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The Individual Mandate: Has the Obama Administration Silently Repealed the Rule that Virtually Everyone Must Have Health Insurance?

Maggie Mahar has been featured at Angry Bear Blog and has written for Angry Bear Blog from time to time. This article has been taken from her blog, Health Beat.

Obamacare’s critics continue to argue that the Affordable Care Act (ACA) will self-destruct. Now, some claim the mandate that uninsured Americans must purchase coverage– or pay a stiff fine— is so “riddled with new loopholes and exemptions” it ceased to exist.

14 New Waivers

When the ACA passed Congress in 2010, it offered a handful of basic exemptions to the mandate of everyone must be insured. For example, if the only comprehensive coverage available would cost more than 8% of a household’s income, the fine would be waived. Individuals who were in jail, or belonged to a recognized religious group that objects to all insurance, including Medicare and Social Security, they to could be excused.

But then, late in 2013, the administration quietly added some 14 new ways the uninsured could dodge the fine.. “’This latest reconstruction’ of the ACA received zero media coverage,’ a Wall Street Journal editorial declared, ‘and the Health and Human Services Department (HHS) didn’t think the details were worth discussing in a conference call, press materials or fact sheet.'”

Yet if the new waivers went largely unnoticed, reform’s opponents claim that the swelling list of escape clauses will have a huge impact. By 2016, they say, almost 90% of the nation’s 30 million uninsured will be able to ignore the mandateof buying insurance – without paying the piper. So much for universal coverage.

Just last week Bloomberg reported of; some Republicans referring to the new list of loopholes as a “stealth repeal” of the individual mandate. To her credit, Bloomberg’s Caroline Chen points out the contradiction in the GOP’s arguments. The same critics who, in the past, argued that the mandate represented “unwarranted government coercion” now criticize it for being too “wimpy.” Can they really have it both ways?

“Hardship Exemptions”

The new waivers were designed to help those who are facing hard times. Some exemptions will suspend penalties for 3 months – others for a year.

Perhaps the most important waiver bails out low-income Americans who have the bad luck to live in a state refusing to expand Medicaid. Originally, the ACA stipulated states must extend Medicaid to adults earning less than 138% of FPL ($27,310 for a family of three), with the Federal government paying the lion’s share of the extra cost. At the same time, the ACA set out to help low and middle-income families earning more than 138% of the FPL by providing government subsidies designed to help them purchase insurance in their state exchanges.

But then, two years after the PPACA passed Congress, the Supreme Court blind-sided the reform’s architecture by ruling states could opt out of expanding the federal/state. program. No surprise, politicians in Red states saw this as an opportunity to undermine Obamacare.

Today, twenty-two states still are refusing to open the Medicaid umbrella to cover some of their poorest citizens. As a result and in many cases, only parents earning less than 50% of the FPL ($9,893 for a family of three) qualify for Medicaid for Medicaid and childless adults remain uninsured in almost all of these states. (When Medicaid passed Congress in 1965 legislators decided that only “the worthy poor” should be covered. People who did not have children were not considered “worthy”.)

Now, roughly4 million low income adults who earn too much to be eligible for Medicaid in their states and too little to qualify for government subsidies in the Exchanges have been left out in the cold. As a result, the administration has waved the penalty for this group for at least a year.

By 2016, the situation is likely to change. Politicians who have refused to take the federal aid letting them expand Medicaid are facing tremendous political pressure. Hospitals, in particular, cannot afford to continue to care for uninsured patients without being reimbursed. States like Texas and Florida are leaving millions of federal dollars on the table. They may be the very last to cover their poorest citizens; but over the next year or two, Red States will no doubt cave to the pressure.

Bankruptcy, Domestic Violence, Fires and Floods

Other hardship exemptions cover a wide range of financial catastrophes. For example, you may be excused from the fine if:

– You were evicted in the past 6 months or are facing eviction or foreclosure;
– You received a shut-off notice from a utility company;
– You recently experienced domestic violence;
– You recently experienced the death of a close family member;
– You are homeless;
– You experienced a fire, flood, or other natural or human-caused disaster that caused substantial damage to your property;
– You filed for bankruptcy in the last 6 months;
– You had medical expenses you couldn’t pay in the last 24 months that resulted in substantial debt;
– You experienced unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member;
– You expect to claim a child as a tax dependent who’s been denied coverage in Medicaid and CHIP, and another person is required by court order to
give medical support to the child. In this case, you don’t have the pay the penalty for the child;
– As a result of an eligibility appeals decision, you’re eligible for enrollment in a qualified health plan (QHP) through the Marketplace, lower
costs on your monthly premiums, or cost-sharing reductions for a time period when you weren’t enrolled in a QHP through the Marketplace; Your individual insurance was cancelled because it did not meet the ACA’s standards, and you believe other Marketplace plans are unaffordable;
– You experienced another hardship in obtaining health insurance.

The last and very broad escape clause prompted Robert Laszewski, a master spinner of Obamacare myths, to ask:“Is there really an individual mandate?”

Laszewski is not alone in this belief. When the administration announced the new exemptions, The Wall Street Journal’s editors joined the chorus of critics, complaining that originally the ACA reserved waivers for “the truly down and out.” But now, the WSJ argued, Washington was tacking on exemptions that would excuse virtually anyone. The Journal quoted Douglas Holtz-Eakin, president of the conservative American Action Forum. A long-time foe of reform, Douglas quipped; “the rules have become so lax, it seems if your pajamas do not fit well, you do not need health insurance.”

But in fact, the mandate still has teeth. Indeed the CBO estimates that the IRS will collect some $4 billion from those who choose to go it alone in 2016, subtracting the fines from taxpayer refunds. (If you are not due a refund in a particular year, the tax collectors will deduct the penalty from your refund in future years.)

Who Will Be Paying Billions in Fines?

Does this meant that the IRS will be dunning poor and middle-class families who just haven’t heard about the bill—or don’t understand it? By and large, no. The CBO reports two-thirds of those fines will be paidby upper middle class and upper class Americans who object to the PPACA for political reasons.

Most could afford insurance, but bring home too much to qualify for subsides, and as a matter of principle, are rejecting Obamacare. The notion of “shared responsibility” does not move them. They would rather pay a fine than jump into an insurance pool with their fellow citizens. They believe that they are responsible only for themselves and their families.

What Reform’s Opponents Do Understand – the ACA Cannot Survive Without the Individual Mandate

The mandate is as the WSJ has acknowledged; out “at the core of reform.” Without the mandate, its deadlines and penalties, many Americans would simply wait until they became sick and then sign up for coverage. When they recover, they might well stop paying their premiums, and drop the insurance.

If that happened, people who need surgery, chemotherapy, or expensive medications soon would outnumber the healthier and younger folks in the insurance pool. Premiums would spiral for everyone. The system simply cannot afford “free riders” — defined as “people who receive the benefits of “a public good” (like universal coverage) “without contributing to paying the costs.”

