Thursday, July 24, 2014

HHS Reports That The ACA Has Saved Consumers $9 Billion

The Department of Health and Human Services issued a report today explaining that the Affordable Care Act has saved consumers $9 Billion since it was enacted. The bulk of the savings was in reduced premiums. But it also included $330 million of refunds to consumers when their insurance companies spent more than 20% of premiums on overhead. Here is a link to the actual report.

An HHS report released today shows that last year alone, consumers nationwide saved $3.8 billion up front on their premiums as insurance companies operated more efficiently. Additionally, consumers nationwide will save $330 million in refunds, with 6.8 million consumers due to receive an average refund benefit of $80 per family. This standard and other Affordable Care Act standards contributed to consumers saving approximately $4.1 billion on premiums in 2013, for a total of $9 billion in savings since the MLR program’s inception.

These savings all come from the 80:20 medical loss ration that requires insurers to limit their overhead to 20% of premiums. The effect of this requirement has been premium reductions totaling $3.8 Billion in 2013 alone. And the insurers who did not reduce their premiums were required to issue refunds to their customers. In the first three years the refunds that have been or will be paid totaled $1.9 Billion.

Most significantly, in the individual insurance market the spending on overhead dropped from 15.3% in 2011 to 11.7% in 2013.

The report also charts how refunds are declining each year as insurers reduce their premiums, which is exactly how the law was intended to work. For instance, in the individual market refunds went from $399 Million in 2011 to $192 Million in 2012 and $128 Million in 2013. There were similar reductions in the small group and large group markets. And in the aggregate, for all markets, refunds went from $1.1 Billion in 2011 to $332 Million in 2013. But most significantly those refund reduction were a direct result of insurers reducing their premiums to the point that for 2013 the ACA caused premium reductions in all markets of $3.85 Billion

This is real progress.

Monday, May 05, 2014

Benghazi Is About The President's Legitimacy Not Just Hillary

The entire premise of the Republican Benghazi fixation is backwards.

All of the Congressional and State Department reports make clear that the Republican Benghazi story is fact free nonsense supported only by delusional drivel. This is all very well detailed in this excellent summary the GOP's disregard of facts. But more importantly, the entire political premise for their Benghazi fixation, the entire foundation upon which it is built, is laughable and completely backwards. In their view Obama is the President only because he lied his way to re-election by pulling the Benghazi wool over peoples eyes. Yes, since the election the focus has shifted to undercut Hillary Clinton if she runs in 2016, but make no mistake it started out and continues to be about the legitimacy of Obama as President of the United States.

The Republican theory is that after the Benghazi attack the President downplayed an al Qaeda/terrorist connection to the attack in order to enhance his election prospects. They say that the Benghazi attack undercut the Administration's position that we were having some success against terrorists intent on doing us harm. They knew that Obama had achieved many successes against terrorists, most notable the killing of Bin Laden. All of these successes had eluded Bush and gave rise to the popular perception that Obama was making advances against terrorism.

The Republicans thought Benghazi would reverse all of that. In their view, if Americans were told that four Americans had been killed in Benghazi by al Qaeda terrorists everything Obama had done in the prior four years would have been for naught and he would go down to stunning defeat. This one event would undo the prior four years.

Of course it wouldn't do if the attack was just part of a sequence of events triggered by a hateful video. It had to be an attack by the big AQ, which would prove that everything else that had been done in the prior four years was meaningless smoke. Benghazi today, Benghazi tomorrow, Benghazi forever.

And so, when Susan Rice read the CIA talking points that suggested this attack was motivated by the same thing that generated protests or attacks in Tunis and Cairo and elsewhere, there had to be a coverup. Even in that telling it was an odd coverup since the President had already said it was terrorism and the story details were revised a week later. It didn't matter, this was a coverup of the Achilles heel of the Obama re-election campaign.

Well, if history is a guide they have it backwards. If Obama wanted to use Benghazi to advance his election prospects he would have hyped the Al Qaeda/terrorist fear and brought back the color coded terror alerts. He would have used the playbook that Bush used for all the years after 9/11, including immediately before the election day. Bush would tout his successes but point to every terrorist attack, or threat of attack, or imagined attack to keep people afraid and manufacture the image he and only he was the one who could "keep us safe."

