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« Reply #3275 on: Dec 01, 2012, 08:36 AM » |
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In the USA...
Senate approves increased sanctions against Iran
By Agence France-Presse
Friday, November 30, 2012 15:35 EST
The US Senate unanimously approved new economic sanctions Friday aimed at further crippling Iran’s energy, shipping and port sectors, a year after Congress passed tough restrictions against Tehran.
The amendment, tacked on to a sweeping defense spending bill being debated by the chamber, passed 94-0, and should sail through the House of Representatives.
It was introduced by Senator Robert Menendez out of concern that Iran was pressing ahead with its nuclear weapons drive despite earlier sanctions that had been hailed as the toughest-ever against the Islamic republic.
“Yes, our sanctions are having a significant impact, but Iran continues their work to develop nuclear weapons,” said Menendez, a Democrat.
He cited last week’s report by the International Atomic Energy Agency that Iran continues to defy the United Nations and the world community by refusing to slow down enrichment facilities, denying access to inspectors, and conducting live tests of conventional explosives that could be used to detonate a nuclear weapon.
“By passing these additional measures ending sales to and transactions with Iranian sectors that support proliferation — energy, shipping, ship-building and port sectors as well as with anyone on our specially designed national list — we will send a message to Iran that they can’t just try to wait us out.”
Senator John McCain offered his characteristically blunt assessment of Iran’s intentions, and the need for expanded sanctions.
“The screws need to be tightened,” he said on the Senate floor just before the vote. “The centrifuges are still spinning in Tehran.”
McCain said the new sanctions “can — I emphasize can — lead to a way to prevent a conflagration in the Middle East.”
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November 30, 2012
Senate Votes to Curb Indefinite Detention
By CHARLIE SAVAGE
NYT
WASHINGTON — The Senate voted late on Thursday to prohibit the government from imprisoning American citizens and green card holders apprehended in the United States in indefinite detention without trial.
While the move appeared to bolster protections for domestic civil liberties, it was opposed by an array of rights groups who claimed it implied that other types of people inside the United States could be placed in military detention, opening the door to using the military to perform police functions.
The measure was an amendment to this year’s National Defense Authorization Act, which is now pending on the Senate floor, and was sponsored by Senators Dianne Feinstein, Democrat of California, and Mike Lee, Republican of Utah. The Senate approved adding it to the bill by a vote of 67 to 29.
“What if something happens and you are of the wrong race in the wrong place at the wrong time and you are picked up and held without trial or charge in detention ad infinitum?” Ms. Feinstein said during the floor debate. “We want to clarify that that isn’t the case — that the law does not permit an American or a legal resident to be picked up and held without end, without charge or trial.”
The power of the government to imprison, without trial, Americans accused of ties to terrorism has been in dispute for a decade.
Last year, in the previous annual version of the National Defense Authorization Act, Congress included a provision stating that the government had the authority to detain Qaeda members and their supporters as part of the war authorized shortly after the terrorist attacks of Sept. 11, 2001. But lawmakers could not decide whether that authority extended to people arrested on American soil, and so they left it deliberately ambiguous.
Ms. Feinstein, arguing that law enforcement officials have proved capable of handling cases that arise on domestic soil, said the amendment was intended to “clarify” that the government may not put Americans arrested domestically in military detention.
Senator Kelly Ayotte, Republican of New Hampshire, objected to the restriction on security grounds, saying that even American citizens arrested inside the United States on suspicion of planning a terrorist attack for Al Qaeda should be held under the laws of war and interrogated without receiving the protections of ordinary criminal suspects, like a Miranda warning of a right to remain silent.
From the other direction, an array of civil liberties and human rights groups — including the American Civil Liberties Union and Human Rights First — objected to the amendment because it was limited to citizens and lawful permanent residents, as opposed to all people who are apprehended on United States soil.
“Senator Dianne Feinstein has introduced an amendment that superficially looks like it could help, but in fact, would cause harm,” said Chris Anders of the A.C.L.U.
But on the floor, Ms. Feinstein said that she limited the amendment to citizens and green card holders because she believed that language would “get the maximum number of votes in this body.”
The Senate on Thursday also passed, 94-0, a series of additional American sanctions on Iran. The amendment would impose penalties on individuals selling commodities to Iran that might be used in ship-building or the nuclear program, including aluminum and steel. It also threatened countries, like Turkey, which are buying Iranian oil with gold, in an effort to circumvent banking sanctions.
The current language does not give the president the power to issue waivers, as he has done for countries like Japan, South Korea and India that buy Iranian oil. The White House has opposed the amendment, with officials saying they fear it could “threaten to confuse and undermine” existing effort to get allies, China and other countries to impose other sanctions already in the pipeline.
Also on Thursday, the Senate voted, 62 to 33, for a nonbinding amendment calling for an accelerated withdrawal of United States combat forces from Afghanistan. The measure was sponsored by Senator Jeff Merkley, Democrat of Oregon, and was backed by 13 Republicans.
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U.S. birth rate hits record low, plummets especially among immigrant women
By Samantha Kimmey
Friday, November 30, 2012 20:40 EST
RawStory
The U.S. birth rate, calculated as the annual number of births per 1,000 women between 15-44, hit an all-time low in 2011, reported Pew Research, largely attributed to the Great Recession.
While final data are not available, the rate hit 63.2 per 1,000 women last year — the lowest since 1920, before which reliable numbers are not available.
The U.S. birth rate fell by 8 percent between 2007 and 2010.
The birth rate among immigrant women in the country is plummeting compared to non-immigrants. While the rate among U.S.-born women fell 6 percent between 2007 and 2010, it fell 14 percent among all immigrant women and 23 percent among Mexican-born women.
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November 29, 2012
Class Wars of 2012
By PAUL KRUGMAN
NYT
On Election Day, The Boston Globe reported, Logan International Airport in Boston was running short of parking spaces. Not for cars — for private jets. Big donors were flooding into the city to attend Mitt Romney’s victory party.
They were, it turned out, misinformed about political reality. But the disappointed plutocrats weren’t wrong about who was on their side. This was very much an election pitting the interests of the very rich against those of the middle class and the poor.
