Author: David Dayen

I just got off the phone with Anthony Weiner, who stirred things up during the debate on repealing the insurance industry’s anti-trust exemption with a pretty glorious call-out speech calling Republicans a wholly owned subsidiary of the insurance industry. During the conversation, he acknowledged that the strategy for actually passing a comprehensive health care bill remained fuzzy, saying “I’m not sure what we’re doing, and I’m pretty tied in.”

Asked by FDL News about the outburst and why he felt it was important to make that known, Weiner explained that there is a “contest of ideas” going on within the Democratic Party. “Some think that, like the unicorn, we’ll discover bipartisanship on health care reform. Some of us believe this is not going to be solved with Republican help. So we need to call them out for what they are.” Republicans were actually trying to get away with the idea that repealing the exemption wasn’t doing enough to introduce competition in the insurance market, and Weiner simply said that his B.S. meter on their concern about that “goes into Spinal Tap neighborhood”.

Weiner didn’t get an invite to tomorrow’s health care summit, but he’ll be watching and even live-blogging the proceedings, he told me. He found its utility limited. “If we want to spend hours tomorrow highlighting bankruptcy of GOP ideas, fine. But we mustn’t delude ourselves. When we gave up public option, we didn’t get a single Republican. When we gave up national exchanges for a state exchange, we didn’t get a single Republican. We keep negotiating with ourselves.” If the summit is meant to contrast the two parties on the issue, Weiner was fine with it, but if it was seen as an opportunity to convert Republicans to the cause of fixing health care, he advised, “Good luck with that.”

I wanted to know from someone who has been in the room for these discussions whether he thought the votes were actually there to pass the bill, regardless of what fixes could be made in reconciliation. Eric Cantor’s memo today certainly suggested otherwise, as have multiple news reports. I asked flat-out, does this thing have the votes?

Weiner replied, “Well, we passed the bill once.” Obviously, he said, the abortion language was a concern, and he admitted, “I don’t know how it gets resolved.” He reiterated the constant dynamic of dropping things like the public option, which he thinks has majority support in the House and Senate and among 72% of the American people, and getting nothing in exchange. In the final analysis, he said, “I’m not sure what we’re doing, and I’m pretty tied in.”

Finally, I asked Weiner about Kent Conrad’s comments, that the House would have to pass the Senate bill first before any changes could be made through reconciliation. He said, “The House has been passing bills on spec for quite some time. I think the record speaks for itself. I don’t know that senate can be trusted to do just about anything, let alone get reconciliation right.” He likes that Obama’s plan was released to work as a 51-vote plan instead of a 60-vote one, and said that if Conrad didn’t like it, he could vote no on it and explain that to his constituents.

The problem with that, I said, is that Conrad is the chair of the Budget Committee, and would be intimately involved in the reconciliation process.

“There is that,” he said. Weiner circled back to today’s vote on repealing the anti-trust exemption. “We’re not going to wait for 60. Waiting for Senate to act has been like waiting for godot. The House is not going to do it anymore.”

Anthony Weiner just made a fiery speech in the middle of the House debate on repealing the insurance industry’s anti-trust exemption [Update: Measure passed, 406-19)]. Angered by a motion to recommit, he lashed out, saying “the Republican Party is a wholly owned subsidiary of the insurance industry!” While continuing on this theme, Republicans asked that the words be taken down, an attempt to rule Weiner’s remarks out of order and ban him from speaking on the floor for the rest of the day. Weiner then asked unanimous consent to substitute remarks, and after withdrawing the initial ones, said “Every single Republican I have ever met in my entire life is a wholly owned subsidiary of the insurance industry!”

Republicans again asked for the words to be taken down.

At issue was a motion to recommit from the Republicans which would essentially scuttle the bill to repeal the insurance industry’s anti-trust exemption. The motion would have inserted a massive loophole that would have allowed insurers to collude with one another. Weiner said “You guys have chutzpah… they say that, well this isn’t going to do enough, but when we propose an alternative to provide competition, they’re against it… they said they want to have competition, and when we proposed requiring competition, the Republicans are against it!”

Eventually, Weiner withdrew his comments. But then he concluded, “there are winners and losers in the way we distribute health care,” and the insurance industry are among the winners, and the motion to recommit would keep that in place. He basically reinstated his “wholly owned subsidiary” comments in slightly more palatable words.

Guess Weiner is showing off what made him an FDL Fire Dog.

[Ed. Note: Teddy Partridge has more on JD Hayworth’s surprisingly smooth and articulate appearance.]

John McCain just put out a silver platter gift to his primary opponent in Arizona, one that could very easily lead to the end of his political career. This is hilarious:

In response to criticism from opponents seeking to defeat him in the Aug. 24 Republican primary, the four-term senator says he was misled by then-Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke. McCain said the pair assured him that the $700 billion Troubled Asset Relief Program would focus on what was seen as the cause of the financial crisis, the housing meltdown.

“Obviously, that didn’t happen,” McCain said in a meeting Thursday with The Republic’s Editorial Board, recounting his decision-making during the critical initial days of the fiscal crisis. “They decided to stabilize the Wall Street institutions, bail out (insurance giant) AIG, bail out Chrysler, bail out General Motors. . . . What they figured was that if they stabilized Wall Street – I guess it was trickle-down economics – that therefore Main Street would be fine.”

It just strains credulity to the extreme that McCain was misled about the bailout. Everyone knew exactly where the money was going – to Wall Street. It was called the Wall Street bailout in pretty much every contemporaneous report at the time. McCain’s lie is so obvious everyone can see it. Including his primary opponent, J.D. Hayworth, who wouldn’t see a truck if it was 10 inches in front of his face:

REPORTER: Let me ask you about something that Sen. McCain has said. He says that he was misled on TARP by then-Treasury Secretary Henry Paulson and Fed Chair Ben Bernanke. McCain says that the two initially assured him that TARP would be used to counter the mortgage crisis not to bail out the big banks. Do you believe that McCain was misled?

HAYWORTH: No I don’t Monica, and I find it most disturbing. Because the night before, on NBC Nightly News, you may remember John Yang had a report that featured John McCain saying that because of his experience, he was best equipped to represent Arizona. Now in Western vernacular, this ain’t John’s first rodeo. With over a quarter-century of experience, when he suspended his campaign to go back to Washington to sit face to face with those decision makers, now a couple years later, he’s telling us he was misled? I’m sorry, but I have to tell you, this instant revisionist history, saying you oppose something now that you actually voted for, that sounds a whole lot more like John Kerry in 2004 than the John McCain I used to work with.

It’s highly amusing to see John McCain go down in a cascade of lies. If Hayworth can get this message out on the bailout, he’s done in a Republican primary. Mark my words.

McCain also decided to lie about suspending his campaign. . . :

Paulson, President George W. Bush’s Treasury secretary from 2006 to 2009, also is dishing out criticism of McCain, who on Sept. 24, 2008, temporarily suspended his ultimately unsuccessful presidential campaign to go to Capitol Hill to confront the economic crisis.

In his new book “On the Brink: Inside the Race to Stop the Collapse of the Global Financial System,” Paulson belittles McCain’s contribution to the response, noting that “when it came right down to it, (McCain) had little to say in the forum he himself had called.” He also called McCain’s decision to return to Washington, apparently without a plan, “impulsive and risky” and even “dangerous.”

