This unique, terrible, phony, fraught-with-lies moment in American politics

September 21st, 2017 at 9:13 am

This will be brief, because a note about how the political debate is misleading isn’t exactly breaking news or even, admittedly, that interesting. So, I’d consider it a personal favor if you’ll allow me to vent for a moment.

It’s just that the extent to which we’re being lied to right now seems, to me at least, uniquely over the top. The transparency of the BS is just so obvious, especially on Cassidy-Graham, the just-as-bad-as-all-the-others repeal and replace bill that may get a vote in the Senate next week.

Same with the tax “plan.” Even though there is no real plan yet, what we’ve seen so far is mostly tax cuts for wealthy businesses and corporations, the cost of which will get loaded onto the deficit. Yet its proponents are selling it as a pro-growth package that lifts the working class.

My CBPP colleagues have been hammering on how C-G is just as much a wolf as past R repeal bills, despite its sheep’s clothing. It cuts health care spending on ACA functions by over $200 billion, 2020-26, and much more in later years (a new study by the health analysis firm Avalere comes up with similar numbers; see their table below) and that doesn’t count cuts to the traditional Medicaid program, which under C-G is no longer guaranteed to expand to meet the health needs of low-income recipients. Under C-G: “Faced with a recession…states would have to either dramatically increase their own spending on health care or, as is far more likely, deny help to people losing their jobs and their health insurance.”

Avalere’s estimates of cuts to states under C-G:

Years Billions
2020-26 -$215
2020-27 -$489
2020-36 -$4,150
Source: Avalere

But, because there’s no CBO score, supporters of the bill claim that these reductions in resources won’t lead to less coverage. How? For that, you need to read this jaw-dropping set of interviews from the Onion Vox. The enterprising Jeff Stein asked 9 R senators why C-G made sense in policy terms, and remarkably, they (sort of) responded. But oy, what responses! Just a rotting bag of wilted word salad.

If there was a theme to their incoherence, it was the magic of devolution to the states, as they’ll handily figure out how to do more with less (notably, the states that get dinged the most are the ones that expanded Medicaid under the ACA).

But this makes no sense at all. States must balance their budgets, so, as the CBPP quote above points out, they can’t be counted upon to meet expanded need. What C-G’s defenders call “flexibility” is actually the ability of states to reduce health care provision to low- and moderate-income people. CBPP:

…States would likely do one or more of the following: cap enrollment; offer very limited benefits; charge unaffordable premiums, deductibles, or copayments; redirect federal funding from providing coverage to other purposes, like reimbursing hospitals for uncompensated care; and limit assistance to fixed dollar amounts that put coverage out of reach for most low- and moderate-income people. As a result, many millions of people would lose coverage.

The ability to avoid such cuts is precisely why, in a federalist system like ours, you want the provision of publicly-supported health care to be nationally financed.

Unless, of course, that’s the last thing you want, which is of course what’s going on here. The majority of today’s R’s want to shrink government and give the proceeds to the rich. Their hostility to Obamacare is thus partly a function of its name, but it’s more driven by the realization that their fundamental goal is completely incompatible with a significant government footprint in health care. That’s despite the fact that every other advanced economy has long since figured this one out, and thus spends about half of what we do, per capita, while achieving universal coverage.

OK–rant over. And, trust me, I’ve been hanging around at the corner of Dysfunction Junction here in DC for a long while, so none of this is new. But especially on health care–do check out that Vox piece–the extent of the lying is worse than usual, and is a symptom of the alternative reality within which team Trump exists and which is increasingly infecting our politics.

And that can’t end well.

A few links: Cassidy-Graham just-as-bad-as-the-rest health care bill, and more re last week’s Census data

September 19th, 2017 at 10:09 am

My CBPP colleagues have been churning out scads of analysis of the Cassidy-Graham last-ditch attempt to repeal and replace the ACA. Here’s CBPP’s main bullet points with color commentary from yours truly.

Second, while I justly touted last week’s good news from the Census of median incomes, poverty, and health coverage, it’s very important to put the last few years within their historical context. I do so here.

A typology of responses to Bernie’s single payer proposal

September 15th, 2017 at 10:51 am

It’s Friday, I’m on the Amtrak with coffee and bagel at hand, so let’s get metaphysical!

