And it’ll achieve 94% coverage.

And it costs $849B.

CNN has more about some of the key points in the new bill…

Among other things, they’ve agreed to subsidize insurance for a family of four making up to roughly $88,000 annually, or 400 percent of the federal poverty level.

They’ve also agreed to expand Medicaid and create health insurance exchanges to make it easier for small businesses, the self-employed and the unemployed to pool resources and purchase less expensive coverage.

They also would limit total out-of-pocket expenses and prevent insurance companies from denying coverage for pre-existing conditions.

Insurers under the Democratic plans would be barred from charging higher premiums based on a person’s gender or medical history.

But can Dems avoid a filibuster?

I think so, and here’s how that could be accomplished…

Reid met Wednesday afternoon with Sens. Mary Landrieu of Louisiana, Blanche Lincoln of Arkansas and Ben Nelson of Nebraska, three moderate Democrats who have expressed concerns about the cost and scope of health care reform proposals. [...]

Landrieu said she has concerns relating to the bill’s costs to small businesses and individuals. She also expressed opposition to a public health insurance option “that will undermine the private insurance market.” If that’s included in the measure, she said, “it needs to come out at some point.” [...]

Nelson released a statement Wednesday noting that the likely weekend vote represents an opportunity “to commence debate and an opportunity to make changes” to improve the bill.

So the public option and the cost are the two big sticking points.

What’s new?

One last note…about the Stupak amendment…it’s being changed slightly…

Sen. John Kerry (D-Mass.), who supports abortion rights, said Reid’s new provisions would preserve the Hyde amendment while enabling people to buy insurance plans with abortion coverage on the exchange.

More as it develops…

So it looks as if the Senate’s bill will be released tomorrow and WSJ shares the broad strokes…

Employers with more than 50 workers wouldn’t be required to provide health insurance, but they would face fines of up to $750 per employee if even part of their work force received a government subsidy to buy health insurance, this person said. A bill passed by the Senate Finance Committee had a lower fine of up to $400 per employee.

The bill to be brought to the Senate floor would create a new public health-insurance plan, but would give states the choice of opting out of participating in it, a proposal that Senate Majority Leader Harry Reid of Nevada backed last week.

The bill is expected to expand health coverage to tens of millions of Americans by giving low- and middle-income Americans subsidies to offset the cost of insurance, and expanding the Medicaid federal-state insurance program to cover a broader swath of the poor. Most people would be required to buy insurance or pay a fine, though exceptions would be made for those deemed unable to afford it.

So this would be a federally funded plan that allows states to opt out if they so choose. That means we’re going to see the blue states adopt it and the red states reject it, plain and simple…even though the red states usually have the highest number of uninsured and underinsured folks.

Personally, I’m not a fan of a federally run system. I’d rather have the federal government give states seed money to build their own public co-ops and have the states figure it out themselves.

I also think it’s unclear whether or not Reid can get the 60 votes he needs to avoid passing this thing via reconciliation.

However, putting all that aside…let’s remember the most important part of health care reform…

Also expected are new rules on insurers to prevent them from denying coverage to people with pre-existing health conditions and from dropping customers’ insurance once they become ill.

Yes, the plan is bound to have flaws since politics is the art of the possible, not the ideal. But if we can outlaw the pre-existing conditions clauses and lifetime coverage caps, that will go a long way towards delivering the type of health care we all deserve.

In any event, I’ll have more once the final bill is released.

Not only that it’s fully paid for.

That’s the latest report from the CBO and it’s encouraging to say the very least.

Here’s more from The Hill:

The Congressional Budget Office (CBO) issued a cost estimate of the healthcare reform bill under consideration by the Senate Finance Committee, concluding it would increase federal spending by $829 billion over 10 years but be offset by enough spending cuts and tax increases to reduce the budget deficit by $81 billion.

The net number of legal U.S. residents without health insurance would reduce by 29 million over 10 years, the CBO further concluded.

Finance Committee Chairman Max Baucus hailed the CBO score as “very good news” that confirms Democratic claims that the bill can expand coverage to 94 percent of Americans and lower the deficit at the same time. He said a final committee vote would be scheduled once he consults with committee members. Baucus also said he trusted the accuracy of the score since the CBO has had the legislation for several days and that the next step after a committee vote is to merge the bill with the version passed this summer by the Health, Education, Labor and Pensions (HELP) Committee.

