Here's hoping the Americans like going around in circles when it comes to our national debt. Because the New York Times article today by Mary Williams Walsh about the situation at Fannie Mae, Freddie Mac, AIG and GMAC promises a carnival ride from hell for the U.S. taxpayer.
Describing them as institutions "in need of continuing infusions that make them look increasingly like long-term wards of the state," Williams Walsh essentially reports that the institutions will be needing to borrow future monies to pay off their existing obligations to the government:
Like the big banks, these four companies would no doubt prefer to be free of government assistance, which comes with pay and other restrictions on their executives. But they appear at risk of getting onto a debt merry-go-round, where they have to draw new money from the government just to keep up with their existing government debts.
Fannie Mae recently warned, for example, that it could not pay the dividends it owes the Treasury, so “future dividend payments will be effectively funded with equity drawn from the Treasury.”
All told, the four have already drawn $600 billion combined and that figure could grow to $1 trillion. To put that figure into perspective, if unpaid it would be more than the 10-year cost of the healthcare plan. My word.
And how are they doing so far in honoring their obligations? Answer: mixed.
A spokeswoman for GMAC pointed out that the company had made all its scheduled dividend payments to the Treasury, as had Freddie Mac. While Fannie Mae has said it will have trouble paying its dividends, A.I.G. does not have to pay dividends.
A spokeswoman for A.I.G. said that the insurance company was committed to repaying taxpayers, but repayment would depend on market conditions. A Freddie Mac spokesman said that the company was dependent on continued support from the Treasury to stay solvent. A.I.G.’s latest request for money offers an example of why it needs more government aid to pay its debts.
WASHINGTON -- A year ago, no one outside of South Carolina -- and not that many people in South Carolina -- had heard of Rep. Joe Wilson. One brief outburst later, he's a conservative hero, speaking at tea party rallies at home and in Washington and inspiring the GOP faithful to join him in the Republican crusade against the Obama administration and all it stands for (socialism, mostly).
But the news isn't all good for the gentleman from the Palmetto State. That is, not unless you subscribe to Oscar Wilde's belief that the only thing worse than being talked about is not being talked about. While Wilson's "you lie!" shriek at President Obama in September helped him rake in the dough, it also enshrined him as the year's most potent symbol of berserk overreaction to Obama's agenda. Which can cut both ways; Democrats are eyeing him as a target in next year's House races, and his opponent, Rob Miller, has raised nearly $1 million just from one Web effort to help him out.
Wilson's also finding himself popping up in quite a few year-in-review recaps as December draws to a close. Dictionary publisher Merriam-Webster named "admonish" its 2009 word of the year, because it received the most intense search traffic of the entire English language after the House voted to, well, admonish him. (For the record, the dictionary defines the word as "to express warning or disapproval to especially in a gentle, earnest, or solicitous manner," which is about right for the toothless resolution on Wilson.)
That wasn't it. Time magazine named Wilson's outburst number three in the year's top 10 political gaffes. Yale University is listing "you lie!" in its book of memorable 2009 quotes (alongside Kanye "I'm going to let you finish, but Beyonce had one of the best videos of all time" West and South Carolina Gov. Mark Sanford's spokesman's claim that his boss was "hiking the Appalachian Trail").
Obama's next big speech to a joint session of Congress -- the 2010 State of the Union -- won't come for another month or two. But given all the notoriety for Wilson, will some other GOP backbencher feel moved to shout during that one, too?
First, the Senate Democrats dropped the public option, promising to appease liberals by letting people buy in to Medicare starting at age 55. Then, when Joe Lieberman, I-Conn., threatened to filibuster that version of the bill, too, they got rid of the buy-ins. As a result, some progressives have been calling for the Senate to kill the bill completely, arguing that no reform is better than this reform. Former Democratic primary candidate and former Democratic National Committee chairman Howard Dean came out against the bill in its current form earlier this week (although Dean told Salon's Joe Conason he's open to fixing the bill and not killing it).
But killing the bill could mean absolutely nothing happens on healthcare reform at all. The Senate has been working on this for most of the year; if it dies now, it's not coming back. And even though Senate Majority Leader Harry Reid is unlikely to find 60 votes to restore the public option or the Medicare buy-in, there are other ways to make a bad bill better before lawmakers vote on final passage. Here's a breakdown of some progressive concerns about the healthcare reform bill most likely to face the Senate, and what Senate Democrats can do to address them. One word of caution: So far, there is no "bill," there are numerous amendments being floated, and it's not sure exactly what will emerge for a Senate vote. And of course, whatever the Senate passes still has to be merged with the House's far stronger legislation. But here are the top five critiques about what's out there for now, and how to improve the bill to answer them:
1) Individual mandates
The problem: Without a public option, the Senate bill would force Americans to buy healthcare from private insurance companies, who could act as a monopoly. So according to this line of reasoning, the real winners would just be the private insurers who got us into this mess in the first place. MSNBC's Keith Olbermann is one proponent of this point of view, arguing on "Countdown" Wednesday night that he will go to jail rather than purchase private insurance under this mandate, and urging his progressive audience to do the same.