This cynical use of terror attack and threats real or imagined was long suspected while Bush Was President. And it was eventually acknowledged by his DHS Secretary Tom Ridge who said, as reported by Time,

Ridge says he objected to raising the security level despite the urgings of former Defense Secretary Donald H. Rumsfeld and then-Attorney General John Ashcroft, according to a publicity release from Ridge's publisher. He said the episode convinced him to follow through with his plans to leave the administration; he resigned on Nov. 30, 2004.

Similarly, as reported by John Amato in connection with the publication of Ridge's book, The Test of Our Times,

Former US homeland security chief Tom Ridge charges in a new book that top aides to then-president George W. Bush pressured him to raise the "terror alert" level to sway the November 2004 US election.

Then defense secretary Donald Rumsfeld and attorney general John Ashcroft pushed him to elevate the color-coded threat level, but Ridge refused, according to a summary from his publisher, Thomas Dunne Books.

"After that episode, I knew I had to follow through with my plans to leave the federal government for the private sector," Ridge is quoting as writing in "The Test of Our Times: America Under Siege ... And How We Can Be Safe Again."

Some of Bush's critics had repeatedly questioned whether the administration was using warnings of a possible attack to blunt the political damage from the unpopular Iraq war by shifting the debate to the broader "war on terrorism," which had wide popular appeal.


He later publicly acknowledged that much of the information underpinning the new alert was three years old, stoking Bush critics' charges of political manipulation.

If President Obama wanted to make political hay about Benghazi he would have done exactly what Bush did, and try to scare the living bejeezus out of the American people right before the election. But that's not what he did. He and spokespersons for the Administration went out and told he truth as they knew it at the time. It was an evolving narrative as is always the case in times of conflict. First reports are rarely completely accurate and the facts become clearer after the dust settles.

The funny thing is the Republicans know that the Administration was being candid and was not hyping the incident as they know Bush would have done. They knew that his demeanor during this time was a strength, exuding a combination of confidence, compassion for the victims, and resolve. It was the calmness that the American people needed.

So they did what they always do? They attacked this strength. This is what they have done throughout his Presidency. They know he is a gifted orator so they attack his use of tele-prompters. They know he is brilliant and extraordinarily well read so they raise bogus questions about his educational background. They know he is very popular in one on one settings so they attack him for being aloof.

They did and are continuing to do the same with Benghazi. They know he was truthful and the tone and tenor were spot on so they attach him for not hyping an al Qaeda connection and cynically argue that if he had done so his re-election would have been doomed, when, if anything, it would have been further bolstered.

Well, the American people didn't fall for that in 2012 and four years of age aren't going to make it a more successful line of attack in 2014 or against Hillary in 2016.

But it isn't just about 2014 or Hillary. It started out as an attack on the President's legitimacy and continues to this day. In Republican minds the 2012 election had nothing to do with the forty-seven percent. It hinged on only one issue - Benghazi. If the Benghazi truth had been told he would have lost in a landslide.

In the Republican mind President Obama's first term was illegitimate because he was a Kenyan (not to mention anti-colonialist socialist) who wasn't eligible to hold office. And his second term is doubly illegitimate because he lied his way to re-election by pulling the Benghazi wool over peoples eyes.

Friday, October 11, 2013

Debt Limit Extraordinary Measures Should Be Repealed.

The House is proposing to eliminate the "extraordinary measures" that delay hitting the debt ceiling. Some people think this is a bad idea or a poison pill but it is not. These special procedures started out as a method to give the Treasury flexibility but have turned into something completely different. They have essentially allowed the Republicans to force a delay in when we hit the debt limit by essentially requiring the Treasury to take money from the civil service retirement fund the federal employees 401(k) plan and other sources. In doing so all they have done is delay the inevitable. Moreover, they have added uncertainty to the process, something that increases the danger that the debt limit will be crossed.

