Handling economic instability…Immigration?

October 25, 2007 – 7:53 am

Joe Klein posits that the GOP may end up running on immigration in 2008:

It’s long been my belief that the GOP hole card in 2008 is going to be a rancid furriner-bashing anti-illegal-immigrant smear campaign. …  A few months ago, I asked Mitt Romney if he thought illegal immigration was a net economic plus or minus. He said…he wasn’t sure (but, of course, he knows that it’s a net plus).

As is typical for Klein, he only sees part of the problem. The Post made a similar point earlier in the week:

"This issue has real implications for the country. It captures all the American people’s anger and frustration not only with immigration, but with the economy," said Rep. Rahm Emanuel (Ill.), chairman of the House Democratic Caucus and an architect of the Democratic congressional victories of 2006. "It’s self-evident. This is a big problem."

Republicans, sensing a major vulnerability, have been hammering Democrats, forcing Congress to face the question of illegal immigration on every bill they can find, from agriculture spending and housing assistance to the State Children’s Health Insurance Program (SCHIP).

Rahm is on to something here. If I am right that the economy is going to be the real issue, how are the parties likely to deal with the issue of economic instability? The Dems are already running on irresponsible anti-globalization populism and silly (in substance, but smart in politics) housing proposals. Not to mention tax increases. And, of course, universal health care.

What do the Republicans have? Well, so far optimism, which could end up looking like thin gruel. After all, Republicans aren’t optimistic about the economy. One way of trying to handle this is immigration. But will that work?

What are the swing states? There’s the rust belt (WV, OH, PA, and, maybe, MI). There’s the upper midwest (WI, MN, and IA). There’s Florida. And there’s the inner west (CO, NV, AZ, and NM) Of these, OH, FL, and the western states are all deeply exposed to the housing crisis. (MI is too, but that’s just the state-specific recession) With the exception of OH, these are all states in which latinos are a hugely important swing vote.

So the states that are most vulnerable to housing-related economic populism are also states in which the GOP needs the immigrant vote. That’s a nasty synergy. Maybe we shouldn’t attack on immigration? Maybe that just makes it worse.

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House RSC blogger call

October 3, 2007 – 10:52 am

Reps. Jeb Hensarling and Marsha Blackburn had a very brief conference call with bloggers.

They noted that S-CHIP was vetoed by the President. They pointed out all the details about this being more than a children’s healthcare program. 17 states are adding  adults with this. Dropping the citizenship requirement. Clearly this call (and further calls) are about rallying support for that. They also talked about earmarks.

Then there were questions.

Ed Morrissey from Captains Quarters. He asked whether or not the veto could be sustained. Hensarling points out that they already have the Republicans votes to win this fight. Then they talked about talking points. "If people realize what they have done with the S-CHIP program. With the Hillary Clinton memo from yesterday. … A walk towards a nationalized healthcare system. … More people will have opposition when they see the details …"

I asked about stripping Rep. John Doolittle of his position as founder of the RSC. Hensarling said that he would not support stripping any RSC member because they are the target of an investigation. That’s very disappointing.

Dave Weigel of Reason.com.  Asks about John Murtha’s comments about earmarks and transparency. "Transparency is John Murtha’s worst nightmare. He will do everything he can to combat transparency to the earmark system. … What the Democrats say and what they have done are completely at odds with one another. … They have huge loopholes in their system. .. This is a soft underbelly of the Democratic Party. … If [earmarks] are so good, why do they try to hide them?"

NZ Bear asked about the future legislative fights over the war. Hensarling says that he was surprised that the Democrats have not brought more resolutions to the floor. "We know that they are being hypocritical about the war. … As Jim Clyburn stated so eloquently, Good news about the war is bad news for the Democratic Party. …"

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Romney’s Clinton problem

September 17, 2007 – 6:38 am

Drudge is pushing a story about Hillary Clinton’s health care plan. While Drudge focused on the dollar amount, I saw this:

The centerpiece of Clinton’s plan is the so-called "individual mandate," requiring everyone to have health insurance — just as most states require drivers to purchase auto insurance. Rival John Edwards has also offered a plan that includes an individual mandate, while the proposal outlined by Barack Obama does not.

