A House Divided in NY 23

It's hard to put into a box just who is supporting Dede Scozzafava in New York's 23rd special election and who is supporting Doug Hoffman in the same. At first, I thought it was the so called establishment supporting Scozzafava and those on the outside looking in supporting Hoffman. Yet, how do you explain the likes of Rick Santorum and Michelle Bachmann supporting Hoffman? I thought it was the conservatives in support of Hoffman and party loyalists in support of Scozzafava? How do you explain Newt Gingrich supporting Scozzafava?

In fact, what's remarkable about this race is two things, 1) you can't put into a box those who support Scozzafava and those who support Hoffman and 2) the race has unnecessarily taken on more significance than it ever needed to take on. This isn't the first special election and most aren't this controversial. In fact, here in the 5th district of Illinois we had one right after the election when Rahm Emanuel, who then held it, went on to become Chief of Staff in the White House. Both the Democrats and the Republicans held a primary and eventually Mike Quigley replaced Emanuel.

Therein lies the first problem. Dede Scozzafava wasn't chosen by the voters but rather in a dark room by power brokers. Insiders seem to never learn. When you choose someone in secret, with no transparency, the voters revolt. Such a corrupted process almost always leads to a flawed choice. For reasons that are still unclear, party insiders chose a moderate if not flat out liberal, Dede Scozzafava, for a seat that has comfortably gone to a Republican since 1871.

The race in 5th District took on almost no national signifcance. Plenty of local Democrats and Republicans ran. The people had a vote and a new Congressman was elected. In fact, about 10% of the registered voters voted. The race couldn't have been less interesting. This one has received attention from coast to coast. It starts with the process and ends with the selection of Scozzafava.

Dede Scozzafava has become the symbol, for many Conservatives, for what is wrong with the Republican Party. The Tea Party movement has decided to draw a line in the sand and flex its muscle electorally. Political heavyweights like Fred Thompson, Sarah Palin, and Dick Armey have all weighed in. Mike Huckabee and Mitt Romney have been asked to weigh in. You'd think that we are nominating the president with all the attention of this race. Instead, it's a special election for the New York 23rd District of the U.S. Congress. Even after elected, this same person will have to be reelected in a year.

The consequences of this race can't be minimized. At some point, the Minuteman movement also decided to flex its electoral muscle. They backed Randy Graff in Arizona and Graff got crushed. JD Hayworth allied himself with the Minutemen and he is now a talk radio host. From there, the Minutemen became a marginalized group. That's what is at stake with the Tea Party movement. If this race goes to Hoffman, then the Tea Party movement has moved from an organizational force to an electoral force. If Hoffman loses, then the Tea Party movement will go the way of the Minuteman movement.

Meanwhile, if Scozzafava loses, what does that do the Republican establishment. If Scozzafava loses then the Republican establishment has no credibility electorally. If a candidate beats their candidate and they do it using all outside resources then the Republican establishment has little electoral power. If that's the case, what is the future of the party at large? If the Tea Party movement becomes the driving force in the Republican Party how will that transform the party? Those are all questions that remain unanswered but they'll need to be asked because of the dynamic of New York's 23rd.

A Political Civil War Brewing

On the one hand, the Democrats are trying their best to suffer a devastating blow at the ballot box come November of 2010. After all, the deficits are at obscene levels. Unemployment will be at 10% and go higher. They can't figure out health care, climate change, and they are desperate to lose in Afghanistan. On the other hand, the Republicans are trying just as hard not to take this opening and run with it. When a Congressional race becomes the flashpoint for a political civil war within the party, you know there are problems.

Yet, that's what the party is on the verge of as a result of the special election in the 23rd District of New York. The seat was held by John Mchugh but he became the Army Secretary. It's a seat that's been Republican for well more than a century. So, it's a bit surprising that the Republican Party is backing Dede Scozzafava. Scozzafava is the preferred candidate of ACORN, the Working Families Party (ACORN's political arm in New York) and the SEIU. Scozzafava appears to be the perfect Democratic candidate but yet she's running as a Republican.

I didn't necessarily have a problem with the NRSC backing Charlie Crist. He's a successful and popular Governor in a purple state. He would most likely win whereas his opponent, Marco Rubio, would likely lose. So, when conservative purists screamed and moaned that a "moderate" was the preferred choice of the party, I was pragmatic. Here, backing the liberal seems suicidal.

The preferred choice of the purists is Doug Hoffman. He's now running under the Conservative Party ticket. He would, however, caucus with the Republicans. He's a much more consistent and reliable conservative.

Yet, the NRSC is supporting Scozzafava. What this is creating is even more tension between the establishment in the Republican party and the base. The establishment seems to forget that the Republicans lost in 2006 because the party dismissed the base and engaged in an orgy of spending. The base is looking for fiscal conservatives. That's Hoffman. Scozzafava is a liberal who bears no difference from most Democrats except that there is an R in back of her name.

It seems inexplicable. It's even more inexplicable that Newt Gingrich has endorsed Scozzafava. Gingrich has always been a reliable and consistent conservative. Yet, he's backing Scozzafava? Right now, this story is getting play on talk radio, the blogs, and among activists. So, it's certainly not a mainstream story. Yet, those are the people that will volunteer, donate, and of course come out to vote. The most active portion of the party feels as though D.C. still doesn't get it. The Tea Parties have recently turned on Republicans. That's not totally unsurprising and the Tea Parties have always stipulated that they aren't a lever of the Republican party. Yet, many of those that make up the Tea Parties are part of the Republican base. It's one thing to be a pragmatist and back the candidate with the best chance to win. That's what the NRSC did backing Crist. It's quite another to simply show contempt for your base and back a liberal in a district that's gone your way for more than a century. Doing that puts you one step closer to a political civil war.

Breaking Down the Latest Health Care Polls

It appears the public disagreed with my assessment of the president's speech. I found little redeeming in it however both the President's personal popularity and the popularity of his health care reform bill have gotten a small bounce. The most recent evidence is Rasmussen showing an up trend for both health care reform and the president's popularity.