And the Obama campaign won largely by disregarding the warnings of squeamish “centrists” and embracing that reality, stressing the class-war aspect of the confrontation. This ensured not only that President Obama won by huge margins among lower-income voters, but that those voters turned out in large numbers, sealing his victory.
The important thing to understand now is that while the election is over, the class war isn’t. The same people who bet big on Mr. Romney, and lost, are now trying to win by stealth — in the name of fiscal responsibility — the ground they failed to gain in an open election.
Before I get there, a word about the actual vote. Obviously, narrow economic self-interest doesn’t explain everything about how individuals, or even broad demographic groups, cast their ballots. Asian-Americans are a relatively affluent group, yet they went for President Obama by 3 to 1. Whites in Mississippi, on the other hand, aren’t especially well off, yet Mr. Obama received only 10 percent of their votes.
These anomalies, however, weren’t enough to change the overall pattern. Meanwhile, Democrats seem to have neutralized the traditional G.O.P. advantage on social issues, so that the election really was a referendum on economic policy. And what voters said, clearly, was no to tax cuts for the rich, no to benefit cuts for the middle class and the poor. So what’s a top-down class warrior to do?
The answer, as I have already suggested, is to rely on stealth — to smuggle in plutocrat-friendly policies under the pretense that they’re just sensible responses to the budget deficit.
Consider, as a prime example, the push to raise the retirement age, the age of eligibility for Medicare, or both. This is only reasonable, we’re told — after all, life expectancy has risen, so shouldn’t we all retire later? In reality, however, it would be a hugely regressive policy change, imposing severe burdens on lower- and middle-income Americans while barely affecting the wealthy. Why? First of all, the increase in life expectancy is concentrated among the affluent; why should janitors have to retire later because lawyers are living longer? Second, both Social Security and Medicare are much more important, relative to income, to less-affluent Americans, so delaying their availability would be a far more severe hit to ordinary families than to the top 1 percent.
Or take a subtler example, the insistence that any revenue increases should come from limiting deductions rather than from higher tax rates. The key thing to realize here is that the math just doesn’t work; there is, in fact, no way limits on deductions can raise as much revenue from the wealthy as you can get simply by letting the relevant parts of the Bush-era tax cuts expire. So any proposal to avoid a rate increase is, whatever its proponents may say, a proposal that we let the 1 percent off the hook and shift the burden, one way or another, to the middle class or the poor.
The point is that the class war is still on, this time with an added dose of deception. And this, in turn, means that you need to look very closely at any proposals coming from the usual suspects, even — or rather especially — if the proposal is being represented as a bipartisan, common-sense solution. In particular, whenever some deficit-scold group talks about “shared sacrifice,” you need to ask, sacrifice relative to what?
As regular readers may know, I’m not a fan of the Bowles-Simpson report on deficit reduction that laid out a poorly designed plan that for some reason has achieved near-sacred status among the Beltway elite. Still, at least you can say this for Bowles-Simpson: When it talked about shared sacrifice, it started from a “baseline” that already assumed the end of the high-end Bush tax cuts. At this point, however, just about all the deficit scolds seem to want us to count the expiration of those cuts — which were sold on false pretenses, and were never affordable — as some kind of big giveback by the rich. It isn’t.
So keep your eyes open as the fiscal game of chicken continues. It’s an uncomfortable but real truth that we are not all in this together; America’s top-down class warriors lost big in the election, but now they’re trying to use the pretense of concern about the deficit to snatch victory from the jaws of defeat. Let’s not let them pull it off.
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November 30, 2012
In Latest Campaign, Obama Takes Deficit Battle to the Public
By PETER BAKER and JONATHAN WEISMAN
NYT
HATFIELD, Pa. — The blue “Forward.” signs with the lonely period were gone. But U2’s “City of Blinding Lights” once again blared over the loudspeakers, and some in the audience broke into a chant of “fired up, ready to go!”
President Obama doffed his jacket and rolled up his sleeves. Someone shouted, “We love you,” and he gave his typical “I love you back” response. Then, sounding like he was still a candidate, he said he was “fighting” for the middle class and called on the crowd to enlist in the battle.
If Mr. Obama’s visit to a toy factory here on Friday felt like a time warp back to the campaign trail, then get used to it. The lesson he drew from four years of often-frustrating relations with Congress was that sit-down negotiations with the opposition do not work unless he turns up the public heat on lawmakers. And so, just weeks after his re-election, Mr. Obama has made it clear that the campaign will continue.
The goal at this point is not winning re-election but instead promoting his plan to raise taxes on the wealthy and avert a year-end fiscal crisis. While House Republicans have signaled a willingness to generate additional tax revenue, they are still resisting raising rates on higher income.
Mr. Obama framed the issue in terms of extending the Bush-era cuts for families with income under $250,000, which would have the effect of allowing them to expire on income above that level for the 2 percent of Americans who earn more. Without agreement, the Bush-era cuts will expire at the end of the year for all taxpayers.
The president mentioned spending cuts only in passing, and without specifics. “I’ve been keeping my own naughty and nice list for Washington,” he told workers on a factory floor featuring a series of K’NEX construction toys assembled in the shapes of roller coasters, a merry-go-round and an American flag. If Republicans refuse to go along, he said, then everyone could end up paying more next year. “That’s sort of like the lump of coal you get for Christmas. That’s a Scrooge Christmas.”
Mr. Obama’s return to the hustings seemed to irk Republicans. “Campaign-style rallies and one-sided leaks in the press are not the way to get things done here in Washington,” the House speaker, John A. Boehner of Ohio, complained on Thursday. Hours later, Republican aides leaked Mr. Obama’s opening bid in the fiscal negotiations.
On Friday, Mr. Boehner again rejected that bid, a $4 trillion, 10-year deficit-reduction package with $1.6 trillion in new taxes and $50 billion in immediate stimulus spending. “There’s a stalemate. Let’s not kid ourselves,” he said. “Right now we’re almost nowhere.”
Mr. Boehner did not offer a counterproposal, but he made it clear that Republicans stood firm in favor of extending the tax cuts across the board. “Increasing tax rates draws money away from our economy that needs to be invested in our economy to put the American people back to work,” he said.
