The People's House

(from theobamadiary.com)

(from theobamadiary.com)

Love It!

(from theobamadiary.com)

Republicans

Orpheus in Greenwich Village

By Jack Gilbert

What if Orpheus,

confident in the hard-

found mastery,

should go down into Hell?

Out of the clean light down?

And then, surrounded

by the closing beasts

and readying his lyre,

should notice, suddenly,

they had no ears?

I think abut Republicans a lot. I have concluded that our current legislative lot are much like the beasts Orpheus discovered in Hell - they have no ears for his, or anyone else's music. And they are bloody dangerous with their thrashing about.

Our only choice is to throw them completely out. November, 2014 is the time.

I am angry today. The GOP's relentless hammering of Secretary Sebelius is the cause. I know politics is a blood sport, but real warriors have clear value codes, such as Honor Your Adversary. The GOP has completely forgotten all of this.

Next November. Payback.

I will try to rediscover my "clear and quiet eyes" perspective tomorrow.

"We Will See This Through!"

The President's speech today in Boston. Obama comes on about 14:30, But Gov. Deval Patrick's remarks are worth hearing.

Republicans should pay attention. This guy is determined.

And I completely believe him.

This Approach Will Backfire

My prediction: this will backfire. Americans don't like dismissive, rude harassment of their public officials. Secretary Sebelius has never sought the spotlight; she has been doing her level best to serve the country, to bring affordable healthcare to all Americans. She does not deserve this level of disrespect. Agree or disagree with the ACA policy, Kathleen Sebelius deserves better than being interrogated as an enemy combatant. 

By Next June

Where will we be by next June? Will the ACA be deemed a success? Will Congress have negotiated a budget? Will Immigration reform have passed? Will the Republicans civil war still be underway? What do the Democrats chances look like for retaking the House in November? I find that asking myself questions that include a longer time horizon help me crystallize my thoughts. So here's where I come out, at least for now:

• The ACA will be a success, and possibly a great success. The website problems will be behind us. Somewhere between six and ten million people will have signed up for health insurance on the Exchanges. From 7 to 10 million people will also have been added to the Medicaid rolls. Here is the key item: the under 35 group will have signed up in sufficient numbers to ensure a stable risk pool in the insurance exchanges. The political storm over almost 3million people losing their individual coverage, and having to buy sometimes more expensive policies on the Exchanges, is behind us (These are the people whose insurance companies adjusted their policies in the last three years, causing them to lose their grandfathered status.) There has been no noticeable or general diminution of the quality of healthcare delivery, and the attention has shifted to those states that did not accept the Medicaid expansion. People in those states with incomes between 100% and 138% of FPL, are not able to join Medicaid or to get subsidies for buying insurance on the Exchanges. This has gotten a lot of media attention, causing problems for Republican legislators and governors. It looks like this will be a big and winning issue for Democrats in the coming elections.
• Contrary to early expectations, a budget deal was finally reached just before Christmas. The sequester was cancelled and replaced with a combination of spending cuts, modest entitlement reform (chained CPI for Social Security, means testing for Medicare) and new tax revenues (closing loopholes). Like the vote to reopen the Government in October, the Budget vote passed with both Democratic and Republican votes. Conservatives (Tea Party) were outraged and vowed to aggressively press primary opposition to the "establishment turncoats". Obama has essentially achieved the basic deal he offered Boehner in the summer of 2011 - tax revenues ($1.0-$1.2 trillion over ten years) and $2.8-$3.0 trillion in spending cuts, totaling the original Bowles-Simpson target of $4.0 trillion - with a big difference: he also got the tax hike on the wealthy that would not have occurred if Boehner had taken the 2011 deal. The MSM has figured this out, and more commentators are questioning the "Obama is a terrible negotiator" meme.
• Immigration reform, including a path to citizenship, has not passed. A group of moderate Republicans broke ranks and signed on as cosponsors to the Senate bill; but it was not enough. Conservatives rallied aggressively and Boehner refused to call a vote.
• The intra-GOP battle is in full swing. All the major GOP leadership are being primaried. Heritage Action, Club for Growth and other Conservative super-PACs are pouring in money to defeat the "turncoats". The hard Right is incensed about the mainstream Republican surrender on Obamacare and then on taxes. Talk is being heard of a Third Party 2016 candidate, unless Conservatives can knock out GOP legislative leadership in the very-soon-arriving primaries.
• Democrats are confident that they will hold the Senate and think they have better than en even chance to retake the House. GOP infighting, residual public anger over the shutdown, the emerging big success of Obamacare, and the failure of Congress to pass Immigration reform have combined to create, quite possibly, a "perfect storm" - a wave election sweeping Republicans out of office.

Those are my forecast. I'm least confident about my Budget/New Tax Revenue prediction. But I am quite sure three of the first four predictions will happen - fully supporting the possible wave election forecast in the last bullet point.

In short - I believe the Democrats will hold the Senate and retake the House. And in 2015 Obama will complete his agenda: Immigration reform; Cap and Trade, or an equivalent measure to control carbon emissions and greenhouse gases; a $9 minimum wage; modest gun control (background checks); and significant job-creating public investment (infrastructure, green energy, manufacturing enterprise hubs).

And 2016 is beginning to look like a Hillary Clinton landslide!

ACA Update

Above is a picture of Jeffrey Zients, Acting Director of the Office of Management and Budget (OMB), who has been assigned by President Obama to fix the ACA website mess. Today he held a conference call with reporters and gave (according to numerous sources) a clear, detailed summary of what has gone wrong. He has appointed software developer QSSI, architect of the ACA federal data hub (up and running well), to be the General Project Contractor (as opposed to HHS playing that role, as they have up until now). Zients said the healthcare.gov site will be up and running effectively by the end of November.

