Tag Archives: Blue Dog Democrats

What to Look for in Obama’s Speech Tonight

First, nothing specific. Here’s how the BBC reports it this morning:

When asked if Americans will find out in his speech whether or not he is willing to sign a healthcare reform bill without a public scheme, he said:

“Well, I think the country is going to know exactly what I think will solve our healthcare crisis.”
Mr Obama said the speech will be directed at the American people, as well as members of Congress…..

“The intent of the speech is to, A, make sure that the American people are clear exactly what it is that we are proposing,” Mr Obama said.

“And B, to make sure that Democrats and Republicans understand that I’m open to new ideas, that we’re not being rigid and ideological about this thing, but we do intend to get something done this year.”

Second, some version of the Baucus plan seems likely to survive. Mitch McConnell, the Senate Republican leader, is softening opposition to the idea of of “reform” –if it’s the “right” reform. That means spending less money, which means cutting existing benefits in Medicare and elsewhere. Remember–Republicans apparently think we are over-insured!

Meanwhile in the House, the Blue Dog leader Mike Ross says he’s flat out against a public option. There are 52 Blue Dogs. In addition, Pelosi,with her stated insistence on a public plan, is beginning to look isolated as part of the leadership caves on that issue. Steny Hoyer, House Majority leader, indicates he won’t insist on the public option.
What’s likely to survive as pivotal in the final plan will be the “exchanges,” which, in fact, are modeled on the federal employees health benefit plan. It will be through these exchanges that insurers will be required to meet certain standards, including accepting everyone with or without pre-existing conditions. Pricing will be left to the insurance companies.

In the end, my guess is Baucus will carry the day with details of a weak bill hammered out in conference.

Another Sweetheart Deal for the Insurance Industry

The biggest recent development in the health care reform follies is not the widely touted “breakthrough” in negotiations between Blue Dogs and the Democratic leadership in the House. It is the Obama administration’s little-reported decision not to regulate—or even try to regulate—the insurance industry. Instead, the White House is proposing another timid and toothless approach to overseeing a rapacious private industry.

Regulation of the insurance industry has for a century been left to the states, which have made a pretty shoddy job of it. Current proponents of federal regulation have pointed to the expanded role the industry plays in the financial sector as a whole, and to the fact that insurance giant AIG helped bring down the U.S. economy, and cost taypayers billions in bailout funds. A story on Politico quoted Congressman Ed Royce of California, the original Republican co-sponsor of a bill to create a federal insurance watchdog: “Never has the federal government been so invested in an industry it has no regulatory authority over,” Royce said. Leaving the business of insurance regulation solely to the various state insurance commissioners, while the federal government taxpayer-funded assistance, is simply irresponsible.”

The House bill, introduced in April by Illinois Democrat Melissa Bean, is pretty weak stuff in itself. But it’s still too much for the White House, which has an even more half-assed solution in mind. As Politico reports:

The White House has stopped short of pushing for the creation of a federal regulator for insurance. Draft legislation that the administration sent to Capitol Hill last week instead called for the establishment of an Office of National Insurance in the Treasury Department, which would monitor “all aspects of the insurance industry” and identify regulatory gaps that could lead to another crisis. But the new office would not have the power to make or enforce rules on insurers.

Obama’s plan is getting a boost from Senate Banking Committee Chair Chris Dodd, who on Tuesday convened an “expert panel of witnesses to testify on regulatory modernization and the insurance industry.” In his mealy mouthed opening statement, Dodd played things right down the middle, saying “there is a solid case to be made that state-based regulation of insurance has worked for more than a century,” but “there is also a case to be made that it’s time for a change.” He all but endorsed Obama’s feeble plan for a powerless Office of National Insurance, and included a couple of valentine’s to the insurance industry, which he said “provides millions of Americans in our country with the safety net they need, whether they be individual homeowners, small businesses or larger enterprises.” Dodd went on:

We live in an uncertain world. The economic crisis has claimed as casualties millions of Americans who have lost jobs, homes, retirement savings, and their families’ economic security.

