Stephen Ford
October 31, 2012
That selfish 1%. They hold the solution to our fiscal crisis in the palms of their gilded, probably gloved, hands. Their wealth is our poverty; their happiness is our sorrow; their freedom is our slavery. All would be well, if only they would pay their fair share.
So says the Left. This refrain is now sung by everyone to the left of the aisle, from the intentionally unwashed masses of Occupy Wall Street to the dapper man sitting in the Oval Office. President Obama reminded us of his dedication to this cause in each presidential debate, demanding with obvious fervor that the wealthy “pay their fair share” and “do a little bit more.”
It’s a nice narrative. It’s an ever better electoral tool — pitting the many against the few is a sure-fire way to win votes. But unfortunately for the Left, it’s also a mathematical myth.
No matter how you do the math, the rich just aren’t as rich as the Left thinks they are. Forget, for a moment, that few liberals will tell us exactly what constitutes “a fair share” and “a little bit more.” Is that 5%? Or 25%? How about 75%, like in newly-socialist France? If only we knew.
Let’s say 100%, at least for the sake of argument. Suppose everyone in the top 1.5% — everyone making over $250,000 — gave every cent they made over that total to the federal government. Surely the resulting revenue would save our sinking ship.
Not even. Taking every penny of the wealthy’s money would only pay the government’s bills for three months. That wouldn’t even cover our yearly trillion-dollar deficits, to say nothing of the $16 trillion debt. Paul Ryan handily trotted this fact out during the vice presidential debate, yet few picked up on it. Joe Biden’s laugh must have drowned it out.
Maybe we’re not being egalitarian enough. Suppose we tax the top 10% at the highest possible level. Surely those people making $114,000 per year don’t need the extra cushion. Yet even then, we can’t cover the government’s yearly expenditures. That last $500 billion isn’t exactly chump change.
If only the Left would crunch these numbers. They’re always keen to remind us that they’re the party of “science” and “logic” (compared to the “superstitious” and “medieval” Right), yet they’re inexplicably unable to count the nickles and dimes — okay, the hundreds and the gold chips — that their fabled tax on the wealthy would raise. Apparently basic addition wasn’t an intro level course in this brave new world.
Thankfully, only the most ardent leftists — trust fund kids at a public university who sit at the feet of their well-spoken socialist professors, otherwise known as “Occupy Wall Street” — want a 100% tax rate. No sane politician has thrown their weight behind such measures, including the president.
But think what that means. If 100% rates would only pay for the government for three months, then how much revenue will lower rates bring? A 66% rate would cover two months, a 33% rate only one. Anything less than that — which, realistically, is all that the president would ever get passed — would only feed the federal spending monster for a few weeks or days.
That spending monster is the real problem. It’s a monster that, like the federally-funded cookie monster, suffers from a crippling addiction. It’s a fiscal addiction that requires withdrawal — the rich don’t have enough stuff to keep its buzz going. But like any good junkie, it only wants more, regardless of what it takes and who it hurts in the process.
Meanwhile, this president’s anti-1% rhetoric is nothing but talk. And once you add up the numbers, his talk is surprisingly cheap. If only the same could be said of his policies.
Stephen Ford is the Research Manager at the Hillsdale College Allan P. Kirby, Jr. Center for Constitutional Studies and Citizenship.
Former Joe Biden aide writes angry tell-all
By: Jonathan Martin
POLITICO
October 25, 2012
Adding another wild-card to the 2012 campaign’s final days, a former aide to Vice President Joe Biden has written a tell-all Washington memoir in which he lacerates the former Delaware senator as an “egomaniacal autocrat” who was “determined to manage his staff through fear.”
The book is hardly an objective study of the vice president, however. Author Jeff Connaughton, a Biden Senate staffer turned lobbyist, is by his own admission deeply disillusioned with the capital and embittered about his experience with the man who inspired him to enter politics.
Connaughton wrote “The Payoff,” which came out last month, in the fashion of guilt-racked whistle-blower: he was a party to a corrupt system and now wants to blow the lid off the game.
“I came to D.C. a Democrat and left a plutocrat,” he confesses.
