PNHP

RAND: Few health reform options would have covered more people at lower cost

RAND: Few health reform options would have covered more people at lower cost

Few Health Reform Options Would Have Covered More People at Lower Cost Than New Law

RAND
June 8, 2010

The recently enacted federal health care reform law provides health insurance coverage to the largest number of Americans while keeping federal costs as low as reasonably possible, according to a new analysis from the RAND Corporation.

The only alternatives that would have covered more Americans at a lower cost to the federal government were all politically untenable—substantially higher penalties for those who don’t comply with mandates, lower government subsidies and less-generous Medicaid expansion, according to research published in the June edition of the journal Health Affairs.

Researchers simulated more than 2,000 different policy scenarios using the RAND COMPARE microsimulation model, which was designed by RAND to provide independent analysis about how different reform proposals would impact the American health care system.

“Of all the proposals on the table that would expand health insurance to more Americans, the final health reform law included those that covered the largest number of people at the lowest cost to the federal government,” said Elizabeth A. McGlynn, the study’s lead author and a senior researcher at RAND, a nonprofit research organization.

http://www.rand.org/news/press/2010/06/08/

RAND article in Health Affairs:
http://content.healthaffairs.org/cgi/content/full/29/6/1142

RAND COMPARE:
http://www.randcompare.org/

Prior qotd on RAND COMPARE:
https://pnhp.org/news/2009/january/rand_compare.php

Comment: 

By Don McCanne, MD

RAND created a microsimulation model called RAND COMPARE that was designed to “provide independent analysis about how different reform proposals would impact the American health care system.” Using this model, Dr. Elizabeth McGlynn concludes, “Of all the proposals on the table that would expand health insurance to more Americans, the final health reform law included those that covered the largest number of people at the lowest cost to the federal government.”

On a RAND Webinar event held in January of last year announcing the release of RAND COMPARE, I noted that a single, public insurance model (single payer or Medicare for all) was not an option available on the RAND COMPARE website. Dr. McGlynn then assured me that it was a model that should be added. In followup, others also contacted RAND to request that this model be added, and they received assurances that the matter was being addressed.

If you check the RAND COMPARE website, you will find that they did add well over 100 legislative proposals before Congress. They marked each proposal as to whether or not they addressed specific policies evaluated by the RAND COMPARE model. Some of the policies considered included individual mandate, employer mandate, tax credits, Medicaid eligibility, high deductible health plans, bundled payment, comparative effectiveness, and others. In the chart, H.R. 676, John Conyers’ Medicare for all bill received no marks whatsoever, as if it did absolutely nothing under the RAND COMPARE model.

Everyone who understands the single payer model knows that the final health reform law will not cover “the largest number of people” since single payer would have covered tens of millions more – that is, everyone. Also the single payer model would be far more effective in slowing health care cost increases than would the legislation enacted. RAND dodges this by repeatedly stating that the bill represents the “lowest cost to the federal government,” but it is our total national health expenditures and not the federal budget that matters.

The slogan for RAND COMPARE on their website is “Facts you can use, analysis you can trust.” Well, that sounds “Fair and Balanced.” It’s only people who need health care that are being victimized.

Health care drama at America's crossroads

By Dr. Quentin Young
The Huffington Post
June 9, 2010

The movement for single-payer health reform – an improved Medicare for All – is hopping in Indianapolis, “the Crossroads of America.”

I can personally vouch for this, having taken part in two events there on May 18 sponsored by Hoosiers for a Commonsense Health Plan and several other groups committed to health care justice.

The occasion? The annual shareholders meeting of WellPoint, the giant for-profit health insurance company.

For the fourth year in a row, a small group of energetic and principled shareholders led by Dr. Rob Stone of Bloomington, Ind., attended the annual meeting with the aim of speaking truth to power. They sought to direct shareholders’ and the media’s attention to some of WellPoint’s most egregious practices, including (as Dr. Stone eloquently describes here) its astronomical premium hikes on individuals and businesses, its notorious algorithm for canceling insurance policies of women predisposed to breast cancer, and – in an evasion of parts of the new health law – its relabeling of administrative expenses as “medical care.”

This year, in their latest bid to move WellPoint away from its corporate-greed and service-denial posture, Dr. Stone and others successfully introduced a shareholder resolution calling upon the company to demutualize – i.e. to return to its original, nonprofit status. (WellPoint was once a nonprofit, charitable Blue Cross company.)

The subtext was clear: WellPoint should concern itself with maximizing health care rather than profits.

It was this shareholder resolution calling on WellPoint to be socially responsible that prompted local organizers to invite me to participate in two related activities in Indianapolis that day – an afternoon health reform rally (“Health reform – we’re still for it!”) and a subsequent strategy session with regional activists – for I had played a modest role in pushing a precedent-setting, similar shareholder resolution some four decades ago.

In 1968, the Medical Committee for Human Rights (where I was then chairman), was given 10 shares of stock in the Dow Chemical Company. Dow was the leading manufacturer of napalm, a jellied gasoline, which was being used widely by the U.S. military in the war in Vietnam, including on its civilian population.

MCHR’s leadership developed a shareholder resolution calling on Dow’s board to stipulate “that napalm shall not be sold to any buyer unless that buyer gives reasonable assurances that the substance will not be used on or against human beings.”