McCain said Bush called him in off the campaign trail, saying a worldwide economic catastrophe was imminent and that he needed his help. “I don’t know of any American, when the president of the United States calls you and tells you something like that, who wouldn’t respond,” McCain said. “And I came back and tried to sit down and work with Republicans and say, ‘What can we do?’ “

McCain’s already flipped on this and walked back those remarks, and is now trying to get away with saying that Obama suspended his campaign too. It’s insanely funny.

Do Democrats have a decent candidate in Arizona? Because J.D. Hayworth is a crook and a thief and can be absolutely torched in a general election. If McCain loses the primary, which now looks highly possible, there’s a real opening here.

UPDATE: McCain is reduced to making a “Hayworth is a birther” video. It may be effective, but it strikes me as reflective of Hayworth’s problems in a general election more than helpful to McCain getting out of a primary.

photo: Old Sarge via Flickr

The Senate just passed its $15 billion dollar jobs bill by a count of 70-28 (roll call will be here eventually), getting some Republicans to break its way after the cloture vote passed. $15 billion is actually a misleading number – the extension of the Highway Trust Fund would add $20 billion for infrastructure projects, but because of the way it’s financed, through a fund shift, it doesn’t count as an expense – but $35 billion isn’t exactly robust.

Still, the small-ball strategy appears to have worked, though one bill does not a jobs agenda make. Whether or not Reid figured out a formula to get an agenda passed will rely on more than shoveling conservative-friendly bills like a job creation tax credit for businesses out there.

So, then, two questions come out of this passage – 1) what will the House do with the bill, and 2) what will Reid push next? Let’s take them in turn.

The House has not decided whether to pass Reid’s pared-down bill whole, or go to a conference with their $154 billion dollar jobs package passed in December. Obviously, a bill whose centerpiece, the job creation tax credit, would create maybe 200,000 jobs at a time when 400,000 jobs a month are needed for three years to get the unemployment rate back to normal, may not be attractive to House leaders. But Reid is promising more down the pipeline.

What would that include? Well, he announced plans for a second bill in a statement yesterday.

“Addressing the economic challenges facing working families in Nevada and all across the nation is the top priority of Senate Democrats. Yesterday the Senate voted to move forward on a targeted jobs bill that could save or create over a million jobs. But Senate Democrats won’t rest because we know there is much more we need to do to help working families struggling to make ends meet.

“That is why I plan to introduce legislation within the next week to extend critical unemployment insurance and COBRA health benefits, extend additional assistance to help states and extend tax relief for individuals and businesses. Each of these proposals has enjoyed Republican support in the past.

“With so many Nevadans facing economic uncertainty and needing critical assistance to support their families, we hope Republicans will work with us on our bipartisan jobs agenda. We need to continue efforts to strengthen our economy, create jobs and support working Americans throughout the year.”

This would seem to have four components. . . : the two safety-net extensions, for unemployment insurance and the 65% COBRA subsidy; state aid in the form of Medicaid (FMAP) funding for fiscal year 2011, similar to what was in the stimulus package; and that package of “tax extenders,” basically re-upping various tax breaks which expired at the end of the year. The tax extenders are a lobbyist’s dream, and may be enough to attract the necessary support to get the safety net extensions and state aid passed. As for the tax extenders themselves, some of them are total giveaways, but some, like the production tax credit for renewables, aren’t so bad.

Because of the different tactics from the House and the Senate, and even the White House, on paying for all of this (remember, PAYGO is the law of the land, so offsets are required), confusion is reigning. The Senate actually waived a point of order from Judd Gregg on the jobs bill today which would have required finding more offsets due to those accounting maneuvers to fund the highway trust extension. So nobody really knows what will reach the finish line at this point.

photo: waynewhuang via Flickr

Keeping with her vow to pass popular individual elements to improve health care while the process for the comprehensive bill works itself out, Nancy Pelosi will bring to the floor today a bill to end the health insurance industry’s anti-trust exemption, part of the McCarran-Ferguson Act of 1945. A similar version of this legislation, which included providers of medical malpractice insurance, passed the House inside their health care bill last year.

And yesterday, the bill, sponsored by Tom Perriello (D-VA) and Betsy Markey (D-CO) picked up some important support – the White House.

The Administration strongly supports House passage of H.R. 4626. The repeal of the antitrust exemption in the McCarran-Ferguson Act as it applies to the health insurance industry would give American families and businesses, big and small, more control over their own health care choices by promoting greater insurance competition. The repeal also will outlaw existing, anti-competitive health insurance practices like price fixing, bid rigging, and market allocation that drive up costs for all Americans. Health insurance reform should be built on a strong commitment to competition in all health care markets, including health insurance. This bill will benefit the American health care consumer by ensuring that competition has a prominent role in reforming health insurance markets throughout the Nation.

The President lent support to the concept of repealing the exemption as far back as last October. But this is the first time he offered support for a specific bill.

The CBO actually scored this measure as one that would have a minimal impact, because “state laws generally already barred the activities prohibited by the federal bill.” But this would both normalize the ban on these activities for all states, and provide support from the Justice Department’s anti-trust division to crack down on them. The Congressional Research Service’s report on this, however, is a concern:

Moreover, a Congressional Research Service report last month said that repealing the exemption could open the door to a flood of lawsuits challenging various insurer practices and could harm smaller insurers that share data because they do not have large pools of information of their own. If the result is that small insurers can no longer share information, the report said, “further consolidation in the insurance industry” would be “a likely, albeit ironic, possibility.”

That’s a fairly extreme scenario, however. Christine Varney, the Assistant Attorney General of the Antitrust Division at the DoJ, testified in October that other studies minimized this as a concern, and since she’d be in charge of making the determination, I think she’d fall on the less restrictive side of the ledger. . .

The Antitrust Modernization Commission recently reviewed whether the McCarran-Ferguson Act is necessary to allow insurers to collect, aggregate, and review data on losses so that they can better set their rates to cover their likely costs. The AMC found that it was not. The AMC said that insurance companies “would bear no greater risk than companies in other industries engaged in data sharing and other collaborative undertakings.” In particular, the AMC said, “[l]ike all potentially beneficial competitor collaboration generally such data sharing would be assessed by antitrust enforcers and the courts under a rule of reason analysis that would fully consider the potential procompetitive effects of such conduct and condemn it only if, on balance, it was anticompetitive.” Significantly, the AMC added that “[t]o the extent that insurance companies engage in anticompetitive collusion then they appropriately [should] be subject to antitrust liability.”

The vote in the House will happen later today.

photo: turtlemoon via Flickr

Harry Reid appointed three Senate Democrats to the Bowles-Simpson deficit commission created by executive order: Budget Committee Chairman Kent Conrad, Finance Committee Chairman Max Baucus, and Minority Whip Dick Durbin. He released an accompanying statement.

“I am pleased that President has decided to take bold action to move forward and create a commission by executive order. The establishment of this commission is an important signal that we understand the need to address our fiscal challenges and are committed to finding bipartisan solutions. Senators Durbin, Baucus and Conrad all have vast experience in dealing with the federal budget and have a proven record of looking out for working families like those in Nevada.

“I have committed to President Obama that I will work to ensure that the commission’s recommendations receive a vote in the Senate. Senate Democrats understand that we have to be responsible stewards of the federal budget.”

