Are the Blue Dogs Moderate?

No says Americans for Limited Government. They've done an analysis of what they call "some of the most controversial votes of 2009". Of these, 856 were Yea and only 207 were Nay. Of course, it's important to note that the "controversial votes" were entirely determined by ALG themselves.

Here's the votes they accounted for: 789 billion "stimulus", bankruptcy mortgage "cramdowns," ACORN funding, a $108 billion International Monetary Fund expansion, the Waxman-Markey carbon emission caps, the $2.1 trillion "public option" health system, the $154 billion assistance program for bankrupt states, and the $290 billion debt limit expansion.

This is being selective and it's without context but still the results are remarkable. The Blue Dogs are supposed to be moderate and certainly fiscally conservative. Nancy Pelosi is a San Francisco liberal. Many of these votes are some of her biggest pet projects and about 80% of the time they voted with Pelosi.

Incidentally, speaking of cap and trade...that's on life support.

Bruised by the health care debate and worried about what 2010 will bring, moderate Senate Democrats are urging the White House to give up now on any effort to pass a cap-and-trade bill next year.

“I am communicating that in every way I know how,” said Sen. Mary Landrieu (D-La.), one of at least a half-dozen Democrats who've told the White House or their own leaders that it's time to jettison the centerpiece of their party's plan to curb global warming.

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Not Buying Pelosi Care

Now, it isn't that I'm not buying. I'm not. That shouldn't surprise anyone that has read this site any more than once. What I'm not buying is that Democrats have the votes to pass this thing. The current version of Pelosi Care is no different in any significant way from H.R. 3200, which passed before the break. The bill will cost about a trillion dollars over ten years. It will cover about 35 million of the uninsured. It will have mandates for employers and for the uninsured. It will have fees for insurance companies and the wealthy. It will expand coverage of Medicare and Medicaid but cut reimbursement for both.

So, we have taxes on the uninsured and small businesses. We have cuts to both Medicare and Medicaid. It's going to cost more than the president wants. These are all the problems that Blue Dogs and others that have had since the beginning. This bill will not "add a dime to the deficit" according to Nancy Pelosi. That maybe so, but that's because it won't start to be fully implemented until 2013 while the taxes begin to be collected starting next year. That's an accounting trick and it isn't going to fool most people. Adding taxes to small business owners and the uninsured is a tax on groups that are the third rail in politics. Cutting Medicaid and Medicare is another third rail.

So, what's so different about this bill from H.R. 3200? There isn't much difference and yet Speaker Pelosi wants this voted on by the end of next week. Bart Stupak was on Fox News this morning saying that he's ready to block the bill simply from the language regarding federal funding for abortion. That's an issue that can and should be resolved and yet, that isn't resolved yet. We haven't even gotten into the weeds of this bill yet. We're still on an unnecessary divisive issue.

The same person that has blown through deadline after deadline is now telling us confidentally that in the next week and a half at the most this will be debated, voted on, and passed. I'm not buying it. This is the same train wreck that H.R. 3200 was. There's nothing diffierent here. The Blue Dogs were against that bill and they will be against this. There's nothing here that has altered the bill to make it any better. If Blue Dogs vote for this bill, they will be voted out en masse. Those that also voted for cap and trade are really in trouble.

This bill was put together in secret. No one outside of a handful of people have seen the bill in its entirety and there are reasons for that. Pelosi knows that with enough sunlight the bill will be exposed for the disaster that it is. That's what is about to happen and so I am not buying the timeline that Pelosi is pushing.

The Chicago Way Won't Work in D.C.

A lot of folks have tried to hyper analyze the influences on President Obama. One influence that largely goes unnoticed outside of the city of Chicago is the influence of Mayor Richard Daley. President Obama made his initial political base in the Hyde Park area of Chicago. No one gets any political power in the city of Chicago without the seal of approval of the mayor himself. Yet, the link between the two is often overlooked. Only John Kass of the Chicago Tribune has done a very good job of making the link.

It's amusing to watch the Washington political establishment feign shock, now that President Barack Obama's reform administration has used a clay foot to vigorously kick one inspector general and boot another out the door.One inspector general foolishly investigated a friend of the president. Another inspector general audited those juicy bonuses given to AIG executives as part of $700 billion federal bailout of the financial industry.

It's a decent man-bites-dog story, at least until North Korea tries lobbing a few missiles toward Hawaii. But until that happens, the political talk shows will buzz about Neil Barofsky, the inspector general overseeing the financial bailout.

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But our president is from Chicago. Obama's Media Merlin David Axelrod and chief of staff Rahm Emanuel come right from Chicago Democratic machine boss Mayor
Richard Daley. They don't believe in fairies.Daley can't wait to be rid of his own inspector general, David Hoffman, who had the audacity to question why Daley's nephew received $68 million in city pension funds to invest.

The mayor insists he didn't know anything about it. Nobody with a functioning brain believes the mayor.The second that Hoffman's term expires, the mayor will change the locks on his office doors and move Hoffman's house plants out into the cold. Daley might even send some of the same political tough guys who helped elect Emanuel to Congress years ago, all in the name of reform.

It's the Chicago Way. Now, formally, it's also the Chicago on the Potomac Way.

To understand how Obama is trying to run D.C, you first have to go back and look at how Daley runs Chicago. Daley runs Chicago like any political machine. There is a notorious quote from George Washington Plunkitt that describes most political machines.

I seen my opportunities and I took 'em.

By opportunities, political machines mean the opportunity to grab money, power and influence. That's really the goal of all political machines. It's an eternal quest for more money, power and influence. That's how Daley runs the city of Chicago. Everything he does, he does with the goal of gaining more power, money and influence.

So, what happens in Chicago. Daley's friends and colleagues are put into the positions of power. They are the ones that are promoted. Worst of all, they are the ones that are put into positions to be the whistle blowers and watch dogs. From Hired Trucks, to Meigs Fields, to the Olympics, that's how Daley has operated. His friends and allies get all the resources of the city while the tax payers are left to pay for the bills. Even the mayor's new push to privatize everything is really nothing more than a power and cash grab. That's because the mayor and his cronies have figured out that it's much easier to shake down private firms that are doing business with the city. It's also much easier to hide the shake down since there is no watchdog or IG for a private firm.

So, in Daley's machine, like all machines, you take care of all your friends. They take care of all their friends. Everyone continues to expand their money, power and reach because more and more want to be on the inside. On top of all this, anyone that doesn't play ball with you gets retaliated against and ultimately eliminated. The unions, the business leaders, and the power brokers are all part of the machine. So, anyone that's honest and reports the abuse will ultimately be reporting to someone allied with Daley.

The media is ultimately irrelevant. They're all dying for access so they never did too deep. Just take the Olympics as an example. For the better part of two years Daley pushed the Olympics under the guise that no tax payer money would be spent. Then, in May, he pronounced that he'd sign the host city contract which would put the city on the hook for all expenses above and beyond those that the IOC would cover. That, in effect, guaranteed that the city, or better yet the tax payers, would be on the hook. Yet, here's the latest editorial from the Sun Times.

As a newspaper, we can't state it more clearly: We are enthusiastically behind the Games coming to Chicago in 2016.

Pat Ryan, the business powerhouse behind the bid along with Mayor Daley, has assembled a world-class bid package thanks to a first-rate management team. If Chicago doesn't win, it won't be for lack of talent and effort.

Keep in mind that this editorial came out only a month after it was revealed that Michael Scott, a member of that "first rate management team", was securing a sweetheart deal for himself all while trying to get other businesses on board with the bid. This is three months after Mayor Daley broke his promise not to use any city funds. Yet, will almost no scrutiny, the Sun Times "enthusiastically" supports the bid. That's the sort of media scrutiny that Daley can expect. So, he creates schemes that he claims will benefit the tax payers all the while knowing they will benefit himself and his cronies. Then, when the truth is revealed, he cries some crocodile tears, makes some half hearted apologies, and he moves on. That's because he knows the media scrutiny will be only skin deep. We've already forgotten about the blatant conflict of Michael Scott and he remains on the bid committee.