With a few cracks developing in Republican solidarity, Democrats are increasing the pressure on Mr. Boehner to take up a Senate-passed bill extending middle-class tax cuts. Representative Nancy Pelosi of California, the Democratic leader, called on him to schedule a vote for next week. If not, she would circulate what is known as a discharge petition to force a vote if it draws 218 signatures. That remained a long shot, but Democrats were increasingly confident they were playing a winning hand.
Mr. Obama’s trip here evoked many of the atmospherics of the campaign. As if seeking volunteers for Election Day, Mr. Obama asked supporters to engage in the tax fight directly. “I want you to call, I want you to send an e-mail, post on their Facebook wall,” he said. The White House even set up a special hashtag word for Twitter users to express their support.
Minutes after Mr. Obama spoke at the factory, the White House sent its e-mail list a letter from David Plouffe, an Obama senior adviser, that had the tone and feel of a fund-raising letter, albeit without asking for money.
“You’re changing an entire policy conversation. And we have to keep it up,” he wrote.
“There’s no denying the power of your voices,” he added.
“Will you speak out today?”
The strategy stemmed from what the White House saw as successful public campaigns to press Congress to renew a temporary payroll tax cut a year ago and to extend lower federal student loan rates this summer. In both cases, Republicans complained that the president was more interested in campaigning than negotiating, but he ended up getting what he wanted and, in his team’s view, he scored political points too.
In some ways, Mr. Obama’s actions are reminiscent of those of presidents like Ronald Reagan, who went over the heads of a Democratic House to rally public support for his legislative priorities.
“Public persuasion by the president as part of Congressional negotiations can be an effective tactic,” said Frank J. Donatelli, the White House political director under Mr. Reagan. The difference, he said, was that Mr. Obama seemed to be neglecting the negotiation side of the equation.
“Public pressure can help to close differences, but cannot be a substitute for the negotiations themselves,” Mr. Donatelli said. “Reagan compromised with Democrats to win his tax bills in 1981 and 1986 and in negotiations to save Social Security in 1983. Thus far, we have seen very little give in Obama’s positions.”
That may change as the end-of-the-year deadline gets closer. Few people, if any, in Washington expected the two sides to show their hands so early. If nothing else, the president and House Republicans have strong incentives to fight, or at least look like they are fighting, right up until the last minute to convince their respective liberal and conservative bases that they resisted as long as possible whatever concessions they ultimately decide to make.
“In Washington, nothing is easy,” Mr. Obama said in the one statement of the day that both sides could agree on. “So there is going to be some prolonged negotiations. And all of us are going to have to get out of our comfort zones to make that happen.”
Peter Baker reported from Hatfield, Pa., and Jonathan Weisman from Washington.
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Pelosi Backs Limiting Oversight of Debt Ceiling
Representative Nancy Pelosi on Friday endorsed a proposal by the Obama administration that would require Congress to cede most of its authority over the debt ceiling, a statutory limit on the government’s borrowing.
As part of the White House’s bold opening bid in the negotiations to resolve the looming financial crisis, The Times reported Friday, the plan would significantly curtail Congressional purview over the debt ceiling, institutionalizing a proposal floated last summer by Senator Mitch McConnell of Kentucky, the minority leader, during negotiations over increasing the debt limit.
The ceiling itself is not strictly speaking necessary, and many other developed countries do not have one. Congress already determines the country’s overall level of debt by budgeting how much tax revenue the government takes in and how much it spends. Rather, the ceiling acts as a secondary budgetary check – and often as a political football.
Back in 2006, for instance, a senator from Illinois took to the floor to bash Republicans for raising the ceiling without taking other efforts to right the country’s fiscal course.
“Leadership means that the buck stops here,” then-Senator Barack Obama said. “Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America’s debt limit.”
Last year, Republicans staunchly refused to raise the ceiling without significant spending cuts. That led to a stand-off with the White House, a wave of anxiety running through financial markets and ultimately fruitless negotiations on a long-term debt deal, as well as the creation of the so-called fiscal cliff looming at the end of this year.
This time, some Republicans have said they would consider not raising the debt ceiling if Mr. Obama vetoed a bill passing the Bush-era tax cuts for all levels of income.
The administration, it seems, has had enough. Recently, Treasury Secretary Timothy F. Geithner, who presented the plan to Republicans this week, has argued for getting rid of the ceiling once and for all. On Thursday, he actually proposed doing it. Congress could pass a resolution blocking an increase in the ceiling, though a president could veto that resolution, aides told the Times. And many Democrats have argued that the president has the Constitutional authority to raise the debt limit unilaterally, under the 14th Amendment.
The White House might love to see the debt ceiling become a historical relic. But it seems exceedingly unlikely that Congress would agree to that sort of proposal, undercutting its authority. On Friday, Republican aides dismissed the idea out of hand.
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November 30, 2012
Simpler Taxes Now, Growth Later
By ANNIE LOWREY and DAVID KOCIENIEWSKI
NYT
WASHINGTON — As lawmakers consider rolling back many of the $1 trillion a year in tax breaks now doled out to businesses and individuals, some are promising that streamlining the tax code will not only raise revenue, but also spur economic growth.
But a number of prominent economists cautioned that, while cleaning up the code is a worthy goal, it would do little to stimulate the flagging economy.
The kinds of changes being discussed in the heated back-room negotiations between President Obama and the House speaker, John A. Boehner of Ohio — raising $800 billion to $1.6 trillion in additional tax revenue, along with significant down-the-road spending cuts — would most likely depress growth in the short term.
Longer term, economists said, streamlining the code might improve the allocation of capital enough to raise growth modestly. The overall economy might be 1 to 2.5 percent bigger than it otherwise would be after five or 10 years, translating into perhaps more than one million jobs.
While that growth would certainly be welcome, it falls far short of claims from some tax reform evangelists, who predict that adding certainty and simplicity to the tax code would by itself ignite an economic boom.
“This religious faith that a broader base gives you a better tax system and economy is overly optimistic and simplistic,” said Alan J. Auerbach, the director of the Robert D. Burch Center for Tax Policy and Public Finance at the University of California, Berkeley. “I think the benefits can be overstated.”