I believe that none of it matters. Now, I am sure some of my liberal readers will be saying that I am trying to justify my earlier analysis. Here's the analysis and the audience can decide. The first problem for the president is that there is no plan. The support is up for an abstract concept. The president straddled on every issue. He straddled on the public option, tort reform, how to pay for it, etc. Once there's a specific plan, people will have to choose sides. Some of the people now supporting the plan want a public option and others don't. Some of them will be disappointed.

More than that, the intensity is still with those that oppose. According to Rasmussen, there's a ten point advantage for those strongly opposed to strongly in favor 38-28. Those with lukewarm support of anything are easily swayed the other way. Supporters of the president's plan are made up mostly of those that support the plan in a lukewarm way. People that oppose the plan are overwhelmingly those that passionately oppose it. Since most of those that now support it are only in support after the speech that's not support he should count on for too long.

Ultimately, the dynamics haven't changed. All of the problems that president had in passing health care reform haven't changed. In the House, he can't pass it without the public option. In the Senate, he can't pass it with the public option. No one believes that he'll pay for it by cutting waste, fraud and abuse. People dont' like the price tag. No one is really sure how any of it will work. No one is really sure what the president wants specifically.

The president made a speech that was well received. It was better received than I expected. That's it though. Nothing has really changed. He's still trying to rule over total chaos. The chaos is in his own party. The Republicans can step back and watch the chaos and benefit. This bump is temporary. Now, the Congress gets down to business and that's what has crushed the poll numbers for the president and the health care reform. So, soon, we'll see the polls back where they were before the speech.

UPDATE:

Since I posted, Rasmussen came out with their most recent health care poll. Support has fallen. This would lend evidence to my theory however Rasmussen has begun to do this poll daily and so we should all watch it over the next few days to see if this is a trend.

The Baucus Plan is Nonsense

Max Baucus finally gave the public a glimpse of his health care plan.

Families who fail to get health insurance could be fined up to $3,800 under a health care reform plan proposed by a top Senate negotiator.

Sen. Max Baucus, D-Mont., who as chairman of the Senate Finance Committee is leading talks among the "Gang of Six" senators to hammer out a bipartisan compromise, offered what he described on Tuesday as a "framework" and not a "final product."

But the detailed proposal comes just days ahead of a self-imposed Sept. 15 deadline for such a deal. Baucus is pushing his committee members hard to hammer out a bill, and those details come as strong suggestions.

The framework, a copy of which was obtained by FOX News, includes what amounts to a no-choice option. It would make health insurance mandatory, like auto insurance.

The plan would provide tax credits to help small employers and help cover the cost for households making up to three times the federal poverty level. That's about $66,000 for a family of four, and $32,000 for an individual.

Those who still don't sign up would face hefty fines, starting at $750 a year for individuals and $1,500 for families -- for those making up to three times the poverty level.

The only redeeming part of this plan is that there is no public option. Let's hope that everyone isn't simply focusing on that because there's so much to hate in this plan that the public would miss all its problems. First, Baucus would make having health insurance mandatory like car insurance. Of course, there's a huge difference between mandatory car insurance and mandatory health insurance. Driving is a privilege not a right. No one forces you to drive. They force you to drive with car insurance. Here, you are forced to have insurance as part of living. That's an aversion to everything this country stands for.

The plan gives credits to small businesses to help them pay for health insurance but it also makes it mandatory that most small businesses provide insurance. There's also a co op idea which is not very different from the public option itself.

There's also a plethora of new taxes including those on insurance companies. Insurance companies will also be forced to take on those with pre existing conditions. At the same time, they will force on new taxes. Where do you think this will take insurance premiums? Meanwhile, there will be all sorts of co ops run by the government. It won't take long to achieve single payer under such a scenario.

Furthermore, there are fines up to $3500 for anyone that doesn't get health insurance. There's nothing about tort reform. There's nothing about allowing health insurance to cross state lines. There's nothing about health savings accounts. This was supposed to be a bi partisan bill and all that's compromised is a watered down public option. This bill is more of the same and it should be opposed.

Cap and Trade on the Ropes?

According to Bloomberg, four DEMOCRATIC Senators have publicly come out against cap and trade.

The U.S. Senate should abandon efforts to pass legislation curbing greenhouse-gas emissions this year and concentrate on a narrower bill to require use of renewable energy, four Democratic lawmakers say.

“The problem of doing both of them together is that it becomes too big of a lift,” Senator Blanche Lincoln of Arkansas said in an interview last week. “I see the cap-and-trade being a real problem.”

The resistance by Lincoln and her Senate colleagues undercuts President Barack Obama’s effort to win passage of legislation that would cap carbon dioxide emissions and establish a market for trading pollution allowances, said Peter Molinaro, the
head of government affairs for Midland, Michigan- based Dow Chemical Co., which
supports the measure.

The four Senators include Ben Nelson of Nebraska, Byron Dorgan and Kent Conrad of North Dakota, and Blanche Lincoln of Arkansas. Now, it's important to note that each of the four are either 1)moderates or 2) from red states or both (in the case of Nelson). The afforementioned Lincoln announced formation of 15 moderate Senators in March of this year. Here's a list of the group.

Senators Mark Udall and Michael Bennet of Colorado, Mark Begich of Alaska, Kay Hagan of North Carolina, Herb Kohl of Wisconsin, Mary Landrieu of Louisiana, Joe Lieberman of Connecticut, Claire McCaskill of Missouri, Ben Nelson of Nebraska, Bill Nelson of Florida, Jeanne Shaheen of New Hampshire, Mark Warner of Virginia, Evan Bayh of Indiana and Tom Carper of Delaware

Everyone of these Senators is now ripe to join the four I already mentioned. Furthermore, Max Baucas and Jon Tester hail from the red state of Montana and Tim Johnson hails from the red state of North Dakota. This makes 18 Democratic Senators that are ripe to follow the four already against cap and trade.

