sent an email of post because there are charts.
The job creation problem exists in a time when we must realize that an increasing number of once ‘US jobs’ now compete in an international job market, often times dominated by the lowest wage, least amount of capital to expand operations, and yes to a certain degree tax advantage. I don’t think that will go away anytime soon. Businesses have to protect themselves, and the best protection on this front is to be an owner or higher up management chain; when it comes to international job market competition. Ideas I put out there are not ideas that I can really demonstrate will work with numbers in reality (at least right now). But I use them to identify guiding logic for what ‘long term’ job creation ideas should be used over others ( I assume there will be lots of ideas to create jobs, in different ways). I only suggest that you be careful with the tax breaks for job creation ideas.
I watched some of Buffet and Gates on CNBC this week talking to Columbia U business students, and was reminded of how unsuccessful I am in many ways….(smile)…Also I was either reminded of something I’ve read or heard. He mentioned his investment philosophy a little than or before, long-term ‘competitive advantage’. I might be treading on someone else’s ideas, but that should be the goal of tax breaks for companies that want incentives for companies (and yes maybe even foreign companies) to hire people in the US. A guiding logic, I think, should be that:
Tax breaks that lead to ‘competitive advantages’ for business which; justify sustained international revenue growth for American companies AND/OR economic advantages for long term US-based jobs that compete in the current ‘international’ job market.
Example of a bad one is a blind tax break to some business just for hiring someone. So the government gives a company $5000 to hire someone that cost them $20000 to $50000 a year in wages and benefits. That’s a good deal for the first month; depending on how they receive it. But after that if the work loads, or revenue generation, are not there to justify that person, it’s a strain on the company.
A tax break idea below that is really flawed, I believe makes the link from tax break-to-‘competitive advantage-to- long term job creation mechanism, in my opinion. Let’s assume that there is a job in another country where the same position costs $2000 less a year than it does in the US. Also let’s assume that if you can reduce that the US workers pay by that much, it is realistic that this job can stay in the states. It’s a build on an even worse housing idea I had in an earlier post. Give a tax break to companies that do 2 things; 1) Give certain employees down payments for home purchases at a certain amount, and 2) that tax break is conditioned on employees accepting a comparable reduction in wages after assumed normal annual raises are calculated. If the tax credit is effective immediately and the ‘down payment assistance benefit’ is treated as ‘before tax’ deductions from the individuals pay; you could close the competitive pay gap (somewhat) while offering the worker something in a benefit that can ‘soften’ the pay cut and in some cases improve them in the long-term. (WARNING; I AM NO PAYROLL EXPERT- THIS IS ROUGH BUT IT SHOULD SHOW THE LOGIC, and I’m tired and don’t want to spend a lot of time on this).
Note: there are assumptions for health insurance premium increases without good reforms and including an annual pay increase of about 3%.
Below- example of % salary raises calculated from previous year’s income after home purchase reduction to gross income is made). Green boxes show year three’s annual raise based on post reduction gross income (for lack of a better term).
Note: The reduction should take place after ‘normal’ pay increases are calculated to; give the employee some form of raise for performance and keep 401k contributions from decreasing. Employee portion of health premiums are independent of the program and keep rising.
The Company gets a $10000 tax credit or deduction for lowering a salary by $2000 and giving a $10000 (or less) home purchase down payment assistance/loan to an employee. With that reduction, this US-based job may be able to compete better (on the basis of pay) with an international equivalent, giving incentive to keep the job here. The US employee gets a tax break to help ease the pain of the pay cut, because taxable income has come down for that person. Also, it can strengthen a workers commitment to that company; it is no longer just a place to get a pay check, it helps them get a home. The down payment assistance can help people get into better loans with better rates possibly; which should lead to more disposable income and cash going into the economy. And the savings are amplified when you factor in possible bonuses that are based on a percentage of salary or wages.
Again this is not a workable idea, but I wanted to illustrate the link from tax break-to-‘competitive advantage-to- long term job creation mechanisms that I feel should guide decision on some job creation ideas. Tax breaks just for the sake tax breaks may not give a company, or an economy, a long term job that can compete in the international job market. I think this link should be the guiding logic. Yes, there may be other ways to increase trade and justify jobs through increased demand. But I like this guiding logic because it can help bring US wages closer in-line with international competitors; particularly for what is considered lower paying job in America that are the back bone of manufacturing. I think the tax break needs to be given to a plan that increases long term revenue growth or improves its margins in a substantial way, if possible. That logic can help judge the merits of ideas that may come up.
And remind some people on the right and left that criticize your team for not stating a plan to create jobs yet. Remind them that there are a lot of ideas that will give businesses reason to hire in the US; they all involve cutting wages, deep and quickly with no upside to the worker. And that your team is trying to avoid those kinds of cuts if possible.
Also the other idea, giving average Americans the ability to invest the way ‘high net worth’ individuals do; has more to do with expanding normal people’s portfolio to include things we normally are not invited, or do not have capital, to invest in. I know that some limit it all to casino gambling, but I would argue that if you look closer at the best investors and hedge funds, they both invest in all kinds of things. A hedge fund can purchase metals from one country to sell to another, offer funding for reinsurance opportunities, one bought Chrysler, etc. High net worth people can become part owners in small business and real estate ventures as well as shorting stocks, and dealing with complex derivatives. I was thinking that if people can have access to those investments some how, it would expand portfolios beyond current public markets, and provide us with the type of investment diversity only the ‘big boys’ really have. Again these are ‘guiding logics’ not idea of specific policies. If I get some time I will try to demonstrate these theories with ideas that can be implemented. I don’t have the time and or research material right now; also they may not work…. (smile). I’ll leave those ideas to those that have the time and resources to do it right…or until I do too. I don’t think diversity is dead just yet, It may be that exists best with the ‘big boys’, and it may be nice if the average guy can invest in a small way like they do. An example of the logic here is deeper than the investment; and goes into liability questions, protections for those who don’t have ‘high net worth’ ability to protect their own interest, and investee protections from new investors, etc.
I only ask that you create the theory and idea with a close eye on the effect the long term operational results of the business. The ideas for job creation are flawed, but the logic I think is sound and I believe links government tax incentive with ‘real’ economic stimulus. Yes I’m a dork and I’ve had to study a lot of this stuff lately.
The Hollow American Economy
A Clarion Call For Leadership
...converting the United States from an exporting, value and wealth creating nation, to one careening recklessly toward bankruptcy. The purpose is to dispel some of the rationalizations for this unhealthy transformation of our economy; and it is to put both data and common sense on the table so reasonable people can engage in the critical discussion of how best to get our economy back on track. ...
As the BLS said, “an increasing share of jobs was in high-paying jobs and required college training; but most jobs that were filled paid below-average wages and did not require a college education.” They are stating the obvious. There is a finite need for doctors, lawyers and professors....
Without people making things and creating value, there is no money for the financial sector to play with....
The number of jobs in true value creation activities is a much more accurate measure of the long term health of the country....
There is no manufacturing voice in our government at a time when we so desperately need one.
We need a full airing in America on this very critical matter. Champions must step forward to lead an effort to honestly explore how best to stop the continuing collapse of American manufacturing.Tell the globalization experts to stay at home. They have had their say. Instead ask people like Doc Hall from Indiana University who formed the Association for Manufacturing Excellence to explain the current state of manufacturing and how we got here. He is a walking encyclopedia of the last thirty years of successes and failures. Call in Brian Maskell to explain how government mandated accounting rules are eroding manufacturing, and how the privately held companies are doing accounting in a radically different way, and managing their companies much more effectively as a result. Have Jeffery Liker explain to you the real reasons for Toyota’s manufacturing tap dance over General Motors.
Our business heroes are the thousands of American men and women in who roll up their sleeves and compete toe to toe every day with the best in the world, and win – .... These people are committed to theircommunities and the people with whom they work. They – not the clever financiers – are our businessheroes; and they are the key to turning our economy around and getting us back on the track we were once on. But they cannot do so without the support of the country, and we are rapidly running out of time.
http://www.bill-waddell.com/images/CLARION_CALL_MASTER.pdf
Senior Faculty Fellow at the Yale School of Management; Author, "It Could Happen Here"
...Earlier this week, we announced a new service, The Cost Savings Guy. For the past six months, I have been leading the development of this initiative, which I passionately believe has the potential to change the fortunes of the millions of small businesses and nonprofits that are struggling to stay afloat. ...
http://www.huffingtonpost.com/bruce-judson/can-the-free-market-save_b_356998.html
I can’t schedule something in Nov. like I thought so I have some down time. I thought about the president’s press conference about job creation. Its tough. I think the biggest problem is not wages, but legitimate asset values here as oppose to the in these countries where jobs tend to go. I believe it’s the asset values of land, raw materials, etc that justify different wages in the US and abroad. If you lower wages here to compete internationally, a person could not make enough to live based on the cost of our assets and living in the states. In a market driven economy like ours, it is virtually impossible to make to lower the cost of assets. Much of why we have such high wages for some jobs is because of inflation over time, value added by improvements, innovation and transaction volume. If you try to make the US worker more valuable with technology (allowing each worker to produce more); than a company will apply that technology to a foreign work force to make them more valuable per person.
Since the president said he was serious about examining new models I will give this a shot. It has a lot of flaws that will make it difficult to work for all jobs, and difficult to rectify someone in this situation changing jobs or losing them. But I think the math can hold up if government allows for early tax breaks or grants, and participants are willing to commit long term.
Give some businesses the ability to purchase homes in some cases (based on higher income levels) or decent apartment-like housing in others at a decent price and maybe with a tax incentive or government help. The company then offers employees a lower wage as a benefit for the ability to live in a ‘company’ home or apartment-like environment for a much reduced rent, rent to own situation, or mortgage. If the price of the living arrangement, home is low enough and the reduction in wages is not too steep, it may be possible for an employer to offer lower wages than the normal market while the average worker in this program has enough disposable income to live on that lowered wage, or even come out better off. A two income family could make out very well.
To give some perspective, what if that $65 to $75/hour (with benefits) wage of American auto workers could be reduced much closer to foreign counterpart’s $45 roughly, but in exchange for that lower wage the American worker pay a mortgage/rent to their employer on a home the employer bought with tax breaks, government assistance with purchases etc. Instead of paying the bank or landlord for the mortgage/rent, you pay your employer in order to pay rent or buy off your house, in this program. If the employer gets to buy the house or rental property with enough incentives from state and local government, they may be able to make up the cost of the housing purchase with the savings in wages paid out. Assuming that benefits stay about the same per hour, the purchase of an average American home at about $200,000 can be made up in savings in wages in a short period of time, if wages can come down by about $10 to $15/hour. Especially if that company only pays about 50 cents or less on the dollar for the house upfront out of pocket when they first buy it to be mortgaged or rented to an employee. But remember that same person would not have the typical $1000 to $1200 mortgage payment. If the ‘employer’ rent or mortgage is considerable less, like $100 or $300 a month in this program only, the cut in pay may not be so bad. There needs to be a reduction in what the company has to pay out, but not at the risk of market price. So government aid steps in to help a business meet reasonable market prices. A program like this can not bring down the prices in a local market. Remember that the fixed payment in a mortgage for land in this idea, saves the company more overtime when wages rise. There may be situations where the employee could come out with far more in disposable income.
And there are a lot of flaws with the idea, but the principle I think is logical. That in order for some of our labor markets, particularly our physical labor and manufacturing, to compete with foreign countries, we will have to find ways to reduce the prices of assets and services people pay for that work those jobs. Housing seems possible to me if entry prices are low enough, and are financed over a long enough period of time. And that way has to work within a capitalist model of profit creation. Another step is to make what other countries want better and cheaper then whoever does it now. This is really hard since most marketing info can not really tell you what can be sold in many parts of the world from American in my opinion.
I know I don’t provide empirical support for a lot of my stuff, but I don’t have time. When I do I can put together a small spread sheet, but the calculations may not be that hard and others may have better research info than I do to check some numbers. After that the projection of saving should not be to hard to calculate. I will have to start studying for 2 of exams for early next year, since I can not take one this month. I’ll add more about this and some possible new ways for the middle class to be involved in investments usually reserved for the ‘high net worth’ club. I may get into some detail tonight if I get off work early or have some time, but by tomorrow I gotta get on the grind. Gibbs and Plouffe over the week. Hang in there Mr. President and bring home a good health care LAW.
Banks see themselves as being ‘the financial system’. They will always see their preservation (as a whole) as more important than any one business or generation of businesses. One bank will probably see thousands of investors and business plans a year on average. They are the ‘money multiplier’ in some ways, and it ‘goes to their heads’ obviously. But we should not forget that there is a great deal of truth to their assumptions. Remember, please, that the relaxing of the mark-to-market rules only increased values on the books of a lot of companies with instruments that require it for measurement before recording. It gives banks time to wait out the large right downs and hits. Instruments tied to housing may still be tough to predict the values of, even if higher values are reported based on a model or assumptions of a better market. The foreclosures keep coming but what makes things worse are lower sales, and large inventories. The stabilized values on the books because of the relaxed mark-to-market rules will one day have to meet the low number of mortgages that receive cash. I hope there is something in place to protect banks, and us, from a point in time when the cash flows can not possibly justify the values based on a mark-to-model valuation. I might be wrong on these things and other things, but you may want to make sure that the accounting rule changes don’t force continuous write-downs in the future, even when financial regulation is enacted. These leads back to capital requirements, and why larger amounts of cash and equivalents in proportion to complex investments are needed.