In 2014, most people had not yet heard of the 14 new hardship exemptions that were added in December of 2013. This might explain why, last year, the penalties were without a question . . . effective, especially for young people,” Erin Hemlin, health care campaign director for “Young Invincibles,” a group that reaches out to young adults, recently told Politico/Pro.

Hemlin reports on a survey published last May showing that 40 percent of respondents indicated they would not have gotten insurance without the individual mandate. For adults ages 18 to 29, it was even more important, with 42 percent saying they signed up to avoid the fine.

What no one knows is what will happen over the next two years. By 2016, many more Americans will have heard about the waivers. But given the size of the subsidies and the growing number of Americans who have tried Obamcare and like it; I doubt that many will ask for a free pass.

How Many of the Uninsured Will Even Try To Get A Waiver?

What Laszewsi, Holtz-Eakin, the WSJ, and a gang of other Obamcare critics ignore is applying for a waiver is not as simple as it might sound. First, almost all hardship exemptions require documentation to prove that you qualify.

Secondly, while in some cases, you can apply for exemptions when filing your taxes, most require you to fill out a separate three – page form providing extensive information about everyone in your household.

Meanwhile, just applying, providing the documents, and filling out the applications is no guarantee that your fine will be cancelled. Decisions are made on a case-by-case basis. Finally, if you do succeed in being approved, you will receive a certification number in the mail—and then must fill out and file a newly drafted tax form.

Taking all of this into account, how many people will take the time and trouble to apply for a reprieve that, in most cases, will let them skirt the penalty for just three months?

The critics also forget that hard times are likely to make people more risk-adverse, not less. Imagine that you are a battered single mother. Recently, you divorce and your husband’s employer no longer covers you. Would this seem like a good time to drop coverage? What if your home was hit by a hurricane — would you be inclined to ditch your family’s health insurance?

This helps to explain why, as of October 2014, TurboTax estimated that less than 5 percent of those who would qualify for exemptions had applied.

Keep in mind that those who have lost their jobs, or have fallen victim to some other form of financial disaster, may well discover that they now are eligible for Medicaid. Others are likely to qualify for generous government subsidies that will help cover their premiums. Last year, nearly 9 out of 10 people who purchased insurance in state marketplaces qualified for tax credits that cut the average premium by 76 percent—to just $82 per month. Almost half of those who received subsidies wound up paying $50 or less.)

My point is that the majority of the uninsured would be better off if they didn’t try to escape the mandate, and instead applied for government help that would make insurance either free, or very cheap.

Waivers Don’t Just Cancel Fines, They Open the Door to New Coverage

The best hardship exemptions do more than erase the fine. Some let the uninsured apply for coverage in their state exchange after the open enrollment period ends on February 15, while others let those who are down on their luck purchase insurance that doesn’t meet Obamacare’s strict rules for “minimum essential coverage.”

For example, if a natural disaster kept you from enrolling on time, you can sign up after the February deadline. If you received a letter from your insurer telling you that your old coverage was cancelled because of the ACA, this year you can meet the mandate by buying a low premium catastrophic insurance which will offer free preventive care as well as coverage for worst-case scenarios.

In the end, what many Americans don’t understand is that ACA penalties are not aimed at punishing those who opt out of Obamacare. As CEO Kevin Counihan recently told The Hill: “Our goal is not to get income [from penalties] or to make this difficult for folks. Our goal, fundamentally is to get people insured.”

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Scott Walker Announces His Foreign Policy: Privatize Social Security and Medicare; end the food stamp program and CHIP, and repeal the National Labor Relations Act

PALM BEACH, Fla. — Two days after provocatively suggesting that standing up to organized labor in Wisconsin has prepared him to fight terrorists overseas as president, Scott Walker told a crowd of conservative donors on Saturday that “the most significant foreign policy decision” of his lifetime was when Ronald Reagan fired 11,000 air traffic controllers. …

“Candidly, I think foreign policy is something that’s not just about having a PhD or talking to PhDs. It’s about leadership,” he said. “I would contend the most significant foreign policy decision in my lifetime was made by a president who was previously a governor. A president who made a decision that wasn’t even about foreign policy. It was in August of 1981, when Ronald Reagan fired the air traffic controllers.”

Scott Walker pressed for specifics at Club meeting, James Hohmann, Politico, yesterday

Turns out that that was the second time in a week that Walker said this.  The first time was in his speech at the private fund raiser in which Giuliani said Obama doesn’t love America, or love Giuliani, or love the donors in attendance at the dinner, later citing as supporting evidence that he (Giuliani) rarely hears Obama profess his love of country using the cants that Dwight Eisenhower and Franklin Roosevelt—er, Reagan and Bill Clinton—did regularly. (Free speech is for college students and human and corporate campaign donors, but not for presidents, who must recite a loyalty oath every few weeks.  Joe McCarthy was right!  That ole five-star general who conned his way into the White House in ’53 was a Communist after all!)  But Walker’s comment received little notice, because … well … you know.

But Larry Kudlow, one of the people whom Giuliani identified by group (Kudlow was an attendee) as someone whom Obama doesn’t love, and who reported on Walker’s speech for Real Clear Politics, did take note:

Noteworthy, Walker argued that when Reagan fired the PATCO air-traffic controllers over their illegal strike, he was sending a message of toughness to Democrats and unions at home as well as to our Soviet enemies abroad. Similarly, Walker believes his stance against unions in Wisconsin would be a signal of toughness to Islamic jihadists and Russia’s Vladimir Putin.

Noteworthy, indeed.

Of course, our Soviet enemy abroad in August 1981 was led by a man who by then was spending much of his time in a hospital, and who died 15 months later at the age of 75, presumably having never recovered from the shock of having to deal with a U.S. president who fired his country’s striking air traffic controllers.  He was replaced with a man who, also elderly, died in office 15 months later after spending all but  the first three months of his presidency in such poor health that it was doubted at the time that he (or anyone else) was actually running the country.  He was replaced with an elderly man who lived only 13 months, not the full 15 months that his three predecessors each had managed while dealing with the stress of trying to oppose a U.S. president who had won his war against unionized air traffic controllers.  The next Soviet president, seriously concerned that Reagan was onto something with his unconventional, remote-control, foreign-policy tactic, and wanting to remain healthy for at least two years into his presidency, waved the white flag and declared glasnost and perestroika.

So I can see why Walker would contend that the most significant foreign policy decision in his lifetime was Ronald Reagan’s decision in August of 1981 to fire the air traffic controllers.  Walker’s lifetime began on November 2, 1967, and nothing much of importance has happened in foreign policy since then.  But even if that weren’t so, fending off four Soviet presidents in as many years simply by firing the striking air traffic controllers was indeed a significant foreign policy achievement.  As well as a major technological advance.  Computer science history books record all this as the first known instance of virtual reality.

But I don’t think Putin will be as easily dispensed with as Brezhnev, Andropov and Chernenko—he’s younger than they were, and looks pretty healthy—or as cowering as Gorbachev was.  And I definitely doubt that Jihadi John or ISIS’s military leaders follow U.S. labor law politics very closely.  So simply ending collective bargaining rights here probably won’t cause ISIS to surrender or Putin to end his attempts to annex Ukraine.

