Wednesday, December 16, 2009

Health Care Reform Staggers Toward The Finish

If, as President Obama predicts, health care reform legislation is approaching the finish line in the Senate, then it has been staggering fitfully across the last stretch of the track. Senators are supposed to vote on this 2,000 plus page bill before Christmas, yet none of them have yet seen the actual text of the legislation. Managers of the bill will not release the final version until CBO has completed its scoring of the measure, and of course CBO is shooting at a moving target as the compromise negotiations stutter along on the two most controversial and stubbornly difficult aspects of reform: abortion funding and the public option.

Senator Joe Lieberman says he won’t vote for a bill with a public option in it, and Senator Roland Burris says he won’t vote for a bill without a public option in it. Either way, Democrats come up one vote short of the 60 needed for passage. No matter what the resolution of the public option problem, abortion coverage is an independent and equally contentious hurdle. Women’s rights advocates insist every American woman should have an avenue to purchase health coverage including the possibility of abortion services, and right to life advocates are equally insistent that not a penny of federal taxpayer dollars should go to fund the purchase of abortion insurance, either through premium subsidies or Medicare and Medicaid coverage.

Of course, passage in the Senate, whether before or after Christmas, does not assure that health care reform becomes reality. The only thing now clear about the Senate version of the legislation is that it won’t be identical to the bill already passed by the House. That means that whatever the Senate does pass will go to a conference committee, where these two seemingly impossible issues will rise again, along with the differences in approach between House and Senate tax impositions to pay for the enormous cost of expanding health coverage for those who can’t or won’t buy it on their own. Super Bowl Sunday may come and go before American citizens know what conclusion Congress reaches regarding health care reform legislation.

Obama’s New Jobs Initiative

The Obama administration and House Democrats are pushing forward a second jobs initiative this week, though prospects for Senate consideration of the measure before year end are grim. The proposal will redirect $75 billion from unspent TARP appropriations to job creation programs and extensions of emergency assistance for those now out of work. The measure is expected to ultimately include $35 billion for highway and transit construction, $2 billion for water construction projects and affordable housing construction, and about $11 billion for school construction and renovation. Additional appropriations will include $23 billion for teaching jobs, and $6 billion for other job programs including local law enforcement, summer jobs for youth, and college work/study programs and AmeriCorps job training.

Conspicuously absent from the House measure are two programs President Obama has promoted as creating “green” jobs: so called “cash for caulkers” incentives for home and business weatherization efforts, and tax incentives for small business new hiring.

Emergency relief measures in the House bill will include $79 billion to provide a six month extension of unemployment benefits, COBRA subsidies, and other “safety net” programs for the jobless. In the expectation that Senate action on the House bill will not happen until next year, the House is at the same time including a two month unemployment and COBRA benefits extension in the Defense appropriations bill, attempting to avoid the break in benefits jobless folks experienced last time Congress stalled action on unemployment extension legislation.

The White House is also proposing a $5 billion addition to tax credits for renewable energy products, in an effort to spur hiring in the manufacturing of such things as wind turbines, solar panels and electric cars. Knowing that the $2.3 billion in the stimulus package for such projects was oversubscribed suggests that users of such new incentives are ready to move at a moment’s notice.

Speaking at a Home Depot store in Alexandria, Virginia yesterday, Obama highlighted the home weatherization programs as part of the administration’s efforts to assist the construction industry, where unemployment has reached 21%. His remarks, however, glossed over the fact that the $5.5 billion appropriated in the stimulus package for energy retrofits of federal government buildings has been painfully slow to percolate out into the economy. GSA so far has allocated only $1.5 billion of the $2 billion appropriated for use in 2009. The agency is racing to allocate the remaining half billion dollars in the final two weeks of this year. Furthermore, of the $2 billion to be allocated, only $89 million, or less than 4.5%, has actually been paid out to contractors.

Reports from contractors in this sector indicate that government projects are replacing only 15% to 30% of the private sector business lost due to the crash of the economy.

