Student loans

I've been meaning to blog about the student loan reforms included in the health care reform "fixes" legislation.  Had this happened on its own, it would have been a fairly major deal, yet it happened almost completely under the radar while everyone was so focused on health care.  Not quite sure the Democrats would have pulled off this very smart move above the radar (too many recalcitrant Democratic Senators who want to prop up the wasteful student loan industry in their states).  The New Yorker's James Suriowiecki had a great post about the absurd state of affairs back in September:

 A couple of years ago, in a column about the perverse economics of the
student-loan business
, I wrote, “For decades, student-loan
companies have had one of the cushiest businesses in America.” The loans
companies like Sallie Mae make to students are subsidized and almost
entirely guaranteed by the federal government, so that if a student
defaults, it’s the government, not the private company, that eats the
loss. It’s a quintessential example of the “heads the corporation wins,
tail the government loses” business model—a model that many Wall Street
firms are now reaping the benefits of—and over the years it made student
lending a very profitable business to be in. Now it looks like there’s a
chance, at least, that the entire system is about to be overhauled. The
House of Representatives yesterday passed a bill that would abolish the loan guarantees and subsidies, and
allow the federal government to make all new federal college loans

There really is no argument against this bill on the merits. Ever since
the Clinton years, the government has been making college loans
directly, and the only reason it hasn’t already become the biggest
player in the market is because the private lenders have lobbied to
restrict it (doing so, of course, with the money they make from
government subsidies and guarantees). According to the Bush
Administration’s own figures, it costs the government four times as much
to back private loans as to make the loans itself, and the Obama
Administration estimates that getting rid of the subsidies and
guarantees will save close to $90 billion.

As to where the savings go, some of it is plowed back into health care and others go into expanding Pell grants.  So, basically, you are creating more government efficiency, and using the money to fund health care and college educations for less well-off citizens and spending less money to go to the vacation homes of bankers.  Sounds like a pretty good trade-off.  Naturally, Republicans are against it.  As nobody else can, Jon Chait eviscerates the incoherence of their support.  This policy is win, win, win all-around.  It's a shame Republicans cannot bring themselves to support something this obviously sensible.    And for students and the American taxpayer– hooray!


Mega quick hits

I've been a bad blogger.  I've got a ton of tabs saved up I've been meaning to blog about and have not done so.  In the list of at least clearing this out, here goes…

1) We so over-screen for Prostate cancer.  Unless things really change, no PSA test for me.  The costs so clearly outweigh the benefits but everyone is irrationally (though understandably) afraid of cancer.  

2) A really important and not fully appreciated point is how much politicians actually shape public opinion.  Yglesias has a great post on how Republicans so consciously and successfully managed to shape opinion on health care. 

3) For all those idiots complaining about how evil, unconstitutional, and liberal the individual mandate is, you might want to mention that the idea basically comes from the Heritage Foundation.  This post from Ezra Klein very much speaks to this point as well. 

4) Charles Blow to tea partiers: "You may want “your country back,” but you can’t have it."  I.e., Uneducated whites are an ever-shrinking part of the population.

5) I've said it before, I'll surely play it again.  I really don't have a big problem with a pro-market philosophy.  I've got a real problem with being pro-business.  The Republican party (and sadly, the Democrats to a considerable degree) are decidedly in this latter category.  Ezra explains

6) For a young woman selling her eggs, an increase of 100 points on the SAT is worth about $2300 in the value of her eggs. 

7) Interesting story about the lobbyist working for Catholic Bishops who did his damnedest to bring down health care.  

8) At Census time, prisoners are counted as residents of the county in which they are imprisoned.  It's not fair

Me on the 2010 Midterms

So, after listening to all the ridiculous media coverage suggesting that the health care vote was going to cost Democrats seats in November, I decided to set the record straight– at least for readers in the Raleigh area.  Here’s my Op-Ed in today’s N&O.  A snippet below:

Political science research on midterm elections suggests, however, that although Democrats will almost surely lose a substantial number of seats in the House of Representatives come November, the vote on health care will have little, if anything, to do with that…

In 2010, Democrats are doubly vulnerable, as they picked up a significant number of normally Republican-leaning seats in both 2006 and 2008. Only once in the 20th century did one party gain House seats three elections in a row. Currently there are over 50 House seats held by Democrats in districts that lean Republican and fewer than 10 seats held by Republicans in districts that lean Democratic. Obviously, this fact alone makes it much easier for Republicans to pick up seats…

We’ve surely all heard too much of the “making legislation is like making sausage” metaphor, but it now proves especially apt, as people really enjoy consuming sausage even if they don’t like to see how it’s made. Despite key health care reforms not kicking until 2014, the Democrats wisely frontloaded the legislation with benefits such as
fixing the Medicare “donut hole,” extending coverage for young adults and ending (or at least intending to end) pre-existing-condition exclusions for children. Thus media coverage will no longer be about the unsavory process, but the more amenable end-result.

When all is said and done on Nov. 2, however many seats Democrats lose – and they will lose many – it would’ve been far worse for them had they failed to
pass health care, not better.

Good losers and bad losers

Great post by "Big Steve" today.  I'm just going to borrow my favorite parts:

 I have come to the belief that much of the grumbling over the past year
in US politics is due to the fact that the Republicans are sore losers. 
That's right, they are LOSERS.  They lost the election, and now they
lost a major policy battle.  The strange thing is that over the course
of time, folks of a certain persuasion have felt entitled to rule and to
win.  But rule number one of democracy is that sometimes you lose and
you have to accept it. 