Economists from across the political spectrum concur that the nation’s complex tax code most likely hampers growth. Tax rates Americans pay are so uneven that they not only raise fairness issues, but also cause distortions in the economy, inducing financial decisions that individuals might not otherwise make, and might not be the most efficient use of capital.
Tax rates on different kinds of individual income vary by 20 percentage points. More than $1 trillion a year in breaks — as varied as a tiny effort to aid domestic makers of toy arrows and the huge exclusions for state and local taxes — riddle the code.
The cumulative effect of those loopholes, preferential rates and special programs distorts how investors invest, economists said. “You put money in less-productive investments,” said Joel B. Slemrod of the University of Michigan, summarizing the problem.
For instance, analysts say generous tax breaks on home mortgage interest encourage Americans to buy bigger and more expensive houses, with little long-term benefits to innovation and economic growth. They also believe generous tax breaks on employer-provided health care spur higher health costs overall.
The bulk of economists agree in principle in the sensibility of “broadening the base” — or eliminating deductions and exclusions, to make more income taxable and allow for lower rates — to improve the overall investment climate.
Hypothetically, economists said, the growth effects of broad tax reform could be enormous. Huge overhauls, like replacing the income tax with a consumption or value-added tax, could increase economic output in the long run by as much as 9.4 percent.
But a consumption tax has few supporters in Washington because many warn that it would be regressive, shifting too large a portion of the tax burden onto lower- and middle-income Americans. Moreover, few politicians think that Congress could agree on passing such a big reform.
In the scheme of things, economists said, the kinds of changes on the table in Washington are far too small to make much of a difference, meaning in the long run they might inject a meager-to-modest boost to growth.
“Nobody’s talking about reforms that big,” said R. Glenn Hubbard, the dean of the Columbia Graduate School of Business and a top Republican economist. “Limiting deductions to raise revenue? That’s not going to raise growth at all. And raising rates would hurt growth.”
“I’m not even sure that the academic literature on tax rates and growth maps well onto what people are talking about now.”
Several experts cautioned that changes to increase taxes on investment and savings income might hurt long-run growth, even if it improved the progressivity of the code.
“There are some tax subsidies that can be reduced with little effect,” said William McBride, chief economist at the Tax Foundation, an independent research group. But he believes that increasing taxes on capital gains and dividends — as the Obama administration is seeking to do — would “significantly slow economic growth” by shrinking the pool of money available for investment across the economy.
In the short term, policy experts expect that the combination of increased tax revenue and reduced government spending would put a drag on the economy. Both Democrats and Republicans have warned that too-steep tax increases or too-deep spending cuts might create a recession.
Nevertheless, a short-term “down payment” on a broader tax and entitlement reform process might sap growth in the next year or two. That so-called fiscal drag might be offset by increased business investment because of the removal of uncertainty, or a “relief rally” in the stock markets.
After that, any tax reform that significantly changed deductions, credits and breaks might cause economic disruption and even a little drag in the short term, economists said. But in the long term, a cleaner code that raised more money might rationalize investment decisions and aid growth, said many economists.
Besides, some economists said even small changes in macroeconomic figures could mean big changes in the lives of thousands of Americans. Edward D. Kleinbard, former director of the Congressional Joint Committee on Taxation, said that if eliminating tax expenditures did bring a one-half-percent increase in the annual pace of economic growth it would be a significant accomplishment.
“You’d be taking victory laps,” said Mr. Kleinbard, now a law professor at the University of Southern California. He said that the difference between economic growth of 3.5 percent and 3 percent a year means the economy would double in size in 21 years rather than 24. “It’s not earth-shattering, but it is meaningful, and there are very few things in the tax world that give you that kind of bend in the G.D.P. curve,” he said referring to the nation’s gross domestic product, or overall economic activity.
Moreover, economists point to another powerful benefit to getting the country’s debt under control: investors might feel more comfortable keeping their money in American bonds, American companies and American dollars down the road.
“There would be nothing better for the economy” than to get the debt under control in the long term, said Mark Zandi of Moody’s Analytics.
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Originally published Friday, November 30, 2012 at 8:07 AM
Congress looks at doing away with the $1 bill
American consumers have shown about as much appetite for the $1 coin as kids do their spinach. They may not know what's best for them either. Congressional auditors say doing away with dollar bills entirely and replacing them with dollar coins could save taxpayers some $4.4 billion over the next 30 years.
By KEVIN FREKING
Associated Press
WASHINGTON —
American consumers have shown about as much appetite for the $1 coin as kids do their spinach. They may not know what's best for them either. Congressional auditors say doing away with dollar bills entirely and replacing them with dollar coins could save taxpayers some $4.4 billion over the next 30 years.
Vending machine operators have long championed the use of $1 coins because they don't jam the machines, cutting down on repair costs and lost sales. But most people don't seem to like carrying them. In the past five years, the U.S. Mint has produced 2.4 billion Presidential $1 coins. Most are stored by the Federal Reserve, and production was suspended about a year ago.
The latest projection from the Government Accountability Office on the potential savings from switching to dollar coins entirely comes as lawmakers begin exploring new ways for the government to save money by changing the money itself.
The Mint is preparing a report for Congress showing how changes in the metal content of coins could save money.
The last time the government made major metallurgical changes in U.S. coins was nearly 50 years ago when Congress directed the Mint to remove silver from dimes and quarters and to reduce its content in half dollar coins. Now, Congress is looking at new changes in response to rising prices for copper and nickel.
At a House subcommittee hearing Thursday, the focus was on two approaches:
-Moving to less expensive combinations of metals like steel, aluminum and zinc.
-Gradually taking dollar bills out the economy and replacing them with coins.
The GAO's Lorelei St. James told the House Financial Services panel it would take several years for the benefits of switching from paper bills to dollar coins to catch up with the cost of making the change. Equipment would have to be bought or overhauled and more coins would have to be produced upfront to replace bills as they are taken out of circulation.
But over the years, the savings would begin to accrue, she said, largely because a $1 coin could stay in circulation for 30 years while paper bills have to be replaced every four or five years on average.
"We continue to believe that replacing the note with a coin is likely to provide a financial benefit to the government," said St. James, who added that such a change would work only if the note was completely eliminated and the public educated about the benefits of the switch.
