When the credit rating agency Moody’s announced recently that the United States had moved “substantially” closer to losing its AAA bond rating, it largely ran as a wire brief, buried in newspaper business sections.
But this obscure announcement may one day be regarded as the beginning of the end of American prosperity.
Now, I know what you might be thinking: Moody’s was late on the subprime mortgage crisis, failing to lower ratings for companies with subprime-heavy portfolios until it was too late.
But, if anything, that should make everyone more nervous. If the bean-counters at Moody’s are starting to get anxious, things may be far worse than we imagine.
Regardless of past missteps, this credit rating agency still has serious influence among investors on Wall Street and around the world.
When companies and governments want to borrow money, they sell bonds. And when investors decide what bonds to buy, they turn to Moody’s and other ratings agencies for advice.
Bond ratings for nations are roughly analogous to FICO credit scores for individuals: The better your rating, the less you’ll pay for a home mortgage — or, in the case of the United States, an $800 billion stimulus package.
Today, the United States has an unblemished AAA credit rating and a reputation as the most reliable borrower in the world. So investors lend us money at low rates. Washington is paying about 3.3 percent interest on $12.5 trillion in outstanding loans.
The good news is that, at current rates, that’s relatively affordable.
Now for the bad news. (You knew it was coming, right?) On a debt as colossal as America's, even a modest rise in rates would be hugely expensive.
If, for example, Washington had to pay the same rate as, say, Australia, it would be shelling out an additional billion dollars in interest. Every day.
Consider this: if everything goes according to plan, in 2020 we will be spending “only” $916 billion on interest. But if, as Moody’s is warning, the United States were to lose its AAA rating, rates would rise and payments could double.
It is getting harder and harder to put a positive face on our financial situation. Even White House budget director Peter Orszag, who you’d hope would have some sort of plan for our fiscal future, recently said, “We’re on an utterly unsustainable path.”
There is only a small window of opportunity to solve this problem. Credit crises work on a positive feedback loop, where small problems snowball into big problems, and big problems snowball into catastrophes.
For some investors the new health care funding for an additional 30 million people may look like double-set-of-books accounting.
The financial markets are already reflecting the new state of affairs. Demand for Treasury securities sold at auction last week was so tepid that interest rates spiked to a level not seen since last June.
More troubling, the yield on some corporate bonds has actually dipped below the yield on their government equivalents.
Such an unusual reversal could mean investors have decided blue-chip corporations such as Berkshire Hathaway are less likely to default than Uncle Sam.
This is not good news.
By creating a new spending entitlement when Medicare is facing $38 trillion in unfunded liabilities, it is not a stretch to say the U.S. is nearing a precipice that has no precedent.
And not unlike going over a cliff, once the U.S. does it, other forces come into play, making it nearly impossible to reverse the fall.
Rick Berman is executive director of Defeat the Debt, a project of the Employment Policies Institute, a nonprofit research group studying public policy issues that affect the U.S. economy.
Read more: http://www.politico.com/news/stories/0410/35307.html#ixzz0jwUK9S3t
Friday, April 2, 2010
Health reform a bitter pill for Fla. voters
As the parties and pundits scramble to calculate the political impact from President Obama's just-passed health care plan, the most powerful - and consequential - aftershocks may be felt in the state that helped make him president.
The health care overhaul law polls poorly in Florida, with its large senior population, and Mr. Obama's fellow Democrats are struggling in races for governor, the Senate and the House of Representatives. Even Sen. Bill Nelson, a Democrat re-elected in 2006 with 60 percent of the vote, trails by a double-digit margin in a hypothetical 2012 matchup with former Gov. Jeb Bush, a Republican, for a third term.
Democrats note that they have seven months to turn the trend by Election Day. But a Mason-Dixon poll released this week shows the hurdle that the lengthy fight over health care has placed in their path. If the numbers don't rebound, Florida and its prize of 27 electoral votes may not go to Mr. Obama in 2012 as they did in 2008.
"We are a swing state," said Stephen Craig, chairman of the University of Florida's political science department. "You can win without Florida, but it's tough."
"Florida is the largest of swing states. As [NBC's late] Tim Russert used to say, its about Florida, Florida, Florida," said Eric Jotkoff, communications director of the Florida Democratic Party.
If so, the latest poll numbers tell a gloomy tale for Democrats.
A majority of state voters, 54 percent, said they opposed Mr. Obama's new plan, compared with 34 percent who support it.
Orlando Sentinel columnist Scott Maxwell, author of the blog Taking Names, said the more intense opposition in Florida compared with the nation as a whole could be attributed to the large elderly population in the state.
"We've typically skewed a little more Republican," he said.
State Attorney General Bill McCollum, a Republican who recently joined a lawsuit against the federal government with a dozen other states to block health care reform, leads Democrat Alex Sink, the state's chief financial officer, by a 49 percent to 34 percent margin in the race to succeed Gov. Charlie Crist.
Mr. Crist is struggling in his own primary battle with fellow Republican Marco Rubio for an open U.S. Senate seat, but polls show both men winning against Rep. Kendrick B. Meek, the likely Democratic nominee. Mr. Crist and Mr. Rubio have pledged to support repeal of the health care overhaul if elected.
Mr. Rubio, a former speaker of the state House and a rising star in conservative ranks, makes no bones about his opposition to the health care plan.
"Those who choose to focus only on the immediate impact of this consequential vote, and how it will factor in November's elections, fail to appreciate the lasting damage it will inflict on our nation's health care system and economy," he said in a statement just before the final congressional votes.
CQ Politics, published by Congressional Quarterly, gave Florida Democrats more bad news this week, downgrading the party's prospects in two hotly contested House races.
Rep. Suzanne M. Kosmas, a Democrat representing the Orlando area, earned a spot on the National Republican Congressional Committee's "Flip-Flop Five" list after opposing health care reform in a November House vote but then backing the plan last month. The CQ shifted her race from "leans Democratic" to a "toss-up." She could face a well-heeled challenger in former restaurant executive Chris Miller, who has run radio and TV ads slamming the health care plan and urging Mrs. Kosmas to oppose it.
