Biting Dogs?

So, after last nights earthquake in Massachusetts, one has to start wondering if the block of "Blue Dog Democrats" will finally find their teeth.

The Blue Dogs are supposed to be the fiscally conservative wing of the Democrats, especially in the House. However, what they've proven to be is an easily bought off group who has let every spending bill go through in exchange for some kibbles and bits.

Last night, however, might have provided the impetus for them to actually grow some teeth and stand up to Nancy Pelosi. Unlike Martha Coakley, who lost in a state that has been solidly Democratic since 1972, the Blue Dogs mostly come from conservative districts and got their jobs promising the fiscal conservatism that Republicans forgot about from 2002-2006. So for them, last night has to be a shocker, and a wake up call. If they want to keep their seats, they may well have to dump Pelosi's ideas on health care and demand a true bipartisan effort.

The idea of "ping ponging" an unabridged Senate health care bill through the House to get it to Obama's desk is something that the Blue Dogs should resist, if they want to stay in office come November. Since Pelosi will have no ability to bribe for votes offer amendments to gain favor with them, they are now in control of the health care debate, if they wish to be.

As the leadership in their party spends the next few days to a week deciding what to do with ObamaCare, it will become evident to the rest of us what is more important to that leadership, maintaining their majorities in 2011, or getting an unpopular bill passed.

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Is it Much Ado About Nothing?

The AP has a story out today asking if the uproar over the "Public Option" in the current health care reform bills is much ado about nothing. If you read only the public option portion of the bill, you'd probably have a hard time disagreeing with that assessment.

The reason they give for believing it's a lot of hot air over a little thing is the CBO estimates of the number of people who will opt for the public insurance program. The CBO says only about two percent of the population would take the public option. In the current House bill you can't get into the public option if you are covered by a plan through your job. To be eligible you'd have to work for a small enough company that the rest of the bill doesn't compel it provide coverage, or already be buying insurance on your own.

I think the CBO has done a good job in point out costs associated with all of the health care legislation, but as always, they do it with static numbers. They assume that no individuals or businesses will change their habits based on the new law. That's where the problem lies with their current estimate. I also understand that it would be nearly impossible for the CBO to run dynamic computer models on behavior in the short amount of time Congress gives them to review legislation. I often wonder if that isn't by Congressional design.

History has already shown in Maine, Massachusetts, New York and New Jersey that the guaranteed issuance and group rating methods drive private insurance companies out of the markets after raising costs to the point they can't be profitable. Both the House and Senate bills contain each of these provisions in them, and I doubt that history will suddenly undo itself, and they'll work without raising costs.

The result will be (as it has been already) that as costs go up insurance companies will drop out of the exchange program, and choices will dwindle to a few not-for profit companies and the public option. Don't think so, go online and try and get a health insurance quote in Maine. There are about 5 companies left doing business there.

Another cost driver in the bill, which seems innocuous at first, is the rescission rules. We all get to hear the breathless stories on the news of the woman who had her insurance dropped right before she started treatment for cancer. "Oh those heartless insurance companies!" the anchor will opine. What the news doesn't tell you is that for every one person who is wrongfully dropped about two hundred and fifty are rightfully dropped for fraudulently obtaining insurance.

The House fix for this is to compel insurance companies to pay for care for anyone they want to drop until a mediator has decided if it's a case of fraud where the person should be dropped. That sounds fair enough, if you are the patient. However, if you are the insurance company, you now get legal bills and medical bills for the 99% of people you can legally drop for fraudulently obtaining insurance. How much of that money does anyone think will be recouped from the fraudster? Who do you think will make it up to the insurance company? Congress isn't going to pay them for it, which means the folks who are legit will get higher premiums to pay for both the care, and legal bills of someone else.

I also think this is going to end up one of the bigger legal entanglements of the bill. Guaranteed issuance says you can't be denied coverage due to a pre-existing condition, and community ratings say you can't be charged more because of it, but the proposed law also says if you don't reveal it you have obtained insurance fraudulently. I'm pretty sure this will end up in court about as fast as any other provision in the bill.

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Fact Checking Congress

The AP has a lot of faults. However, I give them credit for their FACTCHECK series of articles that they've been running. They've been pretty balanced, and gone against the grain of the MSM of late and been critical of President Obama and Congress.