I'm inclined to believe him. He's been a successful problem-solver for the President: The Washington Post called him President Obama's "weed-wacker". Meanwhile, GOP pundits are announcing ruin. Here's Peggy Noonan at the WSJ:

We should not lose The Headline in the day-to-day headlines. This is big history, not small. The ObamaCare rollout is a disaster for the White House, not a problem or a challenge or an embarrassment, not a gaffe or a bad few weeks. It is a political disaster...

Here's Kim Strassel, also of the WSJ:

After 16 long days of vowing to Republicans that they would not cave in any way, shape or form on ObamaCare, Democrats spent their first post-shutdown week caving in every way, shape and form. With the GOP's antics now over, the only story now is the unrivaled disaster that is the president's health-care law.

The picture is not pretty right now, and it's going to get worse before it turns the corner. Many, most likely millions of people who have carried bare bones policies on the individual market, are going to get their policy cancellation notices and told that their policies are not ACA compliant. About 14 million people buy individual insurance and probably half of these folks have minimal coverage policies that have been adjusted in the last 3 years (since ACA was passed) and therefore are not "grandfathered". This is where premium "sticker shock" will be real, especially for single people earning over $30,000, and therefore not entitled to significant subsidies.

Sticker shock is one thing. But what happens if there is no way for them to sign up by December 15, for coverage beginning January 1, and avoid a gap in coverage? A very real problem that we will hear much alrarum about in coming days. My conclusion: there will be a fix, if needed, probably by HHS extending the date out 3-6 months for when all policies must be compliant; then insurance companies can issue policy extension riders to their customers. But it will get very noisy.

Will Democrats abandon the ACA ship and team up with the GOP to delay the individual mandate? No. They will (and already are) asking for an extension of the open enrollment period beyond March 31, 2014. They may even ask for a reduction (even elimination) of the Year 1 penalty (currently $95), but they will not ask for a delay in the mandate itself.

These may be good weeks coming up for the GOP. The Obamacare House may be appearing to break apart. Just hang tight. This will pass. Obamacare will make it through this part of the storm.

The only real and substantive question is: When will we know if the under 35s' are signing up? This is the core of the Conservative argument against Obamacare's economic structure. I have argued the "young" will sign up. Conservatives are ferocious in their disagreement. I think we will start getting numbers soon. For a really clear picture, we might have to wait until Christmas.

But remember: the under 35s' signed up in Massachusetts, albeit not quickly, and the penalties were modest, similar to what has been laid out in the ACA.

As ever, count me an optimist.

More Good News!

Healthcare costs are moderating. For many years cost growth has exceeded GDP by a meaningful margin, causing National Health Expenditures (NHE) to grow as a percent of GDP. Economists track this as excess cost growth, the difference in cost growth per capita and GDP growth per capita, Here's a chart showing the trend in excess cost growth:

The ECG (Excess Cost Growth) began to moderate before the Recession; turned negative during the Recession; surged back for a short time early in the recovery; and has moved back down to the 0.0 - 0.5% range in the last two years.

What will the ECG rate be going forward? This is a big deal, because long term budget projections for Medicare and Medicaid are founded on this rate forecast, and these two Mandatory Spending areas drive the entire Government Budget Forecasts. If ECG stays at 0.5% or less, we have no long term debt or entitlement problem. Debt to GDP levels will gradually decline from the current mid-70% level to the 50% level and below.

Let me say this clearly again: If ECG stays at its 2009-2013 level, we have no debt or long term entitlement problem. Can you imagine how this would change the political conversation if this becomes the official forecast?

So what are the chances of this major miracle happening? Pretty good, I believe; and studies are beginning to be done investigating the possibility that the cost slowdown is not just recession based, that there might be something structural going on, that could give us huge budget relief going forward. A few examples:

• A study published in the May issue of Health Affairs titled "The Slowdown in Healthcare Spending in 2009-2011 Reflected Factors Other than the Weak Economy and Thus May Persist".

Abstract

During and immediately after the recent recession, national health expenditures grew exceptionally slowly. During 2009–11 per capita national health spending grew about 3 percent annually, compared to an average of 5.9 percent annually during the previous ten years. Policy experts disagree about whether the slower health spending growth was temporary or represented a long-term shift. This study examined two factors that might account for the slowdown: job loss and benefit changes that shifted more costs to insured people. Based on an examination of data covering more than ten million enrollees with health care coverage from large firms in 2007–11, we found that these enrollees’ out-of-pocket costs increased as the benefit design of their employer-provided coverage became less generous in this period. We conclude that such benefit design changes accounted for about one-fifth of the observed decrease in the rate of growth. However, we also observed a slowdown in spending growth even when we held benefit generosity constant, which suggests that other factors, such as a reduction in the rate of introduction of new technology, were also at work. Our findings suggest cautious optimism that the slowdown in the growth of health spending may persist—a change that, if borne out, could have a major impact on US health spending projections and fiscal challenges facing the country.

With Utter Conviction

From The Huffington Post

The hard Right believes this stuff - the Shutdown/near Default was "beautifully done". The GOP has succeeded in branding themselves "the anti-Obamacare party". And so on. It leaves me breathless and a bit shaken. The bubble seems impenetrable. Even contrary facts are made to fit in. Wow!

Why would the GOP want to brand itself as the resolutely Anti-Obamacare Party? There is only one reason I can think of: they are totally convinced that it will fail. Why? Just because of the bad website? Surely they know that this can and will be fixed. No - it's the bad website combined with their absolute certainty that the young, under 35s' will not sign up. Here are some very recent comments from two smart conservative analysts:

First, Megan McArdle at Bloomberg - "Is Obamacare in a Death Spiral":

The exchanges were also broadly understood to be needed to get young, healthy people into the system. Somewhat naturally, almost every story you’ve seen about a new enrollee -- including those told by the president this morning -- has focused on someone who couldn’t buy insurance before, or who had very expensive insurance. But it’s not surprising that those people are fighting through the system to get coverage; they would pull themselves to the top of Mount Rushmore using only their teeth if that’s what it took to get a cheap insurance policy. What we need to know is what is happening among the people who didn’t need Obamacare to help them buy insurance, because insurers would be perfectly happy to sell them a policy without it. Those are the folks whose premiums will cover treatment for the rest...

