The first year of a new presidency is a time a of confirmation hearings, strategy meetings, introductions and overarching policy statements. Particularly in the realm of defense and foreign affairs, it is only by the end of year one in an administration that key people are in place, priorities are establised and the political parameters within with the President must operate are made clear. As 2009 comes to an end, we will soon be able to see in concrete terms what the Obama administration will be tackling in the next three years.
A key element of this whole process is the Quadrennial Defense Review (QDR), a congressionally-mandated policy process that was authorized in 1997, which was originally designed to plan the revamp of the U.S. military following the end of the Cold War. The QDR has been done three times so far -- 1997, 2001 and 2006 -- and is a major chance for the Obama Administration through Secretary Gates to make important adjustments to the way Defense policy, procurement and planning is done.
Parallel to the Pentagon's QDR, Secretary of State Clinton has mandated that a Quadrennial Diplomacy and Development Review (QDDR) be performed within the State Department. This review, something new from this Adminstration, has had several false starts, as the QDDR mandate falls partially within the realm of the State Department and partially within USAID (the US Agency for International Development)-- an oestensibly independent agency.
Finally, a Quadrennial Homeland Security review, also modelled on the QDR approach, will be delivered to Congress on 31 December of this year, similarly setting priorities, naming major risks and detailing what the Obama Administration and Secretary Napolitano will be up to at DHS.
The QDR from the Department of Defense and the QDDR from the Department of State will follow in early 2010, likely before the 20 January one-year mark of the adminstration.
A few key take-aways:
1. All reviews are taking an "integrated approach": The agencies have long understood that diplomacy, development, military affairs and national security are heavily interlinked issues, requiring a interlinked approach.
However, particularly in the Defense Department, there has often been a more insular and fragmented strategy (as seen by the alienation between State, USAID and Defense in the Bush Administration). The fact that the QDR includes major segments on diplomacy, development and other issues is quite meaningful. "The Pentagon learns its own lessons through the execution of the missions it is receives from the White House," said a senior career intelligence official I spoke to. "This is an overt acknowledgement by the US Military that a military-only strategy does not work in areas of U.S. strategy interest, including Iraq and Afghanistan."
2. Obama and Co. will have to put their cards on the table: The Obama adminstration has talked about reform in procurement and budgeting in the Defense Department, cutting waste and lowering the influence of special interests in the sector. The recent ban on lobbyists from advisory committees across Federal agencies was his first big move in this regard. However, it is when the allocation of big defense and development contracts comes into play when we will see how far reforms will go.
3. All politics is local: At the end of the day, Defense appropriations are part of the Congressional mandate. Often, defense spending -- worth hundreds of billions a year -- is viewed by congress(wo)men and senators not in terms of overall coherance, efficacy or appropriateness, but instead by dollar value to their home district or state. Pet constituencies are of particular concern. In an election year, with many endangered Democrats in the majority, local considerations quickly trump national interests.
All told, these three documents will give us an important glance into the next three years in terms of strategy, reform, the relationship between agencies and the relationship with Congress. After a bruising health care battle and climate change legislation looming, how much political capital will the Obama administration be willing to spend on defense reform and refocus, especially given the unpopularity of the Afghanistan and Iraq engagements? In addition, how well will Obama be able to bridge the divides between defense, diplomacy and development in practical and political terms? We will look deeper into both questions from the political and operation lens in 2010 here at FiveThirtyEight.
---Renard Sexton is FiveThirtyEight's international columnist and is based in Geneva, Switzerland. He can be contacted at sexton538@gmail.com
12.26.2009
For Pelosi, Many Paths to 218
@ 10:54 AM
Are Democrats (well, some of them) celebrating too soon? Could the health care bill have gotten 60 votes in the Senate only to be doomed to failure in the House, which much reconcile its own, more liberal version of the legislation with that passed by the Upper Chamber?
As Ramesh Ponnuru argues, there are certainly no guarantees. But if I were a conservative, I wouldn't be holding out more than a thin sliver of hope -- probably not more than a 10 percent chance -- that the bill could still be defeated.
The vote for the House's own version of health care reform was 220-215, meaning that the bill received only two more votes than the 218 required for passage. Nor is it necessarily true that there must be at least 50% + 1 votes in the House just because there were 60 in the Senate. The entirety of the House is up for re-election next year, versus just one-third of the Senate. And, although this is a truth somewhat obscured by the filibuster, the House actually has a slightly higher proportion of conservative Democrats than does the Senate.
With that said, the 60 votes in the Senate included members as conservative as Ben Nelson, as liberal as Bernie Sanders, as sanctimonious as Joe Lieberman, as idiosyncratic as Russ Feingold, and as electorally vulnerable as Blanche Lincoln. The reason they all voted for the bill is because they had no choice not to -- with no Republican support, a single defection on the cloture motion would have killed the measure.
In the House, by contrast, the members did have a choice; their individual 'nay' votes did not doom the package to failure. Moreover, they had powerful incentives to exploit this choice. The Democratic caucus seems to have concluded -- rightly I believe -- that failing to pass a health care bill would be injurious to the party as a whole. But that doesn't mean a yea vote is in the interest of each individual member -- especially those in conservative districts where the bill has become rather unpopular. The optimal outcome for a lot of Democrats is to have voted against a bill that passes anyway.
But this also implies that the votes of the 39 Democrats who voted against the bill are more malleable than they appear. If, as in the Senate, their votes really made the difference between success and failure, a goodly number of them might have voted for the package. It's not an accident, in other words, that the health care bill -- like the cap-and-trade bill -- passed the House with exactly enough votes and barely any more. It is, rather, something of the equilibrium outcome. (If the House instead had a standing rule that 55 percent -- meaning 240 -- of its members had to vote for legislation in order for it to pass, you'd probably have an equilibrium centered around 240 votes rather than 220.)
In some ways, indeed, the danger for the Democrats may not be that they have too little margin for error in the House but that they have too much. If Nancy Pelosi could create a credible ultimatum -- vote for this particular bill or else -- I suspect there would be quite a few different permutations of health care reform that would pass the House (subject to the constraint that the compromise would also have to be acceptable to the Senate).
For instance, is the Senate's language on abortion, which was crafted to satisfy Ben Nelson, truly unacceptable to Bart Stupak? In an ultimatum scenario, I suspect not. But likewise, if it was Stupak's language or else, would you see pro-choice Democrats willing to vote down health care? Again, probably not.
This is where Nancy Pelosi comes in; it's her job to sort out the competing ultimatums. This sorting-out process necessarily involves brinkmanship. Of course you're going to have pro-choice Democrats saying that Nelson's compromise goes too far, and Stupak saying it doesn't go far enough. Of course you're going to have House liberals saying that they've already compromised too much -- and Blanche Lincoln saying they hadn't dare budge from the Senate's version. This is normal -- and tells us almost nothing.
About the only meaningful thing I've read on the the House's next step in health care reform, rather, is Blue Dog Democrat Jason Altmire's assertion that "a lot of conservative Democrats who voted against it in the House would support the Senate bill as it comes out of conference." This confirms that Pelosi has some flexibility -- she has, I'm guessing, a playing field of perhaps 240 or 245 potential yes votes, from which she'll have to cobble together 218.
Fortunately for Democrats, Pelosi is very good at her job. I don't know exactly which 218 votes she'll get. And she probably won't get a lot more than 218. But the odds remain very high that she'll get them somewhere.
As Ramesh Ponnuru argues, there are certainly no guarantees. But if I were a conservative, I wouldn't be holding out more than a thin sliver of hope -- probably not more than a 10 percent chance -- that the bill could still be defeated.
The vote for the House's own version of health care reform was 220-215, meaning that the bill received only two more votes than the 218 required for passage. Nor is it necessarily true that there must be at least 50% + 1 votes in the House just because there were 60 in the Senate. The entirety of the House is up for re-election next year, versus just one-third of the Senate. And, although this is a truth somewhat obscured by the filibuster, the House actually has a slightly higher proportion of conservative Democrats than does the Senate.
With that said, the 60 votes in the Senate included members as conservative as Ben Nelson, as liberal as Bernie Sanders, as sanctimonious as Joe Lieberman, as idiosyncratic as Russ Feingold, and as electorally vulnerable as Blanche Lincoln. The reason they all voted for the bill is because they had no choice not to -- with no Republican support, a single defection on the cloture motion would have killed the measure.
In the House, by contrast, the members did have a choice; their individual 'nay' votes did not doom the package to failure. Moreover, they had powerful incentives to exploit this choice. The Democratic caucus seems to have concluded -- rightly I believe -- that failing to pass a health care bill would be injurious to the party as a whole. But that doesn't mean a yea vote is in the interest of each individual member -- especially those in conservative districts where the bill has become rather unpopular. The optimal outcome for a lot of Democrats is to have voted against a bill that passes anyway.
But this also implies that the votes of the 39 Democrats who voted against the bill are more malleable than they appear. If, as in the Senate, their votes really made the difference between success and failure, a goodly number of them might have voted for the package. It's not an accident, in other words, that the health care bill -- like the cap-and-trade bill -- passed the House with exactly enough votes and barely any more. It is, rather, something of the equilibrium outcome. (If the House instead had a standing rule that 55 percent -- meaning 240 -- of its members had to vote for legislation in order for it to pass, you'd probably have an equilibrium centered around 240 votes rather than 220.)
In some ways, indeed, the danger for the Democrats may not be that they have too little margin for error in the House but that they have too much. If Nancy Pelosi could create a credible ultimatum -- vote for this particular bill or else -- I suspect there would be quite a few different permutations of health care reform that would pass the House (subject to the constraint that the compromise would also have to be acceptable to the Senate).
For instance, is the Senate's language on abortion, which was crafted to satisfy Ben Nelson, truly unacceptable to Bart Stupak? In an ultimatum scenario, I suspect not. But likewise, if it was Stupak's language or else, would you see pro-choice Democrats willing to vote down health care? Again, probably not.
This is where Nancy Pelosi comes in; it's her job to sort out the competing ultimatums. This sorting-out process necessarily involves brinkmanship. Of course you're going to have pro-choice Democrats saying that Nelson's compromise goes too far, and Stupak saying it doesn't go far enough. Of course you're going to have House liberals saying that they've already compromised too much -- and Blanche Lincoln saying they hadn't dare budge from the Senate's version. This is normal -- and tells us almost nothing.
About the only meaningful thing I've read on the the House's next step in health care reform, rather, is Blue Dog Democrat Jason Altmire's assertion that "a lot of conservative Democrats who voted against it in the House would support the Senate bill as it comes out of conference." This confirms that Pelosi has some flexibility -- she has, I'm guessing, a playing field of perhaps 240 or 245 potential yes votes, from which she'll have to cobble together 218.
Fortunately for Democrats, Pelosi is very good at her job. I don't know exactly which 218 votes she'll get. And she probably won't get a lot more than 218. But the odds remain very high that she'll get them somewhere.
12.25.2009
Happy Holidays from 538!
@ 8:23 AM
12.24.2009
Postscript
@ 1:36 PM
I'm a little bit reluctant to write about this for a variety of reasons ranging from holiday cheer to the fact that it will feel like kicking salt in the wounds after the Senate's passage of its health care bill this morning.
