Alice In Washingtonland

In 1865 Lewis Carroll wrote a classic for children. However, the logic contained therein seems to be the basis for present political discourse.

A firestorm was kicked up this past weekend by comments from Obama and Kathleen Sibelius. Has his “requirement” of a public option itself become an option, a dispensable element of a plan he is willing to accept as a victory for reform?

Senator Conrad of North Dakota, a less than staunch supporter of the President, appointed himself head head counter. He told everyone that there are not enough votes for a public option. He claimed there never was.

Not counting a few who once declared for a public option but are now going the other way, there seems to be a fairly firm potential 54 to 55 votes for it in the Senate. There are certainly enough to filibuster its absence. The Senator, as senators are wont to do, forgot that there is another chamber of Congress.

New York Congressman Anthony Weiner came forward to remind everyone that there is a letter, signed by 57 members, that they will not vote for any bill that does not contain a strong public option. Seven others have said they fully concur. Only 40 of them need to stick to their guns. One should realize that almost all of these Congressmen are from overwhelmingly Democratic districts. Their position reflects the feelings of their constituents. They are unlikely to cave,

It just came over the ticker that the expected next president of the AFL-CIO is warning Democrats that, without a public option, the unions could sit out the next election cycle. The loss of their money and manpower could hurt lots of incumbent Democrats.

I am not alone in thinking that Obama will take anything he can get that can pass for reform. He seems to understand a failure to get any bill this year will mean large congressional gains for the Republicans in 2010 and jeopardize his chances in 2012.

It’s time for the Blue Dogs and other Democrats in Congress wake up and smell the Budweiser. They will give him a public option or he gets nothing and they return to the minority, or such a slim majority as to stalemate Congress.

Just what is this co-op plan that Conrad is touting? Basically, it is a sham. It would be organized on a state-by-state basis. At the claimed viability level of 500,000 members each, most states would not be able to sign up enough members. Credible actuaries, not politicians, expect fiscal viability to come at a much higher number.

These co-ops would require very large subsidies from the government for start-up costs. Most or all would be too small and have too limited financial resources to really compete with the private corporations, much less cause them to reduce prices.

Some of you may have heard of Blue Cross. They began in the deep, dark past as nonprofit co-ops. They have morphed into standard insurance companies. Some have actually been reorganized as for profit corporations. They could not survive purely as co-ops. The proposed co-ops are to be free from government control. In other words, there is nothing to stop them from following the Blue Cross path.

The Government Accounting Office (GAO) conducted a study of 5 co-ops in the year 2000. Their assessment was that the idea was essentially very much less than a success. As I stated earlier, co-ops are a sham. Those promoting them are at the top of recipients of health insurance lobbyists’ generosity. The insurance companies know that they don’t represent a danger to them, or even a low hurtle.

If you haven’t considered this one aspect of co-ops, you might give it a moment’s thought. Co-ops have more than a passing similarity to communes. The basic concept is the same. Make one of these Regressive’s head explode by connecting their support of co-ops to their support of communism. Then, just stand back and be entertained.

Regular readers know that my opinion of the proposed public options are almost negligibly more positive than of co-ops. They will not be open to everyone. They fail to address the problem of those who have an employer-paid plan if they change jobs. They will have to charge unnecessarily high premiums to allow the private plans to compete. This is a subsidy by public plan participants of the insurance companies’ profits and administrative costs.

Back to Alice and the logic she confronted in Wonderland. The Regressives were adamant that the taxpayer should not save the automobile industry. They were incompetent. They brought it on themselves. They deserved to be consigned to the junk heap of the “Free Market.” Though failing to take into account all of the relevant factors and oversimplifying an industry that generates about 10 percent of our economy, it was consistent with their flawed economic religion.

That position would seem to require them to render the same judgment on the health insurance industry. They are the ones primarily responsible for a far greater screw-up of their industry than the automobile moguls could hope to attain. This fiasco was achieved despite the myriad of government subsidies they have suckled on for decades.

The Regressive support of the health insurance industry is inconsistent with their proclaimed faith. Perhaps the failure of the automobile industry would destroy union jobs, unlike failure of the health insurance industry. I know that those driving the automobile industry are far less generous to politicians than is the health industry. They never came close to the level of six lobbyists for every congressman.

Where were all of those fiscally conservative Republicans and Blue Dogs when Medicare Part D passed? That program is more expensive than any of the plans proposed by the Democrats this time. They also forgot to enact any spending cuts to compensate for the costs of Part D.

Of course, if the Regressive religion is really based on the size of received donations, they are being imminently consistent.

As an added little morsel to think about, I offer this. Some are touting al-PhARMA’s putative contribution of $80 billion. Just remember that is only $8 billion a year for 10 years. Single-payer would save considerably more than $400 billion. By the way, that is almost $500 billion each year. The savings to be realized from permitting Medicare to negotiate with the drug companies also dwarf that puny little $80 billion.

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