Honestly, I was for the Iraq war in the beginning when I thought it would be managed well. I saw it as more Saddam’s fault for not giving full access of inspectors by Bush’s deadline. I’m not trying to defend the bush admin, but Hussein could have made a choice to avoid military action. Saddam never thought about his people and he played chicken with an overwhelming force. I also assumed that with Powell at State that a real plan for nation building would have existed and a new govt would be waiting when Hussein was removed. Estimates were right; we really did not lose too many soldiers fighting the Iraqi republican guard- many of them surrendered. I think we were basically about to storm the capital without losing one solider. But when it was just estimated I thought about the possible end result, even though I was suspicious about Chenney’s motives (Halliburton connections and all). I thought, what if a basically 100% Muslim, democratic and semi capitalist country could be created in Iraqi? What if, by example, the rest of the middle east that hates the west and America could see Muslim praying 5 times and day, women clothed in traditional garments, all being able to vote and have there day in court if they choose. You add in trade with the west where you can and an improved relationship with Israel; I thought that Iraq could change the whole region if the police action to get Hausain out and the democratic nation building was planned well. I knew it was a mistake when it took a few years, but it wasn’t until Powell did not return before I knew that it may have never been planned like I trusted to be. When a guy like that breaks rank, I think you have to really question the chain of command some what. If this admission and my desire to see more troops, but more importantly some positive results in the war on terror in Afghanistan and Pakistan, both make me a ‘neo-con’ or a ‘hawk’, then so be it. But if I am a hawk, I also know I can be wrong. I hope that more ‘dove’ ideas are considered and checked with military types to see if plausible. I think that in these ‘damned if you do or don’t’ situations, whatever you do is accepted better with the public if the president and military staff can agree or can both support compromises. But it is the president’s call, do what you think is best to keeps us safe, sir.
I like the attacks on fox. The left can’t go anywhere, the right only watches it and much of what is said will begin to scare or bother the center. Also, I’m personally tired of good ideas like end of life counseling, at a time of record numbers of senior citizens, having to be taken off of the table because of political attacks to kill a bill. Even worse, that idea can be credited to a republican. Too much politics, not enough level headed, real world conservative policy making and defending, from what it’s worth coming from me. I don’t see the white house attacking, just defending positions that show the other sides weaknesses. If the drama actually starts to drive policy I don’t think you have a choice. I say keep it in the form or responses to comments or questions. Anyway, please check the banking thing this year and next, it should tell us a lot about the link between the number of mortgages that are actually making payments and MBS values on the books. I might be overdoing it, but I hope that another bubble is not being created to fix the last one that burst. I honestly think the housing credit should be extended, and maybe use stimulus to cover the cost.
Nice family photos Mr President.
I have been reading my weekend section of the FT this afternoon and came across two unrelated articles that struck a chord with me with respect to the financial markets. Some items that are notable, 1) Treasuries, since the credit crises, have been the only acceptable collateral in the repo market [http://www.ft.com/cms/s/0/aed6f9c8-c035-11de-aed2-00144feab49a.html?nclick_check=1] 2) There are still non financial companies out there that are writing off huge losses in derivative "investments" that are way out of proportion to the revenues they had as functioning companies, making me think more non-financial companies than I originally thought got hood-winked by Wall Street into derivative positions way out of line with the regular functioning of their business.[http://www.ft.com/cms/s/0/95d34212-bfed-11de-aed2-00144feab49a.html]
So what does this mean?
I have been doing some thinking lately and analyzing the Fed's rate action since 2000 and have decided the biggest problem created by the Fed was not bring rates to historic lows after the 9/11 terrorist attacks. The problem began when the jacked up rates in early 2000. Then after realizing they “goofed” dramatically reversed course in 2001 only to overshoot to the down side where they left rates to low for to long. When realizing this, the Fed followed with a draconian attempt to return the rates back to "normal" beginning in 2004, which wrecked havoc with the credit markets and economy.
I did not mean to come down to hard on some of these topics. I hear that there is good and bad Taliban, but what does that mean? Is there actually good and bad Taliban, or is their strategy for one part to play nice while the other part wages war and supports other extremists; the good part allows them to buy time for the bad part to wreak havoc and try to distabilize our efforts and those of allies?
on banking and market regulation, it may be better that the focus on controling balance sheets and portfolio make ups more so than individual financial instruments. The reality is that you want risk and instruments that hedge or reduce risk of negative/or no return. it may be better to limit any one companies exposure to the amount of them it can carry at one time, or force a certain amount of cash or cash equivelents that have to be part of the balance sheet for a certain amount of complicated assets (derivatives, MBS', etc.). But even those capital requirements may need to be fluid (allow for some time to gain resources) in order to allow strategies to play out.That fluidity can allow risk to take place. If we can reasonable allow risk to investors and market players to exist without it having to endanger the entire market, we may be able to keep risk taking active to a degree that it aids in financing new industries (clean enegery), helps maintain jobs by allow expansion and investment, etc.
Even before the election, your campaign stood for something to alot of people around the world, Mr. President. Whether you want that attention or not, you are the only person in the world that could have made that Cairo speech, and lived a life that personifies some aspects of it. We Americans tend to not see beyond that next election, 5-yr plan, etc. But older countries can not avoid the fact that 'setting a tone for the future' is no small thing. Congradulations, Mr. President....you might just catch Truman one day..... but not yet (smile).
9th October 2009
President Obama has won Nobel Peace for 2009, for giving the world "hope for a better future", we give the President our best wishes and heartiest congratulations. President Barack Obama has been rated as the finest Statesman the world has seen, in the recent years by leading political analysts. His economic policies has seen, the US economy as well as the world economy cool down, from the free fall it has been witnessing. President Obama's climate change initiatives will be creating more job oppurtunity, than any industrial or green revolutions has created so far.
Lets also seek in earnest, pursual of Ethical Governance, i.e Ethics based policymaking and management that addreses performance issues, in business, government, politics, international relations, health care and beyond. The compromise in these, has seen financial woes in major institutions, nations being depraved and fleeced by corrupt practices. Lets seek active support and cooperation for Ethical Governance, locally and globally, to save the world from financial meltdowns, terrorism, corrupt politicians and bureaucrats and gross misuse of power and government machinaries, by despotic rulers, to make this world a better place to live in. (http://ethicalgov.co.cc)
This isn’t the group for it but in all the talk about Afghanistan I think that the president and team should focus in on some basic realities about the war on terror. The families and soldiers who suffer are heart breaking. Nobody wants a longer Viet Nam. And even though it does not apply to me I will try to follow Sec Gates requests and not jump on one side too much…even though I have one. I feel for the fallen soldiers, I know many do not have a stomach for a long occupation of land and not strides made at beating terror. I also understand that the idea of 100,000 soldiers in a small country seems like conventional war strategy used in a war that is a non-conventional war/global police action against suicide gangs with multi-million dollar funding. I will not lean on which way you should go Mr. President. But I think that people on the right and left should remember that…..terrorists are insane (in the most important ways). Polls showing Americans are willing to stay in Afghanistan and possibly attack Iran to stop them from having nukes is a real sign that they see terrorist (and people who can support terrorists) as non logical, and extreme measures may be warranted in many people’s opinions. Remember who your enemy is, even before what it will take to stop them. They are well financed and highly intelligent people (at the top), but lack a moral compass that almost every religion or philosophy of man follows. That lack of a moral compass and the fact that there is no national headquarters makes not forgetting what the enemy is more important than the resources needed to defeat it, at least at first. I think the source of their strength is that their perception of things is opposite to the norm in some ways that it fosters a commitment we have not seen often in the civilian world. There is no treatment and no counseling for them, they can not be persuaded and they threaten civilians of most nations, without claiming a nation or headquarters as a home really, only the goal occupation is some cases. (Anarchists). Do we know that if we cut off the top people will new leaders emerge? Does the U.S. holding land that Al-queda does not need to blow up make sense? Is holding that land part of a plan to strike at headquarters and top people? Does 40000 more troops requires all to be on the front line; and if so, why, and if not, how will they accomplish non fighting objectives?
If your plan is positioned as clearly the best way to deal with that ‘insanity’ and what supports it, you can get a good decision and create a way to sell Americans on the fact that it’s good. They understand the ‘terrorist insane’ part. They will feel sympathy for fallen soldiers and a Viet nam repeat. But a fear of another mainland attack or some Clancy-movie drama will trump that sympathy most of the time. Americans are good people, but we do not all strive to be Gandhi. I know how this sounds and I don’t agree with it myself, but in reality a soldier in uniform dying in a far away land does not move Americans today the way a building blowing up in a downtown area does. Even though some may think that is heartless, they can not honestly argue the morality of it if the threat to American families is considered real.
Who in this war fits the profile of that ‘insane’ terrorist, and how can they get what they want because the terrorist are successful in maintaining the terror. I think that there is a fundamental difference between the behind-the-scenes guys who finances, find weapons, cover tracks of resources, etc; and the guys who live in mountains to fight ‘infidels’ and believe they will go to heaven by blowing up a public place with a bomb on their chest. The guys we’re fighting in the mountains in Afghanistan and Pakistan are not the guys that keep this operation a float and organized on a military level, to me. Whatever you do Mr. President, link your decision to the clear bureaucratic structure, economic resources, organized military assaults; as well as to the kids that could run into a train station with a bomb. You may want to combine strengthening any weakness in homeland security with the 2 headed problems with Terror.’ We will keep you safe, so we can effectively take the fight to them’ kind of message. Whatever strategy, link it to that sir. I’m a novas, but that’s what I think. First remember what the enemy and how to beat that enemy first. I think if you lose that focus, and it becomes more about what might be lost, you may approach this new kind of war/police action the same way.
Also, people in the media don’t keep the Taliban in the same level of importance as Al-queda it seems. Al-queda is insane; the Taliban wants some form of world presence where they can find it. The ‘insanity’ works for them unless the targets change. The Taliban seem to want a different world order and every G20 nation should really like the current one we have….I’ve heard some people separate them, I think your long term strategy should not. I’m not talking about what you should do, I’m saying what you do needs to show Americans that you can protect us from the ‘insanity’ and take the fight to those that support it.
Iran is tricky because the whole region is dependent on by the world for energy, in my opinion. I think the top people in Iran get their ‘balls’ from that fact more than anything else. Military action means price spikes in oil, possibly to a point of deeper economic hardship. Again energy independence in no longer a ‘tree hugger’ issue, it’s about national security. 9 11 was an attack on our financial HQ’s as well as governmental and military, even if just symbolic. Europe’s history of not really getting physical may not mean much to them, particularly when everybody keeps buying oil from them and their neighbors. Russia and China need to get more vocal but they can’t because ….they keep buying oil and other things or selling to Iran and their neighbors. Try to economically isolate them as well. The speeches of the President, Sarkozi and Brown where good, but they know China and Russia need their oil; all three presidents’ countries need oil from the region. I am a speculating amateur, but I think that opinion is shared by many. You may have better negotiations by creating a strong position for the US and allies in the long-term with other world powers that are not as vocally opposed to sanctions or more.
Can you work with those other world economic powers to supply Russia and China some or much of what Iran gives them? I believe China is working toward energy independence anyway, in time (long term) hopefully they will not need oil like they do now. I know that there is proof otherwise, but I think Russia is far more ‘capitalist’ than hard-line, power hunger old KGB. Still tough and not a place to mess with, which is why you may not see a lot of terror attacks there (they may suffer with the good and bad of not following due process in all things). But I think they understand that ‘insanity’ and what it can do, even if they don’t think Iran is there yet-they know Iran can give support to that insanity. Russia and China too will need stable markets and economies in other countries in order to maintain stability in their own economies. But if we can get China and Russia to ‘not need’ resources from Iran as much as they do now, it may be easier for them to make that stance of sanctions and even possibly action if need be. They too are victims to price spikes do to military actions, decisions to stop oil productions as protest etc. (I don’t thinks it’s impossible). Its pie in the sky maybe, but if all or most of the remaining economic powers can work together to supply those 2 countries or more what they usually get from Iran, Iran may have to question the legitimacy of the thinking of their government. I think the money the world pays them and the ties they have with some parts of the world is what they use to justify what they believe about international relations and behavior in my opinion. Yes this is all pie in the sky, idealist thinking. But I have not heard of how our side can get everyone else on our side economically, and not just with security concerns. Some G20’s aiding other G20’s when the whole world is ‘feeling it’ does cross some lines; but what if it could be done and lead to almost total UN Security Council support. Add with the understanding that some of your biggest economic partners will not need your resources if you challenge the international community more.
Also, it could force the Iranian government to show their people and the world, what does all of this get your people? Really, what is the goal and how does it make Iranians safer, wealthier, etc. Can he prove that what he is doing is for the long-term benefit of his people? From what I’ve seen from the election there, they have a lot of good people. Many of them who wish only to believe in their religion, work, support families, etc. I saw that we have more in common with them then I once thought. Why does he stand up to much of the world; and the part that could help bring more prosperity to his people? My prayers go out to them.
Energy independence people not in the white house, use this to point out that a clean energy economy for the world is not just about polar bears anymore. Iran’s and Israel’s problem could lead to higher oil and gasoline prices, right when we are suppose to see some improvement in the economy on a GDP level. There is an argument to be made; even though it may not be taken well by all….it is the truth. Also, keep the oil speculators in check. The price may need to go up if supply is limited, but this is not the time for them to make up for past loses in my opinion. I’m for making profits, but this may not be the time to push for everything.
The ‘we need job creation’ people may do well on TV with that given the reality of the situation we are in. But can they translate tax cuts into increase spending by consumers who still may fear future economic problems? Proponents of the ‘supply curve only’ approach have not yet shown that supply side increases economic growth in a time like now, when the mind set of the consumer is ‘lets what and see for a while before we spend what we can actually afford’.
There is a logical argument that a one tax break or tax credit does not cover the business expense of a new job, unless there is new demand to sustain that job. If job creation talk and strategy steps away from that thinking, I don’t think it gets you to the kind of long-term job creation the President is thinking about. It is a nice idea that may work in normal downturns. But is this, even as GDP may start to grow, a normal downturn on the way up? It should be logical that if low unemployment was linked to easy credit, poor regulation, and over spending by consumers in Jan 2008; low unemployment will not come back quickly unless you institute things that do not work for long term economic stability. “Where are the jobs?” rhetoric makes sense on the surface, but if pressed the right way to give answers- virtually no one can walk the average American from tax break ALONE, to a job being created and sustained over time.
