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I have a great deal of respect for Paul Krugman, and have read him for a long time, since before 2000 when he was criticizing the Bush tax cuts as deceptive and "slicing the salami" favorably to sell his tax cuts.  I will continue to do so.  But Paul Krugman wrote an opinion piece called "Pass the Bill" on why the Senate bill needs to be passed, which I strongly disagree with.  I am writing my first diary to register my opposition and answer as to why the Senate bill must not pass.

Paul Krugman's article centers on two main fronts, which I shall discuss here.  But first...

A message to progressives: By all means, hang Senator Joe Lieberman in effigy. Declare that you’re disappointed in and/or disgusted with President Obama. Demand a change in Senate rules that, combined with the Republican strategy of total obstructionism, are in the process of making America ungovernable.

But meanwhile, pass the health care bill.

Yes, the filibuster-imposed need to get votes from "centrist" senators has led to a bill that falls a long way short of ideal. Worse, some of those senators seem motivated largely by a desire to protect the interests of insurance companies — with the possible exception of Mr. Lieberman, who seems motivated by sheer spite.

Let's dispense with some myths.  

First, there is no filibuster-imposed need to get votes from "centrist" Democrats.  That need is self-imposed. Reconciliation is possible to use to craft a less broad bill, but one that is more publicly popular than the 32% this mess is at while the public sneers at it.  The failure to even consider reconciliation to pass a good bill and to instead gut the reform from a "reform" bill to appease Senators not operating in good faith is an illustration to the public, and particularly to people who got them elected, that Democratic Senators, and the White House, care more about the country club rules of the Senate and its "comity" than they care about implementing policy that will allow more people to see a doctor.  There was no revolution to throw out the Republicans because they passed tax cuts for the rich using reconciliation and violated the "comity" of the Senate.  

Second, this is not about Joe Lieberman.  This is about his enablers - President Obama and people like Rahm Emanuel who act at the behest of the President.  This is especially important because Barack Obama campaigned against the Washington establishment and the dirty deals done in the dark of night there.  The closed-door deals and refusal to say anything criticizing Lieberman while popular policy is sacrificed to placate him is more disillusioning to people who hoped Barack Obama would be different than anything Lieberman has done.  Joe Lieberman is on video, three months ago, supporting the very measure that he now demanded be withdrawn.  It is not accurate to say he "seems motivated by sheer spite".  He is operating quite obviously because of sheer spite.  It's these kinds of contortions and refusals to criticize unethical behaviour that cause Democrats to snatch defeat from the jaws of victory repeatedly, and for the public to not respect them - they don't call a spade a spade, they keep bringing sporks to a gunfight, and get cut down time after time after time.  What's more, this is not about wanting to hang Joe Lieberman in effigy, it's about wanting Congress and the White House to go to bat for policy the public likes, which it is very decidedly not doing when better health care systems are obvious to every informed person, and instead popular policy is thrown in the trash bin because of a reverence for "Senate tradition" after campaigning on a platform that Washington was deeply out of touch with the needs of the public a year ago.

This entire exercise, if it goes uncorrected by passing popular measures through reconciliation, has been a perfect illustration to the general public of how sold-out both parties are, why there is no point in voting hoping to change things, that Democrats are no different, why popular policy can't pass but unpopular policy can, and the public has had a front-row seat because it's about health care which affects whether people will live or die and the public is paying close attention.  Hanging Joe Lieberman in effigy won't let one more person see a doctor, so it's extremely patronizing to be told to do so to blow off some steam and pass everything he demands as if that solves anything at all.

Now, as to the 2 main arguments:

  1.  At its core, the bill would do two things.  First, it would prohibit discrimination by insurance companies on the basis of medical condition or history: Americans could no longer be denied health insurance because of a pre-existing condition, or have their insurance canceled when they get sick.

It would not prohibit discrimination on this basis.  There are loopholes being uncovered before the ink is dry on this.  Insurance companies must offer individuals with pre-existing conditions insurance, but can charge 50% more for individuals with pre-existing conditions, and discriminate further based on age (which is the more likely group to have pre-existing conditions).  So yes, insurance companies must offer insurance - but since it's so expensive, people who need it can't afford it.  This is a distinction without a difference.  What's more, it has been extensively discussed how insurance companies can get around this obligation by limiting the access they offer to types of doctors, etc.