Even the $1 coin's most ardent supporters recognize that they haven't been popular. Philip Diehl, former director of the Mint, said there was a huge demand for the Sacagawea dollar coin when production began in 2001, but as time wore on, people stayed with what they knew best.
"We've never bitten the bullet to remove the $1 bill as every other Western economy has done," Diehl said. "If you did, it would have the same success the Canadians have had."
Beverly Lepine, chief operating officer of the Royal Canadian Mint, said her country loves its "Loonie," the nickname for the $1 coin that includes an image of a loon on the back. The switch went over so well that the country also went to a $2 coin called the "Toonie."
Rep. Bill Huizenga, R-Mich., affirmed that Canadians have embraced their dollar coins. "I don't know anyone who would go back to the $1 and $2 bills," he said.
That sentiment was not shared by some of his fellow subcommittee members when it comes to the U.S. version.
Rep. Lacy Clay, D-Mo., said men don't like carrying a bunch of coins around in their pocket or in their suits. And Rep. Carolyn Maloney, D-N.Y., said the $1 coins have proved too hard to distinguish from quarters.
"If the people don't want it and they don't want to use it," she said, "why in the world are we even talking about changing it?"
"It's really a matter of just getting used to it," said Diehl, the former Mint director.
Several lawmakers were more intrigued with the idea of using different metal combinations in producing coins.
Rep. Steve Stivers, R-Ohio, said a penny costs more than 2 cents to make and a nickel costs more than 11 cents to make. Moving to multiplated steel for coins would save the government nearly $200 million a year, he said.
The Mint's report, which is due in mid-December, will detail the results of nearly 18 months of work exploring a variety of new metal compositions and evaluating test coins for attributes as hardness, resistance to wear, availability of raw materials and costs.
Richard Peterson, the Mint's acting director, declined to give lawmakers a summary of what will be in the report, but he said "several promising alternatives" were found.
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November 30, 2012
Supreme Court to Look at a Gene Issue
By ADAM LIPTAK
NYT
WASHINGTON — The Supreme Court announced on Friday that it would decide whether human genes may be patented. The justices considered but took no action on requests that the court hear one or more cases concerning same-sex marriage.
The case the court added to its docket concerns patents held by Myriad Genetics, a Utah company, on genes that correlate with increased risk of hereditary breast and ovarian cancer.
The patents were challenged by scientists and doctors who said that their research and ability to help patients had been frustrated. “Myriad and other gene patent holders have gained the right to exclude the rest of the scientific community from examining the naturally occurring genes of every person in the United States,” the plaintiffs told the Supreme Court in their petition seeking review. They added that the patents “prevent patients from examining their own genetic information” and “made it impossible to obtain second opinions.”
The legal question for the justices is whether isolated genes are “products of nature” that may not be patented or “human-made inventions” eligible for patent protection.
A divided three-judge panel of a federal appeals court in Washington ruled for the company. Each judge issued an opinion, and a central dispute was whether isolated genes are sufficiently different from ones in the body to allow them to be patented.
“The isolated DNA molecules before us are not found in nature,” wrote Judge Alan D. Lourie, who was in the majority. “They are obtained in the laboratory and are man-made, the product of human ingenuity.”
The company urged the justices not to hear the case, saying that the “isolated molecules” at issue “were created by humans, do not occur in nature and have new and significant utilities not found in nature.” It has long been settled, the company’s brief went on, that “the human ingenuity required to create isolated DNA molecules” is worthy of encouragement and that its fruits are worthy of protection.
The plaintiffs in the case, Association of Molecular Pathology v. Myriad Genetics, No. 12-398, were supported by friend-of-the-court briefs filed by the American Medical Association, AARP and women’s health groups.
The justices were also scheduled to consider on Friday 10 closely watched appeals in cases concerning same-sex marriage, but they gave no indications about which ones, if any, they will hear. It is not unusual for the justices to discuss petitions seeking their attention more than once, particularly when the cases present complex and overlapping issues.
The court is widely expected to agree to hear one or more cases on the constitutionality of the part of the federal Defense of Marriage Act of 1996 that forbids the federal government from providing benefits to same-sex couples married in states that allow such unions.
The court has also been asked to hear cases about Proposition 8, the ballot initiative that banned same-sex marriage in California, and an Arizona measure that withdrew state benefits from both gay and straight domestic partners.
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November 30, 2012
Health Insurers Will Be Charged to Use New Exchanges
By ROBERT PEAR
NYT
WASHINGTON — The Obama administration said Friday that it would charge insurance companies for the privilege of selling health insurance to millions of Americans in new online markets run by the federal government.
The cost of these “user fees” can be passed on to consumers. The proposed fees could add 3.5 percent to premiums for private health plans sold in insurance exchanges operated by the federal government.
In a separate action, federal officials said that consumers would soon have access to nationwide health plans similar to those available to members of Congress and other federal employees. These plans will be offered by private insurance companies under contract with the United States Office of Personnel Management. The agency already provides insurance to eight million federal employees, retirees and dependents.
“This new initiative will promote competition in the insurance marketplace and ensure individuals and small businesses have more high-quality, affordable insurance choices,” said John Berry, director of the personnel agency.
The steps announced on Friday show the White House rushing to carry out the health care law signed by President Obama in March 2010. They also illustrate the rapidly growing role of the federal government in the nation’s health care system.
Consumer advocates, insurers and some state officials had expressed concern about delays in publication of the rules proposed on Friday.
Starting in October, consumers are supposed to be able to enroll in new health plans, for coverage beginning on Jan. 1, 2014, when most Americans will be required to have insurance. At least two nationwide health plans chosen by the federal government will compete with private health plans in the insurance exchanges being established in every state.
The exchanges are supposed to be financially self-sustaining after 2014. States, like the federal government, can charge fees to insurers. Or they can try to raise money in other ways — for example, by charging consumers or employers for using the exchange.
In proposing the new rule, Kathleen Sebelius, the secretary of health and human services, said that fees charged by the federal government would be “sufficient to cover the majority of costs related to the operation of federally facilitated exchanges.” She did not say how the remainder of the money would be raised.
