…the general view among independent health care economists is that these changes will not fundamentally bend the cost curve. The system after reform will look as it does today, only bigger and more expensive.

As Jeffrey S. Flier, dean of the Harvard Medical School, wrote in The Wall Street Journal last week, “In discussions with dozens of health-care leaders and economists, I find near unanimity of opinion that, whatever its shape, the final legislation that will emerge from Congress will markedly accelerate national health-care spending rather than restrain it.”

…the current estimates almost certainly understate the share of the nation’s wealth that will have to be shifted. In these bills, the present Congress pledges that future Congresses will impose painful measures to cut Medicare payments and impose efficiencies. Future Congresses rarely live up to these pledges.

Read it all.

President Obama has conducted a final meeting on his military review for Afghanistan, administration officials said, and he is planning to explain his decision in an address to the nation next Tuesday.

“After completing a rigorous final meeting, President Obama has the information he wants and needs to make his decision and he will announce that decision within days,” Robert Gibbs, the White House press secretary, said Tuesday morning.

Read it all.

A sudden crisis is unlikely. Other rich countries with far bigger debts relative to the size of their economies, from Italy to Japan, have soldiered on without hitting a wall. Stable politics, transparent laws and economic dominance give America unequalled credibility with lenders. For all the anxiety the declining dollar drew from China this week (see article), it has no serious rival as the world’s reserve currency. America has sensibly used this fiscal freedom to enact an aggressive stimulus programme. This should be maintained for as long as it is needed.

Yet ignoring the future is also costly. The problem is not the deficits in the next couple of years, but in the years that follow. Uncertainty over how taxes may be raised to shrink deficits may already be weighing on business confidence. Worries about inflation or default could start to push up interest rates. Eventually, private investment will be crowded out.

Barack Obama and Congress can pre-empt such corrosive uncertainty with a plan to reduce the deficit now. Far from requiring immediate spending cuts or tax increases, a credible plan would reassure markets and allow an orderly exit from fiscal stimulus. The Federal Reserve provides a model: it does not plan to tighten monetary policy in the near future, but has signalled its willingness to do so when inflation threatens.

Read it carefully and read it all.

Companies and groups hiring lobbying firms on health issues nearly doubled this year as special interests rushed to shape the massive revamp of the nation’s health care system now in its final stretch before Congress.

About 1,000 organizations have hired lobbyists since January, compared with 505 during the same period in 2008, according to a USA TODAY analysis of congressional records compiled by the nonpartisan CQ MoneyLine.

Overall, health care lobbying has increased, exceeding $422 million during the first ninth months of the year, according to the Center for Responsive Politics, which tracks money in politics. That’s more than any other industry and a nearly 10% jump over the same period in 2008. The center’s Dave Levinthal said the frenzy of new lobbying activity makes financial sense.

“If lobbying didn’t work, people wouldn’t do it,” he said.

Read it all.

The White House is lukewarm about proposals by congressional Democrats to introduce broad legislation to create jobs, instead favoring targeted measures that would be less likely to inflate the deficit, administration officials said.

There is as yet no agreement within the White House or in Congress on how to try to curb the U.S. jobless rate. But the differences in opinion suggest that rifts could emerge among Democrats as they wrestle with how to beat back the highest unemployment rate in a generation.

The jobless rate, which hit 10.2% in October, has continued to climb despite the implementation of a $787 billion stimulus package in February.

The subheader for the article is: White House Is Unenthusiastic on Legislation That Would Raise Government Debt. To which I respond–good for them. Read it all.

But while our culture of imagination is still vibrant, the other critical factor that still differentiates countries today ”” and is not a commodity ”” is good governance, which can harness creativity. And that we may be losing. I am talking about the ability of a society’s leaders to think long term, address their problems with the optimal legislation and attract capable people into government. What I increasingly fear today is that America is only able to produce “suboptimal” responses to its biggest problems ”” education, debt, financial regulation, health care, energy and environment….

The standard answer [to the the governance problem] is that we need better leaders. The real answer is that we need better citizens. We need citizens who will convey to their leaders that they are ready to sacrifice, even pay, yes, higher taxes, and will not punish politicians who ask them to do the hard things. Otherwise, folks, we’re in trouble. A great power that can only produce suboptimal responses to its biggest challenges will, in time, fade from being a great power ”” no matter how much imagination it generates.

Grandma said that, too.

Read it all.

It’s simply not true that America is ambivalent about everything when it comes to the Obama health plan.