Judging from President Obama’s speech, the administration has decided to triple down on the “burn the boats” strategy pioneered by Hernan Cortes in his conquest of Mexico: Make a total commitment in the hopes that this will somehow enable you to overcome impossible odds. There was no sign of a Plan B (other than call centers), no hint that they might consider a full or partial delay if they couldn’t get the systems working on time. Presumably they think (correctly) that the longer this goes on, the harder it will be to implement a delay, because so many people will have lost their existing insurance and/or bought new policies through the exchanges. But as I pointed out last week, while the “burn the boats” strategy sometimes ends with an improbable victory, the problem is that the other way it ends is in . . . well, a death spiral.

And now, Yuval Levin from The National Review:

The healthy young man who sees an ad for his state exchange during a baseball game and loads up the site to get coverage -- the dream consumer so essential to the design of the exchange system -- will not keep trying 25 times over a week if the site is not working. The person with high health costs and no insurance will.  One might add that he’s probably not going to call into the call center, wait three weeks to get his PDF application mailed to him, review it and send it in, wait another week or two for notification about his subsidy eligibility, and then (finally!) call back yet again to check out his policy options. Some will, of course. But at every tedious step, you will lose people.

Uninsured young people, those under 35 and not on a parent's policy - these folks, who everyone agrees are essential for Obamacare to work, simply will not sign up, the Conservative argument goes. Why should they? Why should they pay $200 a month or more for way more insurance than they need, when the penalty for not signing up is just $95 in the first year? The sophisticated analysts look at the subsidy tables by market to tell their readers at what income level an applicant would need to be at to have opting out and paying the penalty be a "better deal". Turns out the number is pretty low, but that's because the calculation assigns little or no value to the insurance itself. True, you can always get it when you're sick, but only during the 6 month open enrollment period. What's the value to you of having full year coverage?

The Talk Shows

The McLaughlin Group, Friday, 10/18/13

I spent a couple of hours yesterday listening to highlights of the Friday and Sunday morning talk shows. Discouraging, yet informative. Almost no one on the Conservative side, in my admittedly biased perspective, seemed to have a thoughtful, fact-based view of what's going on. Progressives were underrepresented: Eleanor Clift on The McLaughlin Report (one out of five, above); E.J. Dionne on Meet The Press (one out of five, counting David Gregory); Donna Edwards (D, MD) on This Week (one out of five, counting Martha Raddatz, sitting in for George Stephanopoulos); and Rana Faroohar of Time Magazine (one out of five, counting Bob Schieffer). Some recurring themes, often ably rebutted by the sole Progressive voice in the room, but generally drowned out by the other, often strident, or angry sounding voices:

• The President did not "win" the shutdown. He may have gained political points, but the country lost, which is a larger problem.
• Obama failed to lead. His lack of solid, trust-based relationships with key Republicans is a critical weakness and failure.
• Nothing was accomplished. The "can" was just kicked down the road. We could do a second shutdown in January, but most felt the debt ceiling may be out of bounds for political hostage taking.
• The President was broadly criticized for using inflammatory rhetoric - "hostage taking", "blackmail", etc.
• The Obamacare rollout is a disaster that will only get worse.

In other words, these folks, in my opinion, haven't a clue. My point by point rebuttal:

• The President won a decisive victory that will be an essential part of Democrats' retaking the House in November 2014. He has significantly raised the political price for a failed shutdown and has most likely priced a debt default hostage-taking strategy right off the charts. This is a huge win for America's regular constitutional order.
• All Democrats stuck with him on all essential votes in both the House and the Senate. That's leadership. GOP leaders don't want to be seen, like Gov. Christie, as having a good relationship with the President. These folks simply have no earthly idea what integral leadership is all about, where leadership is often most clearly demonstrated by appearing not too lead at all.
• Because of this failed Shutdown, there is a better chance that Republicans will pay attention to what Obama says this time, and not assume quite so cavalierly that he will surely cave. What the GOP is just starting to understand is that there will be no entitlement changes without new tax revenues, and precious little room to move sequester funding levels around without those same revenues. The GOP has been gloating about forcing the Budget to remain at sequester levels; but they really don't like those levels for Defense (which takes almost the complete impact of the sequester reductions coming January 15 - a total of $20 billion in new Defense cuts). My guess is without new tax revenues, there won't be a deal, and both sides will have to accept a sequester level CR going forward. Will the GOP shut us down again? I wouldn't think so - not in an election year; but it's not impossible. Here's the real question: without new taxes, they will be forced in the House to try to develop Appropriations agreements at sequester levels, which they have repeatedly failed to do (failed Farm, HUD and Transportation bills). When will they realize that without new revenues, they won't be able to manage the Appropriations process, and that without new taxes, the Democrats won't budge much at all?
• The President used tough rhetoric because it was appropriate. Yes, he is the President of all the people, not just Democrats, but he was acting to support all the people by saying a tough-minded no to tactics of extortion.
• 20 million people have been to the site. Folks want affordable insurance. Insurance companies are eager to sell it. This will work out by next Spring, for sure, and we will see that Obamacare is truly a triumph.

The President is playing a strong defensive game right now. He has broken the GOP offensive moves by standing solid and unyielding, just saying no. He will advocate strongly for a Budget deal, for the Farm bill (hoping to strengthen Food Stamps), and for Immigration. He knows he may get none of them. He will push his team hard to fix the Obamacare rollout. He will work on a peace deal in Syria, to follow up on what is a successful CW disarming program. He will get a deal with Iran. He will make up for his missed trip to Asia, to support the new Trans Pacific Partnership under development and the overall "Asia pivot". And he will wait. The Long Game, as always.

Come November, 2014, he will be rewarded. He will then have the support he needs to complete his agenda: Immigration, Global Warming, and job-building reinvestment in America.

I can barely wait!

Healthcare Update

Drag counter to 15:40 to hear the President's remarks this am.