The latest, a fact check on insurance profits shows something that Nance Pelosi, Harry Reid, and "The One"© don't want you to know, insurance company profits aren't that high.

WHAT!!! Wait, I was told they are making scads of money, and dead people are piling up so they can do it, how does that work?

It's actually pretty easy. If you only talk in dollars, and not percentages, it sounds like huge profits. When you actually look at the returns on investment and growth rates, the insurance industry is pretty far down on the list.

In fact, if you were writing a portfolio, most insurance companies would be in the sustainable growth category, an area you park money to keep up with inflation and mitigate risk, not to make a big profit.

Right now it might not even get into that category, with profits equalling only two percent of revenue. If you listen to the folks trying to demonize the industry, you'd think expenditures are only two percent of revenue, the rest going into some fat cat's pocket.

The other way the numbers are getting skewed is when someone wants to paint an insurance company as greedy they lump all profits, not just health insurance, into the equation. Companies that provide homeowners, health, life and auto insurance do have higher profit margins. Most of those profits come from the other products though. In fact, if you want to get mad, start looking up the profit to revenue margin on auto and life insurance, and ask why Congress isn't concerned about those.

So who makes more than insurance companies? Railroads, the folks who give you Tupperware, network and communications equipment makers (1ox insurance company profits), Coors brewing, Yahoo and others.

How come they aren't being demonized?

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Advice to Insurance Companies

So I'm reading the news, and see Nancy Pelosi is pissed that insurance companies are telling the truth about the Senate health care reform bill. That truth, your premiums are going to go up, considerably.

This bothers the left because they (desperately) want you to believe that health care reform is going to be a free lunch. They want you to believe that because the truth, as it's played out everywhere that has used community rating, guaranteed issuance and zero waiting has been the opposite.

My advice to insurance companies isn't to shut up so that they'll stop adding ideas to their already bad plan. Just the opposite. Keep getting louder, so they add more.

Why, pray tell, would I suggest that? Easy, the worse the bill gets the easier it will be for insurance companies to exit the market before it takes effect. They will be going out of business once it does, anyway. So hasten your own death, and allow the feds to pick up the entire tab for their folly.

If things work out right, they'll make being an insurance company so onerous at implementation time that no on in the public (other than the "Obama Stash" crew) will blame you... But they will blame congress.

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McConnell Blasts Government Over Gag Order

McConnell Blasts Government Over 'Gag Order' on Private Health Care Provider - Political News - FOXNews.com

What's that about? Humana evidently sent a flyer out to it's Medicare Advantage customers telling them that HR 3200 and the Senate Finance bill by Max Baucus threatened their benefits. Baucus, in a hissy fit, order Medicare's oversight folks to investigate Humana for doing it, claiming they were misleading and confusing seniors.

AARP, who's spending millions advertising to support such legislation; with just as confusing language; and who runs a Medicare Advantage program, hasn't been asked to stop what they are doing.

Mitch McConnnell has hoisted the BS flag, and asked why the government is trying to gag companies from providing information about legislation, other than to protect themselves from being discovered as liars.

The CBO has come out and basically sided with Humana, saying millions of seniors will either lose Advantage coverage completely, or see a decline in benefits due to the cuts Baucus is proposing in the program in his bill, and the House in there version.

If you look at actual facts about Advantage, you'd have to wonder why it's the targets of so many cuts. It provides service for about 20% cheaper than standard Medicare, and the folks who use it rate it much higher for customer service than Medicare.

It seems if Congress were serious about cutting Medicare costs they'd expand enrollment in Advantage, not try and cut it. Except Advantage uses private health insurers to provide it's service, and we all know they are evil, just ask Nancy Pelosi and the President.


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Continuing Contradictions

Could someone please tell the Democrats to get their stories straight! One day House Speaker Nancy Pelosi tells the world that health care reform won't leave the House without a public option. The next day Majority Leader Steny Hoyer says that the bill probably can't leave the House with a public option.

And of course the president is still swaying too and fro on the idea of it being either a necessity, or a single piece of a bigger puzzle.

If the Democrats want to know why American's are confused, and therefore distrustful of their plans, all they have to do is read their own words. Confusion seldom breads concensus and is never the foundation for trust.