Especially if Mitt Romney is the nominee, how do conservatives argue against this? Now Matt Drudge, who seems to be a Romney fan, highlights a different issue, the $110b per year price tag. So, one strategy is going to be price tag. After all, that really is a lot of money.

But once we have abandoned the principle of freedom that is inherent in the mandate issue, aren’t we just, to quote Churchill, "haggling over price?" Don’t Republicans lose when we "haggle over price," rather than principle?

And if Romney points out that he no longer supports these, doesn’t this raise the flip-flopping issue?

UPDATE: In the WSJ’s coverage, they point to a Democracy Corps (D, Carville in fact) poll on this:

A Democracy Corp. poll in May found that 66% of likely voters would be much more or somewhat more likely to support a candidate for Congress who proposed a mandate combined with subsidies. Just 15% said they would be less likely to support such a candidate.

It is going to be very hard to stand against this.

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Huckabee on health care

September 6, 2007 – 2:07 am

Governor Huckabee answered some questions about health care after the debate. This came out of a discussion in which he expressed some frustration that health care, education, trade, and jobs were not being discussed:

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Thoughts on the Huckabee conference call

August 31, 2007 – 3:40 pm

Excuse the disorder of my notes. This should have somewhat more organized thoughts. In some real sense this was my first exposure to Huckabee as a candidate. I had interacted with him previously through the Young Republicans, and I knew that he was doing what he was doing to move his candidacy. But I was never forced to process him in the same way that I did today. So please excuse the structure of this.

The first thing that struck me is that no one that I had heard of was asking questions. Huckabee said that they have 150 "Bloggers for Huckabee," and they are clearly different people. Every question, except mine, started with an expression of support or love. This is not how it works for Rudy Giuliani or John McCain. The people on those calls are high-traffic national blogs focused on politics. The people on the Huckabee call were, at least, local blogs, often focused on things other than politics. At the very least this is a different model than the McCain and Giuliani are taking. It is very possible that it is closer to what Mitt Romney’s campaign is doing online, namely developing a blogger community that talks primarily to supporters. Thompson’s seems some of a hybrid. This is interesting, although I am not sure what to make of it.

Second, I asked a question about Huckabee’s economic populism. The answer is pretty striking, and you aren’t likely to hear it from any other GOP candidate in the field. He attacked CEOs and hedge fund managers. Perhaps the most interesting passage was:

As a Christian, [this is] not just an economic issue, but a moral issue. When you have real success, you share it with the people who helped you.  … That’s the difference between capitalism and greed. … A President has to show the moral leadership of the country, not just policy leadership. …

And:

The basic way that the rules have been written to favor a few. …  You have a tax policy that encourages boards a huge tax incentive to give a huge salary to the CEO."

This language could have come out of Barack Obama’s or John Edward’s mouths with little trouble. It probably couldn’t come out of Hillary Clinton’s mouth. I don’t think that she does populism like that. Unlike many of the national blogs out there, I think that there is a real openness in the GOP base for this. The Fabrizio poll that examined the base of the party found an awful lot of people who are not economic conservatives or who view a more activist government as a good thing. Mike Huckabee could make a real play to turn Romney into the candidate of the country-club set, if he tried. And I’m not sure how much of the country club set is still Republican.

Third, he is quite serious about health care, and he talks about it differently than Rudy or Romney do. They are talking about tax credits and pools of risk, etc. These are, of course, tremendously important. However, it is hard to relate to that. Huckabee’s language, befitting a preacher, is much more grounded in the reality of a person’s experience. Look at what he said:

Giving people a $500 discount for doing a health risk assessment. … Free quit smoking classes… Free weight-loss classes. … Studies show that health costs are 60% or more, even 80%, lower after they reduce their obesity…  Turn this thing toward preventive health…

I might even agree with a lot of this. There’s plenty of evidence that preventative medicine pays back plenty over time. (that’s one of the reason that I have a certain sympathy to the Medicare Part D bill.) It is also notoriously hard to score (no way that the CBO or OMB got it right for Part D, and it is clear that, in some cases, they over-estimated the cost) and would be very difficult to get through in that context if there was real penny-pinching going on.

