Archive for the ‘Healthcare’ Category

Teddycare

Sunday, March 8th, 2015

Ted Cruz is trying to position himself for a run at the 2016 Republican nomination for President.

He has already endeared himself to the Tea Party based on his government shutdown strategy.

As with many who need to retain their conservative bona fides while attempting to appeal to a broader audience, Ted has a problem. His actions and words are often at odds with one another.

In an attempt to distance himself from the last Republican who ran for President, Ted said this at a recent Koch Brothers event.

The central narrative of the last election, what the voters heard was, ‘We don’t have to worry about the 47%.’ I think Republicans are and should be the party of the 47%.’

Just as a reminder, the 47% reference here was Romney’s description of those dependent on the government and, as a result, unlikely to vote for him.

Here’s what Ted has done to help the 47% over the last couple of years.

Government Shutdown
This was an effort to defund Obamacare which provides insurance for a large percentage of the 47%. The government shutdown took a $24B bite out of the ecomony and , according to Mark Zandi from Moody’s, slowed the recovery that we are now experiencing by at least two quarters. It also furloughed thousands of federal employees without pay, though they were eventually paid. Federal contractors also furloughed thousands of employees without pay. They never received their lost pay. Small businesses suffered delays in payments and frozen SBA loans which caused them to lay off workers too.

He later defended his action saying:

As a result of that fight, millions of Americans rose up and demanded we stop the disaster that is Obamacare. Together, we elevated the national debate. And now, the misguided healthcare law is more unpopular than ever.

Immigration Reform
Ted also opposes any immigration reform that would provide a pathway to citizenship. He supports deportation of Dreamers.

Minimum Wage
He opposes any increase in the minimum wage.

Each of these positions makes life for the 47% worse. So it does call into question how he plans to become a champion of the poor and middle class.

Now he wants us to believe that he can provide a reasonable alternative to Obamacare. He remains convinced that “every last word of Obamacare must be repealed”. His alternative is designed to address the 7.5M that could lose coverage if the Supreme Court strikes down subsidies for those who have purchased insurance through the federal website.

The administration has done absolutely nothing to prepare for an upcoming Supreme Court decision that could leave millions of Americans unable to afford insurance thanks to this failed law.

Republicans must offer the American people alternatives that lower costs and break the status quo that favors big government and big health care business over hardworking Americans.

Before we dig into this just a couple of points about how insurance works.

Insurance companies make money by spreading the risk of a claim over a large population of insurance customers. The larger to pool of people unlikely to make a claim, the lower the rates for everyone in the pool. Obamacare works because it adds WAY more healthy people to the insurance pool than sick people.

This “pool” business model also introduces a bit of counter intuition with regard to competition. The bigger the pool, the lower the cost. That means that competition actually increases insurance company costs because the pool now has to be split among competitive companies. The number of insurance companies that any particular state can support depends on that state’s population. Increasing the number of choices for consumers (by allowing buying outside state boundaries) will actually reduce the number of in-state choices consumers have, particularly in smaller population states.

Here are the major points of Teddycare.

Allow people to purchase health insurance across state lines
His claim along with other Republicans is that increased competition would lead to lower premiums. This is disputed by experts. That’s because the cost of insurance is driven by the cost of healthcare, and not the marginal costs to operate their companies.

Eliminating state boundaries will return us to a world where healthy people can get very cheap insurance that they never use and ill people, if they can find insurance, won’t be able to afford it.

Insurance is regulated on a state by state basis rather than nationally. Allowing consumer to buy insurance from any state they choose will encourage at least some states to compete for that business by weakening their regulations. We’ve seen the same thing in credit cards where most companies are headquartered in Delaware or South Dakota where consumer protection laws are weak.

Repeal the individual mandate
Obamacare was able to implement requirements to insure everyone (healthy or sick) by requiring everyone (healthy or sick) to purchase insurance. This increases the pool of healthy people enough to actually offset the costs to offer the same plans to sick people. The result that we’ve seen is that the the rate of premium increases we saw before Obamacare have now slowed.

Eliminate the marketplaces
This reduces the ability for consumers to easily shop for plans on an apples to apples basis. Plans are complicated and even with the requirements that a marketplace impose, comparisons are still difficult. Remove the marketplace and very few consumers will be able to make informed decisions. They will instead have to return to insurance brokers who will help drive the cost of insurance up.

Remove the subsidies
Subsidies also widen the pool and make sure that care is being provided at the lowest cost location, a physician’s office rather than the highest cost location, the ER.

Eliminate protections against pre-existing conditions
Insurance companies will simply refuse to offer coverage to the very sick. The very sick will exhaust their own resources, declare bankruptcy and qualify for Medicaid. Tax payers foot the bill.

Eliminate parents’ ability to carry their kids on their insurance until age 26
Kids who age out of their parents’ plans will simply not purchase insurance. Rates go up because the pool is less healthy

Allow insurance companies to cap lifetime benefits
For the first time in our history, bankruptcies because of medical costs went down in this country because of Obamacare. This will cause them to go back up again.

Ted Cruz isn’t offering an alternative to Obamacare. He is simply returning us to the insurance system that existed before Obamacare. This was the system that was failing the 47% and threatening to bankrupt the country with out of control increases in healthcare costs. This was the system that left many people one serious illness or accident away from financial ruin. This was the system where the most vulnerable in our society had the least protection. This was the system where tax payers where forced to carry the burden for 30M uninsured.

I doubt that this will ever be introduced as a piece of legislation because it then can be scored by the CBO. That will reveal it as the fraud that it really is.

That does seem about right for the party that wants to “lower costs” for “hardworking Americans”. That’s really the code word here. We’re not talking about the 47% anymore. We’re talking about the 85% who have insurance and have been brainwashed into believing that extending care to another 27M people must be costing them something.

That’s what Teddycare is all about, fear mongering and Big Lies. One thing you CAN say about Ted Cruz, he is consistent.

More Paul Ryan Hypocricy

Thursday, March 5th, 2015

The Affordable Care Act is before the Supreme Court again.

The reason is that a particular part of the law was written in an ambiguous way. An opponent to the ACA found this ambiguity about a year after the healthcare law actually rolled out, or almost four years after the law was actually published.

This ambiguity involved federal subsidies promised to those who purchase through through the state exchanges. The law also allows states the option of setting up their own exchange or using healthcare.gov. This particular set of language, however, says that federal subsidies for those who can’t afford to pay the full cost of healthcare coverage will flow to those who purchased their insurance through a state exchange. It makes no mention of subsidizing those who purchased their insurance through the federal exchange. When the law was written, the expectation of the authors was that every state would set up their own exchange. Most republican states, however, opted for the federal government to run their exchange.

The result is a law suit suggesting that those who are implementing the law have overstepped the provisions of the law by providing federal insurance subsidies to everyone who qualifies even if they purchased their insurance through the federal website.

This raises the real possibility that if the Supreme Court upholds the literal interpretation of this law, millions of people will lose the government subsidies they require to be able to afford purchasing insurance.

