Relevant and even prescient commentary on news, politics and the economy.

Dancin With the Stars or “Why is there an Exemption for Representatives, Senators, and Washington staff?

After being confronted by TPM reporter Alice Ollstein about the exemption for Washington elected officials and their staff, it was obvious they were caught off guard. Read some of the answers dancing around the issue.

New Jersey Republican Representative Tom MacArthur who proposed an amendment allowing states to opt out of key PPACA requirements. Read what he and other Republican House Representatives had to say when they were asked about the exempt to the latest AHCA amendment I had writen about.

Rep. Tom MacArthur (R-NJ); he is working to fix the language in question.

Rep. MacArthur puts out statement saying Congress shouldn’t get special treatment, they are working to fix exemption.

Rep. Scott Desjarleis (R-TN); “I don’t know about that. That’s a good question,”

Rep. Morgan Griffith (R-VA).; “I’ll have to read the language more closely,”

Rep. Chris Collins (R-NY); “I didn’t know there was [an exemption for members of Congress]. I don’t know what you’re talking about,”

Rep. Mark Meadows (R-NC), ” because D.C. is not a state, it can not apply for or receive the same waivers states can under their bill.”

Rep. David Brat (R-VA) “an exemption for members of Congress seeking to deregulate the health care market “would be, politically, completely tone deaf.”

Other Republicans: “the carve-out would have to be addressed with a new piece of legislation for complicated parliamentary reasons. A senior leadership staff member confirmed that they are working on a ‘stand-alone effort’ to undo the exemption, which lawmakers would vote on at the same time as the larger health care package.

Freedom Caucasus member Rep. Morgan Griffith (R-VA): “the fix has to come through a separate bill. Did not know whether D.C. could get the same waivers as a state under the legislation; but, Griffith said it did not matter because ‘liberal’ D.C. wouldn’t seek a waiver in the first place.

Republican lawmakers and staff: it was inserted in the first place in order to ensure that it could pass the Senate under what is known as the Byrd Rule, though they did not fully explain why.

The Byrd Rule dictates that strict budgetary legislation that does not increase the federal deficit after 10 years can be fast-tracked through the Senate on a simple majority vote.

Rep. Kevin Brady (R-TX); the Byrd Rule was ‘the genesis’ of the exemption provision, but promised that “every member of Congress is going to vote to make sure we are treated like everybody else.”

Again Rep. Mark Meadows (R-NC): It was a provision that, from a fatal standpoint, would not allow us to address it because jurisdictionally on the budget reconciliation instructions, that were narrowly tailored to two different committees of jurisdiction. To fully address that would had to have gone over to another area which would have made it fatal.” huh?

And the truth?
Health care law expert and professor at Washington and Lee University, Tim Jost: “D.C. is clearly defined as a state in the Affordable Care Act. And I don’t see anything in the AHCA that changes that, including this provision,” he said. “The provision provides for congressional coverage through the marketplace, and the language is clear [regarding the exemption].”

I think most of these reps are residents of the state they represent in Congress, so why wouldn’t they be exempt from the exclusion as defined by the amendment?

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Congressional Republicans looking Out for Your Health, Healthcare Insurance, and Their’s Too . . .

One Happy Republican House Representative
invisible hand If you have not been paying attention, it looks like the Republicans are getting ready again to submit another version of a PPACA/ACA repeal bill. New Jersey Republican Representative Tom MacArthur is proposing an amendment allowing states to opt out of key PPACA requirements. For example:

- Preventative Care: The PPACA has 62 preventative measures or Essential Preventive Care benefits which are no cost to a patient. Cholesterol screening, Type 2 Diabetes screening various immunizations for adults and children, breast cancer screenings, hepatitis B screenings, HIV tests, lead screening for children, etc.

- Community Rating: In the good old days when people had a heart attack , disorder, or illness; insurance companies would rate the individual and either insure them at a much higher rate or deny insurance to them. The PPACA acting like a true insurance pool spread the risk amongst the community adapting a more uniform rate for people. Two exceptions were smoking at 150% of the lowest cost individual and 300% for older people (Republicans wish to increase this to 500%). Where people with pre-existing conditions had to pay much higher rates or had no insurance, the PPACA established rates covering them and spreading the cost.