The diagnosis: There is no way to expand the current insurance system to cover everyone without an individual mandate. At the moment, insurance companies discriminate against people who would be most likely to use insurance by making it unavailable to those with preexisting conditions. Healthcare reform would make this illegal and force insurers to make coverage available to everyone. But without an individual mandate, young, healthy people might not buy healthcare at all, causing premiums for older, sicker people to skyrocket. That's why every healthcare system (British, Swedish, French, Canadian, you name it) with anything approximating universal coverage has some version of individual mandates. Otherwise, universal coverage just doesn't work.
Salon's prescription: Keep individual mandates -- and work on introducing higher subsidies and better regulations to help make insurance affordable for the millions of people who will suddenly have access to it.
2) Who's covered, and how?
The problem: While proponents say the bill will extend coverage to another 31 million Americans, that's a shell game; they're doing it by mandating Americans to purchase insurance.
The diagnosis: The bill would do more than just make people purchase private healthcare: 14 million of these people would gain coverage through the expansion of Medicaid. The other 17 million, who would effectively be "forced" to buy into some private plan, are mostly people who can't currently afford to buy healthcare. Under the Senate bill, people making up to 400 percent of the poverty line ($88,200 for a family of four) would be given subsidies to purchase this insurance.
Salon's prescription: Again, push for higher subsidies extended to more Americans, so the new insurance isn't as unaffordable as the status quo is.
3) Preexisting conditions
The problem: Allegedly, the ban prohibiting insurers from denying coverage to people with preexisting conditions is meaningless. Sure, insurance companies would have to sell these people a plan -- but they could still charge exorbitant premiums and effectively price them out of the market.
The diagnosis: Under the most recent draft of the Senate bill, insurance companies can still charge more for insurance under certain circumstances. However, the bill dictates that premium rates can only vary based on age (older people can be charged up to three times as much for insurance as other planholders) or tobacco use (smokers or other users can be charged up to 1.5 times as much for insurance). Of course, in an ideal world, these factors wouldn't affect premium costs either, but the Senate bill would still make it significantly easier for people with preexisting health conditions to buy insurance.
Salon's prescription: Other than ensuring that there aren't any hidden loopholes, leave it be. The Senate's regulations regarding preexisting conditions would actually accomplish quite a bit.
4) Annual care caps
The problem: The Senate healthcare bill would allow insurance companies to implement annual dollar limits on medical care for people with a costly illness like cancer. This would defeat the purpose of health insurance, since it would no longer protect people from the worst-case scenario (you know, the one where you contract an incredibly costly illness whose treatment you can't possibly afford).
The diagnosis: Although the Senate Finance Committee prohibited annual caps altogether, the Senate bill would only bar "unreasonable" annual caps on medical costs. A Reid spokesperson justified the decision by citing concerns that banning all annual limits could lead to higher premiums. Getting rid of these caps might lead to higher premiums, but permitting them would definitively defang health insurance: It would provide coverage for everyone except people who need it most.
Salon's prescription: Remove this provision from the bill, or define "unreasonable" caps at a level that actually makes sense for the average family's budget. This shouldn't be too difficult: The White House has already indicated that it wants to strike the provision, and even Lieberman hasn't threatened to filibuster a bill that doesn't permit annual caps.
5) Insurers operating across state lines
The problem: The Senate bill would permit insurance companies to sell policies across state lines -- and let the companies choose which states' laws and regulations they would have to follow. This would allow insurers to avoid the strongest consumer protections and benefits required by state governments. A group of House Democrats from Maine and California argue that the arrangement "will lead to a race to the bottom in insurance regulation and severely threaten the important and often lifesaving protections the residents of our states enjoy."
The diagnosis: The bill does already contain several provisions to help avert this scenario. First, states would only be able to join interstate compacts by enacting a state law. So, any state that ended up undermining its own insurance regulations by joining an exchange would have done so through its own legislation -- which is unlikely. Also, insurance companies -- regardless of where they were based -- would still have to comply with some of the regulations of the state where the insurance purchaser lives. Finally, insurers would also need to obey the federal requirements stipulated by the bill in order to participate in the insurance exchanges it would set up. (But these regulations have yet to be spelled out.)