So what happens to them?

Fortunately the Republicans in the person of Paul Ryan, have offered to come to their rescue.

House Republicans have formed a working group to propose a way out for the affected states if the court rules against the administration.

This statement is particularly interesting because it is not the first time that Republicans in general, and Paul Ryan in particular have promised to develop something to replace Obamacare. So far, however, they have only formally proposed one alternative in 2009. When that was scored by the CBO, it cost $30B more than Obamacare and covered less than 10% of the population covered by Obamacare. In the five years since, the House has voted to repeal Obamacare 67 times without any serious alternative.

That didn’t stop Paul Ryan and the Republican party from claiming that they were working on an alternative in part to reassure those who were concerned that they would be left with nothing if the Republicans were successful. Here’s what he said January 20, 2011 in the lead up to the 2012 campaign.

We will hold hearings in Washington and around the country. We will invite affected individuals and job creators to share their stories and solutions. We will look to the Constitution and common sense to guide legislation.

Replacing this law is a policy and a moral imperative. We reject the premise that the only way to improve access to quality coverage is to dramatically expand the federal government’s reach into our lives. On the contrary, we are dedicated to solving the underlying problems in health care by prioritizing affordability, improving transparency, and creating a true, functioning marketplace for health insurance.

No hearings were ever held.

Ryan then spent a year campaigning on the subject with Mitt Romney promising to “repeal and replace Obamacare.”

They talked a lot about the repeal. They never provided any details on the “replace”.

In the meantime, Philip Klein of the right wing Washington Examiner rag has made a career out of proposing alternatives to Obamacare. He wrote an entire book on the subject that was published earlier this year.

Why haven’t they provided their own alternative? Because there isn’t another alternative that is cheaper and free of the same political tradeoffs that are present in Obamacare. Any plan that Republicans might choose to present will either cover fewer people, cost the government more money, and/or cost policy holders more money.

Republicans decided five years ago that they did not have to engage in a debate about the best healthcare policy for this country. They only had to regularly lie about how terrible it is and that a vote for them was a vote for Obamacare repeal.

While that, and gerrymandering, may be sufficient to keep House Republicans in power, it will not be enough to win them the White House, and may not be enough for them to keep their slim majority in the Senate.

But House Republicans don’t seem to care about much about governing anyway, so it is unlikely that we will see much change in this particular deception.

Over the next several months we’re likely to see some additional promises from Republicans with an eye on 2016. We’ll review each of those proposals as they are presented to see how they measure up. Ted Cruz’s Teddycare is the first in that series.

Riding the Ted Cruz Crazy Train

Friday, November 28th, 2014

I heard Ted Cruz on NPR the other evening talking about Net Neutrality. He had a “wonderland” approach to the issue that made my head spin. I thought it would be fun to review his positions on a number of other issues.

First, we should state for the record that Ted Cruz is running for President in 2016. At the point that he formally announces his intensions, he will have been in the Senate for 4 years. If you doubt that claim, he’s what one of his advisors says.

“At this point it’s 90/10 he’s in,” one Cruz adviser said. “And honestly, 90 is lowballing it.”

Cruz has quickly displaced Paul Ryan as the hero of the Tea Party movement. In part that was because Ryan disagreed with Cruz about the government shutdown strategy. In part, it is because Ryan has deliberately distanced himself from the Tea Party.

So let’s go down through the list.

Net Neutrality
By way of full disclosure, Ted Cruz gets significant funding from those who would stand to gain if Net Neutrality rules are not passed.

The basic issue is not legality. The government does have the legal right to regulate the companies who provide Internet service under a law originally passed to regulate telephone service. Companies that provide internet service can charge a premium for people who want faster connections TO the Internet. Just like phone service, however, once you are connected, what comes through that connection is the same whether the “call” is from Amazon or your significant other.

Cable companies oppose regulation. They want an Internet where they can price content delivery in the same way that they price user connections. Big content companies like NetFlix are willing to pay a premium to get their content delivered faster than everyone else. The specific issue, however, is that since everything is delivered at the same speed now, the only way to create a new faster speed, is to slow down those who don’t pay.

Cruz, however, chooses to describe this as a government takeover of the Internet and wraps himself in the sheep’s clothing of champion of the little guy.

I promise the regulations over and over and over again will favor the big guys that have armies of lobbyists in there and will end up putting more burdens on the startups and the entrepreneurs.

The problem with this claim is that the “little guys” want this law. They see government as their defender from the folks who support Cruz.

Julie Samuels is the director of Engine Advocacy which represents about 500 startups and small companies, including Etsy and Kickstarter. She says the biggest Internet companies can afford to pay more for faster access to their customers.

SAMUELS: They can afford to pay Verizon or Comcast or Time Warner more, even if it sucks for them. But let me tell who can’t afford that. That’s the small companies and the startups and the ones who are just trying to get out there and reach consumers and reach users.

Politifact labels Cruz’s claim of a government takeover as false.

Obamacare
Senator Cruz claimed a mandate from the 2014 elections to repeal Obamacare.

the American people overwhelmingly said we don’t want Obamacare. It’s a disaster. It’s hurting the American people.

The facts, however, don’t line up with his claims. Only 37% of those eligible to vote, actually voted. That electorate was more heavily Republican than national elections. But even with that built-in bias, exit polls showed that only 49% thought the law “went too far” – hardly “overwhelming” opposition.

Politifact labled this claim “False”.

How about the claim that the Affordable Care Act is “hurting” the American people?

“Virtually every person across this country has seen premiums going up and up and up” due to Obamacare. – Ted Cruz

The rate of premium increases has gone down nationally from over 10% to 8%.

Politifact labeled Cruz’s claim “False”

Here are a few other facts which contradict Cruz’s claim that the ACA has been a “disaster”.

  • The uninsured rate has gone down from 18% to 13%
  • Medicare trustees have said that the ACA extended Medicare’s fiscal solvency four years.
  • The death spiral that Cruz predicted failed to materialize because healthy people did sign up
  • The ACA has had a positive impact on the deficit as predicted by the CBO
  • Immigration
    Cruz has also made his immigration stance clear.

    This was a referendum on amnesty…. we don’t want amnesty. And I’m sorry to say the president is behaving in an unprecedented way. There is not in recent times any parallel for a president repudiated by the voters standing up and essentially telling the voters go jump in a lake, he’s going to force his powers.

    In those same exit polls in an election already biased in a Republican direction, 57% supported a path to a legal status for illegal immigrants. Only 39% supported deportation. Cruz was overstating his support here too.

    He also said, Barack Obama “is the first president we’ve ever had who thinks he can choose which laws to enforce and which laws to ignore.”

    Politifact found this Cruz claim false too.

    As far as his claim that the President was telling voters to “jump in the lake”, he was doing exactly the opposite. They supported his action.

    Eminent Domain and Keystone
    Cruz is a big supporter of the Keystone pipeline and also a big defender of personal property rights. By way of disclosure, he also has received over $2M in campaign financing from the fossil fuel industry.

