Economist Dean Baker really lets John Kerry, Patty Murray and Max Baucus have it for the column that appeared in the Wall St. Journal this week -- but he's especially savage with Kerry:

Senator John Kerry, along with the two other Democratic senators appointed to the "Super Committee", had a column in the Wall Street Journal yesterday on their approach to the committee's work. This piece is infuriating for its empty platitudes and the refusal to acknowledge economic reality. In just 700 words the piece promulgated 3 major economic myths while ignoring the fundamental truths about the economy and the budget.

[...] The reason that we actually had a $240 billion surplus (2.4 percent of GDP) in 2000 was that the United States had a stock bubble propelled boom at the end of the decade. This caused the economy to grow much more rapidly than CBO expected with the unemployment rate falling to 4.0 percent in 2000, rather than the 6.0 percent predicted by CBO. Do the senators not remember the stock bubble?

In addition to promoting these false stories about the economy and the budget, the senators fail to tell the true story. The large deficits the country currently faces are not the result of an ongoing pattern of excessive profligacy. They are the result of the economy's plunge following the collapse of the housing bubble. Even with the cost of the wars, the Medicare drug benefit and the Bush tax cuts, the projected deficits were relatively modest prior to the collapse of the housing bubble.

The true story is that our deficit problem is really an economic problem - we let a huge housing bubble grow, which would inevitably collapse and sink the economy. The deficit is needed now to make up for the $1.2 trillion loss in annual demand from the private sector, which had been generated by the housing bubble. The bubble had led to booms to both construction and consumption that have gone bust now that house prices have crashed.

Continue reading »

This is a welcome statement coming from an unlikely source.

Senate Finance Committee Chairman Max Baucus says he doesn't think Congress will address Social Security as part of an effort to reduce government borrowing. The Montana Democrat said Tuesday that Social Security has not added to the budget deficit, so it should not be included in a deficit reduction package. Baucus is part of a bipartisan group of lawmakers, led by Vice President Joe Biden, who are trying to negotiate such a package. Baucus said Social Security's finances should be addressed in the next couple of years. But he also said the program is not in a crisis.

At least he said "the program is not in a crisis" and that Social Security doesn't add to the deficit. Where's Dick Durbin on this? Why isn't he the one standing up and doing the right thing instead of standing with the most Dangerous Gang in America?

enlarge

I wonder when it's going to sink into Max Baucus's thick skull that Republicans aren't going to make a deal because as a party, they simply aren't interested in solving the problems of healthcare.

Maybe I'm giving Max too much credit for trying, and he knows exactly what he's doing. Because his latest proposal is a Kabuki dance of a bill that won't really help people. In fact, we'd be paying obscene amounts of money for a plan that doesn't really cover anything.

Bug - or feature?

WASHINGTON — In a last effort to give the Senate a bipartisan health care bill, the chairman of the Senate Finance Committee circulated a comprehensive proposal on Sunday to overhaul the health care system and proposed a new fee on insurance companies to help pay for coverage of the uninsured.

The proposal is the culmination of more than a year of work by the chairman, Senator Max Baucus, Democrat of Montana. A similar fee was proposed by several liberal Democrats in July. In making it part of his proposal, Mr. Baucus may help cover the costs of the bill but also risks alienating Republicans whom he is trying to win over. Mr. Baucus is struggling to forge a bipartisan consensus among 6 of the 23 senators on his committee before President Obama puts new pressure on lawmakers in an address to a joint session of Congress on Wednesday evening.

The proposal by Mr. Baucus does not include a public option, or a government-run insurance plan, to compete with private insurers, as many Democrats want.

This is Max trying to sidestep the charge of taxing workers on their benefits. But of course, there's nothing in the bill to prevent insurance companies from simply jacking up the premiums to cover their losses. Oh, and there's also this:

Mr. Baucus’s plan, expected to cost $850 billion to $900 billion over 10 years, would tax insurance companies on their most expensive health care policies. The hope is that employers would buy cheaper, less generous coverage for employees, thereby reducing the overuse of medical services.

Yeah, because that's the real problem. We all use our health coverage too much.

Max's bill is real horror show for working people. Is this the legislation that's supposed to scare the Republicans into supporting reform? Because it looks like something they'd dream up:

Another section of Mr. Baucus’s proposal would help pay insurance premiums, co-payments and deductibles for people with incomes less than 300 percent of the poverty level ($66,150 for a family of four). It would also provide some protection for people with incomes from 300 percent to 400 percent of the poverty level (up to $88,200 for a family of four), so they would generally not have to pay more than 13 percent of their income in premiums.

[...] Mr. Baucus would impose limits on out-of-pocket medical costs — the co-payments, deductibles and similar charges for covered items and services. The limits would be $11,900 a year for a family and $5,950 for an individual. The comparable numbers in the House bill are $10,000 and $5,000.

