8.2 Million Reasons Not To Give Up

(Sick for Profit)

The House and Senate will be voting on health care bills in a matter of weeks. But the forces behind the status quo have not quit in their efforts to derail the bill or at least get as many goodies out of it as they can.

The lobbying expenses of the top 13 health insurers and their industry association, America's Health Insurance Plans (AHIP), spent nearly $8.2 million in the third quarter of 2009 to influence Congress on upcoming health care legislation, according to analysis released today by the nonpartisan campaign finance watchdog Public Campaign Action Fund (PCAF). The total marks an 11 percent increase over the pace of their spending in the first half of the year.

"Congress is marching toward passing landmark legislation to overhaul the health care system, and the health insurance industry is fighting them every step of the way," said David Donnelly, national campaigns director of Public Campaign Action Fund. "These insurance giants may be running out of time, but clearly they haven't run out of political cash."

This brings the total in lobbying to nearly $23 million this year, including $6.3 million from AHIP, $3.5 million from WellPoint, $3.5 million from UnitedHealth and $2 million from Aetna. Humana, which has spent $1.85 million in lobbying fees this year, saw their earnings rise 65% in the third quarter, a lot of it off the wasteful Medicare Advantage program, which represents a corporate handout and which is earmarked for scale-backs in the health care bills. Majority Leader Reid's office released this statement in response:

“It’s no wonder why Humana has been misleading seniors about health insurance reform -- they saw their profits rise 65 percent last quarter and want to make sure the gravy train doesn’t end. The insurance industry is making billions by gaming the Medicare Advantage system, at the expense of seniors’ traditional Medicare coverage, and taxpayers are footing the bill.

“The American people have had enough, but unfortunately Senate Republicans have sided with insurers like Humana and are working to protect insurance industry profits over Americans’ health care needs. When we pass health insurance reform this year, this will all come to an end. Our seniors deserve better and American taxpayers should not be asked to pad the profits of the insurance industry.”

Insurers like Humana are ready to pounce on this legislation when it hits the floor in both Chambers, particularly in the Senate, where they will use the amendments process to try and cripple reform and the cloture process to outright kill it. But the insurance industry isn't just fighting for their own self-preservation, they're fighting the interests of the people.

You Don't Think They'll Just Give Up, Do You?

(I'm a blogger fellow for Brave New Films and their Sick For Profit campaign)

After today's announcement from Harry Reid, adding a public option to the Senate health care bill, some might think that a great victory has been achieved. And it's a significant accomplishment to this point. But we're at the beginning of the end, not the end. And now that this public option, with a state opt-out, represents the lower bound of health care reform, you can bet that the insurance industry will redouble their efforts to kill the bill and retain the status quo. In fact, they've already started. Blue Cross/Blue Shield of North Carolina has begun to lobby their customers to work against the bill, asking them to contact Senator Kay Hagan (D-NC). Not a front group, or some ad hoc organization funded by BC/BS. No, just the company itself.

(The mailer) reads:

Public option?
Government Cooperatives?
Community plan?
Single payer?
No matter what you call it, if the federal government intervenes in the private health insurance market, it's a slippery slope to a single payer system.

Who wants that?

The enclosed postcard to Hagan reads:

Senator Hagan,
Please oppose government-run health insurance. We can meet our health care challenges without the government unfairly competing with the private sector. Tell Senate leaders that North Carolina doesn't need government-run insurance.

They've also deployed lobbyists and shills to Capitol Hill to make completely dubious arguments. At a hearing about the insurance industry's anti-trust exemption, this amazing exchange occurred:

University of Arkansas business professor Lawrence Powell, who testified on behalf of the medical malpractice insurance industry.

"The best possible outcome from repealing McCarran is continuation of the status quo," he said. "However, it is also likely that repealing McCarran would have negative consequences for consumers, by decreasing competition and accuracy in insurance pricing."

Rhode Island Democrat Sheldon Whitehouse pointed out that the professor was relying on outdated information.

"You cite for the proposition that insurance markets are highly competitive an article by Paul Joskow. Do I have the date of that article correct, it's 1973?" he asked Powell. "I believe so," came the answer.

And, they've started to push their message out to media, getting an AP reporter to buy the canard that poor, henpecked insurance companies just don't make a lot of money.

WASHINGTON – Quick quiz: What do these enterprises have in common? Farm and construction machinery, Tupperware, the railroads, Hershey sweets, Yum food brands and Yahoo? Answer: They're all more profitable than the health insurance industry.