But even in the best of times, there is always risk. And that’s why the insurance industry exists – to provide stability to families and businesses.

Dodd forgot to mention the fact that the insurance industry helped to create the aforementioned economic crisis—which is just about what you would expect from a senator from Connecticut, as state that long served as a home to big insurance companies. In fact, Chris Dodd and before him his father, Senator Tom Dodd, have always been viewed as gatekeepers who got millions in campaign contributions in return for keeping the Congress’s hands off the business. As a recipient of insurance industry campaign contributions over the last 20 years, Dodd ranks second only to John McCain among current members of Congress.

The damage done by insurance companies doesn’t stop with the financial collapse. They are also major stumbling block to a decent, affordable national health care plan—perhaps even more so than Big Pharma. The drug companies at least make a useful product (even if in the process they manipulate, gouge, and generally screw the public in every way they can think of). The insurance companies, on the other hand, play no positive role whatsoever in the provision of health care. They are useless, bloodsucking middlemen whose share of the health care pie is money wasted, pure and simple.

In addition to bilking the public directly, the insurance industry bilks taypayers by securing sweetheart deals from the government: Medicare’s Part D drug program is funded largely by the federal government, but run through insurance companies who take their substantial rake-off. That was the only way Bush and the Republicans, then a majority in Congress, would agree to put through a Medicare drug benefit—as an essentially privatized operation (unlike the single-payer-style original Medicare system). In fact, Medicare Part D has been a boon to the insurance and pharmaceutical companies alike, channeling more government funds into their bulging pockets.

Anyone who hoped for better things under the Democrats now appears to have their retort: The White House, along with the insurance industry’s friends in Congress, will do nothing to meaningfully curb the industry’s power through federal regulation. And the current health care “reform,” in its final construction, is likely to give a taxpayer-funded boost to health insurance companies in the form of mandates and government subsidies to buy private insurance. That’s why the industry will ultimately sign on.

In fact, it’s possible we may soon learn that the two developments are connected—that the concessions on federal regulation of the insurance industry were a trade-off for the industry’s agreement not to block health reform on the Hill. In which case, it’s a win-win for big insurance, once again.

Paterson to City: Drop Dead. The Governor Hands New York’s Senate Seat to an Upstate Blue Dog Conservative

New York Governor David Paterson’s appointment of Kirsten Gillibrand–a one-term Congresswoman from a conservative upstate district–to fill Hillary Clinton’s Senate seat is a slap in the face to both New York liberals and to New York City in general. Yesterday, as Gillibrand emerged as the frontrunner, the Village Voice’s Wayne Barrett called her “too Republican to replace Clinton,” and “out of step with New York voters, particularly Democrats, on a host of issues.”

Gillibrand has described her own voting record as “one of the most conservative in the state.” She opposes any path to citizenship for illegal immigrants, supports renewing the Bush tax cuts for individuals earning up to $1 million annually, and voted for the Bush-backed FISA bill that permits wiretapping of international calls. She was one of four Democratic freshmen in the country, and the only Democrat in the New York delegation, to vote for the Bush administration’s bill to extend funding for the Iraq war shortly after she entered congress in 2007. While she now contends that she’s always opposed the war and has voted for bills to end it, one upstate paper reported when she first ran for the seat: “She said she supports the war in Iraq.” In addition to her vote to extend funding, she also missed a key vote to override a Bush veto of a Democratic bill with Iraq timetables.

Gillibrand’s positions and voting record can be seen as especially offensive to New York City. As Barrett writes:

Gillibrand has a one hundred percent rating from the National Rifle Association ….Gillibrand even opposes any limitations on the sale of semiautomatic weapons or “cop-killer” bullets that can pierce armored vests….Gillibrand voted against both…financial service bailout bills last fall, which have delivered billions to New York, salvaging institutions like Citigroup. An editorial in Crain’s, the city’s premier business news magazine, said recently that Gillibrand “should be disqualified” from seeking the Senate seat “by her politically expedient vote” against the bailout.