Here is the type of announcement the Treasury uses to invoke the special measures:

Today, the United States has reached the statutory debt limit. Secretary Geithner sent the following letter to Congress this morning alerting them to actions that have be taken to create additional headroom under the debt limit so that Treasury can continue funding obligations made by Congresses past and present. The Secretary declared a "debt issuance suspension period" for the Civil Service Retirement and Disability Fund, permitting Treasury to redeem a portion of existing Treasury securities held by that fund as investments and suspend issuance of new Treasury securities to that fund as investments. He also suspended the daily reinvestment of Treasury securities held as investments by the Government Securities Investment Fund of the Federal Employees’ Retirement System Thrift Savings Plan. For more information on these measures, please read this FAQ.

These are but two of the several measures the Treasury uses to delay the day of reckoning. Treasury takes civil-service retirement contributions and instead of investing them in securities, uses them to pay other obligations. It also takes money contributed by federal employees to their 401(k) and instead of investing it, uses that money to pay off other obligations.

It should be noted that this is not what happens with Social Security and other trust funds. This is something totally different and pernicious and it only affects Federal employee money and some other things like the issuance of State and Local Government Series Treasury Securities.

Under normal circumstances all trust fund accounts, whether Social Security, Medicare, Highway Trust Fund, Civil Service Retirement Fund, et al., are invested in special issue Treasury instruments and are part of the national debt. They are under the heading of Debt Not Held By The Public.

But there is a law that applies to Civil Service Retirement Trust funds that allows Treasury to cancel the instruments in the CSRS fund when it reaches the debt ceiling. Once those instruments are cancelled, the national debt is reduced by that amount and the money can be spent for expenses, like Boehner's salary. The law requires the money to eventually be paid back, but for now the instruments are gone. This debt cancellation cannot be done with the Social Security or most other trust funds.

The Thrift Savings Plan (TSP) funds can also be raided under these procedures. The TSP is a 401k administered by a separate board. Federal employees have many choices of where to invest their funds including, stocks, bonds, real estate and Government Securities. This law applies only to money in the G Fund and it allows Treasury to cancel those government securities and spend the money. Also new money designated for the G Fund can be directly spent. Again, the law says it must be redeposited later, but right now the debt is cancelled, and that is why it doesn't it isn't part of the national debt.

Congress should eliminate the authority for these special measures. What started out as something to be used rarely and only in extraordinary circumstances has now been used every time we reach the debt limit and has merely delayed when the final day of reckoning arrives. These extraordinary measures hurt the process by adding uncertainty and confusion and creating the impression the Treasury has some magical tricks that can prevent debt limit catastrophe. And once again it is federal employees who are the victims of Congress' incompetence.

Tuesday, October 08, 2013

The President Restates That There Are No 14th Amendment Tricks Around The Debt Ceiling

At todays press conference the President restated what he said in January that there are no tricks around the debt ceiling, such as the 14th Amendment, gigantic coins or script.

And I know there's been some discussion, for example, about my powers under the 14th Amendment to go ahead and ignore the debt ceiling law. Setting aside the legal analysis, what matters is -- is that if you start having a situation in which there -- there's legal controversy about the U.S. Treasury's authority to issue debt, the damage will have been done even if that were constitutional, because people wouldn't be sure. It'd be tied up in litigation for a long time. That's going to make people nervous.

So -- so a lot of the strategies that people have talked about -- well, the president can roll out a big coin and -- or, you know, he can -- he can resort to some other constitutional measure -- what people ignore is that ultimately what matters is, what do the people who are buying Treasury bills think? And again, I'll -- I'll just boil it down in very personal terms.

If you're buying a house, and you're not sure whether the seller has title to the house, you're going to be pretty nervous about buying it. And at minimum, you'd want a much cheaper price to buy that house because you wouldn't be sure whether or not you're going to own it at the end. Most of us would just walk away because no matter how much we like the house, we'd say to ourselves the last thing I want is to find out after I've bought it that I don't actually own it.

Well, the same thing is true if I'm buying Treasury bills from the U.S. government, and here I am sitting here -- you know, what if there's a Supreme Court case deciding that these aren't valid, that these aren't, you know, valid legal instruments obligating the U.S. government to pay me? I'm going to be stressed, which means I may not purchase. And if I do purchase them, I'm going to ask for a big premium.