We’re getting close to reform folks…it’s going to happen…

More as it develops…

The bill that Baucus passed today didn’t have a public option in it. Let me repeat that…Baucus’ bill had NO PUBLIC OPTION in it.

Yes, there are decentralized not-for-profit co-ops, but that’s definitely not a public option as had been proposed.

Here’s more about what’s in the bill, from Politico:

The bill requires individuals to buy insurance, or else face a penalty of between $750 and $950 annually, depending on income level, and a maximum of $3,800 for families with incomes 300 percent of the poverty line. The Senate HELP bill sets the fine at $750 per year, while the House bill levies a two percent tax on the adjusted gross income of an individual who does buy insurance.

The Finance Committee bill would not mandate businesses to provide coverage for their employees – as the House and Senate HELP bill does – but it would require them to defray the cost of any government subsidies for which their employees would qualify.

To pay for the overhaul, the legislation calls for raising $214 billion through a 35 percent excise tax on high-end insurance plans, assessing $93 billion in fees on industry players, including device manufacturers, insurers and clinical laboratories, and making a series of tax code changes.

And yet no Republicans will support it? Not even moderate Republicans like Olympia Snowe? What gives?

Personally, I think this says a lot about the GOP and their sincerity. It seems to me that all they really want to do is block health care reform because it’s good politics. Sure, there are big costs involved, but they’re paid for with new revenue generation and cuts in Medicare and CHIP. So Snowe’s explanation that she won’t support it due to costs are, well, pretty thin.

And to that point about Medicare…how many Republicans do you hear talking about cutting this program or crying foul about being able to pay for it? Answer: all of them.

Well, their tune changes when Dems actually propose cutting funding and/or paying for it…

“This partisan proposal cuts Medicare by nearly a half-trillion dollars, and puts massive new tax burdens on families and small businesses, to create yet another thousand-page, trillion-dollar government program,” Senate Minority Leader Mitch McConnell (R-Ky.) said in a statement. “Only in Washington would anyone think that makes sense, especially in this economy.

Isn’t it a conservative principle to not give people everything for free and make sure folks pay for things so you can balance the books?

I’m getting so tired of this, and it’s one of the reasons why I haven’t been posting lately. Nobody on the right seems to want to actually compromise on this stuff and it’s beyond frustrating.

However, Republicans beware…if you don’t accept something that you’ve had a say in you might be presented with an option that you really don’t like.

But hey, maybe that’s what they want. Let the Dems pass something with a robust public option so they can just complain about it, call it fiscally irresponsible, cry socialism, etc. Perhaps smart politics, but they can’t say they didn’t have a seat at the table. Baucus’ bill is not a kabuki dance and he has compromised on a lot. Too bad Republicans haven’t held up their end of the bipartisan bargain.

Still, to hear Republicans talk…reconciliation is this scary new thing that’s never been used.

Well, surprisingly, the folks over at Fox News put the lie to that…

Let’s repeat that Judd Gregg quote against for posterity…

Reconciliation is a rule of the senate that has been used before for purposes exactly like this on numerous occasions. Is there something wrong with majority rules? I don’t think so. The point, of course, is this…if you have 51 votes for your position you win.

51 wins. From one of the more moderate Republicans in the Senate. And he’s right. Majority rules in everything, especially elections. Why not here? Why do we have to get to 60 votes in order to pass anything without giving the other side the option to block it indefinitely with procedural stall tactics?

Long story short, Republicans set themselves up for this during Bush and if Dems decide to go the reconciliation route, well, tough.

So Canada has basically decriminalized marijuana possession and Mexico has added cocaine, meth, heroin and LSD to the mix.

Wonder what’s going to happen in the US in the next decade…especially given the current reality in California where shops are selling pot out in the open?

The Daily Beast has more…

In an effort to garner control in the battle against drug traffickers, Mexico has passed a new law that decriminalizes small amounts of drugs by setting maximum “personal use” amounts on marijuana, cocaine, heroin, LSD, and methamphetamine. A person will no longer be arrested if found with 5 grams of marijuana (or 4 joints), a half-gram for cocaine (or 4 lines), 50 milligrams of heroin, 40 milligrams of methamphetamine, or 0.015 milligrams of LSD.

But the Mexican government is quick to point out that the difference between decriminalization and…

“This is not legalization,” assured Bernardo Espino del Castillo of the attorney general’s office. “This is regulating the issue and giving citizens greater legal certainty.” Under the new law, anyone caught with drug quantities below the limit will be encouraged to seek treatment, until the third time a person is caught when treatment becomes mandatory.