Job creation plans for me should start with a ‘tactic’ to get the right participation, but HAS TO BE linked to a foundation that supplies demand and healthy ‘wealth-effect’. A tax credit or tax cut can be a strong ‘tactic’ that justifies hiring in the short-run for a business to get the benefit of the credit or cut. But if it is not followed by plans to give that employer demand that justifies production needs over the long-term, in this downturn that job may not be needed in the long term. That first time buyer tax credit that’s about to expire is good, but when it ends we may find that it was propping up the housing market (along with foreclosure pricing). Remember that currently the right can only cheer the ‘tactic’, because the ‘foundation’ requires some govt evolvement they can not be for. You may be able to turn the argument on them with strong examples. Why would an employer take a one time $10000 tax credit to hire a $50000 a year employee for the next 5 years plus, unless there is work need because of sales to justify his salary from year 2 going forward (for certain industries). Something like that which is linked to policy.
I would also suggest that your team look at a more specific use for the remaining stimulus money. First strategically, you may get information that shows you what areas of the economy are there furthest from what the old ‘normal’. Maybe consumer lending is stabilizing but commercial lending is not, for example. I talked to a far-right republican who knows his stuff (even though I disagree with him often). Extension of unemployment may have to happen. Extension of the first time home buyer tax credit thing should maybe happen as well. New homes force people to purchase things and we may find that the credit along with foreclosure sales might be propping up the housing market. I talked to a real estate developer that is finding it impossible to get small loans anywhere. So I guess my point is, consider changing the focus of the remaining stimulus to more concrete things. Maybe some of it can go to covering the cost of the housing tax credit. Maybe some to secure that certain lending that could take place normally (strong credit, valuable collateral, but the industry is too shaky to risk lending to right now). We know that there are some signs of stability, so it should be easier to focus on weak areas. I really believe that in 2010, much of that stimulus will show up on Ads, and you want to separate the white house from it (mainly because you should, I think it had too much to do with dems being out of power for a while).
Also I must stress that the ‘foundation’ should lead to an eventual exit strategy for government plans. Markets and industries can not rely on government support to make profit; it goes against the nature of ‘the money multiplier’ in my opinion. After looking at things and doing some research that I can, it appears that we want government to support some things until the consumer can get working and start spending more, but in a healthy way. But we don’t want business welfare. I’m not a fan of welfare, but at least if given to citizens most goes into the normal economy. Business welfare programs-consistent money into industries from government spending and specific tax credits- can lead to a recycling of the same dollars, instead of creation of new dollars.
You’re not trying to create temp jobs, Mr. President. That’s why education is a priority, because the new jobs require strong education. That’s also why we have to get health care cost down, so that people can spend more on things that add value to the American experience. Rising health care only means you pay more to stay alive and/or healthy, but not to improve, expand or enjoy your life. You’re the first president in the 24hours news cycle that includes blogs, emails, and internet. You may have to push back on things that have traction. But even the ‘push back’ needs to lead back to that clear message that almost anyone can understand. The right has the luxury of simplicity, less government more freedom…. Easy to understand. You have complex problems and solutions, not your fault. But I believe all of it can be brought back to a philosophy and message of E=MCsqaured for health care, energy, the economy.
Energy independence is still the best ‘foundation’ in my opinion, because it does not exist and has not be made so efficient overtime that it can afford to not take on new employees in bad times (as an industry). Its road map may be unclear right now, especially in distribution of energy. Cap and trade makes sense from an environment standpoint; but as a normal American, I can not see how I can use it to lower my energy cost. There should be enough information from R&D and engineering in these companies to give Americans a picture of this new clean energy economy. What kind of cars? What will the filling stations be like? Will you need filling stations, and if you don’t what will homes have to be like to refuel these vehicles? Can Bobcats or large factories run on clean energy, and can someone show us these machines or prototypes? You don’t have to give names of companies, but they should be able to show us what there are ‘going for’ in terms of prototypes and was to distribute this energy. In my opinion, a lot of ease will come if people can see that this new economy is not science fiction, but around the corner like next year’s model of car.
In the future you may want to consider making part-time work more accessible to benefits like savings, 401k plans, college savings plans. Better tax breaks for companies that pay for college. Also maybe seeing if businesses can get more access to paychecks for layaway plans, loan and mortgage payments, etc. The fact that a payment comes from a paycheck could justify someone as a better credit risk. That could mean millions of purchases and services that did not exist before, coming to people that would normal not get them on part-time salaries. Also the future may force less than 40hrs-a -week jobs to be more of a norm in America. You may want to brace us for that or not, but it is possible. But access to some benefits like these could help lessen the pain of making less. Also it may make people value those jobs more than people tend to now. Again, this may not be the time to talk about it in those terms. Maybe state it as ‘in tough times, when people are working less- the admin wants to add more security to you temporary situation as well. That’s why we are instituting modified 401k’s, college saving plans, credit union and bank accounts through part time jobs’. It may be the norm and a needed way to get into the careers of the future, but the politics of saying it wrong can look like your punting to most people.
And the CBO gave you something to work with I think. Can it be arranged with a public option or well constructed co-ops (I think multi-state, regional ones)? Price from GA sounded like he had some good ideas, but there is a certain number you’re going to need in premium payers to make a public option, co-op, or anything else cover the # of people you want to cover and maintain any kind of budget expectations in the long-term. But remind the left that even if you can not plant your flag of liberal principles upon it, a win is win. And a foundation that gives coverage to millions more with much of what you want is still better than what we have now. Lead them as well Mr. President, they will need you in 2010, more than you will need them in 2012.
Choose your direction on these things and bring all 3 issues back to job creation and job stability-jobs that do not become obsolete or move away so quickly. Why focus on health care now with 9.8% unemployment?-we want the job you will get to remain available for you 10 years after you get it, lowering health care cost helps insure that also part of the current unemployment problem and a larger part of any future unemployment problems will come back to the fact that American businesses can not afford to pay these premium prices. Dealing with health care now is a cheaper way of deal with those premiums and allowing American businesses to keep hiring now and in the future’… something like that but better…(smile).
I will have to focus for a while (no I’m serious this time) and get some personal stuff done. Yes, a check for taxes in on the way. Give them hell, Mr. President. Glad to see Plouffe back again. No one has had to deal with all of this in this modern world, keep your head about you Sir. The republicans are starting to separate the crazies from the right, that’s the sign that they have a message and plan for 2010. You and your team will need to lead the agenda more than guiding the eventual positive process. You may be doing it, but it may not come across that way. Keep up the good work Sir. Give him hell….even Truman could not do it any better in these times and circumstances…But Truman is still my favorite (smile).
President Obama's path breaking climate change initiatives will create more jobs than any major Industrial or Green revolutions ever has, so far globally.
One of the most important factors in the global fight against climate change will be governmental policies favouring climate change. Only active government policy will trigger the wholesale expansion of clean energy? Energy industries is going to be key driver of low carbon and its related employment opportunities. This is a global and a local matter, and action on both levels will create greater benefits for all. Lets seek active support and cooperation to President Obama's Climate Change Initiatives locally and globally.
http://ethicalgov.co.cc
I came across this comment from "White House Economist" off the Dow Jones Newswire today referring to an article in the http://voices.washingtonpost.com/44/2009/09/24/goolsbee_chides_aig_ceo_to_min.html?wprss=44 Washington Post.
I find it objectionable that AIG has a new CEO with anywhere near the attitude he has. I don't care if the guy thinks Washington is clueless about business or esp. running his business. On this front he is more than likely correct. It is very unfortunate we (the American Taxpayer) own 80% of the blasted company. I would prefer we own 0% I don't give a darn if AIG would have imploded. Personally I think it did not implode because of the number of "well connected" wealthy bank running CEO's and "investors" that would have lost a fortune if it did called their "friends" running the Treasury and said, "Bail out AIG or we will loose a fortune". So the American Taxpayer paid to make sure that Goldman Sachs can pay it's employees $700,000 in bonuses each this year.
Besides the fact this is the biggest financial crime ever perpetrated against the American people, mind you done without any approval from our impotent legislators, the guys running the show at AIG should have better taste than say such things in public about the "crazies" in Washington. I mean how many people in the entire Government are qualified to run a sprawling 100 + country "insurance" operation, let alone all the other far flung divisions they own? There are not many people in the world that understand AIG enough to "run" it.
Obviously Hank Greenberg was running an operation with "Enron" financing. It has been reported he was moving money around to skirt the US regulators (Partly allowed because of the arcane and completely outdated insurance regulation in the US which is still state by state and completely out of touch with the fact that the industry is national and international in scope) and pad his accounts to hide the billions of dollars in risk and losses he began to accumulate when they kicked him out over one false reinsurance deal for which was caught.
Hank still gets "answers" when he make calls to Washington and as far as I can tell he is a one man lobbying effort right now to "save" his old company. He has said himself "all of his wealth" is tied up in AIG shares (though he sole enough to pay some bills) and he obviously thinks he can influence "Washington" to loosen up credit terms and allow AIG five years or so to "unwind" loosing positions and rescue the company's balance sheet.
It is not going to happen. AIG should be "gone" as we know it and unfortunately, not unlike the "bad banks" the Chinese created after bailing out their banking industry about a decade ago, the American Taxpayers will NEVER see the $160 billion sunk into the company. This is reality. But the bankers, hedge funds and other "investors" that benefited from the taxpayer bailout "got theirs" and they are living large off what is left of the crumbled institution's lousy contracts.
Shame. Mr. Robert Benmosche should be fired. AIG wound down, sooner rather than later.
If you have not noticed, I have a natural arrogance that has been tamed by consequences of my mistakes in life. I look back on things I’ve done or said wrong and things I’ve been accused of doing or saying wrong. Even though a lot of accusations are false, and the ones that are true take place in an environments of similar actions and I feel, still today, that I was a victim of not fitting in (maybe because of them, but more likely because of me). For me the biggest mistakes I made were not being willing to seek resolution and humble myself right away, even the times I thought I was correct; in the name of the best working environment for me and others. In one instance, I waited to make my apology for what my actual part in the problem was only after speaking to an outside advisor which angered those I worked with and created a difficult environment….. The lessons we learn sometimes and the reasons why…. I can’t speak for his actions and where they came from, and his mistake happened in front many unbiased witnesses. But I can honestly respect him cooling down and apologizing right after. There were times I could have not ‘dug my heels in’, and done that. Some may need to accept that not all things have deep meanings of psychological warfare, or represent underlying rage. And for those who feel there is a legitimate concern about what you think his outburst represents in some parts of our country, I say the best way to right that wrong is to follow the President’s lead, move on, and help him pass a strong health reform bill. Personal attacks, whether accurate or not, don’t fix the major problems we face.
In all this talk about the ‘trigger’ public option, I believe that large co-ops, public options can have a ‘trigger’ effect for a government run public option to take it over if certain conditions are met. If the federal government is putting up the money to create co-ops; they could have claims to ownership in case of insolvency or where the amount government aid needed for it to stay on budget is too great. Also the large co-op idea may push more admin costs onto business in the form of HR department’s doing some of the claim processing. If government forces more work it appears to be government over-reaching and creating more cost to businesses. If fellow members in co-ops work together to reduces costs, it appears to be more like businesses adding efficiency to a service they all benefit from, and pay into. Simply put, to allow co-op members the ability to find ways to save the co-op money through some ‘elbow grease’ and sacrifice will look better than government saying companies need to do more work to make a government-run public option less expensive to run. I don’t have all the information needed, or time to do it, but I know that some decent pro-formas and projections can be made on the cost of creating large co-ops vs. the public option; and the cost of co-ops ‘in the red’ being taken over by a public option. The ‘trigger’ of the government-run public option would force co-op members (mostly incorporated ones) to actively work to keep cost down and apply ‘elbow grease’ where they can, in order to avoid the government-run option that comes if the ‘trigger’ is pulled.
I believe the large co-op plan with a government-run, public option ‘trigger’ may allow you two positives. 1) As I tried to show earlier, if the public option ‘trigger’ is attached, it will force a more efficient creation, and on-going management, of large co-ops because of the fear of the government-run alternative; which would be a stronger motivator than creating co-ops, or reforms, by themselves. 2) A public option that comes into affect behind established large co-ops, have a strong possibility of costing less than just creating the public option from scratch. If the large co-ops reach through out the entire country, more people are added to private insurance and the co-ops are still insolvent by whatever standards; the public option comes in. And when it does, it will literally come to oversee, or put new people into, the top of an established health insurance provider. One that needs improvements can cost less to manage than the creation of a new insurance provider from scratch, because you use the same structure in place to do what any other health insurance provider does. The upside is that the co-ops provide the same coverage of a public option at premium prices much cheaper than private and closer to what a public option would be able to charge for the same amount of benefits. It is basically impossible for a for-profit going-concern to compete with a non-profit going-concern (public option or co-op), based on pricing alone. The assumption will be that they will compete on service, which is not unreasonable give the number of newly insured we could be talking about.
The down side of having a public option ‘trigger’ is lessened by the fact that the public option will simply take over and possibly fix an existing non-profit health insurer with resources and people in place already providing that service. If the large co-ops have to become one large government-run public option, the law of big numbers in insurance will be in its favor in terms of premium pricing related to the amount of benefit offerings. Also the administration of the large regional co-ops should be, at the ‘trigger pulling’ moment, already administering most of the nations health policy holders not on Medicare, Medicaid, VA, federal reservation or plans. There should not be too much more to do to expand services and administering them; only cost to make the ‘triggered’ coverage better and more efficient than what it would replace.
Again I think these thoughts have some merit, but please check the logic of it. Again, if anybody sees this that advises the top guys, I would recommend an old professor of mine Dr. George Manners in Kennesaw State University. His mix of actuarial and managerial accounting may be better suited for this than many experts in just one area. Also, he can demonstrate the complexities of both areas to people that have not seen it before, or do not look at it often. This topic has a lot to do with both those two areas of study.
