Kevin Drum

Killing Obamacare Halfway Is Worse For Republicans Than They Think

| Fri Feb. 27, 2015 1:39 AM EST

Stuart Butler is probably the country's single most influential right-wing health care wonk. He opposed Obamacare and has long pushed a different, more conservative vision of national health care policy. But Joshua Green writes today that even Butler is worried about what will happen if the Supreme Court abolishes Obamacare subsidies in the 34 states that don't run their own exchanges:

Butler’s worry is grounded in an understanding that voters with skyrocketing premiums may not blame Obama, as Republicans assume. They’ll expect the party hellbent on destroying the law to have a solution—and react badly if none is forthcoming. Because 16 states operate their own exchanges and therefore won’t be affected by the court’s ruling, Butler believes the ACA will stagger on and eventually recover, since voters won’t abide a system wherein some states have affordable, federally subsidized health-care coverage and others do not....“People who believe the ACA instantly goes away are deluding themselves,” he says. “By not doing anything to develop a Republican vision of how to move forward, they could end up with the very nightmare they’re trying to avoid.”

....On the business front, the effects would be no less significant....Entire segments of the health system redesigned their business models to take advantage of the ACA’s incentives. Hospitals, for instance, were given a trade-off: They stopped receiving government payments to offset the cost of treating the uninsured, cuts that amount to $269 billion over a decade. In return, they were promised millions of new patients insured through federal subsidies. “All the major hospital systems and big insurers like Kaiser and Geisinger spent a ton of money adapting to the ACA,” says Butler. If subsidies vanish, “suddenly the market is misaligned. If you’ve hired all these new doctors and health-care workers to cover all these new people walking in the door, and they don’t come, what do you do? You lay them off.”

I agree that a system in which residents of some states get subsidies and others don't is untenable. I don't know quite how the politics would play out, but the states with subsidies won't give them up, and the states without subsidies are likely to face a revolt from residents who suddenly see a benefit taken away. Something will have to give.

The effect on the medical industry is less clear. Yes, hospitals and insurers spent a lot of money adapting to Obamacare. If it goes away, they'll have to lay off some of their staff. But how much? Obamacare has reduced the ranks of the uninsured by about 4 percentage points, and roughly half of that is in states that don't run their own exchanges. So the number of insured would probably fall (very roughly) from about 87 percent to 85 percent. That might be bad news for some small regional outfits, who will see a bigger drop locally than that, but nationally it's not a death sentence.

Still, Butler has a good point. The fallout from the Supreme Court halfway killing Obamacare would likely be more serious than conservatives believe. They don't want to think about this because they've been committed for so long to the mantra of simply repealing Obamacare, full stop. But even their own base, which has been told relentlessly that Obamacare represents the end of the America they love, might start to demand a fix once it becomes clear just what they're missing—and what all those blue states with their own exchanges are getting.

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Scott Walker Blows It Again: Asked About ISIS, All He Has Is Bluster

| Thu Feb. 26, 2015 8:09 PM EST

Over at National Review, conservative blogger Jim Geraghty joins the crowd of pundits who are unimpressed with Scott Walker's recent answers to fairly easy questions:

Wisconsin Gov. Scott Walker received a lot of completely undeserved grief from the national news media in the past weeks. But he may have made a genuine unforced error in one of his remarks today. Asked about ISIS, Walker responded, “If I can take on 100,000 protesters, I can do the same across the globe.”

That is a terrible response. First, taking on a bunch of protesters is not comparably difficult to taking on a Caliphate with sympathizers and terrorists around the globe, and saying so suggests Walker doesn’t quite understand the complexity of the challenge from ISIS and its allied groups.

Let's put aside the question of whether Walker deserves any grief for his weasely comments about evolution and President Obama's love of country. Fair or not, those actually seem like the kinds of questions presidential candidates get asked all the time. If Walker wants to be taken seriously, he should have better responses than he did.

But hey—maybe those really were gotcha questions and Walker should get a pass for answering them badly. ISIS, by contrast, certainly isn't. It's one of the preeminent policy challenges we face, and if you're aiming for the Oval Office you'd better have something substantive to say about it. As Geraghty suggests, generic tough-guy posturing does nothing except show that you're out of your depth.

