Category Archives: Gibbons

Coffee and the Papers: Nevada Edition

## The Nevada Republican Party remains in an intriguing state of disarray between and among the Real Republicans and the Shadow Republicans and … whatever.  All summarized and explained by the Nevada Progressive.

## The Sin City Siren observes that this will be the first Olympic games in which every country has at least one female competitor.  2012 is also the 40th anniversary of Title IX!  “Back in 1972, when only 15 percent of all Olympians were women, the country passed Title IX, the landmark legislation that ensured equal treatment for females in educational programs supported by federal dollars.” [Buffalo News]

## Speaking of dollars, Senator By Appointment Only™   Dean Heller (R-NV) voted to extend the Bush Tax Cuts to the top 2% of income earners, and then voted against S. 3412 which would retain tax breaks for 98% of Americans while slightly raising taxes on earnings above $250,000.  More from PLAN.

## NRDC breaks down the truth about the federal deficit in one chart.

## Our Senator By Appointment Only™  Heller  jumped the gun while slamming the Administration for supporting Amonix.  This from the ever vigilant Steve Sibelius: “Amonix never used the nearly $6 million in tax credits available under the administration of President Barack Obama. Taxpayer losses were apparently confined to a 2007 grant of $15.6 million, issued under former President George W. Bush‘s administration. So if Heller (or, more particularly, Heller’s campaign) has a problem, it’s with the former president’s Energy Department policies, not with President Obama’s.

## The owner of the “Senator By Appointment Only” trademark does his best to be charitable to the “Senator By Appointment Only.”   This is difficult when the Senator denies his own campaign ads, supports grandstanding stunt bills, and votes to gut Medicare while feigning ignorance of what was in the underlying bill.

## The Examiner reports Vice President Joe Biden will be in Las Vegas for the DAV convention, during the week of August 4-7, 2012.

## ALEC, the corporate supported right wing group in which Nevada legislators Rhoads, Brower, Kieckhefer, and Cegavske proudly hold membership, has lost more corporate sponsors.  One of their remaining corporate sponsors is GlaxoSmithKline the British pharmaceutical giant which, “agreed to plead guilty to criminal charges and pay $3 billion in fines for promoting its best-selling antidepressants for unapproved uses and failing to report safety data about a top diabetes drug, federal prosecutors announced Monday.” [NYT]

## If you aren’t familiar with the Dillon Rule and its implications for state and local government relationships — start here — with J. Patrick Coolican’s description and commentary.

## The Reno Gazette Journal opens former NV Governor Jim Gibbons’ inbox and the e-mails come tumbling out.  Including:

“Sheldon Adelson wants to know what the law requires regarding foreign investors and gaming licenses, i.e., do they have to go through the same review as investors that reside in the UsA – also how are education contributions disclosed? Are they the same for public education and private or do they have to report at all,” Cornwall asked Dayton.”

## Check out these liberal voices in the Nevada blogosphere:  Vegas Jessie, and the periodic musings of Buzzlzarownd.

## Meanwhile, the town fathers of Pahrump move to lay off firefighters in a cost cutting move.  [PVT]

## From the Economy Corner — Interesting: “12  CEOs who embarrassed themselves right off of Wall Street,” [Business Insider]  “Goldman’s Rich Clients Must Feel Screwed Right Now,” [Business Insider]

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Filed under Adelson, Economy, energy policy, financial regulation, Gibbons, Heller, Nevada politics, Title IX, Women's Issues, Womens' Rights

>Lowden: Lower Corporate Taxes, While Gibbons Mows The Lawn

>** Who knew? Nevada Governor Jim Gibbons is serious about mowing grass [LVSun] and Scandalmonger has all the appropriate photos. His campaign signs say “He Kept His Promise” which seems an easy line except for the fact that evidently “increased fees” don’t count, unless the fees are raised by Democrats — at which time they are magically transformed into “tax increases.” He may have “kept his promises” about not raising taxes, but from another perspective it looks for all the world like he was entirely serious about kicking the can down the road for the next Governor to deal with declining revenues and sharply curtailed services.

** Meanwhile home prices are down 60% in Las Vegas, but that hasn’t stopped developers from trying to attract people to “new” homes, in addition to the 9,517 “new” homes already sitting vacant. [NYT] Other parts of the country seem to be climbing back out of the foreclosure swamp, but not southern Nevada where the 90 day mortgage delinquency rate inched up from 21.4% to 22.2%. [LVSun]

** Republican senatorial candidate, and erstwhile Poultry Princess, Sue Lowden campaigned in Winnemucca, NV [SPJ] suggesting to voters that what this country needs are lower corporate and payroll taxes. The payroll part might earn some credit here, but lowering corporate taxes doesn’t sound very appealing. Had the candidate researched the findings of the Tax Policy Center of the Brookings Inst. she’d have discovered that the actual corporate taxes paid in the United States are equal to 27.3% of the GDP; and, this might sound high except for the fact that the OECD average is 36.2%. More interesting still is the fact that corporations in the United States pay a lower percentage than Switzerland, Australia, Greece, Ireland, and Poland.

