In his State of the Union address last night, President Obama challenged Democrats to take advantage of their substantial congressional majorities and challenged Republicans not to obstruct them:
To Democrats, I would remind you that we still have the largest majority in decades, and the people expect us to solve problems, not run for the hills. And if the Republican leadership is going to insist that 60 votes in the Senate are required to do any business at all in this town -- a supermajority -- then the responsibility to govern is now yours as well. (Applause.) Just saying no to everything may be good short-term politics, but it's not leadership. We were sent here to serve our citizens, not our ambitions. So let's show the American people that we can do it together.
Here are some intriguing facts about filibuster-proof congressional majorities and the legislative productivity of the 111th Congress.
It has been reported widely that the version of health care legislation passed by the Senate (HR 3590, as amended) includes provisions that would prevent a future Congress from changing or repealing it.
A careful review of the bill shows that these reports are incorrect.
Both the Senate and House versions of health care legislation include provisions that would prohibit insurers from declining to underwrite people with preexisting conditions and prevent them from imposing annual or lifetime caps on coverage.
Today's Shoe illustrates one of the problems with these proposed restrictions.
We've delayed publishing analysis of the Senate's health care bill until a version could garner 60 votes, and thus survive a cloture vote to cut off debate. That bill is Majority Leader Reid's manager's amendment to HR 3590.
In its debate over health care legislation, the Senate and the Obama administration must contend with conflicting forces and incentives. There appears to be a political consensus among supporters that "guaranteed issue" and "community rating" are essential features of any bill. ("Guaranteed issue" means people cannot be denied coverage no matter how risky they are. "Community rating" means people with low health risks have to subsidize them.)
As we have noted several times now, keeping these features requires that everyone have health insurance. This means people with low health risks must be compelled to buy (and pay too much for) health insurance.
Proposed health care legislation includes both employer mandates and an "individual mandate." Anyone not covered by employer-provided health insurance would be required by law to buy a qualifying health insurance plan or pay a tax.
An interesting debate has arisen concerning whether Congress has authority under the Constitution to require individuals to purchase health insurance. David B. Rivkin Jr. and Lee A. Casey are perhaps the most prominent opponents:
[C]an Congress require every American to buy health insurance?
In short, no. The Constitution assigns only limited, enumerated powers to Congress and none, including the power to regulate interstate commerce or to impose taxes, would support a federal mandate requiring anyone who is otherwise without health insurance to buy it.
Washington Post columnist Ruth Marcus recently defended the proposition that such a law would pass constitutional muster.
The US Preventive Services Task Force recommendation that women without any risk factors for breast cancer obtain mammograms less frequently has elicited furious complaints by both Republican and Democratic Members of Congress. We blogged on the report when it was released.
A scandal has erupted over the federal government's reporting of the number of jobs created or saved by the "stimulus" bill (formally the American Recovery and Reinvestment Act of 2009).
This scandal would have been avoided if the government had complied with the Information Quality Act.
Estimates of the social costs and benefits of health care legislation are hard to find. The Congressional Budget Office estimates federal budget revenues and receipts, and while it is supposed to estimate non-federal costs, it generally does not do so.
The Kaiser Family Foundation has a calculator that tells you how much taxpayers would subsidize your health insurance if your employer did not provide it, and thus you had to purchase it yourself (the "individual mandate").
This calculator provides some very interesting insights about the House and Senate health care bills. Most strikingly, it's possible that a majority of Americans would receive large taxpayer subsidies.
Janet Trautwein, CEO of the National Association of Health Underwriters, explains why private insurers need a strong individual mandate in federal health care legislation.
The problem, as she sees it, is one of adverse selection: Only high-risk individuals will voluntarily purchase the insurance Congress proposes to require them to issue. That makes the insurance market fatally unstable.
She is correct that fatal adverse selection would arise if the bill lacks highly coercive employer and individual mandates. What she only alludes to, but is the crux of the problem, is the combination of guaranteed issue and community rating.
Recently we have posted on the so-called "public option" (see here and here). Today we look at the effect of proposed health care legislation on the private market.
By necessity, it is private insurers that have both the interest and comparative advantage to estimate these effects. The federal government, and especially the Congressional Budget Office, is almost exclusively concerned with federal budget outlays, not social costs and benefits. To keep federal outlays down, legislators focus on shifting costs off budget -- typically, onto private insurers and their customers.
Analyses recently made public by one private insurer are instructive.
It's in the House Energy and Commerce Committee bill, which the Speaker has not brought to the floor for a vote because it lacks enough votes to pass. It's in the Senate Health, Education, Labor and Pensions bill. It was in the Senate Finance Committee bill, then it was removed to secure one Republican vote. As the Senate leadership tries to merge these competing bills, news stories say that it's back in. Or back out. Or back in under certain conditions.
Economic incentive schemes are popular among economists and increasingly embraced by legislators. Cap-and-trade to control greenhouse gas emissions is perhaps the most visible of these incentive schemes. Pigouvian taxes are the other, and news today from an unexpected source provides useful and interesting lessons in how such taxes can work -- and how they can degenerate into plain vanilla taxes.
