Where's the Conservative Healthcare Plan?

The Wall Street Journal is unhappy with President Obama's support for allowing states to opt out of his healthcare reform law in 2014 rather than 2017. Why? Because to do so, states would have to come up with a plan that offered similar coverage and benefits to PPACA:

So perhaps states could opt out of some consumer or employer mandates, which is a minor release valve. But they would still need to find other mechanisms to achieve the same liberal priorities, which in practice leaves little room to innovate—especially for a straight tax deduction or credit to purchase individual coverage or alternative insurance designs like high-deductible or value-based plans. That's why Democrats had nothing to fear from adding such a provision originally. The Wyden-Brown bill merely moves it forward by three years, to 2014.

The reality is that the liberals who wrote this bill really do think they have a monopoly on good ideas, and they do not include markets. Democrats are more than happy to give the states more freedom, as long as the states use it to impose comparable government control.

Italics mine. If this is the state of the art in conservative thinking, then yes: apparently liberals really do have a monopoly on good ideas in the healthcare arena. As Jon Cohn points out, PPACA does, in fact, allow states to offer high-deductible plans. The table on the right is from the Lewin Group, and it outlines the typical coverage offered by a "Bronze" level plan under PPACA. It's pretty stingy! The deductible for a family is $5,000, the maximum out-of-pocket expense is $11,900, and the "actuarial value" — i.e., the percentage of total medical costs covered by the plan — is only 60%. If conservatives can't come up with a plan that competes with those targets, it means conservatives don't have a plan.

Of course, states would also be required to offer subsidies to low-income residents, and the amount of those subsidies is based on the price of "Silver" level plans. But that's only slightly better, offering an actuarial value of 70%. These just aren't high bars to meet.

If conservatives don't want to make health coverage widely available, they should just say so without the shilly-shallying. But if they do want to make it available — and in public, anyway, that's what they claim — the requirements of PPACA represent the bare minimum of what you can call "coverage" and still keep a straight face. If conservatives really believe they have a better way, PPACA provides both the funding and the minimal requirements to allow them to prove it. They should get busy doing so instead of spending their time inventing feeble excuses. 

A Day Without a Mexican

Texas state Rep. Debbie "Terror Babies" Riddle has introduced a new bill that would make it a serious crime to hire an illegal immigrant. But her bill allows one exception:

Under the House Bill 2012 introduced by a tea party favorite state Rep. Debbie Riddle — who's been saying for some time that she'd like to see Texas institute an Arizona-style immigration law — hiring an undocumented maid, caretaker, lawnworker or any type of houseworker would be allowed. Why? As Texas state Rep. Aaron Pena, also a Republican, told CNN, without the exemption, "a large segment of the Texas population" would wind up in prison if the bill became law.

"When it comes to household employees or yard workers it is extremely common for Texans to hire people who are likely undocumented workers," Pena told the news giant. "It is so common it is overlooked."

No, this is not from the Onion. It's from a Texas Republican. Though it's getting harder and harder to tell the difference these days.

Defending the Indefensible

Good for Joe Klein for pointing out the lunacy of the Republican effort to defund the financial regulation reform bill passed last year:

The Dodd-Frank law was an imperfect remedy....But it did boost the power of the SEC and CFTC to regulate derivatives trading, and it set up a new agency, the Consumer Financial Protection Bureau (CFPB), to protect consumers from the shyster army peddling tricky mortgages, usurious credit-card rates and unscrupulous payday-check-cashing shops. The agencies need larger payrolls to perform those functions, and the Republican House has now stripped much of that money from the federal budget. "It's a back-alley maneuver," says Representative Barney Frank, whose name is on the law. "Unlike health care or environmental regulation, the Republicans didn't try a frontal assault. They hid behind the budget, which means that they're embarrassed by this. They don't want people to know that they're letting Wall Street off the hook."