So there are no magic bullets here. There's one simple way of doing it, and that is Congress going in and voting.
And the fact that right now there are votes, I believe, to go ahead and take this drama off the table should at least be tested. Speaker Boehner keeps on saying he doesn't have the votes for it, and what I've said is, put it on the floor. See what happens. And at minimum, let every member of Congress be on record. Let them -- let them vote to keep the government open or not, and they can determine where they stand and defend that vote to their constituencies. And let them vote on whether or not America should pay its bills or not. And if, in fact, some of these folks really believe that it's not that big of a deal, they can vote no.

And that'll be useful information to -- for voters to have. And if it fails and we do end up defaulting, I think voters should know exactly who voted not to pay our bills, so that they can be responsible for the consequences that come with it.

These positions are not new. In a January 14, 2013 press conference he said "There are no magic tricks here, there are no loopholes." This reiterated what the President, through the Treasury, stated a few days earlier that he will not use the platinum coin option. Both statements echoed his decision in 2011 that he would not use the 14th Amendment option.

All of all these issues are discussed in this post and here is a summary.

It has been argued the President could use the authority to mint a platinum coin in a trillion dollar denomination and use those funds to continue to pay the Treasury's bills. The second alternative was to use his authority to issue scrip that would be used to pay the debts of United States until the debt limit that could be raised and real dollars borrowed. The third option was for the President to simply say that he has the authority under the 14th Amendment, or some other constitution provision, to issue debt notwithstanding the fact that the issuance would exceed the amount of the debt limit law.

The President will not choose the first two options because, whether or not one thinks he has the legal authority to issue a platinum coin or issue scrip, the President knows that both internationally and domestically taking either of those actions would be viewed as a gimmick, a magic trick. They would at the least raise significant legal issues that would call into question the validity of any debt that is issued. Also, either of those actions would merely be kicking the can down the road. They would be giving the Congress an excuse to not raise the debt limit because the President would have continued to keep the country operating and the Republicans would have been let lose to fight the President in the courts and through impeachment hearings.

The third option was for the President to assert that the 14th Amendment gives him the authority, if not a requirement, to avoid default notwithstanding the debt limit. But this assertion would not only raise the legal and practical issues of the first two, but also create a significant Constitutional crisis, a crisis between the President and the Congress as well as between the President and the Supreme Court.

Asserting this position is not the same as a conflict between two statutes, where the President interprets one statute as overriding another. Many people have suggested this possibility by arguing that the Congress has passed Appropriations Acts and that they require the President to spend the money appropriated, a requirement which conflicts with the debt limit law. That argument has little merit. There is no statute that says money that is appropriated must be spent if there is no money available. In fact, if you look at every Appropriations Act the lead off language is ,
"That the following sums are appropriated, out of any money in the Treasury not otherwise appropriated, . . . . . "

"Any money in the Treasury." Very soon if Treasury cannot borrow money and put it in the Treasury, there will only be two dollars in the Treasury for every three dollars of bills coming due. Appropriations acts simply do not authorize let alone require the expenditure of funds that the Treasury does not have. There is no conflict between Appropriations Laws and the Debt Limit law. One tells Treasury how to spend money in the Treasury, the other limits how much can be borrowed to put money in the Treasury. This question is totally different than the question of whether the President can refuse to spend appropriated funds when such funds are available, which the Supreme Court has ruled to be unconstitutional.

Simply put we are talking about the President asserting the power to unilaterally decide whether he will comply with laws that are duly enacted by Congress and signed by the President. Except for Nixon no President has done that, in this way, since Lincoln suspended the Habeas Corpus provisions of the Judiciary Act of 1789. The action was challenged by a prisoner but Lincoln ignored a court decision which ruled the action Unconstitutional. Eventually, however, Congress essentially ratified his action.

The President would be effectively declaring the debt limit built to be unconstitutional because it conflicted with his 14th amendment powers. He would be declaring unconstitutional a law that was passed many decades ago and has been amended scores of times since then. A law which during all that time no President has ever declared to be unconstitutional or in any way inconsistent with the President's powers under the 14th amendment.

