Political India: Engaging America

From The Hindu

After months of Congressional wrangling and a relentless siege of lobbying by Wall Street banks, the United States Senate finally passed an unprecedented and game-changing package of financial reforms on Thursday.

The reform bill passed by 60-39 margin, with three crucial Republican “aye” votes handing President Barack Obama his first major policy victory since the passage of the healthcare bill earlier this year.

Speaking after the passage of the bill Mr. Obama said, “Congress has now passed a Wall Street reform bill that will bring greater economic security to families and businesses across the country.”

The President touched upon what this meant for the common man, saying, it would bring greater security to people on Main Street including families looking to buy their first home or send their kids to college; to taxpayers who should not have to pay for somebody else’s irresponsibility; to small businesses, community banks and credit unions who played by the rules; and to shareholders and investors who wanted to see their companies grow and thrive.

Giving credit to his colleagues in the Democratic Party, Mr. Obama praised the “tireless efforts” of Senators Chris Dodd and Harry Reid and Representatives Barney Frank and Nancy Pelosi. He said, “I am extraordinarily grateful for their determination in the face of a massive lobbying effort from the financial industry, and I’m also grateful for all of the members of Congress who stood on the side of reform — including three Republican senators who put politics and partisanship aside today to vote for this bill.”

Reform to foster innovation

However, Mr. Obama was quick to dispel any notion of a zero-sum game with negative consequences for banks and other financial institutions, noting that the financial industry was central to the U.S.’s ability to grow, to prosper, to compete and to innovate and that the reform would foster that innovation, not hamper it.

Yet, he said, it was designed “to make sure that everyone follows the same set of rules, so that firms compete on price and quality, not on tricks and traps”. It demanded accountability and responsibility from everybody, he added, arguing that “unless your business model depends on cutting corners or bilking your customers, you have nothing to fear from this reform”.

Touching on some of the key overhaul measures proposed by the bill, Mr. Obama noted that there would be no more taxpayer-funded bailouts and there would be new rules to end the perception that any firm is “too big to fail… so that we don’t have another Lehman Brothers or AIG.”

He further said that complex, backroom deals that had helped trigger the financial crisis in the first place would be brought into the light of day and shareholders and other executives can know that it would be shareholders who had a greater say on the pay of CEOs.

Republicans criticised

After the passage of the bill, both the President and senior Democrats criticised the Republican Party for opposing the reform. President Obama said, “Already, the Republican leader in the House has called for repeal of this reform. I would suggest that America can’t afford to go backwards, and I think that’s how most Americans feel as well.”

Similarly, Senate Majority Leader Harry Reid said, “The ink hasn’t even dried yet on our bill that takes away big banks’ ability to gamble away our jobs, savings and houses, and Republicans already want to give it back.”

In a sharply-worded statement he added that this was the Republican job-killing agenda in full effect and that party wanted to go back to the system that cost 8 million Americans their jobs “because that is what [the Republicans’] friends on Wall Street want, and that’s who they’re looking out for”.

Others however welcomed the reform including Federal Reserve Chairman Ben Bernanke, who said, “The financial reform legislation approved by the Congress today represents a welcome and far-reaching step toward preventing a replay of the recent financial crisis.”

He explained that the reform strengthened the consolidated supervision of systemically important financial institutions, gave the government an important additional tool to safely wind down failing financial firms, created an interagency council to detect and deter emerging threats to the financial system, and enhanced the transparency of the Federal Reserve while preserving the political independence that is crucial to monetary policymaking.

According to a statement by White House Press Secretary Robert Gibbs, the President was hoping to sign the bill as soon as possible, possibly towards the latter half of next week.

Labels: healthcare Bill, U.S. Financial Bill, Wall Street reform

From The Hindu

Between making healthcare reform a reality through greater public expenditure and keeping fiscal deficit from ballooning, the U.S. government's resources are being stretched dangerously thin

When the healthcare bill was passed by the United States Congress a few months ago, the triumphalism that accompanied it belied the extent to which the older, demonstrably flawed system would continue untouched.

Last week, a desperate plea from President Barack Obama to his Congressional opposition to not stall one of the many ongoing pieces of healthcare legislation revealed reform for what it really is — a slow, plodding process.