As chief of staff to former Sen. Ted Kaufman (D-Del.), Biden’s successor, Connaughton was radicalized by his unsuccessful experience trying to get an amendment to the Dodd-Frank financial regulation bill that would have broken up the country’s largest banks. So he left Washington politics and wrote what he believes is the unvarnished truth about the country’s political system. The big reveal: Big banks control both parties.
“It’s time people understand why – and how – Wall Street always wins,” Connaughton writes at the outset of his book.
He is harshly critical of his own party and the Obama administration, arguing that the president is no different than most other Washington Democrats in his willingness to kowtow to Wall Street.
President Obama and Biden, he writes, are “both financially illiterate.”
“The Payoff” is every bit the cri de coeur of a man who, as he writes, is “willing to burn every bridge” in order to indict the transactional Washington lobbying and political culture. (After Kaufman’s term ended, Connaughton fled D.C. and moved to Savannah, Ga.)
But the book is also a reprise of the familiar cautionary tale about an idealistic young politico who came to Washington to make a difference but went native – and was let down by the powerful man he looked up to.
Time and again, over the course of decades, Connaughton tells of being disappointed in Biden or not receiving the treatment he felt he was due. He doesn’t hide his sour grapes - he’s up front about his unhappiness and that he never gained the full trust of the former Delaware senator.
“Only a handful of people ever made it into his inner circle,” he writes, adding: “I simply wasn’t one of the chosen.”
What’s remarkable about the book is the lengths that Connaughton goes to portray his former boss and political idol in a bad light, piling up embarrassing anecdotes and examples of when Biden couldn’t be bothered to help one of his own aides.
In the prologue, Connaughton recounts the 2008 campaign gaffe when Biden predicted that Obama would be tested soon into his term.
In a meeting with Connaughton and some of his other advisers a few days after the election, Biden revealed that he had been upbraided by an angry Obama.
“Biden told us that Obama had called him and told him sharply that he didn’t need public tutoring: ‘I don’t need you acting like you’re my Henry Higgins,’” Connaughton writes. “Biden said his private reaction was, ‘Whoa. Where did this come from? This is clearly a guy who could restrict my role to attending state funerals or just put me in a closet for four years.”
Biden added: “I’m going to have to earn his trust, but I’m not going to grovel to this guy. My manhood is not negotiable.”
Biden’s office declined to comment on the charges beyond issuing a general statement.
”The Vice President has not read Mr. Connaughton’s book but remembers working with him over many years in both the Senate and on various campaigns,” said a Biden aide. “The Vice President values his relationships with all members of his staff, and appreciates their hard work and dedication to serving the public. He wishes Mr. Connaughton all the best going forward.”
But Biden officials did direct POLITICO to some former aides who offered a very different account of their one-time boss.
“He took a real interest in younger staffers,” said Herbie Ziskend, who traveled with Biden after the Delawarean became Obama’s running mate. “In the midst of a busy day, 16 hours of campaigning, he’d sit in plane, ask how my family was doing, ask my thoughts on the campaign in a genuine way that he didn’t need to do.”
Annie Tomasini, who worked for Biden in Iowa in the 2008 caucuses and then followed him to the vice-president’s office, described a similar experience, calling him “a mentor.”
“Here I was a 20-something year-old kid working for him and he was always asking about me and my family and where I was from,” she recalled, noting that Biden singled her and another junior aide for praise at a staff party following Biden’s withdrawal from the presidential race. “He was incredibly kind.”
The Biden that Connaughton describes, however, is sharply at odds with the familiar image of a charming, if gaffe-prone, pol who never met a stranger.
To people he didn’t know or his Delaware constituents, Biden was warm and engaging. But to those in his orbit who were not family or close friends, he could be cold.
“Like Napoleon, Biden had captured his personal Toulon at a very young age,” Connaughton writes of the man who was elected to the Senate before his 30th birthday.
He tells of raising money for the senator and getting little in the way of appreciation – not even a thank-you note until he dropped a hint he wanted one – and of Biden treating young aides poorly.
Connaughton recalls a story from the lead-up to Biden’s ill-fated 2008 presidential run.