You know, I think that’s actually a pretty good policy, with the exception of marijuana being a drug that needs mandatory treatment. I mean, if somebody is walking around drunk a few times, will cops stop them? Of course not. Marijuana is far less harmful than alcohol, but the stigma exists and so it goes.

Also, how many LSD addicts are out there? 5? I mean…come on. Maybe that provision was made for the rich kids in Mexico City and the Turistas in Cancun. Hrmmm…

In any event, I think this a good, common sense step forward to make sure that non-violent drug offenders aren’t rammed-rodded through the system and have to serve unnecessary jail time.

…and the libertarians and liberals did cheer…

Roll Cal has more (subscription required) reports that Max Baucus is setting this new date and my guess is that it’ll all come down to whether or not the Dems can get the Repubs to jump on the health care co-ops.

Here’s more on what’s moving through the committees…

Four congressional committees have approved bills, largely on party lines, that would require that every person carry health insurance, would offer credits to families and small businesses that have trouble affording coverage and would begin to realign financial incentives toward performance-based care.

A key fifth committee in the Senate is negotiating a more centrist bill, which could pave the way for a less-ambitious compromise.

Meanwhile, the health care misinformation is getting some light shone on it as well by the AP.

My favorite debunking is about this idea of rationing…

CLAIM: The Democrats’ plans will lead to rationing, or the government determining which medical procedures a patient can have.

“Expanding government health programs will hasten the day that government rations medical care to seniors,” conservative writer Michael Cannon said in the Washington Times.

THE FACTS: Millions of Americans already face rationing, as insurance companies rule on procedures they will cover.

Denying coverage for certain procedures might increase under proposals to have a government-appointed agency identify medicines and procedures best suited for various conditions.

Still…too little, too late?

We shall see…

From Politico:

On ABC’s “This Week,” Treasury Secretary Timothy Geithner said in response to a question by host George Stephanopoulos about extending benefits: “I think that is something that the administration and Congress are going to look very carefully at as we get closer to the end of this year.” [...]

“We’ll do what’s necessary to make appropriate unemployment benefits available,” national economic adviser Lawrence Summers said on NBC’s “Meet the Press.” [...]

On “Fox News Sunday,” Sen. Jim DeMint (R-S.C.) said “yes,” his party would back an extension.

After DeMint objected to what he said was rampant emergency government spending, he was asked specifically about extending unemployment benefits, and replied, “Yes, we’ll support it.”

My question…why is Politico this as a stimulus package? Yes, money being pumped into the economy has stimulative effects, but unemployment benefits have less to do with economic stimulation and more about making sure people can pay their bills. Yes, the money goes right back into the economy, but still.

More as it develops…

In one of those “every silver lining has a cloud” kind of situations, state and federal government road maintenance funds are dwindling as people drive less and use less gasoline per mile as they buy more fuel efficient cars. The federal government had to put $8 billion into the Highway Trust Fund because plummeting gas tax revenue, and a Congressional commission put forth one possible solution that is kicking up a lot of opposition.

Instead of paying a tax per gallon at the pump, how about you install an expensive device on your car that tracked how far you drive, and then you get a bill depending on how long you were on the road?

I really tried to come up with some merits for this plan, but frankly this tax per mile plan is just a terrible idea. If there were no other alternatives, then this may work, since we do need money to pay for roads and highways and it makes most sense to tax the actions that cause those roads and highways to wear out. But don’t we already have ways of paying for roads?

We currently pay for our roads mostly through the gasoline tax. Both the federal government and the states charge a certain amount per gallon of gasoline you pump into your car. Essentially what you’re seeing here is a problem where politicians have been reluctant to raise the gas tax to meet the needs of the programs it funds, and are looking for a different way to do so that might not seem as bad to constituents.

Problem is, its much worse than the gas tax.

There is no infrastructure needed to implement the gas tax. It’s added on to every gallon you pump at the gas station. With this plan every car would need to be outfitted with a device (that currently run in the thousands, but could be brought down into the hundreds apparently) that would track your mileage, then you would have to go to some place that you could upload this information every so often (presumably also at gas stations) and you’d get a bill for your mileage tax. So instead of raising an existing tax to fill the budgetary gap, they’d like to raise a new tax and spend billions on the devices needed on our cars, as well as the collection devices needed to get that information to the state.