Democrats are good losers.  Hell, we are great losers.  We are used to
losing elections and getting tossed out of power, losing major policy
battles and moving on.  Despite the fact that the Democrats dominated
Congress for much of the postwar period, Republicans, perhaps due to 12
years of rule from Reagan to Bush I, have become used to ruling.  The
entire Clinton administration seemed to be one big hissy fit because the
GOP candidate came in 2nd.  Hey, at least, Bush and then Dole didn't
finish third. 

So, now we have some death threats, minor actors of violence and so on
in the aftermath of the health care vote.  What these Americans forget
is that the Revolution's key slogan was No
Taxation Without Representation
, not We
Must Always Get What We Want
.  What the founding folks
wanted was Taxation with Representation.  Representation does not mean
winning–it means that your views are represented, that folks you vote
for are involved in the decision-making process.

Love that last point, so I'll end my excerpt there  

Too big to fail

I'm not sure I've done any posts on financial regulation, so here's a first.  I've long been intrigued by the "too big to fail" problem and without too much knowledge on the subject, it's struck me that "too big to fail" is "too big."  This article is a very wonky, but very clear explanation of the too big to fail problem.  From what I've read from trusted bloggers on the matter, we're not addressing this significantly, but now I can understand exactly what they're talking about.  And, now I definitely believe that too big to fail is too big. 


Keep it Classy, GOP

I suppose that after all the hysteria from the right over health care, we should not be surprised that many Democratic members of Congress have received death threats and had their offices vandalized.  Are Republican lawmakers and media talking heads responsible?  No.  Do they bear some responsibility?  You bet.  When you go about whipping your followers into a frenzy over mythical "socialist takeovers" "death panels" and "Armageddon" is it any wonder that the less mentally stable of these rubes are going to take stupid, violent action.  It's also a nice rebuttal to the "both parties do it" nonsense people are always throwing about.  It's not like it was attack of the liberals after Bush's tax cuts.  The Huffington Post has assembled some of the more over-the-top quotes complete with video.  I also really like this compilation of Republican quotes on major legislation from the past.  Needless to say, somehow America remained a democracy even with Bill Clinton's budget!  Of course, nothing beats Ronald Reagan's doom-saying on Medicare: ""[I]f you don't [stop Medicare] and I don't do it, one of these days you
and I are going to spend our sunset years telling our children and our
children's children what it once was like in America when men were
free."  You'd think people would stop believing the ridiculous Republican rhetoric on this stuff.  Well, at least the smarter people, do.  Unfortunately, this time the dumbest have turned violent. 


The deliverables

The White House posted a nice memo that clearly lays out how Americans will benefit from the health care reform now (or at least in the very near future).  Kevin Drum highlights some of the key points:

  • This year, children with pre-existing conditions can no longer
    be denied health insurance coverage. Once the new health insurance
    exchanges begin in the coming years, pre-existing condition
    discrimination will become a thing of the past for everyone.
  • This year, health care plans will allow young people to remain
    on their parents' insurance policy up until their 26th birthday.
  • This year, insurance companies will be banned from dropping
    people from coverage when they get sick, and they will be banned from
    implementing lifetime caps on coverage. This year, restrictive annual
    limits on coverage will be banned for certain plans. Under health
    insurance reform, Americans will be ensured access to the care they
  • This year, adults who are uninsured because of pre-existing
    conditions will have access to affordable insurance through a temporary
    subsidized high-risk pool.
  • In the next fiscal year, the bill increases funding for
    community health centers, so they can treat nearly double the number of
    patients over the next five years.
  • This year, this bill creates a new, independent appeals process
    that ensures consumers in new private plans have access to an effective
    process to appeal decisions made by their insurer.
  • This year, discrimination based on salary will be outlawed. New
    group health plans will be prohibited from establishing any eligibility
    rules for health care coverage that discriminate in favor of higher-wage
  • Starting January 1, 2011, insurers in the individual and small
    group market will be required to spend 80 percent of their premium
    dollars on medical services. Insurers in the large group market will be
    required to spend 85 percent of their premium dollars on medical
    services. Any insurers who don't meet those thresholds will be required
    to provide rebates to their policyholders.
  • Starting in 2011, this bill helps states require insurance
    companies to submit justification for requested premium increases. Any
    company with excessive or unjustified premium increases may not be able
    to participate in the new health insurance exchanges.
  • This year, small businesses that choose to offer coverage will
    begin to receive tax credits of up to 35 percent of premiums to help
    make employee coverage more affordable.
  • This year, new private plans will be required to provide free
    preventive care: no co-payments and no deductibles for preventive
    services. And beginning January 1, 2011, Medicare will do the same.
  • This year, this bill will provide help for early retirees by
    creating a temporary re-insurance program to help offset the costs of
    expensive premiums for employers and retirees age 55-64.
  • This year, this bill starts to close the Medicare Part D 'donut
    hole' by providing a $250 rebate to Medicare beneficiaries who hit the
    gap in prescription drug coverage. And beginning in 2011, the bill
    institutes a 50% discount on prescription drugs in the 'donut hole.'

 That's a lot of good stuff that will make a real difference in many people's lives.


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