    My view of eminent domain is that it should be limited with regard to the constitution and the fifth amendment of the constitution that provides that it can only be used for public use.

    And

    I am disturbed by eminent domain abuse, because I think private property rights are fundamental to who we are as Americans… I don’t we should be helping out private interests,

    Eminent domain is the core issue with the Keystone Pipeline that is currently in the Nebraska Supreme Court.

    The landowner’s legal challenge cites the use of eminent domain as a major point in their opposition to the project. Previously the elected Public Service Commission had the authority to give utilities or other ‘common carriers’ like railroads to use eminent domain to construct projects that benefited the community.

    So how did Cruz react to the question of eminent domain being used to promote the private interests of TransCanada Corp?

    The problem with the Keystone Pipeline isn’t the issue of Eminent Domain, the problem is the Obama administration with the stroke of a pen shut that project down.

    I could go on, but I think you are getting the picture.

    There is a pattern here.

    Ted Cruz claims to be a champion of “common sense principles – small business, small towns” yet his actions on things like the Affordable Care Act, Net Neutrality, Immigration, and eminent domain directly contradict those principles.

    And it’s not just those issues. It is every issue on which he engages. If you doubt that claim, here’s a list of every issue covered by Politifact and their ruling on those issues.

    Over his last two years in the senate, he has been completely honest just once. Two thirds of the time that he opens his mouth on public issues, he is telling lies.

      True (3%)(1)
      Mostly True (13%)(5)
      Half True (18%)(7)
      Mostly False (23%)(9)
      False (33%)(13)
      Pants on Fire (10%)(4)

    Just by means of comparison for those who think I’m picking on conservatives, here’s the same list for President Obama. He’s clearly told some lies too, but over a much longer time in office with much higher visibility, he has flipped the script on Cruz. Obama has told the truth three times out of four.

    I would not hold this up for a standard either. That’s not the point. The point is that conservatives like Ted Cruz and those that support him vilify President Obama as the worst president ever BECAUSE in part of the lies that he has told. The reality, at least from an objective point of view, is that those who support Ted Cruz fail to apply the same standard of accountability to him that they use for the President. That’s the reason the Ted Cruz can get away with it.

      True (21%)(115)
      Mostly True (25%)(132)
      Half True (27%)(147)
      Mostly False (12%)(63)
      False (13%)(70)
      Pants on Fire (2%)(9)

    Much like the Tea Party he claims to represent, Ted Cruz is a walking contradiction. He thrives on the “straw man” argument where he constructs his own version of reality and then knocks it down with his “common sense” approach. The reality is that he is not the principled person he claims. He is instead just another opportunist taking advantage of dog whistle political issues. He acquires power from the support of those whose bias have left them vulnerable to exploitation. He brokers that power for money from the corporations who are really setting Senator Cruz’s agenda.

    The primary agenda of these interests is to render government incapable of filling its role as a balance to the expansion of corporate power. In that role, Ted Cruz has been a superstar.

    Republican Masquerade

    Thursday, November 6th, 2014

    It appears that the Republican strategy of obstruction has finally paid off.

    The media narrative prior to the elections was all about Obama’s historically low approval ratings. There were only two other president’s in recent history with lower approval ratings at this point in their Presidency – Reagan and Bush II. Both of them also lost control of congress in their 6th year in office.

    What the media didn’t say was that Congressional approval ratings were at RECORD low levels – 12.7% with a disapproval rating above 80%.

    Roughly 30% more of the country approved the job that Obama is doing than approved the job that Congress is doing.

    Yet, even though Congress was up for re-election, Republicans successfully made Obama the focus of their campaign – again.

    How did that happen?

    I think that there were three inter-related forces at work.

    First is simple math. There were more Democratic seats in play in states that Romney won in 2012 than Republican seats in states that Obama won.

    Second, the coalition that elected Obama in 2012 did not turn out the in same numbers in 2014.

    Third, Democrats in close races ran away from Obama and his policies. Republicans in those same states ran away from the Tea Party.

    Here’s how all of that played out.

    Simple math convinced Obama and the Democratic Party to play small ball. Rather than allow this to become the same referendum on Obama’s policies that has occurred in every federal election since 2008, the Democrats in battleground states tried to make this about local issues. They were so terrified of Republicans waving the “Obama” flag that they simply tried to change the subject. Rather than provide voters the “red meat” debate on principles that they were asking for, the Democratic Party served a selection of small issue hors d’oeuvres. The voters rejected this tactic and the Democrats lost.

    Instead of talking about Medicaid expansion, minimum wage, or meaningful gun control, red state Democrats tried to paint their Republican candidates with the banner of Tea Party extremism. They talked about gridlock, failure to invest in the middle class, and accountability for things like the government shutdown. The problem is that midterm elections are generally about paycheck issues and none of those issues resonated.

    The Democratic base IS traditionally difficult to turn out in non-Presidential years. If you want them to come to the polls, you have to give them a reason. That reason could have been a full throated defense of progressive principles. It could have been an appeal to all of those people who HAVE benefited from Obamacare. That would have required their Republican opponent to explain to all those who have gained coverage under Obamacare, what would happen to their coverage if a Republican got elected. Even Mitch McConnell, who vowed to uproot Obamacare “root and branch”, was forced to admit that Kynect, Kentucky’s implementation could stay because it is very popular with Kentucky voters. The Washington Post fact checkers said,

    Ultimately, then, McConnell’s statements make little sense unless he has a specific plan that would allow Kentuckians who currently have insurance to retain it. He relies on narrow technical details that have a ring of truth—the grants for the Web site have ended; the Kynect Web site could continue; Medicaid expansion was a decision by the governor. But he leaves the big picture—What is his replacement plan?—completely empty.

    Thus his statements are a bit slick and misleading. If he wants to rip out Obamacare “root and branch,” then he has to explain what he would plant in the health-insurance garden instead. Otherwise his assurances on the future have little credibility. He earns Three Pinocchios.

    Because his opponent Allison Grimes failed to engage on principles, defend Obama, and defend Obamacare – she had little standing to call him on this lie. Instead she tried to portray herself as more of a Kentuckian that McConnell. She lost.

    It could have been a discussion of how Republican obstructionism has slowed economic growth and damaged the middle class. Instead of portraying themselves as staunch defenders of the poor and middle class, many of the Democratic candidates talked about their willingness to make deals.

    Just to make sure they got elected, Republicans ran just as hard away from the Tea Party and toward the center. Here are some examples.

    57% of Arkansas voters supported Republican Tom Cotton for Senate, but 69% supported an increase in minimum wage which Cotton also supported. Same thing in South Dakota and Nebraska.

    Colorado defeated a “personhood” ballot proposal and elected Republican Cory Gardner to the Senate. Gardner had supported personhood legislation in the past, but in this close election said he had changed his mind and also supported over-the-counter birth control. He narrowly defeated incumbent Mark Udall who tried to make women’s issues the centerpiece of his campaign.