The way he talks about it also makes health care reform a problem of "helping the person" (especially the person acutely aware of their own problems) not "fixing the system." If I am the candidate, I want to be where he is. But can that be converted into a real plan? We shall see.

This was a very interesting call. I still don’t know what to make of Huckabee. There is a lot that I like about him, although I have a gut aversion to populism, and I think that he is wrong, wrong, wrong about how to deal with globalization. But if he continues to gain, he is by far the most credible social conservative and populist in the field.  Those are convertible to victory in Iowa and South Carolina, but probably not in New Hampshire and Florida, and he seems to know that. I wonder where he will go with this.

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Romney’s healthcare plan: The politics

August 24, 2007 – 1:24 pm

So, I have already reviewed the policy aspect of Mitt Romney’s health care plan. Basically, I think it is reasonable, but he is playing "hide the ball" with the money. It has to come from somewhere and he is leaving the "where" up to the states. Fine.

Now the next question is the politics. GraniteGrok has noted that Romney has to back away from what he did in MA with Ted Kennedy. The optics — with the mandatory YouTube example — are bad several different ways. First, Romney spent a lot of time attacking "McCain-Kennedy" to get the link with Kennedy out there. Now Romney has a link too. Second, while everyone wants the gridlock to end, for conservatives that means that they win. Compromising with Ted Kennedy — and indeed getting praised by Kennedy — doesn’t help.

So how does he do that? Basically, he abandons the mandate. Now this is clever politics. Conservatives hate the mandate. And the argument that the policy is smoke-and-mirrors without a revenue stream will be hard to explain. After all, there wasn’t a revenue stream in Massachusetts, why would you need one everywhere else? (note that this is the same fraud that minimum wage politics is based on. A minimum wage isn’t a tax because it is a mandate on private activity.) Furthermore, because there are so few specifics, it will be hard to score this and say, "Romney’s health care plan will cost XXXXX." It will make it hard for Republicans to attack him. So, as primary election politics goes, it is phony but clever. (What would you have expected from Mitt?)

This serves him well in a general too. As FactCheck.org has noted:

Kenneth E. Thorpe, a professor of health policy at Emory University, has analyzed the costs of the Edwards and Obama plans. In reading those and the Massachusetts plans, the similarities are clear, and Thorpe says the Obama and Romney plans are “virtually identical.” Both call for an insurance exchange (an entity that would offer various private insurance plans to the public), and they offer financial assistance to low-income people.

So if a Democrat attacks Romney, correctly, for playing fast-and-loose with numbers, Romney will have a defense. "See there’s Hillary Clinton telling you what you should be doing with your own money." And he can say that his plan was supported by Ted Kennedy (again, Kennedy will object that rich people should pay!!!, again helping Romney) and virtually identical with Barack Obama’s. How can that not be good?

In other words, if Romney can get this policy, with its hidden tax increase on someone, through the primary, it will serve him very well in the general. And the way that he has framed this makes it very hard to see the tax increase.

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Romney’s healthcare plan: The policies

August 24, 2007 – 12:47 pm

UPDATE: Sally Pipes is kind enough to remind us that it just didn’t work in MA. And, of course, Romney’s proposal is tax breaks for people who can afford health insurance but don’t buy it. In other words, another subsidy…

First, let me say that I am reasonably sympathetic to Mitt Romney’s healthcare proposal. At least the Massachusetts one. The reason isn’t so much for the actually policy prescriptions as the seriousness of approach. A long time ago, I heard a podcast from the University of Chicago (my alma mater) Business School where Romney talked about the problem. I can’t find it now, but let me summarize.