“Later in the campaign, a twenty-three-year-old fundraising staffer got into a car with Biden with a list of names and phone numbers: ‘Okay, Senator, time to do some fundraising calls,’” Connaughton writes. “Biden looked at him and said, ‘Get the f**k out of the car.’”
Connaughton fell hard for Biden in 1979 when the vice-president, then a young, ambitious senator, gave a typically fiery speech at the University of Alabama and Connaughton, a student, rode back in the car with the senator to the Birmingham airport.
By 1988, Connaughton had found his way to Biden and worked as a junior aide for the then-senator’s first presidential foray before landing a job on his Senate staff. After graduating from law school, he explains that he wanted to land a job in the White House Counsel’s office. So Connaughton says he asked Kaufman, then Biden’s chief of staff, if the senator could put a call into Abner Mikva, Bill Clinton’s White House counsel. Kaufman told Connaughton that Biden wouldn’t do it because Biden didn’t like Mikva.
“Ted tried to console me,” Connaughton writes of Kaufman: “ ‘Jeff, don’t take this personally. Biden disappoints everyone. He’s an equal-opportunity disappointer.’ ”
In an interview, Kaufman said he doesn’t recall this specific conversation but emphatically denied that he would say such a thing about Biden, his former boss and close friend.
“In general, I would never say ‘Biden disappoints everyone’ because I don’t believe it,” said Kaufman, adding that he never recalled hearing Biden say anything negative about Mikva.
He declined to discuss the book or Connaughton further.
Connaughton writes that the turn of events left him to conclude that Biden was not interested in helping those who had been loyal to him.
“His ambitions, I was coming to understand, were mainly about himself,” writes the former staffer.
Connaughton did wind up landing the White House job and ultimately made his way along the well-trod path to K Street, joining Covington & Burling and wasn’t disappointed enough in Biden to not use the senator to his benefit.
“In my new career as a lobbyist, I dropped Biden’s name shamelessly,” writes Connaughton. “Perpetuating the myth that I was close to him enhanced my cachet and standing in Washington. It was like a political version of codependency. Biden’s slights could be painful, but it seemed too late to break ranks, even though the relationship never actually helped me when I went to work with [Washington lawyer-lobbyist] Jack [Quinn]. Biden never lifted a finger for me or for one of my clients.”
Still a lobbyist when Biden prepared to run for president once again 5 years ago, Connaughton signed up to serve as the Treasurer of the senator’s PAC.
Mocking Biden’s long-windedness, Connaughton recalls a Houston dinner fundraiser he organized.
“As a longtime staffer, I knew to keep flexing my knees while standing through a Biden speech,” he writes. “After awhile, I noticed that the room was getting uncomfortably warm. Suddenly, a woman fainted. Two men caught her and carried her out a side door. Biden just kept on speaking … As the guests filed into the dining room, I stood in the foyer and asked a couple of them for their impressions. ‘He’s got senatorial disease,’ one said. ‘He talks too much.’ At that moment, the front door opened, and the foyer was bathed in the flashing red lights of the ambulance into which the fainting victim was being loaded.”
Connaughton briefly returned to Bidenworld in the days after the 2008 election, but quickly had to resign his position as chair of the vice-president’s inaugural committee because of the new administration’s tough rules on lobbyists.
“It didn’t seem fair,” he writes. “Biden had never helped me once as a lobbyist, yet I was paying the price.”
So instead of working for the new vice president, Connaughton became the top aide to Kaufman, and, while still admiring of the appointed senator, left at the end of Kaufman’s abbreviated term appalled at how Washington works.
“Money is the basis of almost all relationships in D.C.,” he writes. “And, in a nutshell, this is why our political campaign system and DC’s mushrooming Permanent Class — who alternate between government jobs and lawyering, influence-peddling and finance — mean Wall Street always wins.”
Democrats, he argues, aren’t much different than Republicans when it comes to selling out. Connaughton describes the Washington taxonomy of the lobbyists, consultants and lawyers he calls “Professional Democrats.”
“If the Marine Corps’s hierarchy of allegiance is unit, corps, country, God, then the hierarchy for a Professional Democrat is current firm, former-elected-official boss, the congressional Democratic leadership, and the president (if he or she is a Democrat),” Connaughton writes.