    The final results aren’t in from Alaska, but there was a minimum wage measure on the ballot there too. Republican Senate candidate Dan Sullivan had opposed raising the minimum wage, but changed his position in this campaign.

    Republican candidates in Georgia and Virginia criticized high poverty rates. The victorious Republican candidate for Governor in Georgia ran in part on his accomplishments in reducing the number of incarcerated black men in Georgia. Victorious Republican Senate candidate James Lankford in Oklahoma railed against income inequality, as did the Republican senate candidate in Louisiana. The new Republican governor in Illinois said taxes should target businesses rather than “low-income working families”.

    Republicans, at least in part, won by distancing themselves from more radical positions associated with the Tea Party. They not only masqueraded as moderates, they openly embraced traditional Democratic positions that would have been heresy in 2010. And they won.

    This great irony was pointed out by Sally Kohn in the Daily Beast.

    Republicans ran as Democrats—and voters endorsed Democratic ideals both in voting for those masquerading Republicans, and in backing liberal ballot measures. For progressives, that—plus the fact that, thanks to these ballot measures, thousands of hard-working Americans are going to get a much needed basic raise—is about as silver as the lining on this election is going to get.

    7M votes for Obamacare

    Saturday, April 5th, 2014

    The Obamacare deadline has come and gone and guess what? 7M+ people signed up. Exactly what the CBO projected. That also means the CBO projection of $118B in deficit reduction gains credibility.

    In spite of four years of Republican lies, fear, uncertainty, and doubt; people still signed up. In spite of self-inflicted wounds from a fumbled website launch; people still signed up. 7M people signed up even though 26 Republican states refused to expand Medicaid and Michigan signup just started. People need affordable healthcare.

    Those opposed will continue to deny the facts in hopes that they can win another election, but the actions of 7M can’t be ignored. New Washington Post polls show ACA approval has rebounded. It is now 49% compared to 48% opposed. The fastest growing segment of that support? Self-described conservatives whose support rose from 17% to 39%.

    The ACA does two basic things. It improves financial security through affordable medical insurance. It also transforms healthcare through a combination of reduced cost and increased value.

    MANY previously uninsured people now have coverage because of ACA. Those include kids up to 26 and those living in states where Medicaid was expanded. Even those with canceled policies got new often better insurance – many through the same carriers and often for less net cost.

    How are Republican’s reacting to those numbers? The New Republic’s Jonathan Cohn summarizes: “(Republicans) are doing what they almost always do when data confounds their previously held beliefs. They are challenging the statistics — primarily by suggesting that most of the people getting insurance already had coverage. Some, like Sen. John Barrasso of Wyoming, say the administration is ‘cook­ing the books.’ Others, like Sen. Ted Cruz, say that the number of people without insurance is actu­ally rising.”

    As we’ve previously discussed, determining the number of uninsured is a challenge because the numbers have to come from a lot of different sources. Also even the definition is difficult because someone may be uninsured for a month as they transition from one policy to another. Best estimates, however, show the uninsured rate has dropped from an estimated 20.9 percent to 16.6 percent in the law’s first year — hardly the sudden revolution in American health care some dreamed of, but a creditable start.

    There are certainly some whose premiums went up or didn’t have access to the same physicians or hospitals that they had before. Taxes on the wealthy also went up. While we don’t know the numbers yet, it is pretty good bet that those who have benefited will vastly outnumber those who didn’t. That may be why, according to fact-checkers, the Koch-funded Americans for Prosperity ads failed to document even one honest case of ACA harm. The most recent ad running here in Michigan continues that tradition.

    Conservatives argue that the tradeoffs in the ACA are not worth it. House Republicans voted for repeals over 50 times. They even shut down the government. But they failed to pass even one alternative bill that comes close to ACA’s increased coverage. Rather than engage in tradeoff debate, conservatives cling to the fantasy that our healthcare system is the best in the world and those that can’t afford insurance should just use the emergency room. In fact, we do lead the world in the amount of money we spend on healthcare, but we are 35th in the results we get for that money. And ER care? It is 100x more expensive than a doctor’s office visit.

    So where does that leave us?

    Republicans will run against Obamacare again in 2014, but by November the outrage that conservatives feel may largely be old news to the rest of the electorate. By then another 2M people will have signed up through Medicaid in states like Michigan. They will join the 4.5M that have been enrolled by states that expanded Medicaid, and the 3M kids who are insured on their parents’ plans – all because of ACA.

    Even if the Republicans take over the Senate in 2014, they won’t gain a veto proof majority. So the next opportunity to repeal this law will be in 2016 and will require that the Republicans either have veto proof majorities in the House and Senate, or win the White House and have functional majorities in the House and Senate. By 2017 the CBO projects that the laws benefits will extend to 36M people. It’s going to be A LOT harder to make the case to those folks that they should vote for someone who wants to take their insurance away.

    “Wherever they go and whatever they do,” writes Ross Douthat in the New York Times, conservatives “will have to deal with the reality that Obamacare, thrice-buried, looks very much alive.”

    Big Lies and Big Tobacco

    Saturday, November 23rd, 2013

    I am a big believer in democracy. What often baffles me though, is why we go through periods of time when a large number of people believe things that aren’t true.

    I can appreciate how people might have believed that the world was flat, because until people were able to sail around it, astronomers where the only people with personal experience to dispute what the senses told us. Very few people could actually read and fewer still had access to a telescope.

    But science and the personal experiences of sailors soon convinced everyone else that the world was in fact round and orbited around the sun. Those who continued to dispute that fact were ridiculed.

    That’s not the case today. Information is widely available. Most people, at least in this country can read. And most people in this country get a basic education that includes mathematics and science. Yet we seem to be living in age when facts are optional and science is relative.

    What happened?

    I believe that it has a lot to do with politics and in particular the strategy called the Big Lie.

    John Boehner’s quote about the US health system being the best in the world is an example of the Big Lie. It works because those who already agree with his position that Obamacare is ruining the country will accept also accept this lie without question. It also works for those who inherently fear change, because Obamacare is all about change. Finally it works because those who stand to lose money or power as Obamacare rolls out are happy to support the claim that the current system is a better choice.

    It didn’t use to be this way though. In the 50’s when the John Birch Society claimed that Eisenhower was a communist agent, the vast majority of the country just laughed. Now when the Tea Party (direct decedents of the Birchers) claimed that Barack Obama was born in Kenya – almost half the Republican Party agreed with them.

    This is going to take a couple of posts to work through, but I think the train started to jump the track, in terms of these Big Lies, when tobacco companies realized two things – their products were killing people and if voters found out, they were out of business.

    Background

    Excerpts from a Stanford study by historian Robert Proctor

    Cigarettes are “the deadliest artifact in the history of civilization” – more than bullets, more than atom bombs, more than traffic accidents or wars or heroin addiction combined. They are also among “the most carefully and most craftily devised small objects on the planet.”

    “The industry has spent tens of billions designing cigarettes since the 1940s – that’s from the industry’s own documents,” he said.