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The Guise of Consumer Protection

The AP has a story today about how the health care arguement is focusing too much on government control and reach, not enough on the consumer protections built into legislation in various parts of congress.

The protection that's talked about the most is the one most likely to drive your private insurer to drop health insurance, or jack up everyone's rates. That's the idea that you can't deny insurance based on pre-existing conditions, or charge higher rates based on them.

For those who don't realize it, and by listening to people argue about this for years, many don't, insurance is a risk pool. That means that the company's are trying to take in clients where the risk of paying more than they collect in premiums is low. The more risk factors you have, the higher your premium is, to hedge their bet. At a certain point you aren't worth insuring because the company won't be able to charge enough to not lose money.

The idea in HR 3200 (the big one in the House) and other bills is that the company would only be able to charge premiums based on age, not pre-existing conditions, which is insanity at it's finest. It basically requires companies to either raise all rates to a point where they don't lose their shirts, or quit offering health insurance. My guess is that point wasn't missed by Congress, in fact it's one they probably love especially with a "public option" plan out there.

If you look at insurance from a different angle, it's easier to see my point. Think of insurance companies as investment houses. Both are risk based businesses. Now, suppose your investment broker decided that instead of going with low to medium risk investments, he publicly said that the company was going to start putting large amounts of money into a group of investments that were sure to lose money, with no hope of ever returning your original investment, much less make a profit.

The SEC would investigate them for fraud, the Elliot Spitzers of the world would be filing suits, and the entire board of directors would most likely be fired by the shareholders.

Yet for some reason that same scenario sounds not only good, but somehow "fair" when it comes to health insurance companies. We now want to demand that they operate at a loss for a segment of their clients, when any other business would be investigated for it.

While Nancy Pelosi and others rail about the "obscene profits" of insurance companies, they really aren't that high. Aetna will make about $640 in profit from each of it's 19 million policies this year. That's in the area of one month's premiums for most folks, about an 8% profit.

Compare that to your mortgage. For the first twenty years of a 200,000 loan you'd pay more than that in interest PER MONTH! In fact, if the mortgage industry were to operate like Congress wants the health insurance one to work, our housing crisis would probably be even worse. I'm sorry, Barny Frank liked exactly that scenario, then held hearings when mortgage writers went belly up.

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Sweating With The Socialists

Too damn funny! Don't know who did it, but they should win some kind of award.

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Amateur Hour Now Four Years Long!

Used to be that "Amateur Hour" was only an hour (actually, 30 minutes, except one season). Now, two months into the Obama administration, we can see that it will be lasting a lot longer this time.

Whether it's the slew of cabinet nominees having to withdrawl because of tax problems, investigations or stupid comments, or the reversal of his own lobbyist bans to get people into positions he wants, Mr. Obama has proven that he and his staff weren't ready for the big stage quite yet.

Many folks on the right asked last year "what has this guy done to prove he's a leader", and were drown out by shouts of "hope and change". Now it's becoming evident to just about everyone the answer was nothing, and that he's not up to the task of leading.

Hell, he's proven that he's not even up to the task of making comments with a foriegn leader if the teleprompter isn't running correctly. In fact, he just reads what ever they put on the thing, as though he has no idea what he's supposed to be talking about. Wouldn't it be a hoot if one of the guys operating it decided to put up Mary Had A Little Lamb instead of a speech. I wonder how long he'd be reciting it before he realized what was up?


While many of us laughed during the Clinton years about the tail wagging the dog, I can't remember articles in the NY Times about Wednesday night meetings to discuss polls and how to shape the message around them.


Say what you will about the last administration, but one thing was always true for eight years, press conferences were treated as serious discussions of issues, and many time even uncomfortable for them. Contrast this with the new administration, where they seem to be an outlet for Robert Gibbs to display his sarcasm instead of a grasp of issues. The more I see of Gibbs the more I believe he got a lot of wedgies as a kid, and is using his press secretary position to make up for it.


Then of course we get the AIG debacle. No one is happy to see 165 million in bonuses paid out to a company getting hundreds of billions in taxpayer backing. At the same time the outrage of Congressional leaders and the White House now seems funny.

Now that we know that Harry Reid and Nancy Pelosi had language to prevent them removed from the stimulus bill, and Christopher Dodd (largest congressional AIG donation recipient) wrote language into the bill that made them legal their fake indigation and suprise is laughable.