I’ve received many responses to my piece praising Sen. Sanders newly unveiled Medicare for All plan, and read many different takes. Here’s a rough grouping of where they fall:

Go, Bernie, Go!

This group shares my enthusiasm of the aspirational goal of the plan, is less worried about the extent to which, at this early juncture, the numbers add up, and is especially impressed to see the evolution of the political support among Democrats.

Politically, some of these supporters are motivated by the belief, one that appears to be shared by some politicians with national aspirations, that Democrats need a strong, simple progressive message like this. It is a signal, one that’s heretofore been missing from the party, to a lot of economic vulnerable people, that Ds are willing to get outside the usual establishment box, go around vested interests, and fight for a policy that the base has long believed in.

Wonkily, some people in this group operate from the simple principle that if we’re spending 17 percent of GDP on healthcare while other countries with various versions of universal coverage—not all single payer, but all heavily regulated with cost controls and coverage mandates—pay an average of 10 percent—that’s 7 percent of GDP, $1.4 trillion/year, that could be put to better uses than excess profits by drug companies and insurers. True, many in this group recognize the missing pieces stressed by the next group, but they’re less worried about such details at this point.

Go, Bernie, but there are a lot of details to fix, especially re financing…

This group is supportive of the goal of universal coverage, if not single payer, but sees higher barriers to getting there than group #1. They also have issues with the plan as articulated thus far.

Some of the critiques, ones I find to be highly valid, center on the financing. Though I cited a number of options offered by Sanders as payfors, my pal Jason Furman points out that they these options understate the cost of the proposal and their tax base is too narrow. Over to the Furmanator:

I appreciate the way in which the Sanders bill is moving the dialogue forward on how we can and should continue to expand coverage. But I am concerned that it is missing a big opportunity to have the honest debate we should be having about what fiscal direction we want to take as a country and, in the process, offering false hopes of free(ish) lunches. When we established Social Security and Medicare, they were paid for in a broad-based manner through payroll taxes. The system was progressive but everyone paid. The European social welfare systems take this principle even further—people, and not just the wealthy, pay more and get more. They achieve much more progressivity through their fiscal systems than the United States and do it largely through providing broadly shared benefits rather than making the tax systems very progressive.

Whether the United States should move further in the direction of broader-based benefits is an important debate—and one that Senator Sanders would be ideally poised to lead. But instead in this proposal, and in previous rhetoric, he is implying that most of this could be paid for by closing tax loopholes on corporations and taxing the wealthy.

Do not get me wrong—I am all for closing tax loopholes and taxing the wealthy more. But there is a limit to how much that could raise and it certainly is not enough to cover Medicare for All, let alone also paying for higher Social Security benefits, preschool, free college, paid leave, infrastructure, and deal with our existing fiscal hole. If we keep focusing on only raising taxes on the top 2 percent of Americans and corporations we will not be able to do all of this [JB: that’s a particularly germane point]. Advocates of these ideas need to convince the public that it is worth the cost to them—a cost that would be borne in a broad-based VAT or a payroll tax or some other instrument. And, in the process, advocates should make sure that the focus of the debate is on the overall progressivity of the system—how we raise the money and what we spend it on—not just on each of those ideas individually.

Another econo-pal, Dean Baker, crunches some numbers in the journal Democracy and finds Sanders’ financing to come up short to the tune of $650 billion per year—real money, even in DC.

Other objections from supporters relate to major transitional challenges. I’d put most of these under the heading of status-quo bias, which is not, btw, to be at all dismissive. Almost 160 million people, 57 percent of the under 65 population, get health care through their employer, and they often like it. So, if you believe that keeping what you have is a major selling point, you’ve got to consider the possibility that the hit to many service providers under single payer would be highly disruptive (many would presumably change who, where, and what they treat). I’m less worried about this part, ftr, as “keeping your doctor” is already less a feature of most people’s coverage and every employer I’ve worked for over the past few decades pretty regularly changes plans.

Finally, I’d add that any such plan needs more internal cost controls on the demand side, often through some degree of cost-sharing.

Stop, Bernie, Stop!