I do want to make clear, though, that I should probably have made some finer points of distinction among those who I have lumped under the broad heading of "kill-billers". There is a healthy debate to be had over the merits of the health care policy, and there's much to be said from an Overton window perspective about a world in which you're having two liberals (me and Darcy Burner) square off against one another for nearly 15 minutes on Hardball, or David Sirota writing the opposing viewpoint to USA Today's editorial position that the health care bill should be passed. Moreover, pressure from the left has been more successful than the pressure-ers might allow. The concessions that liberals won in exchange for giving up the public option are not trivial, and some further improvements will probably be made to the bill in conference.
There have also, however, been people who have been arguing the bill in what I believe to be bad faith -- recycling or inventing a grab-bag of misleading and often self-contradictory talking points against the bill's passage. The progress of the debate over the past week has perhaps been revealing; whereas some advocates, like Markos Moulitsas and Howard Dean, have tended to ratchet down their rhetoric, in some cases even explicitly calling for the bill's passage, others have tended to become more entrenched. By "others", I mean in particular two or three of the writers at the blog FireDogLake. I don't exactly know what's going on over there; as a group, they're whip-smart, and they also reflect a diversity of voices, some of which I have had a problem with and others of which I haven't. But some of the initiatives they've launched over the past week, particularly teaming with Grover Norquist to pursue a conspiracy theory about Rahm Emanuel, threatening to primary Bernie Sanders, and attacking Joe Lieberman's wife, are a little bizarre and not reflective, in my view, of a website that is in the frame of mind right now to have a fact-based debate about the merits of the health care bill.
I don't have a lot of patience for people who are arguing in bad faith. I have spent many thousands of words explaining why the bill is a good one for progressives and why most of the criticisms do not hold up (see in particular here, here and here). When the people to whom I address those arguments -- and again, I'm referring principally to two or three particular people at one particular blog -- are unwilling or unable to engage with them, I don't know how I'm supposed to take their position seriously.
Let me, however, recapitulate three particular sets of arguments that I believe have not been adequately rebutted.
Firstly, I don't think you can make a credible argument that the bill will leave poor people worse off. The bill provides very impressive subsidies to working-class people, in some cases providing them with in excess of $10,000 worth of assistance per year. Perhaps more importantly, as Jonathan Cohn and Jonathan Gruber have outlined, it radically reduces the downside risk to lower-income families because of annual caps on out-of-pocket expenses. And -- something that hasn't gotten enough attention -- the bill increases the Medicaid threshold from 100 percent to 133 percent of poverty; about half of the assistance in the program is devoted to that Medicaid expansion.
Now, you can certainly argue that the bill is not quite generous enough -- I wholeheartedly agree with that position, and hope that the subsidy levels can be improved, particularly in the 133-250 percent of poverty range. There have been some efforts, however, to conflate the maximum amount that people might have to pay under the bill with the amount they will usually pay. In a typical year, a family of four making $50,000 will have to pay about $300 per month in premiums to cover the entire family. That compares with a retail cost, before subsidies, of about $1,000 per month. They'll probably also bear some out-of-pocket expenses. But no matter how bad things get, a family's exposure is limited to about 20 percent of its annual income. That compares with the status quo, in which even an insured family can bear downside risk of as much as 68 percent of its income, and in which an uninsured family has essentially unlimited downside risk. I don't mean to suggest that 20 percent of one's income is pocket change -- especially given how little savings the typical American family has -- but it's potentially the difference between having to cut back on vacations, entertainment and meals out versus filing for bankruptcy or losing one's home.
Secondly, I don't think you can make a credible argument that reconciliation is a smart strategy. You can certainly argue that reconciliation is possible -- meaning, that you might be able to pass something that you call a health care bill via reconciliation. But I've not seen a persuasive case -- or even really an unpersuasive case -- to rebut the argument that what reconciliation would take out of the bill (most notably the exchanges and the protection for people with pre-existing conditions) is better than what it might be able to put back in (a middling public option or Medicare buy-in). Nor have any of the structural problems I've pointed out with the more "creative" versions of reconciliation really been addressed; people have just dropped the argument when I've pointed out these problems. Although, with the Senate's passage of the bill this morning, this has probably become a moot point.
Thirdly, I don't think you can credibly argue that the bill would be improved -- policywise -- by dropping the individual mandate. You can argue that dropping the mandate makes political sense. You can argue that we can add the mandate later. You can argue that the mandate should be restructured. You can even argue that it's morally unacceptable. I'd disagree with most of those arguments, but you can make them in good faith. But fundamentally, you can only get (at most) two out of the following three things: a bill without an individual mandate; affordable health insurance; coverage for people with pre-existing conditions. This is Health Care Economics 101. (In the status quo, we sacrifice coverage for people with pre-existing conditions and arguably affordability, especially for those on the individual market.)
If you want to argue that the Senate's bill is worse than the status quo, or otherwise an unwise choice, without resorting to any of these three arguments, then more power to you; we're in disagreement, but we're having a logically coherent discussion based on different preferences and priors. And if you want to argue that the appropriate progressive reaction to the bill is a lukewarm one, and that it would be premature to celebrate while the bill can and should still be improved, I certainly don't have a problem with that. Implicitly, in fact, that's what a lot of people -- particularly Markos, Howard Dean, the unions, and Darcy Burner but also many others -- have been saying all along. The differences I have with those folks are more semantic than substantive, and I apologize to anyone to whom I've conveyed the wrong impression.
I do want to make clear, though, that I should probably have made some finer points of distinction among those who I have lumped under the broad heading of "kill-billers". There is a healthy debate to be had over the merits of the health care policy, and there's much to be said from an Overton window perspective about a world in which you're having two liberals (me and Darcy Burner) square off against one another for nearly 15 minutes on Hardball, or David Sirota writing the opposing viewpoint to USA Today's editorial position that the health care bill should be passed. Moreover, pressure from the left has been more successful than the pressure-ers might allow. The concessions that liberals won in exchange for giving up the public option are not trivial, and some further improvements will probably be made to the bill in conference.
There have also, however, been people who have been arguing the bill in what I believe to be bad faith -- recycling or inventing a grab-bag of misleading and often self-contradictory talking points against the bill's passage. The progress of the debate over the past week has perhaps been revealing; whereas some advocates, like Markos Moulitsas and Howard Dean, have tended to ratchet down their rhetoric, in some cases even explicitly calling for the bill's passage, others have tended to become more entrenched. By "others", I mean in particular two or three of the writers at the blog FireDogLake. I don't exactly know what's going on over there; as a group, they're whip-smart, and they also reflect a diversity of voices, some of which I have had a problem with and others of which I haven't. But some of the initiatives they've launched over the past week, particularly teaming with Grover Norquist to pursue a conspiracy theory about Rahm Emanuel, threatening to primary Bernie Sanders, and attacking Joe Lieberman's wife, are a little bizarre and not reflective, in my view, of a website that is in the frame of mind right now to have a fact-based debate about the merits of the health care bill.
I don't have a lot of patience for people who are arguing in bad faith. I have spent many thousands of words explaining why the bill is a good one for progressives and why most of the criticisms do not hold up (see in particular here, here and here). When the people to whom I address those arguments -- and again, I'm referring principally to two or three particular people at one particular blog -- are unwilling or unable to engage with them, I don't know how I'm supposed to take their position seriously.
Let me, however, recapitulate three particular sets of arguments that I believe have not been adequately rebutted.
Firstly, I don't think you can make a credible argument that the bill will leave poor people worse off. The bill provides very impressive subsidies to working-class people, in some cases providing them with in excess of $10,000 worth of assistance per year. Perhaps more importantly, as Jonathan Cohn and Jonathan Gruber have outlined, it radically reduces the downside risk to lower-income families because of annual caps on out-of-pocket expenses. And -- something that hasn't gotten enough attention -- the bill increases the Medicaid threshold from 100 percent to 133 percent of poverty; about half of the assistance in the program is devoted to that Medicaid expansion.
Now, you can certainly argue that the bill is not quite generous enough -- I wholeheartedly agree with that position, and hope that the subsidy levels can be improved, particularly in the 133-250 percent of poverty range. There have been some efforts, however, to conflate the maximum amount that people might have to pay under the bill with the amount they will usually pay. In a typical year, a family of four making $50,000 will have to pay about $300 per month in premiums to cover the entire family. That compares with a retail cost, before subsidies, of about $1,000 per month. They'll probably also bear some out-of-pocket expenses. But no matter how bad things get, a family's exposure is limited to about 20 percent of its annual income. That compares with the status quo, in which even an insured family can bear downside risk of as much as 68 percent of its income, and in which an uninsured family has essentially unlimited downside risk. I don't mean to suggest that 20 percent of one's income is pocket change -- especially given how little savings the typical American family has -- but it's potentially the difference between having to cut back on vacations, entertainment and meals out versus filing for bankruptcy or losing one's home.
Secondly, I don't think you can make a credible argument that reconciliation is a smart strategy. You can certainly argue that reconciliation is possible -- meaning, that you might be able to pass something that you call a health care bill via reconciliation. But I've not seen a persuasive case -- or even really an unpersuasive case -- to rebut the argument that what reconciliation would take out of the bill (most notably the exchanges and the protection for people with pre-existing conditions) is better than what it might be able to put back in (a middling public option or Medicare buy-in). Nor have any of the structural problems I've pointed out with the more "creative" versions of reconciliation really been addressed; people have just dropped the argument when I've pointed out these problems. Although, with the Senate's passage of the bill this morning, this has probably become a moot point.
Thirdly, I don't think you can credibly argue that the bill would be improved -- policywise -- by dropping the individual mandate. You can argue that dropping the mandate makes political sense. You can argue that we can add the mandate later. You can argue that the mandate should be restructured. You can even argue that it's morally unacceptable. I'd disagree with most of those arguments, but you can make them in good faith. But fundamentally, you can only get (at most) two out of the following three things: a bill without an individual mandate; affordable health insurance; coverage for people with pre-existing conditions. This is Health Care Economics 101. (In the status quo, we sacrifice coverage for people with pre-existing conditions and arguably affordability, especially for those on the individual market.)
If you want to argue that the Senate's bill is worse than the status quo, or otherwise an unwise choice, without resorting to any of these three arguments, then more power to you; we're in disagreement, but we're having a logically coherent discussion based on different preferences and priors. And if you want to argue that the appropriate progressive reaction to the bill is a lukewarm one, and that it would be premature to celebrate while the bill can and should still be improved, I certainly don't have a problem with that. Implicitly, in fact, that's what a lot of people -- particularly Markos, Howard Dean, the unions, and Darcy Burner but also many others -- have been saying all along. The differences I have with those folks are more semantic than substantive, and I apologize to anyone to whom I've conveyed the wrong impression.
Health Insurance Stocks Decline on News of Senate Passage of Reform Bill; Have Underperformed Market Since Start of Week
@ 10:47 AM
Just the data. The "start of week" comparison is relevant because it was over the weekend that the Democrats secured Ben Nelson's vote, making passage of their health care reform package much more likely.
Senate Passes Historic Health Care Reform Bill on Party Line Vote
@ 9:47 AM
The United States Senate this morning approved their health care legislation 60-39. The bill was approved by 58 Democrats, one socialist, and one Lieberman; all Republicans voted against, except Kentucky's Jim Bunning, who was not present for the vote.
The bill is noteworthy both for the massive commitment it makes -- close to $200 billion per year in public subsidies to poor, sick, and uninsured people -- and also because it was passed in the face of fairly strong public opposition.
