Progressive Breakfast: Obama's Back, And He's Taking On Health Care

The president's back from his trip to the Middle East, and the New York Times reports that Obama's set to take on a greater role in the health care debate [1], including "an intense push for legislation that will include speeches, town-hall-style meetings and much deeper engagement with lawmakers," in an effort not to repeat the past:

Mindful of the failures of former President Bill Clinton, whose intricate proposal for universal care collapsed on Capitol Hill 15 years ago, Mr. Obama until now had charted a different course, setting forth broad principles and concentrating on bringing disparate factions - doctors, insurers, hospitals, pharmaceutical companies, labor unions - to the negotiating table.

But Mr. Obama has grown concerned that he is losing the debate over certain policy prescriptions he favors, like a government-run insurance plan to compete with the private sector, said one Democrat familiar with his thinking. With Congress beginning a burst of work on the measure, top advisers say, the president is determined to make certain the final bill bears his stamp.

"Ultimately, as happened with the recovery act, it will become President Obama's plan," the White House budget director, Peter R. Orszag, said in an interview. "I think you will see that evolution occurring over the next few weeks. We will be weighing in more definitively, and you will see him out there."

He wasted no time getting started, either. President Obama devoted his weekly address to health reform:

Meanwhile, Democrats are gearing up a grassroots campaign to support the health care reform [2]. Reuters: "Suburban housewives and social workers mixed with Baptist ministers, college students, retirees and many others at grassroots gatherings over the weekend. Spurred by the Democratic National Committee's burgeoning political machine dubbed "Organizing for America," thousands of such meetings had been planned for Friday through Monday."

The Times also reports that the private insurers are still afraid they can't compete [3] with a public health insurance option. Obama's stated support of a public option apparently made them nervous, and Sen. Kennedy's draft bill [4] - which started circulating on the Hill Friday, and would create a new public insurance program - may sent them over the edge:

Under the legislation, the government would subsidize premiums for people with incomes up to 500 percent of the poverty level ($110,000 for a family of four), and private insurers would have to pay out a specified percentage of their premium revenues in benefits.

The new government-run program would pay doctors and hospitals at Medicare rates, plus 10 percent.

Mr. Kennedy's bill would also establish a new insurance program to provide home- and community-based care for 10 million people with severe disabilities.

Politico reports that House Democrats are also drafting a bill that includes a public plan option, along with a few more details [5]:

The outline - identified as an update from the House Energy and Commerce Committee - is more comprehensive than one that emerged last month, and surfaced ahead of a scheduled briefing Tuesday for the House Democratic caucus.

The broad structure of the health-care bill, which is being negotiated jointly by three House committees, resembles what is under consideration in the Senate. A draft of the House bill is expected by the end of next week, the outline stated.

There would be a "soft" mandate on individuals to purchase insurance, with a waiver for those who can't afford it and a "moderate" tax penalty on those who skirt the requirement.

Large employers would need to provide coverage or face a tax penalty. Small businesses could buy into the insurance exchange and receive subsidies.

All insurers would have to provide a minimum benefits package, and end its practice of denying coverage or raising rates based on a preexisting condition.

Businesses are wary [6], too. USAToday:

"It's no secret that the biggest sticking points will be the so-called public option and the employer mandate," said Randel Johnson, a vice president of the U.S. Chamber of Commerce.

Anthony Coley, a spokesman for Senate committee Chairman Edward Kennedy, D-Mass., called the proposal "a draft of a draft." The Senate Finance Committee is writing a separate bill that business groups such as the chamber expect will be less sweeping.

Obama has pushed hard for the public-financed option in recent days, including in a letter last week to Democratic senators.

"The president and many others believe that the availability of a public option alongside private options … is a positive thing," White House adviser David Axelrod said on CBS' Face the Nation.

Financial Times says the "U.S. needs a public healthcare debate," [7] and notes that Massachusetts' experience suggests importance of a public plan in controlling costs. As always, the devil's in the details:

A scheme like the one in Massachusetts, therefore, looks probable - with a mandate, a regulated insurance exchange and taxes on employers to help meet the cost. Debate currently centers on the case for a public insurance plan to compete alongside private offerings. Massachusetts has no such option and, perhaps as a result, has failed to contain costs. Mr Obama wants a public plan in the mix. Republicans are dead against. If the idea was adopted, everything would depend on how the plan was run. At one extreme it might make little difference; at the other, if heavily subsidized, it could grab the whole market.

With US spending on health at 17 per cent of national income and rising, much is at stake. At present, though, none of this debate is reaching the public. This needs to change. Reform of healthcare is far too important to be foisted on the country as a fait accompli.