    The cigarette represents the perfect business model. “It costs a penny to make. Sell it for a dollar. It’s addictive,” says investment guru Warren Buffett. Proctor notes that “by artfully crafting its physical character and chemistry, industry scientists have managed to create an optimally addictive drug delivery device, one that virtually sells itself.”

    Operation Berkshire

    In 1977 the CEO’s of all of the major tobacco companies met in secret in the UK to “develop a defensive smoking and health strategy, to avoid our countries and/or companies being picked off one by one, with a resultant domino effect.” They created a front organization first called International Committee on Smoking Issues (ICOSI) (renamed the International Tobacco Information Centre, INFOTAB, in 1981), to prevent efforts to reduce smoking. That included not only identifying opposition, but promoting research supporting their position, and rebutting the claims of research opposing their position. This organization, code named Operation Berkshire, continued to operate in secret for twenty years. In 1998 as part of a Master Settlement Agreement between tobacco companies and states attorney generals the activities of this organization came to light.

    The plan formed when major tobacco companies met together to form a unified defense against anti-smoking legislation. They agreed that they would not voluntarily make certain concessions about smoking and, if legislation was passed to force them, they would agree to sue. In particular, they decided that they would not concede the point that smoking has adverse health effects and would instead attempt to create controversy, lest they be held legally liable for the deaths of smokers. They also formulated coordinated activities to promote the social acceptability of smoking.

    Similar behavior was demonstrated by the top seven biggest U.S. tobacco company CEOs, dubbed the “seven dwarfs”, testifying together before the U.S. Congress during a hearing on the regulation of tobacco products on April 14, 1994, in which they collectively denied, under oath, the addictive nature of nicotine, despite at least one published New York Times report at the time claiming that it has the ability to be more addictive than heroin, cocaine or amphetamines.

    Here are some of the strategies described in the documents shared with the courts.

    Partners in Crime

    Co-operation between the manufacturers of tobacco and candy cigarettes to effectively promote smoking in children is described by Klein and St Clair. They show that some tobacco companies granted confectioners permission to use cigarette pack designs, tolerated trademark infringement and suppressed research showing the potentially harmful effects of candy cigarettes in promoting smoking to children.

    Astroturfing

    This is the process of creating fake grass roots organizations to suggest that a particular political position has strong support among the people.

    As health advocates began winning legislation to raise taxes and increase regulation of smoking in the US, Philip Morris, Burson-Marsteller and other tobacco interests created the National Smokers Alliance (NSA) in 1993. The NSA and other tobacco interests initiated an aggressive public relations campaign from 1994 to 1999 in an effort to exaggerate the appearance of grassroots support for smoker’s rights. According to an article in the Journal of Health Communication, the NSA had mixed success at defeating bills that were damaging revenues of tobacco interests.

    Junk Science

    A small group of retired cold-war libertarian nuclear physicists pioneered the political use of junk science. They developed their techniques in defense Reagan’s seriously looney Strategic Defense Initiative. Their techniques included demanding equal air-time in the media every time a mainstream physicist or engineer criticized SDI. They also published fear mongering articles in conservative publications suggesting that within 5 years the US would suffer an ICBM nuclear attack. As a result of their success, several including Fredrick Seitz were hired by RJ Reynolds. They perfected their doubt-mongering strategy defending smoking. They insisted that the science was unsettled and therefore that it was always premature for the US government to act to control tobacco use.

    As one tobacco company memo noted: “Doubt is our product since it is the best means of competing with the “body of fact” that exists in the mind of the general public. It is also the means of establishing a controversy.”

    Lobbying

    “My own view is that in many ways, the tobacco industry invented the kind of special-interest lobbying that has become so characteristic of the late 20th- and earlier 21st-century American politics,” said Allan Brandt, dean of Harvard’s Graduate School of Arts and Sciences.

    Tobacco companies not only spent boatloads of money supporting politicians. They also sponsored game shows, cartoons, and sports. They hired celebrities, dentists, and doctors to endorse their products.

    Altria (Phillip Morris) has spent more money since 1998 lobbying Congress than any other single business. In 1998 the Tobacco industry spent $125M lobbying for the defeat of the McCain Tobacco Control Bill.

    Conclusion

    The result of this campaign is that the rate of smoking in the US did not start to decline until 1985. It was as high as 45% in 1955. It is now at 19%. 2011 was the first time a majority of people supported banning smoking in public places.

    In 2013, tobacco is still the leading cause of preventable death in this country. Tobacco kills more people than AIDS, Alcohol, car accidents, illegal drugs, murders and suicides combines. The 400,000 people who die and the 8.6M more who are ill cost the US $96B in healthcare costs and $97B in lost productivity.

    But the tobacco industry was able to continue to produce and sell its products for decades AFTER the Surgeon General’s first report that smoking caused disease. Millions of people died. Several Trillion dollars were spent caring for those whom these companies killed. And they are still killing people today even though, at least in this country, their activities are severely limited.

    That’s how effective their strategies have been.

    These strategies are part of the reason why the Tea Party and movement conservatism exists today.

    Next up, how some of those who learned these skills working for Big Tobacco, used them on behalf of the conservative political movement.

    Big Republican Lie: The Best Health Care Delivery System in the World

    Friday, November 15th, 2013

    When the Son of man shall come in his glory, and all the holy angels with him, then shall he sit upon the throne of his glory: And before him shall be gathered all nations: and he shall separate them one from another, as a shepherd divideth his sheep from the goats: And he shall set the sheep on his right hand, but the goats on the left. Matt 25:31-33

    Republicans have been trying to focus a lot of attention on President Obama’s promise to the American people. That promise was that under the Affordable Care Act, if you liked your current insurance you could keep it.

    What has been lost in this conversation, however, are the bigger lies that Republicans have been telling since they decided to “bet the farm” on repealing this law.

    It is true that healthcare.gov has problems.

    It is also true that as many as 5M people who purchase their insurance on the open market may have received cancelation notices from their insurance provider because their plans were not compliant with the minimum requirements under the ACA.

    Both of those things can be fixed. But Republicans don’t want to fix Obamacare. They want to repeal it. The reason they want to repeal it is because weakens their POLITICAL position. If it DOES ultimately deliver healthcare coverage to 20M people who can’t currently afford to purchase insurance on their own, those people will punish any future candidate or party who proposes to take it away.

    Republicans also don’t want to offer an alternative BECAUSE they also know that it will NOT compare well to what already exists with Obamacare. The last time they tried in 2009, their alternative proposal covered 17M FEWER people and cost $36B more.

    Instead, in order to leverage their political position that Obamacare should be repealed, they ALSO have to argue that the current healthcare system is just fine. That way they can also claim that Obamacare is making things worse, rather than making them better.

    This argument has two added benefits. It appeals to those who fear change. They get to hear Republicans tell them that this particular change is unnecessary. And it appeals to those who make more money under the current system than they would under the new system. Their motivations are obvious.

