Mojo - March 2010

Focus on the Family's Health Care Fundraising Pitch

| Thu Mar. 18, 2010 3:20 PM EDT

As the health care bill nears a final vote this weekend, religious and social conservatives seem to be seizing the opportunity to maximize its fundraising potential. Yesterday, former Christian Coalition leader Ralph Reed e-blasted readers of WorldNet Daily asking for "donations" to his new advocacy group for "FaxGrams" to Congress opposing the bill. Today comes the lobbying arm of the slightly broke evangelical powerhouse Focus on the Family, which claims in an email that it has already spent $800,000 trying to defeat the Democrats' health care proposal. Tom Minnery, the senior vice president for Focus on the Family Action, wrote to supporters on the eve of "one of the most historic votes in history," that Focus was "stretched thin" by the health care battle and needed some extra cash to continue its fight to hold legislators accountable. He writes:

"There's an old saying that there are two seasons in politics: legislative season and campaign season. When the politicians have finished voting on the bills, campaign season begins. That's the time for you and me to hold them accountable. And after all of the secrecy, stunts and parliamentary shenanigans of the past year—on health care alone—lots of accountability is going to be needed!

That's why I'm urgently asking you to help Focus Action hold them accountable with a special gift today. The election may be a few months away, but the accountability work starts right now—while the American people still remember what just happened."

He might have added that health care reform has been a "special gift" to struggling right-wing groups looking for something to stoke hysterical fundraising appeals. No doubt there will be many more to come over the next 72 hours.

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Debunking the Chamber on Consumer Protection

| Thu Mar. 18, 2010 2:55 PM EDT

As our own reporters have shown many times, the US Chamber of Commerce, a lobbying behemoth that's only gaining power by the day, tends to run fast and loose with statistics, facts, even reality. On the financial reform front, the Chamber's latest assault on a new consumer protection agency—proposed by the House and Senate—fits their M.O.

At a press conference this week, Andy Pincus, counsel for the Chamber, laid out for reporters the core of the Chamber's opposition to a consumer protection agency. Essentially, Pincus said creating an agency like the one proposed by the House and Senate would layer on burdensome new regulation and bureaucracy, and moreover would choke off credit to small businesses. As a result, he said, those businesses won't have the funds to hire new employees, pay existing ones, and will ultimately fail, he said:

"Small businesses rely on credit vehicles that are often consumer credit because the small business is just a person…So the question is: How heavily are those kinds of credit vehicles going to be regulated? Are they going to cost more? Or are some of the regulations going to ban those forms of credit entirely on the grounds that they're abusive, whatever that means?"

In one sense, Pincus is right: Most small businesses are average consumers who get off the ground using the same kind of credit you and I have—namely, their credit cards. The Chamber's logic stops there, however. A consumer protection agency, if anything, would crack down on predatory credit card practices, not unlike the Credit CARD Act already in place. The consumer agency in the House bill would not only rein in on predatory practices sure to be harmful to small business owners, but would exempt retailers and other merchants who extend credit and layaway plans to consumers from oversight. (The Senate bill, while in its early stages, would do much of the same.) In short, these kinds of changes would  help small business owners, not hurt them or cut off their access to credit. 

Pincus also claimed that a new consumer agency might ban forms of credit used by small businesses. Perhaps if a small business owner had taken out a toxic subprime mortgage with a floating interest rate for her business, then yes, that owner might have to look for a new mortgage. One with better terms. Not much of a loss there.

In reality, the Chamber's position that a new consumer agency will choke off credit to small businesses just doesn't make sense. "There's no basis for it," says Tim Duncan, chairman of the organization Business Leaders for Financial Reform. "It's so detached from reality. There's nothing to indicate that that's true." And numerous business organizations actually support the consumer agency, including the US Women's Chamber of Commerce, the US Hispanic Chamber of Commerce, and the American Made Alliance. "For the most part, this is a real positive for business owners because they have to personally finance their own businesses," Duncan says. As for the US Chamber, Duncan adds, "I don’t think people are taking seriously the quality of their argument. The more they say this stuff, the more they dig their hole deeper in the ground."