If those statistics aren’t persuasive, we can turn to the CBPP’s study of corporate taxation in the United States and find that 11 members of the OECD paid an average of 16.1% of their profits in taxes between 2000 and 2005, while US corporations paid 13.4%. Defenders of corporate profits often cite the tax rate as being “one of the highest” among developed countries. However, this claim ignores the evidence that the effective tax rate is significantly lower than the statutory tax rate; and, that there are a plethora of tax breaks available for US corporations. The claim also ignores the fact that many small corporations aren’t liable for the highest rates statutory rates (35%) since we have a graduated corporate income tax structure.

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Filed under Gibbons, Lowden

>Look Before You Leap: Governor Wants Appointment Powers; Senator Doesn’t Do His Homework

>Curses, foiled again! NV Governor Jim Gibbons’ proposal to allow a governor (himself?) to appoint the State Superintendent of Education failed in the Legislative Committee on Education. [LasVegasSun] The conservative side of the argument opined that if the governor were to appoint the superintendent “they could work together more closely.” Generally speaking, when one person is given the power to appoint another this is more likely to suggest a subordinate relationship as opposed to a working relationship of equals. More specifically, there’s the incumbent’s propensity for appointing proponents of nuclear waste disposal to boards opposing the Yucca Mtn. project. Or, there was that Director of Public Safety gaffe, combined with the mess with the Taxi Authority, along with the SAGE Commission and the Pahrump Board. [DB] But wait, there’s more: The appointment to the Chiropractic Physicians Board, [RJ] and one to the Wildlife Commission [inform] in addition to a flap about an appointment to the Gaming Commission. [CL] These examples ought to be sufficient to convince any sentient person that perhaps gubernatorial appointment powers should NOT be expanded.

Repeating repetition: Senator John Ensign (R-NV) parrots the GOP talking points about Fannie and Freddie, the mortgage twins, on his website. At the risk of redundancy, the embattled and ethically challenged junior Senator is missing the point. Let’s review: (1) The mortgage twins exist for the purpose of securitizing mortgages from mortgage originators so that lending institutions do not have to carry all residential and commercial mortgages on their own books — thus freeing up funds for additional construction and development. (2) During the housing bubble inflation advocates for more affordable housing and advocates for the bankers BOTH lobbied hard for the reduction in the Mortgage Twin standards for conforming loans so that more fodder would be available for securitization (and thence to the packaging of more CDOs.) (3) Republicans have been arguing for seventy years for the destruction of Fannie Mae, however no one’s yet presented a cogent proposal for replacing its function. If Fannie and Freddie are “destroyed,” then how is the securitization process to be rationalized or restrained?

The answer from the GOP is simply that it would not be. “The Market” would presumably provide the valuation of residential based mortgage securities…and we’ve just seen how well that works. Part of the problem with the Mortgage Twins was that mortgage originators, tired of waiting for Fannie and Freddie to reduced the conforming loan standards, started securitizing, packaging, and selling their own collateralized debt obligations. And, the race to the bottom was on. What Senator Ensign and Senator Sessions are advocating then is the Every Man For Himself “system” of valuing mortgage based securities. If there were ever a recipe for financial instability, this would be a prime ingredient. Without a systemic way to police the securitization, packaging, and sales of mortgage based securities there simply is no housing market. We’ve effectively tossed the proverbial baby out with the hypothetical bathwater.

Somehow or another Senator Ensign has gotten it into his head that the Mortgage Twins “subsidize” mortgages. [Ensign] Once more time: The Mortgage Twins DO NOT subsidize mortgages, they securitize them for sale to investors. Here’s the mission statement from Fannie: “Fannie Mae operates in the U.S. secondary mortgage market. Rather than making home loans directly to consumers, we work with mortgage bankers, brokers and other primary mortgage market partners to help ensure they have funds to lend to home buyers at affordable rates. We fund our mortgage investments primarily by issuing debt securities in the domestic and international capital markets.” (emphasis added) What’s so confusing about that?