Ms. Sebelius said she could not estimate the total amount of federal user fees because she did not know exactly how many states would have federal exchanges. She said the federal fees should generally be “commensurate with fees” charged by state-run exchanges.
The federal government will run the exchange in any state that is unable or unwilling to do so. Indeed, it now appears that federal officials could be running the exchanges — alone or in partnership with local officials — in more than half the states.
Fees charged for use of the federal exchange come on top of a separate annual fee to be imposed on health insurance companies to help offset the cost of expanding coverage under the new law. The annual fees, to be apportioned among insurers according to their shares of the nation’s health insurance market, are expected to total $6 billion in 2014 and more than $100 billion over 10 years.
“Any new fees to pay for the administration of exchanges will add to the cost of coverage,” said Robert E. Zirkelbach, a spokesman for America’s Health Insurance Plans, a trade group.
Erin Shields Britt, a spokeswoman for Ms. Sebelius, predicted that insurers would not raise prices. “Exchanges will provide already profitable insurance companies with access to 30 million new customers while cutting down insurers’ marketing and advertising expenses,” Ms. Shields Britt said. “Exchanges force insurance companies to compete and drive down costs for consumers. The Congressional Budget Office has estimated consumers will save up to 20 percent on their premiums.”
The Office of Personnel Management said its nationwide plans would follow state insurance laws and standards, except in unusual circumstances.
The administration said it “retains authority to make the final decision” on rates if it finds that a state acted in an arbitrary or capricious way in denying a rate increase sought by a nationwide health plan.
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November 30, 2012
A Hospital War Reflects a Bind for Doctors in the U.S.
By JULIE CRESWELL and REED ABELSON
NYT
For decades, doctors in picturesque Boise, Idaho, were part of a tight-knit community, freely referring patients to the specialists or hospitals of their choice and exchanging information about the latest medical treatments.
But that began to change a few years ago, when the city’s largest hospital, St. Luke’s Health System, began rapidly buying physician practices all over town, from general practitioners to cardiologists to orthopedic surgeons.
Today, Boise is a medical battleground.
A little over half of the 1,400 doctors in southwestern Idaho are employed by St. Luke’s or its smaller competitor, St. Alphonsus Regional Medical Center.
Many of the independent doctors complain that both hospitals, but especially St. Luke’s, have too much power over every aspect of the medical pipeline, dictating which tests and procedures to perform, how much to charge and which patients to admit.
In interviews, they said their referrals from doctors now employed by St. Luke’s had dropped sharply, while patients, in many cases, were paying more there for the same level of treatment.
Boise’s experience reflects a growing national trend toward consolidation. Across the country, doctors who sold their practices and signed on as employees have similar criticisms. In lawsuits and interviews, they describe growing pressure to meet the financial goals of their new employers — often by performing unnecessary tests and procedures or by admitting patients who do not need a hospital stay.
In Boise, just a few weeks ago, even the hospitals were at war. St. Alphonsus went to court seeking an injunction to stop St. Luke’s from buying another physician practice group, arguing that the hospital’s dominance in the market was enabling it to drive up prices and to demand exclusive or preferential agreements with insurers. The price of a colonoscopy has quadrupled in some instances, and in other cases St. Luke’s charges nearly three times as much for laboratory work as nearby facilities, according to the St. Alphonsus complaint.
Federal and state officials have also joined the fray. In one of a handful of similar cases, the Federal Trade Commission and the Idaho attorney general are investigating whether St. Luke’s has become too powerful in Boise, using its newfound leverage to stifle competition.
Dr. David C. Pate, chief executive of St. Luke’s, denied the assertions by St. Alphonsus that the hospital’s acquisitions had limited patient choice or always resulted in higher prices. In some cases, Dr. Pate said, services that had been underpriced were raised to reflect market value. St. Luke’s, he argued, is simply embracing the new model of health care, which he predicted would lead over the long term to lower overall costs as fewer unnecessary tests and procedures were performed.
Regulators expressed some skepticism about the results, for patients, of rapid consolidation, although the trend is still too new to know for sure. “We’re seeing a lot more consolidation than we did 10 years ago,” said Jeffrey Perry, an assistant director in the F.T.C.’s Bureau of Competition. “Historically, what we’ve seen with the consolidation in the health care industry is that prices go up, but quality does not improve.”
A Drive to Consolidate
An array of new economic realities, from reduced Medicare reimbursements to higher technology costs, is driving consolidation in health care and transforming the practice of medicine in Boise and other communities large and small. In one manifestation of the trend, hospitals, private equity firms and even health insurance companies are acquiring physician practices at a rapid rate.
Today, about 39 percent of doctors nationwide are independent, down from 57 percent in 2000, according to estimates by Accenture, a consulting firm.
Many policy experts praise the shift away from independent practices as a way of making health care less fragmented and expensive. Systems that employ doctors, modeled after well-known organizations like Kaiser Permanente, are better able to coordinate patient care and to find ways to deliver improved services at lower costs, these advocates say. Indeed, consolidation is encouraged by some aspects of the Obama administration’s health care law.
“If you’re going to be paid for value, for performance, you’ve got to perform together,” said Dr. Ricardo Martinez, chief medical officer for North Highland, an Atlanta-based consultant that works with hospitals.
The recent trend is reminiscent of the consolidation that swept the industry in the 1990s in response to the creation of health maintenance organizations, or H.M.O.’s — but there is one major difference. Then, hospitals had difficulty managing the practices, contending that doctors did not work as hard when they were employees as they had as private operators. Now, hospitals are writing contracts more in their own favor.
“Hospitals are constructing compensation in ways that are based on productivity and performance,” said Steve Messinger, president of ECG Management Consultants, which advises on physician acquisitions.
But the consolidation of health care may be coming at a hefty price. By one estimate, under its current reimbursement system, Medicare is paying in excess of a billion dollars a year more for the same services because hospitals, citing higher overall costs, can charge more when the doctors work for them. Laser eye surgery, for example, can cost $738 when performed by a hospital-employed doctor, compared with $389 when done by an unaffiliated doctor, according to national estimates by the independent Congressional panel that oversees Medicare. An echocardiogram can cost about twice as much in a hospital: $319, versus $143 in a doctor’s office.