Of course, many in this last camp are stakeholders who risk potential displacement under single payer, or even under a more tightly regulated health care sector, i.e., the folks who lose when you take numerous percentage points of GDP out of the system.

Others just think you can’t get there from here, full stop. Single payer, or even Euro-style highly regulated universal coverage is not our fate, and Sanders and his co-sponsors are falling into the Democrats version of the trap in which the Republicans recently got caught. The status-quo and path dependency are too strong; having started from where we did, we now have an entrenched private sector presence in the sector, and the best we can maybe do is inject some sort of public option somewhere into the ACA.

Moreover, they argue, by falling into the health-care trap, Democrats will rue the day they stood with Bernie on this.

FTR, I’m in group #1.5, i.e., I reject the pessimism of group #3 and very much share the enthusiasm of group #1. But I think points like Jason’s are essential to start steering the policy process in a more feasible direction (to state the obvious, nothing in this space is feasible today or tomorrow, no matter how deep the love affair between Don, Chuck, and Nancy). In fact, that dynamic lies at the core of my WaPo piece. If Bernie didn’t get this out there, then Jason, Dean, et al don’t get to start wonking about it.

So. let the analysis, the politics, the advocacy, and the argumentation begin, develop, and penetrate the echo chamber of the possible. That’s a highly salutary development, a sliver of light in our pretty dark times.

Today’s Census data on poverty, income, and heath insurance.

September 12th, 2017 at 1:23 pm

A solid report, showing gains across the spectrum. But inequality’s up too, and median earnings, not so much…

My data dive in the WaPo underscores the clearly favorable results in the report, but here are a few other factoids to consider:

–While this isn’t the best data for inequality analysis, for reasons I note in the WaPo, my piece points out the relative difference between gains at the 10th and 95th percentile. That observation is correct, but the 10th %’ile is a bit of a negative outlier. Better to look at a more stable statistic, the average real income gain for the bottom fifth, up 2.6% last year, compared to a 5.6% gain among the richest 5% of households. The bottom half gained last year, but not as much as the top.

–It’s also true that incomes shares going to the middle and low income households are at all time lows, as the figure reveals. (See note in WaPo piece, however, re the impact of the 2013 survey change on comparisons like this. I think it’s a legit comparison, and it comports with other, better inequality data–where better means inclusive of more data sources, including taxes, more transfers, and capital gains–showing even more growth in inequality.)

Source: Census Bureau

–The lack of change in real median earnings for full-time, full-year workers last year is worth noodling over a bit. It surely reflects a composition effect as lower-paid were drawn into the sample last year, pulling down the median (see here for how this works). But even considering that reality, look at this series for men since 1960:

Source: Census Bureau

Sure, there’s composition effects embedded in there, but they don’t explain away the very long-term stagnation of the series. I mean the median full-time guy earns about the same in 2016 as in 1970!

The trend for women is considerably more positive, but it too hasn’t gone much of anywhere since around 2000.

Source: Census Bureau

So, it’s a really solid report, no question, but structural problems persist.

The 411 on that meeting with Donnie, Chuck, and Nancy

September 11th, 2017 at 9:16 am

Based on various reports, Nancy Pelosi said that the surprise debt ceiling deal she and Senate minority leader Schumer cut with President Trump was partly a function of Schumer being able to “speak New York” to Trump.

Here’s how it came down:

Scene: White House, Oval Office

Dramatis personae: Trump, Mnuchin, Pelosi, Schumer, a couple of Republicans

Mnuchin: (droning on…): And so, based on market expectations, and the recent rise in the risk premiums of bonds with short-term maturities, we estimate the prudent path forward…

Trump: Stifle for a New York minute, will ya, Stevie. Lemme ax you one, simple question. What the %&(* you talkin’ about?!!?

Schumer: Word to that. Donnie, fuggetaboutit, right? I mean, these mooks got nothin.’ Whaddya say we cut a deal–boom!–right here, right now?

Trump: You got it, Chuck. Let’s do this and go get a slice.

Schumer: No, let’s do this and go get some Chinese!

Trump: You freakin’ kiddin’ me; those guys are eatin’ our lunch.

Schumer: Exactly, so let’s go eat their lunch!

Trump: That’s beautiful, Chuck. You da man. Nancy, you in??

[end of scene]