Romney viewed the problem as insuring the uninsured. He found that there were several categories of uninsured:

  • The affluent uninsured. These were about 50% of the uninsured in Massachusetts. These are mostly single men who can afford insurance but don’t think they need it. Either they are crazy or healthy.
  • The poor. These are people who can’t afford insurance but who are above the poverty level and therefore ineligible for Medicaid.
  • The uninsurable. There are some people for whom there is no economic logic for insuring. Health "insurance" for these people isn’t so much "insurance" as "subsidy."

The general problem of health insurance boils down to (2) and (3) not being able to get insurance. Romney’s solution was to:

  • Reduce costs by deregulating the insurance industry to lower the cost of insurance.
  • Subsidize the poor and uninsurable.

The problem is that the subsidies cost money. To some extent, the amount can be reduced by deregulation. The catch is an idea called "adverse selection" which applies to risk pools like insurance. Basically, the people with the least risk try to opt-out of the pools so that they can save money. This leaves the pool full of people that need money. When liberals attack Health Savings Accounts, one of the arguments that they make is that they facilitate adverse selection because healthy people will get high-deductible insurance that gives insurance companies very little money to spend on healthy people. Another way of stating it is that insurance companies need healthy people in their risk pools so that the healthy people can pay for the sick people.

In this context, "adverse selection" is viewed as a market failure. (In the sense that the most economically efficient answer, for the system, is not taken by individuals. Instead, they take the solution that is most efficient for themselves. Note that there is a serious argument that this assessment by the individual is incorrect because he bears the cost in taxes of emergency room treatment, etc. It is in this spirit that Romney says that there is universal health care, but not universal health insurance. It should also be noted that there is a source of savings, which is kind of like revenue, here. People who go to the emergency room will be covered by insurance, so the state doesn’t absorb those costs.

So, recognizing this problem, Romney mandated that rich individuals buy health care. Let’s be clear. This is a tax. Romney paid for the subsidies by taxing the affluent uninsured who do not consume health care. They were forced, penalized by prison time in some cases, to purchase health insurance so that insurance companies could use that money to pay for health care for the sick. This tax is usually referred to as a "mandate" and is generally unpopular among conservatives. Here’s what the New York Times had to say:

The Massachusetts plan, which went into effect this year and is still being watched closely to see how it will fare, was Mr. Romney’s signal legislative accomplishment as governor but has elements that trouble many conservatives, most notably a mandate that everyone who can afford it must buy health insurance or face penalties.

Now let’s be clear because the logic of this is unavoidable. Either you pay for it by taxing the healthy or you pay for it by taxing everyone. But, in general, you are dumping new money into healthcare for people who don’t have it now. So Romney’s national plan doesn’t have mandates:

There is no individual mandate in Mr. Romney’s plan for the rest of the country. Instead, it concentrates on a “federalist” approach, premised on the belief that it is impossible to create a uniform system for the entire country. Along these lines, the federal government would offer incentives to states to take their own necessary steps to bring down the cost of health insurance.

This sounds to me like a sleight of hand. If deregulation couldn’t cover the costs in Massachusetts, the most regulated health care market in the country, why would it work anywhere else? The fact is, to pay for the health care of the sick and the poor, you need revenue. Romney achieved that through a private sector mandate (with a serious solution, which I do not think that I disagree with, in the end).  The other option is tax revenue.

Which is it going to be Mitt? Taxes or mandates? Or are you going to require that the states do one or the other?

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Quote of the Day: Mitt to Hillary

August 15, 2007 – 5:42 pm

On Hannity last night, Mitt Romney was talking about his health care plan:

So it’s one of the things I’m most proud of. And I hope I get a chance to debate Hillary Clinton on the very topic because when I’m asked what the biggest difference is between my plan and her plan, I’ll say that mine got passed.

Wow.

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Romney, 1994 flier, and consistency

May 30, 2007 – 11:01 am

A number of Mitt Romney’s supporters have pulled out a 1994 campaign flier and argued that it shows that he has always been a conservative. First of all, one might wonder why a conservative in 1994 would have opposed the Contract with America and called it "partisan".. That wasn’t my reading of it.