In a televised address, Mr. Obama called on Senate Republicans to stop blocking a vote to prevent a 21-per cent pay cut for doctors who see Medicare patients; a cut, he argued, “that will hurt America's seniors and their doctors.”

This thorny issue dates back to more than a decade ago, when Congress created a formula to govern how doctors would get paid by the Medicare programme.

The original intention was in some ways farsighted, as lawmakers then worried about the fiscal burden that the healthcare system would impose on the economy. The formula annually reduced the reimbursement for doctors who cared for the elderly via Medicare.

A bit of history is in order here. Ever since the Medicare programme was established in 1965, several methods have been used to determine how much physicians are paid for their services.

In the early days, the programme compensated physicians on the basis of their charges and permitted them to bill clients for the entire amount above their Medicare reimbursement. As costs started to steadily climb, by 1975 caps were imposed on the annual increase in fees.

Even with the caps, costs continued to rise and between 1984 and 1991 the annual change in fees had to be determined by legislation. Thus, starting in 1992 a fee schedule was introduced. But, because the mechanism led to excessive variation in payment rates, Congress had to substitute it with what was called the Sustainable Growth Rate (SGR) formula in 1998.

Under the SGR, spending was controlled, according to the Congressional Budget Office, by setting an overall target amount for such items as physicians' services, laboratory tests, imaging services, and physician-administered drugs. In other words, the amount that Medicare spent on doctor fees for each beneficiary would not rise faster than the economic growth rate.

Yet again, the inherent cost-spiralling nature of the healthcare industry resulted in calls for cuts to the amount that doctors got for their services every year. With vociferous opposition from medical professionals' associations, Congress repeatedly passed temporary legislation to postpone these cuts.

Fast forward to the present day and these repeated postponements have led to a cumulative 21 per cent cut requirement — now a serious legislative headache for President Obama.

However, in today's context, where access to healthcare for relatively vulnerable groups has become a prime casualty, these pay cuts have reached a level where they now endanger “not only … our physicians' pay, but our seniors' healthcare”, according to Mr. Obama.

Ironically, this issue had been a bipartisan rallying point since 2003, when Congress undertook legislation to halt the pay cuts. That cross-party bonhomie may be about to falter on the threshold of Congressional elections — set for November this year — as the massive 21-per cent reimbursement cut affecting Medicare-focused doctors looms over Capitol Hill this week.

If Congress were to pass such a pay cut, it would, said Mr. Obama, “undoubtedly force some doctors to stop seeing Medicare patients altogether.”

But, the fact remains that the current administration is engaged in a high-stakes, tightrope act. Between making healthcare reform a reality through greater public expenditure and keeping the enormous fiscal deficit from ballooning, this government's resources are being stretched dangerously thin.

Mr. Obama appeared to recognise this. In his address, he said: “Now, I realise that simply kicking these cuts down the road another year is not a long-term solution to this problem ... I am committed to permanently reforming this Medicare formula in a way that balances fiscal responsibility with the responsibility we have to doctors and seniors.”

The answer that the White House team appears to have come up with is to improve the overall cost coverage within Medicare by curbs elsewhere in the system. For example, the administration is taking some steps to slow the growth of Medicare costs through health insurance reform by “eliminating 50 per cent of the waste, fraud, and abuse in the system by 2012”.

This is commendable. What may be less salutary, and less in keeping with the spirit of the hard-fought reform, would be any measures that punished the elderly who are almost entirely reliant on Medicare, or the service-minded physicians who treat them. As Mr. Obama said: “That's just wrong.”

Labels: Barack Obama, healthcare Bill, Medicare programme, senior citizens

From The Hindu

The healthcare reform bill that President Obama signed into law on Tuesday has hit a “technical snag,” owing to Republican-sponsored amendments, it emerged late on Wednesday night.

According to reports, Senate Majority Leader Harry Reid said the changes made to the original bill, now an Act, would have to go back to the House of Representatives for final Congressional approval.

While Democrats managed to stave off over 22 amendments introduced by Senate Republicans, they, however, encountered a snag over two provisions that violated budget rules, reports said.

Of the amendments that are currently holding up the final passage of the bill, Mr. Reid said: “There's no attempt to improve the bill; there's an attempt to destroy this bill.”

