Obamacare word games, Arianna’s real deal, and Spanish power

By Steven Brill
November 29, 2011

By Steven Brill

This is the second entry in a new regular column, “Stories I’d Like To See.” It’s the notebook of someone who still thinks like an editor but is over the thrill of managing a reporting staff – or the hassle of dealing with “great” story ideas that crash and burn when someone actually goes out and reports them and learns anew that even the best editors can’t hit much better than the best ballplayers (meaning three or four out of ten story ideas will actually work).

1. Obamacare’s Word Game Screw-Up:

As the debate over the constitutionality of Obamacare’s individual mandate moves toward an election-year climax in the Supreme Court, I’m surprised that I haven’t read a story recounting the deliberate but boneheaded decision by Administration officials to call the fine imposed on those not buying health insurance a “penalty” instead of labeling it a “tax.” Someone in the White House counsel’s office or the Justice Department must have spoken up and told everyone else what most constitutional lawyers who have looked at the current litigation now readily acknowledge: that there would be almost zero chance of opponents mounting a credible attack on the provision if it was called a tax. In fact, in one of the lower court skirmishes over the constitutionality of the law, conservative D.C. Appeals Court Judge Brett Kavanaugh seemed to enjoy tweaking the Obama people by readily conceding that the law would be okay had they simply called it a tax. Congress has a well-established right to tax anything or anyone.

Apparently afraid of burying the word tax somewhere in the 974-page bill, the Administration insisted on calling the fine – which, ironically will be assessed on tax returns and collected by the IRS – a “penalty” for not buying insurance. Did any of the President’s lawyers warn the former constitutional law professor about this?

2. Arianna’s Real Deal

The long, gauzy profile of Arianna Huffington in New York magazine raised more questions than it answered. While we read continually of how she is shaping an empire at AOL, I’d like to know how much control over editorial content and budgets Arianna Huffington’s AOL buy-out deal actually allowed her to retain (assuming she had such control in the first place under her original investors).  And what percent of the giant purchase price was she able to cash out on Day One versus having to wait and presumably be at the mercy of AOL’s declining prospects? Although it’s been reported that virtually all of the deal was in cash, as opposed to AOL stock, I’ve never seen the details published anywhere, let alone anything about what independent power she actually has. Does her employment contract with AOL have a non-disparagement clause that would see her risk any remaining payout if she gets into a public fight with CEO Tim Armstrong as the water continues to circle the drain at AOL?

3. Who’s got the power?

The aftermath of October’s freak snowstorm in the Northeast resulted in the second time in three months that power at our home in Northern Westchester was out for a full week. So I became curious about our local utility company. It turns out it’s not so local. It’s owned by a Spanish power conglomerate called Iberdrola. One would think that because electricity can’t be delivered digitally and because electric power – or at least the electric wires running from into our homes – is the one regulated natural monopoly that makes sense, that regulators would want electric utilities to be local to assure better service and tighter control. (Haven’t we learned from the mortgage banking debacle what happens when all links to a community are erased?) But unless I live in Madrid or Barcelona the guy responsible for putting my wires back up on the pole isn’t likely to be my neighbor.

So, how much of our power grid is controlled by national or international conglomerates? And, again thinking of the local banking analogy, does the apparent consolidation of local utilities this way have anything to do with all the cutbacks in maintenance staffs that resulted in the long delays before power at my home and millions of others was restored because we had to wait for borrowed crews to be trucked in from all over the country? How widespread is the sharing of these crews across the country, and how many job were eliminated?  The crew that climbed our poles last month was from Conshohocken, Pa; the one that finally showed up after Hurricane Irene was from Athens, Georgia. Which states or municipalities actually regulate these monopolies well? Do any require staffing levels to be maintained at certain levels so that power can be restored quickly? Do any require fines or refunds to customers after outages? Great story, it seems, for any local or regional news outlet to pursue.

4. Favoritism for College Athletes:

So we now know, based on some great reporting by the Wall Street Journal, that Penn State football coach Joe Paterno was able to shield his errant players from the usual university disciplinary process. Every college newspaper and every newspaper or TV news operation in any city or town where’s there’s a gung-ho campus sport program ought to chase the same story. Either way – if the school shields the players or if it doesn’t – it’s bound to be a good copy or TV, potentially spiced with details of athlete misconduct and how it was dealt with.

5. GE Ads: Is This Imagination at Work?

GE has been running what I think is one of the most effective, compelling commercials I’ve seen in a long time. It’s the one touting GE’s medical imaging devices by introducing us to the people who build these machines and then having them meet the cancer patients whose lives have been saved by them. The survivors tell us their stories as they pull up in a bus at a GE factory that presumably builds the machines. There are hugs all around among this perfect mosaic of American races and ethnicities, as the survivors describe in voiceovers how much it meant to them to meet the workers who saved their lives. (“They were so warm and welcoming…and inspirational.”)