Terrific talk by the President this morning in the Rose Garden, giving an update on the Obamacare rollout, and addressing the website problems. In the middle of his remarks a woman in the group standing behind him, started to faint, The President effortlessly and graciously turned around, and put his arm around her to support her, until someone came to take her inside. A Master's grace.

The website is a mess. In fact "It stank", according to one letter he read from someone who eventually got through to complete the process, and was very happy with the results (his premium will drop from $1,600 per month to $600). The website will be fixed, the President promised - because the 20 million people who have visited it so far want to buy insurance, and because there are a lot of insurance companies who would like to complete the sales.

But Obamacare is not about a website. It's about providing coverage to people who are without insurance - people whose employers don't provide insurance, and who cannot afford to buy it on their own, or cannot get affordable coverage because of a preexisting condition. The product is sound (Most states have a good number of providers, offering a broad range of plans, that for the first time can be easily compared.) People want the product - they want the coverage. There surely are some window shoppers in the 20 million number of site visitors, but most of those folks want to buy insurance. And as a former Marketing executive at a major US-based consumer goods company, I can say this with certainty: When the product is sound, and people want to buy it, both sides of the purchase transaction - the buyer and the seller - will find a way to complete the deal. The buyer for a very important product like healthcare will hang in there. And the seller will find one or more ways to clean out bottlenecks in the distribution chain and complete the sale.

HHS might extend the enrollment period beyond March 31. They might even reduce or suspend the Year 1 individual mandate penalty. Republicans will call these failures. Democrats will say this is healthy adjustment to a major new program. Both will be right to some degree. And now I'll put myself way out on a limb:

By next Fall, very much in time for the November midterms, Obamacare will have 8-10 million enrollees, one third of which will be under 35, making the program a triumph, that will contribute significantly to the Republicans' loss of the House in the midterms.

Never underestimate the power of a determined shopper and an equally determined seller to complete a sale!

Good News!

Democracy Corps, partnered with the Women's Voices Women's Vote Action Fund, just reported out a  national survey showing an "intense majority" favoring implementing and improving the Affordable Care Act:

The "strong implementers" are 10 points more than the "strong repeal and replacers". This is a big shift from January, 2010, when 46% strongly opposed the law. The shift in support is not based on partisan alignment or messaging; it is based on personal experience:

The study makes a clear case that a debate over the principles and benefits of the ACA is a debate Democrats should want. The web site and the sign-up process will eventually be fixed. Survey respondents were quite understanding of likely snafus the law would encounter, calling this a "test case", "something we will need to work and improve upon", and they definitely preferred that Democrats be charged with implementation (20 point margin).

There are some really effective ways to message the ACA, to language the story in ways that are meaningful to consumers, particularly those that Democracy Corps (and others) have identified as the RAE - the Rising American Electorate - minorities, youth, unmarried women, and professionals:

Even supporters still have concerns: slowing job growth due to businesses concerned about healthcare costs; downsizing jobs (part timing); employers dropping coverage; and premiums rising rapidly. The GOP has hammered on these points mercilessly; but evidence is coming in clearly that people pay attention to their own experiences, and that these can overcome the negative messaging - certainly with Democrats and Indpendents, if much less so with Republicans.

And eventually, the experience will be good: premiums are not spiking uncontrollably; employers are not dumping huge number of employees onto the Exchanges; and though there is some increase in shifting workers to less than 30 hours per week (to avoid providing insurance), there is no large scale trend in this direction. The sign-up process is bad. Eventually, it will get fixed. And when it does, the good things that Obamacare does will be the story that lasts.

And I think this will be happening in full swing by next summer, giving Dems a great opportunity to take a bow for what they fought so hard for - the largest, most important step up in support of the middle class in almost 50 years.

This is a great and emerging Democratic triumph. Possibly by next Fall, and certainly by 2016, Progressives can use this as an example of the way Government can be a powerful force for good in America. Now that's a radical idea!

This is Amazing!

(Salon)

Eric Stern at Salon today posted an amazing article titled "Inside the Fox News Lie Machine: I Fact Checked Sean Hannity on Obamacare". Here's Eric:

I happened to turn on the Hannity show on Fox News last Friday evening. “Average Americans are feeling the pain of Obamacare and the healthcare overhaul train wreck,” Hannity announced, “and six of them are here tonight to tell us their stories.”  Three married couples were neatly arranged in his studio, the wives seated and the men standing behind them, like game show contestants.

As Hannity called on each of them, the guests recounted their “Obamacare” horror stories: canceled policies, premium hikes, restrictions on the freedom to see a doctor of their choice, financial burdens upon their small businesses and so on.

“These are the stories that the media refuses to cover,” Hannity interjected.

But none of it smelled right to me. Nothing these folks were saying jibed with the basic facts of the Affordable Care Act as I understand them. I understand them fairly well; I have worked as a senior adviser to a governor and helped him deal with the new federal rules.

I decided to hit the pavement. I tracked down Hannity’s guests, one by one, and did my own telephone interviews with them.

It was all crap:

• One couple has a construction business and they complained to Hannity that because of Obamacare they couldn't grow the business, and they have kept their employees below a certain number of hours, so they didn't have to be covered. Turns out they only have four employees and are not subject to the ACA employer mandate, which app-lies to businesses with 50 or more employees.
• The second couple has two children, one with a preexisting condition that is not covered under their insurance purchased on the individual market for $1,100 per month. So: $13,200 per year with one child uncovered. They received a letter from Blue Cross/Blue Shield that their policy was not ACA-compliant, and they would need to buy a new policy on the Exchange. They had not visited the Exchange, since they heard it wasn't working. Eric visited for them and found they could get a plan covering everyone for $7,600 per year with similar deductibles and out of pocket costs.
• The third couple was paying $800 per month and recently received a Blue Cross/Blue Shield letter similar to Couple #2, saying their plan would be terminated, since it was not ACA-compliant. Their insurance broker told them a policy on the Exchange would cost them 50-75% more. Had they checked out the Exchange? No, they opposed Obamacare. So Eric checked: their bill, without subsidy, would be $3,700 per year, a 63% reduction.