The day after the Congressional Budget Office (CBO) gave its qualified blessing to the version of health reform produced by Senate Majority Leader Harry Reid, a Quinnipiac University poll of a national cross section of voters reported its latest results.
This poll may not be as famous as some others, but I know the care and professionalism of the people who run it, and one question was particularly interesting to me.

It read: “President Obama has pledged that health insurance reform will not add to our federal budget deficit over the next decade. Do you think that President Obama will be able to keep his promise or do you think that any health care plan that Congress passes and President Obama signs will add to the federal budget deficit?”

The answer: Less than one-fifth of the voters — 19 percent of the sample — think he will keep his word. Nine of 10 Republicans and eight of 10 independents said that whatever passes will add to the torrent of red ink. By a margin of four to three, even Democrats agreed this is likely.

Read it all.

House Speaker Nancy Pelosi on Thursday played down the possibility of using a stock trade tax to fund jobs legislation, saying it should only be done in conjunction with other countries.

“It would have to be an international rule,” Pelosi (D-Calif.) said at her weekly news conference. She said that she did not want to see trading action move to other countries to avoid such a tax.

She noted, “Other nations have proposed this, and we have been the ones who resisted.” But global consensus would be difficult, if not impossible, to reach by Dec. 18, when House leaders want to finish their job-creation bill.

Read it all.

President Barack Obama gave his sternest warning yet about the need to contain rising U.S. deficits, saying on Wednesday that if government debt were to pile up too much, it could lead to a double-dip recession.

With the U.S. unemployment rate at 10.2 percent, Obama told Fox News his administration faces a delicate balance of trying to boost the economy and spur job creation while putting the economy on a path toward long-term deficit reduction.

His administration was considering ways to accelerate economic growth, with tax measures among the options to give companies incentives to hire, Obama said in the interview with Fox conducted in Beijing during his nine-day trip to Asia.

Read it all.

Americans may be tempted to take John Connally’s view that none of this is our problem, especially when U.S. stocks are rising and Fed Chairman Ben Bernanke says there’s nothing to worry about.

But that’s a mistake. Asset bubbles that build and burst in Asia will eventually cause trouble here, much as they did in the Asian monetary crisis of 1997. And if Chinese leaders conclude the U.S. is deliberately squeezing their currency as a way to devalue away America’s rising debt burden, they will find ways to return the offense””perhaps on Iran, or North Korea.

The larger mistake is to believe that any nation can devalue its way to prosperity. As other currencies rise in value and force productivity gains, the U.S. economy will become relatively less efficient. American living standards will decline, as those in Asia rise. This is the real lesson of the Connally-Nixon devaluations of the 1970s and the inflation that followed.

Read it all.

Americans are worried about hidden costs in the fine print of health care overhaul legislation, an Associated Press poll says. That’s creating new challenges for President Barack Obama as he tries to close the deal with a handful of Democratic doubters in the Senate.

Although Americans share a conviction that major health care changes are needed, Democratic bills that extend coverage to the uninsured and try to hold down medical costs get no better than a lukewarm reception.

The poll found that 43 percent oppose the health care plans being discussed in Congress, while 41 percent are in support. An additional 15 percent remain neutral or undecided.

Read it all.

Democrats have promised that health reform would reduce health care costs, but legislation the House passed last week would increase costs over the next decade by $289 billion. By 2019, health costs would rise to 21.1 percent of GDP compared to 20.8 under current law, according to an actuarial report prepared by the Centers for Medicare and Medicaid Services.

“With the exception of the proposed reductions in Medicare payment updates for institutional providers, the provisions of H.R. 3962 would not have a significant impact on future health care cost growth rates. In addition, the longer-term viability of the Medicare update reductions is doubtful,” the report said.

In other words, outside of Medicare payment cuts to hospitals, the bill doesn’t curb increasing health care costs. And even the Medicare payment cuts will be difficult to sustain.

The analysis is more bad news for Democrats, who are facing increasing criticism that their reforms don’t do enough to control costs.

Read it all from Politico

While President Obama’s decision about sending more troops to Afghanistan is primarily a military one, it also has substantial budget implications that are adding pressure to limit the commitment, senior administration officials say.

The latest internal government estimates place the cost of adding 40,000 American troops and sharply expanding the Afghan security forces, as favored by Gen. Stanley A. McChrystal, the top American and allied commander in Afghanistan, at $40 billion to $54 billion a year, the officials said.

Even if fewer troops are sent, or their mission is modified, the rough formula used by the White House, of about $1 million per soldier a year, appears almost constant.