What they want is the illusion of a bill that won't actually help anyone. Where do they think all this money's going to come from, especially with a U-6 of more than 15%? Is this going to help anyone get care they need? Hardly.

In the meantime, Max, people like this are literally dying to get health insurance for their families.

So the logical question is, exactly who does Max Baucus serve? Surely not the residents of Montana:

Fifty-five percent of Democrats in Montana disapprove of how Senate Finance Committee Chairman Max Baucus (D-Mont.) has handled healthcare reform, according to a new Research 2000 poll given to The Hill by a liberal activist.

Liberal advocacy groups and labor unions have been running television ads and running grassroots operations in Montana this summer targeting Baucus and criticizing his tepid support for a government-run health insurance program.

It appears the campaign has begun to impact Baucus’s public standing.

A majority of Montana Democrats disapprove of Baucus’s actions on healthcare reform while only 34 percent of Democrats approve, according to the poll, which was conducted from Aug. 17 to Aug. 19. The poll was commissioned by Daily Kos, an influential liberal website, according to the source.

Overall 42 percent of Democratic, Republican and independent voters approve of Baucus on healthcare reform while 44 percent disapprove. Nearly half of Montana Republicans polled, 49 percent, approve of Baucus’s role in healthcare talks.

More than a third of Democrats polled said they would be less likely to vote for Baucus if he opposed a public health insurance option while 52 percent said their vote would not be affected. About one in 10 said they would be more likely to support Baucus if he opposed a public option.

Well, I suppose we should have known. Apparently the big holdup with Max Baucus's Finance Committee bill is... abortion. (Yeah, I wondered what the hell that has to do with finance, too.)

But wait, it gets better! The Senate Republicans not only demand that abortions not be paid for with public funds (something already forbidden by the Hyde Amendment), they want to prevent private insurance plans from paying for them, too.

Wow. If the Dems knuckle under to this extortion, it'll be war.

TAPPED has more:

Many supporters of health reform believe that systemic questions, such as whether or not reform will include a public insurance option, should inform the congressional and public debates. But the truth is that Americans, unsurprisingly, seem to be most concerned about coverage specifics. After reform, what procedures will and won’t be covered? Will my array of choices expand or contract?

Those fears have been artfully exploited by the increasingly enthusiastic and radical conservative anti-health reform movement. In response, today the White House launched “Health Insurance Reform Reality Check“, a website modeled after “Fight the Smears,” a campaign season effort to dispel rumors about Barack Obama’s background and positions.

The new site is built around a simplified, eight-point explanation of how consumers will benefit from health reform. Using this messaging, the administration plans a public relations push during the congressional recess, with a focus on drumming up grassroots support via the Obama’s team’s email list and outreach to the liberal blogosphere. But given the intensity of anti-reform protests over the last week, there is little doubt that the president seems to be on the defensive. The continued lack of one, concrete, completed health reform bill means that opponents of reform can grandstand on a number of hypothetical issues. For example, both the House tri-committee bill and the Senate HELP committee bill create an independent council of medical experts to advise HHS on what services will be covered in the new health exchanges. Conservatives have suggested that the council — which, of course, does not yet exist — will prevent terminally ill patients from receiving life support or continuing care, or will mandate abortion coverage.

Both of those outcomes are completely improbable. Neither are on the White House’s agenda. But by kicking some tough choices on coverage down the line, to after reform passes, Democrats have opened the door to this kind of scare-mongering. Uncertainty is uncomfortable, and opponents of reform — along with skeptical moderates — are exploiting that simple truth.

Nowhere is this more apparent than in the abortion debate. None of the health reform proposals in Congress threaten the Hyde Amendment, which currently prevents the federal government from funding abortions. But anti-choice legislators are not satisfied. Many women will receive government subsidies to buy health insurance after reform, and Republicans — including some senators in the all-powerful “Gang of Six” — would like those women to be banned from accessing abortion with those funds, whether they are covered through private insurance plans or a potential public option. This would be a significant curtailing of reproductive rights, since most private insurance plans currently do offer some abortion coverage.

In this case, the current reform proposals actually do maintain the oft-heralded “status quo:” Medicaid won’t cover abortion, but private insurance plans will. It is reform opponents who are pushing to change the way health care is delivered, by curtailing women’s ability to access abortion coverage in the private insurance market. This morning, a senior administration official, speaking on background, told me that some moderate Republicans are choosing to understand health insurance subsidies as tax credits, and thus, from a libertarian point of view, might support a woman’s right to access any health procedure she wishes with that “tax credit,” including abortion. And yet, this official affirmed that abortion is among the issues holding up the Senate Finance Committee — right alongside long term cost containment and debates over whether the federal or state governments will pay to expand Medicaid.

In other words, almost everything about health reform remains up in the air. Stay tuned.

Continue reading »