Their Brand Is Crisis

Valued commenter Rikyrah draws our attention to a post at No More Mr. Nice Blog in which Steve M argues that the Beltway press is setting Paul Ryan up to be the reedy voice of reason if the GOP goes down in flames in the coming election. An excerpt:

There’s a widespread belief that Democrats are likely to win this year’s presidential election no matter what, and that the GOP is utterly doomed if Donald Trump is the nominee. I don’t share that belief — but even if it’s accurate, even if a Trump-Clinton or Trump-Sanders race ends in a Democratic landslide, I can guarantee you that the GOP will recover from the Trump campaign almost instantly.

How? The press will do what it always does when Republicans stumble: It will give the GOP a do-over. Don’t believe me? Go to Politico today and read about Paul Ryan, who’s positioning himself to be the face of that do-over…

I think Steve is correct on both counts: 1) the upcoming election won’t be a gimme for the Dems no matter which hairball the GOP horks up, and 2) even if the GOP loses in a Goldwater-class epic fail, the political press will rehabilitate the party in time to regain any lost ground in 2018.

Recent history shows this to be true: The rebranding of the GOP in the wake of the Shrub’s utterly disastrous presidency is one of the most unheralded brand management feats of all time, and it couldn’t have happened without the enthusiastic participation of the Beltway media.

Think about the magnitude of that accomplishment: In just two short years, the DC press helped rehabilitate a party that had ignored warning signs and presided over the most deadly terrorist attack in US history, lied the country into a pointless war that cost upwards of a trillion dollars and needlessly killed tens of thousands and oversaw the worst economic collapse since the Great Depression.

Of course they lost the subsequent election, but all it took to flush the GOP’s catastrophic failure down the memory hole was a handful of Koch-funded operatives in powdered wigs and moth-eaten Colonial togs and a scrum of shouty folks disrupting town hall meetings to shriek about socialized medicine, and voila! — a midterm landslide in the other direction.

Overcoming a Trumpism hangover will be child’s play in comparison.

Many Bothans Died To Bring Us These Tax Cuts

The practical upshot from the chaos in the House GOP with Orange Julius now gone and Paul Ryan now Speaker of the House is that the Austerity Death Star will soon be fully operational.

The Wisconsin Republican who claimed the gavel last week is one of Congress’ preeminent tax experts, an ardent advocate of rewriting the code with lots of ideas on how to do it. Over the years, he’s gone further than most lawmakers in pushing politically fraught changes that have gone nowhere, such as wiping out a major tax break for employer-provided health plans and making it harder for the wealthy to claim the hugely popular mortgage-interest deduction.

But now Ryan has far more power to put the issue on Washington’s agenda — and the latest budget deal between congressional leaders and the White House should give him ample room to launch his speakership without being distracted by constant battles over funding the government and raising the debt limit. So some advocates are recalibrating the odds of a long-elusive tax overhaul that they say could spur new jobs and bring corporate money back from overseas.

Sweeping tax change won’t happen this year, supporters say, with lawmakers still staring at a stack of unfinished business — or next year, when the 2016 election will loom even larger. But they say it’s suddenly a lot more likely in the early years of the next presidency, especially if the Republicans win the White House.

It certainly comes as close to guaranteeing it as possible,” said a top Republican staffer. “It’s his No. 1 priority — it’s what he cares about most.”

The sort of ambitious reform Ryan has in mind, which would be the first since 1986, promises to cut both individual and corporate tax rates in exchange for junking scores of credits, deductions and other special provisions. Any rewrite would be hugely controversial, with an array of powerful interest groups sure to line up to defend their favorite provisions, not to mention many Democrats who’ve long complained that Ryan’s plans amount to a giveaway to the rich.

In a speech to the House just before his swearing-in Thursday, Ryan named tax reform as one of his top priorities.

It was bad enough when the Ryan Austerity Budget was a club used to get sequestration into play in 2013.  But as Speaker, Ryan now has significant power as far as bringing his austerity monster to life.  If you still had questions as to what’s at stake a year from now, better hope the GOP doesn’t have the keys to both Congress and the White House when Congress gets called into session in January 2017.