As for the voters, Daley and his machine are the only game in town. So, they're left with little choice but to vote for him. He's the one with the power and influence. If a certain area needs to be cleaned up, then streets and sanitation is sent in and all of a sudden it is. The voters there forget about the obscene corruption that was reported just last month.



That's essentially how Obama has tried to run his White House. Kass alluded to the story surrounding Gerald Walpin. He was an honest whistle blower and he ultimately reported corruption to his own demise. As soon as Walpin reported on corruption of Obama ally Kevin Johnson, he was dismissed. That's what a corrupt political machine does to an honest whistle blower. That's exactly what happens in Chicago. Pat McDonough tried to report on the corruption surrounding the Hired Truck Scandal, and he was summarily fired by the city. In Chicago of course, an honest person would never wind up as an IG since that's counter to the point of the machine. Since Walpin was a Bush holdover, Obama was simply cleaning up a mess.

More to the point is the behavior of Obama in both the health care and cap and trade legislation. All he really did was essentially pay everyone off. That's boiler plate political machine politics. All he really did was create legislation that took care of his friends. The unions, the AARP, the AMA, the auto makers, GE, and the drug companies were all given deals and in return they provided support for both cap and trade and health care reform. That's how Daley does it too. All his legislation and mandates simply take care of his friends, allies, and cronies. In return, they support everything he does. For instance, Daley gave Alderman Shiller her lifelong dream of low and moderate housing in her ward, by way of Wilson Yards, and she supports his bid for the Olympics. She even supports putting all sorts of new tennis courts in her ward.

Then, there's the famous Daley bullying, intimidation and retaliation. It's so notorious that John Kass refers to it as Daley's Chucky alter ego. That's only in public. In private, you cross him and suddenly cops stop showing up in your area. The garbage stops being picked up. The water gets shut off. Your friends and family get fired from their city jobs. You cross Daley and he'll use the full force and power of his machine to bring you down. Again, just ask Pat McDonough what happens when you cross Daley.

Obama does business the exact same way. We all remember Tom Lauria. He's the bankruptcy attorney that dared to challenge Obama's scheme to orchestrate the bankruptcies of Chrysler and GM himself. Suddenly, Obama was...

A leading bankruptcy attorney representing hedge funds and money managers told ABC News Saturday that Steve Rattner, the leader of the Obama administration's Auto Industry Task Force, threatened one of the firms, an investment bank, that if itcontinued to oppose the administration's Chrysler bankruptcy plan, the White House would use the White House press corps to destroy its reputation.

Let's take the health insurance companies. They aren't on board with the President's health care proposal. So, suddenly, Henry Waxman is demanding a plethora of documents from all of them for a yet unnamed investigation.

Even Obama's czar mania is really nothing more than an attempt to consolidate more power in his own hands and the hands of his friends and sidestep the Congress. Obama's M.O. is standard issue political machine politics.

Here's the good news. It won't work. In fact, it will fail miserably. That's because D.C. is not Chicago. First, Daley has no legislature. He technically does, but the city council is nothing more than a rubber stamp. It's all Democrats. Second, anyone that gets out of line will not have the garbage in their area picked up. The police will stop showing up, and Daley will make sure to run someone from his organization against that alderman. Obama has no such power. Not only does he have the other party to deal with, but much of his own party has constituents that simply don't agree with him. It's not as though there are ideological battles in Chicago. It's not as though some part of the city thinks that Daley is too liberal and wants their alderman to reign him in. In D.C., that's exactly what's happening. Obama can't threaten his folks the way that Daley can.

Second, the nature of the media is totally different. The media in Chicago is dominated by two newspapers and four television stations. None of them will ever go too hard after Daley because then no one in city hall will speak to them again. Obama has that contingency as well, but he also has to deal with Fox News, talk radio, and the new media. They already have no access and so they aren't very concerned with what he will do to them if they cross him.

Finally, there's the voters. In Chicago, they don't matter. The machine has too much power, money and resources and so no one ever challenges them. The people will moan and complain and then Daley will get 70% of the vote in the next election. In D.C., that's simply not the case. Every Congressperson has to face the voters every two years. The advantage for an incumbent is enormous but not so enormous that a moderate Blue Dog can be Obama's crony and still get re elected. That's why health care is having so much trouble.

The fact is that bullying, cronyism and favoritism is perfect in Chicago. That's because in Chicago all that matters is controlling the internal machine. In D.C., it's much more complicated than that, and so the Chicago way is failing in D.C.

From ObamaCare to Romney Care?

Foxnews is reporting that the White House maybe backing away from the "public option" in health care.

On Sunday, Health and Human Services Secretary Kathleen Sebelius said the so-called public option -- a government-run health care plan that would be just one component of a broader health care overhaul -- is "not the essential element."

Furthermore, on Fox News Sunday, Senator Kent Conrad said that the public option simply didn't have the votes to pass. Without the public option, the bill would look an awful lot like Romney Care in Massachusetts. In Massachusetts, everyone was insured as well. Employers were mandated to provide coverage for their employees. Those that weren't working and couldn't afford insurance had it subsidized by the state government along with employers.

Now, the current bill, at least in the House, is much more complicated than that, but most key principles would now make ObamaCare and Romneycare indistinguishable. Those princples are these. In both, Medicare/Medicaid would be expanded. In both, employers would be mandated to provide coverage. In both, those without care would be fined. In both, the government would subsidize those that couldn't afford health care. It's also important to note that Romney Care is now bankrupting Massachusetts.

If Obama pulls out the public option, he will have no choice but to move the entire bill to the right and make it a center right bill. The reason for this is that removing the public option would peel off a significant portion of liberals in the Congress. Simply removing the public option won't get many Republicans on board.

By removing the public option the president would guarantee that the only bill that would pass would be one that would ally Republicans and moderate Democrats. Such a bill could pass though it would look nothing like the current bill.

Republicans are not going to stand for a bill that forces businesses to provide health insurance to their employees. They aren't going to stand for a bill that imposes penalties on those that choose not to get health insurance. Republicans also want tort reform and many Republicans want health insurance to be able to cross state lines. Republicans are also big supporters of Health Savings Accounts. I said earlier that the President would need to embrace a health care bill in the style of Bennet/Wyden if he wanted sweeping reform to pass. Removing the public option could be the first step toward that evolution. If he follows through and moderates the bill entirely, not only will he get sweeping health care reform, with bi partisan support, but he will pull off an impressive piece of political jujitsu. He will move from a coalition of liberals to a coalition of moderate and conservatives.

Hubris and Naivete Are Bring the President Down

I don't know the president and so I want to be careful in making character observations. That usually requires reading some one's mind. Instead, I want to analyze his actions which I believe speak for themselves. Right now, health care reform is on life support. If that doesn't pass, it will also spell doom for cap and trade. Without either initiative passing, the president will face mid term elections in which we'll have near double digit unemployment, near two trillion dollars in deficits, and no major legislative accomplishments. That will create a bloodbath for any Democrat running in November of 2010.



It's nothing short of remarkable that only six months ago President Obama had near 80% approval ratings. Now, he is about to be so politically damaged that he may never recover. How did this happen? In my opinion, it's a combination of hubris and naivete. The president exhibited his first fatal sign of hubris in only his second day in office. That's when he signed an executive order to close GITMO a year from that day. It's now clear that he had no plan to close it and the plans he had for it's closure were terribly naive. It's ironic and scary that GITMO hasn't yet affected him politically. That won't happen until early next year. That's when he will either force terrorists on towns and cities that don't want them or he will go back on his publicized promise.



Either way, proclaiming that he would close GITMO in a year with no plan to close it showed not merely arrogance but fatal hubris. It's exactly that sort of a public promise that comes back to haunt presidents. Yet, the president made it confidently in only his second day on the job.



When the stimulus was being debated, President Obama famously, in an exchange with Eric Cantor, proclaimed "I won so I trump you on that". The stimulus passed with only three Republicans voting for it in either chamber. By doing so, he took total ownership of all its effects. Had President Obama tried to incorporate some Republican ideas he would have split the Republicans. He would have gotten about half the Republican chamber to sign on. By doing so, they would have shared in its effects. Now, he owns its effects. As such between the ballooning deficit, the growing unemployment, and the stagnating economy, the President alone is being held responsible. Had he tried to include Republicans their ideas would have been included and they would have shared responsibility for its effects. That he didn't is another sign of both political hubris and naivete.