The President has made clear that he will not take these actions. He knows they do not solve the underlying problem and run the risk of chaos over an extended period of time in the international financial markets and damage to the standing of the United States that may take a long time to fix. And it goes without saying that the political chaos this would create domestically would ruin any chance of his being able to achieve anything in his second term.

Monday, September 09, 2013

President Obama May Be About To Achieve His Syria/Chemical Weapons Objectives

Congress is considering a resolution that would authorize the President to use force against Syria for a limited period of time and restrict the force that could be used by excluding ground troops. Recent developments suggest that the resolution will soon be amended. Secretary Kerry stated that one way for the Assad regime to avoid military strikes was to relinquish its chemical weapons stockpile. Apparently Kerry has suggested this in the past to his Russian counterpart, Lavrov, but made little progress in getting Russian agreement, something that is critical to getting Syria to act. Now the Russians are jumping on the idea and Lavrov offered a proposal for Syria's chemical weapons to be turned over to an international body. The Assad regime has given its initial support to the Russian initiative.

It remains to be seen whether either the Russians or Syria are serious about this but the concept is a useful one that could be included in the resolution for the use of military force. For that reason look for the resolution currently under consideration to be be amended to include some form of trigger that would allow Syria to avoid military action by relinquishing its chemical weapons stockpile to international control. How that is worded and what form the trigger will take is yet to be seen. But there is a reasonable possibility that the resolution will take this form in the coming days.

From the beginning of the Syria conflict President Obama has opposed United States intervention. Initially he opposed giving even non-lethal aid to the Syrian rebels and was only committed to aiding the countries that were taking in Syrian refugees. As the pressure from war hawks mounted and as the conflict became more intense he decided to start giving non-lethal aid to the rebels. Then, after the initial reports of possible gas attacks,but which were convincing not sourced well enough to justify a firm response, the President warned Assad against further use and agreed to provide lethal aid to the Syrian rebels. Finally, after the August 21st chemical weapons attacks in Damascus, attacks which the intelligence community gave its highest rating of probability as having been conducted by the Syrian government, the President decided that the only way to deter further use was to launch a limited military strike.

But the goal of the military strike has always been clear - to deter the Assad regime from using chemical weapons, to degrade their ability to use such weapons and to reinforce the international norm against the use of such weapons. While are the goals it was also recognized that a side affect of the military attacks would be to degrade Syria's overall military capabilities and by extension, benefit the Syrian rebels.

The President's attempts to get Congress to pass a resolution authorizing the limited use of force for this limited purpose have been met with considerable opposition. Some of the opposition has been based on totally valid reasons and some has not.

Valid reasons for opposing the resolution include the belief that it will not achieve its objective; general opposition to the use of force under any circumstances; overall war weariness; and the belief that chemical weapons do not deserve special treatment. This reasoning holds that if we were unwilling to act when 100,000 people were killed using bullets and bombs, the death of an additional thousand people through chemical weapons should not change that equation.

Invalid reasons include the position that anything this President proposes must be opposed because of who he is, or that since the resolution does not provide for full scale war against Syria it is insufficient and therefore limited strikes will not be supported.

But with this new development the level and nature of the opposition to a Syria resolution may now change. There will of course be some persons who will continue to oppose any resolution, including one that enables Assad to avoid military action by ceding control over his chemical weapons. But for others it may well make a difference. Those are the people who, notwithstanding their war weariness and their determination to avoid our getting directly involved in the Syrian conflict, believe that chemical weapons truly are different. They believe that it is critical that the United States and the international community do more than pay lip service to the international norm against their use.

In connection with this amended Congressional resolution, there is a likelihood that we will see an effort to pass resolution out of the United Nations Security Council that condemns the use of chemical weapons and establishes a framework for Assad's weapons to be turned over to international control. The United States may also try to see if it can convince the Russians to include a specific condemnation of Assad and the type of trigger that would authorize the use of military force in the event Bashir Assad does not comply. It will be interesting to see if the Russians continue to object to this last element. It is also unknown how the Chinese will respond.

What is arguably most important about this new development is that it will focus all this discussion on chemical weapons and enable the President to achieve his twin objectives of deterring the further use of chemical weapons in Syria and reinforcing the international norm against such weapons.