Read the whole article.

There is an air of absurdity to what is mistakenly called “health-care reform.” Everyone knows that the United States faces massive governmental budget deficits as far as calculators can project, driven heavily by an aging population and uncontrolled health costs. Recovering slowly from a devastating recession, it’s widely agreed that, though deficits should not be cut abruptly (lest the economy resume its slump), a prudent society would embark on long-term policies to control health costs, reduce government spending, and curb massive future deficits. The president and his top economic advisers all say this.

So, what do they do? Just the opposite. Their sweeping overhaul of the health-care system””which Congress is halfway toward enacting””would almost certainly make matters worse. It would create new, open-ended medical entitlements that would probably expand deficits and do little to suppress surging health costs. The disconnect between what Obama says and what he’s doing is so glaring that most people could not abide it. The president and his allies have no trouble. But reconciling blatantly contradictory objectives requires them to engage in willful self-deception, public dishonesty, or both.

Read it all.

“It’s our belief that it’s not just a political and economic issue, it’s a fundamental moral issue,” said David Liners, state coordinator for WISDOM, an interfaith coalition of about 140 Wisconsin congregations working to advance health care reform.

Despite near consensus in the call for reform, there remains widespread debate over who and what procedures should be covered – with undocumented workers and abortion as the main flash points – and at what cost; the role of government and whether the law or conscience should dictate a health care professional’s participation.

Alliances have emerged that reflect traditionally political divisions as much as faith, according to the Pew Forum on Religion & Public Life.

“It’s not a question of whether we need health care reform, but how we do it. And I don’t think government is the way,” said Mathew Staver, chairman of the faith-based coalition Freedom Federation, which opposes abortion and advocates a free-market approach to reform.”We believe individual liberties trump government-imposed obligations,” he said.

Read it all.

While Massachusetts recipients of federal stimulus money collectively report 12,374 jobs saved or created, a Globe review shows that number is wildly exaggerated. Organizations that received stimulus money miscounted jobs, filed erroneous figures, or claimed jobs for work that has not yet started.

Read it all.

As Mr. Obama nears the end of his review of American strategy in Afghanistan, the issue of how he will prod, cajole or bully Mr. Karzai into taking action on matters he has avoided for the past five years has been catapulted to the center of the discussion.

Administration officials and America’s European allies say that rampant corruption and the illegal drug trade in Afghanistan have fueled the resurgence of the Taliban, and that unless Mr. Karzai moves forcefully to tackle those issues, no amount of additional American troops will be able to turn the country around.

Yet many of Mr. Obama’s advisers said they had seen no evidence that Mr. Karzai would follow through on promises to crack down on corruption or the drug trade. Mr. Obama, who met with his advisers again on Wednesday, is said to be particularly skeptical of Mr. Karzai’s resolve.

Read it all.

What happens now? Democratic supporters of abortion rights need to accept that their House majority depends on a large cadre of antiabortion colleagues. They can denounce that reality or they can learn to live with it.

There is also a challenge for abortion’s foes, above all the Catholic bishops who have a long history of supporting universal coverage but devoted most of their recent energy to the abortion battle. How much muscle will the bishops put behind the broader effort to pass health-care reform? Their credibility as advocates for social justice hangs in the balance.

And if the Senate forces a change in the Stupak language, one obvious approach would involve a ban on abortion in the public plan — if such an option survives — and the application of Ellsworth’s rules to the private policies sold in the insurance exchange. The alternative would be Stupak’s original compromise offer to Pelosi. There are not many other options.

Read the whole piece.

The fiscal 2009 budget deficit, triple that of 2008, was 10 percent of GDP. Lawrence Lindsey says probable policies will produce deficits of 7 percent of GDP for a decade. Ronald Reagan’s worst deficit was 6 percent of GDP and for only one year.

Lindsey — a former member of the Federal Reserve board of governors and director of George W. Bush’s National Economic Council (2001-02) — says Americans’ net worth has dropped at least $13 trillion since the recession began in December 2007. What is to be done?
Americans could suddenly begin saving substantially more, but this would deepen and prolong the recession. Alternatively, America could reflate the value of its assets by printing money. Lindsey says it is already doing that — printing bonds promiscuously and lending money to banks at negligible rates, money that banks can use to buy the bonds. This sharply increases the money supply, which sets the stage either for inflation — too much money chasing too few goods — or for recovery-snuffing higher interest rates to try to prevent inflation. Or for something like Japan’s lost decade — banks pouring money into government bonds rather than the real economy.