The president also totally misread the political landscape. The president was elected on a moderated message. His most famous line was "I do what works". He was supposed to be post partisan, post racial, and pragmatic. Yet, he's governed as a liberal if not far left. Did he really think his mandate was to move the country this far left? Did he not understand the theme of his message? The president furiously denied the National Journal's poll that rated him the most liberal Senator in 2007. He fought hard to present an image of moderation. Yet, his entire agenda has been liberal to far left. How did he think this was going to work? That's both full of hubris and naivete.



Then, there's the price tag on all of this. Brit Hume made an excellent point about this. By passing the massive stimulus, he made it harder to pass any other big spending item. He moved forward with a $787 billion stimulus even though he had a trillion dollar health care bill and a three and a half trillion dollar budget he still wanted to pass. Did he really think that he could pass all this spending all at once?



Because the stimulus was so expensive, the president made a promise not to allow health care reform to add to the deficit. As such, in order to sell health care reform he must raise taxes on someone. A marginal tax increase on soda, cigarettes, or beer won't be enough. He'll have to raise some one's margins on their tax rate. That's rarely popular and just as rarely that becomes law. Walter Mondale ran on a platform of raising taxes. He lost 49 of 50 states. Did President Obama really think he'd be different? Such an assertion is both full of hubris and naivete.



Then, he let the Congress write the details of the bill. He merely set out broad parameters. Congressional leaders are entirely made up of far left liberals. So, what kind of a bill did he think would come out? Did he really think the public at large would like a bill framed by the likes of Henry Waxman, Nancy Pelosi, and Ed Markey? Does the president really not realize that despite his election the country is still center right not far left? So, when far left folks are the major players in crafting legislation is he really surprised the country is rejecting the legislation?



Did he really not understand the make up of the legislature? Between the Congressional Black Caucus, the Congressional Hispanic Caucus, the liberals, and the Blue Dogs, the Democrats are a very loose combination of parts. Trying to craft legislation that will appease enough of them to get a majority. Yet, despite this fact, the president not only made health care reform, the most complicated piece of legislation in decades, his first major priority, but he had the liberal wing write it. Did he really think that the moderate Blue Dogs would just roll over when presented with a big government takeover of the health care system? The legislative mess we are seeing now is entirely due to the complete lack of planning done in March, April and May. Where were the Blue Dogs in negotiations when this bill was just being crafted? Because they weren't included in that, they public opposed it when it was released. Was the president really surprised by how this played? If he was, it's another sign of both fatal hubris and naivete.



Going forward, the president will either learn his lesson or continue to exhibit both hubris and naivete. It's very simple. His liberal agenda is done, it's over. It has no chance of passing and if it does it will be roundly rejected by the public.

The president has a chance to right the ship. It should be clear to him that his liberal agenda isn't going to work. He can allign himself with the Blue Dogs and the Republicans and pass energy reform, health care reform, and education reform with that alliance. It won't look anything like what he wants currently, but if he's truly for "what works" then he has a path to get things done. If not, he will continue to exhibity fatal hubris and naivete that will ultimately doom his presidency.

Health Care Reform is Still on the Ropes

Just as Henry Waxman seemed to appease the center with a deal with the Blue Dogs, that same deal has a potential of a "rebellion" from the left.

House Speaker Nancy Pelosi spent half of Wednesday finalizing a deal with the Blue Dogs — and the other half quelling a brewing rebellion among progressives who think conservatives have hijacked health care reform.

Liberals, Hispanics and African-American members — Pelosi’s most loyal base of support — are feeling betrayed after House Energy and Commerce Committee Chairman Henry Waxman (D-Calif.) reached an agreement with four of seven Blue Dogs on his committee who had been bottling up the bill over concerns
about cost.

The compromise, which still must be reconciled with competing House and Senate versions, would significantly weaken the public option favored by liberals by delinking reimbursement rates to Medicare.

One of the concessions that the Blue Dogs were able to negotiate was a weakening of the "public option". This is a cause celebre among those on the left, and certainly the far left. With it weakened, it's unclear how many of them will vote for the deal, and there's a lot more liberals in the caucus than there are Blue Dogs. So, it appears to coax the middle, Waxman, Pelosi, et al may have lost the left.

Furthermore, the deal in the Energy Committee was cut with only four of the seven Blue Dogs on the committee. That's enough, if Dems hold everyone else, to pass it out of the Energy Committee. It's still unclear how many of the full 52 Blue Dogs are on board with this deal. It's even less clear just how many liberals will be held with this deal.

So, ironically enough, this deal might wind up meaning less votes in the Democratic caucus. It points out two significant problems. The first is structural. This shows again the problem that Dick Morris pointed out first. The Democrats are a collection of factions and it's nearly impossible to craft legislation that will appease them all. (or at least enough of them to get a majority) Between the Congressional Black Caucus, the Congressional Hispanic Caucus, the Blue Dogs, and the liberals that's a lot of people to keep happy. It turns out that it's too many people to keep happy and the Democrats simply can't find a majority on any piece of legislation.

Even more troubling for those in charge, it appears that there is no leadership. How in the world did Waxman secure this deal without making sure the liberal wing would be on board? Furthermore, if the public option is a deal breaker why is Baucus negotiating a coop in the Senate? Even if Baucus figures out how to make a deal with his committee and gets it passed out of his committee, the liberals clearly wouldn't be on board. It looks as though the Democrats aren't talking to each other. People are making deals without knowing the numbers. That's chaos and a total failure of leadership.

Earlier, I said that this deal got them some momentum back. I'm changing my analysis. This deal is symptomatic of the total chaos that the Democrats are governing with.

Some Quick Early Thoughts on the House Health Care Agreement

So far, we know a lot less about the reported compromise between Blue Dogs and the Dem leadership on health care bill in the Energy Committee. We know that the Blue Dogs on this committee have announced that a deal has been cut. We know that under this deal the price tag of the bill will get cut by $100 billion over the next ten years. We know that there will be more emphasis on hospitals in rural areas. We also know that companies with payrolls of $500,000 and less will be exempt from being mandated to provide insurance. There will also be some changes to the public option though those changes aren't clear.



Here's what we still don't know. We don't know when any health care bill will be voted on the full House. The Blue Dogs have gained a commitment not to have a full vote before the break. The current plan is to vote on it in September after the House comes back from break. Of course, in political terms a month and a half is an eternity and anything can happen prior to that. We also don't know the details of the bill that will come out of the Energy committee. Most importantly, we don't know what if anything will come out of the Senate.



The only bill that has been released in detail is this House bill. The only full released bill is nothing short of a monstrosity. It includes at least ten new government regulators. It creates a health care exchange that will be regulated by one of these regulators. All health care providers will be forced to be part of this exchange if they use or provide insurance in their business. As such, almost the entire health care field will now be regulated by a yet created new government regulator. It includes regulation and rationing of cancer care, end of life care, and even electric wheelchairs. It forces audits on any company or individual that self insures. It mandates the government to see patient records, bank statements, and tax records. It even sets salaries for doctors. These are just a few of the "highlights" of this monstrosity of a bill.



So, if what comes out of the Energy Committee is largely a mirror of what is now the only full bill, with the changes mentioned earlier, the Blue Dogs will have betrayed the principles they have professed to believe in. They will have been exposed as much more Democrats than fiscal conservatives. The current bill is not fiscally conservative. The changes made will not make it fiscally conservative. For instance, the Blue Dogs screamed that they wanted to see more in the bill to "control costs". Yet, there's ZERO in the House bill, so far, to deal with tort reform. The hundreds of billion spent in unnecessary tests to protect doctors against potential lawsuits are NOT currently addressed. If the Blue Dogs sign onto a bill without tort reform, they will have betrayed their fiscally conservative principles.