When I said that this is not Viet Nam or civil rights, I meant in the sense that who is right and who is wrong is not really clear. I see why you have to go after health insurers and the correct reasoning behind it; but make sure all outside the administration go for all the things the President touched on. Yes health insurers need regulation, but the cost problem requires lots of things being applied at once. And if anyone higher up gets this remind the experts you hear from to take it to the transaction level. I had a finance professor once say, in a different way, that ‘the theory has to come down to the transaction on the exchange floor, in order to see if it’s a good theory or exchange floor’. In auditing of financial statements a walk-through is used sometimes, to follow the events in a transaction from start to finish. Do not just use the actuarial numbers, but also the logistics of the day-to-day running of the health insurance provider you propose. The efficiencies in providing health care is primarily agreed on from what I’ve seen out there.
Remarks of President Barack Obama – As Prepared for DeliveryAddress to a Joint Session of Congress on Health CareWednesday, September 9th, 2009Washington, DCMadame Speaker, Vice President Biden, Members of Congress, and the American people:When I spoke here last winter, this nation was facing the worst economic crisis since the Great Depression. We were losing an average of 700,000 jobs per month. Credit was frozen. And our financial system was on the verge of collapse. As any American who is still looking for work or a way to pay their bills will tell you, we are by no means out of the woods. A full and vibrant recovery is many months away. And I will not let up until those Americans who seek jobs can find them; until those businesses that seek capital and credit can thrive; until all responsible homeowners can stay in their homes. That is our ultimate goal. But thanks to the bold and decisive action we have taken since January, I can stand here with confidence and say that we have pulled this economy back from the brink. I want to thank the members of this body for your efforts and your support in these last several months, and especially those who have taken the difficult votes that have put us on a path to recovery. I also want to thank the American people for their patience and resolve during this trying time for our nation. But we did not come here just to clean up crises. We came to build a future. So tonight, I return to speak to all of you about an issue that is central to that future – and that is the issue of health care. I am not the first President to take up this cause, but I am determined to be the last. It has now been nearly a century since Theodore Roosevelt first called for health care reform. And ever since, nearly every President and Congress, whether Democrat or Republican, has attempted to meet this challenge in some way. A bill for comprehensive health reform was first introduced by John Dingell Sr. in 1943. Sixty-five years later, his son continues to introduce that same bill at the beginning of each session. Our collective failure to meet this challenge – year after year, decade after decade – has led us to a breaking point. Everyone understands the extraordinary hardships that are placed on the uninsured, who live every day just one accident or illness away from bankruptcy. These are not primarily people on welfare. These are middle-class Americans. Some can’t get insurance on the job. Others are self-employed, and can’t afford it, since buying insurance on your own costs you three times as much as the coverage you get from your employer. Many other Americans who are willing and able to pay are still denied insurance due to previous illnesses or conditions that insurance companies decide are too risky or expensive to cover. We are the only advanced democracy on Earth – the only wealthy nation – that allows such hardships for millions of its people. There are now more than thirty million American citizens who cannot get coverage. In just a two year period, one in every three Americans goes without health care coverage at some point. And every day, 14,000 Americans lose their coverage. In other words, it can happen to anyone.But the problem that plagues the health care system is not just a problem of the uninsured. Those who do have insurance have never had less security and stability than they do today. More and more Americans worry that if you move, lose your job, or change your job, you’ll lose your health insurance too. More and more Americans pay their premiums, only to discover that their insurance company has dropped their coverage when they get sick, or won’t pay the full cost of care. It happens every day.One man from Illinois lost his coverage in the middle of chemotherapy because his insurer found that he hadn’t reported gallstones that he didn’t even know about. They delayed his treatment, and he died because of it. Another woman from Texas was about to get a double mastectomy when her insurance company canceled her policy because she forgot to declare a case of acne. By the time she had her insurance reinstated, her breast cancer more than doubled in size. That is heart-breaking, it is wrong, and no one should be treated that way in the United States of America. Then there’s the problem of rising costs. We spend one-and-a-half times more per person on health care than any other country, but we aren’t any healthier for it. This is one of the reasons that insurance premiums have gone up three times faster than wages. It’s why so many employers – especially small businesses – are forcing their employees to pay more for insurance, or are dropping their coverage entirely. It’s why so many aspiring entrepreneurs cannot afford to open a business in the first place, and why American businesses that compete internationally – like our automakers – are at a huge disadvantage. And it’s why those of us with health insurance are also paying a hidden and growing tax for those without it – about $1000 per year that pays for somebody else’s emergency room and charitable care. Finally, our health care system is placing an unsustainable burden on taxpayers. When health care costs grow at the rate they have, it puts greater pressure on programs like Medicare and Medicaid. If we do nothing to slow these skyrocketing costs, we will eventually be spending more on Medicare and Medicaid than every other government program combined. Put simply, our health care problem is our deficit problem. Nothing else even comes close. These are the facts. Nobody disputes them. We know we must reform this system. The question is how. There are those on the left who believe that the only way to fix the system is through a single-payer system like Canada’s, where we would severely restrict the private insurance market and have the government provide coverage for everyone. On the right, there are those who argue that we should end the employer-based system and leave individuals to buy health insurance on their own.I have to say that there are arguments to be made for both approaches. But either one would represent a radical shift that would disrupt the health care most people currently have. Since health care represents one-sixth of our economy, I believe it makes more sense to build on what works and fix what doesn’t, rather than try to build an entirely new system from scratch. And that is precisely what those of you in Congress have tried to do over the past several months. During that time, we have seen Washington at its best and its worst. We have seen many in this chamber work tirelessly for the better part of this year to offer thoughtful ideas about how to achieve reform. Of the five committees asked to develop bills, four have completed their work, and the Senate Finance Committee announced today that it will move forward next week. That has never happened before. Our overall efforts have been supported by an unprecedented coalition of doctors and nurses; hospitals, seniors’ groups and even drug companies – many of whom opposed reform in the past. And there is agreement in this chamber on about eighty percent of what needs to be done, putting us closer to the goal of reform than we have ever been. But what we have also seen in these last months is the same partisan spectacle that only hardens the disdain many Americans have toward their own government. Instead of honest debate, we have seen scare tactics. Some have dug into unyielding ideological camps that offer no hope of compromise. Too many have used this as an opportunity to score short-term political points, even if it robs the country of our opportunity to solve a long-term challenge. And out of this blizzard of charges and counter-charges, confusion has reigned. Well the time for bickering is over. The time for games has passed. Now is the season for action. Now is when we must bring the best ideas of both parties together, and show the American people that we can still do what we were sent here to do. Now is the time to deliver on health care. The plan I’m announcing tonight would meet three basic goals: It will provide more security and stability to those who have health insurance. It will provide insurance to those who don’t. And it will slow the growth of health care costs for our families, our businesses, and our government. It’s a plan that asks everyone to take responsibility for meeting this challenge – not just government and insurance companies, but employers and individuals. And it’s a plan that incorporates ideas from Senators and Congressmen; from Democrats and Republicans – and yes, from some of my opponents in both the primary and general election. Here are the details that every American needs to know about this plan:First, if you are among the hundreds of millions of Americans who already have health insurance through your job, Medicare, Medicaid, or the VA, nothing in this plan will require you or your employer to change the coverage or the doctor you have. Let me repeat this: nothing in our plan requires you to change what you have. What this plan will do is to make the insurance you have work better for you. Under this plan, it will be against the law for insurance companies to deny you coverage because of a pre-existing condition. As soon as I sign this bill, it will be against the law for insurance companies to drop your coverage when you get sick or water it down when you need it most. They will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or a lifetime. We will place a limit on how much you can be charged for out-of-pocket expenses, because in the United States of America, no one should go broke because they get sick. And insurance companies will be required to cover, with no extra charge, routine checkups and preventive care, like mammograms and colonoscopies – because there’s no reason we shouldn’t be catching diseases like breast cancer and colon cancer before they get worse. That makes sense, it saves money, and it saves lives. That’s what Americans who have health insurance can expect from this plan – more security and stability. Now, if you’re one of the tens of millions of Americans who don’t currently have health insurance, the second part of this plan will finally offer you quality, affordable choices. If you lose your job or change your job, you will be able to get coverage. If you strike out on your own and start a small business, you will be able to get coverage. We will do this by creating a new insurance exchange – a marketplace where individuals and small businesses will be able to shop for health insurance at competitive prices. Insurance companies will have an incentive to participate in this exchange because it lets them compete for millions of new customers. As one big group, these customers will have greater leverage to bargain with the insurance companies for better prices and quality coverage. This is how large companies and government employees get affordable insurance. It’s how everyone in this Congress gets affordable insurance. And it’s time to give every American the same opportunity that we’ve given ourselves. For those individuals and small businesses who still cannot afford the lower-priced insurance available in the exchange, we will provide tax credits, the size of which will be based on your need. And all insurance companies that want access to this new marketplace will have to abide by the consumer protections I already mentioned. This exchange will take effect in four years, which will give us time to do it right. In the meantime, for those Americans who can’t get insurance today because they have pre-existing medical conditions, we will immediately offer low-cost coverage that will protect you against financial ruin if you become seriously ill. This was a good idea when Senator John McCain proposed it in the campaign, it’s a good idea now, and we should embrace it. Now, even if we provide these affordable options, there may be those – particularly the young and healthy – who still want to take the risk and go without coverage. There may still be companies that refuse to do right by their workers. The problem is, such irresponsible behavior costs all the rest of us money. If there are affordable options and people still don’t sign up for health insurance, it means we pay for those people’s expensive emergency room visits. If some businesses don’t provide workers health care, it forces the rest of us to pick up the tab when their workers get sick, and gives those businesses an unfair advantage over their competitors. And unless everybody does their part, many of the insurance reforms we seek – especially requiring insurance companies to cover pre-existing conditions – just can’t be achieved. That’s why under my plan, individuals will be required to carry basic health insurance – just as most states require you to carry auto insurance. Likewise, businesses will be required to either offer their workers health care, or chip in to help cover the cost of their workers. There will be a hardship waiver for those individuals who still cannot afford coverage, and 95% of all small businesses, because of their size and narrow profit margin, would be exempt from these requirements. But we cannot have large businesses and individuals who can afford coverage game the system by avoiding responsibility to themselves or their employees. Improving our health care system only works if everybody does their part. While there remain some significant details to be ironed out, I believe a broad consensus exists for the aspects of the plan I just outlined: consumer protections for those with insurance, an exchange that allows individuals and small businesses to purchase affordable coverage, and a requirement that people who can afford insurance get insurance. And I have no doubt that these reforms would greatly benefit Americans from all walks of life, as well as the economy as a whole. Still, given all the misinformation that’s been spread over the past few months, I realize that many Americans have grown nervous about reform. So tonight I’d like to address some of the key controversies that are still out there. Some of people’s concerns have grown out of bogus claims spread by those whose only agenda is to kill reform at any cost. The best example is the claim, made not just by radio and cable talk show hosts, but prominent politicians, that we plan to set up panels of bureaucrats with the power to kill off senior citizens. Such a charge would be laughable if it weren’t so cynical and irresponsible. It is a lie, plain and simple. There are also those who claim that our reform effort will insure illegal immigrants. This, too, is false – the reforms I’m proposing would not apply to those who are here illegally. And one more misunderstanding I want to clear up – under our plan, no federal dollars will be used to fund abortions, and federal conscience laws will remain in place. My health care proposal has also been attacked by some who oppose reform as a “government takeover” of the entire health care system. As proof, critics point to a provision in our plan that allows the uninsured and small businesses to choose a publicly-sponsored insurance option, administered by the government just like Medicaid or Medicare. So let me set the record straight. My guiding principle is, and always has been, that consumers do better when there is choice and competition. Unfortunately, in 34 states, 75% of the insurance market is controlled by five or fewer companies. In Alabama, almost 90% is controlled by just one company. Without competition, the price of insurance goes up and the quality goes down. And it makes it easier for insurance companies to treat their customers badly – by cherry-picking the healthiest individuals and trying to drop the sickest; by overcharging small businesses who have no leverage; and by jacking up rates.Insurance executives don’t do this because they are bad people. They do it because it’s profitable. As one former insurance executive testified before Congress, insurance companies are not only encouraged to find reasons to drop the seriously ill; they are rewarded for it. All of this is in service of meeting what this former executive called “Wall Street’s relentless profit expectations.”Now, I have no interest in putting insurance companies out of business. They provide a legitimate service, and employ a lot of our friends and neighbors. I just want to hold them accountable. The insurance reforms that I’ve already mentioned would do just that. But an additional step we can take to keep insurance companies honest is by making a not-for-profit public option available in the insurance exchange. Let me be clear – it would only be an option for those who don’t have insurance. No one would be forced to choose it, and it would not impact those of you who already have insurance. In fact, based on Congressional Budget Office estimates, we believe that less than 5% of Americans would sign up.Despite all this, the insurance companies and their allies don’t like this idea. They argue that these private companies can’t fairly compete with the government. And they’d be right if taxpayers were subsidizing this public insurance option. But they won’t be. I have insisted that like any private insurance company, the public insurance option would have to be self-sufficient and rely on the premiums it collects. But by avoiding some of the overhead that gets eaten up at private companies by profits, excessive administrative costs and executive salaries, it could provide a good deal for consumers. It would also keep pressure on private insurers to keep their policies affordable and treat their customers better, the same way public colleges and universities provide additional choice and competition to students without in any way inhibiting a vibrant system of private colleges and universities.It’s worth noting that a strong majority of Americans still favor a public insurance option of the sort I’ve proposed tonight. But its impact shouldn’t be exaggerated – by the left, the right, or the media. It is only one part of my plan, and should not be used as a handy excuse for the usual Washington ideological battles. To my progressive friends, I would remind you that for decades, the driving idea behind reform has been to end insurance company abuses and make coverage affordable for those without it. The public option is only a means to that end – and we should remain open to other ideas that accomplish our ultimate goal. And to my Republican friends, I say that rather than making wild claims about a government takeover of health care, we should work together to address any legitimate concerns you may have. For example, some have suggested that that the public option go into effect only in those markets where insurance companies are not providing affordable policies. Others propose a co-op or another non-profit entity to administer the plan. These are all constructive ideas worth exploring. But I will not back down on the basic principle that if Americans can’t find affordable coverage, we will provide you with a choice. And I will make sure that no government bureaucrat or insurance company bureaucrat gets between you and the care that you need. Finally, let me discuss an issue that is a great concern to me, to members of this chamber, and to the public – and that is how we pay for this plan. Here’s what you need to know. First, I will not sign a plan that adds one dime to our deficits – either now or in the future. Period. And to prove that I’m serious, there will be a provision in this plan that requires us to come forward with more spending cuts if the savings we promised don’t materialize. Part of the reason I faced a trillion dollar deficit when I walked in the door of the White House is because too many initiatives over the last decade were not paid for – from the Iraq War to tax breaks for the wealthy. I will not make that same mistake with health care. Second, we’ve estimated that most of this plan can be paid for by finding savings within the existing health care system – a system that is currently full of waste and abuse. Right now, too much of the hard-earned savings and tax dollars we spend on health care doesn’t make us