The fiscal train wreck is happening sooner than we thought, a leading bond market trader says. Which is why investors are now telling the U.S. government it will have to pay more to borrow money. Not as much more as Greece, but enough to constitute a shot across the Obama bow by what we call the bond vigilantes, investors who try to punish governments that splash too much red ink across national ledgers.
When White House chief of staff Rahm Emanual lobbied Democratic Representative Jason Altmire of Pennsylvania last week to vote for the health care bill, he argued it would cut the deficit. “You ran because you care about the deficit,” he told Altmire, according to the Washington Post. “This is north of $1 trillion in deficit reduction.” Shortly after the bill passed, House Speaker Nancy Pelosi offered the exact number, claiming the bill would save “the taxpayers $1.3 trillion.”
Well, it is done. Obama has signed the Senate bill into law. Americans now have a statutory right to health insurance, and in most if not all cases a right to have someone else pay for that insurance. I believe we have only the dimmest understanding of the full consequences of this legislation. It will raise taxes. Its cost-controls are unproven and trivial. The bill will increase demand for a fixed commodity and thus increase the overall price of that commodity. So health care spending will continue to rise as more people enter the system, the population gets older, and technology continues to improve. Susan Ferrechio runs through the various unintended consequences here.
The CBO’s most recent analysis is out, and it’s not likely to convince wavering House Democrats to jump to the Obamacare side of the fence. Even the Democrats are granting that the latest version of their proposed health care overhaul would cost $69 billion more than the previous version. According to the CBO, this version would siphon even more money out of Medicare, make even further cuts to Medicare Advantage, and levy even higher taxes and fines on the American people.
House majority leader Steny Hoyer has informed his colleagues of the CBO health bill score. Politico reports:
The bill would cost $940 billion, and reduce the deficit by $130 billion over the first 10 years and $1.2 trillion in the second 10 years. The deficit numbers Democrats have been most worried about, and will be key to convincing moderates to coming on board with the bill.
Keep in mind that the second decade estimate is incredibly speculative. Overall, though, this score may move some undecided congressmen into the Yes column. Whether those congressmen will be members who voted No last year is another question entirely, however. Perhaps they will have seen this video:
More CBO details, and the final reconciliation language, are expected later today. A Sunday morning vote is now likely. Gentlemen: Start your engines! The countdown has begun.
Rep. Jason Altmire has met with President Obama twice this month and received a phone call from Air Force One. Two planes circled his western Pennsylvania district, trailing banners urging him to vote against the health-care bill. And conservative "tea party" activists confronted him at his office, trying to force him to answer: "Are you for or against the bill?"
The pressure has been extreme over the past two weeks on Altmire and the few dozen House Democrats who say they still have not decidedhow they will vote on ambitious legislation designed to remake the nation's health-care system.
Says Bart Stupak: “All the phones are unplugged at our house — tired of the obscene calls and threats. [My wife] won’t watch TV,” Stupak said during an hourlong interview with The Hill in his Rayburn office. “People saying they’re going to spit on you and all this. That’s just not fun.”
Fox News Channel's Bret Baier interviewed President Obama today. It wasn't what you'd call a friendly encounter. Baier, concerned that the president was filibustering, repeatedly interrupted the chief executive. Obama quickly grew frustrated. Before long, the look on his face suggested he was wondering why he agreed to the interview in the first place.
Republicans feel it is accurate, particularly in this sense: They believe that no Democratic lawmaker who is definitely planning to vote yes on the bill would want the activists on the left, in this case exemplified by Firedoglake, to believe he or she is still undecided. Why take a beating for nothing?
The current count at FDL is 205 Yes, 209 No, including leaners. That jibes with other whip counts showing health care reform's future up for grabs.
A major factor in the upcoming vote is the CBO score of the reconciliation bill. The number isn't out yet, not because math is hard but because Democrats are manipulating the numbers to get a good result. Yet word is spreading that health care reform's price-tag is still tremendously expensive. As the saying goes: Know hope.
Rep. Kevin McCarthy of California, the GOP deputy whip, just held a conference call with bloggers. Here's what he said. The Republicans estimate that Pelosi has 205 Yes votes, while there are 205 No votes. That leaves about 21 votes up for grabs. Pelosi can lose 37 Democrats and still pass Obamacare into law. Based on rules and precedent and what's happening on the floor, the Republicans estimate that the earliest a health care vote could be held would be late Saturday or early Sunday.
McCarthy also said the Democrats have been pushed backward over the last 24 hours. Forget Kucinich. The reaction to the Slaughter Solution has been horrible for Pelosi and her team. Bart Stupak is holding his ground, even if some of his bloc may peel off in the end. And there's still no final reconciliation language and thus no CBO score for the bill. The Democrats are playing with the numbers in order to earn a deficit-neutral score. Meanwhile, the Capitol Hill switch board has been flooded with calls for and against the legislation.
Rep. Parker Griffith of Alabama, who switched to the GOP in December, shed some light on how the Democratic whip operation works. Griffith said the whip team, when it calls or visits an undecided congressman, knows everything about him. They know the demographics of his district, his popularity, his most recent margin of victory, how safe his seat is, how popular the president and Pelosi are in his state, whether his state has a Medicaid shortfall, and whether he's been wanting money for a new road or bike path or medical school in his district. They come ready to deal. The one thing the whip team can't guarantee? A congressman's reelection.
My specific concern is nothing original: it’s just the national debt. Yawn and turn the page here if you’d like. We talk now of trillions, not yesterday’s hundreds of billions. It’s not Obama’s fault. He did what he had to do. However, Obama is president, and Democrats do control Congress. So it’s their responsibility, even if it’s not their fault. And no one in a position to act has proposed a realistic way out of this debt, not even in theory. The Republicans haven’t. The Obama administration hasn’t. Come to think of it, even Paul Krugman hasn’t. Presidential adviser David Axelrod, writing in The Washington Post, says that Obama has instructed his agency heads to go through the budget “page by page, line by line, to eliminate what we don’t need to help pay for what we do.” So they’ve had more than a year and haven’t yet discovered the line in the budget reading “Stuff We Don’t Need, $3.2 trillion.”