James Pethokoukis

Politics and policy from inside Washington

6 reasons healthcare reform might fail in the Senate

Nov 17, 2009 18:05 UTC

“We no longer expect Congress to pass impactful health reform legislation this year, or even in this political cycle.” That is the opinion of Sector & Sovereign analyst Richard Evans:

1. Voter attitudes are shifting away from both Democrats and health-reform; placing the considerable number of Dems from conservative states and districts in increasingly untenable positions.

2. Substantial time should pass before a vote on final legislation; the Senate is unlikely to vote on a bill by year end, and a final vote on a conference bill is virtually impossible before late January. If trends in voter opinion continue, this is almost certainly too late.

3. On top of this, efforts to keep abortion as a neutral issue have failed. 20 pro-life House Dems have put the issue ahead of health reform, refusing to support legislation that does not completely bar abortion coverage in plans that receive Federal funding.

4. Pro-choice House Dems outnumber their pro-life House Democratic peers nearly 8 to 1. As any final legislation will certainly be well to the right of the House bill, this means House progressives may be asked to support a final bill whose healthcare provisions they find lacking in appeal, and to surrender ground on choice in the process. We bet at least a few refuse.

5. Immigration is a less potent but still meaningful wild-card; 20 House votes rely on the Senate ultimately agreeing to loosen its language and let illegal immigrants purchase coverage on the exchanges with their own money, and to extend subsidies not only to citizens, but to anyone who is in the US legally. 15 Senate Democrats hail from states that Obama either lost, or carried with a 5 percent margin or less. These swing-votes hold inordinate power, and are much more conservative on immigration than their blue-state peers; we believe they may balk at these House provisions.

6. The House bill’s largest source of funding is an incremental tax on the wealthy, which the aforementioned 15 Democratic Senators from red- or swing-states cannot support. The Senate Bill’s largest source of funding is taxes on relatively more expensive ‘Cadillac’ health plans, which the union friendly House cannot support. In effect, each has settled on a plan that the other cannot pass.

Me: Never underestimate the power of numbers. And the Ds do have a big majority in the Senate. And what do they fear more, passing the bill or not passing it? Obama might still sign something, but it might not resemble comprehensive healthcare reform anymore. We await the CBO score ….

COMMENT

Defeat of the anti-heathcare people control bill is essential for the defeat of the collectivist liberals in 2010 who have killed the once great democratic party and now occupy it’s corpse like some demon Parasite in a B grade SI-FI movie. This an attempt to take over another one sixth of the American ecconomy. Make no mistake about it, this is a full blown coup in progress to distroy the American economy and force the transformation the United States into a Fabian Socialist/Communitarian Totalitarist State. The don’t give a damn about people, just power. As Cicero said “Power Corupts, Absolute Power Corupts” Absolutely… The sad thing is that they are not truly dedicated social revolutionary cadres, just corrupt evil people. Real revolitionaries don’t try to make themselves rich on the backs of the people as Al Gore is! They are behaving just like the Laissez-faire Capitalist they want to replace!

Posted by Padraigs Ghost | Report as abusive

2010 outlook for Democrats

Nov 13, 2009 17:58 UTC

Nate Silver on 2010:

My 30,000-foot view is that between the pressures of the jobs situation and the health care debate, the Democrats are in fairly bad shape. But, there’s a long way to go before next year, and their situation does not seem to be quite as bad as it was in August.

Certainly, if I were the Democrats, I’d be adopting a fairly defensive posture, putting money into defending seats — especially those held by non-Blue Dog incumbents — rather than getting cute and trying to pick off more than a handful of potentially vulnerable Republican seats. I’d also be thinking about policies — like a jobs package and financial regulation — that tap a little bit into the populist spirit and might result in somewhat awkward Republican positioning.

So, should the Democrats be panicking? Yeah, maybe a little. But the fundamentals — particularly the poor labor situation and the Republican enthusiasm advantage — should be the reasons for their concern, rather than the results of any one particular poll.

COMMENT

Guys, I’m sticking with my forecast of the Dems losing 65 house seats in 2010. Call me a hero if I’m right or a dummy if I’m wrong. I don’t think it will matter if the economy improves significantly or healthcare passes. The numbers so far look that way on rasmussen (which has been very accurate so far), and the historical relationship has been about a 10 seat change in the margin per every 1 percentage point change in the marginal popular vote.