healthier. That’s not my judgment – it’s the judgment of medical professionals across this country. And this is also true when it comes to Medicare and Medicaid. In fact, I want to speak directly to America’s seniors for a moment, because Medicare is another issue that’s been subjected to demagoguery and distortion during the course of this debate.More than four decades ago, this nation stood up for the principle that after a lifetime of hard work, our seniors should not be left to struggle with a pile of medical bills in their later years. That is how Medicare was born. And it remains a sacred trust that must be passed down from one generation to the next. That is why not a dollar of the Medicare trust fund will be used to pay for this plan. The only thing this plan would eliminate is the hundreds of billions of dollars in waste and fraud, as well as unwarranted subsidies in Medicare that go to insurance companies – subsidies that do everything to pad their profits and nothing to improve your care. And we will also create an independent commission of doctors and medical experts charged with identifying more waste in the years ahead. These steps will ensure that you – America’s seniors – get the benefits you’ve been promised. They will ensure that Medicare is there for future generations. And we can use some of the savings to fill the gap in coverage that forces too many seniors to pay thousands of dollars a year out of their own pocket for prescription drugs. That’s what this plan will do for you. So don’t pay attention to those scary stories about how your benefits will be cut – especially since some of the same folks who are spreading these tall tales have fought against Medicare in the past, and just this year supported a budget that would have essentially turned Medicare into a privatized voucher program. That will never happen on my watch. I will protect Medicare. Now, because Medicare is such a big part of the health care system, making the program more efficient can help usher in changes in the way we deliver health care that can reduce costs for everybody. We have long known that some places, like the Intermountain Healthcare in Utah or the Geisinger Health System in rural Pennsylvania, offer high-quality care at costs below average. The commission can help encourage the adoption of these common-sense best practices by doctors and medical professionals throughout the system – everything from reducing hospital infection rates to encouraging better coordination between teams of doctors. Reducing the waste and inefficiency in Medicare and Medicaid will pay for most of this plan. Much of the rest would be paid for with revenues from the very same drug and insurance companies that stand to benefit from tens of millions of new customers. This reform will charge insurance companies a fee for their most expensive policies, which will encourage them to provide greater value for the money – an idea which has the support of Democratic and Republican experts. And according to these same experts, this modest change could help hold down the cost of health care for all of us in the long-run. Finally, many in this chamber – particularly on the Republican side of the aisle – have long insisted that reforming our medical malpractice laws can help bring down the cost of health care. I don't believe malpractice reform is a silver bullet, but I have talked to enough doctors to know that defensive medicine may be contributing to unnecessary costs. So I am proposing that we move forward on a range of ideas about how to put patient safety first and let doctors focus on practicing medicine. I know that the Bush Administration considered authorizing demonstration projects in individual states to test these issues. It’s a good idea, and I am directing my Secretary of Health and Human Services to move forward on this initiative today. Add it all up, and the plan I’m proposing will cost around $900 billion over ten years – less than we have spent on the Iraq and Afghanistan wars, and less than the tax cuts for the wealthiest few Americans that Congress passed at the beginning of the previous administration. Most of these costs will be paid for with money already being spent – but spent badly – in the existing health care system. The plan will not add to our deficit. The middle-class will realize greater security, not higher taxes. And if we are able to slow the growth of health care costs by just one-tenth of one percent each year, it will actually reduce the deficit by $4 trillion over the long term. This is the plan I’m proposing. It’s a plan that incorporates ideas from many of the people in this room tonight – Democrats and Republicans. And I will continue to seek common ground in the weeks ahead. If you come to me with a serious set of proposals, I will be there to listen. My door is always open. But know this: I will not waste time with those who have made the calculation that it’s better politics to kill this plan than improve it. I will not stand by while the special interests use the same old tactics to keep things exactly the way they are. If you misrepresent what’s in the plan, we will call you out. And I will not accept the status quo as a solution. Not this time. Not now.Everyone in this room knows what will happen if we do nothing. Our deficit will grow. More families will go bankrupt. More businesses will close. More Americans will lose their coverage when they are sick and need it most. And more will die as a result. We know these things to be true. That is why we cannot fail. Because there are too many Americans counting on us to succeed – the ones who suffer silently, and the ones who shared their stories with us at town hall meetings, in emails, and in letters.I received one of those letters a few days ago. It was from our beloved friend and colleague, Ted Kennedy. He had written it back in May, shortly after he was told that his illness was terminal. He asked that it be delivered upon his death. In it, he spoke about what a happy time his last months were, thanks to the love and support of family and friends, his wife, Vicki, and his children, who are here tonight . And he expressed confidence that this would be the year that health care reform – “that great unfinished business of our society,” he called it – would finally pass. He repeated the truth that health care is decisive for our future prosperity, but he also reminded me that “it concerns more than material things.” “What we face,” he wrote, “is above all a moral issue; at stake are not just the details of policy, but fundamental principles of social justice and the character of our country.”I’ve thought about that phrase quite a bit in recent days – the character of our country. One of the unique and wonderful things about America has always been our self-reliance, our rugged individualism, our fierce defense of freedom and our healthy skepticism of government. And figuring out the appropriate size and role of government has always been a source of rigorous and sometimes angry debate. For some of Ted Kennedy’s critics, his brand of liberalism represented an affront to American liberty. In their mind, his passion for universal health care was nothing more than a passion for big government. But those of us who knew Teddy and worked with him here – people of both parties – know that what drove him was something more. His friend, Orrin Hatch, knows that. They worked together to provide children with health insurance. His friend John McCain knows that. They worked together on a Patient’s Bill of Rights. His friend Chuck Grassley knows that. They worked together to provide health care to children with disabilities. On issues like these, Ted Kennedy’s passion was born not of some rigid ideology, but of his own experience. It was the experience of having two children stricken with cancer. He never forgot the sheer terror and helplessness that any parent feels when a child is badly sick; and he was able to imagine what it must be like for those without insurance; what it would be like to have to say to a wife or a child or an aging parent – there is something that could make you better, but I just can’t afford it. That large-heartedness – that concern and regard for the plight of others – is not a partisan feeling. It is not a Republican or a Democratic feeling. It, too, is part of the American character. Our ability to stand in other people’s shoes. A recognition that we are all in this together; that when fortune turns against one of us, others are there to lend a helping hand. A belief that in this country, hard work and responsibility should be rewarded by some measure of security and fair play; and an acknowledgement that sometimes government has to step in to help deliver on that promise.This has always been the history of our progress. In 1933, when over half of our seniors could not support themselves and millions had seen their savings wiped away, there were those who argued that Social Security would lead to socialism. But the men and women of Congress stood fast, and we are all the better for it. In 1965, when some argued that Medicare represented a government takeover of health care, members of Congress, Democrats and Republicans, did not back down. They joined together so that all of us could enter our golden years with some basic peace of mind. You see, our predecessors understood that government could not, and should not, solve every problem. They understood that there are instances when the gains in security from government action are not worth the added constraints on our freedom. But they also understood that the danger of too much government is matched by the perils of too little; that without the leavening hand of wise policy, markets can crash, monopolies can stifle competition, and the vulnerable can be exploited. And they knew that when any government measure, no matter how carefully crafted or beneficial, is subject to scorn; when any efforts to help people in need are attacked as un-American; when facts and reason are thrown overboard and only timidity passes for wisdom, and we can no longer even engage in a civil conversation with each other over the things that truly matter – that at that point we don’t merely lose our capacity to solve big challenges. We lose something essential about ourselves. What was true then remains true today. I understand how difficult this health care debate has been. I know that many in this country are deeply skeptical that government is looking out for them. I understand that the politically safe move would be to kick the can further down the road – to defer reform one more year, or one more election, or one more term. But that’s not what the moment calls for. That’s not what we came here to do. We did not come to fear the future. We came here to shape it. I still believe we can act even when it’s hard. I still believe we can replace acrimony with civility, and gridlock with progress. I still believe we can do great things, and that here and now we will meet history’s test.Because that is who we are. That is our calling. That is our character. Thank you, God Bless You, and may God Bless the United States of America.
Remarks of President Barack Obama – As Prepared for DeliveryAddress to a Joint Session of Congress on Health CareWednesday, September 9th, 2009Washington, DC
Madame Speaker, Vice President Biden, Members of Congress, and the American people:When I spoke here last winter, this nation was facing the worst economic crisis since the Great Depression. We were losing an average of 700,000 jobs per month. Credit was frozen. And our financial system was on the verge of collapse. As any American who is still looking for work or a way to pay their bills will tell you, we are by no means out of the woods. A full and vibrant recovery is many months away. And I will not let up until those Americans who seek jobs can find them; until those businesses that seek capital and credit can thrive; until all responsible homeowners can stay in their homes. That is our ultimate goal. But thanks to the bold and decisive action we have taken since January, I can stand here with confidence and say that we have pulled this economy back from the brink. I want to thank the members of this body for your efforts and your support in these last several months, and especially those who have taken the difficult votes that have put us on a path to recovery. I also want to thank the American people for their patience and resolve during this trying time for our nation. But we did not come here just to clean up crises. We came to build a future. So tonight, I return to speak to all of you about an issue that is central to that future – and that is the issue of health care. I am not the first President to take up this cause, but I am determined to be the last. It has now been nearly a century since Theodore Roosevelt first called for health care reform. And ever since, nearly every President and Congress, whether Democrat or Republican, has attempted to meet this challenge in some way. A bill for comprehensive health reform was first introduced by John Dingell Sr. in 1943. Sixty-five years later, his son continues to introduce that same bill at the beginning of each session. Our collective failure to meet this challenge – year after year, decade after decade – has led us to a breaking point. Everyone understands the extraordinary hardships that are placed on the uninsured, who live every day just one accident or illness away from bankruptcy. These are not primarily people on welfare. These are middle-class Americans. Some can’t get insurance on the job. Others are self-employed, and can’t afford it, since buying insurance on your own costs you three times as much as the coverage you get from your employer. Many other Americans who are willing and able to pay are still denied insurance due to previous illnesses or conditions that insurance companies decide are too risky or expensive to cover. We are the only advanced democracy on Earth – the only wealthy nation – that allows such hardships for millions of its people. There are now more than thirty million American citizens who cannot get coverage. In just a two year period, one in every three Americans goes without health care coverage at some point. And every day, 14,000 Americans lose their coverage. In other words, it can happen to anyone.But the problem that plagues the health care system is not just a problem of the uninsured. Those who do have insurance have never had less security and stability than they do today. More and more Americans worry that if you move, lose your job, or change your job, you’ll lose your health insurance too. More and more Americans pay their premiums, only to discover that their insurance company has dropped their coverage when they get sick, or won’t pay the full cost of care. It happens every day.One man from Illinois lost his coverage in the middle of chemotherapy because his insurer found that he hadn’t reported gallstones that he didn’t even know about. They delayed his treatment, and he died because of it. Another woman from Texas was about to get a double mastectomy when her insurance company canceled her policy because she forgot to declare a case of acne. By the time she had her insurance reinstated, her breast cancer more than doubled in size. That is heart-breaking, it is wrong, and no one should be treated that way in the United States of America. Then there’s the problem of rising costs. We spend one-and-a-half times more per person on health care than any other country, but we aren’t any healthier for it. This is one of the reasons that insurance premiums have gone up three times faster than wages. It’s why so many employers – especially small businesses – are forcing their employees to pay more for insurance, or are dropping their coverage entirely. It’s why so many aspiring entrepreneurs cannot afford to open a business in the first place, and why American businesses that compete internationally – like our automakers – are at a huge disadvantage. And it’s why those of us with health insurance are also paying a hidden and growing tax for those without it – about $1000 per year that pays for somebody else’s emergency room and charitable care. Finally, our health care system is placing an unsustainable burden on taxpayers. When health care costs grow at the rate they have, it puts greater pressure on programs like Medicare and Medicaid. If we do nothing to slow these skyrocketing costs, we will eventually be spending more on Medicare and Medicaid than every other government program combined. Put simply, our health care problem is our deficit problem. Nothing else even comes close. These are the facts. Nobody disputes them. We know we must reform this system. The question is how. There are those on the left who believe that the only way to fix the system is through a single-payer system like Canada’s, where we would severely restrict the private insurance market and have the government provide coverage for everyone. On the right, there are those who argue that we should end the employer-based system and leave individuals to buy health insurance on their own.I have to say that there are arguments to be made for both approaches. But either one would represent a radical shift that would disrupt the health care most people currently have. Since health care represents one-sixth of our economy, I believe it makes more sense to build on what works and fix what doesn’t, rather than try to build an entirely new system from scratch. And that is precisely what those of you in Congress have tried to do over the past several months. During that time, we have seen Washington at its best and its worst. We have seen many in this chamber work tirelessly for the better part of this year to offer thoughtful ideas about how to achieve reform. Of the five committees asked to develop bills, four have completed their work, and the Senate Finance Committee announced today that it will move forward next week. That has never happened before. Our overall efforts have been supported by an unprecedented coalition of doctors and nurses; hospitals, seniors’ groups and even drug companies – many of whom opposed reform in the past. And there is agreement in this chamber on about eighty percent of what needs to be done, putting us closer to the goal of reform than we have ever been. But what we have also seen in these last months is the same partisan spectacle that only hardens the disdain many Americans have toward their own government. Instead of honest debate, we have seen scare tactics. Some have dug into unyielding ideological camps that offer no hope of compromise. Too many have used this as an opportunity to score short-term political points, even if it robs the country of our opportunity to solve a long-term challenge. And out of this blizzard of charges and counter-charges, confusion has reigned. Well the time for bickering is over. The time for games has passed. Now is the season for action. Now is when we must bring the best ideas of both parties together, and show the American people that we can still do what we were sent here to do. Now is the time to deliver on health care. The plan I’m announcing tonight would meet three basic goals: It will provide more security and stability to those who have health insurance. It will provide insurance to those who don’t. And it will slow the growth of health care costs for our families, our businesses, and our government. It’s a plan that asks everyone to take responsibility for meeting this challenge – not just government and insurance companies, but employers and individuals. And it’s a plan that incorporates ideas from Senators and Congressmen; from Democrats and Republicans – and yes, from some of my opponents in both the primary and general election. Here are the details that every American needs to know about this plan:First, if you are among the hundreds of millions of Americans who already have health insurance through your job, Medicare, Medicaid, or the VA, nothing in this plan will require you or your employer to change the coverage or the doctor you have. Let me repeat this: nothing in our plan requires you to change what you have. What this plan will do is to make the insurance you have work better for you. Under this plan, it will be against the law for insurance companies to deny you coverage because of a pre-existing condition. As soon as I sign this bill, it will be against the law for insurance companies to drop your coverage when you get sick or water it down when you need it most. They will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or a lifetime. We will place a limit on how much you can be charged for out-of-pocket expenses, because in the United States of America, no one should go broke because they get sick. And insurance companies will be required to cover, with no extra charge, routine checkups and preventive care, like mammograms and colonoscopies – because there’s no reason we shouldn’t be catching diseases like breast cancer and colon cancer before they get worse. That makes sense, it saves money, and it saves lives. That’s what Americans who have health insurance can expect from this plan – more security and stability. Now, if you’re one of the tens of millions