No, Walker would have to up the toughness ante.  Something that will grab ISIS leaders’ and Putin’s attention.  Something that they’ll understand.

Social Security.

Once President Walker starts privatizing Social Security and makes clear that next up is Medicare, Putin and ISIS will know whom they’re dealing with.  But President Walker, an impatient leader and a man of action, won’t wait to press the point further.  Ending the food stamp and student-lunch programs will provide awesome video of people who starved to death, and ending CHIP will yield perfect photos and stories for the administration’s foreign-policy messaging.  Walker may not even have to push through Congress a measure mandating the shooting on sight of all stray dogs and cats, to get ISIS to surrender.

He’s an irresistible candidate.  Sure, we don’t want those domestic policies, and we, and he, know that they can’t be justified to the public on their own merits.  But we do really want to see Putin end his military aggression in Ukraine, and we really, really want to see the demise of ISIS.  And we want these to happen without the assistance of U.S. ground troops.  So the trade-offs seem fair.

Uh-oh.  Poor Hillary Clinton.


POSTSCRIPT: As someone who has followed the Wisconsin political situation in the last four years fairly closely, I’ve been downright dismayed at the political news media’s facile adoption of the line that Walker is the candidate who can appeal both to the party’s base (pun intended; read the first few paragraphs of Alec MacGillis’s outstanding June 2014 longform article in The New Republic) and the party’s Establishment.  Hillary Clinton, and I, will keep our fingers crossed that the Republican Establishment doesn’t read the MacGillis article or is too clueless to foresee ads featuring audio clips from the two radio shows those first few paragraphs describe, broadcast days apart on some show hosted by someone named Mark Belling, in late 2013.  There is no possible definition of civilized society in which this would be considered a plus for someone campaigning to be its leader.

Then again, I’ve also been sort of chuckling at the Conventional Wisdom of the last few months among political news media folks that the Republican field is much stronger than their 2012 field.  Rick Perry is starting to look good, folks, especially since he’s now remembered the third Cabinet Department he wants to shutter.

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An Act of Kindness – The Rest of The Story

I was never aware of what impact I had over the years in my family until my youngest son reminded me of what I had done on an evening in a store called Woodman’s located on the west side of Madison, WI. I was out of work and I was busy supplementing my income by gaffing up trees, cutting them down, and chipping wood. A job not requiring a lot of intelligence for a man with 4 degrees. I was deadly tired each day.

My 8 year old young son and I were waiting in line to check out with our groceries. The man in front of us had a loaf of bread, a half gallon of milk, and peanut butter. The cashier rang him up and gave him notice of what he owed. He plopped down his money and they stared at each other for the longest 15 seconds I ever experienced. He was short cash to pay. As the cashier reached into her pocket to pay the difference, I dropped a dollar on the conveyor. She took it and he left just taking a moment to look back at us. 25 years passed and my youngest son Craig in a conversation reminded me of what took place that day of something I had long forgotten. It was not important to me; but, my actions had an impact on him.

What makes this story in the picture interesting on USA Today and Crooks and Liars is an adult white male taking time to teach a young black male how to tie a regular tie as opposed to using a clip-on tie. The young man was scheduled to interview for a job and he needed to look the part. The Target employee took the time to teach how to and tie the tie as there were no clip-on ties at Target besides tutoring the young man in answering questions a prospect employer might ask him. Do you believe this young black male will remember the kindness an adult male showed him one day? Furthermore, is it possible in the future this young male might return a moment of kindness to another person who may need his help as a result of one person taking the time to help him regardless of gender, age, religion, and hue of skin? I am sure he will remember.

Perhaps, this gesture is little more than a person who sees the other as a person of equal stature and makes the effort to reach out with a moment of kindness.

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To Mark Cuban on Student Loans: Grab some Bench, “Rookie”

Guest Post by Alan Collinge

Group Founder Alan Collinge has written numerous articles, and editorials on the topic, and also published The Student Loan Scam in 2009. He was selected as one of seven “Financial Heroes” by CNN/Money Magazine in December 2008.

There has been a disturbing coalescence of papers, positions, and proposals coming from Stanford graduates, academics, and Silicon Valley tycoons regarding student loans recently. All of these have, unfortunately failed to address the relevant economic dynamics governing the lending system, and their proposed solutions either completely neglect the $1.3 Trillion dollar problem at hand, or even defend the Public Policies that gave rise to it. Whether by chance, design, or otherwise, these proposals, collectively, are badly distracting the public discourse, and perpetuating a problem that is simply false.

It started with a paper by G. Marcus Cole, Stanford professor, who argues that because student loans are unsecured, there should be no bankruptcy protections for them. Coles is quoted in the Stanford Law School News:

“…With dischargeable loans, the risk that lenders would not receive the money they originally lent would increase. Cole added that investors wouldn’t see the sense in lending to students anymore.”

Cole completely fails to acknowledge that both private banks and the federal government administer unsecured loans, many of which are very profitable (for instance, the credit card industry). invisible hand Cole also fails to acknowledge that in the absence of bankruptcy protections, a lending system has come about where every element in the chain, up to and including the federal government makes more money on defaulted loans than loans that remain in good stead! This is a defining hallmark of a predatory lending system, and Adam Smith himself would agree is an unfair, intolerable, and unacceptable lending relationship. Would Cole argue similarly that medical debt, credit cards, and other unsecured credit be non-dischargeable?

Cole also completely fails to acknowledge that in the run-up to the 2005 bankruptcy bill- which stripped bankruptcy from private loans- the lenders promised they’d lend to needier students , but this has never happened. What the lenders DID do was begin requiring creditworthy cosigners for virtually all private loans, and now use this to extort vast sums from parents and grandparents under the threat of losing their savings, retirement, real property, etc. That Cole, or any economist would attempt to defend such a blatantly dirty trick and all the havoc it has wrought on so many families is, frankly, unconscionable.

The second attempt to address the student debt problem comes from Mr. Peter Thiel, Stanford Grad, Paypal Founder, and Manhattan Dandy who is essentially using the $1 Trillion student loan crisis as a stepping-stone by arguing that kids-particularly disadvantaged; inner-city kids- should forgo college and instead pursue entrepreneurship. Never mind that Mr. Thiel would never have snagged the success he now enjoys were it not for his Palo Alto pedigree. Never mind that a recent job-posting for Thiels investment company was very clear that only well credentialed with applicants with advanced degrees would be considered for employment. Never mind that this is typically horrible advice for young people who aren’t knowledgeable, skilled, and passionate about a potentially marketable product or service- particularly kids who weren’t lucky enough to be born into the kind of wealth and resources that Mr. Thiel was born.