Posted by T | Report as abusive

Is ObamaCare in trouble in the Senate?

Nov 12, 2009 21:47 UTC

A few thoughts on healthcare reform:

1) Just talked to a very insightful Capitol Hill Watcher who doesn’t think Harry Reid has the votes in the Senate to pass anything resembling comprehensive healthcare reform. You can count out Lieberman, Landrieu, Nelson and maybe even Bayh.

2) First, of course, comes the CBO’s analysis of various proposals. Any of them that boosts the deficit or healthcare premiums are DOA. Remember, healthcare reform was supposed to expand coverage, lower premiums and bend the curve on the long-term deficit.

3) Assuming Reid can get 60 votes to proceed to the floor sometime next week, we are talking December being taken up with debate on amendments concerning the public option, abortion, taxes. As it is, Reid is reworking the Senate bill on the fly. One day it is a new version of a PO trigger, the next a hike in payroll taxes. Reconciliation? “That ship has sailed.”

5) Time does not help.  Once the Congress goes homes, members could be inundated with complains and protests, just like in August. Also, the rising unemployment rate continues to sap public confidence in the Obama agenda and Washington, in general.

COMMENT

My grown kids think that socialism/communism would be okay. What did I do wrong in raising them? I wonder when they start paying more taxes if it will make any difference to them?They do not seem concerned about the U.S. deficit, they are too wrapped up in their own little worlds and watch the propoganda(?) machines every night.

Unemployment and presidential disapproval ratings

Nov 6, 2009 20:12 UTC

Some interesting charts (via TNR) looking at the linkage between unemployment and disapproval ratings:

110609reagan

110609clinton2

110609obama1

COMMENT

refitting these graphs so the unemployment rate has a constant scale reveals that the correlation isn’t nearly as strong as it looks right now.

There’s also no reason for the variable scales, other than to mislead. The range for Reagan is almost identical to the range under Obama.

America’s jobless recovery

Nov 6, 2009 18:10 UTC

Here are a few opinions about the jump in the unemployment rate that caught my eye:

1) Dean Baker, Center for Economic and Policy Research

The October unemployment rate is still below the 10.8 percent peak reached in December of 1982, but the workforce is considerably older now and in age cohorts where workers are less likely to be unemployed. If the workforce had the same age distribution as in 1982 but current unemployment rates for each age cohort, then the unemployment rate would be more than a percentage point higher. The 10.7 percent unemployment rate for men is 0.6 percentage points higher than the 10.1 percent peak in 1982. This is consistent with the massive job loss in construction and manufacturing.

In all likelihood, the economy will continue to shed jobs, at least through the rest of the 2009 and probably into the first months of 2010. The unemployment rate will probably not peak until the spring of next year, at close to 11.0 percent.

2) Michael Feroli, JPMorgan

Even worse than this were the figures reported in the household survey of employment. The unemployment rate smashed through the psychologically significant 10% level to hit 10.2% in October. This came even as the labor force participation rate fell another 0.1% last month to fall to 65.1%. Normally, a falling participation rate would be expected to temper any increase in the unemployment rate, as discouraged workers who drop out of the labor force no longer count as officially unemployed. Moreover, the measure of employment in the household survey fell 589,000 in October and has been significantly weaker than the establishment survey measure over each of the prior three months.

Among the other details in the household survey, the unemployment rate for college-educated persons has actually been roughly stable since June at 4.7%, while less-educated groups have seen a big move up. The male unemployment rate hit a post-war high of 11.4% last month, breaking the previous record of 11.2% in December of 1982. . According to the CPS labor force flow data, only 15% of unemployed persons found a job last month, a new low.


3) Mike Englund, Action Economics
The 190k payroll drop, combined with the 91k in upward back-revisions, slightly outpaced assumptions. Yet, the workweek failed to rise from its 33.0 cycle-low, hence leaving a 0.2% drop in hours-worked that will weigh on Q4 GDP estimates, as will the hefty jobless rate surge to 10.2% that shattered the 10% psychological barrier. The household survey also revealed a sobering 589k drop in household employment, while hourly earnings failed to provide any low inflation solace, with a 0.3% gain.
COMMENT

My View : Fundamental Changes Can Ride Out Of This Great Recession Not That Easy

1. Unsustainable oil price & health care premium, disastrous swine flu pandemic, heartbreaking war waste and slow implementation of stimulus package ( roughly $155bn out of $787bn ).