At a broader level, the problem is that although Walker's anti-union victories are a legitimate part of his appeal and a legitimate part of his campaign story, he's become something of a one-note Johnny about it. His supposed bravery in standing up to union leaders and peaceful middle-class protestors has become his answer to everything. This is going to get old pretty quickly for everyone but a small band of die-hard fans.

Needless to say, it's early days, and Walker's stumbles over the past couple of weeks are unlikely to hurt him much. In fact, it's better to get this stuff out of the way now. It will give Walker an improved sense of what to expect when the campaign really heats up and his answers matter a lot more than they do now.

That said, every candidate for president—Democrat and Republican—should be expected to have a pretty good answer to the ISIS question. No empty posturing. No generic bashing of Obama's policies. No cute evasions. That stuff is all fine as red meat for the campaign trail or as part of a stemwinder at CPAC, but it's not a substitute for explaining what you'd actually do if you were president. Ground troops? More drones? Getting our allies to contribute more? Whatever it is, let's hear it.

The FCC Did a Lot More Than Just Approve Net Neutrality Today

| Thu Feb. 26, 2015 6:04 PM EST

The FCC voted today in favor of strong net neutrality rules, but this is something that's been expected for weeks—and something I've written about before at length. So instead of commenting on that yet again, I want to highlight something else that might be nearly as important:

The Federal Communications Commission will allow some cities and towns to set up and expand municipal Internet services, overruling state laws that had been put in place to block such efforts.

The commission granted petitions by Chattanooga, Tenn., and Wilson, N.C., to overturn laws that restricted the ability of communities in those states to offer broadband service. In all about 20 states have passed such laws. The vote was 3-2 and along party lines. The decisions don’t affect the other states, but they do set a precedent for consideration of similar petitions in the future.

This is a step in the direction of creating more competition for broadband internet, which I think is at least as important as net neutrality regulations. So hooray for this ruling, which is a step in the right direction. And while we're on the subject, it's also worth noting that the FCC's net neutrality decision could end up stimulating more broadband competition too. Why? Because net neutrality depends on regulating broadband providers under Title II of the Telecommunications Act, and this means that companies like Google, which are trying to set up their own high-speed networks, will be able to do it more cheaply. This is from a couple of months ago:

In a letter Tuesday to the FCC, Google’s director of communications law Austin Schlick highlighted a potential positive for the company if Title II kicks in. As a regulated telecom service, Google Fiber would get access to utility poles and other essential infrastructure owned by utilities. The FCC should make sure this happens because it would promote competition and spur more investment and deployment of broadband internet service, Schlick argued.

Cable and telecom companies, like Comcast and AT&T have long had the right to access utility poles and other important infrastructure, such as ducts, conduits and rights of way, he noted. Google Fiber, which competes against these companies, has not had this right and the service has had trouble getting access to some poles as it builds out its fiber-optic network to homes.

....Hooking up homes using poles is about a tenth of the price of digging trenches across streets and sidewalks, according to Reed Hundt, who was FCC chairman in the 1990s. “Pole access is fundamental and Google will never be able to make the case for Google Fiber without pole access,” he said. “If Title II gives Google pole access, then it might really rock the world with broadband access.”

If Google gains pole access, and cities and towns are free to set up their own high-speed networks, then local cable companies will finally start getting real competition in the high-speed internet market. Net neutrality is a big win for consumers, but real competition might be an even bigger win. This is far from a done deal, but things are starting to head in the right direction.

Loretta Lynch Now Likely to Win Confirmation as Attorney General

| Thu Feb. 26, 2015 1:19 PM EST

It looks like Loretta Lynch is likely to be approved as our next Attorney General:

Eight Republicans on the Senate judiciary committee, including chairman Chuck Grassley, opposed Lynch’s confirmation after what Democrats criticised as a record-long delay in appointing the first African American woman to the top law enforcement job in the US.

But Lynch was backed by three moderate Republicans to pass through a committee vote on Thursday, 12-8. She is now likely, over the coming days, to scrape through a vote in the full Senate to succeed current attorney general Eric Holder, who announced his resignation last September.

The three "moderate" Republicans who voted to confirm Lynch were Orrin Hatch, Lindsey Graham, and Jeff Flake. Flake is probably a legitimate moderate, but it's an odd world where Hatch and Graham are on that list too. In today's GOP, though, they really are moderates. That tells you most of what you need to know about the state of national politics these days.