And that the President (#2 AIG donation recipient) knew about them; and the legal ramifications of not paying them; before they hit the press makes his outrage just as laughable.

Obama, Harry Reid and Nancy Pelosi have about 5 months until the 2010 election season starts heating up. In that time they have to stop looking so much like Moe Larry and Curly or they may find out what the GOP did in 2006, that the electorate doesn't like gridlock, but they like incompetent single party leadership even less.

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House Cleaning

Well, as I mentioned the other day, some of the GOP leadership is being cleaned out in DC. While Roy Blount 'resigned' his leadership position in the House, one can only imagine that it wasn't a totally voluntary resignation.

The other side of the aisle is doing some expected house cleaning too. Joe Lieberman; no longer needed to keep a Democratic Majority in the Senate; is likely to be stripped of his committee chairmanship shortly.

Joe pissed off the left by supporting Iraq. They thought they were rid of him when they organized to defeat him in the primaries two years ago, but they weren't, he won the general election as an independent.

That was very uncomfortable for Democrats, since they had to have his vote in their caucus to get control of the Senate, but hated the idea that he was even there. So they gave him a committee chair to keep his vote on their side of the aisle.

Now of course, it's different. The Democrats don't need him for anything, and of course, he supported John McCain for President, not Barack Obama. So, off to the scrap heap he goes in Harry Reid's new Senate.

Joe has been offered a spot in the GOP Caucus, though I doubt he'll take it. Unfortunately, for him, he still believes in enough Democratic ideals that he'll probably still give them his vote, though be asked for no input.

Much like McCain, Joe hasn't figured out how politics work today. It's no longer a gentleman's game, where you do what's best for country. Party is first and foremost, especially to the Democrats. If the GOP played by the Democrat's rules folks like Chuck Hagel, Olympia Snowe, and John McCain would never have had big committee chairmanships.

This will play out again in the House, where the Blue Dog's that Nancy Pelosi mollified over the last few years are tossed onto small crappy committees with no power. The ultra liberals she prefers will ascend to more powerful positions now that she has a big enough majority to ignore the Blue Dogs.

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Reality Versus Rhetoric

Come January 20th, as the Democrats enjoy solid majorities in Congress and hold the White House for the first time in sixteen years, reality will set in for them. And they'll learn, once again, as the GOP earlier that reality is much tougher to deal with that rhetoric is to spout off.

The Wall St. Journal had a great piece yesterday about one of those realities, Guantanamo Bay, following up on a New York Times story that said closing Gitmo is going to be tougher than anyone wants to admit. The problems there are many, including the fact that about a quarter of the detainees have been cleared for release, but no country wants them.

Another issue there is going to be what to do with those who really do need to be detained, and as the Times pointed out, really are dangerous people. Deciding to try them here in civilian courts, and if found not guilty, releasing them, will bring more problems. My guess is that the Hyde Park crowd won't be begging for a halfway house for terrorist detainees awaiting repatriation.

Another issue, where rhetoric is going to get overrun by reality is the budget. With Congress already on a bailout spending spree, and talking of another economic stimulus check for everyone, money will run short. As much as the rhetoric over the last 8 years has said that entitlements need to expand, there isn't anyway to pay for it without huge new deficits.

While you can talk a lot about raising taxes on the upper 5% (which is 150,000/yr); or folks making over $250,000 a year; there isn't enough money there to pay for everything Democrats have been talking about. So either they get to scale back their plans, or go back on the tax promise.

Keep in mind that much of their new tax income is from "voluntary taxes" like capital gains. Raising that rate has always resulted in less income from it, not more, because those who pay it just hold onto more assets instead of selling them and paying the higher rate.

Iraq will be another place where reality will meet rhetoric in probably the harshest way. President Elect Obama has already slid back from his 16 months and out pledge, and may have to slide back even further.

Reality on the ground, not just in Iraq but the rest of the region is going to be a slap in his face that he probably doesn't want. While there is a lot of talk of wanting a less arrogant America in the region, the leaders in most every country mean that in a "you stay here, but don't shoot anyone new" sort of way.