New Climate Bill At Odds With Copenhagen Developments

The only really useful document coming out of the U N climate change negotiations in Copenhagen this week is a draft of the REDD draft, Reducing Emissions From Deforestation and Forest Degradation, which will be delivered today to leaders of the 200 or so nations participating in the discussions. This draft document sets up a program for paying developing nations for conserving natural assets which reduce accumulations of carbon dioxide in the atmosphere. The payments are to be funded by industries in developed nations who contribute by purchasing offsets for their carbon emissions into the atmosphere. One top U N official, when asked about the status of talks on other issues, gave a disheartening one word response: “Terrible.” U N Secretary General Ban Ki-moon, speaking of the plan to defer conclusion of a treaty to replace the Kyoto Protocol for another year, said “We do not have another year to deliberate. Nature does not negotiate.”

Meanwhile, back in Washington, Senators Maria Cantwell and Susan Collins have introduced an alternative to the climate change legislation passed earlier by the House, called CLEAR, for Carbon Limits and Energy for America’s Renewal. Directly contrary to the policy emerging in Copenhagen, CLEAR would prohibit American industries from purchasing carbon emission credits based on offsets, such as reforestation or forest conservation in other countries. Under CLEAR, the only trading in emission credits would be permitted among fuel producers, excluding both speculators and energy users from trading in carbon emission credits. The Cantwell/Collins bill would not allow large energy consumers from trading emissions credits as a hedge against rising fuel and power prices. Why is it that some elements in the United States Senate seem to be two steps behind the rest of the world when it comes to twenty first century energy policy?

Gutierrez Introduces Immigration Bill

Illinois Congressman Luis Gutierrez yesterday introduced the Hispanic Caucus version of immigration reform legislation in the House, characterizing the bill he sponsors with nearly 90 other Congressmen as “pro-family, pro-job and pro-security.” The Gutierrez bill would immediately give “nonimmigrant status” to 12 million illegal aliens upon registration with the federal government, payment of a $500 fine, plus application fees, and clearing a criminal and security background check.

After six years, or clearance of the existing backlog of green card applications, whichever comes first, the “nonimmigrants” could apply for lawful permanent resident status. The bill also repeals the 287(g) permission for state and local police enforcement of immigration laws.

While the bill calls for establishment of a permanent system for verifying a person’s work eligibility, it does not specify whether or not the existing E-verify system would be made permanent. Republican Congressmen oppose the bill. House Judiciary ranking member Lamar Smith said “Allowing millions of illegal immigrants to stay and take away jobs from citizens and legal immigrants is like giving a burglar a key to the house.”

Business groups oppose the legislation’s creation of a 100,000 visa random lottery rather than a guest worker program keyed to the unmet employment needs of the American economy.

Friday, December 4, 2009

Lobbyists Drafting Climate Change Treaty

International treaties are a lot like Congressional legislation: if you want a preview of what will be in them, you need to get to be close friends with a lobbyist. The lead lobbying organization at the Copenhagen climate change talks starting next week will be the Climate Action Network, an amalgam of 450 environmental, business and scientific groups worldwide. CAN is already circulating a proposed draft of the new treaty to replace the Kyoto Protocol among delegates and hangers on at the Copenhagen conference.

The CAN draft treaty comes complete with all the required legal language to embody international commitments on greenhouse gas reductions, economic wealth transfers to pay for the costs of environmental controls in developing nations, and a framework for a global cap and trade system of emissions futures. Of course, blanks in the draft exist where diplomats and other government functionaries from participating nations can fill in numbers representing each country’s emission and financial commitments, but except for some minor tweaking to satisfy this or that nation’s particular wants or needs, no government leader or group of leaders from the 192 participating nations needs to bother his or her staff with the details of drafting such an important international treaty – the draft already exists, and the tweaking will be mostly handled by lobbyist cell phone conversations, E-mails and twitter tweets from hallway to hotel room during the conference.

Anyone with a blackberry, a laptop and the price of air fare to Denmark can seek to participate in the real, though informal, corridor conversations which will finalize the details of the next climate change treaty, but only those folks who have already worked at establishing trust and confidence from world leaders is likely to have significant input. If you can stand the Danish winter weather, though, and you have a subscription to twitter, it would really be fun to eavesdrop on the conversations.

Secret Health Care Reform Deals Building Up In Managers’ Amendment

While the Senate floor debate on the health care reform legislation continues along predictable partisan lines, with speeches concerning dramatic reductions in grandma’s Medicare benefits and the evils of federally funded abortion coverage, the real version of the Senate bill continues to be formed deal by deal in secret in Majority Leader Harry Reid’s Senate office just across the corridor from the stately Senate Chamber in the nation’s Capitol. Reid meets privately, one on one, with Democrat Senators, asking them what they need in the managers’ amendment he will present right before the final floor vote.