....And then there's the question of Elizabeth Warren, the Harvard law professor who invented the idea of the Consumer Financial Protection Bureau and should be its first director. The Administration seems undecided on whether to appoint her, fearing a Senate confirmation battle that could last for months. "The banks are scared to death of her," one Senator told me. "She speaks in clear, simple sentences. That terrifies them."

Which means this is a fight worth having — and a way to dramatize the complicated issues at the heart of regulatory reform. The President should appoint Warren. The Senate should be forced to vote on her, so the public will know who really wants to clean up Wall Street and who doesn't.

No, Dodd-Frank wasn't perfect. In fact, that's being rather too nice about the whole thing. But it was at least a step in the right direction following an unprecedented meltdown of the global economy caused almost entirely by the misbehavior of the American financial industry.

One of the themes of Jacob Hacker and Paul Pierson's Winner Take All Politicsavailable soon in paperback! — is that income distribution is far more influenced by politics than most economists think. One of the reasons I was so enthusiastic about the book is that it mirrors my own views, which have become rather more radicalized over the past three years. Think about it: during the aughts the financial industry was so wildly out of control that Wall Street touched off the biggest financial collapse and biggest global recession since World War II — a recession that's required unprecedented government intervention to stabilize; featured massive bailouts of the banking industry; and has caused widespread misery among the working and middle classes, including an epidemic of home foreclosures, plummeting state-level services, and an unemployment rate that's still near double digits more than two years later. And yet, Republicans were not only united in trying to prevent any action whatsoever to re-regulate Wall Street last year, they're making it one of their top priorities this year to defund the very modest bit of regulation that was passed over their near-unanimous opposition.

I don't know how you can watch all this unfold and not conclude that the super rich and their interests are all but politically invulnerable in America these days. It's both wrong and dangerous, and more of us should be pushing the public's nose in it. The whole thing is obscene.

What the People Want

A new NBC/WSJ poll tells us that Democrats, if they could manage to agree on a halfway coherent message, most likely hold all the cards in a budget showdown:

The survey [...] listed 26 different ways to reduce the federal budget deficit. The most popular: placing a surtax on federal income taxes for those who make more than $1 million per year (81 percent said that was acceptable), eliminating spending on earmarks (78 percent), eliminating funding for weapons systems the Defense Department says aren’t necessary (76 percent) and eliminating tax credits for the oil and gas industries (74 percent).

The least popular: cutting funding for Medicaid, the federal government health-care program for the poor (32 percent said that was acceptable); cutting funding for Medicare, the federal government health-care program for seniors (23 percent); cutting funding for K-12 education (22 percent); and cutting funding for Social Security (22 percent).

Those numbers, GOP pollster McInturff says, “serve as a huge flashing yellow sign to Republicans ... if they are going to start to talk about changes to Medicare and Social Security.”

Roger that. The tea party might have different priorities, but the tea party is still a pretty small part of America no matter how loudly they yell or how much attention the media pays to them. Out in real America, people want to tax the rich, cut stupid weapons programs, and stop subsidizing prosperous oil companies. They don't want to cut Medicare, Medicaid, Social Security, or education.

Quote of the Day: Huckabee on Healthcare

From Mike Huckabee, explaining why he's putting off a decision to run for president:

If I run, I walk away from a pretty good income. I don’t want to walk away any sooner than I have to because frankly, I don’t have a lot of reserve built up....One thing I committed to myself, to my wife and God, was that if I do this I’m hopefully going to be in a position that I’m not so completely destitute at the end of it, that I have no idea what to do if I get sick.

Yep, it's a drag that destitute people in America have big problems if they get sick. Perhaps this is something Huckabee should have an interest in fixing?

Yawning Along With the GAO

One of the problems with the GAO's report on government inefficiency is that the vast bulk of it is just eye-glazing stuff. It's all about coordinating this, doing better data collection on that, calculating ROI for something else, and performing better oversight on yet another thing. Yawn. What's more, some of the most interesting big ticket items are already being addressed. Take improper payments. GAO estimates that the federal government pays out a whopping $125 billion per year that it shouldn't. Here's a chart:

There's no question this is real money. But President Obama has already issued a series of orders aimed at reducing improper payments, and last year Congress passed the Improper Payments Elimination and Recovery Act, designed to "to enhance reporting and recouping of improper payments." The goal is to reduce that $125 billion figure by $50 billion over the next two years.