2. Health care reform & sustainable energy act in conjunction with stimulus package are all about economic recovery and work creation.

Posted by hsr0601 | Report as abusive

A few more thoughts on the shocking 10.2 percent unemployment rate

Nov 6, 2009 14:35 UTC

Some quick hits:

1) Remember in the early 1980s 7 straight quarters of avg. GDP growth of roughly 7% (!) lowered jobless rate by only 2.5 percentage points. Hard to see economy booming like that between now and Election Day 2010.

2) Healthcare has added nearly 600k jobs during recession. Good thing Congress is leaving that sector alone. Oh, wait …

3) Obama’s lost year: 2009 may end with no HC, capandtrade, financial reform — just a $787b stimulus that didnt prevent 10.2% unemployment. That is going to be the economic assumption of the average voter, I would think.

4) Dem conundrum: the worse economy gets, more people distrust government. Bad economy was supposed to increase desire for “economic security” …this was reflected in Virginia vote, certainly

5) Will WH actually try and focus on fact that the economy lost 29k fewer jobs in Sept. vs. Oct.? Lead balloon.

6) It’s not that the recession is worse than WH thought, it’s that their model of how the economy works is dysfunctional.

7) End of the Affair? You can be sure liberals (like Krugman) are hugely second guessing Obama decision to not press for LARGER stimulus

COMMENT

“Remember in the early 1980s 7 straight quarters of avg. GDP growth of roughly 7%”

Ah yes, the Reagan years. Remember getting that growth by tripling the national debt?

Posted by gordo | Report as abusive

The massacre of small business

Nov 6, 2009 14:26 UTC

Good point from David Goldman:

The big issue in the US economy is the massacre of small business. That’s why the household survey shows that 558,000 Americans “became unemployed” during October, while the establishment survey of payrolls shows a decline of only 190,000 jobs. The establishment data, which are collected from larger businesses, are more reliable; the household survey is based on telephone interviews with randomly-selected households. But the numbers are so large as to make clear that small businesses are shutting down.

With commercial and industrial lending by American banks down 13% since September 2008, and most banks continuing to “tighten lending standards” in the Fed’s official poll, this is not surprising. Wal-Mart will make it through a recession; not the tea-cozy shop down the mall corridor, much less the real-estate agency in the half-abandoned exurb. The global speculative grade default rate, as Moody’s reported this week, has risen to a post-Great Depression high of 12%. Credit lines for small businesses (including home equity, credit cards, and all the other devices entrepreneurs use to fund themselves) will continue to shrink.

Me: By the way, one-third of the revenue from the surtax in the House healthcare bill would come from small business.

COMMENT

You got it right James, and DC doesn’t, still.

Posted by yr | Report as abusive

US unemployment rate surges to 10.2 percent; 190,000 jobs lost in October

Nov 6, 2009 14:03 UTC

This is an extraordinarily bad number, and makes this week a 1-2 punch for Democrats. A 10.2 percent jobless rate is the highest since April 1983, even though the labor force participation rate actually dipped a bit. The broader U6 measured surged to 17.5 percent. Recall that 7 quarters of average GDP growth of roughly 7 percent in the 1980s only brought down the unemployment rate by 2 1/2 percentage points. As the Labor Department sums things up:

The unemployment rate rose from 9.8 to 10.2 percent in October, and nonfarm payroll employment continued to decline (-190,000), the U.S. Bureau of Labor Statistics reported today. The largest job losses over the month were in construction, manufacturing, and retail trade.

In October, the number of unemployed persons increased by 558,000 to 15.7 million. The unemployment rate rose by 0.4 percentage point to 10.2 percent, the highest rate since April 1983. Since the start of the recession in December 2007, the number of unemployed persons has risen by 8.2 million, and the unemployment rate has grown by 5.3 percentage points.

The number of long-term unemployed (those jobless for 27 weeks and over) was little changed over the month at 5.6 million. In October, 35.6 percent of unemployed persons were jobless for 27 weeks or more.