Simply stunning! I am at a loss for words.But here's what I know: when people have a genuine self-interest in finding out how something works, what it costs, what the real story is - then they will find out, eventually. Will they hold the misrepresenters accountable? Sometimes, but not always. But they will notice and remember that the Conservatives who spent four years trying to destroy Obamacare most likely do not have their middle-class interests at heart. Many of them will go further and conclude that if these misinformers are allowed to stay in their Washington jobs, they may finally succeed in breaking the program, and therefore it might be better if we didn't vote to send these folks back to DC.

There will be consequences. I promise.

Your Evidence is Faulty, Mr. DeMint

(from USNews)

This morning, Heritage CEO, Jim DeMint blasted Obamacare in general, and the premium hikes now being experienced in the individual insurance market, in particular, in an article titled We Won't Back Down on Obamacare:

We know that premiums are going up due to ObamaCare—Americans are getting notices in their mailboxes every day. On Wednesday, Drew Gonshorowski of the Center for Data Analysis at the Heritage Foundation published research that shows exchange premiums are going up in all but five states.

This sounded way off to me, so I went to the Heritage site and pulled up Gonshorowski's study and then checked out the HHS study he carefully references. Have no idea what Gonshorowski did to come up with his numbers - the ones documenting the huge premium increases DeMint attacks in his op-ed - but they bear little relationship to the hard data presented by HHS. Below is an excerpt from Gonshorowski's chart and one from HHS'. The complete charts and full reports are available through the links.

HHS Study

Gonshorowski-Heritage Study

Take Georgia, which DeMint calls one of the "hard-hit states". Gonshorowski shows the Exchange premium at $263.28, a 168.3% increase over the pre-Exchange market for the same policy of $98.12. But the HHS study shows Georgia at $142 (Bronze level). Now let's see what happens after tax credits, which almost 2/3rds of people will be eligible for:

HHS Study

After tax credits, the Georgia premium price for a 27-year old with an income of $25,000 is $103, just  $5, or about 5%, above the pre-Exchange level. In fact most states shown above show a premium after tax credit that is lower than the pre-Exchange price.

I have more or less given up being surprised at misrepresentations like this from the Right, but they still grate. The truth will come out slowly but surely, as long as the media and the blogging world keeps at it.

But I wonder - do Conservatives ever ask themselves if there might be a political price to pay when folks find out that almost everything the GOP has told them about Obamacare is wrong?

I think there will be. November, 2014. The Mid-Term Elections.

Is It Possible?

(from theobamadiary.com)

Is a Grand Bargain possible now? Andrew Sullivan thinks so, though most do not. It will take some time to see how the political balances have changed due to the GOP's utter face plant and humiliation. Sullivan calls on the President to "Go Big" - to make a call for reconciliation and coming together, where he indicates a willingness to trade entitlement reform for new tax revenues from closing loopholes. Issue the invitation through a national public address. At the same time, make it crystal clear there will be no entitlement reform without new revenues, perhaps admonishing the GOP to listen to his words this time, so no one gets confused.

Challenge the GOP to explain why, if they are truly interested in the long term control of our deficits and debt levels, they would turn down this offer. No Democratic President has ever offered to negotiate over entitlements. Why wouldn't the GOP accept this offer, allowing both sides to work together to put the country on a solid long term financial footing?

I will not be surprised if Obama does this. Most of what he would give is already in his 2014 budget. He will still be killed on the hard Left, who call this The Great Betrayal - but he knows this, and is willing to take the hits from Liberals.

Boehner has once again allowed the House to vote on a measure a majority of his caucus rejected - one that was attacked by Heritage Action, and other Right-side pressure groups. Would he do it again for a Grand Bargain, so he and Obama will be remembered like Tip O'Neill and Ronald Reagan?

He might. Not yet probable. But possible.

Back to Work

(from theobamadiary.com)

What Happened?

Our extraordinary President speaking tonight, after the Senate vote and before the House, graciously, as always, announcing that the Shutdown is over and the country will continue to pay its bills as the debt ceiling will be raised.

So what happened? A lot, and I will say more in the next few days. For now, I will say this:

The President did not cave. He led, if not from behind, from the side. He made crystal clear what was at stake - the constitutional order of our democracy - and left the fighting, the tactical maneuvering to the legislative generals. Above all, he knew this particular fight required unconditional surrender: there could be no reward for holding the country hostage. All of his adversaries and many of his allies thought he would back off from this stand. Everyone compromises in politics, right? It's the American way! Rand Paul, on open mic to McConnell, one week into the Shutdown: "We're winning this thing..." Pundits in week 2 kept saying: "Obama hasn't poll-tested his No Negotiations position. It's a loser."

And the GOP really thought they were winning. Why? Because they were certain he would cave. He didn't. And the terms of their surrender have just been voted on and codified into law in the House and the Senate.

It is possible, but by no means certain, that we will look back and call this a major milestone in the evolution of a workable, intelligent political process in this country.

The Baltimore Massacre

(President Obama takes questions at GOP retreat, Baltimore, MD, January 29, 2010, zizi2  at theobamadiary.com)

I had forgotten this moment. Zizi2 this morning at theobamadiary.com brings it back to life splendidly. Scott Brown had just won the Senate special election in Massachusetts. Healthcare was hanging in the balance. The President was being urged by many Democrats to pull back. And Speaker Boehner invited the President to speak at the GOP Baltimore retreat. As Zizi2 reports, he made one request - that he bring along the cameras. Boehner agreed. As Julia Roberts said in Pretty Woman, "Big mistake!"

Obama made an opening statement calling for more real conversation between the parties, and then took questions for an hour and a half. Zizi2's post has the full video. It's a stunning, solo, no teleprompter performance. As the President said towards the end, "I'm having fun."