As if I needed any more reasons, there is the issue of how the gas tax already encourages behavior that not only is good for the country, but also good for the environment… and even good for the roads. Which cars do you think are going to wear the roads down more? Big gas guzzling Hummers, trucks, sports cars and semis, or Smart cars, Priuses and Insights? Gas guzzlers also cause more money to flow to oil producing countries overseas, and send more pollution into the air.

Raising the gas tax to pay for roads makes much more logical sense than making people pay the same per mile if we want to wean ourselves off of foreign oil, get cleaner air and put less stress on the roads. It encourages people to buy lighter, cleaner and more efficient cars, and raising it more would decrease the time it takes to make up the difference in purchasing cost between regular cars and their more efficient brethren. This proposal would literally be a disincentive, counteracting with other government programs designed precisely to encourage purchase of more efficient vehicles.

On the bright side, Obama has come out flatly against the plan, even though his Transportation Secretary Ray LaHood has made comments in favor of the idea. Barbara Boxer supports it, which you might expect from one of the most liberal Senators we’ve got, but the only poll I could find on the subject shows that 70% of respondents (North Carolinians) are against the idea. An older poll that I dug up, showed that while most people are against a hike, 55% would support it if it “reduced the U.S. dependence on foreign oil”. An even larger majority, said they’d support it if it “resulted in less consumption or eased the threat of global warming”.

So I come back to my original problem with this proposal. If the public is against the idea, is it a disincentive for behaviors that the government is already trying to promote with other programs, adds unnecessary infrastructure and of course adds a whole new tax to complicated the already labyrinthine code we have here… then what is a single good reason to support this over a higher gas tax?

The federal gas tax has sat at the same 18.4 cents per gallon for 16 years. That it hasn’t gone up in so long is a clear indication of who is to blame for the Highway Trust Fund running out of money. Its time for politicians to suck it up and tell people they need to either cough up a few more cents per gallon, or learn to live with a whole lot more potholes.

They’re actually going to go on vacation instead of trying to pass it.

Wow…

Reid told reporters he expected the Senate Finance Committee would approve its version of the legislation before the Senate starts its recess August 7.

“We’ll come back in the fall,” and work in the full Senate on the bill, he said.

Get ready for the media to pounce on this as a failure by the Obama administration to pass it before the unnatural deadline they created.

Ugh.

Past the constant calls for saving money by eliminating wasteful spending, which never seem to materialize into actual legislation, we need to find new forms of income to pay for this bill. They seem to be failing at convincing enough senators to support taxing benefits and the more affluent, so what else is left?

For the most part, we pay for our governmental services through income taxes (both individual and corporate), property taxes and consumption taxes. Property taxes are used for other things and rightfully shouldn’t be on the table here. The two proposals that were trotted out for discussion by the Democratic leadership were both taxes on types of income. What remains are consumption taxes.

In a way, consumption taxes are the most fair. For instance it makes perfect sense to tax gasoline and tires to pay for roads, as those driving on those roads need those things to do so. So doesn’t it make sense to tax those behaviors that create high health care costs? The American people seem to think so.

Kaiser Family Foundation poll

A poll by the Kaiser Family Foundation, from back in April, found that reforming health care is one of the public’s highest priorities, that a majority of Democrats and Independents believe that we need reform now and that a majority support taxing unhealthy behaviors as an acceptable way to pay for some of these reforms. When asked it they would support raising taxes on “items that are thought to be unhealthy, such as soda, alcohol, junk food and cigarettes,” 61% approved (39% strongly favoring, with 22% somewhat favoring the idea). I’m a huge fan of proposals that kill two (or more) birds with one stone, and I think this is a textbook example of such.

To fund a health care program, it makes much more sense to tax behaviors that lead to health problems than it does to tax income in general. By doing so we can, in one fell swoop, put more of the costs of the system in the hands of those who are causing the most problems, lower the consumption of these products AND help pay for universal health care. We already have taxes on cigarettes, alcohol and items deemed luxuries like jewelry, hotel stays and amusement parks. So why not extend similar taxes to the most unhealthy ‘food’ items in the market? (I put food in quotes because one could argue that high fat and sugar content items like pop, potato chips and many fast food items can hardly be described as food)

First on the cutting block is alcohol, with 68% of respondents strongly or somewhat favoring raising taxes on it to help pay for health care reform. Smoking is more demonized in our country, but alcohol related health costs actually outweigh those related to smoking. The Marin Institute lists several alcohol related health care costs, among them $175.9 billion on alcohol related problems, also saying that they bring about “$184.6 billion dollars per year in health care, business and criminal justice costs, and cause more than 100,000 deaths.” This being the case, I see it as nothing but reasonable to levy a higher tax on alcohol, possibly in relation to which forms of it result in the worst outcomes, that is equal to the cost to society it incurs.