    So that’s why John Boehner, criticizing Obamacare, said yesterday, “This is going to destroy the best health care delivery system in the world,”

    This is a BIG LIE. Easily on the same scale of “If you like your insurance you can keep it”.

    Here’s why.

    We DON’T have the best healthcare delivery system in world. Not even close.

    What we DO have is the most EXPENSIVE and INEFFICIENT healthcare delivery system in the world.

    Here is the proof with excerpts from NBC News.

    Two studies out this week — and studies going back 15 years or longer — show quite the opposite. Americans pay more per capita for health care than people in any other industrialized country. In return, we are sicker, die younger and are unhappier with the system.

    According to the Commonwealth Fund Study, healthcare costs $8,508 a head in the US, compared to $5,669 per person in Norway and $5,643 in Switzerland, the next-highest-spending countries. New Zealanders spend just $3,182 per person. If we were getting better outcomes than everyone else, perhaps you can justify it, but we aren’t. The U.S. has the eighth-lowest life expectancy in the Organization for Economic Co-operation and Development, which groups developed nations.

    The reason is simple. Too few people have access to healthcare services, particularly the sorts of services that can prevent the onset of expensive chronic conditions like diabetes and heart disease.

    Access

    In the latest survey of more than 20,000 people from Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, Britain and the U.S., Commonwealth researchers found that 37 percent of Americans went without recommended care, did not see a doctor when sick, or failed to fill prescriptions because of costs, compared to as few as 4 percent to 6 percent in Britain and Sweden.

    Cost

    And 23 percent of U.S. adults either had serious problems paying medical bills or were unable to pay them, compared to fewer than 13 percent of adults in France and 6 percent or fewer in Britain, Sweden, and Norway, Commonwealth reported Wednesday in the journal Health Affairs.

    The #1 cause of bankruptcies in this country (62%) is medical expenses. What’s worse, 78% of those filing for bankruptcy because of medical bills HAD some form of health insurance. In Europe the #1 cause of bankruptcy is living beyond your means or job loss.

    Obamacare deals with the bankruptcy issue by putting annual and lifetime caps on medical expenses. This is one of several requirements that add cost to individual policies particularly for the young, healthy, and well off. But it also caps the premium cost to 8% of income, so those of more modest means can still afford to purchase insurance with some government help.

    Satisfaction

    75% of Americans polled said that our healthcare system needs fundamental changes or just rebuilt. Compare that to 50% or more of the Dutch, Swedes, and even Brits who are happy with their system.

    Contrary to Republican claims, US patients wait longer to see a primary care physician than any other major industrialized country except Canada. That’s one of the reasons why we treat more people in our emergency rooms than any other country.

    Waste

    Even the U.S. Institute of Medicine says U.S. health care is a mess, with tens of thousands of Americans dying from medical errors and drug overdoses, and with the system wasting $750 billion in 2009.

    Lifespan

    While lifespans in all industrialized countries are increasing, US lifespans are not increasing as fast as European countries. Also there are huge regional differences in this country with poor Republican southern states lagging behind populous Democratic northern states.

    Conclusion

    This information is not new news to Republicans. They have described the growth in Medicare costs as a ticking time bomb. It’s ticking because until recently the cost of healthcare was growing at a rate 2-4 times GDP. Clearly that is unsustainable.

    The Republican solution was to force seniors to pay more of the cost increase themselves. That is also unsustainable.

    Obama’s solution is to restructure the way that healthcare is delivered in this country as a first step to bending the curve of healthcare cost. If we increase the number of people who can afford to visit their primary care physician where preventative care is practiced, we will reduce or at least delay the onset of chronic conditions like diabetes and heart disease which account for 80% of our costs. If we change the business model from transactions to outcomes, we have hope of physicians and their patients becoming aligned with the goal of better health rather than just treatment of disease. Finally, under Obamacare, the government is taking a more active role in regulating insurance companies. That has to expand to controlling costs particularly of pharmaceuticals.

    And that’s the other basic problem. Restructuring 17% of the economy is going to create economic winners and losers. Those who feel that they are going to lose under the new system are pouring money into the campaign chests of Republicans. That money is being used to mount a cynical campaign of misinformation that easily rivals the worst of the tobacco industry.

    Republicans know that the current system is unsustainable too. But they are more concerned with the precarious political position that they are in. They would prefer to preserve the current system that is bankrupting and ultimately killing innocent people, if that means that they can expand their political power.

    There is a day of judgment coming though. Hopefully that day will come sooner rather than later. When it does, the goats will be separated from the sheep. The liars from the innocent. The punishment will be awesome, swift, and appropriate to the offense.

    More Healthcare Myths

    Thursday, November 14th, 2013

    We already have a pretty good case for healthcare reform. Under our old employer-based insurance system, the cost to provide healthcare to those who need it was growing at two to three times the rate of GDP.

    That’s clearly unsustainable.

    So we are faced with a couple of choices.

    Before we discuss those choices, let’s first look at what other countries around the world have chosen to do.

    The vast majority provide some form of universal healthcare to whomever needs it whether they are citizens, immigrants, or tourists.

    That clearly isn’t the only choice, but it is a choice that most of our global competitors have chosen and almost all of them have demonstrated that their versions of universal healthcare deliver better outcomes at lower costs than we do.

    We are #1 in costs and % of GDP, but we are 35th or so in outcomes.

    That’s because in part we have a lot of people who depend on care through the emergency room rather than primary or preventative care. Some have suggested that we just turn away those who can’t afford to pay for their own care. That opinion has deep ethical issues for a country so steeped in Christian values, but it isn’t a good economic or political solution either.

    It’s not a good economic model because our growth depends on how effective we are at leveraging our basic assets which are capital, infrastructure, and people. If we commit to a path where only rich people are healthy, then we will have an economy where a significant portion of our consumers can only buy the bare necessities of life because they are too ill to either improve their skills or work at better paying jobs. We will, in effect, be trying to compete with other countries with one hand tied behind our back. That’s because their health systems allows a higher percentage of their population to be economically productive than we do.

    It’s not a good model politically either. Building a permanent underclass that has a significantly compromised quality of life both in terms of income and health is going to have serious political repercussions in a country that calls itself a democracy. The ultimate political outcome of this model has been the grist for science fiction writers for decades.

    Some have also suggested that our cost differential is because of an aging population, but that turns out not to be the case. The population across the world is aging, but our costs are growing much faster than any of our competitors. According to a recently released study most of the money in this country is being spent on people UNDER 65 with chronic conditions like diabetes and heart disease.

    “In 2011, chronic illnesses account for 84 percent of costs overall among the entire population, not only of the elderly. Chronic illness among individuals younger than 65 years accounts for 67 percent of spending,” they found.

    “Price of professional services, drugs and devices, and administrative costs, not demand for services or aging of the population, produced 91 percent of cost increases since 2000.”

    When you dig into the numbers of what is really driving cost in the healthcare system today, another dramatic reality emerges.