As a piece of policy, it is assuredly imperfect, although some of the conservative and liberal criticisms alike have been based on misinformation and half-truths. It is principally a coverage bill, expected to extend insurance to 30 million Americans, rather than a cost-containment one, which would probably have required more fundamental alterations to the status quo's employer-based insurance system.
Ezra Klein and Jonathan Chait have more on the nature of the achievement; David Waldman has more on what lies ahead as the Senate seeks to reconcile its bill with the more liberal version passed by the House.
The bill is noteworthy both for the massive commitment it makes -- close to $200 billion per year in public subsidies to poor, sick, and uninsured people -- and also because it was passed in the face of fairly strong public opposition.
As a piece of policy, it is assuredly imperfect, although some of the conservative and liberal criticisms alike have been based on misinformation and half-truths. It is principally a coverage bill, expected to extend insurance to 30 million Americans, rather than a cost-containment one, which would probably have required more fundamental alterations to the status quo's employer-based insurance system.
Ezra Klein and Jonathan Chait have more on the nature of the achievement; David Waldman has more on what lies ahead as the Senate seeks to reconcile its bill with the more liberal version passed by the House.
12.23.2009
2009's Most Valuable Democrat Is...
@ 7:32 AM
This was supposed to be a brief column on Parker Griffith's defection to the GOP, but it's turned into something a little more ... involved. However, since we've been getting into the weeds a little bit lately on health care policy, I thought it was worth turning our focus back to our traditional political nerdery.What makes a congressman valuable to his party? One fairly intuitive answer is that it's someone who votes with his party on key pieces of legislation more often than a typical congressman from his district would.
I have, therefore, compiled roll call votes on ten key pieces of legislation -- in my opinion, the ten most important pieces of legislation -- that came before the House of Representatives this year. These items are: the stimulus package, the FY 2010 budget, the health care bill, the Stupak Amendment to the health care bill, the jobs bill, the financial regulation package, the cap-and-trade bill, the Fair Pay Act, the Guantanamo detainee transfer vote, and the Matthew Shepard Hate Crimes Prevention Act, which was attached to a defense appropriations bill. This is a little heavy on economic policy versus social policy or foreign policy, but that's how the House's agenda been this year. The Democrats won each of these votes in the House, except for the Stupak Amendment, although several of the policies have yet to pass the Senate.
What I then did was to run a logistic regression for each vote, comparing each representative's vote to his predicted vote based on his district's PVI. For example, a congressman in a district with a PVI of R+6 had a .37 likelihood (37% chance) of voting for the stimulus package. A congressman from such a district who voted for the stimulus package would be rated positively for his vote: specifically he'd receive a score of 1 less .37, or +.63. If the congressman voted against the stimulus package, on the other hand, he'd receive a score of -.37. I then added up each representative's score across all 10 votes.
This is pretty simple, really. Note that the method does not account directly for a congressman's party. This is deliberate. It's not proper, for instance, to compare Stephanie Herseth-Sandlin, the moderate congresswoman from South Dakota, to a typical Democrat, or even a typical Democrat in a conservative district, because if she were to retire, we can't take for granted that a Democrat would replace her. In fact, in South Dakota, she would probably be replaced by a Republican. Is Herseth-Sandlin -- even though she breaks with her party somewhat frequently -- more valuable to the Democrats than a typical congressman from South Dakota would be? That's what we're trying to get at.
Abstentions and votes of present are not counted as either positives or negatives. I also threw out a handful of "liberal no" votes; this is a situation where a congressman opposes a policy from the left when most of the opposition comes from the right. The liberal nos I identified were: Kucinich and Kaptur on financial regulation, Kucinich and Massa on health care, Kucinich, Stark and DeFazio on cap-and-trade, Kucinich on budget, and six representatives (Kucinich, Stark, Jackson Jr., Conyers, Filner and Welch) who objected to the defense language in the hate crimes bill.
Here, then, are the 25 most valuable Democrats, relative to their districts:
The most valuable Democrat is ... Bart Gordon of Tennessee. He voted with his party on each policy except health care and Stupak, in spite of being in a R+13 district. Unfortunately for Democrats, he's retiring.
Gordon is followed by several other veteran members, such as John Spratt of South Carolina and Ike Skelton of Missouri. The key thing to notice is that some of the most conservative Democrats are actually the most valuable. For example, Chet Edwards of Texas voted against his party on health care, cap-and-trade, the jobs bill, and financial regulation, but with the Democrats on the other six policies. But because he hails from an R+20 district, each of those yea votes (and these were yea votes on important policies, not tokens) qualifies as something of a minor miracle. Indeed, 12 of the 25 most valuable Democrats are Blue Dogs.
The highest-scoring Democrat to have voted for all ten policies was Gabrielle Giffords of Arizona, who herself is a Blue Dog -- she votes against the Democrats somewhat frequently on certain issues, but evidently sticks by her party on key votes. The the most valuable member of the Progressive Caucus is Alan Grayson of Florida, who also voted for all 10 policies and comes from a R+2 district.
Herseth-Sandlin, for her part, ranks as the 37th most valuable Democrat, with a score of +3.38.
On the other end of the spectrum are a handful of Democrats who have negative scores. They vote with their party less often than a generic congressman from their district would, even without guaranteeing that the generic congressman is a Democrat. In other words, these are people who potentially deserve a primary challenge -- on average, dumping them would leave the Democrats better off, even if there's some chance that they'd be replaced by a Republican.
Topping the list is Artur Davis of Alabama, who comes from a D+18 district but yet has voted against his party on health care, detainees, cap-and-trade and Stupak. Fortunately, Democrats won't have to primary him -- he's quitting the Congress to run for governor -- but he's doing a fair amount of damage in the meantime. Following Davis is John Barrow of Georgia, who has been the subject of a primary challenge before. Then there's our good friend Parker Griffith, who voted against the Democrats on all ten bills -- fellow Alabaman Bobby Bright (who I'd give 60/40 odds of also joining the Republicans) was the only other Democrat to have done so.
(Brief strategy memo to teabaggers: it's not worth mounting your own primary challenge to Griffith. You'll like him. Trust me.)
Although 12 of the 25 most valuable Democrats are Blue Dogs, so are 8 of the 21 least valuable ones. It's short-sighted to lump the Blue Dogs together; they disagree on as much as they agree, and although some of them are among the most counterproductive Democrats, others are among the most worthwhile.
At the same time, the system can be quite punitive for just one or two votes against the party for a congressman who comes from a sufficiently liberal district. For example, Mike Quigley of IL-5, who replaced Rahm Emanuel in a special election in April, is punished here for a hard-to-explain vote against the Democrats on the jobs bill. Although it's probably not advisable to primary a congressman based on literally just one vote, if the pattern is repeated to any extent in future years such a challenge may become viable; the party should be able to expect something close to 100 percent loyalty from members in districts such as these.
(Note: Marcy Kaptur's vote against financial regulation should be classified as a 'liberal no'. The article has been updated accordingly.)
12.22.2009
A Bit More Context on Health Insurer Stocks
@ 11:32 AM
As has become all too characteristic of arguments from liberal skeptics of the Democrats' health care plan, analyses of the recent increase in share prices of major publicly-traded health care stocks have been misleading.
As we and other analysts have documented, share prices have reacted strongly and unambiguously to news that a public option might or might be part of the Democrats' health care reform plans. This is in line with a report issued in November from Goldman Sachs, which estimated that a health care plan passed with a robust public option -- their so called "bear" case -- should result in a 36 percent drop in the prices of publicly-traded health insurance stocks.
The stock market's reaction to the declining prospects for the public option, however, should not be conflated with its reaction to the anticipated passage of the the public option-less reform proposal currently before the Senate. The same Goldman Sachs report, for instance, projected that a "base" case plan modeled on that adopted by the Senate Finance Committee should result in a slight, 4 percent drop in stock prices. (The plan the Senate is currently considering is somewhat more liberal than that adopted by the Finance Committee, although not necessarily in way that would deterministically affect private insurers.)
In other words, the run-up in share prices in recent weeks reflects investor expectations about the "death" of the public option far more than it reflects investor excitement about the Senate's current plan vis-à-vis the status quo. How do we know this? Because the behavior of share prices since market close on Friday provides for a pretty decent controlled experiment. The public option was already "dead" as of Friday, and indeed had been "dead" since at least early last week. Since close of business on Friday, however, the prospects for public option-less reform have dramatically improved, principally because of the news on Saturday morning that Ben Nelson would vote with his fellow Democrats against a Republican filibuster.
And since the markets re-opened yesterday morning, their reaction to the news has been fairly mild. As of 11:00 AM EST on Tuesday, the share prices for the six largest publicly-traded insurers, weighted by their market capitalization, had increased by 3.2 percent since their Friday afternoon close. Meanwhile, the S&P 500 benchmark had increased by 1.3 percent over the same period. Therefore, the health insurer stocks have overperformed the market by slightly less than 2 percent.
For some people, any amount of additional profit accruing to private insurance companies is unacceptable. And no doubt, the insurers and their equityholders were pleased that the public option, which would have adversely affected industry profits, was killed. This does not mean, however, that the plan currently under consideration is a "giveaway" or a "bailout" to the private insurance industry. In contrast, the market's reaction to this plan has been largely indifferent, and the increase in valuation is dwarfed by the magnitude of public subsidies that would be provided to disadvantaged people under the program.
As we and other analysts have documented, share prices have reacted strongly and unambiguously to news that a public option might or might be part of the Democrats' health care reform plans. This is in line with a report issued in November from Goldman Sachs, which estimated that a health care plan passed with a robust public option -- their so called "bear" case -- should result in a 36 percent drop in the prices of publicly-traded health insurance stocks.
The stock market's reaction to the declining prospects for the public option, however, should not be conflated with its reaction to the anticipated passage of the the public option-less reform proposal currently before the Senate. The same Goldman Sachs report, for instance, projected that a "base" case plan modeled on that adopted by the Senate Finance Committee should result in a slight, 4 percent drop in stock prices. (The plan the Senate is currently considering is somewhat more liberal than that adopted by the Finance Committee, although not necessarily in way that would deterministically affect private insurers.)
In other words, the run-up in share prices in recent weeks reflects investor expectations about the "death" of the public option far more than it reflects investor excitement about the Senate's current plan vis-à-vis the status quo. How do we know this? Because the behavior of share prices since market close on Friday provides for a pretty decent controlled experiment. The public option was already "dead" as of Friday, and indeed had been "dead" since at least early last week. Since close of business on Friday, however, the prospects for public option-less reform have dramatically improved, principally because of the news on Saturday morning that Ben Nelson would vote with his fellow Democrats against a Republican filibuster.
And since the markets re-opened yesterday morning, their reaction to the news has been fairly mild. As of 11:00 AM EST on Tuesday, the share prices for the six largest publicly-traded insurers, weighted by their market capitalization, had increased by 3.2 percent since their Friday afternoon close. Meanwhile, the S&P 500 benchmark had increased by 1.3 percent over the same period. Therefore, the health insurer stocks have overperformed the market by slightly less than 2 percent.
For some people, any amount of additional profit accruing to private insurance companies is unacceptable. And no doubt, the insurers and their equityholders were pleased that the public option, which would have adversely affected industry profits, was killed. This does not mean, however, that the plan currently under consideration is a "giveaway" or a "bailout" to the private insurance industry. In contrast, the market's reaction to this plan has been largely indifferent, and the increase in valuation is dwarfed by the magnitude of public subsidies that would be provided to disadvantaged people under the program.