In the clip above, he responds to a question from then Rep. Marsha Blackburn as to why he won't take input from Republicans. He replies that he has done so, that the ACA bill is founded on some GOP ideas. And then he warns the GOP not to raise the rhetoric level too high, nor draw the distinctions in too black and white a fashion (between GOP positions and his), for this would allow the Party almost no maneuvering room to craft bipartisan solutions to the country's problems.

And, of course, that is precisely what has happened in the past 45 months: GOP rhetoric and extremism has effectively eliminated the common ground that Obama in Baltimore was arguing existed. And when some common ground seemed to have been found - Immigration reform in the Senate, the Tea Party in the House worked quickly and hard to shut it down - to literally wipe any common territory off the political map.

Which brings us to now. The GOP has taken themselves into a negotiating box canyon, where there really is no shared ground, where the President has no choice but to require unconditional surrender. Anything less would be recognizing, rewarding, and even blessing a mode of political bargaining that would surely, if allowed to continue, alter the constitutional balance of power.

Why has the GOP gone so far? Lack of courage on the part of moderate GOP legislators. Weak leadership by Boehner (and here I was clearly wrong). Obsessive hatred of Obama by the Tea Party conservative core (40-80 members). The  complete 233 member GOP caucus dances to the tune of the Tea Party faction - because individual members are afraid of being primaried from the Right.

The hostage-taking part of this kabuki crisis will, I believe, end before next Thursday's debt ceiling drop dead date. The GOP will have to cave, though they will say that the ensuing negotiations over the Budget will somehow be a victory - "We forced the President to come to the table...etc...." - but it will be empty rhetoric.

Will the President give anything to get through this impasse? I don't think so.

And then we must wait and see what the Tea Party faction decides to do. 

Third party anyone??

Today's Press Conference

Part 1 (from theobamadiary.com)

Part 2 (theobamadiary.com)

The President answered all my questions today. How about you? Here are the key points I heard:

• The President will not negotiate the CR or the debt ceiling. No wiggle. No slight restating. No change.
• Why is he not willing to negotiate? He will negotiate any and every thing - after we have a clean CR and a clean debt raise.
• Hasn't there always been negotiating over the debt ceiling? Didn't he do it in 2011? In the 2011 case, he did not enter his discussions with Boehner in the presence of a default threat. That came up when their deal fell apart. And it was a close thing. In earlier years and earlier debt ceiling raises, there was lots of posturing, but no explicit default threat. No opposition leader has ever said "We are on a path to default," before or during negotiations.
• There are no secret silver bullets that will be revealed after the October 17 drop dead date has passed. Obama feels that issuing Treasury Bonds and selling them to the public, without a debt ceiling raise would cloud the legal provenance of the bonds so issued, and mess up the market and devalue our bonds.
• One reporter asked whether the idea being looked at by the GOP for a new form of a Supercommittee might be a way around the impasse, a sort of "concession made without conceding". Obama said the GOP could set up any process they want for new budget discussions. He even said they could attach this to the CR and debt ceiling resolutions he needs, but he needs those resolutions to be unconditional. He did not specifically say this, but I think it is clearly implied in his other statements: any new "going-forward" process, like a new Supercommittee, cannot have "triggers" that could lead to a shutdown or a default.
• The ongoing GOP chatter that a default won't happen, or wouldn't be too terrible, because the Government can prioritize payments, to be certain bondholders get paid, is miles off the mark. Not paying other legal, sovereign obligations, even if we pay bondholders, still puts the country in the "deadbeat" category, which will harm the full faith and credit of the United States.
• The President remains hopeful that the GOP will come around and send him a clean bill before the October 17 drop dead date.

The President spoke well - relaxed, clear, not apparently angry, thoughtful, upbeat. You got the feeling that the whole thing is incredibly clear to him, and he is pretty sure the other side will see the light before it's too late.

The biggest risk I see is that the MSM's "false equivalence" presentation and atmosphere will get stronger and stronger as we approach next Thursday's deadline. "It's un-American not to negotiate." "There is no choice but to throw Boehner a lifeline." "No side can win it all." "Unconditional surrender may work in a World War, but not in a political fight." And so on. Many Dems think he'll do it, since he appears to have done it before.

What do you think? It's the only risk I see out there.

I'm convinced he won't budge. And probably on the last day, possibly in the last moments, he will get the clean debt ceiling resolution he needs. I think he'll get a clean CR as well; but on this one I am not as sure.

What an amazing time. We are witnessing in real time a Gettysburg moment for a major political party, the Republicans. They will lose the House in 2014. Hillary (or Biden, or Warren- it really doesn't matter) will cream them in 2016 (7-10% margin). 

America is going through a political transformation that may not be fully apparent until the dust settles after the 2016 election - a change process that is full of possibility, as well as great risk. None of us, I am sure, believes that the GOP will "go gently into that good night." There will be anger, and not a little unrest.

I am excited AND nervous.

The End Game

In today's Wall Street Journal, Gerald Seib pens a very interesting op-ed titled "The Deal That's There for the Taking", where he outlines what I believe the outcome of this contretemps is likely to be. I'll call it the Mini-Grand Bargain. Here are the elements:

• The GOP gets a repeal of the medical device tax in the ACA and agrees to a rewriting of the sequester cuts plus new tax revenues raised by closing loopholes.
• Democrats get relief (amount TBD) from next year's sequester level budget of $967 billion, versus their Senate Budget of $1058 billion. In return, they agree to chained CPI for Social Security and means testing for Medicare.

The reason Seib says this "deal is there for the taking" is that all these items have already been put on the table, mostly in the Obama-Boehner summer 2011 negotiations. The obvious problem is what to do about the current impasse. How do we transition from here to a Mini-Grand Bargain? Here's Seib's last graph:

 For that to happen, Republicans might have to agree to at least some short-term funding of the government to allow time for this broader conversation. Or the White House might have to find a way to back away from its insistence that it won't negotiate until the government is reopened and the debt ceiling raised.