CQ Politics also upgraded the prospects of Rep. Tom Rooney, a second-term Republican, as a top Democratic recruit passed on the chance to challenge him in the 16th District.
Democrats insist it is too early to write off their candidates. Mr. Jotkoff, echoing Mr. Obama, said voters' perceptions of the health care bill will shift as they learn more about its benefits and as memories of the frantic final lobbying push fade.
"As Floridians learn more about the details of the bill, Floridians are more supportive" of the reform, Mr. Jotkoff said.
The University of Florida's Mr. Craig agreed, predicting the Mason-Dixon poll numbers may change as the campaign season proceeds.
"My feeling is, 'So what? It's March," he said.
"So many other things can happen. Many people are reacting to the process, not the content," he added.
Mr. Maxwell, the columnist and blogger, said that while passions over the health care debate are high now, by November pocketbook issues like jobs will reassert themselves.
"I think the economy is going to be the biggest issue," he said.
The 2012 presidential election is even further away, but Mr. Obama clearly faces a major selling job in the Sunshine State. Mr. Obama narrowly defeated Sen. John McCain, the Republican presidential nominee, to claim the state in 2008.
Mr. Obama did not need Florida to clinch his Electoral College victory, but the state has shown it can be a kingmaker in tight presidential contests. Florida has voted for the winning presidential candidate in nine of the past 10 elections.
"I think it's pretty clear that Obama's job-approval numbers are already beginning to float down," said longtime Republican political strategist Ralph Reed.
The health care overhaul law polls poorly in Florida, with its large senior population, and Mr. Obama's fellow Democrats are struggling in races for governor, the Senate and the House of Representatives. Even Sen. Bill Nelson, a Democrat re-elected in 2006 with 60 percent of the vote, trails by a double-digit margin in a hypothetical 2012 matchup with former Gov. Jeb Bush, a Republican, for a third term.
Democrats note that they have seven months to turn the trend by Election Day. But a Mason-Dixon poll released this week shows the hurdle that the lengthy fight over health care has placed in their path. If the numbers don't rebound, Florida and its prize of 27 electoral votes may not go to Mr. Obama in 2012 as they did in 2008.
"We are a swing state," said Stephen Craig, chairman of the University of Florida's political science department. "You can win without Florida, but it's tough."
"Florida is the largest of swing states. As [NBC's late] Tim Russert used to say, its about Florida, Florida, Florida," said Eric Jotkoff, communications director of the Florida Democratic Party.
If so, the latest poll numbers tell a gloomy tale for Democrats.
A majority of state voters, 54 percent, said they opposed Mr. Obama's new plan, compared with 34 percent who support it.
Orlando Sentinel columnist Scott Maxwell, author of the blog Taking Names, said the more intense opposition in Florida compared with the nation as a whole could be attributed to the large elderly population in the state.
"We've typically skewed a little more Republican," he said.
State Attorney General Bill McCollum, a Republican who recently joined a lawsuit against the federal government with a dozen other states to block health care reform, leads Democrat Alex Sink, the state's chief financial officer, by a 49 percent to 34 percent margin in the race to succeed Gov. Charlie Crist.
Mr. Crist is struggling in his own primary battle with fellow Republican Marco Rubio for an open U.S. Senate seat, but polls show both men winning against Rep. Kendrick B. Meek, the likely Democratic nominee. Mr. Crist and Mr. Rubio have pledged to support repeal of the health care overhaul if elected.
Mr. Rubio, a former speaker of the state House and a rising star in conservative ranks, makes no bones about his opposition to the health care plan.
"Those who choose to focus only on the immediate impact of this consequential vote, and how it will factor in November's elections, fail to appreciate the lasting damage it will inflict on our nation's health care system and economy," he said in a statement just before the final congressional votes.
CQ Politics, published by Congressional Quarterly, gave Florida Democrats more bad news this week, downgrading the party's prospects in two hotly contested House races.
Rep. Suzanne M. Kosmas, a Democrat representing the Orlando area, earned a spot on the National Republican Congressional Committee's "Flip-Flop Five" list after opposing health care reform in a November House vote but then backing the plan last month. The CQ shifted her race from "leans Democratic" to a "toss-up." She could face a well-heeled challenger in former restaurant executive Chris Miller, who has run radio and TV ads slamming the health care plan and urging Mrs. Kosmas to oppose it.
CQ Politics also upgraded the prospects of Rep. Tom Rooney, a second-term Republican, as a top Democratic recruit passed on the chance to challenge him in the 16th District.
Democrats insist it is too early to write off their candidates. Mr. Jotkoff, echoing Mr. Obama, said voters' perceptions of the health care bill will shift as they learn more about its benefits and as memories of the frantic final lobbying push fade.
"As Floridians learn more about the details of the bill, Floridians are more supportive" of the reform, Mr. Jotkoff said.
The University of Florida's Mr. Craig agreed, predicting the Mason-Dixon poll numbers may change as the campaign season proceeds.
"My feeling is, 'So what? It's March," he said.
"So many other things can happen. Many people are reacting to the process, not the content," he added.
Mr. Maxwell, the columnist and blogger, said that while passions over the health care debate are high now, by November pocketbook issues like jobs will reassert themselves.
"I think the economy is going to be the biggest issue," he said.
The 2012 presidential election is even further away, but Mr. Obama clearly faces a major selling job in the Sunshine State. Mr. Obama narrowly defeated Sen. John McCain, the Republican presidential nominee, to claim the state in 2008.
Mr. Obama did not need Florida to clinch his Electoral College victory, but the state has shown it can be a kingmaker in tight presidential contests. Florida has voted for the winning presidential candidate in nine of the past 10 elections.
"I think it's pretty clear that Obama's job-approval numbers are already beginning to float down," said longtime Republican political strategist Ralph Reed.
Slapping Friends -Charles Krauthammer
WASHINGTON -- What is it like to be a foreign ally of Barack Obama's America?
If you're a Brit, your head is spinning. It's not just the personal slights to Prime Minister Gordon Brown -- the ridiculous 25-DVD gift, the five refusals before Brown was granted a one-on-one with The One.