12.21.2009
Another Left-Right Convergence
@ 2:03 PM
I'm sorry, but debating the kill-billers on the policy merits of their position has become a bit like debating the global warming denialists. The denalists operate by picking and choosing which evidence they cite and what arguments they respond to. Sometimes, they raise fairly good points or expose legitimately sloppy work on behalf of "consensus" scientists. Sometimes, they are being contrarian for contrarianism's sake. And sometimes, they're just throwing a bunch of sh*t at the wall and seeing what sticks, hoping that the underlying truth or lack thereof is lost in the fog of debate.
A case in point is Jon Walker at Firedoglake, who today has a post claiming that removing the individual mandate would "reduce" the CBO score. I place "reduce" in square quotes because "reduce" is not the antonym of worsen, which is what I had argued the removal of the mandate would do to the CBO's scoring of the bill. The CBO is scoring the health care bills along a number of different dimensions, the four most important of which are outlays, revenues, coverage, and impact upon premium costs. The way that analysts and policymakers will react to the score is based on a combination of all four variables. If a bill slightly reduces the government's outlays but substantially reduces the number of uninsured people who would be covered, is its CBO score better? If the bill reduces outlays but also reduces revenues, would that improve its score?
In any event, Walker's claim is questionable on its face. The evidence he cites is from a Paul Krugman column, which I will quote from at some length now:
This is debatable; what isn't debatable is that a plan without a mandate is much less cost-effective. We're not spending $900 billion for the sake of $900 billion; we're doing it to provide people -- a lot of people -- with health insurance. A plan that spent $800 billion instead but covered only 60 percent as many people would not receive a "better" CBO score by any reasonable person's definition. Moreover, the CBO would also score such a policy as substantially increasing premiums for non-subsided taxpayers in the individual market (and perhaps somewhat increasing premiums in the small group market). Is Kent Conrad going to vote for a bill that is scored by the CBO as increasing premiums by, say, 50 percent for these individuals (which will include a lot of farmers in agricultural states like North Dakota)?
But let's be clear here: the kill-billers are not interested in uncovering the truth about health care policy. They're interested in motivating partisans and winning debating points. To the extent that I'm making mistakes, they're honest ones -- and I take comfort in the fact that people who really do know what they're talking about tend to agree with my conclusions, including Gruber, Krugman, and Jacob Hacker (who "invented" the public option). That's not to say that Walker isn't knowledgeable about health insurance economics -- he is probably more knowledgeable than I am -- but he has chosen not to take advantage of that knowledge so as to honestly and objectively evaluate the policy for his readers.
And so long as I'm throwing elbows and casting aspersions, let me point out a few of the arguments that Walker -- and the other kill-billers -- haven't really responded to. Firstly, Walker hasn't responded to my challenge to him to articulate whether he really does think that the Senate's bill is worse than the status quo. In fact, after he chastised me yesterday for attributing that position to the kill-billers, his colleague, Jane Hamsher, today wrote an article entitled 10 reasons to kill the Senate bill, which did not exactly become any more subtle once you got past the headline.
Secondly, Walker hasn't responded to the vast majority of my arguments about why his reconciliation strategies wouldn't work.
Thirdly, he chose to respond to only one or two of the 20 rebuttals that I made to his answers on my "20 questions" post, complaining instead that "Silver’s questions required extremely detailed answers". Well, damn right they did, because the questions were designed to expose who is really being honest with you about health care reform and who is being a sophist.
It would be one thing if it was just little ol' me who Walker was arguing against. But instead his arguments fly in the face of the broad consensus established by health care economists (on the policy questions) and procedural and political experts (on the process and politics questions). One of the reasons I consider myself to be a progressive/liberal/whatever is because, more often than not, I've found progressives to be on the "right" side of the argument. They're more empirical, more "scientific", less dogmatic, less sophistic, less demagogic, less anti-intellectual -- not always by any means but at least some majority of the time. After tangling with the kill-billers, however, I'm beginning to have my doubts.
A case in point is Jon Walker at Firedoglake, who today has a post claiming that removing the individual mandate would "reduce" the CBO score. I place "reduce" in square quotes because "reduce" is not the antonym of worsen, which is what I had argued the removal of the mandate would do to the CBO's scoring of the bill. The CBO is scoring the health care bills along a number of different dimensions, the four most important of which are outlays, revenues, coverage, and impact upon premium costs. The way that analysts and policymakers will react to the score is based on a combination of all four variables. If a bill slightly reduces the government's outlays but substantially reduces the number of uninsured people who would be covered, is its CBO score better? If the bill reduces outlays but also reduces revenues, would that improve its score?
In any event, Walker's claim is questionable on its face. The evidence he cites is from a Paul Krugman column, which I will quote from at some length now:
[M.I.T. economist Jonathan Gruber] finds that a plan without mandates, broadly resembling the Obama plan, would cover 23 million of those currently uninsured, at a taxpayer cost of $102 billion per year. An otherwise identical plan with mandates would cover 45 million of the uninsured — essentially everyone — at a taxpayer cost of $124 billion. Over all, the Obama-type plan would cost $4,400 per newly insured person, the Clinton-type plan only $2,700.This evidence is supposed to support Walker's side of the argument? It says that a bill without an individual mandate costs about 80 percent more per newly insured person. Perhaps, if fewer persons signed up for insurance, the aggregate cost to the government would be lesser. Or perhaps not: as Jon notes, the individual subsidies are structured such that the cost to the taxpayer is roughly fixed, with the government making up the difference in the event of higher premiums. So you'd have to weigh a higher cost per policyholder against fewer policyholders. My impression, precisely because of the way that the individual subsidies are actually structured (as opposed to Gruber's example of Obama's campaign trail plan), is that the "higher cost per policyholder" side would win out, and swamp the "savings" from leaving more people uninsured.
That doesn’t look like a trivial difference to me. One plan achieves more or less universal coverage; the other, although it costs more than 80 percent as much, covers only about half of those currently uninsured.
This is debatable; what isn't debatable is that a plan without a mandate is much less cost-effective. We're not spending $900 billion for the sake of $900 billion; we're doing it to provide people -- a lot of people -- with health insurance. A plan that spent $800 billion instead but covered only 60 percent as many people would not receive a "better" CBO score by any reasonable person's definition. Moreover, the CBO would also score such a policy as substantially increasing premiums for non-subsided taxpayers in the individual market (and perhaps somewhat increasing premiums in the small group market). Is Kent Conrad going to vote for a bill that is scored by the CBO as increasing premiums by, say, 50 percent for these individuals (which will include a lot of farmers in agricultural states like North Dakota)?
But let's be clear here: the kill-billers are not interested in uncovering the truth about health care policy. They're interested in motivating partisans and winning debating points. To the extent that I'm making mistakes, they're honest ones -- and I take comfort in the fact that people who really do know what they're talking about tend to agree with my conclusions, including Gruber, Krugman, and Jacob Hacker (who "invented" the public option). That's not to say that Walker isn't knowledgeable about health insurance economics -- he is probably more knowledgeable than I am -- but he has chosen not to take advantage of that knowledge so as to honestly and objectively evaluate the policy for his readers.
And so long as I'm throwing elbows and casting aspersions, let me point out a few of the arguments that Walker -- and the other kill-billers -- haven't really responded to. Firstly, Walker hasn't responded to my challenge to him to articulate whether he really does think that the Senate's bill is worse than the status quo. In fact, after he chastised me yesterday for attributing that position to the kill-billers, his colleague, Jane Hamsher, today wrote an article entitled 10 reasons to kill the Senate bill, which did not exactly become any more subtle once you got past the headline.
Secondly, Walker hasn't responded to the vast majority of my arguments about why his reconciliation strategies wouldn't work.
Thirdly, he chose to respond to only one or two of the 20 rebuttals that I made to his answers on my "20 questions" post, complaining instead that "Silver’s questions required extremely detailed answers". Well, damn right they did, because the questions were designed to expose who is really being honest with you about health care reform and who is being a sophist.
It would be one thing if it was just little ol' me who Walker was arguing against. But instead his arguments fly in the face of the broad consensus established by health care economists (on the policy questions) and procedural and political experts (on the process and politics questions). One of the reasons I consider myself to be a progressive/liberal/whatever is because, more often than not, I've found progressives to be on the "right" side of the argument. They're more empirical, more "scientific", less dogmatic, less sophistic, less demagogic, less anti-intellectual -- not always by any means but at least some majority of the time. After tangling with the kill-billers, however, I'm beginning to have my doubts.
Insurance Stocks Rise on News of Health Care Deal; What's It Mean?
@ 11:41 AM
As of 11 AM Eastern time, stocks for the six largest publicly-traded health insurance companies have risen by an average 4.49 percent, as weighted by their market capitalization. As the S&P 500 index had gained 1.09 percent as of 11 AM, these stocks have overperformed the market by 3.40 percent. Although some of the gain may reflect unrelated good news in the health sector, it is safe to assume that most of the improvement in prices reflects improved odds of the Senate's health care bill passing.
The 3.40 percent net gain translates into about $3.34 billion in market capitalization added. However, these six stocks do not represent the entirety of the private health insurance market. Collectively, they insure about 106 million people (WellPoint 35 million; United Health 26 million; Aetna 18 million; Humana 12 million; CIGNA 10 million; Coventry 5 million) as compared to a baseline of about 203 million private insurance policies nationwide, or about 52 percent of the total. Accounting for the gain in market value realized by the unaccounted-for private insurance companies would bring the total value added to $6.41 billion.
Additionally, the Senate's health care bill did not go from a 0 to 100 percent chance of passing overnight. Rather, with the news over the weekend that Ben Nelson would support the package, a more reasonable estimation is that it went from having roughly a 50 percent chance of passing to about a 90 percent chance -- an improvement of 40 percent. Thus, the run-up in stock prices today reflects about 40 percent of the overall gain in value to the private insurance companies from the Senate's bill passing. This would mean that the total value added from passage of the bill is $16.04 billion.
That's a lot of money: $16 billion. But relative to the total outlay from the bill, it is fairly small. Over the course of the next ten years, the Senate's bill directs about $447 billion in public subsidies to people for the purchase of private health insurance. (This is in addition to another $400 billion or so in subsidies for the expansion of Medicaid). The $16 billion in value-added, therefore, represents about 3.6 percent of the subsidy. Coincidentally -- and it is mostly a coincidence, since the numbers are not directly comparable for a variety of reasons -- this compares rather neatly to the 3.3 percent profit margin in the health insurance industry overall.
Another way to look at this is that the Senate's bill will add about 17 million nonelderly members to the private insurance companies' enrollment relative to the baseline case, according to the CBO. As about 177 million nonelderly Americans currently have private insurance, this represents a 9.6 percent increase in their customer base.
Conversely, the stocks of these companies have improved by 3.4 percent today, relative to the market. But, as per our previous estimate, today's gain reflects only about 40 percent of the value to these companies of the Senate's bill passing; this implies that the total gain to these companies from passage of the bill (vis-à-vis the status quo) is 8.5 percent.
You should see that these two numbers -- 9.6 percent and 8.5 percent -- are broadly comparable. What this probably implies is that the increase in share prices today reflects an expectation of higher volumes -- but probably not higher profit margins, which are likely to remain fairly low in the industry.
Yet another neat coincidence is that the roughly $16 billion in value-added we estimate that the Senate's bill is worth to private insurers is in broadly the same ballpark as the $20-$25 billion that the weak public option was expected to save the government.