Still with a few hundred billion dollars to go, we come to tobacco. I was a bit surprised that a higher cigarette tax was supported by fewer than the increased alcohol tax, but this may be because tobacco products are already taxed at a high rate. Florida alone loses $20 billion dollars when you compare the taxes it collects to the money it pays out, amounting to nearly $7,000 per smoker. A study released by the CDC in 2002 showed that “For each of the approximately 22 billion packs sold in the U.S. in 1999, $3.45 was spent on medical care attributable to smoking, and $3.73 in productivity losses were incurred, for a total cost of $7.18 per pack.” These numbers are sure to have risen since then, and with somewhere in the neighborhood of 30 billion packs of cigarettes sold in the US last year, it seems more than fair to tack on at least another few dollars per pack.

Whether or not this fills the gap entirely, we also should look at taxing the most unhealthy food items. A study at University of Victoria (British Colombia) found that all income groups would benefit, although more so near the top of the economic spectrum, from a tax on junk foods that sent money towards health care programs. I would suggest that this disparity would be less pronounced in the US, where many people near the bottom of the economic spectrum have much more to gain from such an arrangement, given that it will help pay for health insurance that many of them currently do not have.

Put all of these together, and you might piece together enough to get over the hump. At the very least we could make it easier to pass one of the income tax ideas by lowering the amounts they’d have to raise through it.

One might argue that this would cause people to consume less of these products, thereby reducing the income from the levies. My response would be that we should then increase the taxes to keep up with the costs. This would hopefully create a cycle where more people would consume less, making the purchase of such products even more expensive, driving more out and lowering costs to treat those people over the long run. Herein lies the killing two birds with one stone situation.

One might also argue that this is a regressive tax. In effect it will be that way, at least at first. It is the lower end of the spectrum that spends a larger amount of their overall income on food. They also tend to eat less healthy foods. However, nobody forces them to choose to purchase these particular food items. Nobody should force them to quit, but if they want to continue to lead an unhealthy lifestyle, the rest of society should not be forced to subsidize it.

If people want to smoke, drink or eat themselves to death, then they can make a down payment on the hundreds of thousands of dollars the government will pay to take care of many of them during the last months of their lives. If we can save some of them from that fate by enacting the proposals mentioned above, thats even better.

Universal Health Care... How?

The Obama administration has managed to collect some concessions from hospital groups and drug companies, to the tune of over $200 billion in savings over ten years. This is nothing to sneeze at, but it still leaves the lion’s share of the proposed legislation searching for funding. Setting a requirement for employers to pay a fee to help cover uninsured employees takes another bite out, leaving hundreds of billions still to be found.

The Democratic leadership has brought up two major ideas fill that gap:

1. taxing the medical benefits of higher earners
2. a surtax on those who make more than $280,000 a year.

After some early indications otherwise, the proposal to tax medical benefits seems to be dead in the water. Support in the Senate dissolved when several polls put the opposition to such an idea among the public at around 59%. Unions, many of whom have negotiated higher benefits in lieu of higher pay over the last few years, were especially vocal in their opposition, which assured the proposal would lose enough support among democrats to block its passage.

It’s unclear whether the surtax proposal has enough support to make it through the senate either. Polls show people’s potential opposition of higher taxes to fund better coverage has been mixed. However, about 60% of those polled are for taxing those making over $280,000 a year to fund reform, lending weight to the surtax proposal. Charlie Rangel, who proposed the surtax plan, is expected to introduce the legislation Monday, but comments by several influential Senate Democrats suggest its chances of passage may be slim.

Dick Durbin, the second-ranking Democrat in the Senate (and Obama’s Blackberry buddy), has come out saying that the proposal is unlikely to pass. Kent Conrad, prominent member of a moderate group of Democratic Senators that would have to support any proposal entirely to block a filibuster, has said that he thinks the senate is heading in a direction other than controversial ideas like these two proposals. If these two senators are correct, and no other major solutions are being offered, then what options are left?

Passing a reform bill of this magnitude was not expected to be a walk in the park. Reforming a massive and labyrinthine system – with interests holding considerable clout and an opposition bent on stopping a public option – would be difficult even if the Democrats had a few more seats in the Senate. So far, Obama has been fairly hands off in his approach to working with congressional leaders on legislation. He seems to favor dealing out broad strokes of what he’d like to see in a bill that he would sign. This time he’s going to have to put more skin in the game and put some of that political capital to the test. If he can’t push either of these two funding proposals pushed through the Senate, he will have to explore other options.

