Monday’s Papers

March 19th, 2012 at 7:24 pm

A few things caught my eyes this AM:

Keep The Feds Out of Our Economy (um…Never Mind): This one reminded me of a point I often make in talks these days.  It’s a good e.g. of how a global trend—climate change—is leading to a situation—rising sea levels—that YOYO economics can’t solve.

The problem here is a highway in Louisiana that’s at risk for flooding as the sea level rises:

Highway 1, unprotected by levees, connects critical oil and gas resources in booming Port Fourchon to the rest of the nation.”

Local residents and business leaders are demanding that the federal government help pay to rebuild and elevate the remaining section of Highway 1, adding two miles to span the levees. Federal officials have provided scientific and technical expertise but will not contribute funding unless the state pledges to complete the road.

Louisiana says it doesn’t have the money.

The ironies are almost too much for my pre-caffeinated, Monday-morning mind to absorb.  Officials in a state with an aggressive tax-cutting governor—Gov Jindal can boast the largest tax cuts in the state’s history—one who consistently inveighs against gov’t spending, are “demanding” the Feds send money.

Which isn’t to say they don’t have a rationale: Highway 1 is a critical supply line.  But this is your country on mindless spending cuts.  Virtually all of the federal budget cuts so far have been on the discretionary side of the budget—the non-entitlement part that’s appropriated each year to fund the agencies and yes, to provide “grants-in-aid” to states.   It’s left to the reader to connect the dots.

It’s also left to the reader to figure out how candidates running for President believe they can adequately address the nation’s growing challenges, be they climate or demographic, on a far smaller share of the economy than the historical average.  If the reader figures this out, let me know.

And then, of course, there’s the grand irony here:  future divers, exploring the lost land that used to be here, will marvel at why our method of dealing with rising sea levels was to put highways on stilts so we could continue to transport the fossil fuels that were causing the sea levels to rise.

In Support of IPAB: You might need to be reminded of this, since a lot of conservatives act like its implementation is optional, but the Affordable Care Act is still the law of the land.*  The purpose of the law is to both expand coverage and reduce costs, and a key mechanism in that regard is the IPAB.  From an editorial in this AMs WaPo:

ONE OF THE MOST promising cost-control measures in the new health-care law is an entity called the Independent Payment Advisory Board, or IPAB. To be launched in 2015, IPAB will have the authority, if growth in health-care costs exceeds a certain target, to recommend changes to the Medicare program. Those changes would take effect automatically unless Congress came up with equivalent savings elsewhere.

The 15-member board of experts from across the health-care field, in other words, is a break-in-case-of-emergency provision; if other parts of the health-care law work as hoped to keep costs down, there will be no need to invoke IPAB’s powers. But if there is such a need, IPAB, if anything, should be made stronger.

Now, unless you don’t think we don’t waste money in health care—and if you do, then you need to explain how all these other advanced economies insure virtually everyone, have comparable outcomes to ours, yet do so for half to 2/3 the cost—you hopefully recognize the need for an independent body whose job it is to identify ineffective, duplicative, defensive spending and squeeze it out of the system.  If anything, the IPAB doesn’t have the teeth it needs—it can only recommend savings to Congress.

Predictably, attacks on the idea focus on the R-word: rationing.  But here’s the thing: the IPAB is explicitly barred from making any recommendations that ration care…that’s right: it is explicitly inoculated from this claim.  That means that it cannot, by law, make an argument that says, “this procedure is useful, but Medicare can no longer afford it, so folks can’t have it.”  It can only say, “this procedure is ineffective,” or “here are more cost effective ways to achieve this outcome.”

And just for the record, the current system is replete with rationing.  It’s called rationing on price, and of the 50 freakin’ million uninsured people in this country, I’m sure someone would be happy to explain it to you.

[Want more?  Get down in the IPAB weeds with my colleague Paul Van de Water.]

*I know, the SCOTUS will be weighing in on this soon.  While picking up the Chinese take-out last night, C-Span radio was playing a really insightful set of arguments as to the constitutionality of the law set forth by, I believe, a very sharp guy named Andrew Pincus.


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3 comments in reply to "Monday’s Papers"

  1. Michael says:

    I just don’t get conservatives. Are they just outright parasitic? “We’re not going to raise the tax revenue to match your contribution; you should just give us the money and not even care if the project gets finished.”

  2. jonathan says:

    If you’re collecting stories in which the GOP wants the federal government to be involved, there is perhaps none better than federal guarantees of mortgage financing for property affected by oil & gas drilling. Without the federal involvement, banks wouldn’t lend on these properties.* This means the reviled mortgage guarantors, the same ones the GOP has promised to eliminate, are necessary so a) oil & gas drilling can proceed and b) at subsidized cost. Without the guarantees, the cost of leases would be higher to compensate for the increased risk taken on by the financing bank, if they’d cover at all. In many areas, I wonder if any bank would write a mortgage for a fracking property.

    *Would you? Given the uncertainties? These uncertainties are greater than the asbestos scares because that was only about what you found and what it cost to remediate while this involves unknowable risks that involve the actions of unrelated parties over time and the damage may not be undoable.