The bottom line is that, by the stock market's estimation, the private health care industry appears as though it will benefit if the Senate enacts its plan. But the benefit -- about $16 billion in discounted cashflows -- is small as compared to the total magnitude of the program, and likely reflects an increase in the size of their customer base rather than any anticipation of higher profit margins.
The 3.40 percent net gain translates into about $3.34 billion in market capitalization added. However, these six stocks do not represent the entirety of the private health insurance market. Collectively, they insure about 106 million people (WellPoint 35 million; United Health 26 million; Aetna 18 million; Humana 12 million; CIGNA 10 million; Coventry 5 million) as compared to a baseline of about 203 million private insurance policies nationwide, or about 52 percent of the total. Accounting for the gain in market value realized by the unaccounted-for private insurance companies would bring the total value added to $6.41 billion.
Additionally, the Senate's health care bill did not go from a 0 to 100 percent chance of passing overnight. Rather, with the news over the weekend that Ben Nelson would support the package, a more reasonable estimation is that it went from having roughly a 50 percent chance of passing to about a 90 percent chance -- an improvement of 40 percent. Thus, the run-up in stock prices today reflects about 40 percent of the overall gain in value to the private insurance companies from the Senate's bill passing. This would mean that the total value added from passage of the bill is $16.04 billion.
That's a lot of money: $16 billion. But relative to the total outlay from the bill, it is fairly small. Over the course of the next ten years, the Senate's bill directs about $447 billion in public subsidies to people for the purchase of private health insurance. (This is in addition to another $400 billion or so in subsidies for the expansion of Medicaid). The $16 billion in value-added, therefore, represents about 3.6 percent of the subsidy. Coincidentally -- and it is mostly a coincidence, since the numbers are not directly comparable for a variety of reasons -- this compares rather neatly to the 3.3 percent profit margin in the health insurance industry overall.
Another way to look at this is that the Senate's bill will add about 17 million nonelderly members to the private insurance companies' enrollment relative to the baseline case, according to the CBO. As about 177 million nonelderly Americans currently have private insurance, this represents a 9.6 percent increase in their customer base.
Conversely, the stocks of these companies have improved by 3.4 percent today, relative to the market. But, as per our previous estimate, today's gain reflects only about 40 percent of the value to these companies of the Senate's bill passing; this implies that the total gain to these companies from passage of the bill (vis-à-vis the status quo) is 8.5 percent.
You should see that these two numbers -- 9.6 percent and 8.5 percent -- are broadly comparable. What this probably implies is that the increase in share prices today reflects an expectation of higher volumes -- but probably not higher profit margins, which are likely to remain fairly low in the industry.
Yet another neat coincidence is that the roughly $16 billion in value-added we estimate that the Senate's bill is worth to private insurers is in broadly the same ballpark as the $20-$25 billion that the weak public option was expected to save the government.
The bottom line is that, by the stock market's estimation, the private health care industry appears as though it will benefit if the Senate enacts its plan. But the benefit -- about $16 billion in discounted cashflows -- is small as compared to the total magnitude of the program, and likely reflects an increase in the size of their customer base rather than any anticipation of higher profit margins.
Could Obama Have Sold the Public Option?
@ 8:25 AM
Wisconsin senator Russ Feingold says the White House wasn't helpful when it came to the public option:
As I've argued here before, I think the defeat of the public option was a fairly robust outcome. That is, I don't think that if you went back in time and made relatively minor, random changes to the parameters the Senate was facing, you'd have wound up with a public option in the bill very often.
The role of Joe Lieberman, for instance, may be somewhat overstated. He may have killed the Medicare buy-in -- but not the public option per se, where there were at least 3-4 strong nos. Nor is it clear that the Medicare buy-in had ever secured 59 votes for passage. Ben Nelson, for instance, was a problem there, as might have been a handful of other Democrats.
And in so far as the more robust versions of the public option went, the Senate was never particularly close. The robust, Rockefeller-type public option failed 8-15 in the Senate Finance Committee and did not have the votes in the House; the semi-robust Schumer-type public option failed 10-13 in the Finance Committee and barely passed the House.
But what about more major changes to the the landscape the Senate was facing? As I argued back in June, I think it would have behooved the White House to take a more publicly and manifestly "hands-on" approach with the health care bill. The political lesson of the stimulus was that outsourcing the salesmanship of key legislation to the Congress, a highly unpopular institution, is likely to result in both less liberal and less popular policy than if the legislation is championed by the White House -- which was a highly popular institution at the time the health care debate began.
The White House, indeed, may have overlearned the lessons of the Clintons, whom conventional wisdom holds took too obstinate a position with the Congress. Or, they might have overestimated the extent which they could "quarantine" the legislation in the Congress. Suppose that the White House anticipated that the health care legislation was going to become somewhat unpopular. OK, so you dump it on the Congress, and let Nancy Pelosi and Harry Reid take the hit, while Obama remains above the fray. The problem with this is that Obama can't remain completely out of the way, and the more you put Congress in charge, the less popular the legislation will have become when you do encounter it again. (Sorry for the crude metaphor, but it's a bit like a sexually transmitted disease that you pass on to a one-night stand, only to catch it again in a new, more virulent form when you sleep with the same person some months later.) In other words, by not willing to spend enough political capital on health care legislation, Obama may in the end have cost himself more political capital, because the negotiating process was dragged out and the final product made less popular.
There are others who would say that this was just the way it was going to have to be -- Congress is the more powerful institution than the Executive by some margin, and it gets pretty territorial, particularly when it comes to legislation as important and complex as health care. And the White House did, after all, end up with a good result -- it appears as though it will get a pretty good health care bill passed, something no Administration has done before.
This counter-argument is perfectly reasonable. But complex processes like this can oftentimes be fairly path dependent, and a White House that had been even marginally more proactive early in the process could have made some difference. I don't think the White House could have done very much, on the other hand, to "save" the public option late in the process.
Of course, we're talking mostly about about how the White House sold -- or failed to sell -- the health care legislation to the public, and not necessarily the substance of the policy. Still, part of the public consists of liberals, and it was clear very early on that the public option was a particular fixation of certain liberals and progressives. If the White House was not willing to put a lot of political capital behind the public option, if it had calculated early on that the defeat of the public option was inevitable, it seems to me that it could nevertheless have done a better job of preparing liberals for the defeat, or selling them on the other virtues of the health care bill. Instead, there was a bit too much reliance on trial balloons and backchannel communication, a poor fit for a perceptive progressive blogosphere that seeks greater honesty, openness and transparency.
I've been fighting all year for a strong public option to compete with the insurance industry and bring health care spending down. I continued that fight during recent negotiations, and I refused to sign onto a deal to drop the public option from the Senate bill. Unfortunately, the lack of support from the administration made keeping the public option in the bill an uphill struggle.Note that Feingold does not say that the White House "killed" the public option; he just says their lack of support was unhelpful.
As I've argued here before, I think the defeat of the public option was a fairly robust outcome. That is, I don't think that if you went back in time and made relatively minor, random changes to the parameters the Senate was facing, you'd have wound up with a public option in the bill very often.
The role of Joe Lieberman, for instance, may be somewhat overstated. He may have killed the Medicare buy-in -- but not the public option per se, where there were at least 3-4 strong nos. Nor is it clear that the Medicare buy-in had ever secured 59 votes for passage. Ben Nelson, for instance, was a problem there, as might have been a handful of other Democrats.
And in so far as the more robust versions of the public option went, the Senate was never particularly close. The robust, Rockefeller-type public option failed 8-15 in the Senate Finance Committee and did not have the votes in the House; the semi-robust Schumer-type public option failed 10-13 in the Finance Committee and barely passed the House.
But what about more major changes to the the landscape the Senate was facing? As I argued back in June, I think it would have behooved the White House to take a more publicly and manifestly "hands-on" approach with the health care bill. The political lesson of the stimulus was that outsourcing the salesmanship of key legislation to the Congress, a highly unpopular institution, is likely to result in both less liberal and less popular policy than if the legislation is championed by the White House -- which was a highly popular institution at the time the health care debate began.
The White House, indeed, may have overlearned the lessons of the Clintons, whom conventional wisdom holds took too obstinate a position with the Congress. Or, they might have overestimated the extent which they could "quarantine" the legislation in the Congress. Suppose that the White House anticipated that the health care legislation was going to become somewhat unpopular. OK, so you dump it on the Congress, and let Nancy Pelosi and Harry Reid take the hit, while Obama remains above the fray. The problem with this is that Obama can't remain completely out of the way, and the more you put Congress in charge, the less popular the legislation will have become when you do encounter it again. (Sorry for the crude metaphor, but it's a bit like a sexually transmitted disease that you pass on to a one-night stand, only to catch it again in a new, more virulent form when you sleep with the same person some months later.) In other words, by not willing to spend enough political capital on health care legislation, Obama may in the end have cost himself more political capital, because the negotiating process was dragged out and the final product made less popular.
There are others who would say that this was just the way it was going to have to be -- Congress is the more powerful institution than the Executive by some margin, and it gets pretty territorial, particularly when it comes to legislation as important and complex as health care. And the White House did, after all, end up with a good result -- it appears as though it will get a pretty good health care bill passed, something no Administration has done before.
This counter-argument is perfectly reasonable. But complex processes like this can oftentimes be fairly path dependent, and a White House that had been even marginally more proactive early in the process could have made some difference. I don't think the White House could have done very much, on the other hand, to "save" the public option late in the process.
Of course, we're talking mostly about about how the White House sold -- or failed to sell -- the health care legislation to the public, and not necessarily the substance of the policy. Still, part of the public consists of liberals, and it was clear very early on that the public option was a particular fixation of certain liberals and progressives. If the White House was not willing to put a lot of political capital behind the public option, if it had calculated early on that the defeat of the public option was inevitable, it seems to me that it could nevertheless have done a better job of preparing liberals for the defeat, or selling them on the other virtues of the health care bill. Instead, there was a bit too much reliance on trial balloons and backchannel communication, a poor fit for a perceptive progressive blogosphere that seeks greater honesty, openness and transparency.
12.20.2009
The Insidious Myth of Reconciliation
@ 2:27 PM
Jon Walker at has a new post up at Firedoglake entitled thusly: The Insidious Myth Of The Progressive Bill Killers. The post argues that wonks like me have greatly mischaracterized the position of the bill-killers. They don't really think the bill is worse than nothing, Jon says. They just think a better bill can be achieved through reconciliation or some other filibuster-breaking strategy.
Really? I appreciate that Jon is injecting some subtlety into the debate. It's been sorely lacking from most (although not all) of the kill-billers, who have unironically grabbed from a patchwork of right-wing frames to make their case. If there's been a post from Jane Hamsher saying: "You know, actually this bill represents a lot of progress in comparison to the status quo, but it's not all we hoped for, and I think we can afford to gamble a bit on making it better via reconciliation", then I must have missed it. Certainly, this more nuanced case has been made by some players in the debate -- it's very close to the position statements put out by the unions, for example -- but it's generally not the one we've seen from the activist/online left, which is the group that I and others have been specifically critical of.
But just so that there are no further misunderstandings, I would join Jon in asking for everyone involved in this debate to state their preferences explicitly. You can see mine in the graphic on the right. I think that the Senate's bill is quite a lot better than the status quo, and quite a lot worse than the ideal. I also think that the inclusion of a weak public option -- which is really all that was on the table -- would have made very little difference. A robust public option would have made more impact, but is still a long ways from the optimum policy.