To make a long story short, after being rebuffed by Dow’s board, the Securities and Exchange Commission, and various courts, the legitimacy of our resolution was eventually upheld and the measure was ultimately voted upon. While it got less than 3 percent of the shareholders’ votes, the effort helped to pave the way for many other “socially responsible” shareholder resolutions in subsequent years – including this year’s WellPoint resolution.

I must admit that I experienced a certain sense of satisfaction in seeing MCHR’s human concerns of four decades ago finding strong expression in today’s context.

Dr. Stone briefly presented his resolution in the morning and then, a bit later in the meeting, his colleagues (and other shareholders) readied themselves to participate in the question and answer session.

But then an interesting, unanticipated event gave drama and an unexpected twist to the meeting. A member of WellPoint’s board, William “Bucky” Bush (brother of George H.W. and uncle to George W.), fainted. The immediate first aid came from Dr. Stone, a seasoned ER doc, and Mr. Bush proceeded to recover promptly.

Nonetheless, WellPoint CEO Angela Braly (whose annual compensation was recently boosted to $13.1 million), who was chairing the meeting, seized on this incident to abruptly adjourn the session, thereby short-circuiting the discussion period. This was bad, but certainly not the worst conduct of the WellPoint organization.

Even so, consider this: a subsequent tally showed that Dr. Stone’s resolution calling for WellPoint to return to nonprofit status received 9.4 percent of the shareholder votes, representing over 30 million shares!

This extraordinary development, and the well-attended rally and activists’ meeting that followed the shareholders meeting, are symptomatic of persistent national unrest with the present financing of our health care system, based as it is on private health insurers. The passage of the new health law has not addressed that unrest.

Physicians for a National Health Program argues forcefully that the central problem in our current health system is embodied in corporate giants like WellPoint. PNHP, sadly, feels that the new health law on balance actually increases the stranglehold of these corporate interests on our health system, with dire results in cost, quality and access.

For this reason, all of our endeavors seek to establish single-payer national health insurance, an improved Medicare for All: “Everybody in, nobody out.”

The Indianapolis events demonstrate the continuing vigor and commitment of single-payer health advocates nationwide.

We must continue to strive to join the rest of the world’s democratic, industrialized nations in achieving a truly universal, comprehensive health care system. Such an achievement will not only enhance the health status of our people but arguably will rescue our failing economy as well.

http://www.huffingtonpost.com/dr-quentin-young/health-care-drama-at-amer_b_606475.html

Health care drama at America’s crossroads

By Dr. Quentin Young
The Huffington Post
June 9, 2010

The movement for single-payer health reform – an improved Medicare for All – is hopping in Indianapolis, “the Crossroads of America.”

I can personally vouch for this, having taken part in two events there on May 18 sponsored by Hoosiers for a Commonsense Health Plan and several other groups committed to health care justice.

The occasion? The annual shareholders meeting of WellPoint, the giant for-profit health insurance company.

For the fourth year in a row, a small group of energetic and principled shareholders led by Dr. Rob Stone of Bloomington, Ind., attended the annual meeting with the aim of speaking truth to power. They sought to direct shareholders’ and the media’s attention to some of WellPoint’s most egregious practices, including (as Dr. Stone eloquently describes here) its astronomical premium hikes on individuals and businesses, its notorious algorithm for canceling insurance policies of women predisposed to breast cancer, and – in an evasion of parts of the new health law – its relabeling of administrative expenses as “medical care.”

This year, in their latest bid to move WellPoint away from its corporate-greed and service-denial posture, Dr. Stone and others successfully introduced a shareholder resolution calling upon the company to demutualize – i.e. to return to its original, nonprofit status. (WellPoint was once a nonprofit, charitable Blue Cross company.)

The subtext was clear: WellPoint should concern itself with maximizing health care rather than profits.

It was this shareholder resolution calling on WellPoint to be socially responsible that prompted local organizers to invite me to participate in two related activities in Indianapolis that day – an afternoon health reform rally (“Health reform – we’re still for it!”) and a subsequent strategy session with regional activists – for I had played a modest role in pushing a precedent-setting, similar shareholder resolution some four decades ago.

In 1968, the Medical Committee for Human Rights (where I was then chairman), was given 10 shares of stock in the Dow Chemical Company. Dow was the leading manufacturer of napalm, a jellied gasoline, which was being used widely by the U.S. military in the war in Vietnam, including on its civilian population.

MCHR’s leadership developed a shareholder resolution calling on Dow’s board to stipulate “that napalm shall not be sold to any buyer unless that buyer gives reasonable assurances that the substance will not be used on or against human beings.”

To make a long story short, after being rebuffed by Dow’s board, the Securities and Exchange Commission, and various courts, the legitimacy of our resolution was eventually upheld and the measure was ultimately voted upon. While it got less than 3 percent of the shareholders’ votes, the effort helped to pave the way for many other “socially responsible” shareholder resolutions in subsequent years – including this year’s WellPoint resolution.

I must admit that I experienced a certain sense of satisfaction in seeing MCHR’s human concerns of four decades ago finding strong expression in today’s context.

Dr. Stone briefly presented his resolution in the morning and then, a bit later in the meeting, his colleagues (and other shareholders) readied themselves to participate in the question and answer session.