Read on about some of those options in my next post, How TO pay for Health Care Reform.

The margin was 7 votes. 219 to 212.

Yikes.

Yes, cap and trade is a contentious issue, but most likely because many thought it would significantly raise their taxes...which it won’t according to the CBO.

More from CNN:

The bill would reduce nationwide greenhouse gas emissions 17 percent by 2020 and 83 percent by 2050 through a so-called “cap-and-trade” program under which companies would buy and sell emissions credits. Among other things, the bill would also require utilities to generate an increasing amount of power from renewable sources.

The House vote came one day after President Barack Obama made an urgent plea for congressional approval in what could be an early make-or-break test of his young administration.

“Now is the time for us to lead,” Obama said during an appearance Thursday in the White House Rose Garden. “We cannot be afraid of the future. We cannot be prisoners to the past.”

The president said the bill will spark a “clean energy transformation” of the U.S. economy and “make possible the creation of millions of new jobs.”

“Make no mistake,” he emphasized. “This is a jobs bill.”

Indeed. This is a jobs bill. And it represents a distinct shift away from the energy policies of old. No wonder it’s unpopular in the House, where Dems from West Virginia and Michigan no doubt lambasted by

Still, the road forward could be tough, as the Senate hasn’t even put forward their version of the bill. But my guess is it’ll happen soon enough since the focus needs to be on health care the rest of the summer.

By the way, there was a Republican alternative, but it was voted down along party lines.

And while it sounded intriguing, it essentially amounted to a lot more of the same we’ve had. However, at least they came up with competing legislation…

The GOP proposal was defeated 172-255. The measure would have scuttled a proposed cap-and-trade system to cut greenhouse gases.

Instead, it called for an aggressive push for research on a broad range of energy programs from solar power and development of biofuels to radioactive waste and nuclear fusion.

Once the Senate bill comes up for review, I’ll share it.

I’ve written quite a bit about the co-op option recently because it seems like a viable bipartisan solution.

Now it looks like the White House is signaling that they’re willing to forgo a government run, public plan and accept alternatives (like co-ops) to garner Republican support.

From Who Runs Gov:

White House Chief of Staff Rahm Emanuel met last night at the U.S. Capitol with Senate Democrats and told them Obama is “open to alternatives” to a new government insurance program in order to get legislation overhauling the health-care system to his desk, said Senator Kent Conrad of North Dakota.

“His message was, it’s critical that you do this,” Conrad said.

Senate Finance Committee Chairman Max Baucus of Montana said Emanuel urged the senators to seek Republican support and didn’t discourage them from pursuing the use of non-profit cooperatives, an idea Conrad has proposed.

The story has been updated to say that Rahm didn’t suggest this, but I bet he did and I can understand why he didn’t want this to get out. This would be a quite a slap in the face to Congressional Dems, but I think the White House has to reign the health care debate back in because Pelosi has been managing it so poorly.

More as it develops…

Congressional Republicans have been telling voters that the cap and trade energy policy that’s set for a vote on Friday will cost each household about $3,100.

CBO puts the lie to those numbers and shows that they’re nearly 20 times the actual costs…in 2020.

From Reuters:

WASHINGTON (Reuters) – Climate change legislation pending in Congress would cost U.S. households only about $175 annually in higher energy and consumer prices, far less than the $3,100 “burden” opponents have claimed would result, according to a Congressional Budget Office estimate.

“The net annual economy wide cost of the cap and trade program in 2020 would be $22 billion, or about $175 per household,” the CBO, which gives Congress nonpartisan advice about the impact of legislation under consideration, said in an analysis delivered to Congress late on Friday.

And that’s just the average price. These costs would be distributed differently based on incomes…

Low-income households would see an average net benefit of $40, mostly through rebates and other aid, while high-income families could see added net costs of $245 per year in 2020.

Think high-income families can afford an additional $245 a year so we can move much closer to energy independence?

Moving on…

After the CBO projected major deficits, the plan was revised and recirculated. And this comes just in the nick of time, as Daschle & Dole’s “state run healthcare” plan has made a major splash today.