Most recently, Mr. Mark Cuban, Dotcom Billionaire, Dallas Mavericks owner, television celebrity, and yes- Stanford alum, has calledfor a 10% reduction in lending limits to undergrads. Cuban, like the others, completely fails to acknowledge the root causes of the out-of-control inflationary spiral the student loan system is now on. As such, his solution does absolutely nothing to cure the root causes of the problem, does nothing to address the massive injustices and harms now being inflicted on the citizenry- many of them Dallas Mavericks fans, and only perpetuates the true “shark tank” mentality that has overtaken this industry, and the big-government behemoth that oversees it (scroll down the link to get the punch line).

While these men don’t necessarily represent the prevailing attitudes of the “Stanford Crowd”, I’d say their comments reveal stunning ignorance of the problem(at best), or an agenda to perpetuate/exacerbate a predatory lending system that has inflicted massive harms on tens of millions of citizens, and is poised to wreak a far greater havoc imminently. This reflects poorly on the university. I hope very much that the economics faculty there will have the courage to step up and inform the discussion up there.

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Krugman, 1980 And All That

Dan here…Paul Krugman New York Times Dec. 24 notes Robert’s thinking on current story lines by some economists in macromedia.  Other posts by Robert on the subject can be found here, herehere, and here.  Krugman writes:

 Robert Waldmann is shocked, shocked, to find conservative economists not doing their homework:

Even now, I am shocked that economists didn’t bother to look up the data on FRED before making nonsensical claims of fact.

But this is typical; it applies to issues across the board. The same people know that growth has been much faster since financial deregulation and the Reagan tax cuts, except that it hasn’t; they know that Reagan was the only president to oversee the creation of millions of jobs, because there never was a Clinton boom; they know that there has been unprecedented growth in government spending under Obama, when the reality is the opposite. At this point you shouldn’t be surprised.

Still, why this failure to do even the simplest homework? In general, people on the right seem to do economic history (and probably history in general) using the principle of 1066 And All That: “history is what you remember”, often what you sort of think you remember. They hear everyone around them saying stuff, repeat it, and that becomes what everyone knows; the idea of checking the facts themselves never seems to arise…

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Magical Thinking and the Paranoid Style

Guest Post by Mark Jamison, a retired Postmaster in North Carolina.

The Rightwing echo chamber has gone nuts at the comments of Jonathon Gruber, comments that were, at the least insensitive and more than a little cynical. Gruber’s assertions that the American public was not very bright and had to be tricked into accepting Obamacare were not very respectful but they did and do reflect what many elites think of the general public.

On the Left we wonder “What’s the matter with Kansas?” and bemoan the fact that so many folks seem to vote against their own economic interests, if they even bother to vote. The Right however has no greater respect for the intellect of the American public. On the contrary, the Right with its highly tuned sensitivity towards the prevailing American religion of MarketThink, sees the ignorance of the populace as a business opportunity; as H.L. Mencken observed, “No one ever went broke underestimating the intelligence of the American public.”

My inbox was recently graced with an e-mail that informed that a number of recent lotto winners were terrified, “because they’re starting to draw a lot of unwanted attention from state lotto office.” The e-mail went on to tell me of a surefire system that “guaranteed” winning lottery numbers. Yikes!

Glen Beck is first and foremost a shill who uses overheated rhetoric and fear mongering to send his audience to gold dealers and get rich quick investment schemes. Now he is using his “brand” to sell expensive hipster clothing.

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Cynthia Lummis’s (Stunningly) Glib Fraud: A Follow-Up

Cynthia Lummis, a wealthy Republican House member from Wyoming, claims her husband passed away, thanks in part to Obamacare. Lummis cited the law as a major contributing factor to her husband’s demise. Instead of blaming her husband, who could easily have afforded the test (who elected to skip the necessary diagnostic), she blames the best thing to happen to millions of low income Americans, Obamacare.

From Addicting Info:

Cynthia Lummis is actually among one of the richest members of Congress. In 2007-2008, Representative Lummis’ financial disclosure forms reported a net worth between $20 million and $75 million… Obamacare wasn’t designed for people who have $20-$75 million. It was passed so the rest of us, who are either self-employed or have no access to insurance, can afford health care. It’s not the fault of the law that Lummis’s husband chose not to get a potentially life saving test – if he chose not to get the test.

Steve Doocy was desperately trying to dramatize her ‘poignant’ moment during these ridiculous hearings based on a pompous MIT economics professor speaking candidly. Lummis would not take the bait and blame her husband’s death entirely on the healthcare law. But she was willing to attribute a likely mistake in coverage to the passing of her husband. She believes men in general are easily dissuaded from seeking medical care, so any little glitch or problem will convince them to discount medical advice.

It’s truly disingenuous to blame a death on a law which is reliant on the insurance marketplace, as we all know insurance companies aren’t exactly cooperative and committed to the well-being of their customers. They are, like Republicans, only interested in financial gain and not human lives. Her husband’s choices and consequences should not deny insurance to the millions of poor people who finally have access to medical care. But they sure as hell will try their best to perpetuate the Republican Cult of Death and take away as much as they can from poor and needy Americans.

Cynthia Lummis Lies And Blames Obamacare For Her Husband’s Death, Crooks and Liars, yesterday


I can’t figure out which is worse. That this woman dragged her dead husband into this witch hunt to make a political point, or that she is so stupid to not realize that her story makes no sense.

And [Washington Post political blogger Nia-Malika] Henderson really needs to get a clue.

— EMichael, comment this morning to my post yesterday titled “Cynthia Lummis’s (Stunningly) Glib Fraud

The one thing I wish Crooks and Liars had added to that post was that Lummis mentioned that her husband was 65 years old.  He therefore was on Medicare–although Lummis failed to say that.* 

Indeed, that may well have been what caused the confusion when he sent in his claim to “Obamacare”; he turned 65 last January, and this might have been his first use of Medicare, and that might have someow complicated the matter.  But in any event the cost at issue would have been the difference between what Medicare paid for the various tests he had, and would have paid for the test he did not have, and the portion of the remainder of the charges that the “Obamacare” plan that Lummis and her husband purchased was supposed to pay for as Medicare supplement coverage.

Lummis is trying to get away with murder here—the murder of others.  I really, really would like to see one of the high-profile fact-checker blogs inquire into why Lummis was effectively claiming that “Obamacare” negated her husband’s access to Medicare coverage.  Nor was her husband even required under the ACA to have insurance beyond just Medicare, although of course the additional coverage was free, courtesy of his wife’s employment with the federal government.

Might the Washington Post’s own Fact Checker, Glenn Kessler, be interested in pointing this out?

But the Cooks and Liars highlights a critical point: that the ACA is reliant on the insurance marketplace, and, as we all know, insurance companies aren’t exactly cooperative and committed to the well-being of their customers.  Thus the problems—of the sort that Lummis complained of and of the sort that virtually everyone else who complains about it, complains about.

Such as Catherine Keefe, whose op-ed published yesterday in the Washington Post, is titled “I’m an Obama supporter. But Obamacare has hurt my family.” The subtitle is “Obamacare has been far more frustrating than I’d ever dreamed.”  Chances are, I’d say, excellent that Keefe wrote the subtitle but not the title, since the subtitle accurately summarizes her piece but the title does not.