Otherwise, the Austerity Death Star is going to do a pretty good job of blowing America up.

Medicare 101: Part D

Yesterday we briefly talked about Medicare Part A and Part B. Part A covers in-patient/overnight stays at the hospital while Part B covers most other services that involve interacting with other people.  When Medicare started, prescription drugs weren’t a big cost driver.  Basic drugs were available, they treated most common cases to some degree of effectiveness and unsusual cases were out of luck.  And then drugs got expensive as they got more complex and the US patent regime encouraged non-market pricing of drugs.  Additionally, the US Congress also discouraged non-market pricing of drugs as the federal Medicare program is not allowed to use the simple fact that it is the biggest buyer of medical supplies in the world to get a good price.  Drug costs for old people became a massive political issue.

And thus an opportunity for Republicans in 2003 to do two things.  The first was to offer a solution that emphasized “compassionate conservatism” for old people to help them get their drugs.  Secondly, it was an opportunity to shovel a massive amount of money at drug companies without asking for a whole lot in terms of policy concessions.  Thus Medicare Part D was born.

The initial design of Medicare  Part D was a kludge of managed market competition.  Private insurers offer plans that cover a variety of different drugs according to a basic benefit design.  Companies could offer limited lists of covered drugs (formularies) or expansive (and expensive) lists of covered drugs.  They could create two tiers (generic and brand) or seventee tiers of coverage with different co-pays and cost sharing.  They could decide to require that all beneficiaries try Drug X before they would authorize Drug Y.  The rules and plan requirements for Mayhew Insurance would be diametrically opposed to the rules for Big Blue Drug Value Super Duper Plus.

There are common benefit design elements for the individual beneficiary responsibility of costs.  The individual would be responsible for a medium sized deductible of roughly $250.  After that, the insurer would pay 75% of the contracted costs until the donut hole started at $2,250.  From $2,250 to $3,600, the individual was responsible for all of the cost.  After $3,600 in total drug costs, the insurer would pay roughly 97% of the remaining drug costs.

Compared to the previous Medicare drug benefit of almost nothing, Medicare Part D as originally designed was significantly better than nothing.  It does provide some significant benefits to seniors while being confusing, complex and a massive give-away to drug makers as Medicare was expressly forbidden from getting good deals.

The Affordable Care Act made several signifcant technical changes to Medicare Part D.   It still maintains the managed competition design but changes the payment structure.   Over the long run, the goal is to get rid of the donut hole completely while in the short run, the goal is to minimize the out of pocket expenses for seniors who are still stuck in the donut hole.

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Cash flow of rejecting free money

Andrew Sprung at XPostfactoid is doing a great series on the individual states and their performance on  His post on Florida generated an interesting insight and one hell of a comment that I want to expand on.

In Florida, 856,092 private plan enrollees — more than half (53.6%) of the total — had incomes between 100% and 150% of the Federal Poverty Level (FPL). That compares with 47% in all states using that refused to expand Medicaid, and just 22% in expansion states.

Those with incomes in 100-138% FPL range would be Medicaid-eligible if the state had expanded. We don’t know exactly how many there are, but my prior analysis of national enrollment numbers suggests that at least two thirds of the 856k in the 100-150% FPL range are Medicaid-eligible — a bit more than a third of all private plan enrollees in the state (and maybe a good deal more).

In Miami-Dade, the proportion of low-income enrollees is even more eye-popping. Fully two thirds of enrollees — 259,000 out of 392,000 — had incomes in the 100-150% FPL range….

and the very interesting comment:

I am curious about whether an appreciable fraction of the cash influx a state loses by rejecting Medicaid expansion is recovered for the rejecting state in premium subsidies for the 100-138%-ers.