This new GOP amendment allows states to waive community rating. Insurers could again charge people based on their health and expected health care costs. The state would have to participate in the Patient and State Stability Fund (which would be underfunded) before it could waive out of Community Rating. The PSS is a pool of money in the AHCA that states can use to set up high-risk pools or shore up insurers that get stuck with really expensive patients (think of Corridor Risk and Reissuance programs which Republicans defunded).

Initially, the AHCA as proposed by Republicans would have resulted in an estimated 24 million people becoming uninsured over 10 years with a loss of 14 million in one year. We would be back to pre-PPACA with no single payer, universal, public option, Medicare-for-all in sight. The change in the Community Rating would target those with severe illness or disorders, the elderly, and those with pre-existing conditions. Removing the Preventative Care portion of the PPACA targets women and children and again patients would have to pay for them. There is just the healthy left or healthy today and the rest of the populations gets to fend for themselves. That would certainly lower healthcare insurance costs until the healthcare industry sucked it up in increasing prices. Not quite sure who the Republicans are tossing a bone to with this amendment, the healthcare industry or healthcare insurance companies?

As Vox’s Sarah Kliff points out; when the PPACA came into play, all Representatives and staffers had to purchase healthcare insurance on the individuals exchange. What was good for the gander was also good for the goose so to speak. I seem to remember differently; but, let’s go with this for now. There was quite a bit of grumbling going on in Congress when this was proposed.

invisible hand Fast forward to today’s amendment by New Jersey Republican Representative Tom MacArthur; it appears Congress now likes the PPACA when it comes to their healthcare insurance. If Representatives and staffers live in one of those states waiving out of Preventative Care and Community Ratings, Congress is exempt from the wavier. Looking at section 1312(d)(3)(D) of the amendment (sixth page) there is an exemption for those who will not be included in a state’s waiver. Senators, House Representative, their staffers and I am sure every other staffer in Washington, the Cabinet and their staffers, Bannon, etc. are all excluded from any state wavier on healthcare. I am glad they are looking out for us and the people who vote for them.

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The Blood of Christ

I recently saw a rather alarming poster advertizing a blood drive

bloodofchrist

The title is “donate blood and follow your artistic inclinations” which, given the image, I interpreted as “donate blood and faint, so that you are inclined head down just like the recently crucified Christ. You will be resurrected too (by some fluids not the holy spirit).”

Oddly, it seems the advertizing agency didn’t notice the potentially alarming relationship between the image and a (rather rare) side effect of blood donation. They also didn’t consider the literal meaning of “inclinazione” when writing about an extremely inclined figure.

Closer reading reveals that The One True Catholic and Apostolic Church is, in a sense, paying for blood. “Donors” receive discounts on tickets to the vatican museums.

This raises an issue related to economic theory and justifies an AngryBear post. “Tranfused Blood, Serum Hepatitis, and the Coase Theorem” is a fundamentally important article about market failure in the presence of asymmetric information. The authors noted that it is much cheaper to buy blood than to convince people to give it. But the bought blood isn’t as good, being more likely to contain hepatitis virus. The point is that if someone gives with the intent to help, they care about the quality of their gift, and follow instructions to not donate if, for example, they self inject drugs. People who sell include many who care only about the money. Since the donor (or seller) knows more about the donor’s behavior and risk of hepatitis infection than the blood collectors, the market fails.

This is a really important article (or an early cite of an earlier really important article — Google Scholar gets weak going back to 1974).

But, it seems to me, that the One True Catholic and Apostolic Church has found a trick — a way to pay and select. The point is that intravenous drug addicts etc may be desperate for money and eager to sell blood for cash, but they are not so desperately eager to get discounts on tickets to art museums to be willing to lie and endager others to get them. Even the relatively art loving heroin addict will probably want to save the money rather than buy even discounted tickets to an art museum.

So paying with a “merit good” (don’t ask me to define or even type without scare quotes) can be a rational strategy to use the market even in this case of asymmetric information.

I do not have a rationale for bringing up crucifixion, when trying to convince people to let other people stick sharp things into them.

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Special elections

Five Thirty Eight‘s Harry Enten offers thoughts on current special elections for Congress:

So, keep an eye on the special elections over the weeks and months to come. Next Tuesday, voters in traditionally red Georgia 6 will cast their ballots. If Democrat Jon Ossoff wins, it would be yet another sign that Republicans are in trouble nationally. If Republicans there do better than expected, it could indicate that California 34 and Kansas 4 are outliers.