Upstate residents may resent the city’s perceived dominance of politics on both the state and local levels, but they are in fact biting the hand that feeds them: The city has historically paid about 20 percent more in federal taxes and twice as much in state taxes than it gets back in services from those governments.

It also seems like the wrong time to do anything that could be hard on New York City, which is already hurting badly. As I wrote late last year, while the effects of the economic meltdown are felt nationwide, New York stands at its epicenter, and is taking the heat on two fronts: It is suffering, along with the rest of the country, from the far-reaching fallout of the Wall Street debacle. But it is also directly dependent upon the financial industry itself: Jobs, retail, services, the real estate market, and an astonishing 20 percent of the state’s tax base all rest upon the now crumbling foundation of the financial sector. The trip from Wall Street to Main Street is a lot shorter in New York than it is anywhere else.

And while there may be plenty of valid reasons to vote against TANF, Barrett writes that Gillibrand’s “argument against the bill seemed to be both parochial and political, contending that ‘upstate New York needs a plan that will actually work to stabilize our economy and protect taxpayers.'”

This statement connects to the most sobering fact about Gillibrand: Upon entering the House two years ago, Gillibrand joined the Blue Dogs, the coalition of Democrats that stands to the right of the Democratic Leadership Council, and is known for their conservative positions on both social and fiscal issues. Gillibrand made it clear that she is pro-choice, and quickly changed her previous position against gay marriage. But the biggest upcoming battles in the Senate will involve fiscal policy, and the Blue Dogs have already telegraphed their intention to demand cuts to offset Obama’s big economic stimulus package, especially in such longtime conservative targets as social safety net programs and old-age entitlements. In fact, there are clear signs that Republicans are counting on the Blue Dogs to keep the president and Congressional Democrats in check.

It certainly seems like a strange move for Paterson, who had a solidly progressive voting record as a state senator from Harlem. But Paterson has changed since he stepped into the statehouse. Since becoming governor, he has dealt with the state’s fiscal shortfalls by presenting a budget that containing severe cuts to Medicaid and other components of the social safety net, while refusing to consider a “millionaire’s tax.”

A number of Albany-watchers have suggested why Paterson might make such moves: basically, as an expedient to his own political ambitions. As Politico described it yesterday:

Gillibrand brings several important political attributes critical to Patterson, who became governor when Eliot Spitzer resigned and has never topped a statewide ticket, when both run for their offices in 2010: She represents a relatively conservative part of upstate the governor hopes to woo, she’s a formidable fundraiser with connections to Hillary Clinton’s cash-generating apparatus and she’s a woman in a state that prides itself of inclusiveness.

WNYC public radio reporter Elaine Rivera mentioned the same factors this morning when she described Gillibrand as potentially a “tremendous” assett to Paterson when he runs for re-election. Less widely noted is the fact that she comes from a district that is 95 percent white, and that Paterson will be running as an African American in a state that has never had a black governor. In the end, it seems to be the upstate conservative chops that mattered: Another member of the shortlist, New York City Congresswoman Carolyn Maloney, is also a woman with ties to Hillary Clinton and a saavy politician, and is far more qualified than Gillibrand-but she’s an urban liberal.

As the muckraking Barrett points out, Gillibrand’s personal and family connections are far-reaching, connecting her not only to Hillary Clinton and other prominent state Democrats like Charles Schumer and both Andrew and Mario Cuomo, but also to state Republicans:

The irony is that Paterson may be swinging from the nation’s most prominent Democratic family to one with strong Republican ties. Gillibrand’s father, Doug Rutnik, is an Albany insider and lobbyist whose ties to former GOP powerhouses Joe Bruno, George Pataki and Al D’Amato are legendary. In fact, Gillibrand won her seat when a state police domestic violence report about the GOP incumbent, John Sweeney, was mysteriously leaked, ostensibly with the acquiescence of the Pataki administration, which had its own reasons to oppose Sweeney. Bruno is under federal investigation now, [He was indicted this morning] and some of the subpoenas in the case involved a real estate deal that partnered Rutnik with Bruno and another lobbyist. Rutnik dated, and eventually lived with, a top Pataki and D’Amato aide for many years, until he broke up with her in 2006 to marry a cousin of his, Gwen Lee, who’d worked in high-paying state jobs secured by the same aide. Rutnik and D’Amato have been registered lobbyists for some of the same clients.
Gillibrand once worked for both D’Amato and Andrew Cuomo, another candidate for the senate seat. She was a special counsel when Cuomo ran HUD in the 1990s and her father was close to both Senator D’Amato and Governor Mario Cuomo in the same time period. Her former law firm, Boies, Schiller & Flexner, has been the largest single donor to her House campaigns, and David Boies, the senior partner at the firm, contributed $25,000 to Paterson’s campaign committee on December 23, 2008, while the governor was considering Gillibrand’s candidacy. Boies’ son Chris, also a partner in the firm, contributed another $25,000 on the same day.

All in all, it appears that what happened this morning has very little to do with anyone’s positions on the burning policy questions of the day. What happened is that one consummate political animal gave the nod to another.

Separation of Powers: All Eyes Are on Obama, But It’s Congress That Needs to Sieze the Day

Now that the euphoria of the election and inauguration are over, we will soon be reminded of the messy realities that come with having three branches of government. As much as the nation is pinning its desperate hope on Obama, the new president’s success or failure at advancing new policies and changing the way government works depends first and foremost on Congress.

The burning questions of the moment have to do with money–how much to spend, and when, and for what. The president will present his stimulus package to Congess, but it is just a recommendation: All spending measures must originate in the House through the Ways and Means Committee. While they receive none of the attention given to cabinet members, the leaders of this powerful committee are no less  important than the secretary of the Treasury, or the other members of the administration who must go to it pleading for funds.

Right now Ways and Means Committee is chaired by New York’s Charles Rangel, still a forbidable figure despite a growing collection of ethics scandals. In the front tier are Pete Stark of California, Sander Levin of Michigan, Jim McDermott of Washington, and John Lewis of Georgia. It’s a solidly liberal lineup (most are members of the Congressional Progressive Caucus) that is likely to support big public works projects as well as improvements to the social safety net for the poor and the unemployed, the disabled and the elderly.

On the other side is the group of conservative Democrats in the House that calls itself the Blue Dogs. Their numbers and influence have increased in the last two elections, and they have already made it clear that in exchange for gritting their teeth and accepting a big stimulus package funded through Keynesian deficit spending, they’ll be looking for concessions over the long  term in other areas, including old-age entitlements. With 51 members, the Blue Dogs have could monkey-wrench some of Obama’s plans if they choose to vote with Republicans.

We learned just how far an uncooperative Congress can go to undermine a president back in 1994, when Newt Gingrich’s Republican revolution emerged from the back benches and dedicated itself to opposing (and eventually impeaching) Bill Clinton. But it’s been such a long time since we’ve had a strong, popular Democratic president along with a solid Democratic majority in Congress, it’s hard to envision what it might be like.

Those of us old enough to remember them might harken back to the early LBJ years. On the day of Obama’s inauguration, Saul Friedman, the long time reporter for major dailies who now writes about the politics of aging, recalled that time, and the vital part played by a strong, committed Congress.

The murder of John F. Kennedy had given Johnson great power and new stature when I arrived in Washington in 1965 to cover the Congress for the Knight Newspapers and the Detroit Free Press….They were an odd couple; Johnson the southerner who grew up with segregation and Humphrey, the northern liberal who had driven Strom Thurmond out of the Democratic Party on the issue of race. But together, they gave the country activist, liberal government the like of which had not been seen since the New Deal.

But…they did it with the help of a Congress, especially the Senate, filled with people who I believe were deeply committed to politics as public service. Many of them had come from service in World War II into reform politics. And like several of the Vietnam and Iraq veterans now serving, they came to make a difference.