I was struck by how much he has moved around on a number of these issues. The question shouldn’t be whether or not he was a real conservative. Instead it should be, what kinds of principles, if any, he has, and how they will relate to how he would govern if he were to become president. So let’s look at this with that in mind.

First of all, we need to realize what this is. It is a political communication. He tried to differentiate himself from Kennedy on some things and blend the differences on others. So, as a political communication, he is saying that the only thing that he agrees with Ted Kennedy on is abortion and gay rights. And on abortion he argued that he was more trustworthy to pro-choicers than Ted Kennedy because Ted Kennedy had flip-flopped(!!!). And on gay rights, he argued that he would be better for gay rights than Ted Kennedy.

The second point to make is that Romney’s image has several problems. The first one is that he’s a simple "flip-flopper". But the second is that he’s a sleazy panderer. The car salesman thing. That he will tell you whatever you need to hear for you to support him. That he has no principles. That’s what really struck me with this.

So, to illustrate, let’s do a little exercise. Let’s take a couple of these issues and see where Romney has gone with these since 1994

First, abortion. Romney’s story is that he changed his position over the stem-cell fight in 2004. But it is worth pointing out that Romney was also sounding pro-life in 2001  when he was considering running for office in Utah. His problem isn’t that he converted. It is that he converted and reconverted and reconverted and reconverted. All occurring while he was running for office and well into middle age and parenthood.

Or, look at his position on campaign finance reform, under the heading of "Congressional Reform." In this 1994 flier, he says that he opposed Taxpayer Financed Campaigns. But in 2002, he supported partial public funding of campaigns, even supporting taxing private contributions to pay for public funding. Now, presumably, he’s against it. So this is his third position on campaign finance reform.

Or, look at this positions on health care. He did not support either a "government takeover of health care" or "requir[ing] employer mandates". But he did sign a health care plan, with the same Ted Kennedy that he is differentiating himself from in this flier, that included employer and individual mandates. (Indeed, it looks like Barack Obama’s health care plan is, in some sense, to the right of Romney’s. Ezra Klein points out that Obama’s plan does not mandate that people purchase health care, whereas Romney’s creates criminal sanctions if you do not)

Tables are often clarifying:

  Romney in 1994 Romney in-between Romney Today
Abortion Pro-choice Pro-life, then pro-choice Pro-life
Public funding of campaigns Against For Against
Employer mandates Against ?? For

"The answer my friend, is blowing in the wind, the answer is blowing in the wind."

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Healthcare lobbies campaign in early primary states

May 28, 2007 – 8:44 pm

I thought this was interesting. It appears that two different healthcare lobby groups are using a strategy of grassroots and media campaigns in early primary states. I have copied the ad for the Partnership to Fight Chronic Disease. The Hill runs a story about AARP and a bunch of patients groups running media and grassroots campaigns in early primary states:

The senior citizens’ lobbying group AARP and a handful of patient-advocacy groups have joined together to stage events in key presidential primary states to sway the debate on healthcare, a key emerging campaign issue.

This morning, the chief executives of the AARP, the Alzheimer’s Association, the American Cancer Society’s Cancer Action Network, the American Diabetes Association and the American Heart Association will hold press conferences, rallies, training seminars and visits to campaign offices in early-primary states to promote healthcare coverage and access, particularly for people with chronic diseases. …

The AARP will hold its event in Concord, N.H., while the diabetes and cancer groups will hold a combined event in Des Moines, Iowa. The heart association will gather supporters in Columbia, S.C., and the Alzheimer’s group will meet in Reno, Nev. Each event is expected to draw somewhere between 100 and 200 people. …

Apparently, AARP had been doing this already:

The AARP has been positioning itself to play a major role in influencing the presidential candidates’ stances on healthcare and financial security for older Americans. The organization has been carrying out its “Divided We Fail” campaign in early-primary states and plans to expand the effort nationwide using its network of state offices as November 2008 approaches.

This is a good strategy for moving the debate. It will be interesting to see how the various candidates handle this.

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