America, says Lindsey, will not be Weimar Germany, where hyperinflation caused people to rush to stores with satchels of rapidly depreciating currency. But, he adds, no country has successfully behaved the way the United States is behaving.

Read it all (emphasis mine).

President Obama is to ask members of Nato to provide up to 4,000 more troops to help to break the deadlock in Afghanistan.

Mr Obama is poised to confirm a surge of more than 30,000 US combat troops, according to senior military sources. He will also urge the rest of Nato to provide thousands of soldiers to train new recruits to the Afghan National Army (ANA).

His appeal is set to be largely ignored, however. At present only two Nato members have offered more troops ”” Britain and Turkey ”” and no other country is expected to come up with any, according to alliance sources. Such a response would threaten the credibility of the alliance in Afghanistan and represent a considerable snub for Mr Obama, who was viewed as a welcome change after the administration of President Bush.

Read it all.

President Obama suggested Monday that he was not comfortable with abortion restrictions inserted into the House version of major health care legislation, and he prodded Congress to revise them.

“There needs to be some more work before we get to the point where we’re not changing the status quo” on abortion, Mr. Obama said in an interview with ABC News. “And that’s the goal.”

On the one hand, Mr. Obama said, “we’re not looking to change what is the principle that has been in place for a very long time, which is federal dollars are not used to subsidize abortions.”

On the other hand, he said, he wanted to make sure “we’re not restricting women’s insurance choices,” because he had promised that “if you’re happy and satisfied with the insurance that you have, it’s not going to change.”

Read it all.

Injecting itself aggressively into the health-care debate, the Roman Catholic Church in America has emerged as a major political force with the potential to upend a key piece of President Barack Obama’s agenda.

Behind-the-scenes lobbying, coupled with a grassroots mobilization of Catholic churches across the country, led the House Saturday to pass an amendment to its health-care bill barring anyone who receives a new tax credit from enrolling in a plan that covers abortion, a once-unthinkable event in Democrat-dominated Washington.

The restriction would still have to be accepted by the Senate, where it will likely face a tough fight. The issue could sink the larger health legislation if the chambers fail to reach agreement, or if any consensus language leads supporters to defect.

The House vote, and the central role played by one of the country’s biggest religious denominations, stunned abortion-rights groups that had worked hard to elect Mr. Obama and expand Democratic congressional majorities. Activists on the left had thought social issues would take a back seat to economic concerns.

Read it all.

But its narrow passage in the House, where the Democrats have a large majority, underscores the difficulties ahead. Senate Democrats are struggling to agree on how to pay for the overhaul and whether to create a new public insurance plan to compete with private insurers, as the House did. Friction over how the bill treats abortion, which almost derailed the House vote, is likely to divide the Senate too.

“If the public option plan is in there, as a matter of conscience, I will not allow this bill to come to a final vote,” Sen. Joe Lieberman (I., Conn.) said on Fox News Sunday.

With the passage of the House bill, Congress moved closer than ever to providing Americans with near-universal health insurance — a goal that has eluded many presidents since the days of Theodore Roosevelt.

Read it all.

MS. [Rachel] MADDOW: So to the extent that this is going to actually cut the deficit, to the extent that this is designed to bring health costs down, we’ve got to do something. And I think people who vote against it are going to regret it.

MR. [E.J.] DIONNE: And 98 percent of small businesses are exempt from the taxes in this bill. This is a millionaire’s tax, basically, the biggest tax in this bill. And that the other thing is there are a lot of benefits in this bill that kick in right away. There’s a fund for people who have pre-existing conditions to get coverage right away. There are a lot of other provisions; no more recisions, so you can’t discover that, “Gee, I’m not covered after all.” They were smart enough to put a lot of things that kick in as soon as the bill is passed.

MR. [David] BROOKS: Rachel’s right that doing nothing is not fiscally responsible. But doing something that adds onto our current system without fundamentally changing our current system is fiscally insane. The idea that this is paid for is a political mirage. That tax surcharge on millionaires, that’s dead, that’s going nowhere in the Senate. The idea that we’re going to cut $400 or $500 billion in waste, fraud and abuse from Medicare, that’s historically unsupportable. We will never make those cuts, we’re never going to pull the plug on granny, all this stuff. It–most healthcare experts think that this fundamentally does not change the problem with healthcare system, which is the fee-for-service system which has been driving up costs for decade after decade.

Caught this on the way home from morning worship–read or watch it all.