You might not agree with my preferences -- although they have been formulated very carefully, over many months of study, and in (mostly indirect) consultation with people who know more about health care reform than I do. But, that's not really the point: I've stated my preferences very clearly. The kill-billers haven't. If the kill-billers indeed think that the Senate's bill is materially better than the status quo, it is incumbent upon them to say so. And if they think the bill is in fact no better than the status quo or even somewhat worse, then it is incumbent upon them to explicitly reassert that too.
Jon may be right that most of the kill-billers have also advocated the use of reconciliation or some other end-around to a bill passed under regular order. But that position reveals nothing about their preferences for the Senate bill vis-à-vis the status quo. And it's this preference that matters, because success via reconciliation is very unlikely.
Jon outlines four variants of such a procedure in his post, each of which I will address below.
As I've argued before, Strategy 2 is liable to be a bad idea on its face: even if the reconciliation attempt were successful, it would almost certainly result in worse policy than the Senate's bill (and perhaps even worse than the status quo):
If you're Harry Reid and want to apply such a strategy, the first thing you'd have to decide is whether to pass the reconciliation bill first or the regular order bill first. Let's consider each alternative:
Pass reconciliation bill first. If this is your approach, then what likely happens is that you won't be able to pass the second part of the bill: Nelson, Lieberman et. al. will be pissed that you've worked to circumvent them, and will instantly promise to filibuster the portions of the bill that would be adopted via regular order. Jon claims you could work around this:
I don't see how attaching the provisions to unrelated legislation like a defense bill would make things any better. After all, it would be the liberals -- not the conservatives -- who would be responsible for having weighted down the "must pass" defense legislation. Public opinion would be overwhelmingly against the liberals for holding the defense bill hostage and they would lose the stare-down.
Pass regular order bill first. This is the strategically sounder approach, since it clears the higher, 60-vote hurdle first before things tend to devolve into the inherently unpredictable reconciliation process. Still, I don't think it overcomes the problem. If you stated explicitly that this was what you were planning to do, it would seem that Ben Nelson, knowing exactly what would come next, would withhold his cloture vote from the regular order portion of the bill.
Perhaps, rather, the idea is to "surprise" the Senate by unexpectedly introducing additional provisions under reconciliation once you've already got the main portion of the bill passed. Does this sound attractive to you? Well then, the best thing to do would be to pass the bill as is now, since that is the first step in the strategy. To repeat: the most promising application of the split-bill/reconciliation strategy involves passing what you can now -- not killing it.
With that said, I would still not consider this an especially promising path. You'd have essentially three separate sets of objections to overcome. Firstly, there would be the senators who objected to the language of the reconciliation bill on its face. This would probably be more than just Nelson/Lieberman/Lincoln, et. al. if you wanted any sort of robust public option. The Schumer public option, for instance, which is comparable to the House's version, failed 10 to 13 in the Senate Finance Committee, losing the votes of Kent Conrad and Max Baucus in addition to Blanche Lincoln. That might already put you close to, or perhaps even shy of, the 50 vote threshold. Secondly, you'd have objections from process hawks, like Robert Byrd and perhaps Russ Feingold, who disagreed with the "creative" use of the reconciliation tactic. And thirdly, you'd have some unknown number of senators who felt tricked and would withhold their votes out of annoyance.
In my estimation, getting something like the House's version of the public option would be distinctly unlikely. A Medicare buy-in or a watered-down public option might be achieved, but is somewhat iffy. But to reiterate: if you want to take this gamble, your strategy is to pass the bill now and not to reject it.
This is Jon's next potential strategy:
Even if you could somehow overcome this barrier, you'd still be taking a huge risk. If you deliberately pass a broken bill, there are two ways to rectify that: you can fix it -- or you can kill it. Which of those two outcomes is more likely I have no idea, and neither does anybody else.
This is Jon's last option:
* * *
The failure to use reconciliation does not reveal any lack of courage on behalf of Harry Reid or the White House. It is, rather, a reflection of reality. The more unadorned, straightforward versions of reconciliation -- like Strategy 2 -- might not work and would probably result in objectively worse policy than the bill that the Senate is considering now. The more exotic versions, like Strategy 3, might or might not result in better policy, but almost certainly wouldn't work.
Nor have we discussed the political fallout from using reconciliation, which in my view could be enormous:
My impressions of the reconciliation process, just like my impressions of the health care bill itself, are formed based on a combination of extensive reading in an area in with which I'm not so familiar (Senate procedure), coupled the expertise I've developed in politics and public opinion. It's a view that reflects the "consensus" that most others who have earnestly considered the issue have come to.
Maybe my view -- the broad consensus view -- is wrong. I'm sure the kill-billers will be ready to accuse me of being trapped within the confines of Beltway conventional wisdom (this would be an odd accusation, since 538 is a completely independent blog, is based in Brooklyn rather than Washington, and does not rely to any material extent on "insider" access). But I have not seen a robust and persuasive attempt to rebut the arguments that I and others have made about reconciliation. And I think, indeed, it forms something of a crutch: a convenient excuse not to have to commit to the question of whether the Senate's bill really is worse than the status quo, and a vehicle to direct one's anger at the White House, Joe Lieberman, Ben Nelson, and the rest of the usual suspects, instead of getting beyond it and working to facilitate the best policy.
Really? I appreciate that Jon is injecting some subtlety into the debate. It's been sorely lacking from most (although not all) of the kill-billers, who have unironically grabbed from a patchwork of right-wing frames to make their case. If there's been a post from Jane Hamsher saying: "You know, actually this bill represents a lot of progress in comparison to the status quo, but it's not all we hoped for, and I think we can afford to gamble a bit on making it better via reconciliation", then I must have missed it. Certainly, this more nuanced case has been made by some players in the debate -- it's very close to the position statements put out by the unions, for example -- but it's generally not the one we've seen from the activist/online left, which is the group that I and others have been specifically critical of.But just so that there are no further misunderstandings, I would join Jon in asking for everyone involved in this debate to state their preferences explicitly. You can see mine in the graphic on the right. I think that the Senate's bill is quite a lot better than the status quo, and quite a lot worse than the ideal. I also think that the inclusion of a weak public option -- which is really all that was on the table -- would have made very little difference. A robust public option would have made more impact, but is still a long ways from the optimum policy.
You might not agree with my preferences -- although they have been formulated very carefully, over many months of study, and in (mostly indirect) consultation with people who know more about health care reform than I do. But, that's not really the point: I've stated my preferences very clearly. The kill-billers haven't. If the kill-billers indeed think that the Senate's bill is materially better than the status quo, it is incumbent upon them to say so. And if they think the bill is in fact no better than the status quo or even somewhat worse, then it is incumbent upon them to explicitly reassert that too.
Jon may be right that most of the kill-billers have also advocated the use of reconciliation or some other end-around to a bill passed under regular order. But that position reveals nothing about their preferences for the Senate bill vis-à-vis the status quo. And it's this preference that matters, because success via reconciliation is very unlikely.
Jon outlines four variants of such a procedure in his post, each of which I will address below.
1. Try to pass a version of the House bill using reconciliation. Take provisions removed by the Byrd rule and pass them by attaching them whole or piecemeal to the next few big defense and/or agricultural appropriations bills.The first two strategies that Jon puts forward are really one in the same. Both strategies try to pass the parts of the bill that could overcome the Byrd rule via reconciliation; Strategy 1 then tries to pass the remaining provisions as a rider to another, unrelated bill whereas Strategy 2 is agnostic about what to do next.
2. Use reconciliation to pass a bill with only Byrd-rule proof provisions. This would include an expansion of Medicaid, expansion of CHIP, early Medicare buy-in, public option, possibly employer mandate, etc.
As I've argued before, Strategy 2 is liable to be a bad idea on its face: even if the reconciliation attempt were successful, it would almost certainly result in worse policy than the Senate's bill (and perhaps even worse than the status quo):
[The] overwhelming opinion among [process wonks] is that, although the public option might survive the reconciliation process, things like the ban on denying coverage for people with pre-existing conditions, the additional regulations on insurers, and the creation of the health insurance exchanges would almost certainly not. Plus, the bill would have to be deficit neutral over five years and would be subject to renewal every five years.I haven't really seen any attempt at a rebuttal to this argument. Thus, some sort of a bill splitting strategy is needed to pass the remaining provisions, such as Jon's Strategy 1.
If your lone objective were to end up with something that you could call a public option, then yes -- reconciliation offers some possibility of that. But I don't see how you're likely, on balance, to wind up with a better bill -- losing the guaranteed issue provision alone would probably outweigh the inclusion of a public option.
If you're Harry Reid and want to apply such a strategy, the first thing you'd have to decide is whether to pass the reconciliation bill first or the regular order bill first. Let's consider each alternative:
Pass reconciliation bill first. If this is your approach, then what likely happens is that you won't be able to pass the second part of the bill: Nelson, Lieberman et. al. will be pissed that you've worked to circumvent them, and will instantly promise to filibuster the portions of the bill that would be adopted via regular order. Jon claims you could work around this:
I dare all 40 Republicans plus one conservative Democrat to vote for a stand-alone provisions that would let insurance companies continue to exclude people for having pre-existing conditions. If they are foolish enough to vote against extremely popular insurance regulation as stand-alone provisions they will face the mother of all attacked ads in 2010.There are four problems with this. Firstly, while some provisions like guaranteed issue would be popular, others like the formation of the exchanges would be bureaucratic banalities that the public would have a hard time getting excised about. Secondly, the senators in question have already demonstrated a willingness to vote against other popular provisions of the legislation, particularly including the public option. Thirdly, the use of the reconciliation procedure would be unpopular and would sour public opinion on the balance of the bill. And fourthly, senators like Ben Nelson have a lot of incentive to preserve the filibuster -- in a 50 + 1 environment, they would no longer be the veto points, and would lose most of their power. So they'd be very disinclined to do anything that even tacitly weakens the power of filibuster.
I don't see how attaching the provisions to unrelated legislation like a defense bill would make things any better. After all, it would be the liberals -- not the conservatives -- who would be responsible for having weighted down the "must pass" defense legislation. Public opinion would be overwhelmingly against the liberals for holding the defense bill hostage and they would lose the stare-down.
Pass regular order bill first. This is the strategically sounder approach, since it clears the higher, 60-vote hurdle first before things tend to devolve into the inherently unpredictable reconciliation process. Still, I don't think it overcomes the problem. If you stated explicitly that this was what you were planning to do, it would seem that Ben Nelson, knowing exactly what would come next, would withhold his cloture vote from the regular order portion of the bill.
Perhaps, rather, the idea is to "surprise" the Senate by unexpectedly introducing additional provisions under reconciliation once you've already got the main portion of the bill passed. Does this sound attractive to you? Well then, the best thing to do would be to pass the bill as is now, since that is the first step in the strategy. To repeat: the most promising application of the split-bill/reconciliation strategy involves passing what you can now -- not killing it.
With that said, I would still not consider this an especially promising path. You'd have essentially three separate sets of objections to overcome. Firstly, there would be the senators who objected to the language of the reconciliation bill on its face. This would probably be more than just Nelson/Lieberman/Lincoln, et. al. if you wanted any sort of robust public option. The Schumer public option, for instance, which is comparable to the House's version, failed 10 to 13 in the Senate Finance Committee, losing the votes of Kent Conrad and Max Baucus in addition to Blanche Lincoln. That might already put you close to, or perhaps even shy of, the 50 vote threshold. Secondly, you'd have objections from process hawks, like Robert Byrd and perhaps Russ Feingold, who disagreed with the "creative" use of the reconciliation tactic. And thirdly, you'd have some unknown number of senators who felt tricked and would withhold their votes out of annoyance.
