Morning Must Reads: The real cost of health legislation

What will $1.6 trillion buy you? Probably not enough to get a soup-to-nuts health-care plan passed.
While paying for an expansion of health insurance coverage is still a matter of great dispute, one point of agreement between all three plans working their way through Congress right now is mandatory health insurance for individuals – get covered or get fined.

Liberals prefer the idea of an employer mandate like the one the Clintons suggested – cover your workers or get fined. But such a plan would be onerous to employers and therefore toxic to necessary moderate support in Congress.

Even with an individual mandate the questions remain: How much to subsidize individuals and at what income level will the subsidies be available?

To get a plan passed, the subsidies have to be generous to keep the coalition together. But if they are generous enough to cross that bar, then they are also generous enough to alarm the same fiscally conservative Democrats who howled enough to make in an individual mandate in the first place. Writer Robert Pear looks in on the delicate negotiations that will help determine whether a national health plan is merely unaffordable or crushingly expensive.

Now you see why Harry Reid said “see you in September.”

“Under the House bill and a similar measure approved by the Senate health committee, premium subsidies would be available to families with incomes up to four times the poverty level, or $88,200 for a family of four. With income at that level, a family could be required to pay as much as 12.5 percent of its income in premiums under the Senate bill and 11 percent under the House measure.

Lower-income families would receive more help. A family of four with income of $34,000 might pay 1 percent to 3 percent of its income in premiums.

But lawmakers said that federal aid for low-income families could be pared back as Congress struggles to hold down the overall cost of the legislation.

Premiums, which increase with health care costs, are rising much faster than personal income. So federal subsidies must also increase to keep insurance affordable.

The Senate Finance Committee is considering proposals to limit eligibility for subsidies, a move favored by some fiscally conservative Democrats in the House Blue Dog Coalition. One proposal would bar subsidies for people with incomes over 300 percent of the poverty level ($66,150 for a family of four.)”
 
Wall Street Journal — GDP Data Likely to Herald an Upturn
 
After two quarters of serious contraction of the U.S. economy, economists are forecasting that the official report on the April to June GDP due out Friday, will show only slight shrinkage.

As writer Justin Lahart explains, having ones economy shrink by 1.5 percent is only considered good news if it comes after a 5.5 percent loss.

The political impact of the turnaround will depend on what happens to consumer confidence, still weighed down by climbing joblessness. Wall Street has started getting better, but President Obama’s oft-repeated promise of equal consideration of “Main Street” will now be put to the test.

The White House is arguing that after a slow start, the February Obama stimulus package is taking hold. But fears of a double-dip recession in which modest growth spurs huge inflation that wipes out small gains are persistent enough that the administration will have to stick with it’s current “rescued the economy from disaster” line.

“Most economists think that consumers and businesses continued to cut back on spending in the second quarter. But consumers trimmed their spending by much less than they did in the fourth quarter, when the financial crisis came to a head. And businesses cut less than they did in the first quarter, when a $170 billion reduction in plant and equipment investment accounted for four-fifths of the decline in GDP.

All this augurs well for the current quarter, which began July 1. Economists expect to see GDP nudge higher this quarter, reinforcing a sense that the recession that began in December 2007 is at or near its end.

With more investors coming to believe that the beginning of an economic recovery is approaching, stocks have been advancing. Last week, the Dow Jones Industrial Average cleared 9000 for the first time since the beginning of the year, putting it 39% above its March low point. Surveys show that consumer and business attitudes also have improved markedly from earlier this year.”
 
New York Times — A Presidential Pitfall: Speaking One’s Mind

In the wake of Gatesgate, writer Peter Baker checks in on one of President Obama’s greatest political stumbling blocks – his tendency to be a know it all who speaks derisively or dismissively of others.
While Bill Clinton had to learn to keep his temper in check in public and George W. Bush forced himself not to offer opinions on baseball and other matters of national, but not presidential, concern, Obama is struggling to tamp down his inner law lecturer and remember the scope of his audience and the impact of his words.

It is proving especially hard for Obama who relies on his humor and broad knowledge for his political success. Coupled with his organization’s decision to keep Obama constantly on air, it makes for some difficult moments, even before the commenter in chief passed judgment on the policing procedures of Cambridge, Mass.

“A joke about Nancy Reagan’s holding séances required him to call her to apologize. (She told Vanity Fair that he said he was actually thinking of Hillary Rodham Clinton.) He had to make another apology after joking that his bad bowling skills qualified him for the Special Olympics.

When Mr. Obama was outraged by hefty bonuses paid to executives at firms receiving federal bailouts, he scolded them not only for that but for flying to, say, Las Vegas for fancy conferences — unwittingly causing a raft of cancellations in that city even by conferees not receiving taxpayer money. To remedy the situation, his senior adviser, Valerie Jarrett, arranged for him to meet with hospitality industry leaders.”
 
Politico – Sarah Palin resigns, blasts press, ‘starlets’
 
Sarah Palin was mad as hell in her resignation speech Sunday, and though no one knows what path she’s taking from here, the former Alaska governor was obviously feeling unbound in her farewell address. She covered everything from foreign policy to her feud with a c-list actress over aerial wolf hunting.

“She went after reporters but also what she called the Hollywood “starlets” who rail against gun rights and the “partisan operatives” who filed the ethics complaints that helped drive her from office.

She even aimed her fire at an undefined group who she deemed insufficiently patriotic.

Some in this group, Palin said, “seem to just be hell-bent on maybe tearing down our nation, perpetuating some pessimism and suggesting American apologetics.”

As for the “starlets,” Palin  seemed to be alluding to actress Ashley Judd, who targeted the former governor on behalf of an environmental group for supporting aerial wolf hunting.

Warning of ‘anti-hunting, anti-second amendment circuses from Hollywood,’ Palin said advocacy groups “use these delicate, tiny, very talented celebrity starlets.”

She offered such individuals this message: ‘By the way, Hollywood needs to know: We eat therefore we hunt.’”
 
New York Times — Forget Aloof, Bernanke Goes Barnstorming
 
Fed Chairman Ben Bernanke has been far from gentle when it comes to his campaign for a second term. As he is out making the pitch for himself, though, Bernanke is also arguing in favor of keeping the central bank’s traditional role – not reducing it as many in Congress want or expanding it President Obama has argued.

Writer Edmund Andrews went out to Kansas City where Bernanke was taping a town hall meeting with PBS – an unheard of bit of PR for the protector of the almighty dollar.

But by enhancing his visibility, Bernanke also draws attention to the mundane limits to his bank’s power to protect the currency, avoid inflation etc.

That de-mythologizing opens the bank and Bernanke to its longtime detractors on the left and right.

“‘The Federal Reserve, in collaboration with the giant banks, has created the greatest financial crisis the world has ever seen,” Representative Ron Paul, Republican of Texas, said at a House hearing last week in which Mr. Bernanke testified about the state of the economy.

Republican lawmakers portray the Fed as the embodiment of heavy-handed big government, and have called for scaling back the central bank’s regulatory powers. But liberal Democrats, like Representative Dennis J. Kucinich of Ohio, have accused the Federal Reserve of caving in to demands by banks for huge bailouts, for failing to protect consumers against dangerous financial products and for being too secretive about its emergency rescue programs.

More than 250 lawmakers have signed a bill sponsored by Mr. Paul that would allow the Government Accountability Office to “audit” the Fed’s decisions on monetary policy — a move that Fed officials see as a direct threat to their political independence in carrying out their central mission of setting interest rates.”