So that's already on the docket. Among other big ticket items that I've picked out of the report, tax expenditures are probably off the table because Republicans won't vote for anything that Grover Norquist defines as a tax increase; ethanol subsidies are probably off the table because small farm states control the U.S. Senate; IRS efficiencies are probably off the table because Republicans don't want the IRS to be more efficient at collecting taxes from rich people; and negotiating better prices for VA/DOD prescription drugs probably won't go anywhere because Republicans are already on record as believing that it's unfair for the U.S. government to reduce pharmaceutical industry profits.

There's other stuff in the report that I haven't gotten to yet. The entire Pentagon procurement section, for example. But aside from that, it's mostly small-ticket stuff that depends on better reporting/coordination/oversight and might or might not produce any benefits. I'll let you know if anything further catches my eye.

BREAKING: Danish CEOs on Verge of Collapse

This comes from Politiken, but it sure sounds familiar, doesn't it?

Since 2008 when the crisis hit, outlays for directors [i.e., CEOs] at the 16 largest Danish companies have increased by 23 percent....This compared to general labour market wage rises of just over nine per cent in the same period.

....Carlsberg Chairman Povl Krogsgaard-Larsen defends the fact that his two directors shared DKK 39 million last year — 30 percent more than in 2008.  “If we are to ensure the most motivated and talented executives, who are willing to work 25 hours per day and risk their health, we should be able to offer salaries close to those paid abroad,” Krogsgaard-Larsen says.

Actually, I take that back. Even in America, I don't think anyone would quite have the balls to claim that their executives deserved outsize pay packages because they were "risking their health" by working so hard. In the BS department, apparently Wall Street has met its match.

My First and Only Stamp Collecting Post

Ryan Avent links to a report that the market for rare stamps is heating up:

The wave of Chinese money that has crashed through the markets for fine wine, art and antiques is now flooding into the altogether sleepier world of stamp collecting. At an auction in Hong Kong this week, a rare block of four stamps from the Cultural Revolution sold for HK$8,970,000 (US$1.1m) — an all-time record for a Chinese stamp or multiple. Including a 15 per cent buyer’s fee, the anonymous buyer paid over US$1.3m for the stamps.

This reminds me of something totally unrelated to Ryan's point, namely that it's surprising how inexpensive lots of old stamps are. A couple of weeks ago I noticed a dusty stamp album sitting in one of my bookshelves and realized that I'd never actually opened it up. I don't know where it came from, but it's dated 1940 and I assume it must have been my father's.

Anyway, I took a look inside, and on the very first page there was a stamp from 1851. This was part of the second series of stamps ever released in the United States — issued before the perforated stamp revolution of 1857 — and you'd think it might be worth something, even in used condition. But no. According to this site, it's worth at most either $70 or $7 depending on whether it's orange-brown or dull red. What do you think? Looks like orange-brown to me, which makes it worth $70. Maybe.

Cheap! And that's for one of the earliest stamps ever issued in America. I guess stamp collecting must be a pretty accessible hobby — though they make up for the low prices with a fantastic array of varieties and special issues. Still, a bargain compared to coin collecting.

Waste, Fraud, and Sen. Coburn

I'll get back to highlighting a few of the results from the GAO's report on streamlining government later today, but first I want to highlight this nugget from Reuters columnist James Pethokoukis:

OK, so the U.S. government’s auditor has found duplication and overlap that may be wasting $100 billion or more a year, according to the Republican senator who commissioned the study. How can anyone argue for higher taxes as long as Washington is so inefficient?....For instance, the auditor found 82 separate federal programs to improve teacher quality ($4 billion a year), and 20 distinct programs to deal with homelessness ($2.9 billion a year).