Immigration Fight Is a Loser Because Republican Hearts Aren't Really Into It

| Thu Feb. 26, 2015 1:06 PM EST

Our story so far: Last year President Obama announced a series of executive actions on immigration. Conservatives went ballistic and threatened to refuse to pass a budget—thus shutting down the government—unless the budget defunded the immigration plan. They eventually gave in on that, but only because they were promised a second bite at the apple. The resulting compromise funded every department except the Department of Homeland Security, which was given only short-term funding. That now has to be reauthorized, and this time around conservatives are threatening to refuse to pass a DHS budget—thus shutting down the department—unless it defunds the immigration plan.

But Democrats have been unified in refusing to approve a budget that defunds the immigration plan, and now Republicans are stuck. Shutting down DHS would be a PR disaster, and they haven't really managed to get the public riled up about Obama's immigration plan. Why not? Dave Weigel reports that the problem is simple. Their hearts aren't really in it:

"Republicans have not done a particularly effective job of communicating what they want here," said Ira Mehlman, FAIR's national media director. "They let the president get out there first and explain his position with public events. I don’t understand why they haven’t turned the tables on the president and capitalized. It is baffling."

And it's less than conservatives did in a comparable standoff, the summer 2013 fight over whether or not to fund the implementation of the Affordable Care Act. Initially, Republican leaders in the House had wanted to split the defunding from the must-pass appropriations bill. They were denied the votes for that from the GOP conference. At the same time, the conservative Heritage Action was hosting town halls around the country, putting pressure on Republicans to kill the ACA. Some members of the Senate, most famously Texas Senator Ted Cruz, joined them.

There have been no comparable Heritage Action rallies in the weekends or recesses of 2015. "This fight was set up by leadership when they opted for the cromnibus strategy," explained Heritage Action president Michael Needham in an email, "and it is a fight nearly every Republican promised their constituents both on the campaign trail and then again in December. In other words, it has been set up for months on the ground they chose."

Heritage Action will key-vote the DHS bill, knuckle-rapping the Republicans who don't go all the way to de-fund the executive orders. But it has not organized opposition to a "clean bill." Neither, really, has [Ted] Cruz. He spent very little of last week's recess talking about the coming DHS fight.

So what happens next? Perhaps Republicans allow DHS to be shut down for a symbolic few days and then allow a vote on a clean funding bill that will pass the House with a few Republican votes and a lot of Democratic votes. Because basically most of them don't really care.

As well they shouldn't. The truth is that they shot themselves in the foot from the very start by going ballistic over Obama's actions. The thing is, Obama didn't really do all that much. Before he acted, we had 11 million undocumented immigrants who weren't going to be deported. Afterward, we had 11 million undocumented immigrants who weren't going to be deported—but would be given temporary documentation that officially protected them from the deportation that wasn't going to happen anyway. Conservatives could have just grumbled and let it go, but instead they gave Obama a huge win by making it seem as if his actions were a major victory in the immigration wars. It's been a boon for both Obama and the Democratic Party, and huge headache for the Republican Party.

It's too late now to back away from the relentless claims that Obama has acted like a lawless, Constitution-shredding tyrant over immigration, but Republicans have to figure out something. The public might or might not approve of how Obama implemented his reforms, but they're fine with the reforms themselves. Aside from a few tea party dead enders, there's just no widespread outrage to tap into.

So instead of spending their first few months in control of Congress doing something, Republicans are fighting dumb battles that Obama has suckered them into. The faster they get out from under that rock, the better off they'll be.

Supreme Court Opens a Crack in Fight Against Occupational Licensing Restrictions

| Thu Feb. 26, 2015 12:13 PM EST

This is not a topic that I've spent a lot of time on, but for several years there's been an interesting coalition of liberals and libertarian-minded conservatives who are opposed to the relentless increase of licensing regulations in occupations like hair dressing and interior decoration. Their complaint is that these requirements are mostly just attempts by the industries themselves to increase barriers to entry and thus increase the prices they can charge.