Politically this is a small victory for the President but it is still very small. No bill will be voted on in either chamber before the August break. That means that at least two more sets of jobs numbers will come out before the vote, and the legislators will go home to hear from their constituents before voting on any final bill. If the bill doesn't change markedly from the current version, they will get an earful. The rationing, government control, and ACORN giveaways are only now being analyzed. The changes that the Blue Dogs received will be marginal outliers if the final bill continues to include the basic tenets of the current House bill.



So, the Democrats and the President have extracted a change in momentum but I still believe it is short term and temporary. The trend continues to be against health care reform. It doesn't appear as though the Democrats have any desire to really moderate health care. Until and unless they do, health care reform will not happen. It remains to be seen if what comes out of the Energy Committee will be real moderation or merely window dressing. That will determine just how close we are to passing health care reform.

The Confusion of Paul Krugman

The only reason that I write about Paul Krugman as often as I do is because I am stunned and amazed that this individual is not only a New York Times columnist but an economics professor at Princeton, not to mention a Nobel Prize winner. It appears tha multiple institutions are willing to pay this man hundreds of thousands of dollars yearly to speak in gibberish. About a month ago, Krugman blamed some obscure law created in the Reagan administration for the current financial crisis. In fact, Krugman is determined to do everything he can to try and muddy Reagan's record for years.

It's also important to understand that universal health care, in its current House form, is a pillar in Krugman's big government liberal vision. This is, after all, the same Paul Krugman that screamed and yelled that the stimulus wasn't big enough. He suggested a stimulus as large as $5 trillion to turn the economy around. Krugman is a true believer Keynesian. Krugman is also a classic liberal that believes the U.S. should become an exact replica of most of Western Europe.

So, Obama's health care reform would be a major pillar in Krugman's dreams of seeing the U.S. turn into a socialist Democracy like France. The problem is that the Blue Dogs have stopped it in its tracks just as it was on the verge of passing. Krugman simply can't imagine that someone, especially a Democrat, could possibly be against his vision of health care reform, and so, naturally, he thinks the Blue Dogs are confused. Of course, what's really confusing is his attack on the Blue Dogs. First, Krugman starts with the four pillars of health care reform: regulation, mandates, subsidies, and competition. Now, if these are the four pillars, everyone must have been keeping them under wraps because this is the first that these four have been referenced together.

Obama has said the pillars are everyone is covered, costs get curbed, and no increase to the deficit. Obama's pillars are statements of purpose. Krugman's pillars are statements of policy. So, the first question is why are the four pillars Krugman references the key to successful health care reform. On top of this, Krugman has a peculiar view of these policies. \Krugman's idea of "competition", for instance, is the inclusion of the public option into the health insurance market. Our country already has over 1300 health insurance companies and yet Krugman never explains how one more will suddenly be the key to competition.Krugman doesn't even address that because he just assumes that his vision is right.

Krugman then acknowledges that health care reform will cost a trillion dollars over the next ten years, raise taxes, and then mentions there will be savings elsewhere to cover some of the shortfall. Then, he chastises the Blue Dogs for being concerned not only with the massive bill but with some of the ways that this bill will be paid. What Krugman never squares is how the same bill can increase costs by one trillion dollars over the next ten years and still be cost effective. Krugman doesn't seem to realize that if a bill costs a trillion dollars over the next ten years it isn't cost effective.

First, Krugman calls the Blue Dogs hypocrites for not speaking out on run away spending back in 2001 when the Republicans were in charge. This is turning into a worn out and boring attack. No matter who proclaims that we have too much government spending is immediately taken to the woodshed because they weren't this vocal eight years ago. As Bill O'Reilly likes to say, that is excusing bad behavior by pointing to worse bad behavior. If no one is allowed to question runaway spending now unless they also questioned it in 2001, then no one will question it and our government will spend with absolutely no limits. He also proclaims that these deficit hawks signed onto a $1.35 trillion tax cut which he claims added $1.35 trillion to the deficit. Of course, that's nonsense. Governmnet revenue increased by 20% in Bush's term. What added to the deficit was runaway spending. Though, Krugman's disgust for allowing people to keep more of their money is evident in that statement.

Then, Krugman can't seem to understand why the Blue Dogs are worried that the House bill forces almost all businesses to provide health insurance for their employees.

But Blue Dogs have also been complaining about the employer mandate, which is even more at odds with their supposed concern about spending. The Congressional Budget Office has already weighed in on this issue: without an employer mandate, health care reform would be undermined as many companies dropped their existing insurance plans, forcing workers to seek federal aid — and causing the cost of subsidies to balloon. It makes no sense at all to complain about the cost of subsidies and at the same time oppose an employer mandate.

So what do the Blue Dogs want?

Maybe they’re just being complete hypocrites. It’s worth remembering the history of one of the Blue Dog Coalition’s founders: former Representative Billy Tauzin of Louisiana. Mr. Tauzin switched to the Republicans soon after the group’s creation; eight years later he pushed through the 2003 Medicare Modernization Act, a deeply irresponsible bill that included huge giveaways to drug and insurance companies. And then he left Congress to become, yes, the lavishly paid president of PhRMA, the pharmaceutical industry lobby.

So, of course, Krugman thinks that anyone that takes a position opposite of his must be a tool of corporate interests. I don't know the CBO study he references but there are other reasons besides government revenue to oppose mandating that all employers have to provide health insurance for their employees. For one, this is a massive burden for small business owners and will likely cost millions of jobs. For another, this is a massive intrusion on freedom. Neither of those reasons necessarily have anything to do with being a tool of corporate interests. Krugman finishes the piece with this point.

Now, however, they face their moment of truth. For they can’t extract major concessions on the shape of health care reform without dooming the whole project: knock away any of the four main pillars of reform, and the whole thing will collapse — and probably take the Obama presidency down with it.

Is that what the Blue Dogs really want to see happen? We’ll soon find out.

Of course, that's both correct and misleading. The Blue Dogs have a fundamental problem with the vision of health care reform that President Obama has. They don't believe it limits costs, encourages competition, and won't add hundreds of billions to the deficit. If the only health care reform is Obama's health care reform, then, yes, they do want to kill it. They have a totally different vision for health care reform. It would focus on moving away from employer sponsored health care, tort reform, and attacking corruption and waste. That, apparently, is something that Krugman can't imagine because, apparently, the only vision for health care reform is Krugman's vision for health care reform.

Democratic Leadership Vs. the Blue Dogs

I think most of us expected for Republicans to battle it out ideological in the aftermath of their stunning defeat in 2008. I'd be hard pressed to imagine that anyone would have thought that there would be a political civil war not six months into the new administration. Though, to be fair, Dick Morris predicted just such a problem when he analyzed the make up of the Democratic party.

The problem is that the Democratic party is a series of factions and those factions have competing agendas. The far left lead by Nancy Pelosi have totally different legislative goals than the moderate and conservative Blue Dogs. Then, there are the Congressional Black and Hispanic Caucuses which also represent their own interests. Now, enter the very complicated nature of health care reform. Is anyone really surprised that Democrats are having problems coalescing around a bill?

If you allow the Blue Dogs to lead in crafting the bill, the Pelosi wing won't be on board, and vice versa. Right now, it's vice versa but Democrats were always going to have problems. It's one thing to have competing wings create chaos on crafting legislation. That can look ugly as it happens but it's also part of the problem.

What's happening now is a full civil war. The Blue Dogs are accusing the leadership of not negotiating in good faith. Meanwhile, the leadership is trying to strong arm the Blue Dogs into falling in line with a bill they hate. That all has now taken on more significance. First, Speaker Pelosi suggested that the health care bill would skip the energy and move directly to the floor. The blue dogs were holding up the bill in that committee and refusing to sign on. Now, Henry Waxman, head of this committee, has made the same threat.

A key House committee chairman on Friday threatened to roll over moderate Democrats who are holding up the health care reform bill and bring the package straight to the floor.

The statement underscored the deep divisions the health care reform debate is causing in the ranks of the Democratic Party.

Fiscally conservative Blue Dogs are holding up the bill in the House Energy and Commerce Committee over cost concerns and other issues. But Chairman Henry Waxman, D-Calif., on Friday accused those Democrats of empowering Republicans.