Nor is it just the symbolism of Obama returning the Churchill bust that was in the Oval Office. Query: If it absolutely had to be out of Obama's sight, could it not have been housed somewhere else on U.S. soil rather than ostentatiously repatriated?
Perhaps it was the State Department official who last year denied there even was a special relationship between the U.S. and Britain, a relationship cultivated by every U.S. president since Franklin Roosevelt.
And then there was Hillary Clinton's astonishing, nearly unreported (in the U.S.) performance in Argentina last month. She called for Britain to negotiate with Argentina over the Falklands.
For those who know no history -- or who believe that it began on Jan. 20, 2009 -- and therefore don't know why this was an out-of-the-blue slap at Britain, here's the back story:
In 1982, Argentina's military junta invaded the (British) Falkland Islands. The generals thought the British, having long lost their taste for foreign lands, would let it pass. Besides, the Falklands have uncountably more sheep than people. They underestimated Margaret Thatcher (the Argentines, that is, not the sheep). She was not about to permit the conquest of a people whose political allegiance and ethnic ties are to Britain. She dispatched the navy. Britannia took it back.
Afterward, neither Thatcher nor her successors have countenanced negotiations. Britain doesn't covet foreign dominion and has no shortage of sheep. But it does believe in self-determination, and will negotiate nothing until and unless the Falkland Islanders indicate their desire to be ruled by a chronically unstable, endemically corrupt polity with a rich history of dictatorship, economic mismanagement and the occasional political lunacy (see: the Evita cult).
Not surprisingly, the Falkland Islanders have given no such indication. Yet inexplicably, Clinton sought to reopen a question that had been settled for almost 30 years, not just pointlessly stirring the embers but even taking the Argentine side (re: negotiations) against Britain -- a nation that has fought and bled with us for the last decade, and that today has about 10,000 troops, far more than any other ally, fighting alongside America in Afghanistan.
Of course, given how the administration has treated other allies, perhaps we shouldn't be so surprised.
-- Obama visits China and soon Indonesia, skipping India, our natural and rising ally in the region -- common language, common heritage, common democracy, common jihadist enemy. Indeed, in his enthusiasm for China, Obama suggests a Chinese interest in peace and stability in South Asia, a gratuitous denigration of Indian power and legitimacy in favor of a regional rival with hegemonic ambitions.
-- Poland and the Czech Republic have their legs cut out from under them when Obama unilaterally revokes a missile defense agreement, acquiescing to pressure from Russia with its dreams of regional hegemony over Eastern Europe.
-- The Hondurans still can't figure out why the United States supported a Hugo Chavez ally seeking illegal extension of his presidency against the pillars of civil society -- its Congress, Supreme Court, church and army -- that had deposed him consistent with Article 239 of their own constitution.
But the Brits, our most venerable, most reliable ally, are the most disoriented. "We British not only speak the same language. We tend to think in the same way. We are more likely than anyone else to provide tea, sympathy and troops," writes Bruce Anderson in London's Independent, summarizing with admirable concision the fundamental basis of the U.S.-British special relationship.
Well, said David Manning, a former British ambassador to the U.S., to a House of Commons committee reporting on that very relationship: "He (Obama) is an American who grew up in Hawaii, whose foreign experience was of Indonesia and who had a Kenyan father. The sentimental reflexes, if you like, are not there."
I'm not personally inclined to neuropsychiatric diagnoses, but Manning's guess is as good as anyone's. How can you explain a policy toward Britain that makes no strategic or moral sense? And even if you can, how do you explain the gratuitous slaps to the Czechs, Poles, Indians and others? Perhaps when an Obama Doctrine is finally worked out, we shall learn whether it was pique, principle or mere carelessness.
If you're a Brit, your head is spinning. It's not just the personal slights to Prime Minister Gordon Brown -- the ridiculous 25-DVD gift, the five refusals before Brown was granted a one-on-one with The One.
Nor is it just the symbolism of Obama returning the Churchill bust that was in the Oval Office. Query: If it absolutely had to be out of Obama's sight, could it not have been housed somewhere else on U.S. soil rather than ostentatiously repatriated?
Perhaps it was the State Department official who last year denied there even was a special relationship between the U.S. and Britain, a relationship cultivated by every U.S. president since Franklin Roosevelt.
And then there was Hillary Clinton's astonishing, nearly unreported (in the U.S.) performance in Argentina last month. She called for Britain to negotiate with Argentina over the Falklands.
For those who know no history -- or who believe that it began on Jan. 20, 2009 -- and therefore don't know why this was an out-of-the-blue slap at Britain, here's the back story:
In 1982, Argentina's military junta invaded the (British) Falkland Islands. The generals thought the British, having long lost their taste for foreign lands, would let it pass. Besides, the Falklands have uncountably more sheep than people. They underestimated Margaret Thatcher (the Argentines, that is, not the sheep). She was not about to permit the conquest of a people whose political allegiance and ethnic ties are to Britain. She dispatched the navy. Britannia took it back.
Afterward, neither Thatcher nor her successors have countenanced negotiations. Britain doesn't covet foreign dominion and has no shortage of sheep. But it does believe in self-determination, and will negotiate nothing until and unless the Falkland Islanders indicate their desire to be ruled by a chronically unstable, endemically corrupt polity with a rich history of dictatorship, economic mismanagement and the occasional political lunacy (see: the Evita cult).
Not surprisingly, the Falkland Islanders have given no such indication. Yet inexplicably, Clinton sought to reopen a question that had been settled for almost 30 years, not just pointlessly stirring the embers but even taking the Argentine side (re: negotiations) against Britain -- a nation that has fought and bled with us for the last decade, and that today has about 10,000 troops, far more than any other ally, fighting alongside America in Afghanistan.
Of course, given how the administration has treated other allies, perhaps we shouldn't be so surprised.
-- Obama visits China and soon Indonesia, skipping India, our natural and rising ally in the region -- common language, common heritage, common democracy, common jihadist enemy. Indeed, in his enthusiasm for China, Obama suggests a Chinese interest in peace and stability in South Asia, a gratuitous denigration of Indian power and legitimacy in favor of a regional rival with hegemonic ambitions.