Conflicts over the changes are numerous. One Florida primary care physician said he could earn a $5,000 bonus for keeping patients in the hospital for less than three days, according to a lawsuit he filed this year. Hospitals, which are typically reimbursed a fixed amount of money for treating a specific illness, can make more money if patients stay for shorter periods of time.
Last month, the Justice Department reached a $9.3 million settlement with Freeman Health System, a hospital group in Joplin, Mo., which was rewarding doctors it employed partly based on how many tests they ordered. Freeman says that it alerted regulators to the potential violations and that patient care was not affected.
Recently, the Office of Inspector General at the Health and Human Services Department sent a letter to emergency physicians across the country asking for information about inappropriate admissions. Federal regulators are also examining the higher numbers of physician contracts being created, searching for violations of laws that prevent hospitals from rewarding doctors for admitting patients or for ordering lucrative tests and procedures.
Health Management Associates, a for-profit hospital chain; EmCare, a Dallas-based emergency room staffing company for hospitals; and other hospitals have disclosed that they are the subjects of federal investigations. Regulators are looking into whether the hospitals improperly pressured physicians to admit patients.
Pumping Up Admissions
According to two emergency room doctors who worked at Carlisle Regional Medical Center in Pennsylvania, the message could not have been clearer: more patients needed to be admitted.
The doctors were employed by EmCare, whose parent company was later acquired by the private equity firm Clayton, Dubilier & Rice in 2011 as part of a $3.2 billion deal. EmCare, in turn, was under contract to provide emergency room doctors for the hospital, which is owned by Health Management Associates. In interviews, doctors said that hospital administrators created targets for how many patients they should admit. More admissions translated into more dollars for the hospital.
Dr. Jean-Paul Romes, one of the physicians, recalled getting phone calls in the middle of the night questioning why he had not admitted an older patient whose hospitalization he could easily have justified. “The pressure to admit was so high,” he said. Dr. Romes left the hospital last year.
After another physician, Dr. Cloyd B. Gatrell, raised concerns that the hospital had too few nurses to keep patients safe, an EmCare executive warned him to “back off,” according to a lawsuit Dr. Gatrell filed last year. EmCare later fired him at Carlisle’s request, according to the suit. Dr. Gatrell’s wife, Kathryn, a nurse at Carlisle, had been fired earlier and also filed a lawsuit. Both Gatrells maintained they were fired for bringing up patient safety concerns, according to Dr. Gatrell’s lawsuit.
Health Management, which operates 70 hospitals, said United States attorneys’ offices in seven states were investigating physician referrals, including financial arrangements and the “medical necessity of emergency room tests and patient admissions.”
EmCare said in an e-mailed statement that it could not comment on continuing legal matters involving it or its clients, but that its “first concern is the well-being of the patient.”
Health Management is also the target of a suit filed last year in Florida state court by a former executive who says there were improper admissions. The executive, Paul Meyer, an officer in the company’s compliance office, was a longtime employee of the Federal Bureau of Investigation. He said in his lawsuit that he was fired from H.M.A. in 2011 in retaliation for raising questions about what he felt were improper admissions at four of the chain’s hospitals. H.M.A. said its overall admission rate from the emergency department had remained constant in recent years and that its practices were in line with those of other hospitals. It also said there was no indication that Carlisle admitted any patients unnecessarily. Admissions are “based solely on what is best for patient care,” it said in an e-mailed statement.
The company said that it had addressed all of Mr. Meyer’s concerns, and that he was fired for what the company said was a failure to cooperate in an internal investigation. Health Management fired the Gatrells, it said, “for performance issues,” an accusation Dr. Gatrell strongly denied.
Doctors at other hospitals also say they have faced pressure to meet financial targets. Dr. Manuel Abreu said his contract with All Care Medical Consultants, a practice in Clearwater, Fla., allowed him to earn a bonus as high as $5,000 if he kept patients’ hospital stays to an average of no more than three days, according to a copy of the contract included with a lawsuit he filed in Florida state court this year. The parties reached a settlement and the case was voluntarily dismissed, court records show. Calls to Dr. Abreu’s lawyer and a lawyer for All Care were not returned.
Other physicians say they are pushed to ignore what is best for patients by referring them to doctors working for the same hospital. Dr. Victoria Rentel, a family practice doctor near Columbus, Ohio, recalled feeling pressured when she was employed by a local hospital to send her patients to doctors there for tests and procedures.
“I routinely got reports about the money I kept in the system,” Dr. Rentel said, detailing how much revenue she was generating for the hospital through in-house referrals. “I tended to refer to specialists I knew who would deliver better care.” The hospital eventually closed the clinic where she worked.
Some physicians also complain about quotas. Dr. Patricia F. White, an emergency room physician who worked at Baptist Health in Jacksonville, Fla., said that starting in 2010, her compensation was partly calculated based on the number of patients she saw an hour, according to a lawsuit she filed in August against the hospital and Emergency Resources Group, which provided emergency room staffing to Baptist.
The staffing group said it had no choice but to agree to the hospital’s demands. “If we don’t comply with their wishes as good partners, there is a termination notice in our contract,” wrote Paul Davidson, administrator for the group, in a series of e-mails that were included with Dr. White’s lawsuit.
In an e-mailed statement, Baptist Health said that patients expected timely access to quality care and that an emergency room physician’s “productivity and efficiency are vital components to delivering good patient care as well as ensuring patient safety and satisfaction.” A lawyer for Emergency Resources Group echoed those sentiments in an e-mailed statement, adding that efficiency was only one component of physician compensation.
Doctors at numerous hospitals said it was often difficult to criticize the policies instituted by hospitals or investor-owned physician groups because, as employees, they could easily be fired.
“We all have families, and we have mortgages,” said an emergency room physician. “If you get fired, it looks bad and it’s hard to get another job.”
Rising Medical Costs
It was about three years ago that Dr. Julie A. Foote, who has been an endocrinologist in Boise for 18 years, began noticing the ads in the local newspaper.
Each week, another advertisement appeared, heralding the hire of a physician or a practice group by either St. Luke’s or St. Alphonsus, which is part of Michigan’s Trinity Health, one of the nation’s largest hospital systems. “The playing field wound up being divvied up pretty aggressively,” Dr. Foote said.