I don't know if the Democrats are planning on using the so called reconciliation option to pass cap and trade. (reconciliation is a budget tactic that allows the Senate t pass a bill with 50 votes rather than 60) At this point, I don't think they could get 50 votes at this point either way.

It's also, in my opinion, not a coincidence that these four came out just as the main media story is the public rejection of health care reform at the town hall debates. While the Democratic leadership puts on a firm public face against this onslaught, it's clear that moderate and vulnerable members are feeling the heat. It appears these town hall protests will take anther victim and that victim will be the death of cap and trade along with health care reform.

Ambiguity: The Real House Health Care Bill Nightmare

SIn defending Sarah Palin yesterday, Newt Gingrich said that this bill puts full faith of the citizens in the government.



Newt is dead on here. The real danger of the House Health Care bill is that it is 1013 pages of ambiguity. Let's start with this. Out of this bill, there will be created 53 new regulators. Now, that should be enough for everyone to oppose the bill. Conservatives think there's too much regulation. Libertarians think there's way too much regulation, but even liberals can't possibly think that health care needs 53 new regulators. What's even scarier is the ambiguous set of power that each of these new regulators will get. Let's take the Health Choices Administration as an example. This is from pages 41-42.

There is here by established as an independent agency in the executive branch by the Government

...

Duties include the establishment of qualified health benefits and standards under this title, including the enforcement of such standards in coordination with state insuruance regulators and the Departments of Labor and Treasury.

Now, that ambiguous statement pretty much means the Health Choices Administration can regulate anything that relates to health care in any way. Now think about this for a minute. The president has proclaimed, often, that if you are happy with your health insurance nothing will change. What happens if the Health Choices Administration isn't happy with your health insurance? This ambiguous language gives that new regulator the power to do just about anything it wants to your health insurance.

Let's look at another new regulator. Let's look at the Agency for Health Care Reserach. This regulator, incidentally, is a sub group of another regulator, the Center for Comparative and Effectiveness Research. This is found on page 502.

The Secretary shall establish with the Agency for health care Research and Qulaity Center for Comparative Effectiveness Research to conduct, support, and synthesize research with respect to the outcomes, effectiveness, and appropriateness of health services and procedures in order to identify the manner in which diseases, disorder, and other health condition can most effectively and appropriately be diagnosed, treated, and managed.

Essentially, this new bureaucracy has power to regulate research and treatment in any way it sees fit. Keep in mind this is a subset of an even larger and more powerful new regulatory body. So, when the president says if you're happy with your health care that won't change, that's not necessarily true because if you health care is deemed "not effective" by this new regulator, it can be eliminated. That's how ambiguous the power is.

Then, there's the now infamous page 425. Some say this page mandates "advanced care planning consultations". Others say its merely optional. The problem is the language is totally ambiguous.

subject to paragrapth 3 and 4 the term advanced care planning consultation means a consultation between the individual and a practitioner described in paragraph 2 regarding advanced care planning, if subject to paragraph 3, the individual involved has not had such a consultation in the last five years.

Now, that pretty much could mean anything as all sorts of other parts of the bill are referenced. Those parts are as ambiguous and confusing. Yet, it does appear clear that if you haven't had in the last five years, then you're supposed to get it. Yet, again, it's the ambiguous language that leads this bill to mean whatever anyone wants it to be. Keep in mind the Health Choices Administration has the power to do just about anything and so even if these advanced health care planning consultations are optional, that regulator can just as easily make them mandatory.

Then, there's this section on pages 240-241

For services furnished on or after January 1, 2009 each of the following categories of physicians services shall be treated as saparate service categories...

It then lists some services like long term care, managed care, etc. and finishes like ths.

Service categories established under this paragraph shall apply without regard to the specialty of the physician furnishing the service.

So, what does that mean? That's a good guess. One doctor told me that it allows the government to set salaries witout regard to specialty. In fact, this section is so ambiguous and confusing that in fact it could mean anything.

Now, let's look at page 272 which deals with "treatment of CERTAIN cancer hospitals"

Insofar as the Secretary determines under the sub paragraph A that costs incurred by hospitals described in section 1866 (d) (1) (b) (v) exceed those costs incurred by other hospitals furnishing services under this subsection, the Secretary shall provide for an appropriate adjustment under paragraph (2) (E) to reflect those higher costs effective for services furnished on or after January 2011.

Now, this sounds as though if a cancer treatment center costs more than the average cancer treatment center, the HHS Secretary can "provide for appropriate adjustment. What does that mean? Well, it means whatever the HHS Secretary at the time wants it to mean. Here you have a confusing and ambiguous section that even references two other sections that are each no less confusing or ambiguous. In the end, it gives the HHS Secretary the power to do as they please with regard to CERTAIN cancer hospitals. What does certain mean? That isn't addressed either. So, certain also means what the HHS Secretary at the time wants it to mean.

Now, I have highlighted a handful of pages, a handful of regulators, regulations, out of a thousand plus pages and 53 regulators. Already, I have shown that only a handful of regulators can do as they please with the new health care plan, and I've only scratched the surface.

The real fear here is that this bill is so ambiguous, with so many new regulators, that it allows the government to do as it pleases in any which way.

Emory University in the Crosshairs?

For at least a year now, Emory University has been the subject of two separate though similar investigations. The first focused on Dr. Charles Nemeroff. Nemeroff, for more than two decades, took money from drug makers while working on making examinations of drugs from the drugmakers that were paying him. He failed, systematically, to disclose the conflicts of interest that these mixed relationships created to the public. He rarely disclosed it when he published articles that spoke favorably in articles that analyzed said drugs in medical journals. Nemeroff gained a reputation in the early 1980's and used that reputation to corrupt the system. The payoffs would up in the millions. The administration at Emory were lax in their controls and then tried to cover up the corruption when it began to surface. The second investigation is on Dr. Stowe who also did something similar also at Emory University.

I can confirm that both investigations are still open, and I can also confirm that the committee knows that both these investigations are the tip of the ice berg. I can also confirm that at least two sources I have spoken with also spoke to the committee. That means that the committee is aware of all of the criminality I have covered.