Everything would depend on how the public plan was run, says The American Prospect's Robert Kuttner [8], and says the president should level with Americans about the biggest obstacle to real reform:

President Obama, the great conciliator, has chosen to work with the private insurance industry rather than targeting it as the primary obstacle to meaningful health reform. Periodic leaks from the White House suggest that if push came to shove, Obama would ditch the public plan in order to get a bill through Congress.

Sen. Max Baucus of Montana, chair of the Senate Finance committee, is no enthusiast of a public plan. After the New York Times last week reported Baucus sparring with Sen. Ted Kennedy on whether to include a public plan, the two senators quickly cobbled together a statement insisting they were really in harmony.

However, in the push to get legislation in the face of fierce industry and Republican opposition, a good public plan could well be tossed overboard. That would leave a legacy of expanded coverage, but a time bomb of exploding costs resulting in underinsurance and a squeeze on actual care.

Personally, I would much rather see President Obama going to the country, making clear that the obstacle to real reform is the private health insurance industry, and battling for public health insurance. That, however, is not the president we have. We'll see what kind of public plan, if any, survives.

Robert Reich [9] on what big pharma and private insurance are doing to derail the public plan option, and what supporters need to do now:

All this will be decided within days or weeks. And once those who want to kill the public option without their fingerprints on the murder weapon begin to agree on a proposal -- Snowe's "trigger" or any other -- the public option will be very hard to revive. The White House must now insist on a genuine public option. And you, dear reader, must insist as well.

This is it, folks. The concrete is being mixed and about to be poured. And after it's poured and hardens, universal health care will be with us for years to come in whatever form it now takes. Let your representative and senators know you want a public option without conditions or triggers -- one that gives the public insurer bargaining leverage over drug companies, and pushes insurers to do what they've promised to do. Don't wait until the concrete hardens and we've lost this battle.

That goes for all 119 million Americans who would ditch their private insurance for a public plan [10]. Robert Parry of Consortium News:

The peculiar argument that 119 million Americans must be denied the public option that they prefer has been made most notably by Sen. Chuck Grassley of Iowa, ranking Republican on the Senate Finance Committee, which is one of two panels that has jurisdiction over the health insurance bill.

"As many as 119 million Americans would shift from private coverage to the government plan," Grassley wrote in a column for Politico.com. That migration, Grassley said, would "put America on the path toward a completely government-run health care system. ... Eventually, the government plan would overtake the entire market."

Grassley's logic is that so many Americans would prefer a government-run plan that the private health insurance industry would collapse or become a shadow of its current self. That, in turn, would lead even more Americans entering the government plan, making private insurance even less viable.

Rarely has an argument more dramatically highlighted the philosophical question of whether in a democracy, the government should represent the people's interests or an industry's.

Open Left's Natasha Chart [11] offers moral fuel for the fight:

...Abandoning all responsibility towards children, weak grandparents, injured spouses or siblings is behavior requiring explanation. You better have had literally no money, some outrageous personal falling out, have given over their care to someone else - or risk being seen as a bad person.

I'm not opposed to a judicious use of shaming to pressure our elected officials to give us a robust public insurance option, one that stops families feeling forced to sacrifice their futures so they can enjoy each other's company for a little longer. Or failing that, forcing elected officials to give up their public health insurance and go out on the individual market themselves, so they can really see.

[12]

Economy Update

The president is also ramping up his stimulus program this week — promising to deliver 600,000 jobs this summer [13], through the $787 billion program — even as his financial advisors are trying to dial down expectations about how the stimulus will impact job losses. Associated Press.

After an appeals court upheld its plan to exit bankruptcy [14], Chrysler puts on the brakes, as pension funds asks the Supreme Court to block the Chrysler's sale to Fiat [15] - which would see it out of bankruptcy, and which the U.S. government as backed. BBC:

Fiat would control 20% of Chrysler, while 68% would be owned by a union trust, and the two governments would share 12%.

However, the pension funds, which hold about $42 million of Chrysler's $6.9 billion in secured loans, are opposed to the sale.

They say it inverts usual bankruptcy practice and unlawfully rewards unsecured creditors, such as the union, ahead of secured lenders.

The deal will go through Monday afternoon, unless the Supreme Court intervenes.

Will another CEO land in the unemployment line? Citigroup says nothing's in the works, and the FDIC won't comment, but word on the street is that Bair and the FDIC are looking to shake up Citi's top management [16]. Mr. Pandit, you're wanted in the boardroom... BusinessWeek [17]:

As the financial crisis has unfolded over the past 18 months, bank executives have come under fire from scores of angry government officials over their pay, poor management, lack of risk oversight, and downright greed. But few rifts have run as deep as the one between the Federal Deposit Insurance Corp.'s (FDIC) chairman, Sheila Bair, and embattled Citigroup CEO Vikram S. Pandit

On June 5, The Wall Street Journal reported that Bair's office has been maneuvering to oust top management at Citi, citing sources it did not identify. An FDIC spokesman on June 5 said the agency does not comment on "open, operating institutions."