The minor provisions that are holding up the bill — according to some reports no more than 16 lines — were flagged by Republicans as cases that violated the Congressional rule that legislation in a reconciliation vote cannot be unrelated to federal budget matters.

Democratic leaders in Congress, including House Speaker Nancy Pelosi, expressed confidence that the final bill would pass nevertheless.

Labels: healthcare Bill, Republicans

From The Hindui

The 24/7 news cycle and the intense glare of a thousand cameras has made all politicians wary of every word escaping their lips.

The media, in turn, has turned into a ravenous, sound-byte-hungry beast that hangs on every such word.

Yet for all the frenzy it is sometimes that unintended whisper caught on tape that reveals more than a thousand prepared lines.

On Tuesday, in the aftermath of the historic passage of the healthcare reform bill, President Obama held a ceremony for signing the bill into law in the East Room of the White House.

The signing was witnessed by an august gathering, including Vicki Kennedy, widow Senator Edward Kennedy, who fought fiercely for healthcare until his death last year; and 11-year-old Marcelas Owens, who lost his mother to illness because she lacked medical care, and yet he had become one of Mr. Obama's favourite ambassador's for reform.

When the President and the Vice-President entered the room they did so to thunderous applause and chants of “Yes We Can!”

But before the President addressed the crowd, who should step up to introduce him but Vice President Joseph Biden, a man with a less-than-perfect record on social faux pas.

He began with aplomb, saying “Mr. President, your passion to make the lives of ordinary Americans better has been on display.

And the principles that guided your public service, beginning when you were a community organiser, have led this nation to this moment... Ladies and gentlemen, the President of the United States of America, Barack Obama…”

And then it happened.

The Vice-President leaned over his boss' shoulder to whisper something in his ear. Sadly he didn't lean far enough to be out of earshot of the microphones.

So the many millions watching their national leaders on stage heard him say to Mr. Obama: “This is a big [expletive] deal.”

News of Mr. Biden's gaffe has since travelled, viral-style and like wildfire, across the global media — as a testimony not only to the breadth of his vocabulary, but more importantly to how much healthcare reform has meant to this White House.

Labels: Biden, controversy, healthcare Bill, Obama

From The Hindu

The United States House of Representatives made history late Sunday night by passing the Senate version of the healthcare reform bill by a narrow but firm margin of 219-212. Further the House also passed the “fix it” bill of House amendments to the Senate bill, by a margin of 217-205. Every House Republican voted against the bill.

Speaking after the vote, Mr. Obama said, “This is what change looks like,” adding however that this was a victory for commonsense rather than for any political party. He conceded that it was not an easy vote for a lot of people, “But it was the right vote,” he said.

Mr. Obama reminded the caucus that the vote was for the common man: “To every unsung American, who took the time to sit down and write a letter… hoping your voice would be heard, it has been heard tonight.”

In due course it is expected that the bill passed on Sunday would lead to additional insurance coverage for almost 32 million more Americans, bringing the healthcare system closer than ever to the goal of universal coverage. It will also weaken the grip of health insurance companies over the market by preventing them from denying coverage based on pre-existing conditions and restrict their ability to raise premiums or drop coverage.

Further, children may remain on their parents' insurance policies until the age of 26 and insurance companies would no longer be able to impose lifetime limits on policies. The costs of obtaining insurance cover would also fall for older people and those with pre-existing conditions through their participation in “high-risk pools.” Small business would also derive such benefits by participating in state-level exchanges and some businesses would face penalties for not providing their employees with insurance.

The bill, which will soon be signed into law by President Obama as the Patient Protection and Affordable Care Act, will also bring down the deficit of the country by $143 billion over 10 years and by over a trillion dollars within the following 10 years, according to the Congressional Budget Office (CBO), the non-partisan scorekeeper on such debates. It will cost the American taxpayer $940 billion, according to the CBO.

High drama on the abortion issue accompanied the passage of the bill. Pro-life Democratic Congressman Bart Stupak – who dropped his opposition to the bill based on the promise of a Presidential Executive Order banning the use of federal funds for abortions – was called “baby-killer” by an unknown member of Congress from the Republican side. Mr. Stupak has been one of the most staunch pro-lifers in the House in years.

Labels: Democrats, healthcare Bill, President Barack Obama, Republicans, U.S. Congress