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To me the common assertion about health care reform reform and tax reform makes no sense

Various people have argued that Republicans decided to repeal and (very partially) replace Obamacare before moving on to tax reform, because Obamacare repeal (aka the American Health Care Act aka AHCA) would make it easier to permanently cut tax rates. To me this makes less than zero sense. The argument is that, since AHCA includes tax cuts, tax reform would start from a lower base, so it would be easier to write a tax reform bill which doesn’t add to the deficit after 10 years. It is, in fact, necessary that bills not add to the deficit after 10 years for them to be passed using the budget reconciliation process which makes them invulnerable to filibusters.

However, I don’t see how preceding tax cuts make new tax cuts budget neutral. No one has explained how the exact same tax reform bill could be passed using reconciliation if it followed passage of the AHCA but not if it preceded passage of the AHCA. I know of no one who has argued that the CBO score of the effects of tax reform would be markedly different, or even argued that the sign of the change in the score would be favorable.

Rather the argument seems to be that with the AHCA tax cuts and the tax reform tax cuts, rich people will pay lower taxes than with the tax reform tax cuts alone. This is obviously true and has nothing to do with the order in which the bills are signed into law.

Jonathan Chait has been a prominent proponent of the view which makes no sense to me at all.

The next source of money is repealing Obamacare. The connection between the two issues might seem obscure, but it matters technically. The Republican plan to repeal Obamacare would eliminate all the taxes that were raised to help pay for the benefits — about $1.2 trillion over the next decade. This would lower the baseline of tax revenue, meaning that Republicans would need to design a tax code that raises $1.2 trillion less in revenue in order to be “revenue-neutral.” That makes it crucial for them to repeal Obamacare before they cut taxes.

I can cut and paste his argument. I can read it. But I can find no sense in it at all. Yes if taxes have been cut by $1.2 trillion, then a revenue neutral tax reform needs to raise 1.2 trillion less. But nothing whatsoever justifies Chait’s use of the word “before”. I can’t refute his argument, because I can’t detect it.

This matters, because it now turns out that Donald Trump is one of the people who have been convinced (presumably by Paul Ryan not Jon Chait).

“We haven’t failed — we’re negotiating, and we continue to negotiate, and we will save perhaps $900 billion … we have to do health care first to pick up additional money so that we get great tax reform.”

This argument too makes no sense (very much less surprising in the case of Trump than of Chait). For the reconciliation process, money can’t be picked up with one bill and spent on another. Each bill taken alone must not increase the deficit after 10 years. Now reactionaries consider the AHCA to include great tax reform, since it includes reductions in taxes on high incomes. But this doesn’t make further reductions easier. The order in which the bills are passed doesn’t matter.

In fact, the AHCA makes tax reform more difficult. The reason is that the AHCA benefit cuts are even larger than the tax cuts. So the maximum allowed fiscal 2027 deficit would be smaller if the AHCA were law. A bill which combined health care reform reform and tax reform could include even larger tax cuts than simple repeal of the ACA tax increases and be passed using reconciliation.

I honestly don’t get it. I’m sure I’m missing something. I am also sure, 100% sure, that, even if passage of the AHCA were to make it easier for the GOP to pass a tax reform bill, this wouldn’t be because the AHCA includes tax cuts or deficit reduction.

update: minds think alike.

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Pence Makes Deciding Vote Allowing States to Defund Planned Parenthood

Second time Pence has cast the deciding vote in the Senate. Last VP to do so was Cheney in 2008.

VP Pence has made it no secret he is opposed to allowing women the right to decide on having an abortions. While in Congress, Pence sponsored the first bill to defund Planned Parenthood in 2007 and when it did not pass then he continued the effort until it did pass in the House in 2011.

More recently a Federal Court blocked a bill signed by then Indiana Governor Pence forcing women to have a funeral for the aborted fetus which would then go through a burial or cremation. The cost of the burial or cremation would have increased the cost of the abortion dramatically in Indiana. The court ruled Pence’s law would have blocked a woman’s right to choose.

If you remember VP Pence had used his tie breaker vote to approve Betsy DeVos as Secretary of Education. Today, VP Pence was again called upon to break a Senate tie involving the right of states to defund Planned Parenthood.