Emory provides about 90% of the staff at Atlanta's Grady Hospital. Grady, in turn, is one of the biggest hospitals in the world and it serves, primarily, the indigent community in the Atlanta metro area. The hospital has been mired in an endless stream of financial difficulties and corruption. The committee has its sights set on much more of the corruption that Emory is involved in than they've investigated so far. As I reported a couple weeks back, Dr. Nemeroff was allowed to roam free because the University was using his reputation in psychiatry to orchestrate negative psychiatric diagnosis of whistle blowers. These bogus diagnoses would lead to ruined reputations which made their charges less powerful.

Grady Hospital has been involved in medicare fraud and has been investigated by both the NIH and HHS. One investigation concluded that...

the conditions at Grady hospital pose an immediate and serious threat to the health and safety of the patients

Keep in mind that the staff at Grady Hospital is overwhelmingly from Emory University. The line between the two is further blurred because often employees move fluidly between the two. For instance, the Chief Medical Officer at the time of the HHS report who's conclusions was so damning is William Casarella. Casarella is currently an Associate Dean and Professor at Emory University. I've also identified at least fifteen whistle blowers that have been paid off and silenced.

Grady and Emory have each been involved in all sorts of complicated and conflicted relationships which have corrupted the hospital for decades. Emory enjoys a very advantageous financial relationship with Grady Hospital while Grady Hospital is always in need of funds, which are often paid by the tax payers. At the same time staff like Cassarella move between the hospital and the university fluidly. More recently, Emory received a $200 million grant from the Woodruff Foundation. The Woodruff Foundation is a well established non profit first founded by former Coke CEO Robert Woodruff which enjoys a very close relationship with the university. (a great deal of the Emory buildings are named after Woodruff as well) Coke makes their headquarters in Atlanta where Emory is also located.

There is overwhelming evidence that patient care at Grady is wholly below par. They were put on notice by JCAHO at the end of 2007, an unprecedented step only done once before. There is overwhelming evidence that Emory professor MDs don't spend time there that they are supposed and often the hospital is run by the medical students with little and no supervision. There's been at least twenty whistle blowers that have come forward. Emory engaged in systematic campaigns to discredit them. During these campaigns professors were targeted including having the psychiatry department issue a diagnosis against the targeted professor that would conclude essentially that the whistle blower was crazy.

Meanwhile, Grady bleeds hundreds of millions in deficits yearly, patient care is totally sub par, and the hospital is old and worn down with elevators broke and their HVAC system being totally outdated.

I've been told be several folks that the only way to have all of this corruption be uncovered is through a Congressional investigation or if it got out of the Georgia court system. (there is even evidence of a corrupt court system) This on going investigation into Emory University may be the confluence of events that will finally unravel all the corruption that continues to go on there. I expect the findings of another investigation to be completed within a year.

The problem with this being such a maze of corruption is that its impossible to predict how an investigation will go. So, while I firmly believe that Senate Finance Committee is aware of exactly just how much corruption there is going on at Emory University, it's impossible to predict how quickly all of it will be unraveled.

The Federal Reserve, and the Shadow Currency and Interest "Markets"

That's a video that everyone that cares about the future of this nation should watch carefully. It's Democratic Rep Alan Grayson from Florida grilling Fed Chairman Bernanke about something called "liquidity swaps". Ask one thousand people what a liqudity swap is and I doubt more than one will have heard of it. All one thousand will have no experience trading them. That's because a "liquidity swap" is something only central bankers trade. That should scare everyone.

That's because, according to the testimony, Rep Grayson said that between 2007 and the end of 2008, liquidity swap trading increase from $23 billion to $553 billion and there was virtually no trading in liquidity swaps prior to 2007.

Think of a liquidity swap as a way for the Central banks of the world to trade currency without having those trade affect the currency market. In other words, through liquidity swaps, Central banks trade currency outside the currency system. Instead of a central bank buying dollars on currency exchanges, they buy dollars from the Federal Reserve which keeps them in reserve. Does that sound like a good idea? Does it sound like a good idea to allow central unelected bankers trade currency without having those trades affect the currency markets? Whether or not this does or doesn't have an impact is entirely up for debate? Congressman Grayson asked if it was mere coincidence that the nominal Dollar exchange rate shot up 20% at the exact same time that the Fed was making these swap transactions in earnest. The Federal Reserve chairman answered that it was.

Central banks, lead by the Fed, have their own shadow lending market created and run just by themselves. The Federal Funds Rate, for instance, is only available to banks in the Fed System. They even have their own shadow currency market as illustrated by the "liquidity swaps". These selected groups of central bankers simply create financial tools that are available only to themselves and then trade these vehicles amongst themselves. Here in the U.S. at least, their activities are left largely unscrutinized. There is very little oversight of our central bank, the Federal Reserve.

H.R. 1207, the act that would force a full audit of the Fed, is very popular but has little hope of passing. As such, the people of the country know very little of the trillion dollar transactions that the Fed engages in. Furthermore, the Fed uses dubious authority to create all of these shadow markets. In the clip referenced, Bernanke alludes back to the Federal Reserve Act of 1913. That was created nearly a century ago and it gave no specific authority for a "liquidity swap" because a liquidity swap was a figment of the imagination of bankers then. Yet, it's now being traded in half trillion dollar amounts by a group of central bankers that have absolutely no oversight.

Again, in the clip, Bernanke acknowledges that authority was given by the Federal Open Markets Committee. That is the group of Federal Reserve regional chairmen and the Chairman himself. None of these people is elected. More than that, they face little scrutiny. The Fed has never gone through the sort of forensic audit that most other government institutions are required to go through.

This exchange received nearly no scrutiny itself. Shouldn't everyone be concerned that our central bank has suddenly decided to make a monumental new investment in a shadow currency market? Such a monumental transaction should require the greatest of transparency. Instead, its hidden, given the least of acknowledgement, and downplayed by the chairman when questioned about it.