All one has to do is look back to 1984 to realize this. When the US pulled out of Lebannon Iran felt empowered to exercise more control over the Persian Gulf. The US ended up escorting tankers in and out of the region to provide stability for world oil prices and supplies. Anyone who believes that something similar won't happen after a full pull out from Iraq is fooling themselves. Anyone who believes that the other Arab states would welcome a big US withdraw from the region is delusional.

There is a reason we are still in Iraq two years after Democrats took control of Congress, there is still a reason Gitmo hasn't closed. While they've had George Bush as the scapegoat for those things those two years, suddenly he's going to be gone, and reality will meet rhetoric for Obama, Reid and Pelosi. If you want to know where my money is, we'll still be in Iraq at the next mid-term election, and Gitmo will still have some sort of purpose.

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Scared to Debate

Nancy Pelosi, Harry Reid, and Robert Byrd are so scared of the idea of a debate on offshore drilling on the US Continental Shelf that they've decided to just not allow any debate on it.

Pelosi is going to refuse to bring it up in the House, and Byrd; with Reids consent; has decided to cancel committee meetings for fear that a drilling amendment might get attached to an appropriations bill.

Why the fear? Because gas prices have reached the tipping point, where people are now wanting to put their pocketbooks ahead of the (overblown, my thought) evironmental concerns about such drilling. The general public supports the idea now that they've been hit with $4.00 per gallon gasoline for their SUV and minivan. The money folks behind the Democratic party don't support it, and in politics we know when the choice is $$ or the people, well follow the money.

There are enough "Blue dog Democrats" and oil state Democrats in congress, that when combined with the GOP would pretty well assure passage of an off shore drilling bill. That would be a stunning defeat for the Pelosi/Reid/Obama end of the party, which can't handle the idea of a loss to Republicans on any issue much less a core belief issue of the environmental end of the party. So to avoid the defeat, they'll just dodge the issue.

Hopefully, come November, the folks who are being ignored (you and I) remember this episode show the folks who've decided we don't even need a debate where the door is.

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Killing American Jobs, Pelosi Style

Nancy Pelosi has taken a big step towards killing a bunch of good paying, union jobs in the US, with the backing of the union's who's workers are going to be hurt.

What she's doing is changing the rules (midstream) on trade agreements. Over the last few years Congress and the Bush administration have agreed that any trade agreement sent to Congress gets an up or down vote within 90 days. Pelosi has decided to change that rule to kill the Columbian Free Trade Agreement.

Pelosi's stand is that she's protecting American workers from having cheaper Columbian goods come to the US under the agreement. That might be good if it were the truth, but it's a lie. Between 92% and 95% of everything coming to the US from Columbia is already duty free under the Andean Trade Preferences Act, which got a yea vote from 365 members of Congress 8 months ago.

The truth is, the unions, specifically the AFL-CIO has decided that anything that says "Free Trade" is bad, and that Pelosi needs to stop it. The Wall Street Journal has a great piece about the actual effects of this action. Specifically they talk about Caterpillar, which employs 50,000 US workers.

Under the agreement Cat's big machines will get rid of the 5-15% tariffs that are currently imposed on them by Columbia. Japan and Canada are also producers of similar machines, and are both expected to ratify free trade pacts with Columbia. That would give both Komatsu and Champion price advantages over US products made at UAW shops in Illinois.

If you don't think that's a big deal, Columbia has more Cat D-11 dozers running in it's mines than any other country in the world. But why buy more from Cat to replace them, when Komatsu will have a 15% price edge?

The other problem this rejection creates is a security issue. Columbia has been a good ally of the US in South America, kind of a counter balance to the Chavez block down there. However, we now get to be seen as a country that doesn't honor it's agreements, we signed the free trade agreement in 2006, and have been revising (to meet Democratic demands) since. Now we aren't even going to give it a vote. That type of action makes Hugo Chavez's anti-American rhetoric sound a little more truthful.

It's a sad day when our Congressional leaders cowtow to union heads on a deal that would have done nothing but increase the US market share in Columbia. US Union's have made boogey men of free trade agreements, and the truth is they hurt their own workers the most when they work to squash them.

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The Trough Shall Be Full!

As Congress passed it's budget plans last night one thing was made certain. Earmarks are here to stay. Ignore all that stuff about reforming the process that you hear in 2006 when the Democrats were going to clean up Congress' wasteful ways. In the Senate only 5 of them voted for a 1 year moratorium on pet project spending, 2 of those five are running for President, and knew they'd be bludgeoned if they didn't.