The “names who personified what was best in American politics at that time were in the U.S. Senate,” Friedman writes. These included Humphrey’s fellow Minnesotans Walter Mondale and Eugene McCarthy; Michigan’s Philip A. Hart, who was called “the conscience of the Senate’; Wayne Morse, William Fulbright, and George McGovern, who all stood up against the Vietnam War; Frank Church, who would expose the abuses of the FBI and CIA; and Sam Ervin, who would help expose Watergate; as well as Bobby Kennedy and Ted Kennedy.

The Republicans, Friedman notes, “also included people of stature who believed in politics as public service.” There were also some “louts and know-nothings,” and some rabid segregationists. Nonetheless, he writes,

When the time came, and Johnson wheeled and dealed and appealed to their better nature, Republicans helped Democrats break southern filibusters and to pass a series of landmark civil rights bills, as well as the gems of the Great Society, Medicare and Medicaid and the Elementary and Secondary Education Act, all of which stand today.

Friedman wonders how the new president will fare with a Congress that seems, by comparison, weak-willed and churlish. (In this light, the tragedy of Ted Kennedy’s illness becomes all the more profound.) Will Congressional Democrats, who have accomplished little since winning their majorities in 2006, heed the call to pick themselves up, dust themselves off, and “begin the work of remaking America”? We’ll know soon enough.

Here Come the Entitlement Wars, Part 1: Quid-Pro-Quo

Any aging or disabled Americans who got nervous last week when Obama promised to make “reforming” old-age entitlements a “central part” of his fiscal program have still more cause for anxiety today. After a long interview with  Obama, the Washington Post reported:

President-elect Barack Obama pledged yesterday to shape a new Social Security and Medicare “bargain” with the American people, saying that the nation’s long-term economic recovery cannot be attained unless the government finally gets control over its most costly entitlement programs.

That discussion will begin next month, Obama said, when he convenes a “fiscal responsibility summit” before delivering his first budget to Congress. He said his administration will begin confronting the issues of entitlement reform and long-term budget deficits soon after it jump-starts job growth and the stock market.

Obama didn’t get specific, and its much too soon to predict what he might propose. But he did juxtapose entitlement reform with his large fiscal stimulus package, which is where we start to get on dangerous ground.

The president-elect said he believes that direct government spending provides the most “bang for the buck” and that his advisers have worked to design tax cuts that would be most likely to spur consumer and business spending.

But he framed the economic recovery efforts more broadly, saying it is impossible to separate the country’s financial ills from the long-term need to rein in health-care costs, stabilize Social Security and prevent the Medicare program from bankrupting the government.

The National Committee to Protect Social Security and Medicare had already begun issuing warnings earlier in the week about a possible trade-off between stimulus and entitlements:

Anti-entitlement members of Congress want President-elect Obama to make a deal to gain their support for a desperately needed stimulus package. It’s a political quid-pro-quo that would trade away long-term benefits for generations of seniors, survivors, the disabled and their families for a short-term economic recovery package desperately needed to reverse the damage of eight years of flawed economic policies.

The trade-off goes something like this…Congress’ so-called “fiscal-hawks” will consider supporting the economic stimulus package if the Obama administration agrees to “entitlement reform” (translation: cuts to Social Security and Medicare).  Of course, Social Security and Medicare didn’t create this economic crisis but some view this as a unique political opportunity to sell their entitlement hysteria to the public. The problem is we can’t balance the budget on the backs of Social Security and Medicare.

It might be tempting to blame this on the usual suspects–the Republicans. But what the possible trade-off actually reveals is Obama’s first bargaining session with the right wing of his own party. The Washington Post article refers to refers to Obama’s “frequent meetings with legislators,” which include

the Blue Dog Coalition of fiscally conservative Democrats, who repeatedly told Obama they would be willing to support his stimulus package only if he pledged not to lose sight of the larger budget picture. Those who will be invited to attend the summit include the Blue Dogs.

Since Obama cannott pass his stimulus package–or indeed, any legislation–without support from at least some of the Blue Dogs, this could be the first in a long line of intra-party Faustian bargains.

Or Obama could remain true to the promises–and the promise–of his campaign, making small adjustments to the Social Security formula that will not hurt the poor and middle class, and saving money on Medicare through a broader reform of the health care system.

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