Citigroup says that a management change is not imminent and that it will not comment on the FDIC's reported moves. Citigroup did release a statement from Richard D. Parsons, its board chairman, saying directors have confidence in management and its efforts to return to profitability. "We went through a rigorous stress test process, the results of which were agreed to by appropriate regulatory agencies and clearly reflect the significant progress made by this management team over the last 15 months to turn Citi around," Parsons said in the statement.

Pandit may not be the only CEO to come under government scrutiny. The New York Times reports that the Obama administration will require banks that have two rounds of federal bailouts to submit any major executive pay changes to a new government official [18] who will monitor compensation:

The proposal is part of a broad set of regulations on executive compensation expected to be announced by the administration as early as this week. Some of the rules are required by legislation enacted in the wake of the worst financial crisis since the Great Depression, and they would apply only to companies that received taxpayer money.

Others, which are being described as broad principles, would set standards that the government would like the entire financial industry to observe as banks and other companies compensate their highest-paid executives, though it is not clear how stringent regulators will make them.

Citigroup, Bank of America, the American International Group, General Motors and its finance arm, GMAC, which all received two taxpayer infusions, will face the strictest scrutiny from the new federal official charged with vetting compensation, Kenneth R. Feinberg. He is known for overseeing payouts to the families of the victims of the Sept. 11, 2001, attacks.

The threat or promise of government scrutiny has prompted some banks to attempt to return bailout funds [19]. And the administration is letting some do just that, while also warning that the move does not signal economic recovery. The Washington Post.

Selling Spector (Back) to Democrats

Arlen Specter is "proud to be a Democrat," again [20]. And, concerning EFCA, he told union members that he is " committed to find an answer which will satisfy you." USAToday:

At an AFL-CIO rally outside the hotel Saturday morning, Specter drew cheers and scattered catcalls when he told the crowd of more than 200 people that he is working with organized labor to try to reach a compromise on a bill that would make it easier for workers to form unions.

"I'm committed to find an answer which will satisfy you," he told the crowd.

Specter had publicly opposed the measure before switching to the Democratic Party in April.

Pennsylvania AFL-CIO President Bill George reminded the demonstrators that Specter has often been on their side on many issues important to labor.

"Over the years we've had our ups and downs with Arlen Specter, but I have to tell you, on a lot of bread and butter issues (important) to organized labor ... he was there," George said.

On both days, second-term U.S. Rep. Joe Sestak, who has said he is likely to challenge Specter for the nomination, quietly mingled with state committee members to make his case.

Specter may be "glad to be back," but Albert R. Hunt writes in the NY Times that Specter's switch isn't any more a harbinger of more party-switching to come than Democratic Senators jumped ship in the 1980s, but more like a sign of Specter's ability to read the writing on the wall:

Here was the reality: Mr. Specter's own calculations were that he would have lost a Republican primary against a conservative challenger he barely beat six years ago. If President Barack Obama's political team - the Senate campaign committee chairman, Robert Menendez of New Jersey, and Gov. Edward G. Rendell of Pennsylvania - had actively enlisted a solid Democratic candidate months ago, he or she would have been a prohibitive favorite to win a general election.

Instead, Mr. Specter may struggle in a bitter Democratic primary next year against Joe Sestak, a U.S. representative and retired navy admiral. If Mr. Specter wins, he'll be 80 years old, beset with health problems and, as always, politically cantankerous.

"The Democrats could have gotten a 100 percent Obama Democrat," said G. Terry Madonna, director of the Center for Politics and Public Affairs at Franklin & Marshall College in Lancaster, Pennsylvania. "Instead, they'll have a 50 percent Obama Democrat, which is the best Specter will be."

Speaking of Senate Democrats, it may finally be time to stick a fork in Norm Coleman [21]. He may finally be done, if not overdone. Politico: "Seven months after Minnesota's Senate election, the state's highest court hasn't reached a decision but election law experts agree: Norm Coleman doesn't have a prayer. ...Edward B. Foley, an election law expert at the Moritz College of Law at Ohio State University, agreed: 'Based on the questioning, I'd be surprised if Coleman got a remand back to the trial court.' ...He and other legal scholars interviewed by POLITICO said that that the facts were simply not on Coleman's side. Friedberg's task this week was to convince the justices of his contention that more than 4,000 additional absentee ballots should be included in the final vote tally because they had not been handled in the same way by every county."