But then an interesting, unanticipated event gave drama and an unexpected twist to the meeting. A member of WellPoint’s board, William “Bucky” Bush (brother of George H.W. and uncle to George W.), fainted. The immediate first aid came from Dr. Stone, a seasoned ER doc, and Mr. Bush proceeded to recover promptly.

Nonetheless, WellPoint CEO Angela Braly (whose annual compensation was recently boosted to $13.1 million), who was chairing the meeting, seized on this incident to abruptly adjourn the session, thereby short-circuiting the discussion period. This was bad, but certainly not the worst conduct of the WellPoint organization.

Even so, consider this: a subsequent tally showed that Dr. Stone’s resolution calling for WellPoint to return to nonprofit status received 9.4 percent of the shareholder votes, representing over 30 million shares!

This extraordinary development, and the well-attended rally and activists’ meeting that followed the shareholders meeting, are symptomatic of persistent national unrest with the present financing of our health care system, based as it is on private health insurers. The passage of the new health law has not addressed that unrest.

Physicians for a National Health Program argues forcefully that the central problem in our current health system is embodied in corporate giants like WellPoint. PNHP, sadly, feels that the new health law on balance actually increases the stranglehold of these corporate interests on our health system, with dire results in cost, quality and access.

For this reason, all of our endeavors seek to establish single-payer national health insurance, an improved Medicare for All: “Everybody in, nobody out.”

The Indianapolis events demonstrate the continuing vigor and commitment of single-payer health advocates nationwide.

We must continue to strive to join the rest of the world’s democratic, industrialized nations in achieving a truly universal, comprehensive health care system. Such an achievement will not only enhance the health status of our people but arguably will rescue our failing economy as well.

http://www.huffingtonpost.com/dr-quentin-young/health-care-drama-at-amer_b_606475.html

RAND: Few health reform options would have covered more people at lower cost

Few Health Reform Options Would Have Covered More People at Lower Cost Than New Law

RAND
June 8, 2010
The recently enacted federal health care reform law provides health insurance coverage to the largest number of Americans while keeping federal costs as low as reasonably possible, according to a new analysis from the RAND Corporation.
The only alternatives that would have covered more Americans at a lower cost to the federal government were all politically untenable—substantially higher penalties for those who don’t comply with mandates, lower government subsidies and less-generous Medicaid expansion, according to research published in the June edition of the journal Health Affairs.
Researchers simulated more than 2,000 different policy scenarios using the RAND COMPARE microsimulation model, which was designed by RAND to provide independent analysis about how different reform proposals would impact the American health care system.
“Of all the proposals on the table that would expand health insurance to more Americans, the final health reform law included those that covered the largest number of people at the lowest cost to the federal government,” said Elizabeth A. McGlynn, the study’s lead author and a senior researcher at RAND, a nonprofit research organization.
http://www.rand.org/news/press/2010/06/08/
RAND article in Health Affairs:
http://content.healthaffairs.org/cgi/content/full/29/6/1142
RAND COMPARE:
http://www.randcompare.org/
Prior qotd on RAND COMPARE:
https://pnhp.org/news/2009/january/rand_compare.php

RAND created a microsimulation model called RAND COMPARE that was designed to “provide independent analysis about how different reform proposals would impact the American health care system.” Using this model, Dr. Elizabeth McGlynn concludes, “Of all the proposals on the table that would expand health insurance to more Americans, the final health reform law included those that covered the largest number of people at the lowest cost to the federal government.”
On a RAND Webinar event held in January of last year announcing the release of RAND COMPARE, I noted that a single, public insurance model (single payer or Medicare for all) was not an option available on the RAND COMPARE website. Dr. McGlynn then assured me that it was a model that should be added. In followup, others also contacted RAND to request that this model be added, and they received assurances that the matter was being addressed.
If you check the RAND COMPARE website, you will find that they did add well over 100 legislative proposals before Congress. They marked each proposal as to whether or not they addressed specific policies evaluated by the RAND COMPARE model. Some of the policies considered included individual mandate, employer mandate, tax credits, Medicaid eligibility, high deductible health plans, bundled payment, comparative effectiveness, and others. In the chart, H.R. 676, John Conyers’ Medicare for all bill received no marks whatsoever, as if it did absolutely nothing under the RAND COMPARE model.
Everyone who understands the single payer model knows that the final health reform law will not cover “the largest number of people” since single payer would have covered tens of millions more – that is, everyone. Also the single payer model would be far more effective in slowing health care cost increases than would the legislation enacted. RAND dodges this by repeatedly stating that the bill represents the “lowest cost to the federal government,” but it is our total national health expenditures and not the federal budget that matters.
The slogan for RAND COMPARE on their website is “Facts you can use, analysis you can trust.” Well, that sounds “Fair and Balanced.” It’s only people who need health care that are being victimized.

Howard Dean and others debate Canadian versus U.S. health care

A conversation with Howard Dean

By André Picard
The Globe and Mail
June 7, 2010

On Monday (June 7), a group of prominent American and Canadian physicians (debated), in Toronto, the question: “Be it resolved that I would rather get sick in the U.S. than in Canada.” One of the panelists is Howard Dean.

Q. Health-care reform dominated the headlines for a long time. Was it successful?

We didn’t pass reform. All we did pass was putting more money into what we already have. It’s successful in a sense that 1) we got a major bill passed, which is something for a new administration; 2) we created a system that’s going to force reform because of the financial realities; 3) a great many more people are going to have coverage. But this system is still not nearly as effective and efficient as the Canadian system.

