything that Democrats propose no matter what, it doesn't really matter what a hypothetical climate bill looks like. But if they don't, Dave's suggestion has a lot of merit. Read the whole thing for more details.