"I won't allow them to turn over control of the committee to the Republicans," Waxman said, threatening to bypass the committee process.

This is the political version of eating your own. The only clear winners in this fight are the Republicans. The only clear losers in this fight are the Democrats. The only question is which of the Democrats will lose more. What is clear is that there is total chaos and disruption within the Democratic party.

It's really baffling that the leadership would ratchet up the pressure in this way on members of their own caucus. First, the Blue Dogs have indicated they would vote against this bill. Even if it bypasses committee, they still have enough votes to kill it. More than that, such heavy handed tactics against their own only create even more schisms within the party.

What's more stuning is that even if this stunt happened to get a bill through the House, it would still be months away from actually having binding legislation. The Senate is nowhere near moving forward. Even if both Waxman and Pelosi by passed the committee and strong armed enough members to pass the bill, the health care debate would only get started. As such, the leadership would look like bullies steam rolling their bill past its caucus that has serious problems with it. That's the perception they'd create while it's debated nonetheless for several more months.

Interview after interview would likely characterize this move as exactly the sort of cynical tactic that everyone hates. That would be the perception they'd create. Even the suggestion that leadership would by pass the committee smells of a leadership that is in full panic mode. It appears as though Democratic leaders have hit an impasse and they can't figure out how to move forward. Instead of making the necessary compromises needed to get enough votes to pass the bill, they want to circumvent the process in the desperate attempt that the stunt will get enough votes.

The Stunning Hubris of Speaker Pelosi

For the last couple days, Speaker Pelosi has continued to boast confidentally that she has the votes to pass health care reform out of the House before the August recess. This always seemed like a peculiar pronouncement because as she has made it, Blue Dogs have taken to television all over the place to proclaim they can't vote for the bill in its current form. To me at least, this appeared to be a lot more wishful thinking than reality. Now, we have a new development.

House Speaker Nancy Pelosi has set the legislative throttle at full-speed-ahead as she plans to bring health care reform to a floor vote by the August recess, a move that could inflame tensions in the party and imperil the bill's passage since fiscally conservative Democrats say they're still not satisfied.

Senate Majority Leader Harry Reid on Thursday announced that the Senate would wait until after recess to bring the bill to a vote, and President Obama said it was "OK" to miss his deadline so long as lawmakers are working in earnest to reach a compromise.

Reid's announcement led some members of the House to wonder why Pelosi feels it's necessary to hold to a deadline that's already been broken.

It's hard to imagine what the Speaker thinks this will accomplish. Even if she's successful in twisting arms, Health care will be nowhere near passing even if it got out of the House. A bill hasn't even been introduced in the Senate.

Then, all those that got their arms twisted in the House will face angry voters when they get back home. On top of it, the Speaker will appear to be drunk on power and out of control. She'll look like she's more concerned with getting her agenda through than respecting centuries of legislative protocol.

All of this would be of minor consequence if she had some tangible legislative accomplishment to show for it. She won't. She'll likely tout the passage of sweeping health care back home. In San Francisco, they might even cheer her. In the rest of the country, the current legislation is unpopular and getting more unpopular by the minute. Furthermore, passing a bill out of the House is not much of an accomplishment.

Then, there's the chance that she'll twist arms and not twist them hard enough. That's very similar to a no confidence vote in a parliament. The leader can't proclaim to have the vote, bring it to the floor, and then have that vote fail and keep her power.

In fact the idea is so ludicrous it seems impossible that she'll follow through. So, why even put out a statement that she's thinking about it? If she changes her mind, her credibility looks weak. None of what is being reported is rooted in either good politics or good policy. It all is rooted in out of control hubris.

Act 2: Meltdown or Reinvention

Let's call tomorrow July 24th, 2009 act two of the Obama presidency. That's because today it became official that health care reform won't pass in its current form. With the end of liberal heath care reform, let's call this the official end of the liberal Obama presidency. Now, the president has one of two paths to go moving forward. He can either insist on moving forward with his liberal agenda and turn his presidency into a joke, or he can reinvent himself.

The president's poll numbers are falling precipitously. Furthermore, each and every one of his major policy initiatives poll even worse. Health care, in its current form, will NOT pass. If the president insists on moving forward with it in this form, then the rest of his agenda will fall apart with it. Cap and trade won't be looked at for several more months. That is about as popular as health care reform. Congress men and women will go home over August and they will speak to constituents. You can bet they will get first hand knowledge of just how much the public dislikes the entire Obama agenda. In fact, here is one example of Missouri Democrat Russ Carnahan.



Now, the example that President Obama should follow is Bill Clinton. Clinton similarly suffered a major defeat in 1993 on health care. That lead to a massive electoral defeat in 1994. Then, Bill Clinton reinvented himself as a moderate. He passed a capital gains tax cut, welfare reform, balanced the budget and enjoyed huge popularity for the rest of his presidency.

President Obama needs to realize, sooner better than later for his sake, that his liberal presidency is over. If he continues to insist on a liberal agenda, it will get rejected. Then, in November 2010, he will have a nearly two trillion dollar deficit, ten percent unemployment, and no major legislative accomplishments heading into the mid term elections. Then, the Republicans will sweep the elections and he will have no choice but to govern as a moderate anyway.

If the president is a shrewd politician, he will come back from the August recess and get together with Blue Dogs and Republicans and pass sweeping MODERATE health care reform. With that legislative victory, he can regain his presidency. I have called the Blue Dogs the Congressional rainmakers. That's what President Obama needs to realize sooner rather than later if he wants his presidency to be compared with that of FDR and not Jimmy Carter. The president isn't going to pass anything without their approval. That isn't going to happen with a liberal agenda. The road to a successful Obama presidency is still clear and that road is moderation. The only question is whether or not the president will reinvent himself.

Health Care Reform Postponed Indefinitely

The House Energy and Commerce Committee cancelled a scheduled "mark up" today.

A key House committee on Tuesday indefinitely postponed voting on health care reform legislation, after Democratic leaders were unable to line up enough votes from moderate members of their own party.

The House Energy and Commerce Committee canceled the session as it faced serious concerns about the legislation from fiscally conservative Blue Dog Democrats, who hold a large number of seats on the panel. The Energy and Commerce Committee is the only House panel with jurisdiction over health care that has not completed writing its version of the reform bill.

Mark up is when a bill is written in earnest, amendments are voted on, and the bill is then voted in during Committee. This process has not only been postponed, but postponed "INDEFINITELY". This particular committee holds a significant number of Blue Dogs. It appears their concerns mean that there are simply not enough votes to pass this out of committee. That indicates that the Blue Dogs are NOT on board. That this has been postponed INDEFINITELY means that all parties are nowhere near an agreement.

This means any hope of passing health care reform (know called insurance reform by the president) by the August recess is over. This puts health care reform in dire trouble. Now, health care reform is dependent on tangible evidence that the economy is recovering.

The first potential for tangible evidence is the July job's numbers on August 7th. Of course, it could be a death blow. If July's numbers are worse than June's (477,000 in June), then you can bet that President Obama's fading approval numbers will fade to critical levels. At that point, this sweeping reform becomes a non starter until his numbers improve. When that would happen is anyone's guess.

Ultimately, I stand by my prediction. If July's numbers are worse than June's then the president won't pass any of his reforms until after the November 2010 elections.

Despite Public Confidence: Health Care Reform is in BIG Trouble

The president has proclaimed that no one should doubt he and his allies and their ability to produce sweeping health care reform. Certainly, the president must put on that public face. Furthermore, the president is supremely confident and so I don't doubt that he believes that he will be able to pull this off. In reality, there continues to be more and more roadblocks. The most recent setback is this poll by WAPO showing the president's approval on health care slipping below 50%.

Heading into a critical period in the debate over health-care reform, public approval of President Obama's stewardship on the issue has dropped below the 50 percent threshold for the first time, according to a new Washington Post-ABC News poll.