Managers of legislation in the Senate have the right to accept suggested amendments to the text of legislation which has been published to members and made available to the public, and to make those changes in the bill under debate right up until the voting begins. So, neither fellow Senators nor average citizens really know what the Senate is voting on until the last second. Reid isn’t telling anyone other than the particular Senator requesting a special provision in the managers’ amendment what he is promising, and no one at all but Reid knows what the aggregate text of the managers’ amendment looks like as time marches on.

We do know that Senator Ben Nelson of Nebraska will be proposing a floor vote on his amendment which would prohibit abortion coverage altogether for anyone buying insurance from the public option and anyone who receives a federal premium subsidy. Nelson’s proposal is even more restrictive than the Stupak amendment in the House legislation.

Meanwhile, Republican amendment proposals include everything from their pet limitations on medical malpractice non-economic damages to a $400,000 ceiling on salaries of health insurance company executives.

Mercer Consulting released results of a survey shows 70% of the businesses say they will cut the health benefits available to its employees rather than pay the proposed tax on Cadillac health insurance coverage. So much for President Obama’s promise that “if you are happy with your present health insurance, you can keep it.” Sixty-three percent of businesses responding to the survey said they would cut back benefits rather than pay the tax, and another 7% said they would terminate their health plans altogether. Only 16% of those who would cut benefits said they would return any of the savings to employees in the form of higher pay. If these numbers play out, health care reform will have a negative effect on about 89% of Cadillac plan participants, most of whom are trade union members.

Thursday the Senate rejected, by a vote of 58-42, a Republican amendment to the health care bill which would have restored the $500 billion in Medicare cuts the Democrats are using to “pay for” the enormous cost of the health care reform legislation.

Estate Tax Extension Faces Suffocation In The Senate

Thursday’s House vote of 225-200 in favor of permanently extending the estate tax at a rate of 45% on individual estates over $3.5 million and family estates over $7 million is no guarantee that the Senate will even take up the bill before the estate expires January 1, 2010. Senate Minority Whip Jon Kyl says Democratic Congressmen and Senators will be in for a rude shock when the estate tax revenue disappears in a puff of smoke New Years Day. Republicans universally oppose extending the tax, and enough Democrats crossed the aisle to vote against the extension in the House to suggest that mustering 60 Senate votes to continue making death a taxable event could be a real challenge for Senate leadership.

Jobs Data Points To Stabilization

Council of Economic Advisers Chair Christina Romer released a statement today commenting on the 0.2% drop in nationwide unemployment in which she characterized employment gains in temporary help services as hopeful for the future of the American economy. “It is important not to read too much into any one monthly report, positive or negative,” Romer said. “Bit, it is clear we are moving in the right direction.”

Yesterday, President Obama hosted a conference of 130 business and labor leaders at the White House to discuss job creation measures the federal government might undertake in the next month or two to keep the employment trend moving in a favorable direction. Stressing the unprecedented federal deficits and the strain they produce on the national economy, Obama pointed out that Washington presently lacks sufficient resources to fund direct government job creation legislation. “Ultimately, true economic recovery is only going to come from the private sector,” Obama told the assembled business and labor leaders and academic economists. “We have to face the fact that our resources are limited.” Obama is expected to detail forthcoming legislation to spur job creation and extend jobless relief for the unemployed in a speech next Tuesday morning at the Brookings Institution.

Expectations are that Speaker Pelosi and her Congressional colleagues will soon introduce legislation funding job creation programs with the $150 billion left over in the Troubled Asset Relief Program, despite Treasury Secretary Geithner’s preference to use the cash to pay down the national debt. Rhode Island Senator Jack Reed today proposed additional federal borrowings of as much as $100 billion to pay for one year of extended unemployment benefits and COBRA health care subsidies for those Americans still out of work. Reed may seek to attach his legislation to the forthcoming omnibus appropriations bill. About a million unemployed Americans will exhaust their benefits in January, and by March 2010 that number could rise as high as 3 million.

Additional proposals could include wage subsidies or tax benefits for hiring new workers.