Q. What’s the single most important lesson that Americans can take from the Canadian system?

It covers everybody with a relative lack of bureaucracy. I know Canadians think there is bureaucracy, but you haven’t seen anything until you work in a system with several hundred insurance companies that all do something different. American hospitals have a whole floor occupied by a billing office. You don’t have that in Canada.

Q. Conversely, what’s the most important lesson Canadians can take from the U.S. health-care system?

I’m afraid I’m not sure there is one. There is more cutting-edge innovative technology, but the cost of that is to pay 70 per cent more than Canadians do for health insurance. Canadians will have to decide if that’s a lesson they want to learn.

Q. Bottom line, which system is better for the patient?

I’ve spent a lot of time in both countries and there is no doubt that you’re better off getting sick in Canada.

Q. But don’t you have the best health care in the world? We hear that mantra constantly.

We have the best health care in the world for people who can afford it. But Canada has very, very good health care for everybody.

http://www.theglobeandmail.com/news/opinions/where-would-you-rather-get-sick-us-or-canada/article1592943/

Toronto Debate (almost 2 hours):
“Be it resolved that I would rather get sick in the United States than Canada.”
Pro team: William Frist and David Gratzer
Con team: Howard Dean and Robert Bell
http://www.munkdebates.com/debates/Healthcare (Click on “Watch the Debate” for video)

Debate results:
Pro: 27%
Con: 73%

Comment: 

By Don McCanne, MD

As Howard Dean states, “We didn’t pass reform. All we did pass was putting more money into what we already have.” This is precisely why a debate on the Canadian versus the U.S. health care systems is more timely than ever.

If you don’t have two hours to watch the full debate, you may want to watch the opening statements, and then slide the time bar forward to catch the closing statements (though I watched the full debate live-streamed, and it was well worth my time).

The importance of this message is that this is a crucial debate that has not gone away in spite of the enactment of PPACA. We should all do our part to see that everyone in the United States becomes fully informed on the true facts.

Important articles on the "Debt Commission" (expected to propose cuts to Medicare and Social Security in its report to Congress on December 1)

Obama Packs Debt Commission With Social Security Privatization & Benefit Cut Supporters
By Jane Hamsher | FireDogLake
President Obama has packed the Debt Commission (also known as the cat food commission) with members who have an overwhelming history of support for both benefit cuts and privatization of Social Security.

Revolt of the Wonks: Former Obama Advisors Want to Know What’s Happening on His Deficit Commission
By Jane Hamsher | FireDogLake
There’s a very important an article in the Neiman Watchdog this morning (Harvard’s journalism review, Deputy Editor Dan Froomkin). It’s written by Nancy Altman and Eric Kingson, entitled “Has Obama created a Social Security ‘death panel’?

The Deficit Hawks’ Attack on Our Entitlements
By Robert Kuttner | The Washington Post
With the enactment of a large economic stimulus package, fiscal conservatives are using the temporary deficit increase to attack a perennial target — Social Security and Medicare. The private-equity investor Peter G. Peterson, who launched a billion-dollar foundation last year to warn that America faces $56.4 trillion in “unfunded liabilities,” is a case in point. Supposedly, these costs will depress economic growth and crowd out other needed outlays, such as investments in the young. The remedy: big cuts in programs for the elderly.

Special Book Salon Today (preview)- The Pact: Bill Clinton, Newt Gingrich, and the Rivalry That Defined a Generation
By Elliott | FireDogLake
Most Americans saw President Bill Clinton and Speaker Newt Gingrich as staunch foes–”the polar extremes of Pennsylvania Avenue.” But as Steven Gillon reveals in The Pact, these powerful adversaries formed a secret alliance in 1997, a pact that would have rocked the political landscape, had it not foundered in the wake of the Lewinsky scandal.

Whacking the Old Folks
By William Greider | The Nation
In setting up his National Commission on Fiscal Responsibility and Reform, Barack Obama is again playing coy in public, but his intentions are widely understood among Washington insiders. The president intends to offer Social Security as a sacrificial lamb to entice conservative deficit hawks into a grand bipartisan compromise in which Democrats agree to cut Social Security benefits for future retirees while Republicans accede to significant tax increases to reduce government red ink.

How Social Security Can Gain Without Much Pain
By Greg Anrig | The Huffington Post
Advocates of cutting Social Security benefits often argue ruefully that they wish that there was some other way to “save” the program. But, they say sadly, the only realistic choices involve shared sacrifice and pain. So they recommend changes like further delays in the age when full retirement benefits can be collected, reducing cost-of-living adjustments to Social Security payments, and other cuts that would reduce how much future retirees are scheduled to receive.

Important articles on the “Debt Commission” (expected to propose cuts to Medicare and Social Security in its report to Congress on December 1)

Obama Packs Debt Commission With Social Security Privatization & Benefit Cut Supporters
By Jane Hamsher | FireDogLake
President Obama has packed the Debt Commission (also known as the cat food commission) with members who have an overwhelming history of support for both benefit cuts and privatization of Social Security.