Everyone must understand once and for all that the most powerful force in the world today is the Federal Reserve bank. It controls the money supply. There is no more greater power than that. Unlike the president, the bank faces no election. It barely faces an audit. Almost none of its financial transactions are ever scrutinized. This exchange is a rarity and most exchanges amount to financial worship. Until the Federal Reserve is reigned and controlled so that its power is signficantly diminished the future of our economy is in constant threat by a central bank that is drunk on power.

Meet the New Executive Human Resources Director: Barney Frank

The House passed the most sweeping regulatory bill on limitations of executive pay today.

The House approved a measure Friday that would put new constraints on executive
pay, capitalizing on outrage over multimillion-dollar bonuses to Wall Street executives whose firms were bailed out by taxpayers.

The measure, which applies to any firm with more than $1 billion in assets, passed 237 to 185, with most lawmakers voting along party lines. The Senate will not take up a similar measure until after it returns from its August recess in September.

The bill, introduced by Representative Barney Frank, Democrat of Massachusetts, would let regulators ban risky incentive-based pay that could have an adverse effect on the financial system.

This bill would give the Congress all sorts of new power to regulate salaries, bonuses, and other benefits packages (like the hated golden parachutes) of any individual deemed an "executive". The good news is that this bill has a slim to no chance of becoming law. The bad news is that our legislators are so drunk on power that they think that this is part of their job description.

It's important to note that Frank's bill wouldn't merely regulate the executive pay of those companies that have $1 billion and more in assets. There is so much troubling in this bill. First, Frank is trying to use class warfare by attacking a class of people that have little sympathy anywhere, executives. By attacking executives, a class no one likes, the Congress can do something that is entirely not their business.

There is absolutely nothing in the Constitution that could reasonably give Congress the power to tell a private company how much to pay any of their employees, executives included. Yet, that's what Congressman Frank has purported to do and he found 236 other lawmakers that agree with him. There's no doubt that many executives are over paid and often paid handsomely for incompetence. There's also no doubt that fixing this is entirely up to the private market and not the federal government.

The negative unintended consequences are numerous. This will no doubt drive executive talent to foreign firms not under this regulation. American companies will simply not be able to compete in the word market place for executive talent. If you were an executive would you work at a firm in which Barney Frank could dictate how much money you can make, when another firm of equivalent credentials doesn't have the same restrictions?

Of course, once the Congress gets its meathooks into executives that definition will continue to expand. If Congress is given any power to regulate executive pay it's not long before executive are defined to include more and more private employees. Of course, power is like a drug. Give Congress this power and it only feeds their monster and their thirst for more.

This is yet another example of why I see class warfare as such a corrosive tactic. Frank capitalizes on the natural disgust and envy for executives and he uses that to give him and his colleagues power none of the founding fathers intended. He uses this envy to craft legislation that will make firms less competitive, give government even more power, and opens the door to give it even more power. We can all only hope that this dies a fast death in the Senate

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 Definitive Dossier on the House Health Care Bill (Pages 1-500) Part I

Introduction: Trying to analyze a one thousand page plan is difficult enough. As such, I will take the first 500 pages first. Even then, it would be way too long a post to analyze all five hundred pages all at once. There are four major points of emphasis: government control, rationing, taxes, and community group benefits that I will analyze. I will take those in four parts. First, let's talk about government control. Also, I will reference pages in the bill which you can find at this link.

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The president has proclaimed on numerous occasions that if you like your health care plan, you need not worry because it WON'T change. Is this true? A thorough analysis of the bill leaves a lot of doubt.

The nexis, if you will, of government control starts on page 72 and page 84. Those two pages establish the government health exchange, define the government's role in it, and define what providers must enroll in it. The health care exchange will be administered by a new bureaucracy, the Health Choices Administration. Any insurer, health practitioner, or hospital in the health care exchange will be subject to the regulations of the exchange as laid out by the Health Choices Administration.

Who needs to be in the exchange? Any health care provider that provides health care that is paid in whole or in part by a third party must be in the exchange. In other words, any hospital that accepts insurance must be part of the exchange. All insurance companies must be part of the exchange. Chiropractors, laser surgeries, and other procedures that don't accept insurance would not be part of this exchange. As such, almost the entire health care industry would fall under the control of the health care exchange. The health care exchange would now be regulated by the Health Choices Administration.

As such, it is totally misleading to say that if you like your health care it won't change. That's only if your current health care plan conforms to whatever regulations are created by the Health Choices Administration.

The control only begins there. A lot of businesses and organizations are self insured. For instance, IBM has created its own insurance company for its employees. Several other companies as well as other groups like churches have also created an insurance company for their members or employees. Since they are self insured, they are not subject to this health care exchange. Remember, the exchange is only for those that have third party costs. Now, the hospitals that IBM employees go to would almost certainly be part of the exchange but that's another story. For those types of companies and groups, on page 22. Those employers, and other organizations that self insure, will then be mandated to a government audit. These audits will measure: financial solvency, their ability to pay the premiums, the extent to which ratings rules will cause adverse selections of their groups in the market. In other words, the government will audit all self insured organizations to make sure their health insurance plan is up to par as the government measures par.

Then, there is the introduction of an alphabet soup of new government bureaucracies to regulate health care. These new bureaucracies include: the Telehealth Advisory Committee, the aforementioned Health Choice Administration, the Independent Medical Avisory Council, the the Office of Civil Rights, the Office of Minority Health, the Public Health Investment Fund, and the Health Affordibility Administration. All of these new bureaucracies will have new regulatory authority over the administration of health care. In all, the bill creates 53 new bureaucracies.

The most insidious government control comes in pages 425-430. Here, the government will regulate "advanced care planning consultation". In layman's terms, the government will regulate how older folks will be treated and by so doing, just how much treatment will be provided to them. (I'll get more into this in the rationing portion but in here is language that will mandate that health care be provided if it isn't cost effective)

On page 335, there is the "Outcomes Based Measures". This will measure the cost effectiveness of all procedures done in the country. (this will also be revisited in the rationing portion) In other words, the government will do sort of health care polling of all procedures to determine if they are worth the cost. Of course, in order to do that, the government has to have access to the medical records of all procedures. This pages creates this"outcomes based measures" and by so doing, gives the government that access.