Salon's prescription: Push for stricter federal requirements as part of the insurance exchange system the bill would set up. Doing so would force insurance companies to provide better coverage across the nation, regardless of what state they were based in.
Warmer climates make people happier, at least according to a new study of American happiness discussed by LiveScience.com.
Of the top 10 happiest states, all but two -- Montana and Maine -- are in the Sun Belt. The top 10, in order, are: Louisiana, Hawaii, Florida, Tennessee, Arizona, Mississippi, Montana, South Carolina, Alabama and Maine.
Ah, but as LiveScience notes, these results contradict another recent study that suggests that wealthier, better educated and more tolerant states are home to the happiest Americans. The top 10 states in that study are: Utah, Hawaii, Wyoming, Colorado, Minnesota, Maryland, Washington, Massachusetts, California and Arizona.
That makes Hawaii and Arizona the only two states to make the top 10 in both.
Smart, tolerant, wealthy and tanned. Not a bad combination. Aloha!
I'm sure you're familiar with the critique of the so-called "pro-life" movement as a group of people interested in protecting life at conception and on the death bed but caring little for what happens during the long stretch of life in between. Well, this morning Matt Yglesias reminded us that Nebraska Sen. Ben Nelson's resistance to the healthcare reform's abortion provisions epitomizes this hypocrisy.
Yglesias' words are best left unaltered:
Providing prenatal services to pregnant women is a pro-life gesture by any stretch of the imagination. As is providing health insurance to young children. As we saw the other day, uninsured children are over three times more likely to die from their trauma-related injuries than are commercially insured children, even after adjustment for other factors such as age, gender, race, injury severity and injury type.
But Nelson won’t let those lives be saved unless the bill is modified in an insulting and discriminatory way. And part of the insanity of it is that the actual impact on the number of abortions in America is going to be tiny. Middle-class women will be able to pay for abortions out of pocket, and the “Hyde Amendment” status quo already screws poor women. But it’s a nice symbolic dig at pro-choice America, and a further means of stigmatizing reproductive health services as somehow not real health care. And Nelson, Bart Stupack, and various bishops love the idea of holding the whole package hostage to this point, since I guess the dead kids with trauma injuries will go to heaven anyway or something.
Nice.
Though attention this week is squarely on dissenters and holdouts on the Senate side, Isaac Wood of UVa's Crystal Ball has a nice, detailed post about the status of House Blue Dog Democrats, how they voted on healthcare bill, and in general who among these 52 Blue Doggies may be vulnerable next November.
Short summary: Wood and the Crystal Ball rate 21, or fewer than half the 52, as safe incumbents running for re-election. In the other 31 cases there is a mix of members retiring (3), running for other office (1), plus 27 who are running for re-election in districts where the underlying demographics have Republicans licking their chops. "In fact, over a third of Blue Dogs hail from districts Obama won last November," writes Wood. 'While the coalition is often portrayed as a group of Southern congressmen who must vote conservatively or risk losing reelection, nineteen members represent districts Obama carried, with seven representing districts in which Obama won over 60 percent of the vote."
OK, so what can we expect come November for this group, which includes a lot of southerners, yes, but many outside the region? Well, if we presume the historical, 16-seat average loss for a president's party in the House during that president's first mid-term, and given that the 52 Blue Dogs are almost exactly one-fifth of the caucus' 258 total members, that would mean a loss of 3 Blue Dogs--if their vulnerability were no greater or less than Democrats generally.
But, of course, they are more vulnerable. Partly this may be a result of their voting records. Woods looks at their roll call on the House healthcare reform bill. Twenty-four voted against, providing 24 of the 39 nay Democratic votes, or 62 percent of nay votes; whereas they provided just 28 of the Democrats' 219 aye votes, or just 12 percent of ayes. But voting against healthcare is going to be the safe electoral move for some of them.
Part of it is that a disproportionate share of them are so-called "McCain-Democrats," those who won in districts that President Obama lost in 2008, as Woods points out. And therein lies a strange political calculus for the president--having to fight harder to save the seats who backed him and his legislative agenda at far lower rates.
War Room is written and edited by Alex Koppelman, with contributions from Salon reporters around the country.
Catholic Charities...Nothings For Free?
Religion and Politics: Still Merging after All These Years
God's Name Stops Traffic For 3 Hours In Jerusalem