Total nonfarm payroll employment declined by 190,000 in October. In the most recent 3 months, job losses have averaged 188,000 per month, compared with losses averaging 357,000 during the prior 3 months. In contrast, losses averaged 645,000 per month from November 2008 to April 2009. Since December 2007, payroll employment has fallen by 7.3 million.

Construction employment decreased by 62,000 in October. Manufacturing continued to shed jobs (-61,000) in October, with losses in both durable and nondurable goods production. Retail trade lost 40,000 jobs in October.

Health care employment continued to increase in October (29,000). Since the start of the recession, health care has added 597,000 jobs.

Temporary help services has added 44,000 jobs since July, including 34,000 in October.

The average workweek for production and nonsupervisory workers on private nonfarm payrolls was unchanged at 33.0 hours in October.

In October, average hourly earnings of production and nonsupervisory workers on private nonfarm payrolls rose by 5 cents, or 0.3 percent, to $18.72. Over the past12 months, average hourly earnings have risen by 2.4 percent, while average weekly earnings have risen by only 0.9 percent due to declines in the average workweek.

The change in total nonfarm payroll employment for August was revised from -201,000 to -154,000, and the change for September was revised from -263,000 to -219,000.

COMMENT

The job market is definitely a scary place right now. Many job seekers are trying to differentiate themselves from the stiff competition and doing so in creative ways, including printing their resumes on t-shirts and offering vacations to people who can help find them a job. Are outside-the-box ideas like these the wave of the future or a gamble in an already-difficult job market?

http://bit.ly/3tyupy

Obama’s lost year

Nov 5, 2009 17:10 UTC

Rahm Emanuel famously said that you “never want a serious crisis to go to waste.”  And certainly the sense of crisis earlier in the year helped the White House pass the $787 billion stimulus package. But where stands the rest of the Obama legislative agenda?

Healthcare. The House will likely pass a bill this weekend, but big difference remain with the Senate, including paying for the plan and what to do about a public option.

Cap-and-trade. Kerry-Boxer is going nowhere which is why Kerry and Graham are working on a a dual-track approach.

Financial regulatory reform. The House and the Senate have completely different notions about what to do about system risk regulation. Plus there may be new efforts to try and “shrink” the banks and limit the scope of future activities.

See you in 2010, Obama Agenda!

COMMENT

Everyone talks about how smart this president is. He is as dumb as a post. Bush didn’t pretend to be the smartest guy on the block. However, this guy Obama does pretend, but only fools people dumber than him like most of the people who elected him and the the DemoRat congress. He is just a hack that parrots things he has learned from his leftist mentors. This man does not have any principles or any original thoughts.

As a black man in America, I hoped that this guy would moderate and succeed. It seems that he is on the way to being a presidential failure because his welfare-state mentality and his weakness on foreign and military policy. He is someone that this black person will not ever respect unless he changes his leftist ways. (Which ain’t going to happen!)

Posted by Jack Smith | Report as abusive

The aftermath of NY-23

Nov 4, 2009 21:43 UTC

Jon Henke applies his own analysis to the NY-23 race:

The story of NY-23 is not “conservatives beat moderates” or “conservative loses to Democrat”.

The story of NY-23 is “the Right starts dismantling the Republican establishment.” This is about how the Republican Party is defined and who defines it.

Right now, the movement wants the Republican Party to be defined by opposition to big government. Gradually, as new leaders arise, we will demand that the Republican Party be defined by its own solutions, as well, but rebuilding is an incremental process. We can hammer out the policy agenda and the boundaries of the coalition later.

For now, our job is to disrupt the establishment GOP.  If we beat Democrats while we’re at it, great. But the first priority is to fix the Drunk Party – the Living Dead establishment Republicans. They’re history. They just don’t know it yet.

NY-23 was the first shot in that war.  It was a direct hit.  Next year, we start storming the castle.

Me: Next up, Rubio vs. Crist and DeVore vs. Fiorina.

COMMENT

Republicans had to choose between a liberal Republican and a very conservative candidate – most moderate Republicans were unhappy with both choices. Perhaps that’s why the Democrat won this three-way race.

Posted by Camron Barth | Report as abusive
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