A quick peek at the mission statement from Freddie Mac provides: “Freddie Mac’s retained portfolio plays an important role in making sure there’s a stable supply of money for lenders to make the home loans new homebuyers need and an available supply of workforce housing in our communities.” And, “Freddie Mac makes sure there’s a stable supply of money for lenders to make the loans new homebuyers need. This gives everyone better access to homefinancing, raising the roof on homeownership opportunity in America.” (emphasis added) This is about Stability and Liquidity. Obviously, this isn’t about “subsidizing” home mortgages, it’s about providing stability and liquidity for LENDERS.

It’s unfortunate that Senator Ensign didn’t review these basic bits of information about housing market finance BEFORE taking to the floor of the Senate to embarrass himself by intoning GOP talking points first set forth in 1938.

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Filed under Ensign, financial regulation, Gibbons, housing

>Gibbons: Careful What You Wish For? Open Negotiations Initiative

>The Las Vegas Sun informs us that Nevada Governor James Gibbons wants local government contract negotiations with public employees open to the public. One might offer a bit of caution.

Caution #1: It takes two to tango. What’s open for the unions would also be open for the administrators. If the Governor believes that this “openness” would automatically redound to the credit of the administrative side of the bargaining table — it’s equally possible that the publicity could backfire. Such administrative money manipulation as shuffling funds between accounts and related accounting tricks would be mercilessly exposed. Expenditures by Boards of Trustees by and for such Boards of Trustees would be wide open to scrutiny. Sometimes it’s not “if you have nothing to hide you don’t have to worry;” it might be that the public would find out how many tax dollars are expended for Board member training (which might be perfectly appropriate, but just “look bad”) or for memberships in various lobbying/advocacy groups.

Caution #2: Look Ma! I’m on camera. If public meetings between negotiators take place with an audience there’s always that unpleasant possibility of someone from either side, or both, playing to the balcony. And, while “eating the scenery” they could easily create a situation in which it’s altogether too easy to grandstand one’s way into impasse or arbitration. The latter two are to be avoided if possible, if for no other reason than they are both rather expensive.

Caution #3: Even if no scenery gets eaten, there are always other ways to turn a calm and civil bargaining session into a circus. One side, or both, could decide to play “pack the peanut gallery.” However, even if the turn out is small, there is always the potential for the actual bargaining sessions to transform into mere proposal exchanges without much discussion. This could actually lengthen the amount of time necessary to complete the agreement. The scenario would run something like this:
(a) The Board/Commission meets privately to prepare initial positions. The union meets privately to prepare initial positions. The first bargaining session is held. The proposal exchanges are made; both sides declare the other to be perfectly irrational; and, both go back into private sessions to work up the next set of proposals.
(b) The “lather, rinse, repeat” cycle continues in this fashion delayed by the fact that neither side wishes to trade any horseflesh in public or appear to take a compromise position; and so it goes — a stilted, stultifying, endless exchange of paperwork.

Thus, one of the nation’s least illuminating Governors has a proposal to protract negotiations with public employees, which could backfire on some boards and commissions, could result in codifying an adversarial relationship (especially where one had not been a problem before), and could result in the expenditure of more funds for impasse and arbitration processes. We might want to take a second thought before signing on to this one.

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>Saturday Quick Clips: Least Influential Lists and other matters

>** Thanks…a bunch, to NV Senatorial candidate Sue Lowden for increasing the number of reasons that the Silver State is a topic on late night comedy shows. (video link) Her rival, Danny Tarkanian, has his own little problem — that business with his license to practice law. She (Lowden) “said the Nevada Supreme Court had “reprimanded him for practicing without a license. Tarkanian, a lawyer and Las Vegas businessman, said he had merely been sanctioned for not responding to a letter for doing legal work while his law license was inactive, not for practicing without a license.” [LVSun] “merely?” And, if one’s license is Inactive, then if a person practices law without an Active license, that’s “practicing without a license.” Or, translated: I wasn’t practicing without a license, I was practicing while I had an inactive license? Same difference. Last time out, Tarkanian was trying to explain that “he’d forgotten that his license had expired.” [DB2006] Jon Ralston added some information at the time, his 2006 column is worth a review.

** As if dealing with Lowden’s Plucked Campaign, and Tarkanian’s parsing of his ethical/legal problems weren’t sufficient — we’ve made another one of those lists from which it would be nice to be omitted. NV Senator John Ensign (R) and Governor Jim Gibbons (R) have “made” Time Magazine’s Least Influential List. [LVSun] It’s not-so-good to be on a list with Tila Tequila, Jack Abramoff, and the last president of Lehman Bros. ever Dick Fuld.

** Meanwhile back in the back benches: Rep. Dean Heller (R-NV2) is concerned that the debate over health care reform took attention away from employment concerns. [LahontanVN] Old news, which goes absolutely nowhere toward explaining why Congressman Heller voted against H.R. 2847 Hiring Incentives To Restore Employment Act on March 4, 2010.