The Final Health Care Bill: Winners and Losers

| Thu Mar. 18, 2010 2:19 PM EDT

Democrats are preparing to drop the final health care reform bill—that is, the Senate's legislation plus a package of fixes to be passed via reconciliation—and already everyone's scrambling to sort out the winners and losers. One of the big questions hanging over the package of fixes was whether they would reduce the budget deficit by at least $1 billion, as reconciliation rules require. According to the latest analysis from the Congressional Budget Office, that's no problem: The legislation would cost $940 billion, and the CBO estimates that it will save the government $130 billion in the first ten years and $1.2 trillion in its second decade. If the legislation clears its last hurdle, Democrats will be touting these numbers for the rest of the year to counter the Republican line that health care reform is fiscal insanity.

So who benefits from the latest tweaks to the bill? According to Jonathan Cohn, who has a good round-up, the biggest beneficiaries will include: middle-income Americans, who will get more generous subsidies; senior citizens, who will gain stronger prescription drug coverage in Medicare; and non-unionized workers, whose obligation to pay the excise benefits tax on high-costs plans will be delayed for a few more years (union workers were already exempt). With the new fixes, the final legislation would provide insurance to 1 million more people than the original Senate bill—meaning that the legislation will now cover 95 percent of Americans. It also provides stronger consumer protections in insurance plans. And that's on top of the market-changing reforms already contained in the Senate measure.

Who's still unhappy? Union officials remain disgruntled about the so-called "Cadillac" tax on high-costs plans, which will increase more quickly in the final bill than they had hoped. Originally, House Democrats and labor officials wanted to index the tax to inflation plus 1 percent. But the Democrats ultimately had to drop the 1 percent in order to conform to the CBO's accounting rules and reach their deficit reduction targets required for reconciliation.

Fiore Cartoon: Anti-Gay, Gay Politicians

Thu Mar. 18, 2010 2:06 PM EDT

It's been a banner few weeks for political hypocrisy on the issue of gay rights. Anti-gay California state senator Roy Ashburn admitted he's gay, while congressman Eric Massa—opposer of gay marriage—was accused of making a pass at a male colleague. 

Satirist Mark Fiore has a few thoughts on this hypocritical oath. Watch his video below:

Idaho Bans Health Care Reform

| Thu Mar. 18, 2010 12:32 PM EDT

On Wednesday, Idaho became the second in what promises to be a long list of states passing legislation that would "protect their citizens from being forced to purchase health insurance or participate in any health care system against their will," according to a press release. The legislation, crafted by the American Legislative Exchange Council (ALEC), is an attempt to undermine any federal health care legislation by invoking the 10th Amendment and claiming that it prohibits the federal government from forcing states to implement the reform plan because the Constitution doesn't say anything about health care. While all the rhetoric around such measures, which are pending in more than two-dozen other states, is about freedom from tyranny, state's rights, etc., ALEC has a long history of serving as a front group for big corporations, particularly the tobacco industry. Legal experts don't think the state legislation will hold up under court scrutiny, but the idea must be a tremendous fundraising tool for ALEC, which has long been able to gin up funding for unconstitutional and politically un-passable legislation to ban civil lawsuits against big corporations. No doubt it is awash in corporate health care money right now from companies duped into thinking this scheme might actually work. 

The open question about this latest round of state-level protests against health care reform, though, is how the states plan to enforce their legislation. I attended a "Tenth Amendment Summit" in Atlanta a few weeks ago that was attended by a bunch of state legislators, candidates like Alabama's Ten Commandments judge Roy Moore, and various tea party types all pledging to promote a return to 10th Amendment purity. Many, if not most of them believe that states have the power to ignore federal laws they deem unconstitutional, and to use their National Guard troops to enforce that decision if necessary. Which made me wonder: If Idaho, home of the Ruby Ridge debacle in the 1990s, can't stop federal health care reform, is the state preparing to take up arms to protect their citizens' "right" to remain sick and uninsured? I guess weirder things have happened. More likely? Once the health care bill passes, Idaho residents will be clamoring to take advantage of its benefits and the state will quickly repeal the law in order to cash in on all the potential budget savings.