That was the true faith he lived by for about 25 years until he finally left the capital, bought a dog and took refuge in Savannah.
Connaughton recounts the conversation he had with his father upon quitting the political game.
“ ‘I can’t believe after all those years of blood and sweat for Biden he never even gave you a crumb,’ ” he writes of his dad’s reaction. “I didn’t even know how to put any context around that for him, it’s just too complicated. I’d learned the hard way: loyalty for loyalty’s sake is a fraud. I was guilty.”
Obama and Biden are “Both Financially Illiterate.”
October 25, 2012 By Daniel Greenfield
Obama told Leno that he’s bad at math and now we have independent confirmation of that. Still you have to be really financially illiterate to run annual trillion dollar deficits while running on a pledge to cut the deficit.
Author Jeff Connaughton, a Biden Senate staffer turned lobbyist, is by his own admission deeply disillusioned with the capital and embittered about his experience with the man who inspired him to enter politics.
“I came to D.C. a Democrat and left a plutocrat,” he confesses.
So did the entire Democratic Party. This is a tell-all book telling us things that we already know or could have easily guessed.
Adding another wild-card to the 2012 campaign’s final days, a former aide to Vice President Joe Biden has written a tell-all Washington memoir in which he lacerates the former Delaware senator as an “egomaniacal autocrat” who was “determined to manage his staff through fear.”
Not exactly a major surprise for anyone who saw Biden’s performance at the last debate. The man is a jackass and probably treats staffers almost as badly as Ralph Nader or Michael Moore, both of whom have left behind their own trail of horror stories.
President Obama and Biden, he writes, are “both financially illiterate.”
Again, not very surprising. And not just financially.
In the prologue, Connaughton recounts the 2008 campaign gaffe when Biden predicted that Obama would be tested soon into his term.
In a meeting with Connaughton and some of his other advisers a few days after the election, Biden revealed that he had been upbraided by an angry Obama.
“Biden told us that Obama had called him and told him sharply that he didn’t need public tutoring: ‘I don’t need you acting like you’re my Henry Higgins,’” Connaughton writes. “Biden said his private reaction was, ‘Whoa. Where did this come from? This is clearly a guy who could restrict my role to attending state funerals or just put me in a closet for four years.”
Biden added: “I’m going to have to earn his trust, but I’m not going to grovel to this guy. My manhood is not negotiable.”
“Biden: My Manhood is Not Negotiable” was the original headline for this article. It’s also the title of Biden’s upcoming biography.
“Ted tried to console me,” Connaughton writes of Kaufman: “ ‘Jeff, don’t take this personally. Biden disappoints everyone. He’s an equal-opportunity disappointer.’ ”
Well at least he’s not a racist disappointer. Chris Matthews will be pleased.
Connaughton writes that the turn of events left him to conclude that Biden was not interested in helping those who had been loyal to him.
“His ambitions, I was coming to understand, were mainly about himself,” writes the former staffer.
Yet another thing Biden has in common with Obama.
“If the Marine Corps’s hierarchy of allegiance is unit, corps, country, God, then the hierarchy for a Professional Democrat is current firm, former-elected-official boss, the congressional Democratic leadership, and the president (if he or she is a Democrat),” Connaughton writes.
Dems defend Obama on debt, say balancing budget now a bad idea
Published September 02, 2012
FoxNews.com
After a week of withering attacks on President Obama's fiscal record, top Democrats on Sunday defended the president's plans for shaving down the deficit -- but said balancing the budget now would actually be a bad idea.
Senior campaign adviser David Axelrod, speaking on "Fox News Sunday," repeated claims that Obama's plan would cut the deficit by $4 trillion over the next decade, bringing the budget shortfall down to a point that would "stabilize" the debt.
"And then, with growth, we'll be in a position to begin reducing it further," he said.
But, when pressed, Axelrod would not say when the president's plan could bring the budget into balance. With the deficit clocking in at over $1 trillion once again this year, he suggested that's not the goal in the near-term.