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Filed under Ensign, Gibbons, Heller, Lowden

>Things Better Left Unsaid: Nevada Politicians

>Things I Wish Nevada Politicians Wouldn’t Say:

#1.You know, before we all started having health care, in the olden days our grandparents, they would bring a chicken to the doctor, they would say I’ll paint your house,” she said. “I mean, that’s the old days of what people would do to get health care with your doctors. Doctors are very sympathetic people. I’m not backing down from that system.” Candidate Sue Lowden [Las Vegas Sun] The Sun links to the Jay Leno riff on Mrs. Lowden’s proposal. However nostalgic one might be for remote days in remote rural areas, most physicians these days prefer to be paid in legal tender. It makes paying their office staff so much easier.

#2.I am pleased to see that our fund has reached its goal less than two weeks after its establishment,” Gibbons said in a statement. “We are proceeding with our legal work and plan to file appropriate documents with the court by mid-May.” Uh-huh, and the Governor of the State of Nevada is going to file a major Federal court challenge to the recently enacted health care reform law with the $3,825 his “Defense Fund” has raised. [LV Sun] He has A lawyer working pro bono. Somehow that just doesn’t quite feel like enough. There’s probably a joke in here somewhere too.

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Filed under Gibbons, Health Care, Lowden

>Horrific Hyperbole From The Substance Free Zone: NV Governor’s Fund Raising Letter

>We ought to be used to this by now. Hyperbole permeates almost every form of modern American communication, and Nevada’s governor recently added his contribution to the miasma. His fund raising letter, helpfully provided by Jon Ralston, and eviscerated by Scandalmonger provides an excellent example of unedited, uninformed, and almost unintelligible hyperbole.

Witness the opening paragraph: “We’ve all seen where this “hopey…changey…feely…and now “believey” kind of stuff” has gotten our great Country…to the Socialist World of Big Government and of Higher Taxes…and to a Government Takeover of the Banks…of the Insurance Industry…of the Car Companies…and now…of the Peoples’ Health Care and their Right to make Personal Decisions with their doctors.”

Our first clue comes with the capital letters. Lots of capital letters, but not very many capital ideas. In fact, the litany sounds ever so much like a recitation of GOP buzz words from an unfocused focus group. It’s a long way from buzz words to policy statements, and Governor Gibbons evidently hasn’t made the trip.

“Socialist World of Big Government and of Higher Taxes”

About those higher taxes? Actually taxes have been cut for most American families: “I kept a promise I made when I campaigned for this office and cut taxes for 95 percent of working Americans,” he said in his weekly radio address Saturday. “One thing we have not done is raise income taxes on families making less than $250,000. That’s another promise we’ve kept.” The president noted that the stimulus bill passed last year has already delivered $160 billion in tax credits to Americans.” (Obama) [TDB] Additionally, the child and dependent care tax credit has been expanded for middle class families. The “saver’s tax credit” assists Americans save for retirement by providing a tax credit to match their own retirement savings. [ABC] The Heritage Foundation analysts are not impressed with tax cuts for middle class Americans, insisting that continuing the Bush Administration policy of marginal tax cuts is preferable, and claiming that targeted tax cuts are essentially unfair. The problem with that line of argument is, of course, that marginal tax cuts overwhelmingly favor those in higher income brackets. The bottom line is that the Obama Administration tax cuts target middle income wage and salary earners while the preferred model for the conservatives at the Heritage Foundation includes tax cuts targeted at those in the upper 2% of American families.

Do we have a “Socialist Big Government?” Not really. The standard definition of socialism is an economic structure including either public or worker ownership of the means of production, and the allocation of resources. We don’t have this economic framework in this country. The notion that we might comes from Governor Gibbons’ next string of hyperbolic terminology.

“A Government Takeover of the Banks”

The Governor, and his GOP cohorts nationally, are well wide of the mark. The federal government doesn’t take over banks until they are bankrupt or are very close to that condition. The FDIC has been empowered since March 12, 1933 to place banks in receivership until the bank assets can be acquired by another banking institution. [FDIC] For example, the deposits of recently insolvent Beach First National Bank in South Carolina have been acquired by the Bank of North Carolina. [FDIC] 42 insolvent banks have been closed, and the assets sold off to other institutions thus far. Surely, the transference of deposits from the custody of insolvent institutions into receivership to be acquired by solvent private institutions is not what constitutes “socialism.”