Then, the Associated Press is reporting that the White House is delaying release of the latest quarter's budget numbers. (raising speculation that our deficit is large, even MUCH LARGER, than predicted by the administration)

The White House is being forced to acknowledge the wide gap between its once-upbeat predictions about the economy and today's bleak landscape.

The administration's annual midsummer budget update is sure to show higher deficits and unemployment and slower growth than projected in President Barack Obama's budget in February and update in May, and that could complicate his efforts to get his signature health care and global-warming proposals through Congress.

The release of the update — usually scheduled for mid-July — has been put off until the middle of next month, giving rise to speculation the White House is delaying the bad news at least until Congress leaves town on its August 7 summer recess.

Then, OMB director Peter Orzag foolishly left open the possibility that under the public option there might be tay payer funded abortions.






The final voting on any bill is likely to be razor thin. Those that support the Democrats' health care bill likely would support tax payer funded abortions. Those on the fence are much more likely to be swayed against it if this provision is in there than the opposite. So, all the White House is doing by being wishy washy on this issue is making it more difficult to pass a final bill.



Then, the nation's governors held their annual meeting and many expressed serious reservations about health care reform and their financial strains on their states.

The nation’s governors, Democrats as well as Republicans, voiced deep concern yesterday about the shape of the healthcare bill emerging from Congress, fearing that the federal government is about to hand them expensive new Medicaid obligations without providing the money to pay for them.


The role of the states in a restructured healthcare system dominated the summer
meeting of the National Governors Association here this weekend - with bipartisan animosity voiced against the Obama administration’s plan during a closed-door luncheon Saturday and in a private meeting yesterday afternoon with the secretary of health and human services, Kathleen Sebelius.

Most devastating is the revelation that twenty freshman Democrats have come out in unison against the plan to raise taxes on the superwealthy and the weekend confirmation that the Blue Dogs have banded together against the current proposal.

Twenty freshman Democrats, led by Rep. Jared Polis (Colo.), have threatened a revolt against the $544 billion worth of tax increases spelled out in the House bill — one of the two revenue pillars holding up the Democrats' promise of producing a “deficit-neutral” healthcare bill that is expected to cost more than $1 trillion.

...

Committee Chairman Henry Waxman (D-Calif.) has vowed to finish his markup by midweek as promised. But the Blue Dogs have said they have enough votes to kill the bill in committee if changes aren’t realized. And on issues where the committee lacks jurisdiction, such as the tax portion, Blue Dogs have warned that there are enough votes to kill the bill on the floor as well.

As such, right now the Democrats simply don't have the votes to pass what has been presented.



Furthermore, the CBO has calculated that the current proposal also will add $239 billion to the deficit over the next ten years. The White House disputes this calculation because it includes $245 billion in payments from Medicare to doctors to cover shortfalls. They did this to get crucial support from the American Medical Association. The AMA was concerned that the health care reform package would squeeze doctors even further when treating medicare patients. Of course, this payment IS IN THE BILL. The Democrats are trying to remove it from the budget as if it were removed it wouldn't be paid. All of this is very critical because the president assured America that he wouldn't sign any bill that would add further to the deficit.



Put all of this together and fifteen days before the summer recess we're nowhere near passing health care reform. The President and the Democrats will put together a full court media and legislative press on health care reform this week and until the recess. Of course, it's totally unclear just how they will resolve the issues at hand.



They currently are nowhere near the votes to pass what's been put forward. As such, if something were to pass, something different would have to emerge and move through both houses by August 7 (which is my birthday). August 7th also happens to be the day that July's employment numbers come out. If July's jobs numbers are poor, that will make health care reform nearly impossible. The president's popularity will erode even further. Americans will have serious questions about whether or not his vision will work. Furthermore, most people will demand job creation not health care reform.



In my estimation, health care reform is on life support.



Finally, here is my blue print for health care reform.

Sizing Up the Day's Activities on Health Care Reform

It was a day that every political junkie would love regarding health care reform. It was also a day that will likely have ramifications for the future of health care reform. The first event was another nuclear bomb handed down by the Congressional Budget Office.

Instead of saving the federal government from fiscal catastrophe, the health reform measures being drafted by congressional Democrats would increase rather than reduce public spending on health care, potentially worsening an already bleak budget outlook, the director of the nonpartisan Congressional Budget Office said this morning.

Under questioning by members of the Senate Budget Committee, CBO director Douglas Elmendorf said bills crafted by House leaders and the Senate health committee do not propose "the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount."

"On the contrary," Elmendorf said, "the legislation significantly expands the federal responsibility for health-care costs."

It's amazing how much political power the CBO has garnered, and they have again flexed their muscles. In this case, they have totally repudiated the idea that Obama's health care approach will save money. Instead, the CBO has figured out that Obama's health care approach will only make costs more. Because the CBO's analysis is respected on all sides of the aisle, this analysis will have reverberations throughout the debate.

Next came the news conference put on by Senate Finance Chair Max Baucus.

The only bipartisan effort, being hammered out in the Finance Committee, is still stuck in a rut as members try to come up with about $320 billion in revenue to pay for the massive reforms.Committee Chairman Max Baucus, D-MT, who has been working for months on a bipartisan overhaul, was clearly frustrated Thursday, telling reporters, “The President is not helping us,” as Obama opposes one major way of bringing in the money: taxing employer-provided health benefits.

Normally these benefits are excluded from taxation, but Baucus is finding it difficult to continue this exclusion as he searches for revenue. “Is tax exclusion off the table? No,” Baucus said, emphatically bucking the President

Not only did Baucus' statement show a splinter in the Democratic Party, more importantly, Baucas' statement means that taxing health care benefits is OFF the table. This takes away a farily popular option, at least among Senate Democrats, to try and pay for health care reform. This was yet another step toward making health care reform more difficult.

Meanwhile, Nancy Pelosi continued to add to her legend of infamy in her news conferences. First, the Speaker asserted that she believed that health care reform could be paid for with savings within the system. This lead to the obvious question. Why were tax increases still in the bill then? Here is how she answered.

But the Speaker made it clear that Democrats still plan to tax the rich, and said if the money isn't needed to pay for health care it would be directed at the nation's budget deficit. "There is going to be a revenue change at the high end. It will be directly to reduce the deficit or to reduce the deficit by helping to cover the cost of this initiative

I can only assume that her call to reduce the deficit was a fig leaf to the Blue Dogs who are skeptical of the bill. I doubt anyone will be swayed. More likely, it appears both bizarre and disingenuous that there are both mysterious "savings" that will be found and that tax increases are still necessary.

The reality of the day was that haymakers were reigned on health care reform. Right now, it's a total mess. The Blue Dogs are NOT on board. Several are threatening to clog it up in committee. Meanwhile, the Senate still hasn't figured out how to pay for it and now an option is off the table. Meanwhile, it's Democrat against Democrat trying to figure it out. Furthermore, Nancy Pelosi needs to stop talking because she embarrasses herself and everything near her everytime she opens her mouth. Health care reform is still a long way away and passing it prior to August appears to be slim at best.

If it isn't passed by August, then at least two sets of jobs' numbers will come out before it is passed. If they continue to show an economy mired in deep recession, that will make passing it that much more difficult. I firmly believe that if we lose 500,000 or more jobs in July that will end his agenda for this year at least. As such, if health care doesn't pass prior to August, those August numbers will take on much more significance.

Blue Dogs in the Spotlight

When this health care debate is over, we are going to know if our Congress is Democratic or Conservative. The irony of the Democrats' majorities is that ideologically they have no majorities. The Blue Dog Democrats are often more Conservative than many Republicans. They have to be because their districts vote in a manner that would never accept anything but a conservative voting record. Many of the Blue Dogs got into office in 2006. They were recruited by the liberal, now Chief of Staff, Rahm Emanuel in one of the shrewdest political move in history. The Blue Dogs attacked most of their Republican opponents for losing their fiscal conservatism. It worked because in 2006 the Republicans had spent their way into six years of oblivion. As such, if they now turn around and sign onto several big spending programs, they will themselves be attacked for a liberal spending plans by other Republicans running as a true fiscal conservative.