Possible? Yes. Probable? We'll see.

Here's Seib talking about why Obama may come off his No Negotiation position:

The White House doesn't think it's required to do much of anything now to end the impasse. Indeed, there is a deep-seated feeling within the administration that giving in on any front would amount to acquiescing in GOP hostage-taking, in the form of holding up both the funding of government and an increase of the debt ceiling that will be needed in two weeks. Administration officials see a chance to put an end to budget brinkmanship.

The problem with that approach, though, is that the standoff risks a dangerous impasse that could do real damage to an economy that, ultimately, the president owns. Moreover, the history of these showdowns is that the party with the temporary advantage almost always overplays its hand, snatching political defeat from the jaws of victory by reaching for too much.

So, ultimately, both parties should want an exit ramp. 

In other words, the Administration will cave and agree to negotiate, before a clean CR and debt ceiling raise have been effected.

I think Seib's outcome is right, but his sequence of events is wrong. Obama will not back down. If the GOP figures this out in time, they will cave, pass a short term clean CR and a debt ceiling hike, and begin negotiations on the deal Seib outlines. If they don't we will go over the debt ceiling edge in 9 days. At that point I am convinced that the President will assert his constitutional duty (perhaps under the 14th Amendment) to protect the country from grievous harm, and order the Treasury to issue Special Notes that the sole legal borrower, the Fed, will buy, thus funding the Government until the debt ceiling is raised, and we can go back to issuing regular Notes and Bonds. In fact, the US did this near the end of World War II, and markets took it in stride.

If Obama is going to do this, why not announce it up front and end the uncertainty over the debt ceiling? I think he wants the GOP to pay a steep price for their hostage taking; and he knows that unprecedented Executive action is better taken, then defended, than offered as a trial balloon before the fact.

In either case, there will be negotiations, with a Mini-Grand Bargain a very possible end result. If so, the aborted 2011 Obama-Boehner deal will finally be completed - $2.4 trillion in budget cuts (2011 Budget Control Act plus sequester),  $1.0-1.2 trillion in new tax revenues ($600 billion from raising upper income rates at the Fiscal Cliff in January, 2013, and $400-$600 billion in tax reform "loophole-closing" revenues now), plus $400-600 billion in interest savings = $4 trillion in deficit reduction, Obama's original goal.  The absolutely crucial difference: Boehner could have avoided the tax hikes on the wealthy had he made the deal in 2011. Plus the GOP now will be in bitter disarray, having suffered an astonishing and humiliating defeat.

Simply cannot wait until the media picks this up.

And I wonder if folks like Bob Woodward on the Right, and Obama's many critics on the Left will finally acknowledge that our President does play a very long game, that he is, in fact, a Master Negotiator.

Not a Clue

This man has no clue! Here's from Robert Costa at NRO this afternoon:

It hasn’t been announced, and you won’t hear about it today, but the final volley of the fiscal impasse, at least for House Republicans, is already being brokered. And according to my top sources — both members and senior aides — it won’t end with a clean CR, or with a sprawling, 2011-style budget agreement. It’ll end with an offer — a relatively modest mid-October offer that concurrently connects a debt-limit extension, government funding, and a small, but strategically designed menu of conservative demands.

Boehner simply does not recognize that the President is not bargaining, or making a preliminary offer, when he says he won't negotiate the debt ceiling raise. Obama, and fellow Democrats believe hostage-taking, particularly in regards to the debt ceiling, must end. The GOP cannot even see this position - not one conservative columnist I've read has even considered the idea that Obama is taking a stand on principle, from which he will not waver.

They don't understand our President. They literally cannot see him. They have no idea what he is about. And therefore they will almost always be wrong about what he will do.

There is no way this ends well for Republicans.

Paranoid Politics (2)

It is at least conceivable that a highly organized, vocal, active, and well-financed minority could create a political climate in which the rational pursuit of our well-being and safety would become impossible.

Richard Hofstadter, The Pseudo-Conservative Revolt-1954

The quote above was the focus of my first Paranoid Politics post on September 1. Clearly the paranoid element has been part of American politics since the beginning - anti-freemasonry, anti-catholicism, anti-gold, anti-immigrant, anti-communist. But never before has the paranoid element seized control of one of the national parties, as the Tea Party has done with the GOP, bringing us to the current Shutdown impasse and possible debt default.

Ezra Klein takes this up this morning at Wonkblog, when he interviews Christopher Parker, political scientist at the University of Washington and co-author of "Change They Can't Believe In: The Tea Party and Reactionary Politics in America". Here's Parker talking about the study that led to the book:

So I run a survey research lab at the University of Washington. In 2010, I began to see these opposing views on the tea party. You had Peggy Noonan and Juan Williams basically saying, the tea partiers are just angry Republicans, no big deal. Then I read Frank Rich, and he says no, these people are completely different. He says they’re more in line with Richard Hofstadter’s "Paranoid Style of American Politics." And I thought, I can get real data on this! And when I looked at it empirically, I found that people who supported the tea party tended to be more racist, sexist, homophobic, xenophobic, and anti-Obama.

Parker went on to say that this paranoid element clearly rises up during periods of rapid social change:

Look at who rose during this period. It’s not all about Obama. Nancy Pelosi was the first female speaker of the House. Barney Frank wielded real power. Two women, one of whom was a Latina, went to the Supreme Court. Undocumented workers have gotten a ton of attention. There’s been the rise of same-sex rights.

That’s the crux of the book. The title is ‘Change They Can’t Believe In’. This isn’t new. Whenever there’s rapid social change it triggers this kind reactionary conservatism. People see their social prestige threatened, their way of life threatened. And they react.

And the reaction is deeply emotional, often irrational and not grounded objectively - in other words, it's nuts. Here's Parker again:

 We also ask if people think Obama is destroying the country. We asked this question of all self-identified conservatives. If you look at all conservatives, 35 percent believe that. If you look at tea party conservatives and non-tea party conservatives, only six percent of non-tea party conservatives believe that vs. 71 percent of tea party conservatives.