of Americans who don’t currently have health insurance, the second part of this plan will finally offer you quality, affordable choices. If you lose your job or change your job, you will be able to get coverage. If you strike out on your own and start a small business, you will be able to get coverage. We will do this by creating a new insurance exchange – a marketplace where individuals and small businesses will be able to shop for health insurance at competitive prices. Insurance companies will have an incentive to participate in this exchange because it lets them compete for millions of new customers. As one big group, these customers will have greater leverage to bargain with the insurance companies for better prices and quality coverage. This is how large companies and government employees get affordable insurance. It’s how everyone in this Congress gets affordable insurance. And it’s time to give every American the same opportunity that we’ve given ourselves. For those individuals and small businesses who still cannot afford the lower-priced insurance available in the exchange, we will provide tax credits, the size of which will be based on your need. And all insurance companies that want access to this new marketplace will have to abide by the consumer protections I already mentioned. This exchange will take effect in four years, which will give us time to do it right. In the meantime, for those Americans who can’t get insurance today because they have pre-existing medical conditions, we will immediately offer low-cost coverage that will protect you against financial ruin if you become seriously ill. This was a good idea when Senator John McCain proposed it in the campaign, it’s a good idea now, and we should embrace it. Now, even if we provide these affordable options, there may be those – particularly the young and healthy – who still want to take the risk and go without coverage. There may still be companies that refuse to do right by their workers. The problem is, such irresponsible behavior costs all the rest of us money. If there are affordable options and people still don’t sign up for health insurance, it means we pay for those people’s expensive emergency room visits. If some businesses don’t provide workers health care, it forces the rest of us to pick up the tab when their workers get sick, and gives those businesses an unfair advantage over their competitors. And unless everybody does their part, many of the insurance reforms we seek – especially requiring insurance companies to cover pre-existing conditions – just can’t be achieved. That’s why under my plan, individuals will be required to carry basic health insurance – just as most states require you to carry auto insurance. Likewise, businesses will be required to either offer their workers health care, or chip in to help cover the cost of their workers. There will be a hardship waiver for those individuals who still cannot afford coverage, and 95% of all small businesses, because of their size and narrow profit margin, would be exempt from these requirements. But we cannot have large businesses and individuals who can afford coverage game the system by avoiding responsibility to themselves or their employees. Improving our health care system only works if everybody does their part. While there remain some significant details to be ironed out, I believe a broad consensus exists for the aspects of the plan I just outlined: consumer protections for those with insurance, an exchange that allows individuals and small businesses to purchase affordable coverage, and a requirement that people who can afford insurance get insurance. And I have no doubt that these reforms would greatly benefit Americans from all walks of life, as well as the economy as a whole. Still, given all the misinformation that’s been spread over the past few months, I realize that many Americans have grown nervous about reform. So tonight I’d like to address some of the key controversies that are still out there. Some of people’s concerns have grown out of bogus claims spread by those whose only agenda is to kill reform at any cost. The best example is the claim, made not just by radio and cable talk show hosts, but prominent politicians, that we plan to set up panels of bureaucrats with the power to kill off senior citizens. Such a charge would be laughable if it weren’t so cynical and irresponsible. It is a lie, plain and simple. There are also those who claim that our reform effort will insure illegal immigrants. This, too, is false – the reforms I’m proposing would not apply to those who are here illegally. And one more misunderstanding I want to clear up – under our plan, no federal dollars will be used to fund abortions, and federal conscience laws will remain in place. My health care proposal has also been attacked by some who oppose reform as a “government takeover” of the entire health care system. As proof, critics point to a provision in our plan that allows the uninsured and small businesses to choose a publicly-sponsored insurance option, administered by the government just like Medicaid or Medicare. So let me set the record straight. My guiding principle is, and always has been, that consumers do better when there is choice and competition. Unfortunately, in 34 states, 75% of the insurance market is controlled by five or fewer companies. In Alabama, almost 90% is controlled by just one company. Without competition, the price of insurance goes up and the quality goes down. And it makes it easier for insurance companies to treat their customers badly – by cherry-picking the healthiest individuals and trying to drop the sickest; by overcharging small businesses who have no leverage; and by jacking up rates.Insurance executives don’t do this because they are bad people. They do it because it’s profitable. As one former insurance executive testified before Congress, insurance companies are not only encouraged to find reasons to drop the seriously ill; they are rewarded for it. All of this is in service of meeting what this former executive called “Wall Street’s relentless profit expectations.”Now, I have no interest in putting insurance companies out of business. They provide a legitimate service, and employ a lot of our friends and neighbors. I just want to hold them accountable. The insurance reforms that I’ve already mentioned would do just that. But an additional step we can take to keep insurance companies honest is by making a not-for-profit public option available in the insurance exchange. Let me be clear – it would only be an option for those who don’t have insurance. No one would be forced to choose it, and it would not impact those of you who already have insurance. In fact, based on Congressional Budget Office estimates, we believe that less than 5% of Americans would sign up.Despite all this, the insurance companies and their allies don’t like this idea. They argue that these private companies can’t fairly compete with the government. And they’d be right if taxpayers were subsidizing this public insurance option. But they won’t be. I have insisted that like any private insurance company, the public insurance option would have to be self-sufficient and rely on the premiums it collects. But by avoiding some of the overhead that gets eaten up at private companies by profits, excessive administrative costs and executive salaries, it could provide a good deal for consumers. It would also keep pressure on private insurers to keep their policies affordable and treat their customers better, the same way public colleges and universities provide additional choice and competition to students without in any way inhibiting a vibrant system of private colleges and universities.It’s worth noting that a strong majority of Americans still favor a public insurance option of the sort I’ve proposed tonight. But its impact shouldn’t be exaggerated – by the left, the right, or the media. It is only one part of my plan, and should not be used as a handy excuse for the usual Washington ideological battles. To my progressive friends, I would remind you that for decades, the driving idea behind reform has been to end insurance company abuses and make coverage affordable for those without it. The public option is only a means to that end – and we should remain open to other ideas that accomplish our ultimate goal. And to my Republican friends, I say that rather than making wild claims about a government takeover of health care, we should work together to address any legitimate concerns you may have. For example, some have suggested that that the public option go into effect only in those markets where insurance companies are not providing affordable policies. Others propose a co-op or another non-profit entity to administer the plan. These are all constructive ideas worth exploring. But I will not back down on the basic principle that if Americans can’t find affordable coverage, we will provide you with a choice. And I will make sure that no government bureaucrat or insurance company bureaucrat gets between you and the care that you need. Finally, let me discuss an issue that is a great concern to me, to members of this chamber, and to the public – and that is how we pay for this plan. Here’s what you need to know. First, I will not sign a plan that adds one dime to our deficits – either now or in the future. Period. And to prove that I’m serious, there will be a provision in this plan that requires us to come forward with more spending cuts if the savings we promised don’t materialize. Part of the reason I faced a trillion dollar deficit when I walked in the door of the White House is because too many initiatives over the last decade were not paid for – from the Iraq War to tax breaks for the wealthy. I will not make that same mistake with health care. Second, we’ve estimated that most of this plan can be paid for by finding savings within the existing health care system – a system that is currently full of waste and abuse. Right now, too much of the hard-earned savings and tax dollars we spend on health care doesn’t make us healthier. That’s not my judgment – it’s the judgment of medical professionals across this country. And this is also true when it comes to Medicare and Medicaid. In fact, I want to speak directly to America’s seniors for a moment, because Medicare is another issue that’s been subjected to demagoguery and distortion during the course of this debate.More than four decades ago, this nation stood up for the principle that after a lifetime of hard work, our seniors should not be left to struggle with a pile of medical bills in their later years. That is how Medicare was born. And it remains a sacred trust that must be passed down from one generation to the next. That is why not a dollar of the Medicare trust fund will be used to pay for this plan. The only thing this plan would eliminate is the hundreds of billions of dollars in waste and fraud, as well as unwarranted subsidies in Medicare that go to insurance companies – subsidies that do everything to pad their profits and nothing to improve your care. And we will also create an independent commission of doctors and medical experts charged with identifying more waste in the years ahead. These steps will ensure that you – America’s seniors – get the benefits you’ve been promised. They will ensure that Medicare is there for future generations. And we can use some of the savings to fill the gap in coverage that forces too many seniors to pay thousands of dollars a year out of their own pocket for prescription drugs. That’s what this plan will do for you. So don’t pay attention to those scary stories about how your benefits will be cut – especially since some of the same folks who are spreading these tall tales have fought against Medicare in the past, and just this year supported a budget that would have essentially turned Medicare into a privatized voucher program. That will never happen on my watch. I will protect Medicare. Now, because Medicare is such a big part of the health care system, making the program more efficient can help usher in changes in the way we deliver health care that can reduce costs for everybody. We have long known that some places, like the Intermountain Healthcare in Utah or the Geisinger Health System in rural Pennsylvania, offer high-quality care at costs below average. The commission can help encourage the adoption of these common-sense best practices by doctors and medical professionals throughout the system – everything from reducing hospital infection rates to encouraging better coordination between teams of doctors. Reducing the waste and inefficiency in Medicare and Medicaid will pay for most of this plan. Much of the rest would be paid for with revenues from the very same drug and insurance companies that stand to benefit from tens of millions of new customers. This reform will charge insurance companies a fee for their most expensive policies, which will encourage them to provide greater value for the money – an idea which has the support of Democratic and Republican experts. And according to these same experts, this modest change could help hold down the cost of health care for all of us in the long-run. Finally, many in this chamber – particularly on the Republican side of the aisle – have long insisted that reforming our medical malpractice laws can help bring down the cost of health care. I don't believe malpractice reform is a silver bullet, but I have talked to enough doctors to know that defensive medicine may be contributing to unnecessary costs. So I am proposing that we move forward on a range of ideas about how to put patient safety first and let doctors focus on practicing medicine. I know that the Bush Administration considered authorizing demonstration projects in individual states to test these issues. It’s a good idea, and I am directing my Secretary of Health and Human Services to move forward on this initiative today. Add it all up, and the plan I’m proposing will cost around $900 billion over ten years – less than we have spent on the Iraq and Afghanistan wars, and less than the tax cuts for the wealthiest few Americans that Congress passed at the beginning of the previous administration. Most of these costs will be paid for with money already being spent – but spent badly – in the existing health care system. The plan will not add to our deficit. The middle-class will realize greater security, not higher taxes. And if we are able to slow the growth of health care costs by just one-tenth of one percent each year, it will actually reduce the deficit by $4 trillion over the long term. This is the plan I’m proposing. It’s a plan that incorporates ideas from many of the people in this room tonight – Democrats and Republicans. And I will continue to seek common ground in the weeks ahead. If you come to me with a serious set of proposals, I will be there to listen. My door is always open. But know this: I will not waste time with those who have made the calculation that it’s better politics to kill this plan than improve it. I will not stand by while the special interests use the same old tactics to keep things exactly the way they are. If you misrepresent what’s in the plan, we will call you out. And I will not accept the status quo as a solution. Not this time. Not now.Everyone in this room knows what will happen if we do nothing. Our deficit will grow. More families will go bankrupt. More businesses will close. More Americans will lose their coverage when they are sick and need it most. And more will die as a result. We know these things to be true. That is why we cannot fail. Because there are too many Americans counting on us to succeed – the ones who suffer silently, and the ones who shared their stories with us at town hall meetings, in emails, and in letters.I received one of those letters a few days ago. It was from our beloved friend and colleague, Ted Kennedy. He had written it back in May, shortly after he was told that his illness was terminal. He asked that it be delivered upon his death. In it, he spoke about what a happy time his last months were, thanks to the love and support of family and friends, his wife, Vicki, and his children, who are here tonight . And he expressed confidence that this would be the year that health care reform – “that great unfinished business of our society,” he called it – would finally pass. He repeated the truth that health care is decisive for our future prosperity, but he also reminded me that “it concerns more than material things.” “What we face,” he wrote, “is above all a moral issue; at stake are not just the details of policy, but fundamental principles of social justice and the character of our country.”I’ve thought about that phrase quite a bit in recent days – the character of our country. One of the unique and wonderful things about America has always been our self-reliance, our rugged individualism, our fierce defense of freedom and our healthy skepticism of government. And figuring out the appropriate size and role of government has always been a source of rigorous and sometimes angry debate. For some of Ted Kennedy’s critics, his brand of liberalism represented an affront to American liberty. In their mind, his passion for universal health care was nothing more than a passion for big government. But those of us who knew Teddy and worked with him here – people of both parties – know that what drove him was something more. His friend, Orrin Hatch, knows that. They worked together to provide children with health insurance. His friend John McCain knows that. They worked together on a Patient’s Bill of Rights. His friend Chuck Grassley knows that. They worked together to provide health care to children with disabilities. On issues like these, Ted Kennedy’s passion was born not of some rigid ideology, but of his own experience. It was the experience of having two children stricken with cancer. He never forgot the sheer terror and helplessness that any parent feels when a child is badly sick; and he was able to imagine what it must be like for those without insurance; what it would be like to have to say to a wife or a child or an aging parent – there is something that could make you better, but I just can’t afford it. That large-heartedness – that concern and regard for the plight of others – is not a partisan feeling. It is not a Republican or a Democratic feeling. It, too, is part of the American character. Our ability to stand in other people’s shoes. A recognition that we are all in this together; that when fortune turns against one of us, others are there to lend a helping hand. A belief that in this country, hard work and responsibility should be rewarded by some measure of security and fair play; and an acknowledgement that sometimes government has to step in to help deliver on that promise.This has always been the history of our progress. In 1933, when over half of our seniors could not support themselves and millions had seen their savings wiped away, there were those who argued that Social Security would lead to socialism. But the men and women of Congress stood fast, and we are all the better for it. In 1965, when some argued that Medicare represented a government takeover of health care, members of Congress, Democrats and Republicans, did not back down. They joined together so that all of us could enter our golden years with some basic peace of mind. You see, our predecessors understood that government could not, and should not, solve every problem. They understood that there are instances when the gains in security from government action are not worth the added constraints on our freedom. But they also understood that the danger of too much government is matched by the perils of too little; that without the leavening hand of wise policy, markets can crash, monopolies can stifle competition, and the vulnerable can be exploited. And they knew that when any government measure, no matter how carefully crafted or beneficial, is subject to scorn; when any efforts to help people in need are attacked as un-American; when facts and reason are thrown overboard and only timidity passes for wisdom, and we can no longer even engage in a civil conversation with each other over the things that truly matter – that at that point we don’t merely lose our capacity to solve big challenges. We lose something essential about ourselves. What was true then remains true today. I understand how difficult this health care debate has been. I know that many in this country are deeply skeptical that government is looking out for them. I understand that the politically safe move would be to kick the can further down the road – to defer reform one more year, or one more election, or one more term. But that’s not what the moment calls for. That’s not what we came here to do. We did not come to fear the future. We came here to shape it. I still believe we can act even when it’s hard. I still believe we can replace acrimony with civility, and gridlock with progress. I still believe we can do great things, and that here and now we will meet history’s test.Because that is who we are. That is our calling. That is our character. Thank you, God Bless You, and may God Bless the United States of America.