It’s more likely that what the Governor refers to is the purchase of bank holding company stock to shore up the U.S. financial system. Shoring up Citigroup provides an instructive example. During the “Panic of 2008” Citibank received a total of $45 billion to keep it afloat, later on $25 billion was converted into common stock and $20 billion was paid back by Citigroup to the U.S. Treasury. On March 29, 2010 the Treasury Department announced it would begin selling its stake in Citigroup Inc. at a potential profit of about $7.5 billion, for its 18 month investment. The Treasury Department’s sale is “a major step in the government’s effort to unravel investments it made in banks under the $700 billion Troubled Asset Relief Program at the height of the financial crisis.” [NBC/AP]

Even if we grant that the Treasury will not recoup all the funds shoveled in to bail out this floundering financial giant, we have to admit that the common stock conversion was never intended to be a permanent federal investment in the private banking sector. It was messy, complicated, and frustrating, but the final line is that with the sale of the Citi shares, the 8 major banks that got “bailout” money will have repaid the federal government in full. [NBC] If this is socialism, then it’s an extremely strange version in which private banks are temporarily subsidized such that they can return to the private banking sector in a solvent condition.

“of the Insurance Industry”

What insurance industry? It’s difficult to determine what the Governor is talking about here. If he means the buffeted and battered AIG operation, brought down by the financial mismanagement of its hedge fund, then what’s happened hardly fills the definition of a government takeover. The polite way to describe what occurred at AIG in September 2008 is to call it a “liquidity crisis.” Less politely, we could say they “crashed and burned.” The Federal Reserve created a $85 billion “credit facility” to allow the shattered company to meet “increased collateral obligations” when the full force of AIG’s decision to be on the wrong side of the bets on the U.S. housing market sent the corporation reeling toward bankruptcy. AIG agreed to the $85 billion “credit facility” in exchange for the issuance of a stock warrant equal to 79.9% of its equity. In May 2009, AIG received about $70 billion in investment support, a $60 billion credit line, and $52.5 billion to buy mortgage based assets owned or guaranteed by AIG. Since then AIG has sold several subsidiaries and other assets to pay down the loans received, and is still looking for buyers for other assets. Recently, March 5, 2010, AIG announced the sale of its shares in Transatlantic Holdings, Inc. a subsidiary of AIG’s American Home Assurance Corporation. [StreetInsider] Translation: AIG is having a corporate garage sale.

“of the Car Companies”

Once again, the Governor implies that the government assistance to General Motors and Chrysler (Ford was fine, thank you very much), constitutes a takeover. General Motors restructured during a 40 day bankruptcy, and now plans on repaying loans made by the U.S. and Canadian governments by the end of June 2010. The company owes the U.S.government $6.7 billion and another $1.14 billion to the Canadians. The loans have a scheduled maturity of July 2015. Unwilling to grant bridge loans without some collateral (and who would do that?) the Treasury assumed 61% ownership of the company. Thus far this sounds like a “Takeover,” but for the fact that the Obama Administration has allowed corporate management to restructure and run the company. “The Obama administration has been “hands off” and lets the board manage the company, Whitacre said. He said that he speaks with Treasury officials about once a week and that GM’s chief financial officer meets with them about once a quarter.” [Blmbrg] In short, the Treasury has evidenced little, if indeed any, appetite to remain in the automobile business beyond getting as much taxpayer money back as possible.

The situation at Chrysler is slightly different, in no small part because it was a private corporation to begin with. FiatSpA CEO Sergio Marchionne is trying to get Chrysler LLC back to profitability, in spite of the fact that Chrysler Group sales fell 5.3% in the first quarter of 2010. [Blmbrg]There is more risk here for the Treasury, but less exposure. The Treasury’s stake in Chrysler LLC is only 9.9%, hardly a percentage implying government ownership of the means of production. []

The Treasury Department’s commitment to GM and Chrysler included $22.9 billion in loans, $7.4 billion for assistance to auto finance companies, $5 billion to the supplier support program, and $1.1 billion for warranty commitment obligations. [GAO pdf]

The biggest losers should Chrysler and GM fail may not be the U.S. Treasury, but the pension funds of retired employees. The automakers have about $17 billion in unfunded pension obligations. “If either company’s plan must be terminated, the government would become liable for paying benefits to hundreds of thousands of retirees. The effect on the government’s pension insurer, the Pension Benefit Guaranty Corporation, would be “unprecedented,” the report said. The agency manages plans with assets totaling $68.7 billion, less than the $84.5 billion in G.M.’s plan alone.” [NYT] It’s important to remember at this point that failure of these two companies isn’t just a matter of current workers’ jobs, but also of the solvency of the Pension Benefit Guaranty Corporation.

