Wall Street Journal — Democrats Turn Up the Heat on Insurance Industry
Moderate Democrats are getting that seasick feeling again as the most liberal versions of President Obama’s health care plan are zooming ahead and a compromise plan in the Senate looks less moderate by the day.
To try to get his compromise plan going again, Finance Committee Chairman Max Baucus is talking about huge new special taxes on health insurance companies.
Now the insurance companies that cut deals with the White House in hopes of benefiting from coverage mandates and new spending find themselves facing major cuts in Medicare payments, a public health plan that would cost 10 percent less than private coverage to be subsidized by $100 billion in new taxes on private insurers.
The president and other liberal Democrats hope that by moving the legislation so quickly, the insurance industry won’t be able to muster opposition in time to stop the legislation now that its members realize they’ve been burned. Certainly the manic pace in Congress since the terms of the previously vague plan became clear suggests that Obama’s squad is hoping for another 1,000-page bill to go mostly unread.
As writer Laura Meckler explains, with bipartisanship now all but abandoned, Democrats’ remaining worry is a blockade by conservative members of their own party.
“Across the Capitol, there were cautionary signs as three House committees prepared to consider their versions of the legislation. The toughest road will be in the House Energy and Commerce Committee, which includes seven members of the fiscally conservative Blue Dog coalition.
‘The current bill would have to be substantially amended before we could consider supporting it,’ said Rep. Mike Ross (D., Ark.), a member of the coalition.”
New York Times — Paulson Expected to Face Hard Questioning on Merrill Deal
Things have changed a lot since Henry Paulson left town in January. The former treasury secretary will find out just how much today when he appears before the House Committee on Oversight and Government Reform to answer questions about the shotgun wedding he arranged between Bank of America and Merrill Lynch during the Panic of 2008.
While beating up Paulson for strong-arm tactics of telling the BoA President Ken Lewis to merge or be fired will be a bipartisan undertaking, Republicans may try to wheedle out information about other deals undertaken before the change of administrations but consummated under Tim Geithner’s Treasury Department.
For his part, Paulson is planning to follow the example of Jack Nicolson in “A Few Good Men,” as writer Zachery Kouwe explains:
“Mr. Paulson, now a visiting scholar at Johns Hopkins University, plans to defend his record vigorously. ‘I believe my remarks to Mr. Lewis were appropriate,’ Mr. Paulson said in his prepared testimony.
‘Bank of America’s completion of the merger, and the subsequent assistance from the government, not only protected our country’s financial system but also was in the best interest of the shareholders, customers, employees and creditors of Bank of America and Merrill Lynch,’ he said, noting that the Fed had the authority as the bank’s regulator to remove its management.”
Washington Post — Obama Hears Dissent on Plan To Reform Financial Regulation
Not wanting the Federal Reserve to become the ultimate protector against financial risk seems to be a bipartisan concern as the White House’s plan to make the central bank a mega-regulator faces stiff headwinds.
Writers Tomoeh Murakami Tse and Brady Dennis explain that while liberals want more control over the bank and investigations into its past practices, conservatives are worried that it’s basic function of maintaining a stable currency would be compromised by redefining its relationship to markets and making it beholden to Congress.
“Reflecting growing concern about lawmakers’ efforts, more than 250 economists have signed an open letter to Congress and the Obama administration, urging politicians to reaffirm their support for the Fed’s independence.
‘Calls to alter the structure or personnel selection of the Federal Reserve System easily could backfire by raising inflation expectations and borrowing costs and dimming prospects for recovery,’ the letter says.”
Financial Times — China GDP growth accelerates to 7.9%
While the American economy is still struggling to nurture a few green shoots, the Chinese economy roared back to life in the second quarter of the year, including a major increase in lending. In the same period, the U.S. is expecting less than 3 percent growth and still hasn’t seen a rebound in lending.
Because China may triple its rate of growth on massive stimulus spending and extremely loose currency controls with almost no inflation, some American economists and politicians will be making the case that the U.S. should follow suit with a third stimulus and an even more slatternly monetary policy.
The growth rate may also, though, give pause to those considering massive tax increases during a recession to pay for new social programs.
Writer Richard McGregor provides some details:
“The bank lending and fiscal spending has driven fixed asset investment, the prime engine of growth, up by 33.5 per cent in the first half of the year compared to the same period in 2008.
Government incentives for consumption, such as rebates on buying cars and white goods, helped support retail spending, which expanded by a healthy 15 per cent in the first six months of the year.
Inflation, the Chinese government’s biggest policy headache until the middle of last year, remained under control in the first half of the year, with the consumer price index falling by 1.1 per cent from a year ago and 1.7 per cent in June alone.”
New York Times — For Clinton, ’09 Campaign Is for Her Turf
The cold war being waged between the State Department and the White House escalated Wednesday as the Secretary of State, sidelined temporarily by a broken elbow, reasserted her role as the top dog on foreign policy in the administration and looking to downgrade the perception that special envoys reporting directly to President Obama have become the main vehicle for U.S. diplomacy.
After reader Mark Landler’s piece, one can only imagine what the former forst lady is thinking about when she does her physical therapy:
“In recent weeks, the administration’s top Iran policy maker was reassigned from the State Department to the White House’s National Security Council; Mrs. Clinton’s candidate to lead the United States Agency for International Development has been tangled up in a vetting process; and she has failed to get her choices into some plum ambassadorships, notably Japan, which went to a fund-raiser for President Obama.
Also, the White House recently scuttled Mrs. Clinton’s effort to bring Sidney Blumenthal, a journalist and confidant of both her and former President Bill Clinton, into the State Department.
The injury to Mrs. Clinton’s elbow — she fractured it in a fall last month, and it is being held together with pins and wire — has compounded the challenge. Her recuperation from surgery sharply curtailed her schedule, forcing her to cancel two overseas trips, including one to Russia with Mr. Obama.
Though she departs Thursday for India and Thailand, she is in constant pain and faces grueling physical therapy five times a day, according to people close to her. Among the exercises: repetitively squeezing a gelatinous ball.