In my estimation, getting something like the House's version of the public option would be distinctly unlikely. A Medicare buy-in or a watered-down public option might be achieved, but is somewhat iffy. But to reiterate: if you want to take this gamble, your strategy is to pass the bill now and not to reject it.
This is Jon's next potential strategy:
3. Pass the bill with no individual mandate for right now. Let progressives hold the individual mandate hostage until some point between now and 2015 (when the individual mandate goes into effect), and they will trade it in exchange for better reforms. There is zero need to have the individual mandate just sitting on the books unused for the next few years.This is creative and daring -- but I don't see how it works. The most obvious barrier is that you probably could not get 60 votes for a bill without an individual mandate. Why? Because such a bill, with good reason, will be scored terribly by the CBO. You would definitely have very high premiums and would probably have a bill that was no longer deficit-neutral (the government is on the hook for some of those higher premiums to the extent that it's paying subsidies). Is Ben Nelson going to vote for a bill with a $1.1 trillion price tag that raises premiums by 30 percent? Is Kent Conrad? Is Claire McCaskill? There's almost no way. And the "we'll fix it later" argument won't impress them, since they think the bill is "fixed" as is!
Even if you could somehow overcome this barrier, you'd still be taking a huge risk. If you deliberately pass a broken bill, there are two ways to rectify that: you can fix it -- or you can kill it. Which of those two outcomes is more likely I have no idea, and neither does anybody else.
This is Jon's last option:
4. Force Harry Reid to use the “nuclear option” like former Senator Bill Frist threatened to do.He concedes that this is a long shot. Senators generally like the filibuster. Attempts to reform it have tended to go down overwhelmingly -- by a 19 to 76 margin, for instance, on a bill introduced by Joe Lieberman (!) in 1994. That probably paints too pessimistic a picture -- the Republicans, after all, came fairly close to exercising the nuclear option in 2005. But there are a couple of conditions that would need to be in place to make winning the "nuclear war" at all likely, neither of which apply here. Firstly, you'd want to use the process on a bill that was fairly popular with the public, which health care decidedly is not. (Financial reform might be a better candidate.) Secondly, you'd need unbending, rock-solid consensus among at least 50 senators on the underlying policy you were trying to pass; you don't have that on the more robust versions of public option.
* * *
The failure to use reconciliation does not reveal any lack of courage on behalf of Harry Reid or the White House. It is, rather, a reflection of reality. The more unadorned, straightforward versions of reconciliation -- like Strategy 2 -- might not work and would probably result in objectively worse policy than the bill that the Senate is considering now. The more exotic versions, like Strategy 3, might or might not result in better policy, but almost certainly wouldn't work.
Nor have we discussed the political fallout from using reconciliation, which in my view could be enormous:
The Bush tax cuts were popular; health care is not. Moreover, the filibuster actually polls well, so use of [reconciliation] would be unpopular. If you intersect an unpopular policy with an unpopular process, I don't know what you're going to get, but the downside risk would seem to be fairly profound -- as in, I'd take even money at that point that the Democrats would lose the House.None of this is to say that the reconciliation strategies are impossible. They might work. But the hurdles are much more significant than what Jon has implied, and reconciliation might also "work" but produce a worse, perhaps much worse, policy outcome. Even if one were willing to ignore the political fallout, it would be a fairly poor strategy. And when the consequences for the Democrats' electoral fortunes are taken into account -- as well as their compromised ability to pass policies like a jobs bill and financial reform next year -- it seems like a very poor risk.
Also, tax cuts are a relatively straightforward application of the reconciliation process -- health care is not, and the resulting procedural debate would last weeks if not months, giving the public plenty of time to stew over it.
My impressions of the reconciliation process, just like my impressions of the health care bill itself, are formed based on a combination of extensive reading in an area in with which I'm not so familiar (Senate procedure), coupled the expertise I've developed in politics and public opinion. It's a view that reflects the "consensus" that most others who have earnestly considered the issue have come to.
Maybe my view -- the broad consensus view -- is wrong. I'm sure the kill-billers will be ready to accuse me of being trapped within the confines of Beltway conventional wisdom (this would be an odd accusation, since 538 is a completely independent blog, is based in Brooklyn rather than Washington, and does not rely to any material extent on "insider" access). But I have not seen a robust and persuasive attempt to rebut the arguments that I and others have made about reconciliation. And I think, indeed, it forms something of a crutch: a convenient excuse not to have to commit to the question of whether the Senate's bill really is worse than the status quo, and a vehicle to direct one's anger at the White House, Joe Lieberman, Ben Nelson, and the rest of the usual suspects, instead of getting beyond it and working to facilitate the best policy.
Bruce Tix or 2.4 Birds in the Bush?
@ 11:16 AM
I’ve been trying to weigh the healthcare reform arguments of those who advocate supporting the current bill (like Nate, who I obviously respect), and those who want to kill it and hold out for something better (like Jane Hamsher, who I also respect). And the other night, two classic examples from rational choice theory suddenly came to mind.
The first: Let’s say you have a front-row ticket to a Bruce Springsteen concert, for which you paid $200, but on the night of the show a scalper outside the venue offers you $1,000 for it. You love Bruce, but you also need a new laptop, so you sell it. Then, walking toward the parking lot, you spot another front-row ticket on the ground. Nobody is around to claim it, so you head back toward the arena, where the same scalper again offers you $1,000 for the second ticket. Do you sell it or go to the show?
From a purely rational choice standpoint, you should sell again. Moments earlier, you valued a front-row ticket less than $1,000. (In fact, you paid $200 for the first ticket, so you actually valued it less than $800.) To value an identical ticket, mere moments later, more than $1,000 is irrational, right? Yet, many people would go to the show with that second ticket: It’s a "freebie," you still love Bruce, and something about having already profited $800 from the previous sale makes the second $1,000 offer seem less attractive.
The second: You’re on a game show and the host offers you a choice of a guaranteed $500 in cash or a 50/50 chance to win $1,200. The expected value of the first option is $500, whereas the expected value of the second is $600 (half $1,200), meaning the latter is more preferable. Yet people typically opt for the guaranteed payout: They prefer a “bird in hand” instead of two—or in this case, 2.4—in the bush, so to speak. But again, taking the cash in hand is technically the less "rational" option.
Now, these classic rational choice scenarios are not perfectly analogous to a complex policy decision like the biggest health care reform bill in almost half a century. But I submit that opponents of the current legislative compromise are similar to the ticket-finders in the first scenario, whereas proponents of supporting it are like the game show participants in the second. Let me explain.
After the disaster years of the Bush presidency and the awe-inspiring, historic presidential campaign of Barack Obama, progressives of every stripe were excited and emboldened. Nancy Pelosi expanded her majorities in 2008 and, following the Arlen Specter’s 2009 switch, Harry Reid gained his (supposedly) filibuster-proof majority. The sky--or something damn sure close to it--seemed the limit. This was that once-in-two-generations moment long-frustrated progressives had been anticipating for years. Settling for anything less than “real” reform would be a sell-out for progressives, and no price could buy their dreams away. Like the ticket-finder who knows taking the $1,000 is the sensible thing to do, but who has been waiting a long time for concert night to arrive, taking that deal just doesn’t feel right.
Supporters of the compromise are like the game show contests. They emphasize the value of the sure thing, the guaranteed pay out. They say: Take the bird in hand, even if there are two, maybe more, in the bush. Sure, it’s a lower expected payout than the other possibilities--and certainly the originally-considered (public) options--that were on offer. But, they point out, you eliminate the risk of getting nothing done, making zero progress, if you take the bill as it has been brokered. And there are 30 million uninsured and underinsured Americans who desperately need that bird in hand, even if they--and we--might make out better by taking a chance on a better overall deal at some future point.
That said, you can understand the rationality of each side’s arguments—and just as easily see why each thinks the other side is making an irrational choice.
Me? I’m inclined to take the bird in hand. Why?
Well, for one thing, I’m not sure the prospects are 50/50 for getting a bill that includes everything that’s in there right now, plus a Medicare buy-in, or a public option, or prescription drug importation, or the abortion provisions Ben Nelson just eliminated in exchange for his vote--or some combination thereof. And, moving forward, as the unemployment situation forces the president, Congress and the rest of the country to shift their focus to job creation, the possibilities for a healthcare compromise will diminish. In other words, there are not two (or more) birds in the bush.
The first: Let’s say you have a front-row ticket to a Bruce Springsteen concert, for which you paid $200, but on the night of the show a scalper outside the venue offers you $1,000 for it. You love Bruce, but you also need a new laptop, so you sell it. Then, walking toward the parking lot, you spot another front-row ticket on the ground. Nobody is around to claim it, so you head back toward the arena, where the same scalper again offers you $1,000 for the second ticket. Do you sell it or go to the show?
From a purely rational choice standpoint, you should sell again. Moments earlier, you valued a front-row ticket less than $1,000. (In fact, you paid $200 for the first ticket, so you actually valued it less than $800.) To value an identical ticket, mere moments later, more than $1,000 is irrational, right? Yet, many people would go to the show with that second ticket: It’s a "freebie," you still love Bruce, and something about having already profited $800 from the previous sale makes the second $1,000 offer seem less attractive.
The second: You’re on a game show and the host offers you a choice of a guaranteed $500 in cash or a 50/50 chance to win $1,200. The expected value of the first option is $500, whereas the expected value of the second is $600 (half $1,200), meaning the latter is more preferable. Yet people typically opt for the guaranteed payout: They prefer a “bird in hand” instead of two—or in this case, 2.4—in the bush, so to speak. But again, taking the cash in hand is technically the less "rational" option.
Now, these classic rational choice scenarios are not perfectly analogous to a complex policy decision like the biggest health care reform bill in almost half a century. But I submit that opponents of the current legislative compromise are similar to the ticket-finders in the first scenario, whereas proponents of supporting it are like the game show participants in the second. Let me explain.
After the disaster years of the Bush presidency and the awe-inspiring, historic presidential campaign of Barack Obama, progressives of every stripe were excited and emboldened. Nancy Pelosi expanded her majorities in 2008 and, following the Arlen Specter’s 2009 switch, Harry Reid gained his (supposedly) filibuster-proof majority. The sky--or something damn sure close to it--seemed the limit. This was that once-in-two-generations moment long-frustrated progressives had been anticipating for years. Settling for anything less than “real” reform would be a sell-out for progressives, and no price could buy their dreams away. Like the ticket-finder who knows taking the $1,000 is the sensible thing to do, but who has been waiting a long time for concert night to arrive, taking that deal just doesn’t feel right.
Supporters of the compromise are like the game show contests. They emphasize the value of the sure thing, the guaranteed pay out. They say: Take the bird in hand, even if there are two, maybe more, in the bush. Sure, it’s a lower expected payout than the other possibilities--and certainly the originally-considered (public) options--that were on offer. But, they point out, you eliminate the risk of getting nothing done, making zero progress, if you take the bill as it has been brokered. And there are 30 million uninsured and underinsured Americans who desperately need that bird in hand, even if they--and we--might make out better by taking a chance on a better overall deal at some future point.
That said, you can understand the rationality of each side’s arguments—and just as easily see why each thinks the other side is making an irrational choice.