Ezra Klein got his hands on the latest and describes it as such…

Sources say that it’s a major scale-back of the outline they had before. Specifically, subsidies have dropped from 400 percent of the poverty line to 300 percent. Medicaid eligibility has been tightened to 133 percent of poverty for children and pregnant women and 100 percent of poverty for parents and childless adults. The plans being offered in the exchange have seen their actuarial values sharply lowered.

Beyond the changes, this is also the clearest look we’ve had at the specific policies being considered. There’s a fairly strong individual mandate, albeit with exemptions for those beneath the poverty line, those who would have to spend more than 15 percent of income for a plan, and undocumented workers. There are a variety of options for an employer mandate, or the absence of one. Sen. Kent Conrad’s co-op idea is up for discussion. There’s no public plan mentioned anywhere in the document.

Find the file here.

And while no public plan is mentioned anywhere in the doc per se, trust me, they’ll still be pushing for one. But maybe Conrad’s co-op idea, which is still technically a public plan, could take the place of a massive federal entity? Personally, I think both have pluses and minuses.

However, we may also want to look at another plans that aren’t under serious consideration right now.

Again, Klein highlights…

Rather than capping the employer tax exclusion, the Finance Committee could end it entirely and convert it, as Ron Wyden does, to a progressive standard deduction. Wyden’s plan, incidentally, was scored by CBO as being revenue neutral in two years and revenue positive in four. Rather than protecting the private insurance system, the Finance Committee could include a public plan with the ability to bargain to Medicare rates, thus saving, according to the Commonwealth Fund, 20 percent to 30 percent against traditional private insurance. Ezekiel Emmanuel, brother to Rahm and health-care adviser to Peter Orszag, has a proposal for a universal voucher system funded by a value-added tax. All these ideas would make health reform better, cheaper, and more sustainable. None of them, so far as I know, are under serious consideration.

But I do think the reality is that the current system is unsustainable. Will it take a genuine seismic policy shift in order to change it?

More as it develops…

Does anyone care about the opinions of former Senate majority leaders? What if one was once his party’s presidential nominee and another one nearly became President Obama’s Secretary of Health and Human Services?

Today, former Senate majority leaders Bob Dole, Tom Daschle and Howard Baker released a health care plan they claim includes the kind of compromises necessary to win significant support from both parties.

The plan seeks to reconfigure health care reimbursement to focus on health outcomes – a tricky maneuver to say the least. But that’s just one of the ways they hope to reduce costs. It’s not where the “compromise” comes in. The former senators want to tax health care benefits over a certain level (something most Dems are against), mandate coverage (something Republicans don’t like), cap premiums and out-of-pocket percentages (market controls that aren’t usually popular with the right) and create state-level insurance systems rather than a federal one (and you know the left has their heart set on a Big Daddy system coming out of Washington).

Whether this plan is any good or not is up for debate. But at least Dole, Daschle and Baker are making a concerted effort to draft bipartisan legislation. Rather than trying to ram through one side’s idea or saying no to every idea, this plan takes a shot at bringing everyone to the table.

Dole says a true bipartisan bill should be able to win the votes of 20 Senate Republicans. That’s a tall order. But if enough congress people buy into the idea of compromise (and there is some common ground out there), it might be possible. Whether a compromise bill ends up being any more effective than one forced through by Democrats is unknown. But I think it’s definitely the way we should be heading.

This has been a long time coming, especially when you consider that the tobacco companies have never had to share the ingredients in their products with the public.

From NY Times:

The Family Smoking Prevention and Tobacco Control Act, as it is called, stops short of empowering the F.D.A. to outlaw smoking or ban nicotine — strictures that even most antismoking advocates acknowledged were not politically feasible and might drive people addicted to nicotine into a criminal black market.

But the law would give the F.D.A. power to set standards that could reduce nicotine content and regulate chemicals in cigarette smoke. The law also bans most tobacco flavorings, which are considered a lure to first-time smokers. Menthol was deferred to later studies. Health advocates predict that F.D.A. standards could eventually reduce some of the 60 carcinogens and 4,000 toxins in cigarette smoke, or make it taste so bad it deters users.

And then there’s the marketing and the warnings…

Colorful ads and store displays will be replaced by black-and-white-only text. Beginning next year, all outdoor advertising of tobacco within 1,000 feet of schools and playgrounds would be illegal.

And cigarette makers will be required to stop using terms like “light” and “low tar” by next year and to place large, graphic health warnings on their packages by 2012.

If you think that’s extreme, check out what Brazil makes cigarette companies put on the back of their boxes (Warning: VERY graphic.)