Revolt of the Wonks: Former Obama Advisors Want to Know What’s Happening on His Deficit Commission
By Jane Hamsher | FireDogLake
There’s a very important an article in the Neiman Watchdog this morning (Harvard’s journalism review, Deputy Editor Dan Froomkin). It’s written by Nancy Altman and Eric Kingson, entitled “Has Obama created a Social Security ‘death panel’?

The Deficit Hawks’ Attack on Our Entitlements
By Robert Kuttner | The Washington Post
With the enactment of a large economic stimulus package, fiscal conservatives are using the temporary deficit increase to attack a perennial target — Social Security and Medicare. The private-equity investor Peter G. Peterson, who launched a billion-dollar foundation last year to warn that America faces $56.4 trillion in “unfunded liabilities,” is a case in point. Supposedly, these costs will depress economic growth and crowd out other needed outlays, such as investments in the young. The remedy: big cuts in programs for the elderly.

Special Book Salon Today (preview)- The Pact: Bill Clinton, Newt Gingrich, and the Rivalry That Defined a Generation
By Elliott | FireDogLake
Most Americans saw President Bill Clinton and Speaker Newt Gingrich as staunch foes–”the polar extremes of Pennsylvania Avenue.” But as Steven Gillon reveals in The Pact, these powerful adversaries formed a secret alliance in 1997, a pact that would have rocked the political landscape, had it not foundered in the wake of the Lewinsky scandal.

Whacking the Old Folks
By William Greider | The Nation
In setting up his National Commission on Fiscal Responsibility and Reform, Barack Obama is again playing coy in public, but his intentions are widely understood among Washington insiders. The president intends to offer Social Security as a sacrificial lamb to entice conservative deficit hawks into a grand bipartisan compromise in which Democrats agree to cut Social Security benefits for future retirees while Republicans accede to significant tax increases to reduce government red ink.

How Social Security Can Gain Without Much Pain
By Greg Anrig | The Huffington Post
Advocates of cutting Social Security benefits often argue ruefully that they wish that there was some other way to “save” the program. But, they say sadly, the only realistic choices involve shared sacrifice and pain. So they recommend changes like further delays in the age when full retirement benefits can be collected, reducing cost-of-living adjustments to Social Security payments, and other cuts that would reduce how much future retirees are scheduled to receive.

The Deficit Hawks' Attack on Our Entitlements

By Robert Kuttner
The Washington Post
Monday, February 23, 2009

With the enactment of a large economic stimulus package, fiscal conservatives are using the temporary deficit increase to attack a perennial target — Social Security and Medicare. The private-equity investor Peter G. Peterson, who launched a billion-dollar foundation last year to warn that America faces $56.4 trillion in “unfunded liabilities,” is a case in point. Supposedly, these costs will depress economic growth and crowd out other needed outlays, such as investments in the young. The remedy: big cuts in programs for the elderly.

The Peterson Foundation is joined by leading “blue dog” (anti-deficit) Democrats such as House Budget Committee Chairman John Spratt of South Carolina and his counterpart in the Senate, Kent Conrad of North Dakota. The deficit hawks are promoting a “grand bargain” in which a bipartisan commission enacts spending caps on social insurance as the offset for current deficits.

President Obama’s economic advisers devised today’s White House fiscal responsibility summit to signal that the president takes the deficit seriously and to lay the groundwork for such a bipartisan deal. Originally, Peterson was slated to be a featured speaker.

But Capitol Hill sources say that Democratic congressional leaders were skeptical of the strategy. The summit has been reduced to a lower-profile, half-day event; Peterson will attend but no longer has top billing, and Obama reportedly is lukewarm about the idea of a commission.

Obama should indeed be wary of such a plan, and official briefings on his first budget suggest that he will drastically reduce the deficit by 2013, but without going after social insurance.

What’s wrong with the story of entitlements wrecking the economy? Plenty.

For starters, the $56 trillion “unfunded liability” figure relies on creative accounting. Only about $6.36 trillion is the actual public debt, according to the U.S. Treasury. Most of the number Peterson cites is a combination of the 75-year worst-case projections for Social Security, Medicare and Medicaid.

These three programs face very different challenges and remedies. Social Security’s accounts are actually near long-term balance. The Congressional Budget Office puts the 75-year shortfall at only about one-third of 1 percent of projected gross domestic product.

Social Security is financed by taxes on wages — and since the mid-1970s, wage growth has stagnated. If median wages rose with productivity growth, as they did during the first three decades after World War II, Social Security would enjoy a big surplus. Even without a raise for working America, Social Security needs only minor adjustments.

Medicare really does face big deficits. But that’s because Medicare is part of a hugely inefficient, fragmented health insurance system. It makes no sense to “reform” Medicare in isolation.

If we just cap Medicare, needy seniors would get bare-bones care while more affluent people could supplement their insurance out of pocket. The decent cure for Medicare’s cost inflation lies in comprehensive universal health insurance so that the entire system is more efficient and less prone to inflation. You don’t hear many budget hawks supporting that brand of reform.

The deficit hawks’ story also contends that we are sacrificing our children’s future by too much (deficit) spending on the elderly. In fact, today’s young adults are already falling out of the middle class because of the high costs of the investments we don’t adequately finance socially — child care, college tuition and health insurance. But fiscal conservatives seldom call for increased investment in the young. Today’s young, of course, will be tomorrow’s retirees, and they will need social insurance, too.

The overall bottom line? The economy we bequeath to our children has everything to do with getting growth back on track and almost nothing to do with imagined future deficits.