What Keefe’s complaint, like most other accurately stated complaints about the ACA are really complaints about this country’s for-profit, market-based healthcare insurance industry.  So were Lummis’s.  Keefe’s only actual harm from the ACA itself, as opposed to harm from the obnoxious insurance-industry-created provider-networks system—a factor now in most employer-based insurance coverage, although that’s rarely mentioned in the media—is that as a 56-year-old woman (her husband is 59), she should not have to purchase a plan that includes children’s dental coverage and maternity care.  Point taken, but that would be an easy fix.  (Missing from her article is mention of two benefits from the ACA that may matter to her husband: no annual nor lifetime coverage cap.  She does, though, note her gratitude for the ACA’s having ended the pre-existing-conditions thing, a big factor for husband, especially, but also for her.)

As for Lummis, what she’s really complaining about is that, thanks to an amendment offered by Sen. Charles Grassley (R. IA) to the original ACA bill as it was being debated in Congress, members of Congress and their staffs no longer are covered by the federal government’s famously generous and user-friendly healthcare coverage. They now must, like regular folk, deal with the for-profit, market-based healthcare insurance industry that she and her ideological cohorts claim to hold in such high esteem.

As I read Keefe’s op-ed yesterday, what struck me is how very ready huge swaths of the public are for Medicare-for-all. And how thoroughly clueless most politicians, political operatives and pundits are that this is so.  Lummis’s husband needed simply to schedule that final test and present his Medicare card when he arrived at the medical facility.  And that’s how simple and direct such things should be for everyone. Including the spouses of people whose financial assets don’t range between $20 million and $75 million.


*Post edited slightly to clarify that while Lummis mentioned her husband’s age, she failed to note that he had Medicare coverage–a key point I made in my earlier post.  12/11 at 1:07 p.m.

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Cynthia Lummis’s (Stunningly) Glib Fraud

The big news story of the last 24 hours, of course, is the Senate Intelligence Committee’s sickening torture report.  But you might also have heard about Wyo. Rep. Cynthia Lummis’s dramatic statement yesterday as a member of Darrell Issa’s Committee on Oversight and Government Reform’s Jonathan Gruber/Marilyn Tavenner Obamacare hearing.

The purpose of the hearing was, naturally … well, you know.  But something surprising did happen at the hearing.  In short, Lummis, the chairwoman of the Republican Study Committee’s Obamacare-repeal subcommittee, claimed that her 65-year-old Medicare-eligible husband failed to get a physician-recommended medical test to diagnose the cause of his chest pains because he was told incorrectly that he and his wife “were not covered by Obamacare”.

Even if you did hear about this, you might have missed Washington Post political blogger Nia-Malika Henderson’s precious take on it as “the most moving moment of the Gruber hearing.”:

Jonathan Gruber, the MIT economist who said that the stupidity of the American public played a major role in the passage of the  Affordable Care Act, came to Capitol Hill on Tuesday to be verbally flogged by members of Congress. Amid the predictable litany of “stupid” references, Wyoming Republican Rep. Cynthia Lummis (R-Wyo.) provided a poignant moment. Here’s what she said:

“On October 24, the week before election, my husband went to sleep and never woke up. He had a massive heart attack in his sleep at age 65.  A perfectly, by all accounts, healthy man. Come to find out, in a conversation with his physician after he died, he chose not to have one of the tests, the last tests, his doctor told him to have. This happened to coincide with the time that we were told that we were not covered by Obamacare. I’m not telling you that my husband died because of Obamacare.  He died because he had a massive heart attack in his sleep.

Lummis’s husband was Alvin Wiederspahn, a former Democratic state legislator and a lawyer and rancher. They married in 1983. When he died, Lummis released this statement, which mentions the couple’s only child: ‘Last night, my husband, Al, passed away peacefully in his sleep in our home in Cheyenne. Annaliese and I know that God has taken Al home to heaven, but right now our hearts are broken.’

“Her statement about her husband in the Gruber hearing wasn’t so much a question as much as it was a raw accusation about the Affordable Care Act, a statement she ended by asking for some compassion. ‘I want to suggest that regardless of what happened to me personally, that there have been so many glitches in the passage and implementation of Obamacare that have real-life consequences on peoples’ lives,’ she said, almost choking up. ‘The so-called glibness that has been referenced today has direct consequences for real American people. So get over your damn glibness.’”

“Centers for Medicare and Medicaid Services Administrator Marilyn Tavenner tried to offer Lummis some sympathy, but was cut off by outgoing chairman Darrell Issa (R-Calif.)”

Hearings like this are always political.  But they don’t usually offer such deeply-felt personal stories from lawmakers.

Apparently, it didn’t occur to Henderson, nor for that matter to Tavenner, to mention that Lummis’ husband surely was covered by Medicare.  For the record, Mr. Wiederspahn, according to his own Wikipedia page, was born on January 18, 1949, so he turned 65 a full 10 months before his death.

Also for the record, Lummis and her husband had a net worth of between $20 million and $75 million, including three Wyoming ranches.  Although Mr. Wiederspahn himself came from a prominent Cheyenne family and was a successful lawyer, the couple, who met when they were young across-the-political-aisle colleagues in the state legislature, inherited most of their extensive wealth from Lummis’s family.

Lummis said at that hearing that her husband had had several routine heart-health tests, presumably months or at least weeks before he died, and had submitted payment claims to “Obamacare,” but was told, erroneously, by “Obamacare” that the two of them were not were not covered, even though they had purchased a plan through the DC exchange website.  She said he resubmitted the bills and was told again that he and his wife weren’t covered.  But he was covered primarily by Medicare. And of course he knew that. Lummis didn’t mention that, but she did say that he had been having chest pains yet declined to have that final diagnostic test.

Lummis ran unsuccessfully in September to chair the Republican Study Committee, and she heads its legislative-repeal subcommittee. Her story was not a deeply-felt personal one but instead a deeply-felt ideological one.  The chance is nil that her husband delayed getting that final diagnostic test for fear that he might have to pay out-of-pocket some relatively small portion of the cost for the test–the portion that Medicare would not pay. Or that he thought the insurance error would not be corrected.

Her claim is a fraud.  Call her the “‘Jackie’, the-University-of-Virginia-fraternity-gang-rape-victim” of the Obamacare-horror-story crowd.  By which I mean that, theoretically at least, her fabrication in order to try to serve her cause may prove to have the opposite effect.  But only if the news media reports the credibility issues.  And because this is not about sex but instead about Obamacare, the news media probably won’t.

And, no, I’m not being glib.  Lives indeed are at stake.

And while it may be unfair to analogize Henderson to Rolling Stone journalist Sabrina Rubin Erdely, the author of the infamous UVa-fraternity-gang-rape article—Henderson, after all, was just extemporaneously reacting to what she had just seen on CSPAN, not writing an ostensibly extensively-investigated in-depth news article—I’ll draw the analogy anyway, albeit while noting that important distinction.