Liberal technocrats have been assuming that the states which refuse to expand are giving up massive amounts of money and thus economic growth by refusing to expand Medicaid will eventually expand.  However, are we accounting for the additional cash flow coming in as premium and cost sharing subsidies for people making between 100% and 138% Federal Poverty Line.  Brad Delong on Kansas from last fall:

 there is one number that I cannot find on either graph or in either version of the policy brief:

$8 billion.

That $8 billion is the amount of federal dollars the U.S. government will commit to match 100% of extra costs for the first three years and 90% for the next seven if Kansas expands the Medicaid program as ObamaCare envisions. And that is money that will not flow to Kansas if Medicaid is not expanded by Kansas.

And a more mathed-up Delong post:

The rejectors have 1/3 of the wealth of the nation–call it $5 trillion/year. They are throwing 0.7% of that away to make a political point….In the short-run of our currently-depressed economy we want to apply the within-monetary-union Keynesian multiplier to these flows: Medicaid-rejcting red states are thus making themselves 2% poorer in the short-run. For medical-care hubs like Dallas, Omaha, Atlanta, and Kansas City, the effects are likely to be larger: 3% less in terms of economic activity relative to the baseline, while the Bostons, the Denvers, and the Albuquerques will be on baseline. In the long-run–should they continue this insane and self-destructive policy–we want to apply Enrico Moretti’s long-run regional economic distribution multipliers–which means that we are talking a fall relative to baseline growth of 6% of regional GDP as far as medical-hub cities are concerned.

Does this analysis hold true for all the moving parts of the ACA as a whole?

The cash outflow to the federal government part is a constant whether or not a state expands Medicaid, it is a constant whether or not a state goes on or sets up their own exchange.  So the cash outflow component is a constant and not worth analyzing.  However cash in-flow is dependent in a post-King world only on whether or not they expanded Medicaid.

Now how do the cash flows balance?

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The Kroog Versus The GOP Budget

Paul Krugman is tired of Republican fraudsters powered by Magical Laffer Curve Fairies in general, but this year’s version of the Hunger Games is particularly bonkers.

So, about those budgets: both claim drastic reductions in federal spending. Some of those spending reductions are specified: There would be savage cuts in food stamps, similarly savage cuts in Medicaid over and above reversing the recent expansion, and an end to Obamacare’s health insurance subsidies. Rough estimates suggest that either plan would roughly double the number of Americans without health insurance. But both also claim more than a trillion dollars in further cuts to mandatory spending, which would almost surely have to come out of Medicare or Social Security. What form would these further cuts take? We get no hint.

Meanwhile, both budgets call for repeal of the Affordable Care Act, including the taxes that pay for the insurance subsidies. That’s $1 trillion of revenue. Yet both claim to have no effect on tax receipts; somehow, the federal government is supposed to make up for the lost Obamacare revenue. How, exactly? We are, again, given no hint.

And there’s more: The budgets also claim large reductions in spending on other programs. How would these be achieved? You know the answer.

It’s very important to realize that this isn’t normal political behavior. The George W. Bush administration was no slouch when it came to deceptive presentation of tax plans, but it was never this blatant. And the Obama administration has been remarkably scrupulous in its fiscal pronouncements.

O.K., I can already hear the snickering, but it’s the simple truth. Remember all the ridicule heaped on the spending projections in the Affordable Care Act? Actual spending is coming in well below expectations, and the Congressional Budget Office has marked its forecast for the next decadedown by 20 percent. Remember the jeering when President Obama declared that he would cut the deficit in half by the end of his first term? Well, a sluggish economy delayed things, but only by a year. The deficit in calendar 2013 was less than half its 2009 level, and it has continued to fall.

So, no, outrageous fiscal mendacity is neither historically normal nor bipartisan. It’s a modern Republican thing. And the question we should ask is why.

Well, the “why” part seems pretty obvious.  “Break the government, then blame the government for being broken” has been the game at least since Reagan, and the solution is always to take a larger hammer to the federal machinery.  Rolling back everything since the New Deal seems pretty much par for the course for these guys, if not cynically burning out the last of America’s consumerist resources before going on to new markets in China and India to exploit.  It’s always been about pillaging the treasury and setting the place on fire on the way out the door.