History provides a parallel. At the end of World War II, the public debt was about 120 percent of GDP — about three times today’s ratio. Yet the heavily indebted wartime economy stimulated a quarter-century postwar boom — because all that debt went to recapitalize American industry, advance science and technology, retrain our unemployed and put them to work.

We need to increase public spending and debt now to restore economic growth and then gradually reduce the debt ratio once recovery comes. Social Security has little to do with this challenge. Nor does Medicare, if we reform our overall health system.

Since the early 1980s, Peter G. Peterson has been warning that future entitlement deficits would crash the economy. Yet when the crash came, the cause was not deficits but wild speculation on Wall Street.

Now, with 401(k) plans swooning and health benefits being cut, Social Security and Medicare are the two bedrock programs that keep tens of millions of elderly Americans from destitution. Why perversely cut these programs to pay for the sins of Wall Street? The attack on social insurance is really an ideological assault, dressed up as fiscal high-mindedness.

Robert Kuttner, co-editor of the American Prospect and a senior fellow at the New York public policy group Demos, is most recently the author of “Obama’s Challenge: America’s Economic Crisis and the Power of a Transformative Presidency.”

http://www.washingtonpost.com/wp-dyn/content/article/2009/02/22/AR2009022202003.html

The Deficit Hawks’ Attack on Our Entitlements

By Robert Kuttner
The Washington Post
Monday, February 23, 2009

With the enactment of a large economic stimulus package, fiscal conservatives are using the temporary deficit increase to attack a perennial target — Social Security and Medicare. The private-equity investor Peter G. Peterson, who launched a billion-dollar foundation last year to warn that America faces $56.4 trillion in “unfunded liabilities,” is a case in point. Supposedly, these costs will depress economic growth and crowd out other needed outlays, such as investments in the young. The remedy: big cuts in programs for the elderly.

The Peterson Foundation is joined by leading “blue dog” (anti-deficit) Democrats such as House Budget Committee Chairman John Spratt of South Carolina and his counterpart in the Senate, Kent Conrad of North Dakota. The deficit hawks are promoting a “grand bargain” in which a bipartisan commission enacts spending caps on social insurance as the offset for current deficits.

President Obama’s economic advisers devised today’s White House fiscal responsibility summit to signal that the president takes the deficit seriously and to lay the groundwork for such a bipartisan deal. Originally, Peterson was slated to be a featured speaker.

But Capitol Hill sources say that Democratic congressional leaders were skeptical of the strategy. The summit has been reduced to a lower-profile, half-day event; Peterson will attend but no longer has top billing, and Obama reportedly is lukewarm about the idea of a commission.

Obama should indeed be wary of such a plan, and official briefings on his first budget suggest that he will drastically reduce the deficit by 2013, but without going after social insurance.

What’s wrong with the story of entitlements wrecking the economy? Plenty.

For starters, the $56 trillion “unfunded liability” figure relies on creative accounting. Only about $6.36 trillion is the actual public debt, according to the U.S. Treasury. Most of the number Peterson cites is a combination of the 75-year worst-case projections for Social Security, Medicare and Medicaid.

These three programs face very different challenges and remedies. Social Security’s accounts are actually near long-term balance. The Congressional Budget Office puts the 75-year shortfall at only about one-third of 1 percent of projected gross domestic product.

Social Security is financed by taxes on wages — and since the mid-1970s, wage growth has stagnated. If median wages rose with productivity growth, as they did during the first three decades after World War II, Social Security would enjoy a big surplus. Even without a raise for working America, Social Security needs only minor adjustments.

Medicare really does face big deficits. But that’s because Medicare is part of a hugely inefficient, fragmented health insurance system. It makes no sense to “reform” Medicare in isolation.

If we just cap Medicare, needy seniors would get bare-bones care while more affluent people could supplement their insurance out of pocket. The decent cure for Medicare’s cost inflation lies in comprehensive universal health insurance so that the entire system is more efficient and less prone to inflation. You don’t hear many budget hawks supporting that brand of reform.

The deficit hawks’ story also contends that we are sacrificing our children’s future by too much (deficit) spending on the elderly. In fact, today’s young adults are already falling out of the middle class because of the high costs of the investments we don’t adequately finance socially — child care, college tuition and health insurance. But fiscal conservatives seldom call for increased investment in the young. Today’s young, of course, will be tomorrow’s retirees, and they will need social insurance, too.

The overall bottom line? The economy we bequeath to our children has everything to do with getting growth back on track and almost nothing to do with imagined future deficits.

History provides a parallel. At the end of World War II, the public debt was about 120 percent of GDP — about three times today’s ratio. Yet the heavily indebted wartime economy stimulated a quarter-century postwar boom — because all that debt went to recapitalize American industry, advance science and technology, retrain our unemployed and put them to work.

We need to increase public spending and debt now to restore economic growth and then gradually reduce the debt ratio once recovery comes. Social Security has little to do with this challenge. Nor does Medicare, if we reform our overall health system.

Since the early 1980s, Peter G. Peterson has been warning that future entitlement deficits would crash the economy. Yet when the crash came, the cause was not deficits but wild speculation on Wall Street.

Now, with 401(k) plans swooning and health benefits being cut, Social Security and Medicare are the two bedrock programs that keep tens of millions of elderly Americans from destitution. Why perversely cut these programs to pay for the sins of Wall Street? The attack on social insurance is really an ideological assault, dressed up as fiscal high-mindedness.