    The reason healthcare is so expensive in this country is because we are one of the few industrialized countries that treat it as a business rather than a service. The result is that our prices for comparable services are the highest here because there is no effective economic counter to the basic capitalistic drive to maximize profit.

    “Other countries negotiate very aggressively with the providers and set rates that are much lower than we do,” Anderson says. They do this in one of two ways. In countries such as Canada and Britain, prices are set by the government. In others, such as Germany and Japan, they’re set by providers and insurers sitting in a room and coming to an agreement, with the government stepping in to set prices if they fail.

    In America, Medicare and Medicaid negotiate prices on behalf of their tens of millions of members and, not coincidentally, purchase care at a substantial markdown from the commercial average. But outside that, it’s a free-for-all. Providers largely charge what they can get away with, often offering different prices to different insurers, and an even higher price to the uninsured.

    and

    Moses points to a very big culprit – the standard fee-for-service system that encourages doctors and other caregivers to give lots of tests, individual treatments and to prescribe drugs, instead of keeping patients well. It’s not a new idea, but Moses says his team’s study shows it very clearly.

    “This is a very myopic country,” he said. “There are lessons to be learned from other countries. Chronic illness is where the misery is, it is where the money is and it is where the greatest opportunity lies.”

    Some have suggested that we are the innovation engine for the rest of the world and if our business model changes, that innovation will cease. Well that’s not exactly true either. Most of that money is just pure profit.

    Many researchers are skeptical that this is an effective way to fund medical innovation. “We pay twice as much for brand-name drugs as most other industrialized countries,” Anderson says. “But the drug companies spend only 12 percent of their revenues on innovation. So yes, some of that money goes to innovation, but only 12 percent of it.”

    What’s the solution?

    Universal healthcare so that everyone has access to preventative care which can prevent the onset of the chronic conditions which drive most of the cost in this country.

    A change in the business model where physicians are compensated for outcomes rather than transactions. That will provide significant financial incentives for both patients and physicians to make the sort of lifestyle changes required to prevent the onset of diabetes and heart disease.

    Greater awareness of the real costs of care by those who are paying for them. It is possible that consumerism might help drive costs down, but it is likely going to be greater government involvement that will ultimately be required to bring our costs for comparable services in line with the rest of the world. That’s because the medical industry represents a huge lobby and they are not going to willingly live with lower profits. You don’t have to look any further than the Medicare Prescription Drug program where Congress expressly prohibited Medicare from negotiating lower prices.

    As just one example, the health insurance lobby secretly funneled over $100M to the Chamber of Commerce to oppose the Affordable Care Act while they simultaneously were trying to cut the best deal they could with the White House on how the marketplace would be structured.

    The consequences of inaction are not just felt by those who are sick. It affects everyone.

    “There are opportunity costs,” says Reinhardt, an economist at Princeton. “The money we spend on health care is money we don’t spend educating our children, or investing in infrastructure, scientific research and defense spending. So if what this means is we ultimately have overmedicalized, poorly educated Americans competing with China, that’s not a very good investment.”

    When Russia beat us to space with Sputnik, it was a wake-up call for the country. We invested in education, funding research, and promoting technology. The result was ultimately the growth of a whole new industry that revolutionized the world. We are facing a similar crisis today. The only difference is that we are talking about human capital rather than technology. Unfortunately we don’t appear to have to the same political will that we did 60 years ago to confront that issue and agree on a path forward. There is at least one reason that might not be obvious. I’ll cover that in a future post.

    Obamacare Facts

    Tuesday, November 5th, 2013

    We need healthcare reform. Our employer-based system failed to manage costs or improve health. Cuba gets better results and spends far less than us.

    Republicans proposed a healthcare marketplace in 1989. Romney successfully implemented it in 2006. Now 95% have coverage in Massachusetts.

    Obamacare will REDUCE the deficit by $109B over the next decade. The best Republican alternative cost $36B more and covered 17M fewer people.

    Most of us (149M) get employer-based health insurance. Because of Obmacare, your paperwork is simpler. Your policy now includes pre-existing conditions, kids up to age 26, free preventative care, smoking and alcohol cessation, birth control, and maternity care. There’s even an appeal process for denied claims.

    70% of all health issues are preventable. More preventative services = better health

    Employee payroll deductions are projected to go up 9.5% this year because of an improving economy – not Obamacare. As incomes improve, those who put off going to the doctor last year, ARE going this year. That drives up cost. The same dynamic that resulted in a 5% increase last year, is what is driving higher employee costs this year. Those costs will likely return to the 8% average next year. Any double-digit increases that individuals see are from employers shifting more cost to employees. As Obamacare cost containment and reductions in emergency room visits take hold, we should finally start to see the growth rate in healthcare costs come down. That should translate into slower growth in the rate of employee cost increases.

    Seniors covered by Medicare will see no change. The 28% who purchase Medicare Advantage plans may see some changes as federal subsidies come in line with standard Medicare cost increases.

    12M people buy their own insurance. These plans also must meet minimum coverage standards designed to reduce emergency room visits. Compliant plans may cost more, but subsidies will provide most people with better coverage at a lower cost.

    The 20M uninsured will get subsidies to cover their costs. Access to primary preventative care will reduce the burdens on our hospitals and businesses and improve overall health.

    96% of small businesses are exempt. 90% of all other businesses already provide insurance. The 3% who choose not to provide insurance will pay a penalty in 2015.

    While healthcare.gov had rollout problems, it’s now fast and easy to browse prices. Try it yourself. Buying should be just as easy by December.

    The CBO predicts 7M will sign up by the March deadline. Consumer subsidies, a reinsurance pool, and risk corridors built into the plan will prevent the death spiral Republicans hope for.

    The first leg of the argument that Republicans are now making for a collapse of the healthcare exchanges is around rates. The claim is that insufficient participation of healthy people will drive the rates for everyone else up. That will drive more people out of the exchanges and ultimately they will collapse when no one can afford insurance. Consumer subsidies are going to protect those who buy through the exchanges from rate swings even if participation doesn’t follow the current predicted model. Those subsidies bring down the cost to purchase insurance to a particular percentage of income regardless of the actual costs for the insurance. While this could become a burden for tax payers, the government has built a structure to protect consumers from rate swings that would damage the marketplace.

    The second part of the argument is that insurance companies will be saddled with a bunch of expensive customers that they otherwise wouldn’t insure. So they will drive the rates up or worse yet, just exit the marketplace reducing the competition that supposed to keep rates low. The government addresses this issue to with a reinsurance program. That program is funded by a tax on every insurance policy sold in the country. This tax provides the government funds that they can inject into the insurance markets to protect insurance companies from loss if the mix of sick and healthy people threatens to drive up rates.

    The last part of the argument is that insurance companies will choose to sit out the first couple of years of the marketplace just because there is no track record that they can use to predict what their costs are going to be. The law addresses this too. The government has entered into a risk sharing agreement with all those companies that are participating in the marketplaces. In that risk sharing agreement, if the risks end up being less than government forecasts, insurance companies pay a portion of their gain into the pool. If in any particular year the risks are higher than forecast, the pool pays the insurance companies.