On pages 57-59, there is the establishment of the standardization of electronic administration. This will provide such things as real time determination of an individual's financial responsibility at the point of service, harmonize all common data points across administrative and clinical transactions, and describe all data points in unambiguous terms. On page 58, a National Health Care ID card is created. This card will be used by the government to create the ability to make real time financial determinations of a patient. As such, this will give the government real time access to bank statements, investment accounts and anything else necessary to make this decision. Thus, we finish off the Orwellian takeover of health care by the government.

On page 195, the Health Choice Administration is given access to the tax records of all Americans in the health care exchange. Here is the relevant text

The Health Choice Act of 2009, shall disclose to officers and employees of the Health Choice Administration, or such state based health insurance exchange, as the case may be, return information of any tax payer whose income is relevant

Finally, on page 241, government bureaucracies will set salaries for doctors. Here is the relevant portion.

...Service categories established under this paragraph shall apply without regard to the specialty of the physician furnishing the service.

Here is the second part on rationing.

Deciphering Conrad's Statement on Health Care

Kent Conrad made a startling and curious statement on health care today.

Senate Democrats are going to need help from Republicans to get President Obama's ambitious plan to reinvent the health care system over the goal line, a top lawmaker acknowledged on Sunday.

"Look, there are not the votes for Democrats to do this just on our side of the aisle," said Sen. Kent Conrad, the chairman of the powerful budget committee.

Even though the Democrats enjoy a majority in the Senate, some are skittish about the financial or political costs of the proposals.

And Republicans said they will continue their opposition to a plan they claim is simply a government takeover of private decisions.

It's important to put this into context. Social Security passed with nearly unanimous Republican support. Medicare passed with about half of the Republican voting with most Democrats. Sweeping health care reform would be legislation on the magnitude of those two. Democrats would be taking an enormous political risk if they passed this without significant Republicans on board.

At the same time, Conrad isn't merely saying that Democrats don't want to pass health care reform without the Republicans but he's saying he doesn't have the votes in the Democratic caucus. Democrats, of course, have 60 votes in the Senate. That means several Democrats are refusing to get on board.

This has two significant consequences. First, it means that significant numbers of Democrats are aware of the historical context I just laid out. Significant numbers of Democrats are unwilling to put their political hides behind without some Republican cover. Second, this is yet more evidence that health care reform, in its current form, is dead.

Imagine you're a Republican and you just heard what Conrad said. You now know that if your caucus unites against the current plan IT WON'T PASS. What exactly are you going to do if you're Mitch McConnell? In fact, that's exactly where the Republican caucus is at right now.

At this point, speaking about the current health care reform is elementary. We will all do it. I will do it. Make no mistake however, we are all debating a piece of legislation that won't pass. That doesn't mean sweeping health care reform won't pass, but it won't pass in any form near where it is now. Enough Democrats aren't willing to risk their political future on the current legislation. Republicans are NOT going to suddenly get on board. As such, we have put yet another nail in the coffin of the current health care reform bill.

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.

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.

Analyzing the House Health Care Bill

The Democrats finally unveiled their health care bill in the House. The CBO has a detailed analysis. According to the CBO, this bill will cost just over $1 trillion over the next ten years and by then 97% of all LEGAL Americans will have some sort of health care coverage. The Democrats propose to pay for this with incremental tax increases on the wealthy starting with those making $350,000 and more. The biggest hit will come to those making $1 million and more. Those folks will see a tax increase of 5.4%.

The bill will attempt to create universal coverage by several different methods. First, they will increase the income cap for Medicare. Starting in 2013, anyone making 400% of the poverty line would be eligible for Medicare. Furthermore, the break point for Medicaid will jump to 133% of the poverty line in the same year. Furthermore, in the same year, the government would mandate that every individual be covered in that same year. Anyone not covered would be subject to a fine determined by that person's income.

Furthermore, all businesses making $250,000 and more would be required to provide health insurance for their employees and any business that wouldn't comply would be subject to fine.

The public option would be a part of this plan. The public option would pay Medicaid rates plus 5%. So, doctors would NOT get wealthy treating those on the public option. Most importantly, the Democrats have only figured out how to pay for half the bill so far. The taxes would cover half the cost. Democrats claim that the other half will come from future savings from more efficient record keeping, preventative care, etc.

The Democrats will claim that this plan won't tax that many small businesses, but this is totally misleading. It will require that all small businesses making $250,000 and more to provide some sort of a health care plan for their employees. According to this Kaiser Foundation study, about 60% of small businesses offered health insurance in 2005. There are about $27 million small businesses, those with 500 employees and less, currently in the U.S. This means that about 12 million small business owners will either need to provide health insurance for their employees or pay a fine. That's no different than a tax on 12 million people.

This bill also takes away much of people's liberty. Everyone will be mandated to get health insurance, like it or not, or pay a fine. Small business owners will be forced to provide health insurance for their employees or pay a fine. Furthermore, this complicates the tax code even more. This creates all sorts of new income break points, $350,000, #5000,000, and $1 million for new marginal tax rates. The president promised to simplify the tax code and this complicates it terribly.

Finally, this will undoubtedly lead to cuts in Medicare and Medicaid services. Both programs are on the verge of bankruptcy already. Now, both will cover millions more. That simply cannot happen without a cut in services. It increases the size and scope of government in manners consistent with the president's entire domestic agenda.

I predict that nothing near this bill will ever become law. It's possible that it gets out of the House, but nothing similar to it will get out of the Senate. Furthermore, once details of this bill get out, I further predict that the public at large rejects it overwhelmingly.