But Henderson certainly is correct on her last point: Congressional hearings don’t usually offer such deeply-felt personal stories—real ones or fake ones—from lawmakers. Nor, of course, was this lawmaker actually testifying.  Not under oath, anyway.

But to Henderson’s observation, I’ll add one of my own: There has, at least to my knowledge, never been a House or Senate hearing at which, say, a surviving spouse of someone who died because of lack of access to diagnostic tests or to treatment because of the family could not afford healthcare insurance on the private market on the pair’s minimum-wage jobs, or because the spouse had a pre-existing condition detailed this.  Nor, to my knowledge, has there been testimony by a witness who alone or along with a spouse filed for bankruptcy, or completed lifelong savings and retirement accounts, because of huge and possibly ongoing medical bills that far exceeded the pre-Obamacare annual benefit cap on the family’s Blue Cross plan.

For that matter, there has been no Congressional-hearing testimony by people who will lose access to healthcare insurance if Antonin Scalia brings along with him next spring the votes of four other justices to interpret the ACA as containing an antidisestablishmentarian clause that bars insurance-premium subsidies under that statute in states that have allowed the federal government to set up and run their state’s insurance exchange website, as per the ACA, rather than set one up and run it itself.  During a little-publicized private speech to the Appellate Judges Education Institute Summit last month, Scalia decided to tamp down public speculation that in the ACA cases, King v. Burwell and Halbig v. Burwell, he might adhere to the rule of statutory construction that he announced for the Court last June in a ruling favoring a who’s-who cadre of anti-environmental-regulations Republican campaign finance benefactors, and against the EPA.  Scalia reportedly told his audience that judges don’t have the power to interpret “garbage” statutes enacted by Congress to avoid an undesired outcome. (Scalia and four of his colleagues do believe, however, as they demonstrate regularly these days, that they have the power to interpret non-garbage statutes and statutory procedural rules as garbage statutes, but apparently he didn’t mention that in his speech.)

And there has been no Congressional testimony by anyone who, notwithstanding a very moderate annual income ($11,670 to $29,175 a year for an individual), this year has enjoyed excellent healthcare insurance through an ACA provision that has remained almost secret because it requires a separate budget appropriation that the Republicans have blocked. HHS has used funds appropriated for the tax subsidies to fund the program this year, but the professional-anti-Obamacare-litigation industrial complex is challenging the legality of this in the courts.  New York Times healthcare reporter Robert Pear explained on November 29:

In mounting the latest court challenge to the Affordable Care Act, House Republicans are focusing on a little­-noticed provision of the law that offers financial assistance to low­ and moderate­ income people.

Under this part of the law, insurance companies must reduce copayments, deductibles and other out-­of­pocket costs for some people in health plans purchased through the new public insurance exchanges. The federal government reimburses insurers for the “cost-­sharing reductions.”

Nor has there been Congressional testimony by anyone who is deeply grateful for the dramatic slowing of the decades-long virulently-rising annual increase in healthcare insurance costs for private-employer-based insurance, although surely there are many, many millions who are.

I want to suggest that regardless of what happened to Lummis personally, that although there have been so many glitches in the passage and implementation of Obamacare, the actual real-life consequences of Obamacare on peoples’ lives are that it mitigates to some extent but by no means fully the profoundly harsh and quite-often deadly American healthcare-access/healthcare-coverage system, and that Lummis is fraudulently invoking her husband’s untimely death in the service of trying to strip millions of spouses, parents, and children of their newfound, very-long-in-coming access to diagnostic tests, treatments, and preventative medical care.  That—unlike her false indictment of the ACA in her husband’s death—is a fact.

Lummis’s husband, whether or not he remained a Democrat throughout his life, did remain someone whose heart was in the right place.  He reportedly played a large role in obtaining financial support for Cheyenne’s largest homeless shelter.  His widow should have let him rest in peace, rather than glibly invoking his death in a cause whose purpose is to deny access to healthcare insurance to massive numbers of people.  His widow’s glibness was intended to have direct consequences for real American people, of exactly the sort that her husband (who surely knew that at the least he was covered by Medicare) did not face.  It is not Gruber, but Lummis, whose glibness will kill, as is its intention.

Yes, Henderson really did title her blog post “This was the most moving moment of the Gruber hearing.”  Once Obamacare has been repealed root-and branch, as Mitch McConnell has vowed, or just branch-but-not root, by the Supreme Court, as Scalia is hinting, there will be many possible moving moments, superficially similar but substantively different than Lummis’s, although of course not by lawmakers.  There still is a difference between staged theater and real life; at least I think so.  So I suppose we’ve seen the last of the moving moments, at Congressional hearings, concerning spousal deaths due to lack of health insurance coverage.

Lummis surely mourns her husband.  Deeply.  But she also made him her unwitting stage prop yesterday.



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Prez throws PRC Chair under the bus, WaPo misses the bus completely

invisible hand

Guest Post by Steve Hutkins of Save The Post Office

Josh Hicks has a piece in yesterday’s Washington Post about the announcement that Ruth Goldway (pictured in China) had stepped down as Chairman of the Postal Regulatory Commission, to be replaced by Commissioner Robert Taub as Acting Chairman. It’s entitled “Jet-setting postal regulator replaced amid scrutiny of travel habits.” Hicks begin his piece like this:

“President Obama replaced the globetrotting chairman of the Postal Regulatory Commission this week after years of criticism over frequent trips she charged to U.S. taxpayers.”

Hicks provides no evidence that Goldway was replaced because of the controversy over her “travel habits.” Instead, the WaPo just attacks her as “jet-setting” and a “globetrotter,” as if that explains everything. As for actual facts, Hicks mostly recycles some quotes and statistics from a hatch job the WaPo’s Ed O’Keefe did on Goldway back in 2012.

Hicks also provides some details drawn from a November 4 article in the Washington Free Beacon. The Beacon is a project of the Center for American Freedom, a conservative advocacy group, and it’s not shy about promoting a right-wing ideology. On postal matters, it’s probably not too far from the Washington Post, which has a track record of ill informed op-eds endorsing the dismantling of the Postal Service.

The bogus travel issue was examined in a previous post back in February 2012. It was clear then, as it is now, that attacking Goldway for her travel expenses had nothing to do with the cost of her travels or whether or not her trips are appropriate or necessary. The attacks are about getting Goldway out of the way. Now they’ve finally succeeded.

Since Hicks’ article is short on facts, here are some numbers to consider. According to O’Keefe’s 2012 article, Goldway spent $70,000 on travel between August 2009 (when she became the PRC chair) and January 2012. That comes to about $28,000 a year. According to Hicks’ article yesterday, Goldway spent $71,000 in official travel expenses during her first three years as chairman. That comes to about $23,700 a year.
Hicks notes that the Beacon reported that between 2012 and 2013, Goldway spent over $36,000. It’s not clear if this is the amount for one or two years. If it’s for two, her travel budget was $18,000 a year.