President Barack Obama has said he wants to sell off the 60.1% stake in GM and the 9.9% stake in Chrysler owned by the federal government as soon as possible. The GAO report said Treasury officials overseeing those stakes expect GM and Chrysler’s profits “will be able to attract sufficient investor interest for Treasury to sell its equity.” [DFPress] Once again, this statement doesn’t seem to reflect the sentiments of an administration seeking to control the means of production and the allocation of resources.

“of the Peoples’ Health Care and their Right to make Personal Decisions with their doctors”

Once more with feeling: Nothing in the health care reform bill recently enacted by Congress and signed into law by the President does anything to insert the government into the actual practice of providing health care, and absolutely nothing in the law creates an intrusion between a patient and physician. However, we probably ought to take a look at what the new law actually does accomplish in the immediate future.

* Health insurance corporations cannot deny children health insurance because of a pre-existing condition. A ban on this type of discrimination for adults takes effect in 2014.

* Businesses with less than 50 employees will get tax credits covering up to 50% of employee premiums.

* Senior citizens will get a rebate to fill the Medicare drug coverage “donut hole” and as of 2011 50% of that “donut hole” will be filled.

* The cut off age for young adults to continue to be covered by their parents’ health insurance increases to age 27.

* Lifetime caps on the amount of insurance an individual can have will be banned. Annual caps will be limited, and banned in 2014.

* A temporary high risk pool will be set up to cover adults with pre-existing conditions, to be replaced with health care exchanges in 2014.

* New health insurance plans must cover checkups and other preventive care without co-payments. All plans will have to have this benefit by 2018.

* Insurance corporations may not longer abuse the rescission clauses and cut someone off from the insurance plans they’ve been paying for when the person becomes ill or injured.

* Insurance corporations must publicly reveal how much money they spend on overhead costs for administration and other expenses.

* Any new insurance plan must now implement an appeals process for coverage determination and claims.

* New screening procedures will be implemented to help eliminate health insurance fraud and waste.

* Medicare payment protections will be extended to small rural hospitals and other health care facilities that have a small number of Medicare patients.

* There will be a temporary program for companies that offer early retiree health benefits for those between 55 and 64 to help reduce the cost of that coverage.

* The Department of Health and Human Services will establish a Web site to make it easier for Americans in any state to find affordable health plans, and will also include information useful to small business owners. [HuffPo]

Screeds For Screeds Sake

The Governor has joined the GOP chorus calling for a declaration of unconstitutionality in regard to the health care insurance reform measure. So, at this juncture it’s appropriate to ask: Does the Governor really want to have the immediate benefits listed above terminated by a court decision declaring the law unconstitutional? Does he really want insurance companies to revert to their abuse of rescission clauses, lifetime caps on coverage, and denying coverage to children based on a pre-existing condition? Nothing in the aforementioned list does anything other than to increase the likelihood of a person being able to afford to see a physician in the first place. How could this be even remotely considered a barrier between an individual and his or her doctor?

The answer, of course, is that nothing in the health care law serves to place obstacles between patient and doctor. Nothing in the implementation of the Troubled Asset Relief Program could be labeled a government take over of the banking industry. The Administration is trying to get out of the car business as quickly as possible, but not at the expense of the Pension Guaranty Corporation’s solvency. And, nothing in the Governor’s overheated rhetoric supports the contention that we are barreling down the road to any form of socialism.

What we have in the Governor’s fund raising letter is the kind of pure hyperbole that pre-supposes that increasing the decibel level adds credence to the assertions. It is almost as if the Governor gathered all the recent talking points from the Party of No, reduced them to phrases, and sent them out in a blast of meaningless verbiage.

It’s very difficult to maintain civic discourse when one side or the other insists on replacing policy statements with talking points, and ever more difficult when those talking points are reduced to sloganeering. However, this letter comes from an individual who eschewed substantive policy debates during his election campaign, and ran on slogans without being called to explicate their content. He was all “no new taxes,” “tax and spend,” and “less government” before, and now he’s merely replicating the substance-free campaign of a previous season. Nevada voters deserve better.

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Filed under Economy, Gibbons, Health Care, Politics

>The End Of The World Not: Fun, Games, and Not So Funny Antics

>** Senator John Ensign’s (R-NV) contribution to the Vote-A-Rama was just voted down this morning. The ploy is to introduce amendments, lots of amendments, to the “side-car” reconciliation measure finalizing the health care reform bill to accomplish two ends. First, the GOP gets some “show votes” to use in November advertising campaigns showing “Senator Sludgepump voted to give Viagra to Child Molesters,” and secondly, to slow walk the finalization as part of the overall “kill the bill” efforts.