The GOP has stumbled upon a brilliant strategy. The strategy of NO.
The strategy of No coupled with distortions, misrepresentations, shock and awe has diverted attention from the real issues and has enabled the GOP to dilute and block any legislation that would benefit Americans.
By simply saying NO without any explanation or offering a counter plan, the Democratic must guess at what is need to gain bipartisan (Republican) support. So begins the game of what if....
If I remove this, if I change that, If I add this will you provide support. The if continues until a Maybe is said.
The loser in all of this is the American Public. The public is strapped with a bill that does not benefit them or address their needs. The winner is this are the lobbyist and special interest groups who provided the necessary funding (bribes) to ensure that their interest was represented. Neither party represents the people...the Republicans via the strategy of NO and the Democratic who have failed to take a position. This scenario is similar to that of an abused child who loves the abusive parent unconditionally and will do anything to please the abuser. The democratic party (or the party of wimps) by caving in to and making concessions to the GOP responses are similar to that of the abused child. The abuse does not stop if the child does everything they think will please the abuser. The GOP position does not change even if they are given everything that one thinks they want.
BRILLANT....AN BRILLANT AND EFFECTIVE STRATEGY....A disaster for the Public.
I read some articles on co-ops and here are some ideas I have, for what its worth. Any policy whether it is a public option or not, would have to have ‘actuarial value’ in order to be effective at lowering some of the cost of health care. I got the term ‘actuarial value’ from an article talking about what Sen. Snowe wanted to see in a bill. That term means to me (in my mind) enough policy holders that pay premiums in order to hopefully cover as much of the cost of administering and paying benefits as possible. Therefore ‘actuarial value’ is getting the most amounts of premium paying policy holders so you can justify the cost of the most or best benefits you can get.
construct ideas for the regional co-op
Okay, how do you get the most ‘actuarial value’ out of co-ops? I think the best way is to add as many people to a co-op policy as possible. The Wyden plan wanted states to determine a lot, maybe too much, of the premium pricing and administration individually. I think if you make them multi-state co-ops while making some allowances on state requirements for health insurance; you can get working co-op policies that are big enough to offer lower prices to the health insurance market.
First, make every business or organization that is incorporated (for profit and non-for-profit) in each state eligible for membership to the regional co-op; and people who are residents in a state who ‘go-it-alone’ eligible for a citizen membership. If they sign-up for at least one policy, the business or person is a member of the co-op. All premiums go into the same pool. (I’m not sure about fees yet, but let’s just deal with the construct for now). After that, examine information from each state’s individual law on health insurance benefit requirements to determine which state has the highest, or costliest, benefit requirements for health insurers to meet. For example, I understand that New Jersey (NJ) has some tough requirements on the kinds of benefits health insurers must offer on policies sold in that state. So you group NJ with 5 or 10 states in the region (east coast) and base the co-op requirements for minimum coverage required on NJ’s requirements; or on requirements that at least meet those of the other states in that region (this may not be that clear of a comparison, but some adjusting can be done to the co-op and what states will allow). For example, if NJ requires $30 co-pays while surrounding states offer $50 co-pays, use NJ standards for $30 co-pays as a standard on all co-op policies in the region(or for certain memberships).
The type of benefits offered may be tough to provide at a reasonable price to all states in the region, individually (based on population and other factors). But we are talking maybe 10 states worth of new premium payers from a pool of maybe millions not covered or that choose the co-op for whatever reason, all under one policy. That is potentially 2 million policy holders or more for one, 5 to 10 state, region (based on my intuitive estimates, but I doubt I’m too far off some very well researched estimates). That many people on one policy can justify, in premium money received, a large variation of demographics for policy holders that would normally get larger valuation pricing (education, income, type of work performed, medical history, etc and all the things that determine what one company is charged versus another).
The only difference between the citizen and incorporated memberships is that the incorporated have the traditional co-op ownership rights and responsibilities directly, like in other kinds of co-ops, when they have at least one employee on it. Citizens members (who do not have co-op coverage through an employer) would not have that same rights (if they did it would be logistical nightmare) but their complaints can be heard, assuming premiums are paid (somehow, maybe subsidies early on), as one voice when grievances relate to something that can affects a large # number of members or is an injustice. I would think it would be easier for the administrators for each regional co-op to be selected by the top insurance officers from all the states in the region (they can vote, or whatever).
If you would use the Medicare provider network for the public plan, why not use it for the regional co-ops? There may be less people signing up for a co-op plan anyway, so it could be more manageable to treat them while the structural changes are being implemented or coordinated. I think you want to have government insuring medical provider fees for treatments covered by the co-op plans; either early in creation of the co-op or permanently. If you do not have pre-existing condition restrictions, most likely the co-ops will be in the ‘red’ early on which could worry medical providers if they think it could affect them receiving payment from the co-op plan on covered treatments. Government insuring those payments would lessen that worry I think, but it may be a tough sell.
So the co-ops may be like a GSE (Fannie or Freddie) for health insurance, but without toxic assets. Bad policies no longer have benefit requirements (liabilities) tied to them. Bad assets (toxic assets) no longer have (or can not predict) cash flows coming in that justify higher values of that asset on a balance sheet. So before they say it, co-ops would not be just like Fannie and Freddie. If the co-op gets anywhere in congress, don’t take any crap on that one.
Although, they will need more than start up cost in the early years. The co-op may need to get special concessions from states on reserve requirements. But realistically, without pre-existing condition limitations you will need tens of billions, but more likely hundreds of billions, in reserves for all co-ops to cover benefits of all the people that will need covered treatments, at least in the first few years or more. I’m thinking reserves in cash or cash equivalent at all times in case new policy holder treatments out value your budget.
Businesses with about 500 or fewer employees (maybe 1000) may be able to do much of the claim processing in-house with their own HR depending on the business and the employees. You would get complaints about it, but for the average claim, the employee calls HR, files a claim and that claim is recorded and given to the regional co-op. The insurance card should cover non-business hour emergencies. Many HR departments in companies that size, play a big hand in medical leaves, sick pay, anyway. A large company like Wal-Mart, that has stores (branches, offices, etc) in different states, will file claims with the co-op in the state that store (branch etc) is located. The number of medical claims generated by a large company should determine if claim processing is done in house or by each co-op’s claim processing department (companies with thousands of employees and/or high medical claim filing rates). But that part can vary, I would recommend that with the co-ops, small and medium sizes businesses have their HR’s handle claims to the co-ops (if there are no pre-existing condition requirements, than the claim process and approval should be much easier and less labor intensive).
The health insurance/health care transaction in a regional co-op
If you get it through the company, you will probably get more benefits (bells and whistles) and an HR department that ‘has your back’. If you get it on your own through an exchange, you may not get benefits as good, but the number of policy holders should allow you to get good coverage anyway. Also businesses can pay a little more for coverage than citizen members that get coverage. You get your co-op coverage and find out how to pay, where to pay, or when premiums come out of your check. You want a check-up for your child; you make an appointment and take your insurance card to a network doctor/provider with your co-pay. The doctor bills the co-op, and receives payment for services covered just like he or she would under a private plan. If you get hit by a car and that same child has to stay in intensive care for a week, it would work the same way as it would with private insurance. Show them the card to prove coverage, the co-op is billed and the person would be responsible for their percentage of costs incurred (whether it’s 20%, 10% or Zero). Your premiums come out of your check, maybe direct withdraw out of checking accounts, or walk up and mail-in payments.
To recap the structure of the regional co-op idea
- Make every business that is incorporated (for profit or non for profit) in each state a member of the regional co-op.
- People who are residents in a state who go-it-alone have a citizen or individual membership.
- Examine information from each state’s individual law on health insurance benefits requirements to determine which state has the highest, or costliest, benefit requirements for health insurers to meet in order to sell in that state.
1. That state’s requirements, or close variations, are used as the minimum benefits offered on that regional co-op’s plan. (Again you may need allowances from the states, or make them accept these co-ops as federal GSE’s. Assumption here is more benefit requirements, the more expensive for insurance companies to provide coverage there).
- The incorporated membership has the traditional co-op ownership rights and responsibilities directly, like in other kinds of co-ops, when they have at least one employee on it.
- Individual or citizen memberships would not have the same rights, but the citizen complaints can be heard, assuming premiums are paid (somehow possibly subsidies at first), as one voice when grievances relate to something that can affects a large # number of people or is an injustice.
- The administrators for each regional co-op to be selected by top insurance officers in each state or by all incorporated members (they can vote, or whatever).
- Medicare provider network would be used for the public plan, why not use it for the regional co-ops?
- Government insuring medical provider fees for treatments that are covered by the co-op plans; early in creation of the co-op or permanently.
- Businesses with about 500 or less employees (maybe 1000 or less) may be able to do much of the claim processing in-house with their own HR (technology can simplify that a lot).
OR
- The number of medical claims generated by a company should determine if claim processing is done in house or by each co-op’s claim processing department (companies with many employees and/or high medical claim filing rates).
If my structure holds up in simulation, these multi-state regional co-ops can produce what I think are the essentials of a public option to lower costs of premiums. For example, a co-op policy with anywhere from 1 or 2 million people on it from the western plain states, to 2 to 5 million or more people on it for regions like the west and east coasts, or the mid west (big 10 conference area). That many people paying premiums may be able to justify longevity of some decent policy benefits. If there are no pre-existing condition limitations, people can go to their local co-op office to apply for coverage, maybe online (with state residency verifiable) or simply choose it with their employer when it’s listed with private options (every company and non-profit should be eligible, anyone with a least one employee enrolled has membership benefits). Because of the number of people in one regional co-op, and there’s no profit motive or sales commissions; the price should not only compete with private insurance but be low enough for people that can not come close to paying that average private premium rate (whether you are a business or a person who can not handle COBRA-like premiums). Also there will be people that are in between jobs that will have citizen memberships until they get new employment. These are benefits that are likely not to have claims against them because those people are not on the policies long enough. That can help cover cost for co-ops and a public option.
The 30 second explanation
I write these things for people in this group who get it and are well versed in this stuff and many other things (its mostly for the ‘meeting with the opposition’ a sales pitch for those that fully understand what’s being sold, not the evening news). I was reminded that the real world needs that shorter, easier-to-understand description. I would explain the co-op like this: what is a co-op for health insurance? ‘It is a non-for-profit organization made up of businesses and US citizens. A ‘union’ of businesses and citizens that pay premiums into a pool of money, and that pool of money pays to administer the policy and pay for covered treatments like pregnancies, certain injuries or many long lasting illnesses.” What is a regional or multi-state co-op? ‘It’s a pool of businesses and citizens from your state that pools its premiums together with businesses and citizens of other states. Together they create an insurance policy for everybody that ‘chips-in there share’. The pool of money from these regions of states, pays to administer the day-to-day of keeping the policy working internally and for the covered treatments of any member in any state that pays premiums to the pool.’