Hicks writes that Goldway’s travel budget during 2009-2012 was “outpacing her predecessor,” but he bases that on O’Keefe’s piece and doesn’t provide any numbers.

The previous chair of the PRC was Dan Blair. According to the WaPo’s 2012 article, Blair spent $58,788 on travel during his two-and-a-half-year tenure (December 2006 through August 2009) — about $23,500 a year.

A report prepared by the PRC in response to the travel controversy provides similar numbers. Between March 2007 and June 2010, Blair spent a total of $70,262: $20,794 in FY 2007; $23,869 in FY 2008; $16,725 in FY 2009; and $8,874 in FY 2010. That averages out to about $1,800 a month or $21,600 annually, and it includes twelve months Blair wasn’t even serving as chairman.

Goldway’s expenses were thus very comparable to her predecessor’s, especially if you consider the rising costs of travel. They were also in the same ballpark as other high-ranking postal officials.

An OIG audit on “Officers’ Travel and Representation Expenses for Fiscal Year 2011” shows that the travel and representation expenses for USPS officers totaled about $700,000. The audit for 2012 shows a total of $806,000, and the audit for 2013 shows a total of $771,000. These budget numbers cover about 40 USPS officers, so the average annual expense per officer would thus come to about $19,000.

The OIG also does an annual audit for the members of the USPS Board of Governors. It appears that they too like to get around. In 2011, they spent $163,000 in travel and miscellaneous expenses; in 2012, they spent $216,000; and in 2013, $153,000. There are supposed to be nine members on the BOG (not including the PMG and Deputy PMG), but there were several vacancies throughout this period. For example, as of Sept. 30, 2013, there were just five members (and at the moment there are only four). The audit reports don’t break the numbers down per person or separate travel from miscellaneous expenses, but there’s enough data to estimate the average annual budget per member: somewhere between $25,000 and $30,000.

One could probably look into the travel expenses incurred by other high-ranking government officials with international responsibilities. The numbers are unlikely to show that Goldway has spent much more on travel than is normal for someone in her position.

It’s also important to remember that the 2006 Postal Accountability and Enhancement Act (PAEA) specifically requires the PRC to play a role in international postal affairs. The PRC website has a whole section on PRC Website, Goldway is “the longest serving, full-time, Senate-confirmed Presidential appointee within the Executive Branch of the United States Government.”
Obama’s decision to replace Goldway raises a couple of important questions. Why did Obama replace a Democratic chairman with a Republican? And why has the president not taken care to give the PRC a Democratic majority?

The PRC normally has five commissioners, so Obama could have easily made sure three of them were Democrats. Instead, he has made appointments giving the Republicans the majority. Currently there are three commissioners — two Republicans and one Democrat. Two appointees are waiting for confirmation — one Republican and one Democrat. Once they’re confirmed, the Commission will thus have a three-to-two Republican majority as well as being chaired by a Republican.

It’s not hard to see where all this going. With the Republicans in control of Congress, with Republicans holding a majority of the PRC and its chairmanship, and with a president that doesn’t seem to care much about preserving the Postal Service, it’s clear that over the next couple of years we’re in for more of the same — more cuts in service, more slowing down of delivery, more cluster boxes, more rate increases, more part-time contract labor, more outsourcing to the private sector, more secret NSA deals with corporate partners like Amazon, more Village Post Offices and postal counters in big box stores, more post office and plant closures, more dismantling of the infrastructure, more piecemeal privatization.

The PRC doesn’t have all that much power to stop any of these things, but with Goldway gone and Taub in place, it will be a bit easier for the next Postmaster General to continue the Potter-Donahoe agenda and for Congress and the President to help her do just that. And that’s what this whole story is about — not a few thousand dollars in travel expenses.

Steve Hutkins of the Save The Post Office Blog and the author, is a literature professor who teaches “place studies” at the Gallatin School of New York University. Steve has no affiliation with the U.S. Postal Service — he doesn’t work for it, nor does anyone in his family. Like millions of Americans, he just likes his local post office, and he doesn’t want to see post offices being closed.

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Why Congress Should Not Get Out of the Way of the Postal Service

invisible hand Guest Post by Mark Jamison, retired Postmaster. News of Ron Johnson the Tea Party favorite from Wisconsin taking over as chair of the Senate committee on Homeland Security & Governmental Affairs has caused an overwhelming sense of panic among progressives and postal workers. Johnson will control oversight of the Postal Service in the Senate.

There may be good reason to think this has the makings of disaster. Johnson is on the record stating that it would be a good idea if the Postal Service went into bankruptcy and got privatized. His training is in accounting, but he has refused, with an aggressive ignorance, to acknowledge the basic tenets of accounting. When witnesses come before his committee, he bullies them and waves his arm abrasively. His dislike of unions is so intense he is willing to set aside his worship of the business principles of a contract to concoct a bankruptcy scheme to abrogate postal labor agreements.

Is the coming of Ron Johnson any reason to panic?

Tom Coburn, the current ranking member on the committee, has said virtually all of the same things as Johnson (in his quiet, deadly way). Several of the other Republicans on the committee — Rand Paul, Mike Enzi, and Kelly Ayotte — have also said many of the same things Johnson has. All of them have shown a disdain for the Postal Service as an institution. All of them have questioned the Postal Service role as a national infrastructure.

Never mind too that Tom Carper, the Democrat from Delaware and current chair of the committee, has endorsed virtually every cut, every closure, every act of outsourcing that PMG Donahoe has engaged in or even imagined. On postal matters, his views are not that far from Johnson’s.

It could be the end

While Ron Johnson will probably just carry on like Carper, Coburn, and the other Republicans on the committee overseeing the Postal Service, the specter of Senator Johnson as chair is haunting progressives.

The sky is falling atThink Progress, where Kira Lerner tells us that with Johnson “it could be the end of the Postal Service as we know it.” Lerner therefore hopes that Congress passes legislation — any legislation at all, bad as it might be — before Johnson can pass something worse.

How likely is any legislation coming out of a lame duck session will be good? Anything likely to come out of the Senate would carve in stone the current agenda of cuts to the workforce, reductions in service, and secret NSA agreements. Plus, any bill passed by the Senate would have to go to conference with whatever Darrell Issa comes up with in the House. The result will be further degradation of the postal network. There is little chance it will make those who care about postal services in this country very happy.

Over at Daily Kos, Laura Clawson seems just as frightened of Johnson as is Lerner. Faced with Johnson’s statement that the Postal Service should go through a bankruptcy process, Clawson says, “Another solution is for Congress to get out of the way of the Postal Service making money providing needed services like banking for tens of millions of people who don’t have access to financial institutions.”

Postal banking might be useful for the millions of unbanked citizens, but it is worth giving this notion of “getting Congress out of the way” a bit more thought. The idea seems to be almost everyone’s answer for what ails the Postal Service. Blaming Congress is apparently something folks everywhere on the political spectrum can agree on.