Apparently Reid wanted Daniel Inouye, the chair of the Appropriations Committee, but he begged off, citing a re-election campaign in Hawaii. So Durbin got the nod.

If Republicans actually comply with this commission, you can bet that Ranking Member of the Budget Committee Judd Gregg will get a spot. So maybe this is the Conrad-Gregg Commission after all.

The rules of the commission state that 14 of the 18 members (six picked by Dem leaders in the House and Senate, six by the Republican leaders, and six by the White House) would have to agree on any recommendation in order for it to make the final list. Clearly no Republicans will agree to a single tax increase, even if they pay lip service to it during the hearings. But Conrad and Baucus would in all likelihood have no problem cutting entitlement benefits, given their past statements. Baucus did slammed the Conrad-Gregg Commission when it was up for a vote in the Senate, but that was more a function of his committee getting bypassed than anything else. And now, he’ll be in the arena, where he thinks he belongs.

If Nancy Pelosi applied the same logic as Reid, appointing the chairs of the relevant committees to the commission, we’d have John Spratt (Budget), Charlie Rangel (Ways and Means) and David Obey (Appropriations). Speculation on Obama’s other four choices outside of Bowles and Simpson have gone anywhere from the CEO of Honeywell to Andy Stern of the SEIU to deficit scold Alice Rivlin.

I think there’s reason to be concerned about the clear tilt toward cuts and away from new revenues on this panel. And I wouldn’t expect the cuts to be in the real fat of the budget, like the military. The final recommendations would have to pass supermajorities in both houses of Congress, however, and the final appointees haven’t even been named yet, so there’s a ways to go.

(photo: aflcio2008)

I mentioned earlier today that the Senate would seek to pass a minimal 15-day extension on unemployment benefits to buy time for a longer extension later. This would cause mass confusion, as jobless Americans would get a letter explaining that benefits ran out followed by another letter saying they were extended just days later. The red tape at state and local unemployment offices would be maddening. What’s more, extending benefits has a stimulative effect.

Given the problems in the states, I would say they do not need any more costly matters right now.

The recession can now claim another troublesome record: state tax collections shrank at the end of 2009 for a fifth consecutive quarter, the longest period of continuing state revenue declines since at least the Great Depression, according to a new report.

Over all, state tax collections fell to $134.5 billion in the last quarter of 2009, a 4.1 percent drop from the $140.2 billion collected during the same period a year earlier, according to the report, which will be released Tuesday by the Nelson A. Rockefeller Institute of Government.

Their unemployment funds in particular have been going bankrupt all year, and absent a federal extension millions of Americans will see benefits run out. In a rare display of bipartisanship, 47 Governors signed a letter to Congress asking for a federal extension of FMAP (Medicaid) funding that was provided in the stimulus package. Frankly, the states are struggling mightily, and millions of jobs along with mass suffering are at stake. We’re talking about a $357 billion dollar shortfall in the states, and the Senate can barely pass $15 billion dollar micro-bills.

Harry Reid says he wants to extend unemployment benefits for all of 2010, in an omnibus package with FMAP help, the COBRA subsidy and tax extenders (and probably an extension of the Patriot Act). But to start with a small extension will make things worse. Working America, a division of the AFL-CIO, is fighting for an immediate extension of unemployment benefits, without a patch.

So it’s time, once again, to call your senators. How many times do they expect us to go through this cycle? They pass an extension that’s not nearly long enough. Almost as soon as it takes effect, we have to start pressuring them again. They drag it out to the bitter end. Jobless workers face more uncertainty, and possibly go through a month without benefits, pulling them even deeper into debt.

Let your senators know these patchwork, piecemeal responses to the needs of tens of millions of struggling families are not enough. We need unemployment insurance to be extended through 2010, so that we can turn our attention to real economic recovery, for the country, for communities, and for families.

People’s lives are on the line.

photo: Leo Reynolds via Flickr

290. Two hundred and ninety. That’s the number of additional bills which would have passed into law during the Obama era in an alternate universe where America has a unicameral legislature. Student loan reform? Passed. Health care? Done, with a public option. Climate bill? Moving on. Financial reform? Complete, along with a provision to audit the Fed. Etc. Etc. Etc. Not all of these bills are dead-solid perfect policy, but they would be finished and ready for improvements and tweaks during implementation.

It’s gotten to the point where bills that can actually pass the Senate must be so small as to be undetectable under anything less powerful than an electron microscope. Harry Reid’s small-bore “jobs agenda” has an outside chance of gaining momentum, but more likely it’s a political gambit, to prove that Republicans are disinterested in the people’s business, only so we can come back in another year and watch them happily obstruct again. Heck, their representatives for this “bipartisan” health care summit include Tom “I love gridlock” Coburn.

This Congress as currently constructed cannot tackle real problems because obstructionism works in modern American politics. And until that dynamic changes, the minority party has every reason to continue the obstruction.

Democrats have bent over backward to at least try and make it appear as though they are reaching out to Republicans. And, following the script, Republicans have done a good job of obstructing Democrats for the sake of obstructing Democrats.

The problem for Democrats is that their plan resulted in a massive improvement in the Republican electoral situation, rather than improving their own…

Over the last fifteen and a half months, Democrats have lost 4-5% in net partisan self-identification, around 9% in the National House ballot, and around 15% in net party favorability […] Republicans are paying no political price for their obstruction. Quite to the contrary, they are actually reaping a political reward from it. The Democratic plan of delaying legislation in order to make a big, public show of reaching out to Republicans was a miserable failure.

It has hurt politically and it has hurt in the context of substantive policy. Delaying the health care bill for 75 days so Max Baucus could sit in a kumbaya circle with Chuck Grassley was the biggest mistake of the lost year of 2009, impacting not only health care policy but everything else behind it in the queue. The far better option for Democrats was to use all legislative means at their disposal in the Senate to make up ground on those 290 stalled House bills. They have not done so, and they’re paying a terrible price.

"Cause of death: Sallie Mae Private Signature Loan; Return to Sallie Mae so fillings can be melted down for further payment." (photo: T. Roberts Photography via Flickr)

Jane wrote earlier today about the lobbying effort against the student loan bill, a no-brainer piece of legislation that would simply end massive subsidies to banks and student loan servicers and have the government lend directly to students on loans they backed anyway, saving $87 billion over ten years that would be plowed back into increasing Pell Grants and access to higher education. A key element of the lobbying pushback is a claim that curtailing student loan privatization will cost jobs:

President Obama wants to pass the Student Aid and Fiscal Responsibility Act (SAFRA), which cuts out these bankster middle men so the government can save $8.7 billion a year administering the loans directly. The bank lobbyists claim that 35,000 jobs will be lost if that happens. But that 35,000 figure is dubious — the entire student loan industry employs 30,000 people in total, and as Pedro de la Torre writes in The Nation, the number of actual jobs lost could actually be in the hundreds. Hard to tell, because those who promote the 35,000 figure are so vague about its sourcing. It comes from a survey conducted by the National Council of Higher Education Loan Programs, but they don’t seem to document it anywhere on their site.

The notion that all of those jobs will be lost — as the Senate Republican Policy Committee suggests — is ludicrous. These banks will continue to service the hundreds of billions in loans they already have, and they’ll also be able to compete (yes, compete) to service future loans.