Not that any member of the GOP would solicit my advice, but here it is anyway. If a “show vote” is what you have in mind, then do it on a stand-alone piece of legislation. The national media, slow as they are to catch on to political gamesmanship, has already labeled the Vote-A-Rama a political game, and the fact-checkers will be all over any campaign attempts to use these votes seconds after the ads hit the air-waves. One of the messages that may very well be sent to the public is that those recorded votes were necessitated by the very same folks who voted against health insurance reform legislation in the first instance. I’m not at all sure the GOP would be well served by publicizing such a reminder.

Secondly, be cautious that the slow down doesn’t look like a tantrum. While the filibuster-lite nature of the Vote-A-Rama is not surprising, all too many people were surprised that anonymous Republican Senators used a Senate Rule to cut off all hearings after 2:00 PM. Unfortunately, someone forgot to look at the schedule before launching this tactic. One of the hearings that got halted in mid-stride was Senator Daniel Akaka’s (D-HI) Armed Services Committee hearing on how to address the needs of approximately 100,000 homeless veterans over the next five years. [HuffPo] It’s difficult to shut down a hearing on homelessness among former servicemembers, and then try to re-attach a “Support The Troops” sticker to your cause.

Senator Claire McCaskill (D-Mo) was perturbed that she had to cancel an oversight hearing on police training contracts in Afghanistan, and Senator Carl Levin (D-MI) had to cancel a hearing which included testimony from “Admiral Robert Willard, United States Navy Commander of the U.S. Pacific Command; from General Kevin Chilton, United States Air Force, Commander of the U.S. Strategic Command, and from General Walter Sharp, United States Army Commander, U.S. Forces Korea.” [HuffPo] Shutting down a hearing the agenda for which includes funding U.S. forces in Korea doesn’t seem to be the brightest way to convince the American public that “national security” is the forte of the Republican Party.

** Nevada Governor Jim Gibbons would very much like to have Nevada Attorney General Cortez Masto join the T’bagging Lawsuits against the recently enacted health insurance reform bill. In this, as in so many other unfortunate cases, the Governor appears not to have done his homework. It is one thing to spew that the new law “eviscerates the state” and quite another to address specific areas of contention on which the constitutionality of the bill could be challenged.

Cortez Masto isn’t moving without ammo. Representative Dean Heller (R-NV2) has joined the right wing chorus for a court challenge, but he, too, failed the homework part of the assignment: “U.S. Rep. Dean Heller, a Republican, on also raised concerns in a letter to Cortez Masto about the health care bill. Cortez Masto responded to Heller’s letter, writing: “You fail to cite to any specific provisions… I mention this in the hopes that you can provide my office with the specific provisions in the new law that you are referencing in your letter.” [LVSun] (emphasis added)

As we’ve all known all along: Anybody can file a lawsuit; intelligent people file suits they think they can win. From the Department of Repeated Reminders: (1) The Commerce Clause allows for federal plenary authority; (2) The ‘takings’ precedent doesn’t stand given the established constitutionality of minimum wage and disabilities act statutes; (3) The inclusion of taxation provisions in the health reform statute places the law directly in line with the Article I Section 8 language allowing Congress to “lay and collect taxes;” and (4) the inclusion of the “Wyden Language” on waivers for states using alternative health insurance plans approved by the Department of Health and Human Services further detracts from the probability that a constitutional challenge would be successful. (See part IV, sections 1331+)

Now, can we get back to business?

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>Nevada Governor Yells At Clouds

>Nevada’s most likely candidate for the title of “His Irrelevancy,” Governor Jim Gibbons, doesn’t like the health care reform legislation recently enacted by the 111th Congress: “What if the federal government forced you to buy a car or a television set then threatened you with IRS fines if you didn’t obey?”, Gibbons said in a statement. “That’s what they are doing with this health care debacle, the federal government has no right to force anyone to buy health insurance and the federal government has no business butting in to the relationship between a patient and their doctor.” [LVSun]

Let’s get rid of the extraneous rhetoric first. There is NOTHING in the legislation that inserts “thuh government” into any doctor-patient relationship. This canard has been around for so long (circa 1948) that its promoters have become inured to the possibility that health insurance reform doesn’t have anything to do with “doctor-patient” connections. In fact, one of the most common forms of interference comes from the managed care and preferred provider listings from the insurance corporations themselves which “inform” the policy holder which physicians and medical facilities to use in order to be reimbursed for insurance claims. Now, we’re ready for those lawsuits at hand.