Friday, September 06, 2013

Assad Gassed His People, Even Opponents Of Syria Resolution Agree. Question Is What To Do

The Senators and Representatives who have seen the classified materials agree that Assad gassed his people. That includes those who are strongly against intervention. The debate is over what if anything should be done.

Here are some samples of statements by opponents of intervention on the question of whether Assad perpetrated the Damascus attacks:

Senator Tom Udall (D-NM)

I want to repeat that I am horrified by what Bashar al-Assad has done to his own people. He has committed a heinous act and a violation of the Geneva Convention no doubt about it. However, I still believe this proposal is the wrong course of action for the United States and its military.

I am voting no because this policy moves the United States toward greater American conflict and increasing regional conflict.

Senator Chris Murphy (D-CT)

Bashar al-Assad’s use of chemical weapons against the people of Syria is a human rights atrocity and a blatant violation of international law. It’s impossible to see the horrific images of death and suffering in Syria and not feel compelled to act in some way. But there is not always an American solution to every international crisis. For me, today's vote was a close call, but in the end, I voted no because I believe that the downside risks of military action, both for U.S. interests and the Syrian people, outweigh the potential benefits.

Senator John Barrasso (R-WY)

“Over the last two years, the Assad regime has committed terrible atrocities against thousands of innocent men, women and children in Syria. I join the rest of America in strongly condemning these awful acts of violence.

“This past week, I’ve participated in both open and closed hearings with the Administration about the President’s call for military strikes in Syria. Like most folks back home, I am concerned about the Administration’s willingness to commit to military action without providing an ultimate objective and an overall strategic plan in Syria.

Rep. Jeff Duncan (R-SC)

“I don’t see where any imminent threat to the United States is evident,” he said. “I do believe that chemical weapons were probably used in Syria but I don’t understand and don’t see a way that we involve the United States in this. So I plan on voting no.”

Michael McCall (R-TX)

I think what gives Congress great pause, and the American people great pause, is there's no good outcome here. They don't see a good side versus a bad side. They see Assad as a bad actor who's used chemical weapons. There's no question about that. But then who is the other side? Who are the rebel forces?

Ted Yoho (R-FL)

The use of chemical weapons is deplorable and should be decried as such by the rest of the world, yet for some reason some people think it is the United States alone who must enforce the world’s outrage. The philosophy that the United States should be the world’s police is one that will lead to our own demise.”

The members of the House and Senate of both parties who have seen the materials agree on two things - there was a gas attack on Damascus and Assad's troops did it. They disagree on the response.

This is not Bush and Iraq, and bogus intelligence to support a war that was unjustified even if the intelligence had been accurate. This is a question of Assad using gas increasingly over several months until the last usage was so egregious that some response is warranted.

When earlier uses were suspected but not conclusively confirmed, Assad was warned directly, and through intermediaries like Russia, that he needed to cease. Instead he escalated. The only debate now is what, if anything, that has not already been tried should be done.

Wednesday, September 04, 2013

Congressional Letter On Syria AUMF

The following was sent to my Members of Congress, Senator Bennet, Senator Udall and Representative Tipton.

"I urge you to Vote for the Syria Joint Resolution to "Authorize The Limited And Tailored Use Of The United States Armed Forces Against Syria." It is absolutely essential that the United States take action to respond to the use of chemical weapons by Syria. The last time we faced this issue in the Iran-Iraq war we did nothing when Iraq killed tens of thousands of Iranians with chemicals weapons.

To put my position in perspective I view this as analogous to the naked aggression of Iraq against Kuwait, which is why I supported the Gulf War resolution. Similarly, I supported the Afghan resolution because it was a response to aggression. On the other hand I opposed the Iraq AUMF resolution because it was not in response to anything and was based on ridiculous assertions of a future threat to the United States.

I do not believe the United States should be actively engaged in the Syrian Civil War. But I also believe that unless we respond to this use of chemical weapons there will be two consequences. First, Syria will be emboldened and will continue to use chemicals weapons realizing that there will be no consequences. Second, for all intents and purposes there will be no enforceable international norms on any issue moving forward. Rights without remedies are not rights. And prohibitions without penalties are not prohibitions. It is time to make clear that the rules against indecency and inhumanity will be enforced."