-- Poland and the Czech Republic have their legs cut out from under them when Obama unilaterally revokes a missile defense agreement, acquiescing to pressure from Russia with its dreams of regional hegemony over Eastern Europe.
-- The Hondurans still can't figure out why the United States supported a Hugo Chavez ally seeking illegal extension of his presidency against the pillars of civil society -- its Congress, Supreme Court, church and army -- that had deposed him consistent with Article 239 of their own constitution.
But the Brits, our most venerable, most reliable ally, are the most disoriented. "We British not only speak the same language. We tend to think in the same way. We are more likely than anyone else to provide tea, sympathy and troops," writes Bruce Anderson in London's Independent, summarizing with admirable concision the fundamental basis of the U.S.-British special relationship.
Well, said David Manning, a former British ambassador to the U.S., to a House of Commons committee reporting on that very relationship: "He (Obama) is an American who grew up in Hawaii, whose foreign experience was of Indonesia and who had a Kenyan father. The sentimental reflexes, if you like, are not there."
I'm not personally inclined to neuropsychiatric diagnoses, but Manning's guess is as good as anyone's. How can you explain a policy toward Britain that makes no strategic or moral sense? And even if you can, how do you explain the gratuitous slaps to the Czechs, Poles, Indians and others? Perhaps when an Obama Doctrine is finally worked out, we shall learn whether it was pique, principle or mere carelessness.
five words, and a comma, may cause a world of hurt to state governments.
The addition to existing law of five words, and a comma, may cause a world of hurt to state governments.
Tucked away on page 466 of President Obama’s 2,704-page health-care bill is a provision that changes the definition of “medical assistance,” the term describing what states are required to provide to Medicaid recipients.
States have in the past been required to provide payment for services to physicians. Now, under the new definition, states will be liable for ensuring provision of “the care and services themselves.”
In other words, states are legally on the hook not only to ensure that Medicaid recipients are paid for, but that they’re seen by a doctor.
Medicaid recipients have found it increasingly difficult to be seen by doctors, as states in extreme economic duress have cut payment rates.
The new law seeks to solve the problem, but may cost states even more money at a time when most are in some of the worst economic straits since the Great Depression.
“With the expanded definition, it leaves every state vulnerable to a new wave of lawsuits any time someone cannot access a service, even if that service is limited by virtue of the rates we pay,” said Alan Levine, Louisiana’s secretary of health and hospitals, in a recent memo prepared for fellow state government officials.
Levine wrote: “DHH cannot estimate the cost of this, but it is not even worth estimating. It will be substantial.”
Ann Kohler, director of health policy at the nonpartisan American Public Human Services Association, said she was aware of the concern and was “looking at the legislative language,” but had not yet reached a determination.
“I have my lawyers looking at it right now,” she said.
Republicans on the House Energy and Commerce Committee said they agreed that the provision could open the floodgates to lawsuits.
“Section 2304 changes the definition of Medical Assistance, and potentially, wipes clean years of court precedent that has kept states from losing very expensive lawsuits,” a GOP staffer said. “The states and the Medicaid directors are very worried about this provision.”
A spokeswoman for House Energy and Commerce Committee Chairman Henry Waxman, California Democrat, did not respond to a request for comment on the provision.
Victor Schwartz, a tort law expert at Shook, Hardy and Bacon in D.C., said that Waxman sees trial lawyers as positive agents of change.
“He sees tort law as a regulatory engine that’s needed just beyond legislation. He sees trial lawyers as heroic who are there to help the ordinary people,” Schwartz said.
“That may have been true 30 years ago when Mr. Waxman was a lawyer, but now it’s big business as much as Exxon,” Schwartz said. “The hero with a slingshot isn’t around too much any more.”
Not all state Medicaid directors said they were concerned about the change to the law.
“There’s been some chatter on this issue among state Medicaid directors. Some say the sky is falling, others say it makes little difference, still others say they are unaware of the ‘change,’” said Doug Porter, an assistant secretary of social and health services in Washington state.
“I’m in the ‘makes little difference’ camp,” Porter said by e-mail. “We here in the 9th Circuit are used to getting sued.”
Other states said they were still trying to determine the impact of the change.
Nicole Brossoie, a spokeswoman for New Jersey’s department of Human Services, said the health bill is “a complex statute that requires careful review in order for New Jersey to consider the various expansion options – and fiscal implications of those options – over the course of the next decade.”
“We’re unable to give you any additional information at this time,” she said.
The House Report on the legislative language described the change as merely clarifying the long-held understanding of state requirements.
Levine, however, said that the language “wipes the slate clean of years of litigation precedent that has protected states from Federal encroachment by federal judges.”
“In virtually any case where federal judges have imposed their discretion, it has cost states hundreds of billions of dollars,” he wrote in his memo.
Louisiana’s Medicaid director, Jerry Phillips, said that the most likely consequence – if a Medicaid recipient sues because he or she is unable to find a physician to see them and wins – would be to force states to increase payment rates.
Phillips said that Louisiana has spent $300 million over the last three years to increase payment rates for 30,000 elderly and disabled Medicaid recipients.
More than a quarter of Louisiana’s 4.5 million population is already on Medicaid, and around 400,000 more are expected to join the program due to expanded eligibility standards also in Obama’s new health law.
“If you have something that’s required of a broader population, the number could be staggering,” Phillips said.
E-mail Jon Ward and follow him on Twitter
Read more: http://dailycaller.com/2010/04/02/states-fear-that-five-words-in-obama-health-law-will-open-door-to-lawsuits/print/#ixzz0jwGjOCeh
Tucked away on page 466 of President Obama’s 2,704-page health-care bill is a provision that changes the definition of “medical assistance,” the term describing what states are required to provide to Medicaid recipients.
States have in the past been required to provide payment for services to physicians. Now, under the new definition, states will be liable for ensuring provision of “the care and services themselves.”
In other words, states are legally on the hook not only to ensure that Medicaid recipients are paid for, but that they’re seen by a doctor.
Medicaid recipients have found it increasingly difficult to be seen by doctors, as states in extreme economic duress have cut payment rates.