The Blue Dogs caved on the stimulus mostly because the President was overwhelmingly popular and he put the fear of God into enough of them that they signed on. Health care won't work quite that way. Already, conservatives in the media are skeptical that the Blue Dogs will stand up to the President. Here's how Michelle Malkin sees it.

"Centrist” Democrats in the House say they oppose the government health care takeover plans of their leaders and their president.

They’re barking loudly, demanding major amendments to protect small businesses and taxpayers.

But do the Blue Dogs have any bite? Or will they be bought off like many of them were on cap-and-trade and Porkulus One?

Gateway Pundit has similar skepticism.

There are no Blue Dog democrats.There are democrats who occasionally vote with the GOP out of fear of losing their seat in Congress but there are NO Blue Dog democrats. If push comes to shove so-called Blue Dogs always vote with the
democrats.

Just words.Yesterday, Representative Dan Boren (D-OK) admitted this week that Barack Obama is becoming a political liability. Representative Boren comes from the reddest state in America, Oklahoma. Not one single county in Oklahoma went for Barack Obama in the 2008 election. Obama got 34 percent of the vote statewide.Rep. Boren talks a good game.But, Rep. voted with Obama 81% of the time. He even voted for the Stimulus boondoggle.

Here are the stakes for the Blue Dog Democrats. I have seen several all over cable news and each one has emphatically said that the bill in its current form is NOT one they would vote for. The Blue Dogs believe, as I do, that the problem is that system has far too much waste. They see a system that rewards waste, abuse, and corruption, and they see savings in reforming the system. That's what all of them have said in unison.

The president's plan focuses in universal health care coverage and a public option. It does NOTHING to remove the waste and inefficiency in the system. Make no mistake, the Blue Dogs are committed to health care reform. They want to work with the President. They will continue to negotiate with him. They will not, however, sign on to anything that is similar to what is currently being debated. If they did, they would lose all credibility because each of them are all over television proclaiming that the current plan is nothing like what they want. If they did, they would lose the next election.

I have called the Blue Dogs the Congressional rainmakers. I doubt very much that they aren't acutely aware of this now in the health care debate. I believe they are all committed to health care reform. I believe they are committed they are not committed to anything near the sort of health care reform currently in the House. To see what the Blue Dogs want you need to look at what Centrist Democrat Senator Ron Wyden of Oregon has come up with Robert Bennet, Republican of Utah.

Under the Healthy Americans Act, health coverage would be portable. Individuals could keep the coverage they have as they move from job to job. Insurance would also no longer be tied to employment. If an individual is laid off, leaves their job voluntarily, or develops a serious illness, he or she would continue to be covered.

All employers, along with individuals and the government, will share the responsibility of financing health care. During a two-year transition period, employers who provide employee health benefits would be required to convert their workers' health care premiums into higher wages. Employers who don't currently offer health benefits would have to make phased-in

"Employer Shared Responsibility Payments," which would be used to provide financial assistance to individuals and families of modest income. After two years, all employers would make "Employer Shared Responsibility Payments." These payments would reflect the relative ability of small and large employers and low- and high-wage industries to make such payments, and would have no direct impact ON the coverage that is available to their employees.

Employees, in turn, would be required to purchase private health coverage with their higher wages. To ensure that it's affordable, the plan would fully subsidize the premiums for those who live below the poverty line. Those people between 100 percent and 400 percent of the federal poverty line would also receive subsidies on a sliding scale to help pay their premiums.

Individuals would choose from a variety of private plans offered in their state. State-based Health Help Agencies (HHAs) would guide individuals through the enrollment process. These agencies would also provide consumers with unbiased information about competing private health plans and determine premium reductions that will ensure every American can afford their health plan. HHAs would ultimately lower administrative costs by coordinating payments from employers, individuals and the government.

This is a plan, correctly in my opinion, that focuses on moving the country away from employer funded health insurace and moves us toward health insurance that individuals get on their own. The Blue Dogs are NOT against a mandate that everyone be covered. They are NOT against charging those that don't get coverage. Yet, that's not their most important agenda. The Blue Dogs see the health care system as very inefficient. Their main concern is fixing these inefficiencies. That's the sort of thing that the Wyden bill does. It's NOT what the current bill in the House does. I would be stunned if they went along with anything near what is being debated now. I firmly believe the Blue Dogs will act as rainmakers and either force the sort of reforms they are looking for or kill the bill.

Health Care Reform on the Mend?

It looks there is yet another delay in the unveiling of sweeping health care reform.

The drive to remake the nation's health care system suffered yet another setback in Congress on Thursday when a pivotal group of House Democrats demanded numerous changes in legislation the leadership was drafting on a fast track.

The emerging bill "lacks a number of elements essential to preserving what works and fixing what is broken," 40 members of the Blue Dog Coalition of moderate to conservative Democrats wrote in a letter to party leaders.

To win their support, they said, any legislation would need to be much more aggressive in reining in the growth of health care.

The letter addressed to House Speaker Nancy Pelosi and Majority Leader Steny Hoyer also called for greater protections for small businesses and rural health care providers. It did not specify how much additional time the group wanted, but Rep. Mike Ross, D-Ark., said he believes no vote should take place until September.

There are several things playing out here that I've written about often. First, the Blue Dog Democrats are asserting their power as Congressional rainmakers. Second, it once again shows the problems the Democrats have in governing. There are simply far too many factions and each has its own agenda. Those agendas are difficult to bring together to create legislation. Third, and most importantly, it shows the difficulty in trying to enact the kind of sweeping health care reform the president wants.

The Blue Dogs:

On some issues, you can't tell the difference between a Blue Dog Democrat and a Conservative. They favor pay go. They're not necessarily for big government or the tax and spend policies of the leadership. The Blue Dogs, about 40 of them, can form a bloc that, voting with the Republicans, can stop any and all legislation they don't like. They all come from moderate or Conservative districts. As such, supporting big government policies is not something that voters in their districts normally go for. Since the Pelosi wing and Obama himself often agree, it is the Blue Dogs that would need to be wooed to craft all legislation. That's what's happening in this case, and they are flexing their political muscles.

The Democrat's Governance Problem:

Try and imagine the philosophical differences between Nancy Pelosi, a San Francisco liberal, and the Blue Dogs, themselves moderates. Crafting legislation in such an environment is nearly impossible. Giving way to one group means you turn another group off entirely. You are either left with no legislation, or the legislation is so watered down that it's rendered worthless a la cap and trade.

Health care will NOT pass:

This latest news is yet another sign of how difficult it will be to get health care to pass. This is one of the most complicated pieces of legislation to every be attempted. On top of this, the Democrats are loose knit coalition of members with varying agendas. The agenda for the Pelosi wing is a lot different than the agenda for the Blue Dogs. Yet, Pelosi needs almost all of her coalition to pass it. Trying to navigate through all of this is nearly impossible.

Break Through on Cap and Trade

There's been a major break through on cap and trade.

They still call it the Waxman-Markey climate-energy bill — but it’s Nancy’s bill now.

By saying she would pass the massive — and massively controversial — cap-and-trade bill by the start of the July 4 recess, the House speaker took a big gamble, setting herself up for a daring political victory or the biggest defeat of her six months as President Barack Obama’s legislative ramrod.

And on Monday, Pelosi doubled down, scheduling a Friday vote on the legislation, overriding the objections of farm staters and moderates who fear the vote could explode into a potentially lethal election issue next year as Republicans cast it as a one huge tax hike.

Tuesday evening, the bet seemed to be paying off. After weeks of negotiations, House Energy and Commerce Committee Chairman Henry Waxman (D-Calif.) announced he had struck a deal with Agriculture Committee Chairman Collin Peterson (D-Minn.), who led a push for greater protections for farmers and rural interests.

Now, earlier I said this about cap and trade.

Cap and trade always had a dubious chance of passing. It's not something that just about any Republican would ever support. It would also not enjoy support of any legislator in any state or district that relied on any form of energy that would be adversely affected by its imposition. As such coal states, agriculture states, and any state that relies on oil, would be furtive ground for opposition to the legislation. So far, it passed through the Energy and Commerce Committee in the House.