Let's settle down a bit here. First of all, note that the GAO didn't say its recommendations could save $100 billion per year. That's what Republican senator James Inhofe says, and it's basically just a number he pulled out of his hat to make the government look as wasteful as possible. Pethokoukis then goes along with the gag by kinda sorta implying that the GAO found $4 billion a year of waste in teacher programs and $2.9 billion in homelessness programs.

They didn't. That's just the total amount of money spent by these programs, and GAO thinks the administrative portion of this might be reduced if those programs were better coordinated. And maybe so. But most of the money in those programs isn't spent on administration, it's spent on improving teacher quality and dealing with homelessness. Administrative expenses probably amount to no more than 10-20% of their budgets, and streamlining administration would probably save 10-20% of that. That's worth doing, but even in the best case it would most likely save a hundred million or so, not several billion. We're not going to come within a light year of closing the budget deficit by streamlining duplicative programs, and no one who suggests otherwise should be taken seriously.

That brings up two other points that are worth keeping in mind. First, keep your eye out for attempts to turn the GAO report into a fight not over waste, but over the actual programs themselves. Perhaps federal homelessness programs really could be run better, but my guess is that what Coburn and a lot of his allies really want is simply to slash funding for homelessness programs. Exaggerated accusations of waste and duplication are a convenient cudgel in that fight, but that's all they are.

Second, it's worth keeping in mind that sometimes it's useful to have multiple small programs instead of one big coordinated program because small programs can experiment with different approaches to see what works best instead of being stifled by a single big bureaucracy. It's also the case that sometimes it's actually more efficient to have multiple programs. A homelessness program aimed at helping municipal governments is probably best run out of an agency that already deals with municipal governments and doesn't have to reinvent the wheel just to figure out who the players are and how to do outreach. Ditto for programs aimed at church groups, nonprofits, law enforcement, etc.

Streamlining is a worthwhile goal, but it's wise not to get too caught up in box-drawing exercises. They're the favorite solution of management consultants and CEOs with no better ideas at hand, but it's rare that reporting structure is really the key problem in an organization. If you have 20 different programs that provide assistance to 20 different kinds of clients, it's simply not obvious whether you should organize things by program type or by client type. On a more general level, sometimes centralization is good, sometimes decentralization is good, and sometimes it's good just to shake things up. But the real problems usually lie elsewhere.

What Do Republicans Really Want?

What do Republicans really care about? Cutting the deficit, or cutting taxes on rich people? The AP reports, you decide:

The IRS has dramatically increased its pursuit of tax cheats in the past decade: Audits are up, property liens are up and asset seizures are way up. President Barack Obama and Democrats in Congress see stepped up enforcement as a good way to narrow the nation's staggering budget deficit without raising tax rates or cutting popular spending programs.

....IRS Commissioner Doug Shulman told the committee Tuesday that the $600 million cut in this year's budget would result in the IRS collecting $4 billion less through tax enforcement programs. The Democrat-controlled Senate is unlikely to pass a budget cut that big. But given the political climate on Capitol Hill, Obama's plan to increase IRS spending is unlikely to pass, either.

That $600 million cut is part of the Republican budget plan, and even if we assume that Shulman is talking his book, it's a dead certainty that cutting the auditing budget will be a net loser for the deficit. However, it's also a dead certainty that cutting the auditing budget will primarily benefit rich people who are cheating on their taxes.

The AP dispatch also reports that Republicans are planning a retro-style blast from the past: a reenactment of the infamous Roth hearings of the 90s, in which IRS agents were portrayed as jackbooted thugs who waved guns around and extorted money out of innocent, hardworking small businessmen. Virtually none of it turned out to be true, but it didn't matter: the Roth hearings led to budget cuts that crippled the IRS's auditing capability for years. The rich cheered then, and they're cheering now too.

But the budget deficit? That's a worry for another day.