Robert Kuttner, co-editor of the American Prospect and a senior fellow at the New York public policy group Demos, is most recently the author of “Obama’s Challenge: America’s Economic Crisis and the Power of a Transformative Presidency.”

http://www.washingtonpost.com/wp-dyn/content/article/2009/02/22/AR2009022202003.html

Special Book Salon Today (preview)- The Pact: Bill Clinton, Newt Gingrich, and the Rivalry That Defined a Generation

The Pact: Bill Clinton, Newt Gingrich, and the Rivalry That Defined a Generation

By Elliott
FireDogLake
Tuesday May 18, 2010

Chat with Steven Gillon on this Special Salon about Bill Clinton and Newt Gingrich – The Pact: Bill Clinton, Newt Gingrich, and the Rivalry That Defined a Generation . Hosted by Jane Hamsher.

Most Americans saw President Bill Clinton and Speaker Newt Gingrich as staunch foes–”the polar extremes of Pennsylvania Avenue.” But as Steven Gillon reveals in The Pact, these powerful adversaries formed a secret alliance in 1997, a pact that would have rocked the political landscape, had it not foundered in the wake of the Lewinsky scandal.

A fascinating look at politics American-style, The Pact offers a riveting account of two of America’s most charismatic and influential leaders, detailing both their differences and their striking similarities, and highlighting the profound and lasting impact the tumultuous 1960s had on both their personal and political lives. With the cooperation of both President Clinton and Speaker Gingrich, interviews with key players who have never before spoken about their experiences, along with unprecedented access to Gingrich’s private papers, Gillon not only offers a behind-the-scenes look at the budget impasse and the government shutdown in 1995–the famous face-off between Clinton and Gingrich–but he also reveals how the two moved closer together after 1996–closer than anyone knew. In particular, the book illuminates their secret efforts to abandon the liberal and conservative wings of their own parties and strike a bi-partisan deal to reform the “third rail of American politics”–Social Security and Medicare. That potentially groundbreaking effort was swept away by the highly charged reaction to the Lewinsky affair, ending an initiative that might have transformed millions of American lives.

Packed with compelling new revelations about two of the most powerful and intriguing figures of our time, this book will be must reading foreveryone interested in politics or current events.

Steven M. Gillon is the Resident Historian of the History Channel and Professor of History at the University of Oklahoma. He is the host of the network’s flagship public affairs program, HistoryCenter, as well as Our Generation. He is an award-winning teacher and the author of a number of critically acclaimed books about modern American politics and culture. (Barnes and Noble)

http://seminal.firedoglake.com/diary/48875

Revolt of the Wonks: Former Obama Advisors Want to Know What’s Happening on His Deficit Commission

There’s a very important an article in the Neiman Watchdog this morning (Harvard’s journalism review, Deputy Editor Dan Froomkin). It’s written by Nancy Altman and Eric Kingson, entitled “Has Obama created a Social Security ‘death panel’?

Headlines like that are normally the reserve of DFH bloggers, so it’s notable that the academic world is talking about Obama’s Deficit Commission in that way. Even more notable are the article’s authors: Altman and Kingson both served on the Obama Campaign’s Retirement Security Advisory Committee, and then on the Advisory Committee to the Social Security Administration Transition Team.

Altman was on the faculty of Harvard University’s Kennedy School of Government, has taught at the Harvard Law School, and was Alan Greenspan’s assistant when he chaired the commission that developed the 1983 Social Security amendments. She also served as a legislative assistant on Social Security issues to John Danforth, whose Danforth-Kerrey Commission was the predecessor to Obama’s commission. Kingson was also a staffer on the Greenspan Commission, and was Social Security Advisor to the Kerrey-Danfoth Commission.

Alex Lawson has been livestreaming the closed door of the Catfood Commission on FDL.  They have refused to conduct their deliberations in public, but the committee is stacked with enough votes to cut benefits.  It takes 14 out of 18 votes to pass any recommendation on the committee, and there appear to be a sufficient number of votes to do so based on the past positions of individual members.  So Altman and Kingson raise important questions, but to my mind, none more important than these:

Q. Why is the Commission apparently working so closely with billionaire Peter G. Peterson, who served in the Nixon administration and who has a clear ideological agenda?

Q. Mr. Peterson has been on a decades-long crusade against Social Security. The day after the first meeting of the commission, which focused heavily on the need to cut Social Security, the co-chairs and two other members of the commission participated in a Peterson event that reinforced the same message. A Peterson-funded foundation is supplying commission staff. And Peterson’s foundation is funding America Speaks to develop a series of high-profile town halls across the country to host “a national discussion to find common ground on tough choices about our federal budget.” (For more background about Mr. Peterson, see William Greider in the Nation on Looting Social Security — Part 2.)

Note the buried lede:  Pete Peterson is supplying commission staff.

One important lesson I learned from the health care fight:  the health care industry had been laying the groundwork for this for years, and that should have been an early focus.   It wasn’t until the Gruber incident that I learned how the medical industrial complex had been working through foundations like Kaiser for over a decade to basically buy the academic underpinnings of their plan (and probably longer if you count the GOP/Heritage response to HillaryCare as its roots).  They ran a  nice back-and-forth between Congress, the White House, the CBO and Gruber to make it look he was supplying independent confirmation of the health care bill, when in fact it was all part of the same carefully orchestrated plan.  It bought them a lot of credibility that they otherwise would not have had in the academic world.