The new law seeks to solve the problem, but may cost states even more money at a time when most are in some of the worst economic straits since the Great Depression.
“With the expanded definition, it leaves every state vulnerable to a new wave of lawsuits any time someone cannot access a service, even if that service is limited by virtue of the rates we pay,” said Alan Levine, Louisiana’s secretary of health and hospitals, in a recent memo prepared for fellow state government officials.
Levine wrote: “DHH cannot estimate the cost of this, but it is not even worth estimating. It will be substantial.”
Ann Kohler, director of health policy at the nonpartisan American Public Human Services Association, said she was aware of the concern and was “looking at the legislative language,” but had not yet reached a determination.
“I have my lawyers looking at it right now,” she said.
Republicans on the House Energy and Commerce Committee said they agreed that the provision could open the floodgates to lawsuits.
“Section 2304 changes the definition of Medical Assistance, and potentially, wipes clean years of court precedent that has kept states from losing very expensive lawsuits,” a GOP staffer said. “The states and the Medicaid directors are very worried about this provision.”
A spokeswoman for House Energy and Commerce Committee Chairman Henry Waxman, California Democrat, did not respond to a request for comment on the provision.
Victor Schwartz, a tort law expert at Shook, Hardy and Bacon in D.C., said that Waxman sees trial lawyers as positive agents of change.
“He sees tort law as a regulatory engine that’s needed just beyond legislation. He sees trial lawyers as heroic who are there to help the ordinary people,” Schwartz said.
“That may have been true 30 years ago when Mr. Waxman was a lawyer, but now it’s big business as much as Exxon,” Schwartz said. “The hero with a slingshot isn’t around too much any more.”
Not all state Medicaid directors said they were concerned about the change to the law.
“There’s been some chatter on this issue among state Medicaid directors. Some say the sky is falling, others say it makes little difference, still others say they are unaware of the ‘change,’” said Doug Porter, an assistant secretary of social and health services in Washington state.
“I’m in the ‘makes little difference’ camp,” Porter said by e-mail. “We here in the 9th Circuit are used to getting sued.”
Other states said they were still trying to determine the impact of the change.
Nicole Brossoie, a spokeswoman for New Jersey’s department of Human Services, said the health bill is “a complex statute that requires careful review in order for New Jersey to consider the various expansion options – and fiscal implications of those options – over the course of the next decade.”
“We’re unable to give you any additional information at this time,” she said.
The House Report on the legislative language described the change as merely clarifying the long-held understanding of state requirements.
Levine, however, said that the language “wipes the slate clean of years of litigation precedent that has protected states from Federal encroachment by federal judges.”
“In virtually any case where federal judges have imposed their discretion, it has cost states hundreds of billions of dollars,” he wrote in his memo.
Louisiana’s Medicaid director, Jerry Phillips, said that the most likely consequence – if a Medicaid recipient sues because he or she is unable to find a physician to see them and wins – would be to force states to increase payment rates.
Phillips said that Louisiana has spent $300 million over the last three years to increase payment rates for 30,000 elderly and disabled Medicaid recipients.
More than a quarter of Louisiana’s 4.5 million population is already on Medicaid, and around 400,000 more are expected to join the program due to expanded eligibility standards also in Obama’s new health law.
“If you have something that’s required of a broader population, the number could be staggering,” Phillips said.
E-mail Jon Ward and follow him on Twitter
Read more: http://dailycaller.com/2010/04/02/states-fear-that-five-words-in-obama-health-law-will-open-door-to-lawsuits/print/#ixzz0jwGjOCeh
Underemployment Rises to 20.3% in March
WASHINGTON, D.C. -- Gallup Daily tracking finds that 20.3% of the U.S. workforce was underemployed in March -- a slight uptick from the relatively flat January and February numbers.
"The underemployed in March became neither more nor less hopeful about finding work soon."These results are based on March interviews with more than 20,000 adults in the U.S. workforce, aged 18 and older. Gallup classifies respondents as underemployed if they are unemployed or working part-time but wanting full-time work. Gallup employment data are not seasonally adjusted.
A rise in the percentage of part-timers wanting to work full time (from 9.2% to 9.9%) is responsible for the March increase in underemployment. Unemployment saw a slight, but insignificant, decline in March.
Underemployed Americans Still Not Hopeful
Despite the Obama administration's March 16 announcement that unemployment would remain high or increase in coming months, the underemployed in March became neither more nor less hopeful about finding work soon. Six in 10 underemployed Americans are not hopeful they will find work or move from part-time to full-time work in the next four weeks. That translates to 12% of the workforce that is both underemployed and not hopeful they will find their desired amount of work. The lack of change suggests that underemployed Americans anticipated long-term difficulties in finding work well before the administration's formal announcement was made.
Bottom Line
As unemployed Americans find part-time, temporary, and seasonal work, the official unemployment rate could decline. However, this does not necessarily mean more Americans are working at their desired capacity. It will continue to be important to track underemployment -- to shed light on the true state of the U.S. workforce, and the millions of Americans who are searching for full-time employment.
Survey Methods
Results are based on telephone interviews with a random sample of 20,504 national adults, who are part of the workforce, aged 18 and older, conducted March 1-31, 2010. For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±1 percentage points.
For results based on the sample of 4,164 adults who were underemployed in March, the maximum margin of sampling error is ±2 percentage points.
Interviews are conducted with respondents on landline telephones (for respondents with a landline telephone) and cellular phones (for respondents who are cell-phone only).
In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.
"The underemployed in March became neither more nor less hopeful about finding work soon."These results are based on March interviews with more than 20,000 adults in the U.S. workforce, aged 18 and older. Gallup classifies respondents as underemployed if they are unemployed or working part-time but wanting full-time work. Gallup employment data are not seasonally adjusted.
A rise in the percentage of part-timers wanting to work full time (from 9.2% to 9.9%) is responsible for the March increase in underemployment. Unemployment saw a slight, but insignificant, decline in March.