I still say that the public option is the better plan, that might have less managerial bureaucracy and could have 20 to 30 million people on one policy instead; giving that one policy a stronger ‘actuarial value’ than any one co-op can. But I don’t think it will sit well with anyone if we do not make serious strides to improve health care distribution, because a public option bill does not get out of congress in this environment. And given that the tax payer will be on the hook for co-ops going into the ‘red’ anyway, you might as well get the ‘actuarial value’ the public option gives you with its large numbers. And maybe some people are willing to risk their re-election for the better plan for their country, I applaud them. But the static given is not just them being sensitive about losing their seats. It’s a reflection of where the people are in their part of the world. And this reform will take a long time and will not come without some logistical problems and political drama probably. And I’ve heard from TV people I trust that reconciliation is not that likely in the Senate, but I think the White House knows this already. With the White House and the majority in Congress all in the Democratic Party, it’s still a toss up by many estimates.
I think some of these ideas have merit. I did some work on them in school for a project to see if business owners could reduce the cost of benefits to help increase retention and productivity. A lot of the thinking for that idea worked here. Also there is a congressman I heard on Hardball once, Cooper (I think) from TN. I think that he understands what I am ‘going after’ and believes that, in general, the co-op can be designed to have the essential elements of the public option, in regard to health care reform. I would say quietly check with him. Again, I say go after what you think you can get, and hold fast to what you feel you must. But if you can get some heavy-weights to strengthen the co-op idea so it takes on the essential elements of a public option that will help cause reform; I think you will have a strong plan B in place. If the public option or the ‘trigger’ will not work, the co-op can get it done well enough to be a major factor in comprehensive reform, while still not having left that after taste of ‘government-run health care’ in the minds of many people in this country (I'm really not sure why). The other stuff which is actually a larger part of fixing the cost ‘driver’ problem in the current health system. Coverage or lack of coverage, is only part of the problem really. After this post I will be busy on other stuff (I kinda have a life outside of this site....smile). Good Luck, Mr. President and staff. Give them hell tomorrow.
....I think I've had some security problems lately. thoughts over the last week and a half.
I understand why the CEO pay-scales, and much of the compensation issue in general, upset many people. But I don’t think that it’s an argument that will get anywhere with the people that are not already sold on major health care reform. If those CEO’s all made what the top pay grade government officials made, there would still be a growing cost problem inherent in the construct of the system and the people (patients, insured and uninsured) that drive up the cost. The ‘right’ and the ‘left’ have drained a lot of the logic out of this issue and both have not allowed for real discussions and compromise on it. The New York Times wrote about conservatives saying that they can not get good ideas into the debate. But their arguments come from the strategy of capitalism is good for all aspects of health care and they find theories and supporting research that support that logic; even if the basis of their studies assumes all participants in health care are good consumers and providers of services that can work for individual and systemic well being. Some of these conservative ideas that are based on the free market don’t deal with the health system inter-workings the way the Obama administration has laid out before. Contracting out Medicare’s administrative functions doesn’t guarantee, or really lead to, a reform of cost savings in treatment and administration by itself. It only makes the treatment and administration process slightly cheaper in the short run by making a ‘bad process’ cost a little less. This and the voucher-system I’ve heard mentioned by some on the ‘right’ both do not fix the problem and don’t deal with the 2 part cost/price dilemma. One part is the cost of operating this multi-industry ‘thing’ that finances, and provides us with, health care. The other part is not just reducing or stabilizing the price of coverage for people and businesses, but also finding a way to offer good coverage that is significantly lower than what the market tends to charge; so that people who either do not get coverage and can not afford it now, can get coverage. The ‘right’s’ plans will attempt to keep the inflation problem in health care in check-I’m not so sure their plans will. But they don’t deal with the fact that there are millions of people and many businesses that need a premium price that is considerably less than the norms in the marketplace, right now.
The ‘left’ is not convincing people why a public option is the only way to achieve real reform, and I’m for a public option. Health insurance executive salaries do not explain the dramatic rise in health care cost over the last decade or two. The ‘left’ sees the public option as a compromise from universal health care, when that was never really realistic for this country right now. Also, they can tell you why they are for the public option, but they can not demonstrate why large, non-for-profit co-ops will not meet many of the goals they are setting out to achieve. This makes people like me suspicious of why they can not or will not tell us why. No one that is a supporter of the public option on TV can give any good reasons to be against co-ops and that leads people to think they do not understand co-ops or how they can be constructed to achieve much of what the public option can. And I believe that’s why the ‘middle’ is losing patience with everyone, even the President (even though I don’t see this as his fault, really). If you play by the rules and try to stay healthy you may not be concerned that many people have no insurance or poor insurance. This is not civil rights or Vietnam. And if you think drastic changes will affect your treatment, as someone that plays by the rules in life for the most part, you will be worried about taking on so much change in health care. The president has done a good job on some grounds dealing with the issue, I think that conservatives that study this topic and the entire ‘left’ needs to consider looking at things objectively.
What is needed seems to be 1) more efficient and cost effective treatment and administration in health-care that can deal with millions more newly insured people. 2) An ability to price premiums in a way that, those without coverage and companies who may not be able to, can afford decent coverage in the near future (or as close to now as possible). The title and the method that some prefer to use to achieve these goals should be put aside for a while. The party platform on either side doesn’t get to the correct legislation and/or does not convince in the public that is undecided.
The ‘well intentioned right’ needs to deal with the fact that the general price levels of premiums will not go down enough, in a short-enough time period, to meet the needs of the growing uninsured through competition alone. You can open up interstate sales or contract out certain functions of Medicare to private industry but neither deal with the previous statement. If a company in a different state charges 5% less in premium prices to attract new business, that’s great; unless the population that needs coverage needs a 30 to 40% reduction on the lowest prices in the market to be able to afford it. The reality of waiting for efficiency to spread through out all the interdependent and competing industries that make up American health care could take a decade or more, if it happens at all. There is little incentive for the individual companies/practices to stop certain practices in health care because 1) the competition is not directly medical provider against medical provider for better service at lowest cost and 2) people in the actual medical treatment world are not cut-throat capitalists who will search for the best way to compete on cost and pricing, with competition they don’t think they have. Insurance companies have to pay what they agreed to cover, and costs of things they will cover are still growing at 2 fast a rate. Something (with help from all the players in health care) has to interject itself into daily processes and point out what works best for the system as a whole and the economy, in order to stabilize costs and premium pricing. It’s bigger than reducing the costs of the billing department of Medicare and private insurers, it about dealing with the growing part of our economy that is spent, not to improve the American experience; but spent to keep us alive and functioning on a basic level. One large insurance policy, like a public option, is better for long term premium price stability and can begin pricing low enough to meet the needs of the uninsured because the law of big numbers in insurance work in its favor (better prices tend to come from more participants in a plan). Either the right can honestly, with objective information refute that argument in a way that makes sense to most of us, or you can not. Trying to avoid it based on the idea that the ‘free market’ is always best will not hold up if costs keep going up, after money keeps going into fixing the problem. And if people can ‘choose’ to purchase a public option or not, the market is still free; unless the ‘right’ is now admitting that the government will deliver equal health insurance service for lower prices or that free market pricing is only driven on the lowest prices for services and goods (tell that to luxury product makers and service providers and high-end banking and money managers-who all justify their prices on quality and reputation). Also, the ‘right’ can not honestly say that health care can be based around the capitalist model the same way a normal commodity can; maybe in 1909 but not today.
Again it’s no longer you paying your local doctor to put a cast on or give you medication. If you can prove it in a way that can be demonstrated or work toward a compromise that achieves most of what real reform requires. We need cures for this system; not temporary, one department cost ‘band aids’.
Keep things simple when pushing back bad arguments. Opening up interstate sales will not lower prices because… walk them through a transaction. If one insurer under-cuts another one’s premium for the same coverage by $10 less a month to get your business, that’s great for everyone. But what that person needs it to be is $50 less a month to be able to afford it.
The ‘right’ is bothering me because of what is being said, but the ‘left’ is bothering more because of what they are not saying. I’m starting to think that the reason they are against co-ops is because policy holder ownership makes it harder to force universal government health care in the future. I hope I’m wrong about that. I don’t think I am because the President seems willing to consider other options even though he has a preference, while the ‘left’ have to have a public option or nothing, right now. Maybe things could have been said better, but there is no road map for a successful trip on this one. But it appears the administration is more concerned with fixing the problem, than fixing the problem the exact way they want to. For what it’s worth I really appreciate that. It should be about allowing the most numbers maids, janitors, people out of work, unemployed or underemployed as possible, the ability to get coverage and good treatment given the entire political environment right now. I believe that your intentions are honorable, and therefore I feel the people can trust your judgment more than those on the ‘right’ and ‘left’ this time. Go after what you think you can get Wed, hold fast to what you feel you must. If you chose based on what is doable and possible, for what its worth I think people like me will have your back, Mr. President and staff…..no matter who challenges you on this issue. Let their ideas “prove their worth, in a test of arms, under the eyes of God”- from one of my favorite movies as a kid. Go get’em Mr. President!!
PS. Your ideas on retirement never would have occurred to me….even though that bothers me a little, Nice Work!!!- (smile)
The ‘trigger’ aspect for the public option is a good idea but it still exposes some logistical problems with real health care reform that needs to change how health care providing industries do business. What will the environment need to look like, or what will have to happen, to set off the ‘trigger’? In order to increase coverage to millions of people at a substantially lower premium price, all insurance providers would have to work in unison to offer coverage at a predetermined price; even if that premium puts them into the ‘red’ once it’s in place. Regulation is suppose to keep an existing environment (which is working generally well except for extreme situations) from violating economic and industry rules, it is not suppose to determine the business model that all industry participants have to follow, by its own definition. Regulation that goes into businesses (that have predetermined cost structures and profit margins) in order to force them to lower prices for services ‘overnight’ without correctly adjusting cost structures and profit margins; will appear to be creating de-facto government-run health insurance companies, that have marketing departments. It’s a great strain on the operations of insurance businesses because they will have to come out of pocket to restructure for these new lower priced plans; or the government will have to subsidize their restructuring.
Let’s pretend more government money going to health insurance companies is even doable, what do you restructure within a health insurance company? Processing claims and underwriting don’t really force company expenses to increase out-of-control, alone. Decreasing commissions or incentives is really all there is to do, but we have to go back to what insurance companies do. They pay on claims that are covered. Therefore, much of the health issuers expenses passed to all of us, is the amount charged to them by the actual ‘health care providing’ industries, that are covered by health policies. And therefore, I think much of controlling what expenses health issuers pass to us has a great deal to do with the non-coverage part of reform the President wants to do. Adding new technology to records, reducing redundancy in the treatment and administration parts of health care; these can not be done simply by forcing private insurance to cover more people and charge lower premiums alone. But in this environment, how you describe coverage is all that people think about and doing it correctly is the only way to get legislation for all of it (I hope I'm wrong about that). Health insurance reform is needed as part of the solution, but a comprehensive solution with all players being able to (or forced) work together should be the goal.
Government paying for health insurance upgrades may be tougher to sell than the current health care reform plans out there. Also, financing for businesses is hard enough now. The fact that there is a ‘trigger’ that can ‘go off’ (and mostly like will go off, if in place) means that budget plans in the future would have to always consider that possibility of that 'trigger' during a year, or it would be wise if they did. Any year could be the year you have to start planning for the public option. With this type of problem and some of the general rules of inflation, it will cost more to get the public plan going later, than sooner (particularly if deficits start to effect the dollar in currency markets over the next 2 to 3 years or sooner). In a strange way, creating a public option or strong, well designed co-ops to enter the health insurance market is closer to economic examples of how innovative market entrants can, in a pseudo-organic way, change an industry through natural competition (even though this would be competition by government). The ‘trigger’ for the public option seems to be forcing all industry participants to adopt money-losing business plans while possibly not giving them the time and resources to restructure operations accordingly. That’s not entirely evil, but what if the time period for them to change is too long and they don’t meet the ‘trigger-put-on-safety’ requirements? The public option goes into affect and it costs more to do it later than to do it now. And what if you do not give health insurers and all industries enough time to restructure, while staying in the black, before the ‘trigger’ goes off? The cost and needed resources to meet the deadline could be too much for them and the public option starts sooner, but with more cost added to it because it happened later and with the collateral damage of failed health reform in the short run. I think both ‘right’ and ‘left’ need to remember what the White House has admitted recently; the direct and indirect (circumstantial and unnecessary) cost of treating people is just as big as the coverage problem, and probably more pressing. The coverage part of reform may just be a ‘sliver’ of actual comprehensive health care reform, according to the President. It’s the cost which goes into treating people from ‘start to finish’ of a condition, illness or life that causes premiums to go up, and makes it almost impossible to have ‘portable’ health plans now. The costs which go into treating people also allow it to be easier to make profits on the health system, or make excessive profits. The trigger option can work, but I think the public option or large co-op coverage plans, timed with improving the medical treatment and administration parts of health care, may work better because the later options may actually be more predictable to budget and plan for correctly. Telling a company ‘cover more people and charge this much by a certain date or you’ll compete with a public option’ may force industries to change faster than they have the resources to. Especially considering that health insurers does not have much control over the cost of covered claims that are literally charged to them nowadays. If they have the resources to make those structural, operational changes that allow for lower premiums immediately, I hope it’s considered with everything else the President is thinking about in his approach to health care. The right and left can not explain why they are against what they claim to be against. I have not ‘drunk the Kool-Aid’ of anyone, but I’m assuming that the President will set a direction since it has been tough for congress to do it. (Again, I know this is all hard to do, and easier to pick apart as an arm-chair quarterback like me).
(For football fans and players only) For those that play on the national stage, ‘leave it all out on the field’ for those of us who do not have the ability to be on the field with you. Put on a show this season, make those who are favored to win earn it, underdogs…there are no coronations in football!!!
Give’em hell Mr. President on Wed!!.... and everybody doing the media thing this week. I’m going to try to watch ‘A-rod’ Axelrod on MTP tomorrow. I think it’s great that the President is talking to school kids!! Lord knows I could have used some inspiration to work harder when I was a kid (smile).