It Was A Good Idea Until The Democrats Suggested It

The prepared suits all revolve in some way or another around the individual mandate, which the Republicans supported before they were against it. On September 22, 2009, Senator Charles Grassley (R-IA): “I’ve been finding among some conservative Republicans the feeling of individual responsibility. Not that they want to do that, but the fact is that it is costing everyone anyway,” Grassley said. “So you have a shared responsibility.” [Politico] Grassley’s support for the individual mandate shifted from “pro” in June when others shared his view such as “Bob Bennett, Lamar Alexander, Norm Coleman, Bob Corker, Mike Crapo, Lindsey Graham, Judd Gregg and Trent Lott have also come out in support of an individual mandate, as they all co-sponsored Ron Wyden’s Healthy Americans Act, which includes one.” [WaPo] However, that was then, and as is so often the case with Republican positions, this is now.

The Commerce Clause

Article I, Section 8 will likely get another turn in the barrel: “…To regulate Commerce with foreign nations, and among the several States, and with the Indian Tribes.” Two questions come to mind immediately: (1) Is purchasing health insurance a transaction in inter-state trade? Yes. It isn’t unusual to require people to conform to national regulations in inter-state commerce. For example, I cannot sell A Potent Concoction For The Prevention Of Male Pattern Baldness (a lovely mixture of coconut oil and whipped cream) because there is a long history of federal control over what I can sell to the public, especially when I am being blatantly unethical, and members of the public are likely to be deluded by my claims. Since Gibbons v. Ogden (1824) the Commerce clause has been cited to show that in the absence of state regulation, federal power is plenary. [West] And, insurance policies are sold by national companies in a nationwide market.

(2) Can an individual be required to purchase a product offered in inter-state commerce? Yes, again. We require automobile insurance. What if I don’t decide to own a car? What if I refuse to engage in the transaction? This looks at first sight like a good argument for health care reform opponents — however, this is precisely where the argument breaks down. Can the government require a person to make a purchase (in inter-state commerce) even if I refuse the transaction?

It can if my refusal affects other transactions in inter-state commerce: “Covering more people is expected to reduce the price of insurance by addressing free-rider and adverse selection problems. Free riding includes relying on emergency care and other services without paying for all the costs, and forcing providers to shift those costs onto people with insurance. Adverse selection is the tendency to wait to purchase until a person expects to need health care, thereby keeping out of the insurance pool a full cross section of both low and higher cost subscribers. Covering more people also could reduce premiums by enhancing economies of scale in pooling of risk and managing medical costs.” [Slate]

The “free riding” and “adverse selection” arguments once made by some Republicans when they were in favor of individual mandates, are the very same contentions that underpin the application of the Commerce Clause in the matter of health insurance reform.

Taking The 5th

The Fifth Amendment states: “no shall private property be taken for public use without just compensation.” Opponents of the individual mandate charge that requiring a person to purchase health insurance “takes” their private property (money) without compensation. This line is the weakest link in the chain. First, I am being compensated — I am getting health insurance. But, but, but… how can this “taking” be justified even if I am getting health insurance, because there is no taxation element inserted into the process? Simply…we do it everyday. The only way to argue that this is an uncompensated taking without a requisite taxation element is to deny that the Congress has the power to set a minimum wage, or to require under the provisions of the Americans with Disabilities Act that businesses be accessible. There are ultra-conservatives who adhere to these notions, however, none have been successful making their cases in actual courts. [Slate]

There is a long history of reform opponents attempting to overturn federal legislation when it revises the status quo. One of the rather more egregious in recent memory was South Carolina vs. Katzenbach, 1966, when the state sought to overturn the 1965 Voting Rights Act. Major cases concerning the Fair Labor Standards Act of 1938 (minimum wage) have centered around the application of the statute in terms of transit time and employee classifications, and assume the constitutionality of the initial statute in question.

Be Careful What You Wish For

Before opponents of health insurance reform become too enamored of their “constitutionality lawsuits” they may wish to remember that the Commerce Clause blade cuts both ways.

There are instances in which pro-corporate, pro-business, advocates have used the Commerce Clause to justify national jurisdiction over state regulation. The 1978 Marquette National Bank of Minneapolis vs. First of Omaha Service Corporation case held that state usury laws could not be imposed on nationally chartered banks. Arguing that health insurance individual mandates are unconstitutional because the federal government cannot apply the Commerce Clause to the several states which do not care to participate could come perilously close to over-turning the foundation for this business friendly precedent.

All in all, Governor Gibbons’ latest rantings on behalf of the last lost cause seem to be little more than oratorical offerings designed to please some elements of the Republican base, perhaps of the TeaBagging variety, than considered constitutional arguments with any extensive analysis of the implications or ramifications of their results.

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>When A Picture Is Worth At Least A Thousand Words

With all due credit, gratitude, and thanks to Talking Points Memo for originally publishing this wonderful photo of two of our nation’s more notorious governors at the “Big Governor’s Bash” in Washington, D.C.

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