Krugman ends with this:

Look, I know that it’s hard to keep up the outrage after so many years of fiscal fraudulence. But please try. We’re looking at an enormous, destructive con job, and you should be very, very angry.

And our problem is that we’re always finding new and exciting ways to direct that outrage at President Obama and the Democrats rather than the Republicans trying to talk us into self-immolation.

BuzzFeed Exploits Unsuspecting Cats for Political Propaganda Purposes

Kids today are a tough nut to crack for corporate media pimps with a plutocrat-friendly political agenda to sell. My generation was easy — an improbably large portion of our cohort voluntarily read Ayn Rand’s master-race bodice-rippers. And those of us who came of age in the Gipper’s America and grew up to be politicians like Paul Ryan then wove those crackpot principles into public policy, exponentially enriching greed-heads like the Koch Bros. and hedge fund managers while despoiling the American dream for tens of millions. 

But try getting 140 character-consuming Tweeters to read one of Rand’s turgid, 10K-page doorstops. Nope. So the e-ville new media marketing execs gathered ‘round the conference table, twirled their pointy aging-hipster mustaches and brainstormed strategies to corrupt a new generation of impressionable yoots. And because they are morons, they came up with libertarian cats:

So much wrong. For one thing, the premise is an outright lie. Show me a domestic house cat, and I’ll show you a dole-accepting layabout. Pets are goddamn moochers! 

Anyway, fuck you, BuzzFeed Politics. If you want to conscript animals under Rand Paul’s banner and bamboozle millennials into voting against their own interests, at least have the decency to annotate cutesy anaconda pictures.

Both sides don’t do it

Robert Laszewski is analyzing the recent Republican “plan” to replace Obamacare with Hatch/Burr/Upton.  I analyzed the basic projection last year in three parts (Part 1, Part 2, Part 3).  The basic analysis is that Hatch/Burr/Coburn assumed that the big problem with the US healthcare system is that us peons have it too good as it is now, and the actuarial value of our coverage is way too high.  Low value coverage would be provided with small tax credits, and then everything else would allow the invisible hand of the free market to fist us.

There are a couple of things worth talking about (Medicaid demonstration waivers, price transparency etc) on purely technocratic grounds, and then there are a lot of conflicting values being displayed by budgetary committments between Hatch/Burr/Coburn or Upton vs. current baseline of PPACA.

Laszewski makes a decent point with the following:

They will have an uphill battle. Not because these Republicans don’t have a lot of good ideas, but because they have put a list of big and complicated changes on the table. Lots of people may not like Obamacare but Republicans have now really muddied the waters with a huge take it or leave it alternative that will have plenty of its own reasons to give voters pause….

Status quo bias is immensely strong in healthcare politics as Democrats have been getting kicked in the groin on status quo changes for the past three election cycles.  However he goes off the rails when he says the public would like a bit of PPACA and a bit of Hatch/Burr/Upton but there is one big block to that:

If Democrats would just admit Obamacare needs some pretty big fixes, and Republicans would be willing to work on making those fixes by putting some of these good ideas on the table, the American people would be a lot better off


Democrats have been offering fixes, tweaks and changes to PPACA since the ink dried on Obama’s signature in March, 2010.  Just in 2013/ 2014, there was a proposal to add a Copper plan level, there was a proposal to tweak ministry plans, there was a proposal to delay the sunsetting of non-compliant plans, there was a proposal to tweak expatriate coverage, Democrats have been proposing numerous fixes, tweaks and modifications to a  basic structure of a guarantee issue, subsidized, mandated insurance tripod.  Right now the Republican response has been fuck you, let’s revert to status-quo of the Bush Administration.

There has been no serious Republican thinking that meets the following two criteria:  Does not reduce the current level of coverage for Americans and has at least 10 sponsors or champions in the GOP caucus.  One side wants to engage in healthcare policy and the other does not.