Underemployed Americans Still Not Hopeful
Despite the Obama administration's March 16 announcement that unemployment would remain high or increase in coming months, the underemployed in March became neither more nor less hopeful about finding work soon. Six in 10 underemployed Americans are not hopeful they will find work or move from part-time to full-time work in the next four weeks. That translates to 12% of the workforce that is both underemployed and not hopeful they will find their desired amount of work. The lack of change suggests that underemployed Americans anticipated long-term difficulties in finding work well before the administration's formal announcement was made.
Bottom Line
As unemployed Americans find part-time, temporary, and seasonal work, the official unemployment rate could decline. However, this does not necessarily mean more Americans are working at their desired capacity. It will continue to be important to track underemployment -- to shed light on the true state of the U.S. workforce, and the millions of Americans who are searching for full-time employment.
Survey Methods
Results are based on telephone interviews with a random sample of 20,504 national adults, who are part of the workforce, aged 18 and older, conducted March 1-31, 2010. For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±1 percentage points.
For results based on the sample of 4,164 adults who were underemployed in March, the maximum margin of sampling error is ±2 percentage points.
Interviews are conducted with respondents on landline telephones (for respondents with a landline telephone) and cellular phones (for respondents who are cell-phone only).
In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.
Thursday, April 1, 2010
Obama health bill hid $30 billion
The federal government already has the “Doc Fix,” an annual shortfall of about $20 billion that must be paid to maintain current payment rates to physicians under Medicare.
Now, it looks like President Obama’s health-care bill created another funding cliff, costing an additional $5.5 billion or so each year.
Critics say the costs were hidden from view in the $940 billion health-care bill to lower the price tag by about $30 billion, and also as a way to gain the support of doctors and hospitals without angering governors.
The recently passed bill mandated that, starting in 2013, state governments must pay primary care physicians the same amount for Medicaid recipients, who are mostly poor, as it does for Medicare recipients, who are mostly elderly.
Low Medicaid reimbursement rates have cut down on the number of physicians that will even see poor and indigent recipients in the first place.
Some states pay doctors and hospitals about the same rates for Medicaid as they do for Medicare. But states with some of the largest Medicaid populations – New York, New Jersey and California – pay some of the lowest rates for Medicaid.
New York pays primary care doctors 36 percent of the Medicare rate for Medicaid, while New Jersey pays 41 percent and California pays 47 percent, according to the Kaiser Foundation’s statistics.
All three of these states already have enormous mid-year budget shortfalls at the moment: New York’s is $3.2 billion, New Jersey’s is $2.2 billion and California’s is $6.6 billion, according to the Center on Budget and Policy Priorities, and are facing even larger deficits in the 2011 fiscal year that begins in July (New York is alone in that its fiscal year begins on April Fool’s Day).
And Medicaid already costs enormous amounts of money: in Fiscal 2007 (the most recent year available on the Kaiser Foundation’s Web site) New York spent $22 billion of what is now an $80 billion budget on the program, New Jersey spent $4.5 billion out of what is now a $32 billion budget on it, and California spent $18 billion out of what is now an $87 billion budget on Medicaid.
The health bill says that the federal government will pay the extra cost of paying higher rates for Medicaid patients. But only for two years: 2013 and 2014.
The cost for those two years of federal spending is $8 billion, according to the Congressional Budget Office.
So in 2015, the federal government will either step in and pay the extra charges, as they’ve done with the Doc Fix, or they will force states to take on the extra costs.
“It’s hard to say which is worse: intentionally hiding $29 B of spending, or intentionally creating a funding cliff. I’ll call it a tie,” said Keith Hennessey, former director of the White House National Economic Council under President George W. Bush, in a recent blog post.
Hennessey calculated, based on a November 2009 CBO estimate, that the cost of the higher Medicaid payments would be about $5.5 billion a year.
State officials in Indiana and Louisiana — which pay 61 percent and 90 percent of Medicare rates for Medicaid, respectively — have complained about the new provision.
Health officials in the state governments of New York, New Jersey and California either did not respond to a request for comment Wednesday or said they were unable to respond in just a few hours to questions about such a complicated issue.
The White House also did not respond to numerous requests for comment on why the increased Medicaid obligations were funded for only two years in the health bill.
“The political brilliance of this is that when the move comes to extend it, I assume the governors will be on board because it doesn’t cost them anything,” Hennessey said in an interview. “They figured out a way to reward the doctors without upsetting the governors.”
Governors were given the ability in the 1990s to set Medicaid payment rates themselves, around the same time that President Bill Clinton and a Republican-controlled Congress passed legislation cutting Medicare payments to doctors.
Those Medicare payment cuts have created the “Doc Fix” problem. Fearing that Medicare patients would face the same problems finding care that Medicaid patients have encountered, and under pressure from the American Medical Association, Congress has repeatedly authorized annual legislation that pays back the cuts to keep the doctors happy.
The cost of the Doc Fix over the next 10 years is $208 billion, according to the CBO.
Republicans such as Rep. Paul Ryan, of Wisconsin, argued that the Doc Fix should be included in the cost of the health bill, which was scored by the CBO as reducing the deficit by $143 billion over the first 10 years.
The GOP also came under fire after it distributed a memo that purported to be from Democratic congressional leadership and spoke of a deal between the White House and the AMA to approve another Doc Fix this spring in return for the AMA’s support for the health bill, but could not then verify where it got the memo.
Democrats charged that the memo was a hoax.
Nonetheless, if Congress again approves Doc Fix again this year, it will guarantee that Medicaid payments will also need to raise to that same rate, guaranteeing the presence of Doc Fix 2.0 in 2015.
“For a lot of states section 1202 will not be a problem,” said Edmund Haislmaier of the Heritage Foundation in a blog post, “but for some — especially New York — it triggers a countdown to a state budget fight in five years.”
Email Jon Ward and follow him on
Read more: http://dailycaller.com/2010/04/01/obama-health-bill-hid-30-billion-in-medicaid-costs-critics-say/print/#ixzz0jqoU0dDH
Now, it looks like President Obama’s health-care bill created another funding cliff, costing an additional $5.5 billion or so each year.
Critics say the costs were hidden from view in the $940 billion health-care bill to lower the price tag by about $30 billion, and also as a way to gain the support of doctors and hospitals without angering governors.
