Republicans Reject Purity Test     Permalink

At the RNC meeting in Hawaii, RNC member James Bopp withdrew his resolution requiring all Republican candidates to take and pass a "purity test" in order to get RNC funding. The party elders were against this resolution because it would mean they could not support moderate candidates like Scott Brown in Massachusetts, where a true conservative would have no chance. The resolution was replace with a bit of mush that urges the Republicans to support candidates who endorse the party's platform. There are no rewards for endorsing it and no sanctions for not endorsing. In other words, the party brass won this fight with the tea partiers.

Some Democrats Want Scaled-Down Health-Insurance Reform     Permalink

Some Democrats have floated the idea of a scaled-down health-insurance bill. They think that by keeping the popular parts of it and removing the unpopular parts they could get enough votes in Congress. The trouble is, anyone saying this does not understand the economics of health insurance. What these people are hinting at is making it illegal for insurance companies to refuse people with pre-existing conditions (popular) without levying new taxes (unpopular). That simply doesn't work. Here's why.

If people could walk around uninsured and then be able to sign up when they got seriously sick, many people would adopt precisely that strategy. For the average family of four, health insurance costs something like $13,000 a year. If a family expected its medical costs to be below $13,000 it rationally it would forego insurance. Then if a member got seriously ill, it would sign up for insurance and couldn't be refused. The consequence of this new law would cause healthy people to cancel their insurance until the insurance companies were just insuring sick people, which would cause premiums to skyrocket and more people to drop their insurance. The only way to prevent astronomical premiums is to make sure the pool of insurees contains very large numbers of healthy people who pay premiums and don't file many claims. That is what insurance is all about, after all, sharing risk. That is why all other industrialized countries have mandates--everyone has to buy health insurance under penalty of law, to fill the pool with healthy people. Both the Senate and House bills contain mandates, which are unpopular but essential to prevent premiums from skyrocketing.

The problem is that you can't expect a family making $30,000 before taxes to pay $13,000 a year for health insurance. It can't be done. And about one third of all familes make less than this. Even a family making $50,000 (55% of all households) will find paying a quarter of its pre-tax income on insurance tough. In many cases, employers pay the insurance, but with increasingly many employers dropping or cutting back on insurance and many people unemployed or underemployed, the insurance burden is falling more and more on individuals. The only plausible solution (short of just letting these people die when they get seriously ill) is government subsidies, which is why the House and Senate bills both provide them, albeit at different levels. To make the bill revenue neutral, you need new taxes to generate the money for the subsides.

In other words, you can't just have the dessert. You have to eat your spinach, too. The whole thing fits together like a puzzle. Making insurers take everyone means forcing healthy people to have insurance which requires subsidizing poor people which means new taxes. In theory, there are other ways, but they are very draconian. For example, anyone not wanting to be insured could sign a document that would prevent them from getting emergency care unless they could pay for it and would prevent them from getting insurance in the future should they be in an accident or get sick. Some people would surely choose this option, but then there would be newspaper and TV stories about some poor little girl who was badly mangled in a car accident and when she was brought to the hospital was turned away because Dad opted out. People would scream. Since a scheme is economically feasible but not politically feasible. The bottom line is that it is something approximating the current bill or nothing. The reason the bill is 2000 pages (double spaced with wide margins) is that all the above issues must be addressed in detail. However, the length of the bill has nothing to do with why it hasn't passed yet. TPM has a good story on how the Democrats botched it.

Democrats Working Quietly on Health Care     Permalink

Behind the scenes, the Democrats are working quietly to iron out the differences between the House and Senate bill. The current plan is for the House to approve the Senate bill in its entirety and then make small changes via the budget reconciliation process. The Republicans will howl at misusing the reconciliation process, but a recent Pew Poll shows that only 26% of Americans know that it takes 60 votes to invoke cloture. It is probably a safe bet than not more than a couple of percent have a clue how the reconciliation process works, so when the Republicans scream at this being undemocratic, the Democrats can simply say: "A majority voted for it" and most people will probably think that sounds reasonable.

Dorgan and Dodd Have $7.5 Million in Campaign Funds     Permalink

Sen. Byron Dorgan (D-ND) and Sen. Chris Dodd (D-CT) together have a combined warchest of $7.5 million that they are allowed by law to donate to other candidates. They can also return it to their contributors, give it to charity, or hoard it for possible future runs. That's quite a chunk of change and there is a lot of interest in what they plan to do with it.

Another House Republican Will Retire     Permalink

Rep. Steve Buyer (R-IN), has announced that he is retiring at the end of this session of Congress and will not run for reelection. His district is R+14, so the Republicans will certainly hold the seat. Below is the list of House seats in which the 2008 winner is not running and which is between R+9 and D+9, inclusive. Seats that are more partisan than that are in no danger of flipping, but here is the full list. The colors indicate the incumbent party, not the PVI. While more Republican than Democratic seats are at stake, the Republican open seats are mostly in friendly territory whereas the Democratic open seats are largely in hostile or neutral territory.

Tomorrow is Primary Day in Illinois     Permalink

Voters in Illinois will go to the polls tomorrow to select candidates for senator and governor. One of the senatorial candidates, Jacob Meister (D) dropped out yesterday and threw his support to state Treasurer Alexi Giannoulias (D). Meister is the first openly gay person to run for the Senate from Illinois. He had little chance, but two other Democrats, Cheryle Jackson, former head of the Chicago Urban League, and attorney David Hoffman might conceivable pull an upset against the front runner, Giannoulias. The Republican senatorial nominee is sure to be Rep. Mark Kirk (R-IL). The gubernatorial race on the Democratic side features Gov. Pat Quinn (D-IL) against Comptroller Dan Hynes. The Republicans have a multiway primary among candidates none of whom are well known.

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