The House of Representatives passed a sweeping health care bill Saturday night with a tight vote of 220-215, making it the biggest expansion of health care coverage since Medicare was created more than 40 years ago.

The Affordable Health Care for America Act, or H.R. 3962, restricts insurance companies from denying coverage to anyone with a pre-existing condition or charging higher premiums based on gender or medical history. It also provides federal subsidies to those who cannot afford it and guarantees coverage for 96 percent of Americans, according to the nonpartisan Congressional Budget Office.

However, turning the bill into law remains uncertain.

Read it all.

The President and his economic team have claimed that the plan is working as intended, that they’re on track to save the original goal of 3.6 million jobs, but somehow, despite practically drowning in success, we’re going to have to live with high unemployment for years to come. Oh, and that everything is still Bush’s fault.

These claims have been debunked by a variety of sources, including the AP (and here), the Chicago Tribune, the Denver Post, USA Today, the Wall Street Journal, and blogs such as Political Math (H/T d3ft punk).

But forget the quantitative treatment for a moment and consider what the Obama team’s graph said on a qualitative level. The graph says that within a couple of quarters, the stimulus package will stop the increase in unemployment and reverse the employment trend. That was the real mission of the stimulus. Stop job loss. Get the private sector hiring again.

So no matter how convoluted and fanciful the “jobs created or saved” numbers get, we just have to remember what the point used to be, and realize how far short we’ve fallen. And whose fault that really is.

Read it all and look carefully at those graphs.

Despite White House efforts to discount the importance of the loss of the only two governorships on the off-year ballot, especially in New Jersey, where Obama had campaigned heavily for embattled Gov. Jon Corzine, the implications were clear to other Democrats.

Rep. Jim Cooper of Tennessee, a leader of the moderate-conservative “Blue Dogs,” called the result “a wake-up call for Congress. A tidal wave could be coming.”

His fellow Tennessean, Republican Sen. Lamar Alexander, said that Obama “retains his personal popularity, but his policies, and those pushed by the congressional Democrats, are scaring the daylights out of people.”

Democratic pollster Peter Hart, in a memo to his clients, warned of the possible consequences of “the disappointment and disgust the American public feels toward Washington. It is as strongly negative as the period of 1979-80 and 1973-74.” Both those cycles saw wholesale changes in Congress, the Democrats benefiting in the latter and the Republicans in the former.

Read it all.

Vast economic discontent marked the mood of Tuesday’s off-year voters, portending potential trouble for incumbents generally and Democrats in particular in 2010. Still the gubernatorial elections in Virginia and New Jersey looked less like a referendum on Barack Obama than a reflection of their own candidates and issues.

The gubernatorial elections in Virginia and New Jersey looked less like a referendum on Barack Obama than a reflection of their own candidates and issues. Still, the two Republican victories, in predominantly Democratic New Jersey and in purple Virginia, had to smart.

Just under half the voters in Virginia, 48 percent, approved of the way Obama is handling his job, rising to 57 percent in New Jersey. Most in both states, in any case, said the president was not a factor in their vote.

Perhaps most striking were economic views: A vast 89 percent in New Jersey and 85 percent in Virginia said they were worried about the direction of the nation’s economy in the next year; 56 percent and 53 percent, respectively, said they were “very” worried about it.

Read it all.

Afghan President Hamid Karzai’s election by default Monday confirms at least a week earlier than expected that the Obama administration will continue for the foreseeable future to have the same mercurial partner in Afghanistan.

Karzai was expected to win the Nov. 7 runoff election easily and continue in the role he has held for nearly eight years, just as President Obama enters the final stage of deciding whether to escalate U.S. involvement in the war.

But the departure of Karzai’s chief rival, former foreign minister Abdullah Abdullah, deprives him of a genuine win at the polls and potentially undermines the Obama administration’s goal of building a legitimate government in Kabul.

Read it all.

What does all of this mean?

Populism is on the rise and conservatism is gaining steam, perhaps at its own expense. (If Hoffman loses in New York, it almost ensures that the Northeast will be almost exclusively Democrat-blue territory).

A sour mood exists among people, with close-to-10-percent unemployment, decreasing health-care benefits and rising taxes – and a view that the well-heeled get bailed-out but John and Joan Q. Citizen do not.

Because our political system was designed to be slow and laborious and to do little, that sour mood grows rather than dissipates.

These political conditions have made the difficult course of lawmaking become nearly impossible, and governing has become highly averse to coherent action.

Read it all.