Me? I’m inclined to take the bird in hand. Why?
Well, for one thing, I’m not sure the prospects are 50/50 for getting a bill that includes everything that’s in there right now, plus a Medicare buy-in, or a public option, or prescription drug importation, or the abortion provisions Ben Nelson just eliminated in exchange for his vote--or some combination thereof. And, moving forward, as the unemployment situation forces the president, Congress and the rest of the country to shift their focus to job creation, the possibilities for a healthcare compromise will diminish. In other words, there are not two (or more) birds in the bush.
What Republicans Can Learn from French Communists
@ 10:00 AM
The French Communist Party (Parti communiste français, PCF ) was once the backbone of the left in French politics and a major power in national elections. While the PCF remains an important power broker among the center-left and an ocassional partipant in left-side governments, the party's vote share has plummeted in the last 25 years.
PCF's vote share from the elections to the French National Assembly in 1978 and the European elections of 1979 was nearly 21 percent, while in the most recent parliamentary elections, 2002 and 2007, PCF received less than 5 percent of the national vote.
The above chart shows national legislative elections among the larger left-side parties in France (there are several other small ones, like the Radical Left) since 1973. Among the left, the Communists have been taken over by the Socialist party and have been eroded by the Greens.
At the same time, the French left as a whole has struggled in more recent years, with the right holding the presidency since 1995 and the national assembly since 2002. In fact, in the 2002 Presidential election, decided by run-off, center-right candidate Jacques Chirac face not the Socialist Party's Lionel Jospin in the runoff, but instead far-right candidate Jean-Marie Le Pen -- to the enormous embarrassment of the left.
The ails of the French Communists -- some of which apply to the French left as a whole -- have been widely discussed in France and among the academic community. Five major problems have not adequately been dealt with by the PCF:
1. Changing demographics: With it's base among rural agriculturalists and blue-collar workers, the party's base is shrinking as France becomes more urban and less dependant on manufacturing. While both areas remain important for the country, they are generally declining as a proportion of the electorate.
2. Loss of connection to the past: The French Communists were very important to the country during and after World War II. Sometimes called "the Resistance generation," these past leaders, activists and voters have been replaced with the boomer generation, who have little nostalgia for the old days. Young, student voters, who are the bread and butter of French activism of this sort, are regularly pulled towards other parties (Radical left, Greens, etc.)
3. Over-connection with rigid principles: The Communists, to this day, regularly argue that those in the "center-left" have corrupted their principles for the prize of power. As well, the PCF now accepts that for decades, the Communists were overly reliant on Moscow for ideas, vetting of people, etc., as the Soviets were rapidly losing support and reputation in France.
4. Poor leadership: The bottom line regarding leadership is that many PCF leaders were out of touch with their base and the French public at large.
5. Refusal to move towards the center: Linked with point 3, the Communists have had a very tough time moving to the center (even the center-left). As a result, many voters would sit elections out or defect to the Socialists or Greens over time. This problem can been seen most effectively with the second Chirac election (2002), where the Socialist candidate was outvoted by the Front National's Le Pen because of the highly polarized and fractured left (the communist movement had more than 5 candidates, who collectively took more than 20 percent, as compared to the Socialists' 16.2 percent).
The communists have been most successful when it participated in a broad left-side coalition, such as the 1997-2002 "Plural Left" coalition under Lionel Jospin, which roundly defeated the right (320 seats to 251 seats). Similarly, the Presidency of Francois Mitterand (the last President from the left side), was elected when the vote from the left was far more centralized (he received 26 percent in the first round in 1981, and 34 percent in 1988).
As alluded to by the title, there are clear parallels between the French Communists and the right-wing of the Republican party as it stands today. The cautionary tale that fragmentation equals marginalization has been echoed far and wide by political observers, as the moderate and more radical wings of the American right fight for supremacy in the Republican party.
Several elements of the comparison are not an exact fit, for example that France is a pluralistic, parliamentary democracy in terms of the legislature, whereas the US is a two-party system with completely district-based voting. However, the conceptual issues fit quite snugly.
Therefore, below are a few concerns for the factions of the American right, in terms of political positioning and avoiding overly-damaging fragmentation. The following categories have certain overlaps, as any political grouping analysis does, however, it hopefully captures the main ideas.
1. Pro-Business Community: The biggest threat here is that Republicans become split in a time of economic downturn between the haves and the have-nots. The U.S. has a largely pro-business orientation and this interest group has several of the most influential lobbying shops in the country. However, the perception that the big-money interests are overwhelming and subverting "Main Street" has pervaded since the financial crisis.
2. Social Conservatives: Hot-button issues have long gotten social conservatives out to vote, but some from this faction have felt marginalized and taken for granted by the Republican establishment. At the same time, though the country remains polarized on two big ones, abortion and gay marriage, these issues are shifting away from being the undeniable motivators they once were.
3. Populist and Tea Party-ers: Drawing from the long traditional of challenging government in the U.S., the Tea Party people are both empowered and endangered by their outside-the-mainstream approach. Basically, they will have to integrate again with the establishment, whether by breaking it down and building it up in their image or by moving towards the center in terms of policy and ideology. The Tea Party crew is likely the group most at risk of going the way of the Communists in France -- loud, motivated, but systematically out of power.
4. Neoconservatives & Hawks: The Neocons, led in 2009 by Dick Cheney's high profile interventions, have been loudly protesting the Obama foreign policy approach. Some have called the Bush Doctrine, which epitomized many of the Neo-conservative and Hawkish ideas, a discredited approach, while others have argued that it will be born out in the future analysis. While there are many foreign policy Hawks in government and Congress today, many felt burned by the Bush approach.
All told, the recent history of multi-party democracy, whether in Europe or North America, has rewarded big-tent parties and coalitions, rather than strongly ideological movements. While they gain steam in the short term, radical movements have usually fizzled out, because support for a change of political system is not there. Even in France, where there is ocassional discussion of a Sixth Republic (changes to the system), the public has not been interested in truly radical action. So, without a movement to the mainstream center, on the fringes you will remain.
---
Renard Sexton is FiveThirtyEight's international columnist and is based in Geneva, Switzerland. He can be contacted at sexton538@gmail.com
PCF's vote share from the elections to the French National Assembly in 1978 and the European elections of 1979 was nearly 21 percent, while in the most recent parliamentary elections, 2002 and 2007, PCF received less than 5 percent of the national vote.
The above chart shows national legislative elections among the larger left-side parties in France (there are several other small ones, like the Radical Left) since 1973. Among the left, the Communists have been taken over by the Socialist party and have been eroded by the Greens.At the same time, the French left as a whole has struggled in more recent years, with the right holding the presidency since 1995 and the national assembly since 2002. In fact, in the 2002 Presidential election, decided by run-off, center-right candidate Jacques Chirac face not the Socialist Party's Lionel Jospin in the runoff, but instead far-right candidate Jean-Marie Le Pen -- to the enormous embarrassment of the left.
The ails of the French Communists -- some of which apply to the French left as a whole -- have been widely discussed in France and among the academic community. Five major problems have not adequately been dealt with by the PCF:
1. Changing demographics: With it's base among rural agriculturalists and blue-collar workers, the party's base is shrinking as France becomes more urban and less dependant on manufacturing. While both areas remain important for the country, they are generally declining as a proportion of the electorate.
2. Loss of connection to the past: The French Communists were very important to the country during and after World War II. Sometimes called "the Resistance generation," these past leaders, activists and voters have been replaced with the boomer generation, who have little nostalgia for the old days. Young, student voters, who are the bread and butter of French activism of this sort, are regularly pulled towards other parties (Radical left, Greens, etc.)
3. Over-connection with rigid principles: The Communists, to this day, regularly argue that those in the "center-left" have corrupted their principles for the prize of power. As well, the PCF now accepts that for decades, the Communists were overly reliant on Moscow for ideas, vetting of people, etc., as the Soviets were rapidly losing support and reputation in France.
4. Poor leadership: The bottom line regarding leadership is that many PCF leaders were out of touch with their base and the French public at large.
5. Refusal to move towards the center: Linked with point 3, the Communists have had a very tough time moving to the center (even the center-left). As a result, many voters would sit elections out or defect to the Socialists or Greens over time. This problem can been seen most effectively with the second Chirac election (2002), where the Socialist candidate was outvoted by the Front National's Le Pen because of the highly polarized and fractured left (the communist movement had more than 5 candidates, who collectively took more than 20 percent, as compared to the Socialists' 16.2 percent).
The communists have been most successful when it participated in a broad left-side coalition, such as the 1997-2002 "Plural Left" coalition under Lionel Jospin, which roundly defeated the right (320 seats to 251 seats). Similarly, the Presidency of Francois Mitterand (the last President from the left side), was elected when the vote from the left was far more centralized (he received 26 percent in the first round in 1981, and 34 percent in 1988).
As alluded to by the title, there are clear parallels between the French Communists and the right-wing of the Republican party as it stands today. The cautionary tale that fragmentation equals marginalization has been echoed far and wide by political observers, as the moderate and more radical wings of the American right fight for supremacy in the Republican party.
Several elements of the comparison are not an exact fit, for example that France is a pluralistic, parliamentary democracy in terms of the legislature, whereas the US is a two-party system with completely district-based voting. However, the conceptual issues fit quite snugly.
Therefore, below are a few concerns for the factions of the American right, in terms of political positioning and avoiding overly-damaging fragmentation. The following categories have certain overlaps, as any political grouping analysis does, however, it hopefully captures the main ideas.
1. Pro-Business Community: The biggest threat here is that Republicans become split in a time of economic downturn between the haves and the have-nots. The U.S. has a largely pro-business orientation and this interest group has several of the most influential lobbying shops in the country. However, the perception that the big-money interests are overwhelming and subverting "Main Street" has pervaded since the financial crisis.2. Social Conservatives: Hot-button issues have long gotten social conservatives out to vote, but some from this faction have felt marginalized and taken for granted by the Republican establishment. At the same time, though the country remains polarized on two big ones, abortion and gay marriage, these issues are shifting away from being the undeniable motivators they once were.
3. Populist and Tea Party-ers: Drawing from the long traditional of challenging government in the U.S., the Tea Party people are both empowered and endangered by their outside-the-mainstream approach. Basically, they will have to integrate again with the establishment, whether by breaking it down and building it up in their image or by moving towards the center in terms of policy and ideology. The Tea Party crew is likely the group most at risk of going the way of the Communists in France -- loud, motivated, but systematically out of power.
4. Neoconservatives & Hawks: The Neocons, led in 2009 by Dick Cheney's high profile interventions, have been loudly protesting the Obama foreign policy approach. Some have called the Bush Doctrine, which epitomized many of the Neo-conservative and Hawkish ideas, a discredited approach, while others have argued that it will be born out in the future analysis. While there are many foreign policy Hawks in government and Congress today, many felt burned by the Bush approach.
All told, the recent history of multi-party democracy, whether in Europe or North America, has rewarded big-tent parties and coalitions, rather than strongly ideological movements. While they gain steam in the short term, radical movements have usually fizzled out, because support for a change of political system is not there. Even in France, where there is ocassional discussion of a Sixth Republic (changes to the system), the public has not been interested in truly radical action. So, without a movement to the mainstream center, on the fringes you will remain.
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Renard Sexton is FiveThirtyEight's international columnist and is based in Geneva, Switzerland. He can be contacted at sexton538@gmail.com
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