That should come as no surprise, considering that Congress has become less popular than a shady used car salesman. But would all be right with the Postal Service if Congress just got out of the way?

The answer to that depends a lot on what you want the Postal Service to do with its newfound freedom.

Getting Congress out of the way

For many people, “getting Congress out of the way” means that the Postal Service should be free to compete. It should be allowed to deliver wine and beer, it should be allowed to get into the banking business, and it should be allowed to expand its products and services in many other ways now prevented by law. Even Vermont Senator Bernie Sanders, one of the most enlightened members of Congress, likes to say that the Postal Services needs to be free to compete so that it can increase revenues and sustain itself.

That all sounds fine — unless you’re one of the companies that has to compete with the Postal Service. In fact, one of the reasons that legislation has been stalled for the past four years is there are many interests who don’t want to free the Postal Service to compete. The mailers want cheap rates, the package industry wants a cheap way to fill the last-mile, ideologues on the Right want to kill labor, legislators with rural constituencies want to protect the infrastructure and services that benefit their communities. Everybody wants something, but no one really wants competition.

Other advocates of “getting Congress out of the way” have something else in mind. They’re thinking about how Congress had made it difficult to close post offices, interfered with ending Saturday delivery, and tried to stop the closure of most mail processing plants and ending overnight delivery.

For these folks — like the large mailers who think downsizing will keep their rates down — getting Congress out of the way means giving the leaders of the Postal Service more freedom to do exactly what they have been doing for the past several years — closing plants, reducing service, and all the dismantling we’ve witnessed.

Still another view of “getting Congress out of the way” involves ending the prefunding mandate, i.e., the law passed by Congress in 2006 (the Postal Accountability and Enhancement Act) that unnecessarily requires the Postal Service to prefund its retiree health benefit fund (RHBF) to the tune of $5.5 billion a year. According to this view, the main problem facing the Postal Service is that it is running so deep in the red — a problem caused almost entirely by the RHBF payments.

But prefunding is not really the problem. It is just an excuse. The Board of Governors and the senior leadership in L’Enfant Plaza have been using the crisis created by the RHBF payments — along with the drop in volume associated with the Great Recession — as an excuse to advance an agenda they have long held dear. It is an agenda that goes back way, long before prefunding became an issue.

Transforming the Postal Service

The corporate elite has sought a more corporatized Postal Service, free of regulation and oversight, at least since the Postal Reorganization Act of 1970, if not before. Postal management has consistently helped achieve that goal. Since 2003 when former PMG Jack Potter offered his Transformation Plan, the goal of the Postal Service has been to do exactly what Mr. Donahoe has done over the last five years.

The management of the Postal Service does not want the agency under its stewardship to function as an institution that serves the needs of millions of average Americans. It wants to be a corporate player. So when the leaders of the Postal Service talk about getting Congress out of the way, they’re saying they don’t want government oversight and regulation to interfere with allowing them to turn the Postal Service into a corporation — more specifically, a delivery company.

To that end, then, postal leadership has been very clear about wanting to jettison the retail network, especially thousands of small post offices that do not make significant profits but that have been essential to rural communities across this country. Donahoe, his predecessors, his enablers on the BOG, and politicians of both parties have sought to reduce employment, undermine labor agreements, degrade the mail-processing network, as part of this move toward a corporate model. They continue to sign secret agreements with companies like Amazon, Staples, UPS, and FedEx while reducing service standards for the American public. They have abandoned any pretense of “binding the nation together.”

Yes, the 2006 PAEA put what seemed to be a big impediment in the way of postal progress in the form of the RHBF prefunding payments. But a closer look at the law reveals all sorts of ways in which Congress “got out of the way” — with some very problematic results.

PAEA divided products into two categories, which has led to the Postal Service’s practice of moving products from the more regulated market-dominant category into the competitive category, which is less regulated and often shrouded in secrecy. PAEA has fostered more Negotiated Service Agreements, which has resulted in the likelihood of more, not less, monopoly in the package delivery market. The rate cap regime set up by PAEA may have looked like a grand advance supposedly creating a predictable rate system; but, it further endorsed the idea the Postal Service exists for the benefit of stakeholders, primarily a narrow sector of the mailing industry, and not as an infrastructure designed to benefit the American economy and the American people as a whole.

The public good

The problem is that government — and the Postal Service is a legitimate function of government — does not exist to compete. Government exists to facilitate commerce, communication, transportation, and all the rest. One of its main functions is to build infrastructures that promote the general well being of both the economy and the civic space. The postal network is one of the government’s great infrastructures. It is not supposed to be a competitive player in the marketplace.

We do not expect highway systems to compete. We do not expect water and sewer systems to compete. We expect these infrastructures to function well and to extend access and service broadly.

The postal network, even as technologies change, serves as a fundamental infrastructure for both information and goods. The Founding Fathers saw the value in that sort of infrastructure, and that view is no less valid today. The network that we have created can and should adapt, but it remains essential.

We have lost our appreciation for public goods and the public square. All around us we see the basic fundamental structures of our society being captured by private, rent-seeking interests. We are told that our schools and universities would be better if they competed — in other words, if we introduced the profit motive. The same thing goes for our prisons and law enforcement. Everything will supposedly work better if private enterprise takes over.

This kind of thinking reduces everything in life to a single paradigm of profit and loss. It co-opts and perverts words like “effective” and “efficient,” reducing their meanings to a very narrow slice of human experience.

But different elements of society have different goals, different ways of measuring success, efficiency, and effectiveness. Trying to stuff everything into a model of competition simply doesn’t work. Businesses should pursue profits, schools should educate, infrastructures should facilitate.

The postal network has been built over generations to serve the American people. It has done that job well by connecting every corner of America, by maintaining the most affordable rates in the world, and by adapting to changing technologies. It has done this while providing a sense of identity to thousands of communities and meaningful employment to hundreds of thousands workers.

Yet in spite of all the Postal Service has accomplished, its leaders remain committed to turning the Postal Service from useful infrastructure into nothing more than a delivery company.

Doing the work of the people

The Postal Service does not need to be set loose, and it does not need to be freed from Congressional control. Giving the leaders of the Postal Service a free hand is not going to help matters. They will continue doing exactly what they have been doing.

Instead, the Postal Service needs to be properly managed, properly maintained, and properly directed towards fulfilling its role as a basic national infrastructure, owned by all Americans.

The problem is not that Congress needs to get out of the way but that Congress needs to do its job.

Congress needs to ensure that the Postal Service operates under a robust universal service mandate that is clearly defined. It needs to ensure that the management structure of the Postal Service works for the American people, not its own agenda. It needs to find appropriate means to maintain our existing postal infrastructure while adapting it to 21st century needs and technologies. Congress needs to do its job and properly tend to and care for public goods and national assets.

The new Congress probably isn’t going to do any of those things, but passing bad legislation in a lame-duck session or giving the management of the Postal Service more freedom to degrade the institution is not going to solve anything.

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