The Department of Health and Human Services under President Obama ruled organizations providing family planning and preventive health care services could not be barred by states from receiving Title X grant dollars for any reason other than those related to their “ability to deliver services to program beneficiaries in an effective manner.” It required states and local governments to distribute federal Title X funding for services related to contraception, fertility, pregnancy care and cervical cancer screenings to health providers without regard for whether those facilities also performed abortions outside of Title X. Title X funding covers services such as contraception, STD screenings, treatments and can not be used to pay for abortion services.

Weighing in after the tie-breaking vote to overrule President Obama’s Department of Health and Human Services, Senate Majority Leader McConnell had this to say:

“It was the Obama administration’s move that hurt ‘local communities’ by substituting Washington’s judgment for the needs of real people. This regulation is an unnecessary restriction on states that know their residents a lot better than the federal government.”

Not sure what needs McConnell’s real-people would have to block a woman’s decision to have an abortion which is not taken lightly by a woman and using it as an excuse to defund Planned Parenthood. It appears McConnell, Pence, and the Republicans are practicing a tyranny of a majority to disregard the rights of an individual in favor of their own views.

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Crazification Factor Smashed

Kung Fu Monkey has a sad. Paul Ryan has totally crushed his crazification factor

h/t Kerry Eleveld

This issue has made Paul Ryan into the most unpopular politician in the country. At the start of the Trump administration he had a 33% approval rating, with 43% of voters disapproving of him. Now his approval has plunged to 21%, with his disapproval spiking all the way up to 61%.

I count this as a new event, because Ryan is very famous and 82% is respectably close to 100 %

But mostly, because I want to post this here

blue-eyesA

blue-eyesB

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Blinded by the Right — Literally

Patrick Ruffini tweeted a graph showing a break in the trend of health care cost inflation with the ironic comment “The “Affordable” Care Act sure has bent the cost curve.” In the graph he posted, it is broken not bent.

ruffini2

h/t @ChrisDeLong_

The trick is that the graph starts in 1996 & includes college tuition and software, so the huge change looks tiny.

In comments, it is clear that other people can’t see what is right in front of their eyes (good thing the ACA covers eye exams).

Jon Chait helps out by graphing inflation not the price level and leaving out other goods and services with huge changes.

chaitonruffini

I just asked Fred. I look at the ratio of health care PCE chained indes to the overall PCE deflator. Chait shows a huge decline in overall inflation, which isn’t relevant. Here is an (admittedly annual graph) which sure looks bent to me

fredonruffini

Ideology prevents people from seeing what’s right in front of their eyes.

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Poor Salesman Great Grasp of Policy

I am aware of all internet traditions (with notably rare exceptions) and I think this might be another classic.

In a generally very good article in Politico Tim Alberta wrote “Ryan is poor salesman with a great grasp of policy” [skip] “After he unveiled the bill, leading health care experts on the right like Yuval Levin and Avik Roy trashed it as a poorly conceived mess; ”

So having a great grasp of policy is consistent with writing an immensely important poorly conceived mess. I am googling [Ryan salesman "great grasp of policy"] which only gives 142 results. Does seem twitter has taken over the snark industry. This thread burns. Also at least 1% of the US Senate took Alberta to task.

update: I was wrong. The classic is actually

TimAlberta

So the fact that Ryan’s polics don’t withstand scrutiny shows that Ryan has a great grasp of policy. OK I fell for it. Tim Alberta is just trolling me. He. will. not. make. my. head. explode. No he won’t.

end update:

I think the crazy claim shows a few things. One is that conventional wisdom is invulnerable to evidence. Ryan has been declared a super wonk by the cool kids, so the assertion is riskless. Another is that Alberta wasn’t thinking about policy (he wrote almost nothing about the content of the AHCA). Another is that he assumes that the problem for Ryan with Levin and Roy was that he didn’t flatter them enough and not that his bill was a poorly conceived mess (the preceding sentence was “There was no such effort on Ryan’s part, and it showed. (Several allies argued he had done some outreach, but they failed to provide any specific examples.)”). Finally, symmetry is dangerously tempting. The whole crazy claim is “If the bill failed because Trump is a great salesman with a poor grasp of policy, it also failed because Ryan is a poor salesman with a great grasp of policy.” This is symmetry at the expence of accuracy. Ryan is a brilliant salesman who has a weak grasp of policy.

I foolishly said that ignoring policy and discussing inside baseball is what Politico does, then found out that they also published an excellent article by Harold Pollack “Paul Ryan Failed Because his Bill was a Dumpster Fire”

update: Ouch

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