The recently passed bill mandated that, starting in 2013, state governments must pay primary care physicians the same amount for Medicaid recipients, who are mostly poor, as it does for Medicare recipients, who are mostly elderly.
Low Medicaid reimbursement rates have cut down on the number of physicians that will even see poor and indigent recipients in the first place.
Some states pay doctors and hospitals about the same rates for Medicaid as they do for Medicare. But states with some of the largest Medicaid populations – New York, New Jersey and California – pay some of the lowest rates for Medicaid.
New York pays primary care doctors 36 percent of the Medicare rate for Medicaid, while New Jersey pays 41 percent and California pays 47 percent, according to the Kaiser Foundation’s statistics.
All three of these states already have enormous mid-year budget shortfalls at the moment: New York’s is $3.2 billion, New Jersey’s is $2.2 billion and California’s is $6.6 billion, according to the Center on Budget and Policy Priorities, and are facing even larger deficits in the 2011 fiscal year that begins in July (New York is alone in that its fiscal year begins on April Fool’s Day).
And Medicaid already costs enormous amounts of money: in Fiscal 2007 (the most recent year available on the Kaiser Foundation’s Web site) New York spent $22 billion of what is now an $80 billion budget on the program, New Jersey spent $4.5 billion out of what is now a $32 billion budget on it, and California spent $18 billion out of what is now an $87 billion budget on Medicaid.
The health bill says that the federal government will pay the extra cost of paying higher rates for Medicaid patients. But only for two years: 2013 and 2014.
The cost for those two years of federal spending is $8 billion, according to the Congressional Budget Office.
So in 2015, the federal government will either step in and pay the extra charges, as they’ve done with the Doc Fix, or they will force states to take on the extra costs.
“It’s hard to say which is worse: intentionally hiding $29 B of spending, or intentionally creating a funding cliff. I’ll call it a tie,” said Keith Hennessey, former director of the White House National Economic Council under President George W. Bush, in a recent blog post.
Hennessey calculated, based on a November 2009 CBO estimate, that the cost of the higher Medicaid payments would be about $5.5 billion a year.
State officials in Indiana and Louisiana — which pay 61 percent and 90 percent of Medicare rates for Medicaid, respectively — have complained about the new provision.
Health officials in the state governments of New York, New Jersey and California either did not respond to a request for comment Wednesday or said they were unable to respond in just a few hours to questions about such a complicated issue.
The White House also did not respond to numerous requests for comment on why the increased Medicaid obligations were funded for only two years in the health bill.
“The political brilliance of this is that when the move comes to extend it, I assume the governors will be on board because it doesn’t cost them anything,” Hennessey said in an interview. “They figured out a way to reward the doctors without upsetting the governors.”
Governors were given the ability in the 1990s to set Medicaid payment rates themselves, around the same time that President Bill Clinton and a Republican-controlled Congress passed legislation cutting Medicare payments to doctors.
Those Medicare payment cuts have created the “Doc Fix” problem. Fearing that Medicare patients would face the same problems finding care that Medicaid patients have encountered, and under pressure from the American Medical Association, Congress has repeatedly authorized annual legislation that pays back the cuts to keep the doctors happy.
The cost of the Doc Fix over the next 10 years is $208 billion, according to the CBO.
Republicans such as Rep. Paul Ryan, of Wisconsin, argued that the Doc Fix should be included in the cost of the health bill, which was scored by the CBO as reducing the deficit by $143 billion over the first 10 years.
The GOP also came under fire after it distributed a memo that purported to be from Democratic congressional leadership and spoke of a deal between the White House and the AMA to approve another Doc Fix this spring in return for the AMA’s support for the health bill, but could not then verify where it got the memo.
Democrats charged that the memo was a hoax.
Nonetheless, if Congress again approves Doc Fix again this year, it will guarantee that Medicaid payments will also need to raise to that same rate, guaranteeing the presence of Doc Fix 2.0 in 2015.
“For a lot of states section 1202 will not be a problem,” said Edmund Haislmaier of the Heritage Foundation in a blog post, “but for some — especially New York — it triggers a countdown to a state budget fight in five years.”
Email Jon Ward and follow him on
Read more: http://dailycaller.com/2010/04/01/obama-health-bill-hid-30-billion-in-medicaid-costs-critics-say/print/#ixzz0jqoU0dDH
This Time We Really Mean It By THOMAS L. FRIEDMAN
This newspaper carried a very troubling article on the front page on Monday. It detailed how President Hamid Karzai of Afghanistan had invited Iran’s president, Mahmoud Ahmadinejad, to Kabul — in order to stick a thumb in the eye of the Obama administration — after the White House had rescinded an invitation to Mr. Karzai to come to Washington because the Afghan president had gutted an independent panel that had discovered widespread fraud in his re-election last year.
The article, written by two of our best reporters, Dexter Filkins and Mark Landler, noted that “according to Afghan associates, Mr. Karzai recently told lunch guests at the presidential palace that he believes the Americans are in Afghanistan because they want to dominate his country and the region, and that they pose an obstacle to striking a peace deal with the Taliban.”
The article added about Karzai: “ ‘He has developed a complete theory of American power,’ said an Afghan who attended the lunch and who spoke on the condition of anonymity for fear of retribution. ‘He believes that America is trying to dominate the region, and that he is the only one who can stand up to them.’ ”
That is what we’re getting for risking thousands of U.S. soldiers and having spent $200 billion already. This news is a flashing red light, warning that the Obama team is violating at least three cardinal rules of Middle East diplomacy.
Rule No. 1: When you don’t call things by their real name, you always get in trouble. Karzai brazenly stole last year’s presidential election. But the Obama foreign policy team turned a blind eye, basically saying, he’s the best we could get, so just let it go. See dictionary for Vietnam: Air Marshal Nguyen Cao Ky.
When you can steal an election, you can steal anything. How will we get this guy to curb corruption when his whole election, and previous tour in office, were built on corruption? How can we be operating a clear, build-and-hold strategy that depends on us bringing good governance to Afghans when the head of the government is so duplicitous?