Rescission is not eliminated.  The language about rescission reads as follows:  "The Patient Protection and Affordable Care Act will stop insurers from rescinding insurance when claims are filed, except in cases of fraud or intentional misrepresentation of material fact."   That's pretty much what we have now.  It goes as ridiculously far as "You didn't disclose to us that you smoked a cigar 10 years ago, or sprained your hamstring last year, and we're not paying."  So the insurance company claims fraud for a reason for rescission, doesn't pay, and you get to fight them in court while your condition goes untreated.  If you can afford the legal representation.  Hopefully people will live that long.

  1.  Second, the bill would provide substantial financial aid to those who don’t get insurance through their employers, as well as tax breaks for small employers that do provide insurance.

That's valid enough, but it doesn't address (in fact, it enhances with government subsidies) the fundamental problem of the system - that health care dollars are being spent inefficiently, and that insurance does not equal care.

Additionally, Paul Krugman is an economist.  He knows the effects of supply and demand.  So he knows that the true price of the product here is not represented by just the price the consumer pays for the insurance product, but the price the consumer pays plus the subsidy, which is being spent inefficiently because the system is an entirely private, profit-maximizing oligopoly with an antitrust exemption.  

The equilibrium quantity of health care (not to be confused with health insurance) is problematic because the United States pays so much for it.  Mandating the purchase of a private product shifts the demand curve to the right and increases prices.  Subsidies shift the demand curve to the right, and increase prices.  But those measures require no corrective action from the suppliers - the private health insurance industry.  Everything about this bill drives towards increasing costs.  The problem with the health care system is that it is too inefficient.  There is no cost control here.  The closest people come to arguing that there is cost control is that there is an as-yet-undetermined community rating, which doesn't control costs of health care in the system proposed.  Community rating is a useful mechanism, but with mandates and no government competition, it simply represents the target premiums need to be increased to in order to achieve the desired profit margin increase, because the higher the total premium (consumer + subsidy), the higher the profits.  The cost-plus contracts in Iraq worked on the same principle.  With no public mechanism to compete with private insurance, or even a foothold to build on later, both mandates and subsidies are gifts to the private insurance industry that has caused the problems - insurance companies will naturally raise prices to absorb the demand curve shifts and real cost (consumer payment + government payment) will rise.  Subsidies and mandates are not automatically bad policies, but the environment needs to be considered.  Subsidies and mandates in an oligopolistic, and completely private, environment that has health insurance as the product, will not get at a solution.

Bear in mind also the lessons of history: social insurance programs tend to start out highly imperfect and incomplete, but get better and more comprehensive as the years go by. Thus Social Security originally had huge gaps in coverage — and a majority of African-Americans, in particular, fell through those gaps. But it was improved over time, and it’s now the bedrock of retirement stability for the vast majority of Americans.

But no social insurance program is being created here.  The only mechanism being created is a subsidy to an unpopular, profit-maximizing private industry with an incentive to deny care and a legal requirement to buy from them.  Social Security did not subsidize private retirement companies, it was a social compact between government and the public.  This bill is not.  It isn't even an offer to people of a choice of a public program that the public pays into with their own funds.  It isn't even a foot in the door.

This isn't about the "left" being "pure"; they have made compromise after compromise on this.  A public option is already a compromise, and over 60% of the public support it, so this is not a "left of the left" issue.  This is about the White House never exhibiting any leadership in the name of signing "a bill".  Any bill.  There is a point where enough is enough, and we have passed that point.  This is a giveaway to the insurance lobby and makes real reform less likely in the future.  If Democrats pass this gift to insurance companies, Democrats - and progressives - who defend it will have no credibility after it increases costs going forward.  How are we to argue for real reform then?

Finally, Paul Krugman talks about the concept of the filibuster:

Beyond that, we need to take on the way the Senate works. The filibuster, and the need for 60 votes to end debate, aren’t in the Constitution. They’re a Senate tradition, and that same tradition said that the threat of filibusters should be used sparingly. Well, Republicans have already trashed the second part of the tradition: look at a list of cloture motions over time, and you’ll see that since the G.O.P. lost control of Congress it has pursued obstructionism on a literally unprecedented scale. So it’s time to revise the rules.

But that’s for later. Right now, let’s pass the bill that’s on the table.

Passing the most important legislation Democrats will table and then correcting the filibuster is a losing strategy.  And Democrats appear not to be interested in changing it.  Republicans don't care about Senate tradition, they abuse the filibuster and pass tax cuts for the rich through reconciliation to get around it.  And as said above, the public doesn't care about reconciliation - they didn't line up to throw the Republicans out for using it years ago.  As long as Democrats respect "Senate tradition" like this they'll keep getting rolled like they are now.  The public doesn't care if Democrats pass a tremendously popular program through reconciliation.  All you have to do is say "Republicans passed tax cuts for the top 1% through reconciliation and had no problem with it; we are going to pass a public insurance option like an option to buy into Medicare that the people overwhelmingly wants through reconciliation because they are being obstructionists."  This assumes that Democrats view that better policy result as favorable, however, which is certainly questionable at this point.