The Pelosi lead House, and Harry Reid's Senate voted to keep their earmarks, and they'll probably "bundle" them again in the next budget, to make sure that their new, transparent process is anything but.

But hey, when you vote to raise taxes by hundreds of billions of dollars, why would you want to close the feeding trough? The folks in Congress see that huge increase in (Congress's) income as a way to make everyone happy, and keep themselves in power. Everyone will get a bridge to nowhere and two new parks! And they see you, typical voter, as too stupid to remember the promises that they made less than 2 years ago to fix this process.

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McCain's Boeing Problem

John McCain has a problem, now that Boeing has been beaten out by Northrop-Grumman and EADS for an Air Force contract to build tankers.

Why is McCain in trouble because of this? He was one of the guys who pulled the rug out of a previous deal, awarded to Boeing to build those tankers. Democrats from Nancy Pelosi to Rahm Emanuel to Norm Dicks from Washington (where Boeing has a lot of plants) are screaming that it's McCain's fault.

The truth is, it's Boeing's fault. These folks railing against McCain have short, selective memories about this particular incident. You see, the reason Boeing lost the contract originally wasn't because McCain had a problem with them. They had a hiring problem, and a scandal problem.

Boeing had hired Darleen Druyun, an Air Force procurement officer illegally, actually while she was still in the Air Force. She went to jail for that. The guy responsible for her hiring, Michael Sears admitted that the hiring was illegal, and that Druyun was funneling Air Force contract money to Boeing, including helping with the original tanker deal. He went to prison for his role in the scandal.

Nearly a dozen years worth of Druyun's contract work, totalling billions of dollars, came under scrutiny, and it was found that's she'd been working pretty closely with Boeing and getting them sweethart deals.

Somehow, in Congressional Democrats minds, rebidding a contract that was fraudulently awarded is now a bad thing. These are the same folks who've been asking for, or conducting, hearings about anything and everything under the sun since Bush took office to try and find some sort of fraud.

They are the same folks who, bipartisanly, included new military procurement guidelines in the 2006 Defense Authorization Bill, because of the Boeing scandal. Now, suddenly, they are appalled at the idea that their version of an 'open and honest' contracting process didn't give them the winner they wanted.

Hopefully Congress doesn't decide that the Air Force has to rebid the contract, or just come out and order them to award it to Boeing. International defense spending is tilted pretty far in the US favor when you look at closely. There is European money being spent on the F-35, Aegis equipped destroyers, F-16's and other US equipment. It would be a shame to see those contracts come under scrutiny from the other side of the pond because suddenly we don't like doing business with European companies.

Of course if they do, Congressional Democrat's won't take responsibility for it, as always it will be someone elses fault.

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A Great Question

In my last post concerning Nancy Pelosi's decision not to bring FISA modernization to a vote, one of the commenters asked "What in the hell is wrong with these people?" The answer is both annoying, and shows the depths of despair of the Democratic Party over the last year.

First, the contention by some on the left that this is the Democrats standing up to George Bush is a crock. Were the Democrats standing up to Bush the bill that was tabled by Pelosi would never have made it to her. Instead, Senate Democrats and Republican's worked together on a bill that would allow intel agencies to continue their work, telecom's to be protected for cooperating, and require FISA review of all surveillence within 72 hours of starting such "eavesdropping".

So, why is Pelosi holding onto it, instead of letting the House vote? That's easy, and annoying, she's placating the Daily Kos/MoveOn.org wing of the Democratic Party. The far left of the party is very very unhappy. Democrats have controlled Congress for over a year, and we're not only still in Iraq, we're doing a better job than they can stomach. No one has introduced articles of impeachment for Bush, and none of their pet projects have come to fruition.

Two years ago the MoveOn guys and Kossites decided to attack any Democrat who didn't vow to do their bidding. While they were wildly unsuccessful at getting folks they wanted into office, they cost the party a lot of money defending incumbents who were attacked, and distracted a lot of candidates from other messages.

Now, election season is starting to heat up, and Pelosi doesn't want to deal with those folks again, so instead of giving them something to complain about, the passing of a bipartisan piece of legislation, she's decided to calm them down, at our expense. At least that's my theory.

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