For example, why should you have to pay a dentist for a tooth-whitening procedure? That doesn't require years of schooling and it could be done perfectly well by a technician with less training and a lower price tag. Yesterday the Supreme Court kinda sorta agreed:

The Supreme Court on Wednesday effectively rejected North Carolina’s tight control over the lucrative teeth-whitening business.

In a divided decision that polishes up the court’s free market credentials, six justices agreed the Federal Trade Commission can charge the dentist-dominated North Carolina State Board of Dental Examiners with “anticompetitive and unfair” actions....The court’s 6-3 decision did not, by itself, explicitly strike down the North Carolina teeth-whitening regulations that restrict the work to dentists. The decision does, though, reject the North Carolina board’s argument that it enjoyed immunity from the Federal Trade Commission filing charges.

....North Carolina dentists began teeth-whitening services in the 1990s. By 2003, non-dentist providers began offering the same service in spas and salons. They charged less, prompting dentists to complain to the state board, which subsequently issued cease-and-desist orders to the non-dentists.

This is a small step, but potentially an important crack in the door. All it says is that the FTC can file antitrust charges if it wants to, which obviously depends a lot on who happens to be appointing FTC commissioners at any given moment. It's also limited to industry licensing boards that aren't "actively supervised" by the state. In the North Carolina case, "the board is funded by industry fees rather than taxpayer dollars, and six of the eight members are dentists selected by industry representatives." That was enough for the Supreme Court to decide that state supervision was basically a sham.

So it's a narrow ruling. But it has some potential to lead to a loosening of occupational licensing restrictions in the future. It's worth keeping an eye on.

UPDATE: I just read my morning paper over breakfast (yes, I'm a dinosaur), and David Savage has a piece about this in the LA Times that explains the issues pretty well. It's better than the McClatchy piece above. Click here to read it.

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Chart of the Day: Inflation Continues to Fall Short of Weimar Germany Levels

| Thu Feb. 26, 2015 11:51 AM EST

The BLS released its January inflation report today, and guess what? Hyperinflation continues to be kept at bay. In fact, the CPI didn't just stay at a low level in January, it was actually negative. Compared to a month ago, prices dropped 0.7 percent. Compared to a year ago, prices dropped 0.1 percent (blue line in chart below):

This will cause Paul Krugman to dance another victory jig, but the number the Fed really cares about is core inflation, which excludes food and energy (red line in the chart). This is because food and energy tend to be volatile, which makes them unreliable guides to the long-term trajectory of inflation. The core rate is a better predictor of that. But the news is good here too: Core inflation remained low and stable, increasing only 1.6 percent compared to a year ago.

According to the BLS, gasoline was "overwhelmingly" the cause of the sharp decline in the overall CPI, and it's unlikely that this will continue. Gasoline prices have probably fallen about as much as they can, and over the next year will remain stable or perhaps rise a bit. But there's no telling for sure because energy prices are volatile. That's the whole point of focusing on core inflation.

In any case, as you can see, core inflation has remained below the Fed's 2 percent target for quite a while. Two years, in fact. This is why Krugman and many others are urging the Fed to hold off on raising interest rates. The labor market still has some slack, and there's simply no sign of inflation on the horizon—and when there is, there will be plenty of time to act. After all, if the Fed can tolerate two years of inflation below their target, they can tolerate a year or two of inflation above their target. What's more, there's no risk here. The Fed knows perfectly well how to get inflation down if and when it gets above target for a sustained period.

In other news, wages are up a bit:

Real average hourly earnings for production and nonsupervisory employees rose 1.3 percent from December to January, seasonally adjusted. This result stems from a 0.3 percent increase in average hourly earnings combined with a 0.9 percent decrease in the Consumer Price Index for Urban Wage Earners and Clerical Workers.

That's nice, but note that it's mainly an artifact of negative inflation. If you think of core inflation as the better measure of long-term price levels, wages are up only slightly. That's better than nothing, of course, but still nowhere near a sign of dangerous tightness in the labor market.

Bottom line: Inflation continues to be well controlled. There's no need to give up on loose monetary policy yet. Let's wait until the labor market looks like it's really picking up again.