If Paul Krugman believes just taking this deal because it's the "best we can get" is the best course because of the 60-vote threshold to clear a filibuster, it has grave consequences for the future.  Other legislation will be coming up for passage, and the message from this fiasco to lobbyists is All It Takes Is One.  Any one Senator can rewrite legislation if they are the 60th vote, and the White House won't say boo to them.  It has terrible implications for every piece of legislation that comes down the line for Obama.  Lobbyists only need to pay off a single Senator to write the bill as they wish.

I see no way the White House will improve this legislation given how it has negotiated to this point, and mealy-mouthed statements like this on behalf of the White House "wanting to move in direction of the House bill" give me no reassurance either (this is not a quote of Paul Krugman's):

White House health care czar Nancy-Ann DeParle told a conference call of progressive bloggers that there "are some things I'd like to improve" in the Senate's health care bill once legislators merge it with the House's legislation. The primary objective for the administration is to adopt the House's language on making insurance more affordable (which is more generous than the Senate's), she explained.

"I'd like to make some more changes there and move a little bit more towards the House bill," DeParle said. "So we'll see, I don't know what we'll be able to do there."

Who thinks the White House is going to break heads to improve this bill, after reading things like this?

I don't like where we are, but we're here because of conscious choices the White House made in making it clear that they would sign anything.  It was their choice, and it's not our job to make excuses for it and save face for them and do whatever they want us to do.  They never maintained that public competition was important, and exhibited no leadership from the start.  I get that there's incentive to want to "pass something".  But I have no credibility (and neither will Paul Krugman or the progressive community) if we stand by this corporate giveaway when we argue for real health reform down the road.  And we have no voice to this administration if we will just accept anything.

Originally posted to Sil on Fri Dec 18, 2009 at 06:41 PM PST.

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Comment Preferences

    •  while thestupiditburns seems to feel (0+ / 0-)

      that you "YOU have NO clue what you are talking about", I completely disagree.

      I'll be linking to my twitterpage (with my 41 followers) with the following:

      If you read 1 thing on Healthcare Reform today - READ THIS

      Because (unlike thestupiditburns) I found myself agreeing with you more and more as I read the diary.

      You've expressed the idea that has been weighing on my mind - that our hope and change president is turning out to be a finger in the wind kind of fellow.

      Why didn't President Obama use the political capital he had so much of right after his inauguration to pound the bully pulpit on behalf of the Public Option, instead of simply reiterating "I support the Public Option as one part of healthcare reform and not necessarily a required part of healthcare reform"); and strongly calling for the Democratic Majority in Congress to bring the legislation that would make it Law?

      Why should Progressives be the faction that must always give up what we want, why can't the Moderates or the Conservatives give up something for a change?

      Nicely written.

  •  Permit me the response this post deserves (0+ / 0-)

    YOU have NO clue what you are talking about.  Not just a little clue or sort of a half assed back asswards clue.  NONE...zero...zip...zilch.  Up until a few days ago I didn't think that was possible.

    Critics are [like] losers. It takes no effort to be one.

    by thestupiditburns on Fri Dec 18, 2009 at 06:44:17 PM PST

  •  Senate Reid is going to reveal the real final (0+ / 0-)

    bill tomorrow morning or mid-afternoon according Dick Durban and being reported by both Politico and The HIll.

    He's still working out a comprosmise on the abortion language to try to lock in Ben Nelson.

    It needs a 36 hour interval until they introduce the motion for cloture early next week, maybe Monday.

    So, the first time anyone other than Reid's immediate staff knows whats actually in the Senate Bill will be tomorrow morning or afternoon.

    http://www.politico.com/...

    The means is the ends in the process of becoming. - Mahatma Gandhi

    by HoundDog on Fri Dec 18, 2009 at 06:47:12 PM PST

  •  Don't be so naive. Really. This is politics. (0+ / 0-)

    It's the best that can be done. Reconcilliation won't produce as good of a bill.

    "Repetition does not transform a lie into a truth." - Franklin D. Roosevelt

    by markstevens7139 on Fri Dec 18, 2009 at 06:59:18 PM PST

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