The purest example of this con game on jobs to try and forestall progress on ending this corporate welfare came this weekend. Two Democratic Senators from Delaware, Ted Kaufman and Tom Carper, wrote a letter to Tom Harkin, expressing “concern” with SAFRA, and claiming that hundreds of jobs in their home state are at risk. These concerns mirror those from other ConservaDems and Senators with student lending operations in their state, so this makes it a good example:

Supporters say that proposal, which would essentially shutter companies like Sallie Mae out of the federal loan market, could save the federal government $87 billion over 10 years and lower students’ loan payments. However, Carper and Kaufman — who represent the state Sallie Mae in particular calls home — fear the reform could stifle local investment and result in lost jobs.

While they did not explicitly call for the provision’s removal from Harkin’s bill, they did implore the chairman to reconsider its language.

“We also have concerns over the potential impact on Sallie Mae’s operations in Delaware, which employs nearly 700 workers,” they wrote. “We ask that as you draft the committee’s mark … you maintain a role for Sallie Mae in the student lending process that recognizes the important services Sallie Mae has provided millions of students and mitigates any potential job loss in Delaware.”

Matthew Yglesias took a look at this and reasoned that this kind of inefficiency and waste was a price to be paid to maintain boondoggles in various states. But in so doing, Matt takes Carper and Kaufman’s numbers at face value.

Just a quick read of De la Torre’s Nation article shows that Sallie Mae, on the outside, claims that 30% of their workforce would be lost, not the entire workforce, if SAFRA passes. Since there are 700 workers total at Sallie Mae’s operation in Delaware, that lowers the jobs at stake to around 210. In addition, De la Torre notes that Sallie Mae is bringing thousands of jobs back from overseas to compete for Department of Education contracts to service federally administered loans. This is how he shrinks the potential number of lost jobs at Sallie Mae from thousands to a handful.

But there’s more! It turns out that the Sallie Mae offices in Delaware don’t even specialize in federally guaranteed loans, the types of loans at stake if SAFRA passes:

Sallie Mae’s executives support alternative legislation that would achieve savings by putting the government in charge of raising capital for the loans while allowing Sallie Mae and others to continue making and servicing the loans.

They say the bill that passed the House would mean job cuts, though possibly less severe at the Delaware center, which specializes in private loans instead of government-backed loans.

Kaufman and Carper also want to protect Access Group, a non-profit student loan provider which employs 400 in Delaware. But non-profit lenders already benefit in SAFRA with millions in no-bid contracts to service the federally administered loans, meaning that Access Group would be guaranteed an annual contract on at least 100,000 borrowers. So their employees aren’t likely to go anywhere either. There’s nothing good about that deal, but it really makes Kaufman and Carper look foolish for going to bat for this company that’s already been delivered support.

If you add all that up, I can’t imagine that Carper and Kaufman are protecting more than a half-dozen jobs with their opposition and “concern.” What they undoubtedly are protecting are massive subsidies to Sallie Mae and the banks, which go not to job creation but to bonuses and stock payments and corporate coffers.

The Delaware Senators are so proud of their work preserving corporate welfare that they do not link to these letters anywhere on their websites.

Stupak campaign sign (photo: Brian Rendel via Flickr)

The push in the House and Senate for finishing the Senate bill through reconciliation, and the push to include the public option in that reconciliation sidecar, has focused attention on the need for 50 votes in the Senate. The road to 218 in the House (actually 217 now, because of two vacancies) has been less discussed, but people are starting to understand that passage is not guaranteed there. And the main impediment has always been Bart Stupak and his allies on the abortion funding issue. He considers the Nelson amendment from the Senate bill unacceptable, and the reconciliation sidecar strategy offers no way to ameliorate it within the current bill.

I was pleased to see that President Obama’s health care proposal did not include several of the sweetheart deals provided to select states in the Senate bill. Unfortunately, the President’s proposal encompasses the Senate language allowing public funding of abortion. The Senate language is a significant departure from current law and is unacceptable. While the President has laid out a health care proposal that brings us closer to resolving our differences, there is still work to be done before Congress can pass comprehensive health care reform.

Let’s recall Stupak’s statements during his brief media flurry after getting his amendment passed last year. “We won fair and square on the floor of the House” was basically his point of view. He considers this a settled victory, and he cannot return home and explain to supporters that the victory transformed into defeat, and he assented to it. Maybe that works for him on some other issues, but not this one. Even though the Nelson amendment may have the same practical effect as Stupak’s, only the latter has his name on it. And the anti-choice groups and the Catholic bishops have Stupak’s back on this.

After understanding that, it becomes a simple question of math. Stupak probably brings 10 House members or so with him on this, not because they are as invested in the abortion funding issue, but because it’s a nice way to vote against a health care bill they don’t want to see pass anyway. All of those votes would need to be made up on the other side, with members flipping from No on the House bill in November to Yes on this one. Virtually all of those potential flippers come from conservative-leaning districts, and all but three are up for re-election in November. If Nancy Pelosi can find 10 votes out of there, she’s a miracle worker. I don’t buy Jim Clyburn’s spin that the House would get even more votes for the bill on the second pass. And Bart Stupak provides the reason why.

The New Jell-O Book of Surprises (image courtesy of the Chemical Heritage Foundation)

Mary Landrieu just signaled that she could support a health care bill moving through the budget reconciliation process. With Landrieu, among the four or five members of the Democratic caucus who were the last to sign on to the health care bill at all, now supporting the sidecar strategy, it seems assured that Senate Democrats will at least give it a shot.

“I don’t know about that, but I’m staying open to see how these negotiations go forward. I’ve not generally been a big supporter, but the Republican Party, the leadership, has really been very, very, very disingenuous in this process,” Landrieu told reporters.

She called the Republicans overtures at bipartisanship “a faux effort.”

Everyone’s focused on whether the Senate could steel themselves to make this happen. The real action now is in the House, where it’s completely unclear whether the votes exist to pass any health care bill at this point, especially with the Stupak amendment left unresolved.

Meanwhile, Debbie Stabenow and Tim Johnson signed on to the Bennet letter on passing the public option through reconciliation, bringing the total number to 24. But the White House signaled today that they’d expend no energy whatsoever in helping that along, and as for the House, see above (and keep in mind that they need to find members who voted against the House bill the first time – the one that had a public option – to vote for it now).

UPDATE: And then there’s Jay Rockefeller, nominally a supporter of the public option, saying that it should not pass through the reconciliation process. . . .

“I don’t think the timing of it is very good,” the West Virginia Democrat said on Monday. “I’m probably not going to vote for that, although I’m strongly for the public option, because I think it creates, at a time when we really need as much bipartisan[ship] … as possible. ”

Rockefeller added: “I don’t think you [pursue] something like the public option, which cannot pass, will not pass. And if we get the Senate bill–both through the medical loss ratio and the national plans, which have in that, every one of them has to have one not-for-profit plan, which is sort of like a public option.”

He doesn’t seem to reject the reconciliation process itself, he just wants to make sure he’s being bipartisan while using a majority-vote process that allows one party to push forward its agenda. Maybe he just wants to preserve and take credit for his medical loss ratio idea. Who knows.

Yesterday, Gen. David Petraeus became the latest military leader to downplay the significance of the military’s Don’t Ask Don’t Tell policy on unit cohesion or military effectiveness, suggesting that he too has no problem with repealing it:

GREGORY: Do you think soldiers on the ground in the field care one way or the other if their comrade in arms are gay or lesbian?