Ezra asks how a group that amounts to 22% of the population could carry so much influence in deciding or obstructing policy. Parker answers:

Because they won’t compromise. You’ve got about 52 members of the Republican conference who are affiliated with the tea party in some official way. That’s a bit less than a quarter of all House Republicans. That’s enough in the House. They refuse to compromise because, to them, compromise is capitulation. If you go back to Hofstadter’s work when he’s talking about when the John Birch Society rode high, he talks about how conservatives would see people who disagree as political opponents, but reactionary conservatives saw them as evil. You can’t capitulate to evil.

This is no joke. This group cannot be reasoned with. They must be defeated and thrown from office. The battle we are fighting right now is an essential, most likely critical milestone on the path to turfing the GOP out of control of the House in the November 2014 mid-terms.

Elizabeth Warren Says It All

(from boomantribune.com)

Elizabeth Warren brilliantly makes the case that America will not be governed by Anarchists, and despite current appearances due to the Shutdown, is not governed by Anarchists. "This too shall pass," she says. I agree. But it will take some work on our parts.

Obama Hangs Tough

(This photo and video from theobamadiary.com)

Today the President spoke at the M. Luis Construction Company in Baltimore, Maryland. Luis Construction was founded by immigrant parents, with little English, who set out to build something useful and valuable in the construction field with a truck, a wheelbarrow, and a shovel. When their daughters were born, they grew up helping out in the business, went to college (Mom and Dad had little schooling) and then bought it from their parents. It's now a $40 million dollar construction firm, a real going concern - crystal clear evidence of the American Dream that drew Mom and Dad to this country. The top photo is the President with some of the company's employees. The video is his hard-hitting and uplifting speech.

It's possible, but by no means certain that some Republicans are beginning to get the box they are in, though I think most are still in denial. The President will not negotiate on either the CR or the debt ceiling. This runs completely contrary to GOP expectations: Obama "caved" in 2010 December by agreeing to extend the Bush tax cuts for two years. He "caved" again in 2011 when his negotiations with Boehner collapsed and he had to accept the sequester deal in order to avoid a debt ceiling debacle. And more recently, he "caved" in the fiscal cliff deal by moving his "wealthy" cutoff point up to $400,000 from $250,000. This time, he will not cave.

Why not? In each of the three "cave-in" incidents, there were strategic reasons to make the calls he made:

• In 2010, the economy was still very fragile; there was zero chance of further fiscal stimulus; and keeping the tax cuts in place would prevent the fiscal drag of higher taxes from taking place.
• In 2011, Obama thought he had a deal with Boehner that would have generated the $4 trillion in deficit reduction the Bowles-Simpson Commission said was needed - $3 trillion in cuts and $1 trillion in new tax revenues. When Boehner pulled out, Obama was left with just the cuts (immediate budget caps ($1.8 trillion) followed by the sequester ($1.2 trillion) if a Congressional Supercommittee could not get a deal.)
• In the "fiscal cliff" deal, moving the $250,000 threshold up to $400,000, Obama wanted a deal to prevent middle class taxes going up; there was a time bind; and he chose to make a concession.

It's different now. Republicans are not making any budget argument in what should be budget discussions. They are attacking Obamacare, and holding it hostage, and trying to insist that it's unfair, unpresidential not to negotiate. This is not a legitimate argument, and the American public mostly gets that it's not. Moving to the debt ceiling - and with two weeks to go, it is no longer possible to keep these discussions in separate boxes - the President has said repeatedly, and very clearly that he will not negotiate on the debt ceiling. He makes both of these arguments in his speech today (above).

The President is not bluffing. He will not give anything on either the CR or the debt ceiling, because there is nothing to give that doesn't compromise his principle that it is illegitimate for one party to hold the Government hostage.

Will Republicans realize this in time? I think so, but I am not at all sure.

Underestimating Obama

Republicans just don't get this guy. They think and say many things, most of them negative. But I've never heard or read a conservative analyst thoughtfully, carefully working through a somewhat balanced list of strengths and weaknesses. Every great general is scrupulously fair in his analysis of his opponents in the field. If this general fails to perceive a key strength or weakness, accurately reported, it could mean disaster. Why is this sort of careful analysis almost completely absent from GOP thinking about our President? Even an adversary that you despise needs to be looked at carefully for possible craftiness or stratagem that might upset your plans. Yes, anger felt passionately can blunt your "people reading" capacities. But I think it's something more - it's contempt, utter and profound contempt. If someone is "beneath contempt", you need pay him no mind, for he can and will be swept away.

The GOP figuratively and literally cannot see who Obama is. Part of it is developmental (as I have written) - they literally don't see the world as he sees it and cannot connect to the vision and images he offers. But contempt creates another and deeper level of "distancing" from the subject under review. To Republicans, the President speaks a different language and probably comes from a different planet - which of course he quite literally did. 

So where does this "not seeing" lead? It leads to deeply flawed reading of the opponent's strengths and weaknesses. When he folded in the late 2010 Bush tax cut discussions, and folded again in August, 2011, in the first big debt ceiling crisis, you cannot consider that each of these moves may have been strategic, at least partly planned, or situational. You will be wrong, potentially fatally wrong, if your contempt of this man allows you to conclude that he will always cave in, that he is not a powerful leader to be respected, even feared (if you are an opponent).

Watch the video above: do you think the President will cave on either the Budget CR or the debt ceiling? I don't. Not for a minute. Am I affected by my admiration for this man? Is it possible my reading is off because of this? It's possible, but I assure you I work hard to "notice" my positive bias, and to "frame it", so it's out front in my awareness, where I can see it. This way I can have confidence in my own judgments.

The GOP thinks he will cave and agree to some alteration of the ACA in return for a Budget CR. He won't. Nor will Democratic leadership in the House and Senate.

On the debt ceiling, they think he will cave and negotiate some portion of their "dream" list. He won't. And again, Democratic House and Senate leaders will back him.