Pete Peterson has been serving the same function on Social Security that Kaiser and others did on health care. From the Concord Commission to the Peterson Foundation, cutting Social Security benefits and diverting as much money as possible into Wall Street’s coffers has been Peterson’s holy grail.  He himself was on the Danforth-Kerrey Commission, and was set to be the key note speaker at Obama’s first fiscal responsibility summit shortly after the inauguration.  After we reported it, the White House canceled him then denied he had been scheduled to speak, but Robert Kuttner subsequently confirmed it in the Washington Post.

The current budget deficit will be used to justify cuts to Social Security benefits, just as the surplus was used to justify cuts during the Clinton era.  As Steven Gillon said the other day when he was here talking about his book on the secret Clinton-Gingrich deal negotiated by Bowles to cut Social Security in the 90s, Bowles is running the same play.

Peterson plays a huge role in the world that shapes the thinking that drives the commission. Bill Clinton simply gushed about him at Peterson’s own recent fiscal summit.  As long as Peterson is allowed to hide in the shadows and pull the strings, the choices that the Commission will make will come from a very small menu.  Defense cuts will not be a factor.  They won’t be talking about the trillion dollars they could save over the next decade simply by expanding Medicare to cover businesses. They’re only going to ask the questions that drive them to the same answer:  cut Social Security.

It’s going to be important to tell the tale of Peterson’s inexorable march and diffuse the notion that the Commission is simply responding to temporal economic factors.  This is class war, pure and simple.  The rich against the poor. Hedge fund billionaires and defense contractors against senior citizens struggling to get by. Altman and Kingson have done us all a tremendous favor by opening up the discourse and asking important questions that need to be answered before the Commission makes its report on December.  That’s just in time to jam it through a lame duck Congress before the Christmas break, something both John Conyers and John Boehner have warned about — a repeat of what Bowles planned to do in the 90s.

http://fdlaction.firedoglake.com/2010/05/21/revolt-of-the-wonks-former-obama-advisors-want-to-know-whats-happening-on-his-deficit-commission/

Obama Packs Debt Commission With Social Security Privatization & Benefit Cut Supporters

By Jane Hamsher
FireDogLake
Monday May 10, 2010

President Obama has packed the Debt Commission (also known as the cat food commission) with members who have an overwhelming history of support for both benefit cuts and privatization of Social Security.

The “National Commission on Fiscal Responsibility and Reform” is operating in secret over the objections of both parties. John Boehner and John Conyers have both raised concerns that the commission will make recommendations in December that could be passed by a lame duck Congress that doesn’t have to worry about being reelected. They requested that the commission report its findings prior to the election so that the public can have a chance to factor in the recommendations into their voting decisions in the election. The commission denied the request.

As we are seeing with Audit the Fed, it is falling to Judd Gregg — who doesn’t have to worry about being reelected — to raise concerns about “populist pandering,” and he is likely to be the one to refuse unanimous consent and force a cloture vote that will impose a 60 vote hurdle. (The transpartisan support for Audit the Fed we’ve built over the year makes it difficult for anyone with re-election worries to play the Joe Lieberman role, even Joe Lieberman.) Though they have different agendas with regard to the outcome, the concerns of both Boehner and Conyers and the commission’s lack of transparency are well founded.

As we reported at the time, the Obama White House has been interested in cutting Social Security right out of the gate. David Brooks reported that three administration officials called him to say Obama “is extremely committed to entitlement reform and is plotting politically feasible ways to reduce Social Security as well as health spending” in March of 2009. The neoliberal TNR/JournoList set who cheered on the Iraq war and the corporate-friendly health care bill are already lending their support: Privatizing Social Security, No, Cutting Social Security, Si! says Jon Chait.

Chait conflates and confuses two separate statements. Obama has dismantled liberal opposition to many of George Bush’s policies, and whatever he wants to do with Social Security will be accepted by many just because they like him. Matt Yglesias had this to say about Elena Kagan’s nomination to the Supreme Court: “Clinton & Obama like and trust [Kagan], and most liberals (myself included) like and trust Clinton & Obama.” To which Glenn Greenwald rightly responds, “In other words, according to Chemerinksy and Yglesias, progressives will view Obama’s choice as a good one by virtue of the fact that it’s Obama choice. Isn’t that a pure embodiment of mindless tribalism and authoritarianism? ”

What Wall Street wants is to wind up with a good chunk of the Social Security trust fund in its own coffers. Where that intersects with the objectives of the commission remains to be seen, but the fact is that Obama has packed it with people who have a strong history of supporting both reducing benefits and privatization. Even the token “liberals” like Jan Schakowsky have a history of abandoning their strongest principles when the President asks it of them, and Dick Durbin is now telling “bleeding heart liberals” to be open to benefit cuts for the sake of the fiscal responsibility.

Brad DeLong indicates liberal objections may well be overcome by the government guaranteeing any Wall Street losses, but that will irk the libertarians.

http://fdlaction.firedoglake.com/2010/05/10/obama-packs-debt-committee-with-supportes-of-social-security-benefit-cuts-and-privatization/