"What's necessary is to stabilize the debt and then work from there," he said. "You can't balance the budget in the short term, because to do that would be to ratchet down the economy."
Axelrod was referring to warnings that to act too quickly to close the deficit would deprive the economy of needed federal dollars at a time when it is barely growing and is creating jobs at a still-modest pace.
A recent Congressional Budget Office report said that if tax rates rise and sweeping defense cuts go into effect as planned in January, it could result in the economy contracting by .5 percent and unemployment rising to 9.1 percent -- even though the tax hikes and defense cuts would help to close the deficit.
The unemployment rate now is 8.3 percent.
But the Obama campaign remains at risk of appearing reluctant to act on the deficit, as the debt nears $16 trillion and interest payments on that debt rise. Republicans hammered that vulnerability this past week at their convention in Tampa, displaying two giant debt clocks in the convention hall and repeatedly noting that the debt had risen $5 trillion under his watch.
Axelrod, though, said Republicans -- with their plans to cut taxes for the middle class and the wealthy - "are not credible on the deficit."
Though GOP running mate Paul Ryan hammered the president for ignoring the plan put out by his own deficit-reduction commission, Axelrod pointed out that Ryan didn't vote for that plan either.
"(Obama) didn't let it die on the vine," he claimed, suggesting it informed his own proposals.
The only reason that won't pass, he said, is Republicans won't raise taxes. Republicans claim Democrats are the ones holding back a balanced budget by refusing to compromise on entitlements.
Los Angeles Mayor Antonio Villaraigosa, chairman of the Democrats' convention, claimed on "Fox News Sunday" that Obama is ready to address entitlement reform.
"He has made it absolutely clear he is willing to work on a bipartisan basis to address things like Social Security," he said.
The Obama campaign, though, has spent the last several weeks hammering Ryan's plan to "voucherize" Medicare without touting any particular plan of its own to address Medicare's gaping deficits.
Democratic advisers were blanketing the airwaves Sunday in the run-up to this week's Charlotte convention. They're trying to recapture the spotlight and reframe their candidate after a week of GOP attacks on the incumbent.
Mitt Romney, in his nomination acceptance speech Thursday, argued that Obama's campaign does not meet a simple test -- in that Americans, he said, are not better off today than when he took office.
"This president can ask us to be patient. This president can tell us it was someone else's fault. This president can tell us that the next four years he'll get it right," he said. "But this president cannot tell us that you are better off today than when he took office."
Axelrod, though, said the campaign can say "we're in a better position than we were four years ago."
"The average American recognizes that it took years to create the crisis that erupted in 2008 ... and it's going to take some time to work through it," he said.
President Obama is AWOL on the biggest issue of all
By L. Brent Bozell III
Published August 23, 2012
FoxNews.com
Thursday’s jobless numbers and Wednesday’s CBO report are beyond ominous and present a direct challenge to the rationale for Barack Obama’s presidency.
Before President Obama took office, he vilified President Bush for adding $4 trillion to our nation’s debt as “unpatriotic.” If Bush’s spending over the course of two terms was “unpatriotic,” Obama adding nearly $5.3 trillion to the national debt in half this time is not only “unpatriotic,” it’s also hypocritical. It displays an utter disregard for financial health of this country.
Obama pledged to cut the deficit in half by 2012, but instead has increased spending so rapidly that our nation has surpassed the $16 trillion threshold. He and his Obama Clones in the Senate continue to call for even more liberal deficit spending.
Senate Democrats have enabled Obama by refusing to produce a budget for over three years. This is a complete dereliction of duty on the part of Majority Leader Harry Reid. The Senate is mandated to produce a budget but has failed to do so for almost the entire time Obama has been in office.
Democratic Senator Joe Manchin of West Virginia expressed rare honesty in saying he was at a loss to explain why his fellow Democrats have gone along with this. The former governor even said if he had done this while governor of his state, he would’ve been impeached.
It’s an absolute disgrace that the last time the Senate passed a budget was on April 29, 2009. Since this resolution—which aimed to cut the deficit by two-thirds by 2014—the deficit has increased by $4.8 trillion.