PETRAEUS: I’m not sure that they do. … You heard Gen. Powell who was the chairman when the policy was implemented, had a big hand in that, who said that yes, indeed, the earth has revolved around the sun a number of times since that period 15 months ago. You have heard a variety of anecdotal input. We have experienced certainly in the CIA and the FBI — I know, I served, in fact, in combat with individuals who were gay and who were lesbian in combat situations. Frankly, you know, over time you said, hey, how’s this guy shooting or how is her analysis or what have you?

It was amusing to see Tim Pawlenty, directly after Petraeus said this on Meet the Press, argue that the military thinks the DADT policy has worked. Petraeus is just the latest of the military to say basically the opposite, that repeal would cause no major outcry. He joins the Secretary of Defense, the Chairman of the Joint Chiefs, former JCS Chair and Secretary of State Colin Powell, former Secretary of Defense and Vice President Dick Cheney, etc., etc. There may be a few bigots left in the military leadership (we may hear from some of them this week), but they appear to be in the minority. Far from being indoctrinated or brainwashed, the leadership is simply prepared to make a change they view as no big deal.

So right at this moment, in swoops Joe Lieberman to try and take the lead in the Congress.

Just when you thought Joe Lieberman couldn’t frustrate and perplex liberals any further, he is going off to become chief sponsor of the most significant piece of socially progressive legislation that Congress will deal with this year.

Next week, the Connecticut senator will announce that he’s taking the lead on repeal of Don’t Ask, Don’t Tell, the 1993 law that prohibits gay people from serving openly in the armed forces. Since implementation of the statute nearly 20 years ago, the military has discharged some 14,000 qualified men and women, many of them serving in critical jobs like Arabic and Persian translation.

This is a James Kirchick article, and it’s mainly written to stick liberals in the eye by lauding Lieberman as a proud man of principle, who acts on his beliefs no matter the ideological direction in which they lead. The better explanation is that he needs every man, woman and child in this country eligible to serve in his cascade of proposed military adventures.

But let’s back off the proud man of principle argument for a second. . . .Joe Lieberman could have come out the day Obama was elected and handled this, as it was a campaign promise. Instead, the project fell to relative newcomers like Patrick Murphy in the House and Kirsten Gillibrand in the Senate, because the old guard was simply afraid to address it. Now that the President, practically the entire senior leadership at the Pentagon, close to 200 House members and pretty much everyone in the Democratic caucus in the Senate have signed on, now Lieberman announces his “leadership”? That’s supposed to be a mark of boldness?

If this helps the bill along – Gillibrand is not on the committee of jurisdiction, Armed Services, and having a senior member may help – then great. And Lieberman is merely following what John McCain said all along – when the military comes to him and argues for a change, he will agree to it. At least he held to his word better than St. McCain, who’s in the middle of a primary that has pushed him further to the right. But Lieberman can get over himself on this. Others do the hard work and he enters at the last minute to hog the glory. That’s something less than leadership.

photo: Old Sarge via Flickr

[Ed. Note: The vote to move to consideration of this bill has passed, 62-30. Ben Nelson voted “no.” Blanche Lincoln voted “yes,” but only after an amusing/pathetic dance (see below, after the jump). Both senators from Maine, along with the retiring Voinovich and the newly elected Scott Brown were the GOP senators joining Dems in the “aye” column.]

The Senate is voting on moving forward on HR 2847, which is the shell for the Senate’s jobs bill. Without Sen. Lautenberg, who is ill, on the floor today, Democrats would need at least two GOP votes to move forward to consideration of the $15 billion dollar jobs bill, which right now includes four provisions that Republicans either wrote, co-wrote, or co-sponsored in the recent past. In his speech before the vote, Harry Reid insisted that there would be other job creation bills in the future as part of the “jobs agenda” throughout the year in the Senate. He invited Republicans to join in the business of governing, saying, “My friends on the other side of the aisle share this responsibility. When I had 60 votes, all the responsibility was mine. It’s no longer that way. We’re down to 59.”

It’s genuinely unclear whether or not this cloture vote will pass. We’ll keep you posted.

…Scott Brown just voted yes on advancing the jobs bill. So far he’s the only Republican to flip. Can’t wait for the Tea Party blast faxes of betrayal.

…Susan Collins just voted aye, and she wrote that letter urging Reid to reconsider taking away all the tax breaks in the Baucus-Grassley bill. Provided no Democratic defections, this will pass today.

…Snowe and Voinovich just voted aye as well. In the end this will pass with a little breathing room.

…Here’s Scott Brown’s statement on voting yes on his first mildly significant piece of legislation in the Senate:

I came to Washington to be an independent voice, to put politics aside, and to do everything in my power to help create jobs for Massachusetts families. This Senate jobs bill is not perfect. I wish the tax cuts were deeper and broader, but I voted for it because it contains measures that will help put people back to work.

I was disappointed with the continuation of politics-as-usual in the drafting of this bill, as it was crafted behind closed doors, without transparency and accountability. I hope for improvements in that process going forward. All of us, Republicans and Democrats, have to work together to get our economy back on track. I hope my vote today is a strong step toward restoring bipartisanship in Washington.

Clearly, the tea party patriots supported his run in Massachusetts to restore bipartisanship in Washington.

Robert Gibbs justified the lack of a public option in the health care reform bill today by laying it at the feet of Harry Reid.

The White House says it’s up to Harry Reid whether the Senate votes on the public option […]

White House press secretary Robert Gates [sic. should read: Gibbs] said today that the White House will leave that up to the Senate Majority Leader.

“I think they’ve asked for a vote on the floor of the Senate, and that’s certainly up to those who manage those amendments and up to Leader Reid,” Gibbs said.

We have seen this before during the health care debate. The House says it’s up to the Senate to determine what can pass. The Senate says it’s up to the White House to expend the political capital to get it across the line. And the White House punts it right back to Congress. Nobody wants to actually be responsible for the demise of the popular measure, but everyone wants to be on its side. Therefore you get the preposterous claim from Dan Pfeiffer today that the President didn’t include a public option in his proposal, but he supports it.

To this point, all of this has been predictable. However, Reid’s rising chances to actually win re-election in Nevada may offer a glimmer of hope. A new statewide poll shows that the inclusion of a Tea Party candidate as a third option in the race bring Reid well within striking distance, actually within the margin of error. Sue Lowden only leads 42-37 over Reid, with Tea Party candidate Jon Ashjian at 9%. With Danny Tarkanian it’s even closer, with Reid down 40-39 and Jon Ashjian at 11%. Reid is at 58% disapproval in the poll and clearly tops out around 40% support, but that may actually become a winning number, given the third-party pull and the likely success of Reid spending untold millions on the race. A public option push – it would have to actually be successful this time – in a state where the public option holds much higher support than the overall bill – could put Reid over the top.

That’s probably not an insignificant factor in his decision-making. But the whip count would probably have to reach a critical mass to bring that back into play. Reid’s probably just hoping for a positive effect to getting something, anything done, enough to make him competitive in Nevada again.

UPDATE: If you want to read tea leaves, Reid just announced the list of attendees for Thursday’s health summit. . .