Our envoy in Kabul warned us of this before the election, but in his case, too, we were told to look the other way. On Nov. 6, the ambassador, Karl Eikenberry, wrote to Washington in a cable that was leaked: “President Karzai is not an adequate strategic partner,” he warned. “Karzai continues to shun responsibility for any sovereign burden, whether defense, governance or development. He and much of his circle do not want the U.S. to leave and are only too happy to see us invest further. They assume we covet their territory for a never-ending ‘war on terror’ and for military bases to use against surrounding powers.”
One reason you violate Rule No. 1 is because you’ve already violated Rule No. 2: “Never want it more than they do.”
If we want good governance in Afghanistan more than Karzai, he will sell us that carpet over and over. How many U.S. officials have flown to Kabul — the latest being President Obama himself — to lecture Karzai on the need to root out corruption in his administration? Do we think he has a hearing problem? Or do we think he believes he has us over a barrel and, in the end, he can and will do whatever serves his personal power needs because he believes that we believe that he is indispensable for confronting Al Qaeda?
This rule applies equally to the Israeli prime minister, Bibi Netanyahu, and the Palestinian president, Mahmoud Abbas. There is something wrong when we are chasing them — two men who live in biking distance from one another — begging, cajoling and pressuring them to come to a peace negotiation that should ostensibly serve their interests as much as our own.
Which leads to Rule No. 3: In the Middle East, what leaders tell you in private in English is irrelevant. All that matters is what they will defend in public in their own language.
When Karzai believes that the way to punish America for snubbing him is by inviting Iran’s president to Kabul — who delivered a virulently anti-U.S. speech from inside the presidential palace — you have to pay close attention to that. It means Karzai must think that anti-Americanism plays well on the streets of Afghanistan and that by dabbling in it himself — as he did during his presidential campaign — he will strengthen himself politically. That is not a good sign.
As Filkins and Landler noted, “During the recent American-dominated military offensive in the town of Marja — the largest of the war — Mr. Karzai stood mostly in the shadows.” And if Karzai behaves like this when he needs us, when we’re there fighting for him, how is he going to treat our interests when we’re gone?
We have thousands of U.S. troops on the ground in Afghanistan and more heading there. Love it or hate it, we’re now deep in it, so you have to want our engagement there to build something that is both decent and self-sustaining — so we can get out. But I still fear that Karzai is ready to fight to the last U.S. soldier. And once we clear, hold and build Afghanistan for him, he is going to break our hearts.
The article, written by two of our best reporters, Dexter Filkins and Mark Landler, noted that “according to Afghan associates, Mr. Karzai recently told lunch guests at the presidential palace that he believes the Americans are in Afghanistan because they want to dominate his country and the region, and that they pose an obstacle to striking a peace deal with the Taliban.”
The article added about Karzai: “ ‘He has developed a complete theory of American power,’ said an Afghan who attended the lunch and who spoke on the condition of anonymity for fear of retribution. ‘He believes that America is trying to dominate the region, and that he is the only one who can stand up to them.’ ”
That is what we’re getting for risking thousands of U.S. soldiers and having spent $200 billion already. This news is a flashing red light, warning that the Obama team is violating at least three cardinal rules of Middle East diplomacy.
Rule No. 1: When you don’t call things by their real name, you always get in trouble. Karzai brazenly stole last year’s presidential election. But the Obama foreign policy team turned a blind eye, basically saying, he’s the best we could get, so just let it go. See dictionary for Vietnam: Air Marshal Nguyen Cao Ky.
When you can steal an election, you can steal anything. How will we get this guy to curb corruption when his whole election, and previous tour in office, were built on corruption? How can we be operating a clear, build-and-hold strategy that depends on us bringing good governance to Afghans when the head of the government is so duplicitous?
Our envoy in Kabul warned us of this before the election, but in his case, too, we were told to look the other way. On Nov. 6, the ambassador, Karl Eikenberry, wrote to Washington in a cable that was leaked: “President Karzai is not an adequate strategic partner,” he warned. “Karzai continues to shun responsibility for any sovereign burden, whether defense, governance or development. He and much of his circle do not want the U.S. to leave and are only too happy to see us invest further. They assume we covet their territory for a never-ending ‘war on terror’ and for military bases to use against surrounding powers.”
One reason you violate Rule No. 1 is because you’ve already violated Rule No. 2: “Never want it more than they do.”
If we want good governance in Afghanistan more than Karzai, he will sell us that carpet over and over. How many U.S. officials have flown to Kabul — the latest being President Obama himself — to lecture Karzai on the need to root out corruption in his administration? Do we think he has a hearing problem? Or do we think he believes he has us over a barrel and, in the end, he can and will do whatever serves his personal power needs because he believes that we believe that he is indispensable for confronting Al Qaeda?
This rule applies equally to the Israeli prime minister, Bibi Netanyahu, and the Palestinian president, Mahmoud Abbas. There is something wrong when we are chasing them — two men who live in biking distance from one another — begging, cajoling and pressuring them to come to a peace negotiation that should ostensibly serve their interests as much as our own.
Which leads to Rule No. 3: In the Middle East, what leaders tell you in private in English is irrelevant. All that matters is what they will defend in public in their own language.
When Karzai believes that the way to punish America for snubbing him is by inviting Iran’s president to Kabul — who delivered a virulently anti-U.S. speech from inside the presidential palace — you have to pay close attention to that. It means Karzai must think that anti-Americanism plays well on the streets of Afghanistan and that by dabbling in it himself — as he did during his presidential campaign — he will strengthen himself politically. That is not a good sign.
As Filkins and Landler noted, “During the recent American-dominated military offensive in the town of Marja — the largest of the war — Mr. Karzai stood mostly in the shadows.” And if Karzai behaves like this when he needs us, when we’re there fighting for him, how is he going to treat our interests when we’re gone?
We have thousands of U.S. troops on the ground in Afghanistan and more heading there. Love it or hate it, we’re now deep in it, so you have to want our engagement there to build something that is both decent and self-sustaining — so we can get out. But I still fear that Karzai is ready to fight to the last U.S. soldier. And once we clear, hold and build Afghanistan for him, he is going to break our hearts.
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