China: World's Biggest Bubble?

| Thu Mar. 18, 2010 11:32 AM EDT

Is China, soon to surpass Japan as the world's second-largest economy, a massive, dangerous bubble? According to one man who's witnessed financial calamity at close range, the answer is an unabashed Yes. "As I see it, it is the greatest bubble in history with the most massive misallocation of wealth," said James Rickards at a recent conference in China, according to Bloomberg News. Rickards is the former counsel for the infamous hedge fund Long-Term Capital Management, an all-star, Nobel Prize-powered fund that proceeded to melt down in 1998 and almost drag the global economy down with it. (For more on LTCM, read Kevin Drum's "Capital City" cover story.) Whether his role helping save LTCM burnishes or blemishes his record is for you to decide, but his time there clearly colors his view of China today. Bloomberg reported that Rickards argued that "Chinese central bank’s balance sheet resembles that of a hedge fund buying dollars and short-selling the yuan."

Echoing Rickards, a recent World Bank report warned of inflation and a property bubble in China. (Here's a PDF of the report's overview.) The World Bank suggested that China tighten up its overall monetary policy by raising interest rates to contain a housing bubble—something, you'll remember, former Fed Chairman Alan Greenspan and current chair Ben Bernanke failed to do.)

To be sure, there are some startling parallels between China's housing boom and the US' bubble circa 2003-2007. There's the economics—$560 billion of real estate was sold in China last year, the Times reported recently, an 80 percent increase from 2008—and the blinding details, too, like the home with crocodile skin bedposts and doors inlaid with Swarovski diamonds. Or the anonymous investor in Shanghai who bought 54 apartments in a single day. Or the $3 billion "floating city" in the north of China. The key question here is whether China's in a boom or inflating a bubble—and without a Chinese version of, say, the Case-Shiller housing index, it's hard to decipher what exactly is going on in the Middle Kingdom.

Figuring out whether China is indeed in the middle of a bubble—or a massive Ponzi scheme—is a lot tougher than in the US simply because China's government is so opaque. Reliable data is hard to come by, which makes it far more difficult to understand what continues to fuel China's rise—and if that's a good thing or not. If it is a bubble, though, the ramifications of it popping could be just as disastrous and far-reaching as the US' recent financial implosion.

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We're Still at War: Photo of the Day for March 18, 2010

Thu Mar. 18, 2010 9:22 AM EDT

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1st Lt. David J. Leydet uses his rifle's scope to scan a hill while he provides security outside an Afghan police checkpoint in Taktehpol, Afghanistan, on March 10, 2010. Photo via the US Army.

Teachers Unions May Derail Obama's Plans to Revamp NCLB

| Thu Mar. 18, 2010 6:00 AM EDT

In the ambitious blueprint for overhauling federal education policy that President Obama presented to Congress on Monday, he outlined a vision of higher academic standards and fewer federal proscriptions for how to meet them -- a vision that applies to most of the country's 98,000 public schools. For the lowest performing 5 percent of schools, however, Obama proposes stiff consequences for academic failure, including firing most of the principals and teachers who run them. The idea has drawn ire from the nation's two largest and most powerful teachers unions and threatens to derail education reform.

Obama and Secretary of Education Arne Duncan are firm believers in the notion that the most important factor in students' success "is not the color of their skin or the income of their parents; it’s the person standing at the front of the classroom." Without a cadre of excellent teachers, Obama believes it will be impossible to turn around the nation's lowest performing schools. In short, getting all students "college-ready and career-ready" by 2020 means weeding out the worst teachers at schools where students simply aren't learning.

But Dennis Van Roekel, president of the 3-million-member National Education Association, doesn't consider axing teachers a reasonable solution to students' under achievement. "If there's a high-crime neighborhood, you don't fire the police officers," he told New York Times education reporter Sam Dillion. "This is a huge issue for us." American Federation of Teachers President Randi Weingarten criticized the plan for placing too much responsibility on teachers without giving them sufficient authority to drive reform efforts. It's unclear how AFT wants to revise Obama's plan. Weingarten couldn't be reached for comment.  

If unions turn key Democrats against Obama's plan, he may be able make up the lost votes with support from Republicans, notes Alyson Klein of Education Week. Michael Petrilli, a vice president at the Thomas B. Fordham Institute who served in George W. Bush's Education Department, considers the blueprint "a huge improvement over current law" and says that it "backs away from federal intrusion big time....Republicans couldn’t expect anything more friendly to the states.”

Just about eveyone agrees that No Child Left Behind is long overdue for an update. And yet bipartisanship is no guarantee of success. House Education and Labor Committee Chairman George Miller proposed a re-write three years ago. His effort failed in part due to the same snag that Obama is facing: A call to "close the teacher quality gap."