    The whole purpose of these various parts of Obamacare is to minimize the risks and the volatility of the marketplaces as they get up to speed. Clearly the government has created sufficient incentives and protections to attract enough insurance companies to make it work. The same people who designed and implemented the Massachusetts marketplace, helped design and plan Obamacare.

    By Election Day a year from now, voters will have an opportunity to hold Republicans accountable for their obsessive opposition to healthcare reform. That includes those who, in an attempt to defund Obamacare, voted twice to close the government and force the country into default. Cuccinelli’s defeat in Virginia and the victory of Chamber of Commerce based Bradley Byrne over the classic Tea Party birther Dean Young are harbingers of a national repudiation of Tea Party philosophy and tactics.

    A new report by the Kaiser Family foundation supports this view. That study finds that almost 17M of the 29M people eligible to purchase insurance through the marketplaces will be eligible for tax credits. As a result, many people will discover that their net costs to purchase insurance will go down. Combine this with those covered by expansions in Medicare, and you have a lot of people whose personal experience will be at odds with the current Republican narrative.

    That narrative, at its core, suggests that we scrap Obamacare and return to the current system of employer-based care. The problem is people like the current system even less than Obamacare. If Obamacare DOES deliver the projected individual savings, those who have been struggling to obtain or afford insurance under the old system are not going to vote for return to that system. If millions of people do discover that Obamacare DOES lower their net costs, Republicans will lose a lot of credibility and find it very difficult to run on this issue.

    The question every Democrat is waiting to ask a Republican incumbent in the fall is, “Tell me again why you voted to close down the government and threatened to throw the country into default?”

    Madness

    Wednesday, October 16th, 2013

    ‘‘Of all the damage to be done politically here, one of the greatest concerns I have is that somehow John Boehner gets compromised,’’ said Sen. Lindsey Graham, R-S.C., a former House member and a Boehner supporter.

    Something interesting happened over the past couple of weeks.

    First a little bit of background.

    Congress failed to pass a budget this year. The result of that failure was predictable. The government ran out of budget authority to continue to operate.

    At the same time, the government was also exhausting its ability to borrow money through the sale of bonds in order to pay its bills. This was also predictable based on the rate at which the government was authorized to spend money compared with the rate at which tax revenues were coming in.

    While these two things are related, they reflect two VERY different dynamics. In the first case, budget authority reflects the government’s ability to incur NEW debts. In the second case, the credit limit is the government’s ability to borrow money to pay bills that have come due as a result of the exercise of the budget authority that the government already had.

    In other words, raising the government credit limit DOES NOT affect the deficit.

    Giving the government more budget authority potentially DOES affect the deficit.

    Ted Cruz seized on these two financial events as a political opportunity to enhance his standing with conservatives and perhaps position himself for a 2016 presidential run. He did this using the Madman Theory by suggesting that Republicans in the House and Senate were willing to shut down the government AND prevent the government from paying its bills if Senate Republicans and the President didn’t agree to their demands. They then made good on their first promise and shut down the government.

    What happened next was also predictable.

    Tea Party Republicans rallied around Ted Cruz.

    More seasoned politicians questioned whether this plan would work based on past history and the fact that there weren’t even close to enough votes in the Senate to support the plan.

    As the reality of the government shutdown spread throughout the country, Ted Cruz and his supporters including Glenn Beck and Fox News tried to convince the country that it was the fault of the President and the Democrats.

    Everyone suffered losses in the polls, but Republicans suffered the most with historic new lows in popularity.

    “The only reason why the Democrats don’t look terrible is we look even worse,” said Sen. Roy Blunt (R-Mo.), a member of Senate GOP leadership.

    As it became obvious that the President and the Democrats were willing to call the Republican’s bluff, House Republicans began distancing themselves from this plan. At last count there were more than enough with Republican support to pass a simple bill to re-open the government and raise the credit limit.

    Republican Senator Kelly Ayotte called the tactic of tying Obamacare to the shutdown legislation “an ill-conceived strategy from the beginning, not a winning strategy.”

    “It’s very, very serious,” Senator John McCain, Republican of Arizona, warned on Tuesday. “Republicans have to understand we have lost this battle, as I predicted weeks ago, that we would not be able to win because we were demanding something that was not achievable.”

    “We took some bread crumbs and left an entire meal on the table,” said Senator Lindsey Graham, Republican of South Carolina. “This has been a really bad two weeks for the Republican Party.”

    “Let’s just say sometimes learning what can’t be accomplished is an important long term thing, and hopefully for some of the members they’ve learned it’s impossible to defund mandatory programs by shutting down the federal government,” Republican Senator Burr said.

    The last steps are now playing out.

    Boehner failed to craft a bill in the House because the 30 or so Tea Party Republicans were unwilling to support any compromise even though it would further weaken the political position of their party.

    Democrats and Republicans will pass a bi-partisan bill in the Senate. Ted Cruz will vote against it, but he won’t filibuster it because he isn’t a Madman, just an opportunistic politician.

    That bill will come up for a vote in House and will pass with a comfortable majority comprised of all the Democrats and a large number of Republicans.

    This particular bill will set up another potential confrontation in six months, but it will not be a repeat of what we’ve just seen. Those who would threaten to use this strategy again will not have the support to even start.

    Finally after five years of political dysfunction, Congress will start working again. That’s because more Republican members are now more afraid of the voters in their districts than they are opposition from Tea Party. Mitch McConnell will be the hero and emerge as the leader of “rational” Republicans. Compromise will become the new badge of honor with the Senate modeling that behavior. Getting things done will become the new measure of success.

    It will prove, however, too little and too late. The Tea Party will run candidates in Republican primaries against those they feel betrayed them. It won’t matter whether they win or lose because voters in November are NOT going to re-elect anyone who behaved like a Madman. The Democrats will win the seats they need to take control of the House and retain control of the Senate and government will begin operating again. Unemployment will come down. The economy will grow robustly in the last two years of the Obama administration. Immigration reform will pass. Healthcare will roll out. The tax code will get re-written and address income inequality. We’ll fix Medicare and Social Security and take the first substantive steps to deal with climate change. Deficits will come down and debt as a percentage of GDP will drop to safe manageable levels. As long as the Democrats can avoid shooting themselves in the foot, they will be well positioned to retain their majorities and the White House in 2016 regardless of who Republicans choose.

    On the Republican side, we’ll see if the Tea Party retains enough influence to get one of their candidates nominated in 2016. If so, it will be a Democratic landslide. If not, there is a very real possibility that the Tea Party may align with the libertarians or start their own third party. If that happens, it will virtually guarantee a Democratic win and confirm what we have known about the Tea Party from pretty much the beginning. They ARE mad.

    Democracy will again begin to work in predictable ways as the Tea Party retreats back to the shadows of fringe politics. History will later attribute this moment in time as the point at which conservative radicalism was defeated by Obama’s firm resolve.