Obama and his enablers in the Senate refuse to do their jobs and idly stand by as our nation teeters on the fiscal cliff. The American people not only deserve to know how the politicians in Washington are spending their tax dollars, they also deserve representatives who do the job they were elected to do.
Do we need more evidence that Obama doesn’t take fiscal responsibility seriously? His last budget proposal was shot down by both Democrats and Republicans in both houses of Congress: 414-0 in the House of Representatives and 99-0 in the Senate. When was the last time—if ever—you had a national, unanimous repudiation of this magnitude?
Both Obama and Reid must be held accountable for failing to do their jobs. The same goes for other enablers in the Senate such as Bill Nelson (D-Fla.), Claire McCaskill (D-Mo.), Sherrod Brown (D-Ohio) and Jon Tester (D-Mont.) – all of whom are up for re-election this year.
Additionally, former Democratic National Committee Chairman Tim Kaine (D-Va.) is running for the Senate in Virginia, and he has continually supported all of Obama’s policies which have driven our country deeper in debt. Mr. Kaine needs to answer for this if he wants the voters to support him. He is not exempt.
Obama declared that Stimulus One (a trillion dollars of taxpayer money) would get the economy back on track. It was a miserable failure. When that didn’t work, he threw more tax dollars at more failed projects in Stimulus Two.
Back in February 2009, Obama said that as president he would be held accountable. He said that if the economy didn’t recover in three years, his presidency would be a “one-term proposition.”
Come November, the American people will remember Obama’s proclamation. They will also remember that this administration has engaged in the most reckless deficit spending in history which has grown the federal debt over $16 trillion.
At some point, the public’s patience will wear out unless Obama changes his spending ways and both he and his party begin to take this problem seriously. Don’t bet on this. You’ll be as successful as Obama and the Democrats have been lately.
Brent Bozell is chairman and CEO of ForAmerica.org, the largest online conservative army in America with 2.5 million supporters
Former Obama Budget Director Explains Why It May Be Hard to Restrain Health Spending Under ObamaCare
Peter Suderman|
Aug. 21, 2012
reason.com
Former Obama administration budget director Peter Orszag has been a staunch opponent of “overpayments” in the Medicare Advantage program, which allows seniors to select from a menu of private insurance options, for years. In selling ObamaCare, the Obama administration made the case that the program paid too much to private providers and that payments could be reduced without affecting benefits.
Orszag was one of the chief proponents of this argument: In 2009, he told an audience of health industry insiders, "I believe in competition. I don't believe in paying $1.30 to get a dollar.” And he helped translate that belief into a legislative plan: Under Orszag’s watch, the Obama administration signed a health care overhaul that relies quite heavily on savings generated by cuts to allegedly excessive Medicare Advantage (MA). More than 30 percent of the law’s $716 billion in Medicare payment reductions were set to come from the MA program.
In a Bloomberg View op-ed today, Orszag continues to argue in favor of those payment reductions. He might want to have a chat about this with his former employers at the White House. The administration has delayed its plan to reduce overpayments until at least 2014 in order to run a “pilot program." The Department of Health and Human Services says this demonstration project will help test ObamaCare's revised payment scheme, which was supposed to tie payments to quality. The way HHS plans to do that is by continuing with the old, “excessive” payment rates for a large number of providers nationwide that do not meet the law’s quality standards. At a cost of $8 billion, it’s by far the largest pilot program of this type ever conceived — indeed it is larger than all other Medicare demonstration projects since 1995 combine — so one hopes it will provide some useful information.
It’s difficult, however, to see how the experiment will provide reliable results. And anyone wondering how exactly this will help HHS determine whether or not its MA quality payments work, you’re not alone: The Government Accountability Office recently looked at the HHS plan and concluded that “the design of the demonstration precludes a credible evaluation of its effectiveness in achieving (the administration’s) stated research goal.” The GAO report also issued a strong recommendation that the HHS demonstration program be shut down, and the overpayments be cut as planned.
Orszag also warns that Medicare Advantage relies on a system of payment tweaks known as risk adjustment to counteract overpayments. But, he writes, although risk adjustment mechanisms have improved in recent years, “evidence suggests it still does not work very well.” And he points to 2011 research for the National Bureau of Economic by four economists who look at MA’s risk adjustment program and warn of its limits.