Still, some are saying that the bill doesn’t go far enough because it doesn’t address menthol cigarettes, which are supposed to be the most addictive.

From The Big Money:

The National African American Tobacco Prevention Network released a statement on the bill last May that read, “Tobacco legislation that treats menthol differently from other flavoring additives is incomplete.” This is in response to studies showing that menthols are far more addictive then other cigarettes and far harder to quit, no matter what race the smoker is.

And last July, the Harvard School of Public Health released a study showing that tobacco manufacturers carefully controlled the menthol content of cigarettes to maximize its masking of harsh tobacco smoke, even creating new brands for longtime smokers who require increasing amounts of menthol to maintain its numbing, cooling effect.

Menthols accounted for a quarter of the roughly 370 billion cigarettes smoked domestically in 2006 and are more popular here than anywhere else in the world. So far, neither Waxman nor Sen. Ted Kennedy, who shepherded the Senate version through his Health, Education, Labor and Pensions Committee last week, has specifically defended the exclusion of a menthol ban. Waxman notes that after an FDA study, menthol could be banned as well but didn’t explain why menthol merited a study period and chocolate cigarettes did not.

I think it’s pretty obvious why we didn’t ban menthol cigarettes. Because it would be politically impossible right now since they’re such a huge part of the market.

Maybe it’ll happen further down the road, but for right now this is a great first step.

Yikes.

From NY Times:

[...] in comments submitted to the Senate Finance Committee, the American Medical Association said: “The A.M.A. does not believe that creating a public health insurance option for non-disabled individuals under age 65 is the best way to expand health insurance coverage and lower costs. The introduction of a new public plan threatens to restrict patient choice by driving out private insurers, which currently provide coverage for nearly 70 percent of Americans.”

If private insurers are pushed out of the market, the group said, “the corresponding surge in public plan participation would likely lead to an explosion of costs that would need to be absorbed by taxpayers.”

You mean when compared to exploding costs that the free market has brought about? Considered me unconvinced by that line of reasoning.

And not all doctors who belong to the A.M.A. are on board with this…

The A.M.A., an umbrella group for 180 medical societies, does not speak for all doctors. One group, Physicians for a National Health Program, supports a single-payer system of insurance, in which a single public agency would pay for health services, but most care would still be delivered by private doctors and hospitals. In recent years, some doctors have become so fed up with the administrative hassles of private insurance that they are looking for alternatives.

Actually, I know quite a few folks who say that single payer is really the only way to truly contain costs.

Still, I wonder if the A.M.A. would be in favor of the co-op solution I talked about earlier?

But this “no dice!” statement begs the question…what’s the A.M.A.’s solution? Because costs are exploding anyway? Year after year health care gets less affordable for the majority of Americans AND businesses. So how do the propose we fix this? Because I’m not hearing any solutions out of them as of yet.

Or maybe this is all a strategy to usher in some tort reform. Obama’s going to meet with them soon, and the NY Times points out a bridge he could build…

Mr. Obama’s trip recalls a speech to the A.M.A. in Chicago on June 13, 1993, by Hillary Rodham Clinton. She proposed “a new bargain” in which the White House would limit malpractice lawsuits and free doctors from onerous rules if doctors supported her effort to overhaul the health care system.

Malpractice lawsuits are definitely the bane of physicians’ existence since they drive up insurance to the point where it’s nearly impossible to practice. And this is why we’re seeing physicians cover their ass by giving people every single available test so patient’s can’t sue them. It’s definitely gotten out of control and some type of reform is needed.

More as it develops…

Today, Congress sent President Obama the much talked-about bill setting in place new rules for the credit card industry.

The new restrictions will protect debt-ridden consumers from many of the surprise charges common in the industry, like over-the-limit fees and a charge to pay the bill by phone. People under 21 also will find it difficult to get a card.

In addition to outlawing other hidden/unexpected fees, the bill puts into place a measure that will allow credit card holders who miss a payment and see their rates rise to lower their rate back to the original level if they pay on time for six consecutive months.

Of course, there are expected to be some negative consequences:

As banks scramble to make up for the lost revenue, cardholders who pay off their balance in full each month could see annual fees become the norm and lucrative rewards programs canceled.

Annual fees? No more thank you points? I have a feeling that competitive forces will still push credit card companies to offer perks to desirable customers. But I also have a feeling that the lost revenue from the now out-lawed fees will be recouped through various shifts and alterations of still-legal fees and rates. As long as so many of us rely on credit cards, the companies who offer us the credit will find a way to remain profitable.