Sunday, March 8, 2015

Tom Fina's Letter From Washington for February 23

To Democrats Abroad

23 February 2015
Tom Fina
Executive Director Emeritus of Democrats Abroad

    February ends in a climate of stark political contrasts.  Obama and the economy are looking better by the day. But, Obama’s greatest achievements face new existential threats both at home and abroad.
    The 2015 Economic Report of the President to Congress is bullish. The economy grew at a steadily higher rate, employment grew for the 59th month, the longest streak on record and from 2013 to 2014, unemployment saw its largest decline in three decades. Wal-Mart, our largest (and one of our stingiest) employers, said it will raise wages for US employees and others are expected to follow.

Not out of concern for their employees on food stamps. But because workers increasingly have other job opportunities.Gasoline prices have plunged. Healthcare prices grew at the lowest rate in nearly 50 years and the Federal Budget deficit fell to a very manageable 2.8% of GDP from 9.8% in 2009. Gallup reports its Economic Confidence Index is holding at +3 after being at minus 65 in 2008.

    The success of Obamacare is also becoming indisputable.  At the end of the 2015 enrollment period, about 11.4 million had signed up, compared to about 8 million last year. Moreover, Medicaid coverage expanded from 8 million in 2014 to 10 million in 2015. This has brought the number of uninsured down by almost 30%. Steve Rattner (who managed the auto industry bailout) estimates that at least 31 million have benefited from the many provisions of the Affordable Care Act.

    And these improvements have also improved public attitudes. Pew Research reported (10 February) that for the first time since 2009, more of the public is hearing good news (28%) than bad (22%) about jobs. Just a year ago only 12% heard good news while 42% heard bad. That improvement applies, too, to views of the economy. For the first time since December 2008 the public is hearing more good news about the economy than bad: 18% vs 17%. In 2008 it was 80% bad and almost none good.

    Obama’s approval ratings have risen in parallel. Gallup found in mid-February that his approval score for handling the economy was up from 33% to 43% and for foreign affairs from 31% to 36%. Most interesting that among Independents, his economic approval jumped 17 points (but only 2 points on foreign affairs where there appear to be no good choices.)

    Yet, the relentless efforts of Republicans and libertarians are putting at risk Obama’s major achievements.   

    Chief among these is the existential threat to the Affordable Care Act in the case before the Supreme Court of King (four Virginia men) vs Burwell (Secretary of Health and Human Services). Oral arguments are to be made before the Court on March 4, one day after Israel’s Netanyahu is to make his argument before the Congress against the President’s effort to reach an agreement with Iran.

    Four Virginians, recruited and funded by the Competitive Enterprise Institute (CEI), are challenging the Affordable Care Act on the grounds that the law permits subsidies for insurance to be provided only in marketplaces (exchanges) run by a state. There are only 13 of these and the residents of the remaining 37 states have access to subsidized insurance only through those run by the Federal government.

    The first effort by the CEI to kill the law was to challenge its constitutionality in 2012. That failed by one vote when Chief Justice Roberts sided with the liberal members of the Court.

    The second attack,  made in both the District of Colombia and Virginia, was rejected by the District and Appeals courts in both jurisdictions in early 2014. But, in November,  the necessary four justices of the Supreme Court (guess who) agreed to hear the King case. The decision is expected to be handed down in June.

    A decision that only state run exchanges may grant insurance subsidies would be catastrophic for some 13 million of those insured by 2016. At present, about 87% of those enrolled for insurance receive a subsidy.  Those who would lose the subsidy are primarily employed, white and in the south. The largest number (1.6 million) is in Florida followed by Texas (1.2 million), North Carolina, Georgia, Pennsylvania, Virginia and Illinois. Eleven of the 37 states dependent on the Federal exchange have asked the Court to preserve the subsidies.

    Without the subsidy, low income citizens would drop their insurance. Only those with immediate medical need would be expected to sacrifice to continue their coverage. And, that would greatly increase the high risk pool forcing insurers to raise their rates triggering a vicious spiral of higher rates for all health insurance and ever fewer paying premiums.   

    A denial of subsidies would be a kick in the gut for the major goal of the Affordable Care Act to reduce the number of citizens without healthcare. But, other important parts of the law applicable to all health insurance would remain: e.g. inclusion of children to 26 in their parents’ insurance, regulation of insurance company profits, coverage of pre-existing illness, barring lifetime or annual ceilings on benefits paid, and leaving Medicaid expansion untouched.

    About 10 states might be able to take over the Federal exchange but, even after overcoming Republican opposition, the states would have to bear the considerable cost while the mechanics would take 12 to 18 months.

    The guessing is that Chief Justice Roberts, not wishing to be remembered as the 21st Century Roger Taney, will again side with the liberals as may Justice Kennedy. If not, the fall-out from the national political explosion as 13 million voters abruptly lose their health care will be spectacular.

    The other, immediate, legal challenge to Obama’s policies is the decision of a Texas Federal judge in mid-February to block a major change in immigration policy. On November 20 Obama announced that deportation of illegal immigrants would concentrate on criminal elements and lift the threat of deportation from about 5 million others. Now, the Administration is asking a stay in application of the ruling and seeking a decision  by the Supreme Court which could well find for the government.

    At the same time, the Republican Congress is about to send the President a bill forcing the approval of the XL pipeline which he has promised to veto on the ground that it is an invasion of Executive authority. His veto is certain to be sustained and mark the beginning of a new “veto” chapter in the Obama presidency as the Republican leadership attempts to roll back Administration policies on air pollution, relations with Iran, immigration,  children’s nutrition and others you can imagine.

    If this scenario is not enough to explain Obama’s increasingly grey hair, think of Putin’s denied aggression in the Ukraine, ISIL barbarism in Iraq, the Republican’s open recruitment of Netanyahu and the opposition of the ranking Democrat in Senate Foreign Relations Committee to Obama’s openings to both Cuba and Iran.

    Thus, February draws to a close. Caesar was warned of the Ides of March. Obama must be more focused on March 3 and 4. So am I.

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