Challenging Rove & Douthat to a Duel

| Wed Mar. 17, 2010 1:50 PM EDT

Okay, I'm getting tired of conservatives who pooh-pooh the argument that George W. Bush misled the United States into war. Oh, they say, the problem was that the intelligence about Iraq's WMD capabilities was bad. Or, Bush believed what he was saying. Or, it's more complicated than that—or, as New York Times columnist Ross Douthat puts it, the whole mess was a murky Shakespearean tragedy with no clear bad guys. The "Bush lied" meme, they maintain, is merely an irrational liberal catechism. In his new book, Karl Rove insists Bush did not "lie us" into war. In a column assailing one of mine, Peter Wehner, who worked with Rove at the Bush White House, says there's "no real evidence" for the "'Bush lied' mantra." And Douthat decries "the comforts of a 'Bush lied, people died' reductionism," while bemoaning Green Zone, the new Matt Damon thriller.

Time for these Bush-backers to put up or shut up. Responding to Wehner, I posted a PoliticsDaily.com column listing instances when Bush and Dick Cheney, during the run-up to the war, made provocative and dramatic assertions about the supposed WMD threat posed by Saddam Hussein that either overstated the available (and iffy) intelligence or were not based on any existing intelligence. I noted:

Bush and Cheney again and again made statements that were not true and that were not supported by the available intelligence. Moreover, once U.N. inspectors entered Iraq in late 2002 and eventually began reporting that there was no evidence of significant WMD programs, Bush and Co. ignored these experts and continued to claim that Saddam was up to his neck in WMD. They insisted Saddam had been shopping for uranium in Africa, even though the intelligence on this point was dubious. All together, they waged a willful campaign of misrepresentation and hyperbole. And to such an extent, it can be branded a lie.

Or let's put it this way: Can Wehner, Rove and Douthat state that Bush carefully reviewed the intelligence in order to present to the public an accurate depiction of what was known and not known about the WMD threat possibly posed by Saddam? Bush and his aides were looking for ammo. They wanted this war—and they made unsubstantiated claims to get it. The truth was not a priority.

And I put forward a challenge:

If Wehner, Rove, and Douthat insist on defending Bush, let them explain the pattern detailed above. I dare any of them to attempt a line-by-line response. The evidence is clear: Bush, Cheney and other administration aides engaged in reckless disregard of the truth to sell a war. That is not an article of faith or a Hollywood fantasy—it's what happened.

Believe it or not, none of these three gents have yet signaled they will do so.

Ralph Reed Joins Health Care Fight

| Wed Mar. 17, 2010 12:55 PM EDT

As the future of health care reform seems to be coming down to the very last wire, the high-stakes political battle seems to be drawing out of the woodwork long lost activists and groups once associated with the disgraced lobbyist Jack Abramhoff. Yesterday we noted the participation of the National Center for Public Policy Research, which has put out some slick new campaign materials for health care opponents. That group was accused of flacking for Abramhoff clients in exchange for big donations. Today comes none other than Ralph Reed, the former Christian Coalition leader who helped Republicans take over Congress in 1994 but then crashed and burned after revelations about his work for Abramhoff. (Reed famously took millions from an Indian tribe represented by Abramhoff to run a religious-based anti-gambling campaign that was actually designed to prevent a rival tribe from opening a competing casino.)

Reed is now head of a new group called the Faith and Freedom Coalition, which today sent out an appeal to readers of WorldNet Daily soliciting "FaxGrams of Protest" against Obamacare to members of Congress. The email comes with all the doomsday predictions about the bill. Reed writes, "This vote is happening any day or hour now. It is do or die for freedom's survival in America! We are now at D-Day for Obamacare. Will America become another failed Cuba-style Socialist state? Or will freedom and respect for Constitutional government make a comeback in America? The next few hours and days will answer that question."

Links from the WND email lead through Reed's website. Naturally, this being a Reed endeavor, the fax grams don't come free. In order to send one, health care opponents have to provide a credit card number to make a "donation" to the Faith and Freedom Coalition. Whether Reed is simply capitalizing on the health care debate to raise money or whether he's been hired by some desperate anti-health care forces to fight the bill isn't clear. (Could be both.) But one thing's for sure: If Indian tribes start to chime in, we should really start to get suspicious.