I’m glad to see that Orszag is familiar with this research, because it suggests some potential problems with ObamaCare, which relies on a similar sort of risk adjustment within its health exchanges. A 2010 working paper on risk adjustment by the same authors not only found that risk adjustment did not work particularly well, but warned that ““in light of the results presented here, one question is how well a risk adjustment mechanism will reduce adverse selection in the exchanges” created by President Obama’s health law.
Despite GAO’s recommendation, HHS has yet to cancel the MA bonus payment, which if nothing else provides a solid data point in favor of the argument that political pressure will make it hard to restrain Medicare spending through technocratic payment tweaks to providers. All in all, I think Orszag has (perhaps unintentionally) identified some real flaws in ObamaCare’s design, and a number of potential implementation hazards.
A further wrinkle comes from recent research suggesting that even though MA pays more, the program’s competitive private design may have actually succeeded, at least partially.
A paper in the Journal of the American Medical Association (JAMA) by three Harvard economists reports that although MA payments are higher on a dollar for dollar basis, the program is actually cheaper than traditional fee-for-service Medicare when measured on a cost-per-benefit basis, providing the same set of services for about 9 percent less. One potential reason why? Competition amongst private plans. Reihan Salam has a tasty, cheeseburger-based analogy that helps explain how this works:
Imagine that there is a federal program devoted to providing seniors with cheeseburgers. There is a publicly-run cheeseburger assembly plant that needs $15 to produce a quarter-pound burger with a toasted bun, a sliced tomato, and cheddar cheese. Costs have been rising over the years as the price of the discrete components of this standard cheeseburger have been rising, for a variety of complex, interrelated reasons. In recent years, the federal cheeseburger program has allowed cheeseburger beneficiaries to choose private cheeseburgers at public expense. Various private cheeseburger firms bid for the right to take part in this bonanza of subsidies, and on an enrollment-weighted basis they bid $14 — a bid that reflects what they need to produce that same quarter-pound burger with a toasted bun, a sliced tomato, and cheddar cheese plus enough to turn a profit.
But rather than pay these private cheeseburger firms $14, the amount of the bid, the federal cheeseburger program has devised a complicated benchmark based on what it costs the publicly-run cheeseburger assembly plant to produce said cheeseburger. The end result is that private cheeseburger firms are in many cases paid $16 to take part in the program. This doesn’t mean they pocket an extra $2 in profit, however. These private cheeseburger firms could be required to offer more or higher-quality ingredients — grass-feed beef, romaine lettuce, muenster cheese, fried onions, and so forth. So it is true that these private cheeseburgers cost the system more than the public cheeseburgers. But this reflects the benchmark and, in some cases, the fact that we’re not making an apples-to-apples comparison.
As the authors of the JAMA paper note, this has significant implications for premium support Medicare plan proposed by Reps. Paul Ryan and Sen. Ron Wyden, which relies on a similar form of competition to restrain Medicare spending. And it suggests that in the quest to reform Medicare we ought to be looking for ways to harness private competition to provide benefits more cheaply rather than focus on technocratic adjustments to the payment system, especially in light of the long and deeply mixed record of attempts to control federal health spending through pricing tweaks.
Senate rejects Obama budget in 99-0 vote
By Erik Wasson and Daniel Strauss - 05/16/2012
Thehill.com
A budget resolution based on President Obama’s 2013 budget failed to get any votes in the Senate on Wednesday.
In a 99-0 vote, all of the senators present rejected the president’s blueprint.
It’s the second year in a row the Senate has voted down Obama’s budget.
Obama's 2012 budget failed 97 to 0 last May after Obama himself last April said he wanted deeper deficit cuts.
The House earlier this year unanimously rejected Obama's budget.
The White House sought to provide cover for Democrats to vote against the Obama budget resolution before the vote, arguing the resolution offered by Sen. Jeff Sessions (R-Ala.) was different from Obama’s budget because it did not include policy report language.
Democrats made the same point on the floor Wednesday in explaining their votes.
The Senate also voted on four GOP budget blueprints, which were all defeated.