Senate Majority Leader Harry Reid
Assistant Senate Majority Leader Dick Durbin
Democratic Conference Vice Chairman Charles Schumer
Democratic Conference Secretary Patty Murray
Senator Max Baucus, Senate Finance Committee Chairman
Senator Chris Dodd, Senate Banking Committee Chairman
Senator Tom Harkin, Senate HELP Committee Chairman
Senator Jay Rockefeller, Senate Finance Subcommittee on Health Care Chairman
Senator Kent Conrad, Senate Budget Committee Chairman

The relevant chairmen we expected. Rockefeller is positive, but given his subcommittee, also expected.

The White House’s health reform plan is up at WhiteHouse.gov, or you can take a peek here. This represents a compromise document, one prepared to pass by using the Senate bill as a base and making changes that the Administration thinks could pass through the reconciliation process if need be, “informed by the process” that has already taken place of the House and Senate bridging their differences, according to White House communications director Dan Pfeiffer.

What’s in this bill that differs from the Senate bill? Let’s take the main pieces:

• Affordability. The subsidies improve upon the Senate bill, particularly at the low end, but also between 250-400% of poverty, where the maximum amount of income paid out of pocket as in insurance premium dips from 9.8% to 9.5%. The actuarial value also increases at the low end slightly, from 133% to 250% of poverty. For instance, instead of a 70% actuarial value at 250% of poverty, the number rises to 73%. These are cosmetic but tangible changes upward from the Senate bill.

• Donut hole. The donut hole, where Medicare Part D subscribers pay out of pocket for prescription drugs above a certain amount, would now get closed by this legislation.

• Community health centers. Bernie Sanders worked hard to get close to $10 billion in additional funding for community health centers, some of the most efficient money in the entire bill, offering universal coverage to low-income community residents. The House bill allocated $12 billion for CHCs. The compromise proposal sets the number at $11 billion.

• Rate review: This is the Health Insurance Rate Authority proposal from Sen. Feinstein that I mentioned last night. Again, I cannot see how this becomes germane through a reconciliation process. I asked Dan Pfeiffer today if they took that into account when crafting the proposal, and he said they did, although he added that “These calls are made by [the] Senate parliamentarian.” In other words, this piece may get flagged by the parliamentarian, in which case the Senate could vote on waiving the Byrd rule, which would take 60 votes to overcome. That could be the plan, to force a clean vote for Republicans between the people and the insurance industry. This part of the bill would also require states that do not currently conduct rate review to do so.

• Losing the Cornhusker Kickback. The bill cancels the Nebraska deal to pay out their expansion of Medicaid coverage in perpetuity. However it adds serious assistance to states for the expansion, adding a year to cover the full cost (until 2014), upping funding to 95% through 2018 and 90% thereafter, with more money for states that already have expanded their coverage. Basically, the “unfunded mandate” of expanding Medicaid is extremely small. While this does not just take over Medicaid funding as a federal concern (which it should), it goes pretty far in that direction.

• Excise tax. Essentially, the changes mirror the deal already worked out between the White House and labor to tweak the excise tax, although the bill raises the threshold for the excise tax all the way up to $27,500, higher than previously suggested. Nothing in the excise tax exempts collectively bargained plans – the changes specifically for labor now apply to all plans. This will allow the tax to, in the words of Jason Furman of OMB, “focus on the costliest plans, not the costliest workers.”

• Individual and employer responsibility. To make up some of the money from the tweaks to the excise tax, increase in FMAP funding for states and the improved affordability credits, the bill adds a variety of provisions. One of the ways is by increasing the penalties for the individual mandate and the employer responsibility. The hard dollar amounts are actually smaller for the individual mandate, but the percentage of income has increased. Basically it adopts the percentages from the House bill. The “hardship” exemption on affordability, exempting those who cannot find coverage that costs a certain percentage of income, remains.

On employer responsibility, the penalties are jacked up significantly, though there’s an exemption for the first 30 employees). The penalty goes from $750 per worker to $2,000.

• Waste, fraud and abuse in Medicaid/Medicare. Basically they adopt a bunch of Republican proposals from old bills to crack down on waste, fraud and abuse in public health programs.

• Other offsets. There are increased savings through lower Medicare Advantage payments (basically, lower subsidies to private insurers to run that program). They’ve added an extra $10 billion in givebacks from branded pharmaceuticals (basically increasing the givebacks in the PhRMA deal). They’ve extended the Medicare HI (Hospital Insurance) tax, the payroll tax for Medicare, onto unearned income, and increased it for high-income earners – there’s even a 2.9 percent assessment on dividend and capital gains income. And the “black liquor” exclusion is included, along with a provision ending certain tax shelters.

That’s most of the important provisions in the bill. This supplement would then get tacked on to the Senate bill, presumably through a reconciliation sidecar, and passed as an overall comprehensive piece. The total bill, the White House calculates, would cost $950 billion, an increase over the House and Senate bills as well as Obama’s former baseline number, and would be fully offset.

You’ll notice I’ve left off the public option. It’s not in this bill. Neither is any change beyond the Senate bill of the abortion funding provisions.

photo: Patricia Drury via Flickr

A few people took issue with my description of Dianne Feinstein as a “radical moderate” in this story about her bill to create a national health insurance regulator to undergo rate review whenever an insurer hikes premiums. I didn’t really put that in the context of being sarcastic the way I should. But what I meant is that a lawmaker with little interest in populism was using something in the news affecting her constituents to take it out on everybody’s favorite villain, health insurers. Only she was also creating something that remedied one of the more glaring omissions in the bill, the lack of federal oversight as a backstop to the state-based framework.

Well, Feinstein’s fellow radical moderate, Barack Obama (again, sarcasm), has picked up on the proposal and will apparently include it in his health insurance bill presented to the nation in advance of the bipartisan summit.

President Obama will propose on Monday giving the federal government new power to block excessive rate increases by health insurance companies, as he rolls out comprehensive legislation to revamp the nation’s health care system, White House officials said Sunday […]

By focusing on the effort to tighten regulation of insurance costs, a new element not included in either the House or Senate bills, Mr. Obama is seizing on outrage over recent premium increases of up to 39 percent announced by Anthem Blue Cross of California and moving to portray the Democrats’ health overhaul as a way to protect Americans from profiteering insurers.

Congressional Republicans have long denounced the Democrats’ legislation as a “government takeover” of health care. And while they will likely resist any expansion of federal authority over existing state regulators, they will face a tough balancing act at the meeting with the president to avoid appearing as if they are willing to allow steep premium hikes like those by Anthem.

Specifically, Obama will just pick up Feinstein’s bill, whole, and incorporate it into the legislation.

It’s fair to wonder if this will have a major impact; the individual market where most of these kinds of rate hikes happen would hopefully go away, and the exchanges already have a rate regulation and review component. This may actually stop a “Wild West”-style individual market from taking shape; if rate hikes cannot match health inflation in a way to ensure giant profits, insurers would be less likely to offer insurance to individuals outside of the exchanges. The other positive here is to give the federal government a role in regulating insurance, a role which can expand over time. Obviously, Republicans live to decapitate federal regulatory agencies, but the status quo of the health care bill, to leave it to the states, is unacceptable and unlikely to work effectively, so a federal regulator at least offers another bite at the apple.

The big question I have is the fact that it’s not germane for reconciliation. CBO will probably decline to score such a federal rate reviewer, meaning it would be vulnerable to the Byrd rule. Incorporating it into the White House legislation is nice, but it cannot pass within the comprehensive bill.

However, it can pass as standalone legislation. And as the article notes, it would create a pretty nice little vote to make Republicans take. Few bills would offer a choice between the people and the health insurance industry so cleanly.