A Surreal Day in the House

Today, at least, no one can say that our legislators didn't earn their salaries. It was a rather long day in the House and it only just ended with the House approving cap and trade 219-212. Initially, in the morning, news reports expected the House to vote on the bill sometime in the afternoon. The afternoon came and went and the rumors began that the Democrats didn't have the votes to pass it. Then, we got to 5 PM ET and suddenly things truly turned surreal. John Boehner stepped to the floor. In the middle of his speech, Boehner put on his reading glasses and began reading from the bill. Its sponsor, Henry Waxman, had snuck in a 300 page amendment early this morning. Boehner began reading from the amendment. It first appeared that Boehner would attempt his own version of a filibuster by reading the entire 300 page amendment. Instead, he only read from parts of it and finished after about a half hour. The vote came down to the wire. There were eight Republican defectors, Bono-Mack, Castle, Kirk, Lance, LoBiondo, McHugh, Reichert, and Smith: as well as 44 Democratic defectors.

Republicans are certainly seeing this as a loss. I take a contrarian view. Cap and trade still has no chance of passing. It barely passed the House and it will have even more trouble passing the Senate. It will be all but impossible to square the two bills, if we get there, and still keep majorities. In the meantime, there will continue to be debate surrounding this bill. Astute observers may have noticed that most of President Obama's policies don't poll nearly as well. As such, the Republicans should welcome several more months of intense debate over the worthiness cap and trade.

With cap and trade moving the Senate, it means the Senate won't have time to take up such things as regulatory reform and immigration. Ultimately, the longer this debate goes on the better for Republicans. That's because the more people find out about this bill, the less they like it. Ultimately, it's not going to pass. If, by chance, it does, it won't be anything that will do anything of substance. You simply would have to pay off far too many people in order to get it to pass.

The president has already used an enormous amount of political capital to get it through the House. He'll need to use even more to get it through the Senate. Again, ultimately, this won't pass. The more political capital the president spends the better. Let him spend as much political capital on this lemon as possible. In the meantime, let the debate continue.

"Nobody knows for sure how this is going to work."

Let's try a thought experiment. Imagine you had a friend that was a chemist. Imagine your friend invited you to their lab. Imagine, instead of merely observing, you, a layman, began mixing the chemicals in whatever haphazard manner you thought up at the time. Does that sound like a wise thing to do?

Now, imagine you're a lawmaker and you have a major hand in crafting sweeping legislation that will revolutionize the manner in which energy is produced and consumed. What if you crafted legislation without really knowing how it would come out? Welcome to the wonderful world of cap and trade. In response to the manner in which off sets will work in cap and trade, here's how Collin Peterson, chairman of the Agriculture Committee, characterized it.

The truth is, nobody knows for sure how this is going to work."

Let's try a couple more hypothetical situations. Imagine you meet with your financial planner. They lay out your retirement plan, plan to save for your child's college fund, and other investments, insurance, and financial services. Then they say, "the truth is nobody knows for sure how this is going to work".

Imagine you go in for major surgery. Your surgeon explains the procedure, the recovery, and all the drugs that will need to be administered. Then, the surgeon says, "the truth is nobody knows for sure how this is going to work".

Would anyone wind up working with either of those folks? Yet, despite a startling and honest admission, the Democrats are ready to move forward on this bill even though, clearly, they don't know how it will work.

Peterson was referring to the system of offsets

a program that would allow covered sources to purchase measurable and verifiable emissions reducing credits from sources outside the cap

Off sets are crucial to cap and trade for a number of reasons. First, the whole point is to move our energy production from that which emits C02 and other pollutants to that which doesn't. Furthermore, in order to gain consensus, the Democrats have compromised to exclude many energy sources that might in fact emit carbon but were protected by powerful interests. For instance, Peterson's vote was only received after major concessions were granted to farmer's energy sources.

So, how will this system of offsets work in the new cap and trade bill? Well, as Congressman Peterson points out.

the truth is, nobody knows for sure how this is going to work

Doesn't that just fill you will confidence about how well cap and trade will serve its intended purpose? After all, the road is littered with bills that wound up doing things no one intended. Sarbanes Oxley is a great example. Going back further, Smoot Hawley was an even better example. Far too often, Congress passes a bill that winds up having all sorts of unintended consequences. Here, we know this will happen because Peterson says as much.

Cap and Trade on the Ropes?

It's not being reported much but the first major initiative for President Obama, cap and trade, is in deep trouble. One of the reasons that this story is underreported is that much of the dynamic is total inside baseball politics. Right now, cap and trade is having trouble finding enough votes not merely out of the Congress, not even out of committee, but out of sub committee.

First, as has become his modus operandi, President Obama ceded the nuts and bolts of writing the bill to members of the House. In this case, the two major architects of the president's cap and trade are Henry Waxman and Ed Markey. Both Markey and Waxman are liberal stalwarts of the Democratic party. As such, the writing of cap and trade already has problems attracting moderates and certainly conservatives.

The major problem with cap and trade is not necessarily ideological but rather economic, demographic and economic. Most of the Democratic legislators against cap and trade are against it because they are from states which have energy sources that would be hurt by cap and trade. States like Ohio, Michigan, Pennsylvania, etc. have robust industries that would be adversely affected by cap and trade. As such, legislators from those states are against cap and trade.

The second sub narrative in the cap and trade story is the emergence of strength of both the New Democrats and the Blue Dogs. I predicted before the term that the Blue Dogs would eventually flex their political muscle and they have on cap and trade. The Blue Dogs are conservative and Democrats and they have on cap and trade. Much of both coalitions, the New Democrats and the Blue Dogs (often members of both are members of both)

The third sub narrative is the power struggle within the power structure of the Democratic party. The Hill has the story.

Democratic centrists are pressing House Speaker Nancy Pelosi to set aside a flagging climate change bill to focus on what they think is a more achievable goal: overhauling the nation’s healthcare system.

But those close to Pelosi (D-Calif.) say she is charging forward on cap-and-trade legislation, despite the potential defections of Democrats who represent states with industries that would be adversely affected by the bill.

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The views of the two Ways and Means Southerners square with those of Rep. Chris Van Hollen (Md.), the House Democratic campaign chief charged with protecting vulnerable members in conservative districts. In an exchange in a leadership meeting last week confirmed by aides and participants, House Energy and Commerce Committee Chairman Henry Waxman (D-Calif.) criticized Van Hollen for disparaging the chances of cap-and-trade. Van Hollen said he felt that healthcare reform should be done first.