Of course, with widespread and expensive medical imaging a likely target of efforts to cut Medicare costs, GE’s motive is not simply to make us feel good about our fellow man.  Yet, the ads do add a legitimate human dimension to this debate.

Based on FTC advertising guidelines, I assume the people in the ad are real, but I’d like to know that for sure, and that the survivors didn’t overstate their conditions or the role played by the GE’s products in saving them. I’d also like to learn more about them and why they wanted to participate in the ads, as well as what the financial stakes are behind GE’s effort to popularize medical imaging. This story should also tell us what the rules are for this kind of advertising. The ad carries no information about how effective the GE devices are in finding cancers at various stages, let alone which other, less serious maladies now get this expensive treatment. How much can you not only make up or embellish, but also leave out? And are the requirements different when you’re advertising medical devices or procedures?

PHOTO: Arianna Huffington arrives at the 21st annual Glamour Magazine Women of the Year award ceremony in New York November 7, 2011. REUTERS/Lucas Jackson

10 comments

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

Steve, I just found your work and I am now one of your fans. I rarely find a voice that is clearly not bought and paid for with Corporate needs and funding. But I did today. Keep at it.
Gil McCarthy

Posted by Alexthen | Report as abusive

To # 3, Despite some faults, (What’s perfect?) Hydro Quebec, a government owned,though arm’s lenght, utility comes to mind. There performance during and since the ’98/99 winter ice storm has garnered them a lot of respect. They also, deploy crews when called upon to aid neighoring states and provincial utilities.

Posted by Boxster550 | Report as abusive

“Romney was governor of Massachusetts from 2003 to 2007 and worked with a Democratic-led state house to close a budget shortfall. He signed a healthcare overhaul that required nearly all state residents to buy insurance or face PENALTIES. Massachusetts’ healthcare law became a model for President Barack Obama’s nationwide healthcare overhaul, enacted into law last year.”

http://www.reuters.com/article/2011/11/2 9/us-usa-campaign-romney-idUSTRE7AH2O020 111129

Posted by CarlOmunificent | Report as abusive

#1 is interesting, but not really a story. Tax is a poison word. They took their chances on an insurance word (penalty) and this whole shiny turd was headed to the Supreme Court anyway.

#3 is interesting because utilities are under-discussed in general. Most families pay more in utilities than they do in income taxes, it’s a non-competitive service…. and we hear almost nothing about the racket.

The others are not interesting. No one cares about Ariana Huffington; College athletes are spoiled rapists (Old news); And GE is the bank and the organ-grinder in the military-industrial complex. Everybody knows that already.

So…. #3.

Posted by MarketForce | Report as abusive

I enjoyed your points in the ‘Who’s got the power’ sequence – despite the mis-spellings.
I have witnessed hurricanes, tornadoes, typhoons, snow storms and ice-storms since the end of WW2, and still cannot for the life of me figure out why these power companies haven’t buried the cables yet…. after 65 years, you’d think that they would learn, and that the public would demand this… But I guess not…

Posted by edgyinchina | Report as abusive

Yea what she (Gil McCarthy) said

Posted by Gillyp | Report as abusive

I’d like to see a story on just how much additional federal tax various income groups would pay if the Bush tax cuts were to expire. All it would take is a simple table.

This would be useful for politicians and the public alike, since the expiration of these taxes would go a long way to decrease the deficit.

Posted by Bartolo | Report as abusive

RE #1 There’ll be a “penalty” for having cadillac plans
which is regressive. Go figure.

RE#3 A generator is a nice thing to have. Storing
petro, though, is the only downside.

RE #3, also: On our electric bill, we pay a “tax” for
the poor or people who are having difficulties paying for
their heat. I’d be all for this ’cause it is only right
and fair, however, this money doesn’t go to them. Much
of this money is siphoned off and given to landlords to
improve their business asset. Landlords could use their own cash to make window tighter etc., however, they’d rather save their own money and use it to purchase more
assets to rent out. I’ve been badgering my lawmakers for ever on this because this is not right and fair and it is a total snow job to people like me who scrape and scrape to afford my own heat without assistance AND scrape and scrape to afford improvements like making windows tighter.

Posted by limapie | Report as abusive

With regard to the constitutional argument about Obamacare, I would assert that if it looks like a tax, affects economic activity like a tax, and is collected like a tax, then it must be a tax. Everyone in their right mind surely knows it was called a penalty in order to get around the Republican ideological phobia against raising taxes. If the Republicans were fooled by the cosmetics, they still went along with it and Obamacare is still the law of the land and should be upheld as the law of the land.

Posted by skimish | Report as abusive

“….the Republican ideological phobia against raising taxes”

It passed without Republican support. The anti-tax language was needed to get DEMOCRATS to support this mess. It deserves it’s doom, whether in the courts or the next congress/administration.

Posted by Plainsspeak | Report as abusive