Senate Republicans are trying to frame this as an admission that the comprehensive bill wouldn’t stop large rate hikes. But that’s a temporary tactic, and if Democrats propose a solution, the opposition would have to choose a side.

UPDATE: The Hill reports that the bill will be released at 10AM ET Monday.

[Welcome Dean Baker, and Host David Dayen.] [As a courtesy to our guests, please keep comments to the book.  Please take other conversations to a previous thread.  – bev]

False Profits: Recovering from the Bubble Economy

Let me tell you my story about reading this book.

I spent some time last month in San Francisco for a little thing called the Prop 8 trial (perhaps you’ve heard of it?), which happened to coincide with the worst week for liberalism in recent memory. In the space of a few days, Martha Coakley failed in Massachusetts; the Supreme Court opened the spigot on money in politics with the Citizens United ruling; Air America signed off; and on and on. What’s more, it rained pretty much every second that week in San Francisco, and I spent most of my non-courtroom time huddled on a street corner waiting for a MUNI bus. I’ve often joked that in the movies, rain always symbolizes rain, but in this case it accurately symbolized the general mood of progressives circa mid-January 2010. The gloom represented the lost year for the progressive agenda; an economy saddled with millions of Americans jobless and seemingly no plan to get them back to work; a moribund legislative branch bound by arcane rules and processes that frustrated action; an executive branch aloof and adrift; and a judiciary branch that might as well have their own personal corporate sponsorships. Most of all, progressives were wondering where the fight had gone from their political leaders, how the steadfast and resolute nature of Truman, Roosevelt and Kennedy, could lead to the tepid mush that passed for boldness today.

My literary accompaniment for this week was the book False Profits by Dean Baker, which dared to name names about the elites most responsible for the biggest economic crisis in generations. In the book, Baker highlights the trillions of dollars they squandered, the suffering they caused, the mistakes they made and continue to make, and asks the obvious question: “Why do these people still have jobs?”

It was oddly comforting.

Because Dean Baker, armed only with facts and common sense, actually presented a simple and coherent argument, actually offered solutions, actually held the responsible parties accountable and actually vowed not to forget about their transgressions.

You know, like a Democrat is supposed to do, in the theoretical model of politics that inhabits our best hopes.

Baker, the co-director of the Center for Economic and Policy Research, pens a fairly simple message, broadly described – our elites have failed, and yet they somehow remain elites. Make sure you understand this phrase before embarking upon this book – “the eight trillion dollar housing bubble.” Baker points to this as entirely responsible for the economic collapse, and provides the economic underpinnings for such a claim, so rarely heard in Washington debates about spending and deficits.

In Baker’s retelling, the Federal Reserve Board and the Treasury Department, specifically Alan Greenspan, Ben Bernanke and Henry Paulson (featured on the cover as the “false profits” of the title), allowed the housing bubble to grow unchecked, ignored and even encouraged the reckless mortgages that intensified risk, and were caught completely off-guard by the eventual meltdown. Stripped of their home equity wealth, consumers could not ring up the purchases that fed the national economy. Foreclosures and a glut of vacant housing on the market devastated the construction industry. The write-offs and toxic securities at the banks brought them to their knees. Baker says this was completely predictable:

“None of this is complicated or mysterious. Anticipating this disaster didn’t require brilliant insights or complex models. In fact, a good student in an introductory economics course would have possessed all the knowledge needed to see this train wreck coming.

However, the political elites do not want the official story to be that simple. They don’t want the public to know that the people holding the top economic policy positions are incompetent, corrupt, or both. By burying the story in complexity, these elites are trying to confuse the American public.”

It’s perhaps unsatisfying to chalk up a recession which has caused so much pain and suffering to the fact that a few people in key positions simply didn’t do their job well. But that’s Baker’s thesis statement, and he proves his point over and over using simple math and common sense, making the complexities of financial and housing policies seem perfectly obvious. Baker attacks the usual excuses from the elites – that they needed more regulatory tools (actually, the Federal Reserve had plenty of authority to crack down on the housing bubble) or that they lacked a “systemic risk regulator” (the Federal Reserve is quite well-equipped to serve in this capacity), and comes back to his core point constantly – that any economic “expert” who created this much havoc through sheer negligence doesn’t deserve the title, let alone their job.

Most important, Baker goes beyond identifying the central problem but articulates innovative solutions for both the jobs crisis and the reforming of the financial sector. Baker, an idea factory for stimulus, follows the principles of Keynes while offering new ways to introduce those types of demand-side stimulus measures. Baker endorses ideas you’ll never hear from other liberals, such as: subsidies for local transit agencies to encourage low-cost ridership; public funding for clinical drug trials (which could lower the cost of prescription drugs and allow generics to be sold more immediately); New Deal-type funding and support for writers and artists to post copyright-free work on the Internet; and a work-sharing tax credit that would pay companies to reduce worker hours at the same salary, allowing for more hiring. Some of Baker’s previous ideas, like transitioning homeowners facing foreclosure into renters of their own properties or instituting a financial transactions tax on stock purchases, have begun to gain traction, with Fannie Mae implementing a modified “own to rent” program, and global financial leaders talking about financial transaction fees.

I’m pleased to have Dean Baker with us today to talk about his book. Heck, I’m pleased to have read it when I did, considering the faith it gave me that somewhere out there, liberals still know how to come up with policies that solve problems, and how to call incompetence what it is.

by twolf1

For the first time in the health care debate in a couple months, the major players seem to be reading from the same script. The President made his pitch for health care reform before the big summit this week. Democrats, including members of the leadership, continue to sign on to using reconciliation to finish off the bill. And Harry Reid provided a timeline.

Democrats will finish their health reform efforts within the next two months by using a majority-vote maneuver in the Senate, Majority Leader Harry Reid (D-Nev.) said.

Reid said that congressional Democrats would likely opt for a procedural tactic in the Senate allowing the upper chamber to make final changes to its healthcare bill with only a simple majority of senators, instead of the 60 it takes to normally end a filibuster.

“I’ve had many conversations this week with the president, his chief of staff, and Speaker Pelosi,” Reid said during an appearance Friday evening on “Face to Face with Jon Ralston” in Nevada. “And we’re really trying to move forward on this.”

The majority leader said that while Democrats have a number of options, they would likely use the budget reconciliation process to pass a series of fixes to the first healthcare bill passed by the Senate in November. These changes are needed to secure votes for passage of that original Senate bill in the House.

I think the White House and the Congressional leaders looked around, recognized that most of the rest of the agenda was stalled, and realized that if they wanted to show progress to the base they had to take up this health care bill, which offered the least resistance since something’s already passed the Senate and they could finish it off with 50 votes.  A year of nothing in 2010 after a year of health care without final passage in 2009 would clearly have been devastating, and really there aren’t many other paths to progress. And with the President working the obstructionism angle hard, the ability to pass health care even in a polarized environment will, they probably believe, reflect well on their abilities. Here’s the last paragraph of the President’s YouTube address:

What’s being tested here is not just our ability to solve this one problem, but our ability to solve any problem. Right now, Americans are understandably despairing about whether partisanship and the undue influence of special interests in Washington will make it impossible for us to deal with the big challenges that face our country. They want to see us focus not on scoring points, but on solving problems; not on the next election but on the next generation. That is what we can do, and that is what we must do when we come together for this bipartisan health care meeting next week. Thank you, and have a great weekend.