At first glance, this latest development would seem to prove me wrong, but in fact, it only points out the problem I have already talked about. The concessions given to Collin Peterson, a very powerful Chairman of the Agriculture Committee, mean that farming will be all but exempt from cap and trade. Already, 85% the permits that will be used by companies that go over their emissions caps will simply be given to them.

This past week, Rep. Henry Waxman's House Energy and Commerce Committee passed a climate-change bill that gives away 85% of the emission permits until 2026.
President Obama applauded, calling the bill "a historic leap."

Huh?

The point of climate-change legislation is to raise the price of activities that emit carbon so consumers and businesses engage in fewer of them, and favor alternatives that contribute less to climate change. Taxing carbon is one way to do that, but it's unpopular.

As such, this bill is already mostly nonsense. Now, the farming interests have gotten major concessions. The bill still hasn't passed the House. If it does, it will go through a much more difficult process in the Senate. How many more interests will get a hold of it and ask for exemptions?

In fact, Fox News is now characterizing the bill as a cap on carbons at power plants, factories and automobiles.

Key Democrats reached a deal Tuesday that its supporters hope will lead to House passage of the biggest environmental bill in decades. The bill would impose nationwide limits on carbon gases emitted from power plants, factories and automobiles.

That's because other interests, like farming, have been able to get exemptions. Even here, the automakers have also been able to carve their own exception.

U.S. Rep. John Dingell, D-Dearborn, signed on after the auto industry was promised 3 percent of the federal government's revenue from emissions permits for five years, which would be worth billions of dollars. The revenue is linked to investments in new vehicle technology. The industry has also been promised up to $50 billion in new technology loans.

As this continues through the legislative process, it will get watered down even further. This will happen until anything that passes will be mostly inconsequential.

President Obama's Pay Go Chutzpah

When I first read this on Politico, I thought it was a joke.

A day after announcing the acceleration of federal spending under his economic stimulus plan, President Barack Obama Tuesday called for binding legislation that would force a return to pay-as-you-go budgeting rules.

The so-called paygo approach would mean the federal government could not launch new tax cut or entitlement programs without finding a way to pay for them with budget cuts or revenue increases.

Pay go is the legislative idea that all increases in spending are made up by decreases in spending elsewhere. So, let's see, the president passes a stimulus package worth $787 billion. His omnibus has just under 8000 earmarks. His budget is $3.6 trillion, and now he wants to spend more than a trillion dollars on health care reform, and we still have education reform, no price tag yet, on the plate. Now, President Obama claims that going forward he won't spend on anything without cutting anything else.

This is sort of like Imelda Marcos buying up over a hundred pairs of shoes and then saying that she would only buy a new pair if she donated one to charity. The whole thing is absurd on its face, but also, it smacks of genius.

If you follow politics closely, you will see the absurdity of this president, who's spent more in 5 months than all other presidents COMBINED, now championing pay go. If you don't follow politics, and most people don't, you may believe him when on the issue of fiscal responsibility he touts his support for Pay Go.

Essentially, the president hopes that enough people will be too dumb and too naive to realize that his pulled this misdirection. After running up our deficit to unsustainable levels, the president hopes to also become a champion of fiscal conservatism by championing pay go. The president took his chutzpah this far even.

Paying for what you spend is basic common sense,” he said. “Perhaps that's why, here in Washington, it has been so elusive.

That's good philosophy. It's too bad that he's only $4 trillion late on taking it himself. It should also come as no surprise that President Obama's pay go has all sorts of holes.

The PAYGO rules will apply to new tax cuts and mandatory spending, with four major exemptions – any renewal of the 2001 and 2003 tax cuts, the continued efforts to “patch” the Alternative Minimum Tax, any effort to address physician's payments in Medicare, and modifying the estate tax.

In addition, discretionary spending – roughly 40% of the federal budget – is not covered by PAYGO.

"This is like quitting drinking, but making an exception for beer and hard liquor," said Maya MacGuineas, President of the Committee for a Responsible Federal Budget (CRFB). "Exempting these measures from PAYGO would increase the ten-year deficit by over $2.5 trillion dollars. That's not fiscal responsibility."

Again, those that follow politics will see the cynicism of this move. President Obama is counting on enough people not following close enough. Let's all hope he doesn't get away with it, because if President Obama is also known for fiscal responsibility then we truly have entered the twilight zone.

Climate Change, Health Care, and the Dem's Governance Problem

Back in 2006, Dick Morris pointed out that the Democrats have a fundamental governance problem. It is simply impossible to coalesce factions that include moderates like the Blue Dogs, the New Democrats, with the likes of the Congressional Black Caucas, Congressional Hispanic Caucas, as well as the far left Soros wing of the party. Both the Blue Dogs and the New Democrats have enough members that, when voting together, they can stop any bill if they vote with Republicans. Because most of both of these groups are much more often in agreement with conservatives rather than liberal democrats, this is a problem for most of the president's agenda.

Rahm Emanuel brilliantly recruited dozens of candidates in moderate and conservative districts that were essentially no less conservative than their Republican candidates, and in many cases more so, back in 2006. By doing so, he created a majority for the Democrats. Yet, it is a majority that makes it nearly impossible to govern.

Now, you have to be following serious inside baseball to see how this governance problem has manifested throughout Obama's agenda. Right now, cap and trade is on life support. That's because there are serious objections from legislators that are not only in districts that would be adversely affected by the restrictions on coal, gas, and other CO2 "pollutants", but also by all of the newly created moderate Democrats that are against the plan on ideology.

Now, on health care, we have the exact same thing forming. Here's how Politco describes the dilemma.

In the meetings, the Blue Dogs were concerned with process and how the reforms would be paid for, while the New Dems were focused on policy.

Still, both groups raised concerns over the controversial proposal to create a public insurance plan that competes with the private insurance market.

During the meeting with the New Dems, the committee chairmen made it clear that including the public plan was central to bringing costs down, according to a source familiar with the meetings.

The groups agree that the public plan can't be based on Medicare rules, that it must pay for itself and operate under the same rules that private plans do. The principles are similar to a public plan option rolled out by Sen. Chuck Schumer (D-N.Y.).

"There's a good chance if we can work out the details — because I don't think they can pass it without us — having a public plan option that can compete may be the compromise," Ross said.

But a senior leadership aide involved in the process said that Blue Dogs are going to have to make a choice.

The policy differences that both the New Democrats and the Blue Dogs have with Obama's sweeping universal health care proposal go to the heart of his proposal entirely. They are concerned with the manner in which the public option will operate. They want it to be a for profit operation. If that's the case, there's almost no point to passing the bill. A for profit operation run by the government is a sure failure.

Then, there is the second sticking point. How does the president plan on paying for it? The Blue Dogs are strong proponents of pay go, paying for any spending increases with spending cuts elsewhere. This proposal will cost north of $120 billion yearly. So far, Obama has only found $30 billion in new taxes. He's still $90 billion short.

Both the Blue Dogs and New Dogs were nearly non existent in the debate over the stimulus. Yet, that was weeks into the new presidency of a very popular president. I said from the beginning that these groups would be the Congressional rainmakers. That's what's emerging.

What President Obama is realizing is that his very liberal agenda needs the support of a Congress that, ironically enough, is a majority of moderates and conservatives. As such, all of his signature proposals are stalled.

There is no easy answer here. The only way to pass cap and trade is to water it down so much that it is rendered totally impotent. The only way to pass universal health care is to put together a mish mash of ideas that no one will be pleased. The so called universal health care proposal that is likely to come out won't necessarily cover everyone. It will be a mish mash of ideas that will likely cause rationing, sky rocketing costs, all while some or even a lot of those currently uncovered will still be uncovered. There's really no other way to do it. The moderates won't vote for his proposal. The ideas they have will water it down. Once the president tries to please everyone, the proposal will turn into a monstrocity that pleases no one.

I think soon enough we are going to find out that the president's bold agenda will ultimately wind up nothing more than a figment of his imagination. Passing most of it will be a non starter and that's because the mish mash of groups that make up the Democratic party created a Democrats' governance problem. By problem I mean, they simply can't govern with their competing coalitions.