In the last four years, St. Luke’s acquired 22 physician practices in the area.
Dr. Mark Johnson, a family practice physician who has worked in Boise for about 25 years, was part of a five-person practice that sold itself to St. Luke’s. Among the factors behind the decision were the high cost of adopting an electronic health records system, and a concern that the group members would not be able to find younger doctors willing to buy them out of the practice.
“But probably the driving reason was the changing landscape of health care delivery and the uncertainty around that,” Dr. Johnson said. “The thought was that we were going to be in a safer position if we were aligned and affiliated with a network.”
But as St. Luke’s moved forward with its plans to acquire most of the Saltzer Medical Group — a practice of about 50 doctors in Nampa, Idaho, about 20 miles west of Boise — St. Alphonsus filed an injunction to block the purchase.
St. Alphonsus argues that St. Luke’s dominance is hurting its business because it has experienced steep declines in hospital admissions and referrals from physicians acquired by St. Luke’s.
St. Luke’s says it is positioning itself to compete better by improving its ability to coordinate patient care. It recently filed an application with Medicare officials to become a so-called accountable care organization. Hospitals designated as A.C.O.’s can usually keep a portion of any savings they generate. They cut health care costs by avoiding unneeded procedures and tests or by keeping patients out of the hospital, while still meeting quality targets.
But St. Luke’s remains under investigation by state and federal authorities for possible antitrust violations. While most physician group purchases are too small to draw regulators’ attention, concerns have been raised about whether consolidation is resulting in higher prices and fewer choices for patients.
In 2009, the F.T.C. forced the sale of two outpatient clinics that had been acquired by Carilion Clinic, based in Roanoke, Va., saying Carilion’s fee structure would have increased patients’ out-of-pocket expenses for a brain imaging test, for example, to $350 from $40.
In another case, the F.T.C. and the Nevada attorney general ordered Renown Health in Reno to release 10 cardiologists from their noncompetition agreements after the hospital system bought the two largest cardiology groups in the area, giving it 88 percent of the market.
In Boise, doctors are pressured to refer only within their own system, according to St. Alphonsus in its complaint. It reported a 90 percent drop in admissions to its hospitals by physicians employed by St. Luke’s. In one community, independent doctors often send patients 40 miles away for CT scans because prices at St. Luke’s are 60 percent higher, the complaint said.
Mr. Pate, the St. Luke’s chief executive, disputed the notion that physicians employed by St. Luke’s were prohibited from referring patients to outside doctors.
“My own wife was referred by a St. Luke’s physician to a St. Al’s physician for her particular condition because he felt the St. Al’s physician was the best for this problem,” he said. “If the wife of the C.E.O. is being referred to a physician at another hospital, that should prove that our physicians send many referrals over there.”
Mr. Pate acknowledged that prices for some services had risen, but he said this was only because they had been severely underpriced. In the long run, he argued, overall costs will decline as St. Luke’s is better able to coordinate care, avoiding expensive emergency room visits and redundant tests.
But some people remain skeptical that patients will be better served.
“I’m not certain what all this means is that patients are getting cost-effective care, which is how the nation is painting this evolution,” Dr. Foote said. “If this is better quality for less price, I want to see the less price.”
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November 30, 2012
Small Employers Weigh Impact of Providing Health Insurance
By REED ABELSON and STEVEN GREENHOUSE
NYT
Like many franchisees, Robert U. Mayfield, who owns five Dairy Queens in and around Austin, Tex., is always eager to expand and — no surprise — has had his eyes on opening a sixth DQ. But he said concerns about the new federal health care law had persuaded him to hold off.
“I’m scared to death of it,” he said. “I’m one of the ones sitting on the sidelines to see what’s really going to happen.”
Mr. Mayfield, who has 99 employees, said he was worried he would face penalties of $40,000 or more because he did not offer health insurance to many of his full-time workers — generally defined as those working an average of 30 hours a week or more. Ever since the law was enacted in 2010, opponents have argued that employers who were forced to offer health insurance would lay off workers or shift more people to part-time status to compensate for the additional cost. Those claims have drawn considerable attention — and considerable anger in response — in recent weeks.
John H. Schnatter, the chief executive of Papa John’s, the pizza chain, said some franchisees were likely to reduce their employees’ hours to avoid having to provide coverage. And an unhappy Denny’s franchise owner in Florida warned that he would raise prices 5 percent as a “surcharge,” adding that disgruntled customers could offset that by reducing their tips.
Some health care experts said comments like those came from outliers and sometimes resulted from confusion about a highly complicated new law, the Patient Protection and Affordable Care Act. Many of the provisions do not go into effect until 2014. Federal officials are still tweaking the fine print, like defining exactly what constitutes a 30-hour workweek. Even so, restaurants and hotels are among the industries likely to be squeezed the hardest by the law because they are low-wage industries that do not offer coverage to most of their workers.
Most employers, even small businesses, already offer health insurance, and the federal law is not expected to have a significant impact on what they do over the next year or so. But businesses that rely heavily on low-income workers, many of whom do not make enough to afford their share of the cost of the insurance premiums, are being forced to rethink their business models.
Almost half of retail and hospitality employers do not offer coverage to all their full-time employees, according to a recent survey by Mercer, a benefits consultant.
“They’re all developing their strategies,” said Debra Gold, a senior partner with Mercer who advises several major retailers.
Many who oppose the requirement say the cost of providing health insurance could mean hiring fewer workers. “Any dollar that gets diverted, whether it’s through Obamacare or increased tax rates, puts franchisees one dollar further away from being able to expand their businesses,” said Don Fox, chief executive of Firehouse Subs, a fast-growing chain of 559 restaurants based in Jacksonville, Fla. At the 30 stores the corporation owns, only full-time managers are offered coverage. Mr. Fox is wrestling with whether to absorb the considerable cost of covering 100 more employees or pay the penalties — which would probably cost him less — but risk losing valued employees to competitors who choose to offer coverage.
Employee health coverage now averages nearly $6,000 for an individual plan. That is considerable for businesses like restaurants in which the majority of workers make $24,000 a year
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