The thinking goes that finishing health care would show the solving of a problem. And Mitch McConnell had to acknowledge that his ability to block passage is limited.

I do agree that the Democrats seized on the news peg about Anthem Blue Cross of California’s rate hike to return to health care, and it was a fairly sharp tactic for them. I’ve heard about Anthem in at least two dozen public comments from Administration officials in the past week. And it’s allowed a pivot, to contrast the bill with the consequences of inaction.

The only problem I see with this newfound approach from a mechanical standpoint, regardless of the content of the bill, is that they are going about it in a modular fashion. They first sought agreement on a procedure, and the reconciliation sidecar appears to have won out. Since the House refuses to go first, the action has been on the Senate side. But they must figure out a parliamentary function, to make it so the sidecar assumes passage of the Senate bill, otherwise the CBO scoring will prevent that solution (see here).

In addition, everyone is basically neglecting the House in all of this, and in particular the math of a bill without the Stupak amendment. I’ve probably mentioned this 50 times, but I don’t know where you find those dozen or so votes who would drop off the bill for that reason, no matter what gets passed in a sidecar (especially because this abortion issue probably cannot be solved there).

photo: Leo Reynolds via Flickr

One of the reasons many of us had so many problems with the health care legislation running through the Congress was that it lacked a federal overseer for the insurance regulations. As such, it punted those responsibilities over to the states, which have proven themselves unwilling or unable to enforce strict regulations. The design of the exchanges, from a state-based framework in the Senate bill to a more national framework in the House bill, alleviate some of this, but still the enforcement falls to the states.

Radical moderate Dianne Feinstein, of all people, has a solution to this – creating a Medical Insurance Rate Authority which would have say over insurer rate hikes at the federal level. It’s a small leap from this, intended to react to Anthem Blue Cross’ 39% rate hike in California, and a federal regulator of the health insurance industry with oversight over all regulations.

Sen. Dianne Feinstein (D-Calif.) said Friday that she plans to introduce legislation that would bar insurance companies from enacting health insurance premium rate increases that the Secretary of the Health and Human Services deems to be unjustified.

The bill would create a national Medical Insurance Rate Authority, which would be able to prevent such increases. Feinstein’s announcement follows reports that Anthem Blue Cross had intended to jack up premiums for certain policyholders in California by as much as 39 percent.

This should be enacted tomorrow. It leads to the fixing of one of the most glaring problems with the health care bill – its weak regulatory enforcement framework. We know from the financial collapse that federal regulators aren’t bullet-proof. But they exceed by leaps and bounds the state network of regulators, who are even more susceptible to industry capture.

Eric Massa said in his talk with supporters that this would be a good way to get Republicans on the record with their belief in the interstate sale of insurance. “We’ll agree to that, if there’s a federal regulator. A single federal regulator. A single payer federal regulator…” Obviously, there’s no way Republicans would agree to such a thing, since their purpose in seeking interstate insurance is to make the health insurance industry look like the credit card industry, where all the companies pile into one state with virtually no regulations and then leave everyone no choice but to buy that crappy product.

So it’s an open question whether this Feinstein bill will take off. But by centering it solely on insurance rates at first, perhaps she can back-door it into existence.

DoJ says: fuhgeddaboudit (photo: sixes & sevens)

With a Friday night news dump, the Justice Department has released the Office of Professional Responsibility report on the conduct of Bush Administration lawyers in crafting terrorism policy. The House Judiciary Committee has put the report up on its website.

Marcy Wheeler has a working thread up; she and her commenters are well-equipped to do the spade work on every inch of the report. I want to note the Memorandum for the Attorney General, however, from career DoJ attorney David Margolis, who made some additional decisions on the draft report after its completion.

Margolis, as was expected based on news reports, essentially shielded Jay Bybee and John Yoo from any disciplinary action by absolving them from any professional misconduct in writing their justifications of waterboarding and other torture techniques. He gives his explanation here:

OPR concluded that former Office of Legal Counsel (OLC) attorneys John Yoo and Jay Bybee engaged in professional misconduct by failing to provide “thorough, candid and objective” analysis in memoranda regarding the interrogation of detained terrorist suspects […]

For the reasons stated below, I do not adopt OPR’s findings of misconduct. This decision should not be viewed as an endorsement of the legal work that underlies those memoranda. However, OPR’s own analytical framework defines “professional misconduct” such that a finding of misconduct depends on application of a known, unambiguous obligation or standard to the attorney’s conduct. I am unpersuaded that OPR has identified such a standard. For this reason and based on the additional analysis set forth below, I cannot adopt OPR’s findings of misconduct, and I will not authorize OPR to refer its findings to the state bar disciplinary authorities in the jurisdictions where Yoo and Bybee are licensed.

This is essentially getting away with murder, or if you like, torture. Margolis has saved Yoo and Bybee from any disciplinary action, relying on Yoo and Bybee’s own responses to the charges and what amounts to a generous reading of the law. Margolis basically took Yoo and Bybee’s side, that OPR did not apply the necessary framework, over OPR. It amounts to “we cannot know what was in the heads of Yoo and Bybee.”

That’s how it reads to me, anyway, maybe others will disagree. They can decide for themselves. But basically, another, and perhaps the last, opportunity for accountability and justice for the Bush torture regime, at least from inside the US government, has been squandered.

In releasing the report, John Conyers, the Chair of the House Judiciary Committee, said that “The materials released today make plain that those memos (written by Yoo and Bybee) were legally flawed and fundamentally unsound, and may have been improperly influenced by a desire to tell the Bush White House and the CIA what it wanted to hear.” Conyers added that “While the Department ultimately concluded that the lawyers did not breach their minimum professional obligations, I certainly hold top lawyers at OLC to a higher standard than that, as all Americans should.” He vowed hearings on the matter in the near future.

Stern letters will surely ensue.

Updates after the jump. . . .

UPDATE: To be clear, some news reports made it sound like OPR would change its findings, per Margolis’ wishes. They did not. Margolis simply overruled them, and ordered OPR not to deliver its findings to state bar associations. More from Justin Elliott.

UPDATE II: The Senate Judiciary Committee already has a date for their hearings on the OPR report: Friday, February 26 at 10am. Patrick Leahy just released a statement:

“The report from the Office of Professional Responsibility is a condemnation of the legal memoranda drafted by key architects of the Bush administration’s legal policy, including Jay Bybee and John Yoo, on the treatment of detainees. The deeply flawed legal opinions proffered by these former OLC officials created a ‘golden shield’ that sought to protect from scrutiny and prosecution the Bush administration’s torture of detainees in U.S. custody. In drafting and signing these unsound legal analyses, OLC attorneys sanctioned torture, contrary to our domestic anti-torture laws, our international treaty obligations and the fundamental values of this country.

“I have serious concerns about the role each of these government lawyers played in the development of these policies. I have said before that if the Judiciary Committee, and the Senate, knew of Judge Bybee’s role in creating these policies, he would have never been confirmed to a lifetime appointment to the federal bench. The right thing to do would be for him to resign from this lifetime appointment.

“As a United States Senator, as a former prosecutor, and as an American citizen, I am offended by the premeditated approach taken by former high-ranking officials in the Office of Legal Counsel in constructing the legal underpinnings of seriously flawed national security policies.”