I Want to Hear the Republican Plan For Fighting ISIS

| Wed Feb. 25, 2015 5:12 PM EST

The drumbeat for President Obama to "do something" to fight ISIS is growing louder every day among prospective Republican presidential candidates. It's all a bit weird, since Obama rather plainly is doing something, as interviewers repeatedly point out whenever the subject comes up. But no matter. It's a good sound bite, and in any case, whatever Obama is doing, Republicans insist they want to do more. Today, Paul Waldman points out that all these presidential wannabes are just reflecting what the Republican base wants to hear:

Four months ago, 57 percent of Republicans thought we should use ground troops to fight ISIS in Iraq and Syria; that number has now gone up to 67 percent. Among the conservative Republicans who will dominate the primary contests, it’s even higher, at 71 percent. When Pew asked respondents to choose between “using overwhelming military force is the best way to defeat terrorism around the world” and “relying too much on military force to defeat terrorism creates hatred that leads to more terrorism,” last October 57 percent of Republicans chose the overwhelming military force option; that number is now 74 percent.

I don't suppose that most voters have really thought this through in much detail, but I wonder just how far they really want to go. The ISIS stronghold of Mosul, for example, is about five times the size of Fallujah, and probably has about 3-4 times as many ISIS defenders as Fallujah had Sunni insurgents back in 2004. And Fallujah was a huge battle. It took more than a year to retake the city; required something like 15,000 coalition troops in all; and resulted in more than a hundred coalition deaths.

At a first guess, a full-scale assault on Mosul would likely require at least 2-3 times as many troops and result in several hundred American deaths. And Mosul is only a fraction of the territory ISIS controls. It's a big fraction, but still a fraction.

So this is what I want to hear from Republican critics of Obama's ISIS strategy. I agree with them that training Iraqi troops and relying on them to fight ISIS isn't all that promising. But the alternative is likely to be something like 30-50,000 troops committed to a battle that will result in hundreds of American casualties. Are Jeb Bush and Marco Rubio and Ted Cruz willing to own up to that? If they are, then good for them and we'll let the American public decide who's got the better strategy. But if they're not, then it's all just a con job for the rubes. The GOP candidates are screaming for "more," but not willing to acknowledge what "more" really means.

Let's hear it, folks. When you say "more," what do you really have in mind? Candidates for president shouldn't be allowed to get away with nothing more than vague grumbles and hazy bellicosity any longer. Let's hear the plan.

Health Update

| Wed Feb. 25, 2015 3:28 PM EST

This is not of interest to most of you, but I do get emails and queries fairly frequently, so I figure I ought to share once in a while. The big picture summary is that nothing serious is wrong; a biopsy is scheduled for Friday; and I've been officially enrolled in the second stage of chemo treatment (the stem cell transplant). For those who want to know more, additional detail and miscellaneous griping is below the fold.

Eat What You Want, But Eat Fresh

| Wed Feb. 25, 2015 1:46 PM EST

This is interesting. Yesterday I wrote a post suggesting that we should all try to eat more fresh food and less processed food, but that otherwise it didn't matter much what kind of diet you followed. (Within reason, of course.) This was based solely on my intermittent reading of food research over the years, not on a specific rigorous study. Today, however, fellow MoJoer Tom Philpott tells me that there is indeed a rigorous study that backs this up:

Over the past decade, there has been a bounty of research on the ill effects of highly processed food. And when Yale medical researchers David Katz and Samuel Meller surveyed the scientific dietary literature for a paper in 2013, they found that a "diet of minimally processed foods close to nature, predominantly plants, is decisively associated with health promotion and disease prevention."

Interestingly, Katz and Meller found that as long as you stick to the "minimally processed" bit, it doesn't much matter which diet you follow: low-fat, vegetarian, and Mediterranean have all shown good results. Even the meat-centered "paleo" approach does okay. The authors conclude the "aggregation of evidence" supports meat eating, as long as the "animal foods are themselves the products, directly or ultimately, of pure plant foods—the composition of animal flesh and milk is as much influenced by diet as we are." That's likely because cows fed on grass deliver meat and milk with a healthier fat profile than their industrially raised peers.

Now, Tom is optimistic that processed food is losing its allure as Americans migrate more and more to fresh foods. I can't say that I share this optimism, but I hope he's right. There's nothing wrong with a potato chip or a can of soup here and there (everything in moderation!), but a steady diet of processed food really is something worth avoiding.