So, while Democrat heavy weights like Chris Van Hollen, Henry Waxmen, and Nancy Pelosi battle it out for power, the fate of cap and trade lies in the balance.

Beyond this, the agenda of President Obama is also in flux. Most of the same folks strenuously objecting to cap and trade say that health care reform has a much better chance of passing. Yet, so far at least, the president is determined to pass cap and trade before moving onto health care reform.

Furthermore, while health care "reform" may in fact be popular, what that reform is remains to be determined. While in my opinion, cap and trade is misguided, it's also a fairly simple piece of legislation. Health care reform is not simple. It will be very complicated and messy.

On top of this, if President Obama cedes crafting health care reform to liberal stalwarts like Ted Kennedy, you can bet that moderates will object. Trying to manage the competing interests of ideology, demographics, and economics for health care reform will make cap and trade seem basic math. Furthermore, if the president isn't able to maneuver the passage of cap and trade, it will give competing interests that much more power to extract more concessions on health care in order to get their vote.

As for cap and trade, the divisions are largely irreconcilable. With total control, this is an issue that Democrats can't blame on Republicans. Most of those against it see cap and trade as hurting economic interest of their constituency. As such, the only way to appease these legislators is to waive their particular piece of energy from cap and trade. In other words, anyone from a coal producing region will want coal waived from cap and trade. Of course, such a watered down bill would not really be cap and trade, and Republicans would easily deride it. Furthermore, such waivers would inherently confirm that cap and trade is economically adverse.

Keep an eye on the travails of cap and trade. The real job of governing by President Obama starts now and passage of cap and trade is a real sign of his political influence.

Irony and Poetic Justice for Senator Specter

Senator Specter's career as a Democratic Senator got off to a rocky start. First, he voted against the first two Democratic initiatives that were put in front of him. Then, he pronounced he was rooting for Norm Coleman to win in Minnesota though later he backtracked, likely when he realized what party he is a part of now. Then, Democrats began to announce that they weren't necessarily going to get out of the Pennsylvania primary just because Specter switched. The most recent hit is the announcement that he will not get committee seniority but rather he will be treated as a rookie.

All of this rings of poetic justice as well as irony. It appears that at least Joe Sestak will challenge Specter in the primaries. Already the netroots are against Specter. The unions are lukewarm at best. This has all happened in less than a week of him being a Democrat. So, what does it all mean? It means that the best case scenario is the Specter will win a brusing primary. At worst, he will lose in the primaries. As such, he is essentially facing the exact same options as he did as a Republican, only then he had seniority.

Meanwhile, the Republicans are in at least as good a position to win in Pennsylvania as they were with Specter. Tom Ridge is ready to put his hat in the ring. He of course would have never run if Specter was still a Republican. In effect, after all the wheeling and dealing, the Republicans are in roughly just as good a position to keep the Senate in Pennsylvania as they were when Specter was a Republican.

Meanwhile, the Democrats still don't have a filibuster proof majority. That won't happen until Minnesota is resolved. The time frame on that is still up in the air. Even assuming they do, it's unclear just how solid that majority will be. Specter is proving to be nearly as unreliable as a Democrat as he was a Republican. Meanwhile, the Republicans have just become that much more cohesive. Most votes still come down to Bayh, Nelson, Specter, Collins, Snowe, and Landrieu, only now there is one more Democrat in that field. The unions appear to be demanding a vote on card check for their support of Specter, but even that still remains unclear.

So, it is all rather ironic and full of poetic justice. Arlen Specter switched parties. Yet, everything continues to be just as muddled. Furthermore, given that his switch was entirely opportunistic, it is nothing short of poetic justice that ultimately the only thing we know for sure is that the switch cost him seniority.

Denocratic Legislators Vs. President Obama on Iran

(H/T to Weekly Standard) Yesterday, several prominent Democratic Legislators, including Steny Hoyer. sent President Obama this letter. The letter sounds as thought it was written by former UN ambassador John Bolton rather than members of the President's own party. Here are some of the highlights.

Engagement must be serious and credible, but it cannot be open-ended. Our goal should be to bring about Iran's near-term suspension of uranium enrichment, and we should offer Iran meaningful incentives in order to achieve this goal. But we cannot allow Iran to use diplomatic discussions as a cover for continuing to work on its nuclear program....

We urge that the talks begin as soon as possible, so that we will have the earliest possible indication of whether they will succeed in halting Iran's nuclear program. American action on this matter cannot be deferred...until after the Iranian presidential elections...

The legislators go on to propose a series of stiff economic sanctions on just about any business that does business in or with Iran. Now, while I agree with the sentiment, I am skeptical of the motives. In Illinois, the so called balanced budget amendment is routinely perverted through a series of accounting tricks. At other times, this is done outside the Constitution of the State. The state's comptroller, now Dan Hynes, will note the impropriety in footnotes when signing off on the budget. This allows the Comptroller a way to say that he warned everyone about the deficit being created in Illinois all while never really doing anything of substance about it.

If all these lawmakers only send this letter, that is the foreign policy equivalent of sounding the alarm in the footnote of the budget the way the Comptroller often does here in Illinois. If the situation is really as dire as they make it in the letter, they should be on every media that will have them sounding the same alarm. If they are really as concerned as they claim in the letter, this won't be the last we will hear from them.

While the economy has grabbed our attention, a nuclear Iran is the most dangerous geopolitical dynamic the president will have to deal with. While their nuclear program has taken a backseat the economic crisis, make no mistake, a nuclear Iran would change things in the Middle East and the world. The Democratic legislators have sounded the alarms that the President's policies only allow Iran more time to continue towards their ultimate goal of a full operational nuclear bomb. Now if they are serious about their concern, this letter will only be the beginning. They will continue to sound the alarm until the president takes this issue with the seriousness it deserves.

For my view on bringing Iran down peacefully take a look at this post.