The missing ingredient here is scale. Tupperware is more profitable than health insurance on a percentage basis, but 1/6 of the US economy doesn't go through Tupperware. In real dollars, the insurance industry makes a mint. And remember, "profit" doesn't count salaries, not even what's given to CEOs.

The truth is that, even with this public option, insurers will do just fine in the health care bill. They get millions of new customers, with competition that is limited (not everyone can get the public plan, under even the most expansive version). But it's just not good enough for them. The notion that they might have to offer coverage with actual benefits, and not cherry-pick the healthy to pay their premiums, which would cut into those profits, is just distasteful to them. So they will fight. And we will be ready.

Honduras, Red State

I think the plan for the ruling regime in Honduras is to negotiate out the clock on restoring Mel Zelaya. He only has a few months left on his term, and so endless talks would just serve to push resolution past the end. While they talk the talk of diplomacy, the government is using mercenaries, in violation of international conventions, to suppress dissent and support the rulers.

Meanwhile, the ruling regime has spent over $600,000 in a high-profile lobbying campaign, hiring those responsible for America's bloody crackdown in Central America in the 1980s like Otto Reich, along with corporate whores like Lanny Davis who will literally say anything for money. This has allowed them to gather friends at the top of the government, particularly Congressional Republicans like Sen. Jim DeMint.

Let's see, endless delays in negotiations, use of mercenaries, fealty to lobbyists, PR as a national policy.

They really are a mirror for American democracy! Circa 2002, at least.

Turning Over The Hen House To The Foxes

One thing I've been tracking in the health care debate is what would be the mechanism for enforcing insurance company regulations. Right now we have a loose state-based framework for overseeing health insurers, with no federal oversight. Under the reform bills, the feds set down some pretty strong mandates on insurers - no rescission, no denying coverage for pre-existing conditions, rates set within a certain range. But who will enforce that? Will there be a new federal bureaucracy created? Or will the states continue to dominate. In Max Baucus' Senate Finance Committee bill, at least, the answer is the latter.

Healthcare overhaul legislation moving through the Senate Finance Committee would put crucial rule-making authority in the hands of a private association of state insurance commissioners that consumer advocates fear is too closely tied to the industry.

The National Assn. of Insurance Commissioners currently writes model laws and regulations that individual states are free to accept or discard. Under the bill by Sen. Max Baucus (D-Mont.), it would craft a model rule governing "health insurance rating, issuance and marketing requirements" that would become "the new federal minimum standard without any further congressional action." States would be permitted to deviate from the standards only by appealing to the Department of Health and Human Services.

In effect, the bill would allow the group to write many of the new rules on issuing and marketing insurance to millions of uninsured Americans who would be required to purchase policies.

"The NAIC is clearly an organization that is dominated by the insurance industry," said California Lt. Gov. John Garamendi, a former state insurance commissioner.

"I think the NAIC has an important role to play. They have a lot of knowledge, but I would be concerned about giving them authority to set the rules."

The NAIC is composed of 56 public officials, insurance commissioners variously elected or appointed to their positions. They hold no open meetings. Their records do not have to be made public. They have no federal accountability and are not vulnerable to any federal sanction. And there's also this:

Much of the criticism, particularly from consumer groups, stems from the departure of top association officials for plum industry jobs.

In 2004, the president of the National Assn. of Insurance Commissioners quit midterm to head the Property & Casualty Insurers Assn. of America.

Last year, one official left to become chairman of Swiss Re America Holding Corp., a division of global reinsurance giant Swiss Re. Another left to lead the Insured Retirement Institute, a Washington-based trade group that promotes the use of insurance in retirement portfolios.

It seems really bizarre to hand off these important rulemaking functions to a closed body often criticized of being influenced by the insurance lobby, many of whose members go through the revolving door back to the industry as executives and lobbyists. This looks like regulatory capture to me. Henry Waxman's bill creates an independent rulemaking panel accountable to Congress. Sounds like a far better solution. I know these details aren't as sexy as the public option, but they are quite important. If the NAIC builds insurance regulations with giant loopholes that the industry practically writes to their advantage, we have done virtually nothing to expand access and ensure affordable health care for everyone.

Annals Of The Insurance Industry

Just a few tidbits about the industry that Republicans and many conservative Democrats say we must keep in business at all costs:

• A member of a non-profit in Virginia was arrested at the headquarters of Anthem for trying to question them about a rate increase. This is the same Anthem who sent a letter to their customers telling them to contact members of Congress and tell them to oppose a public option. When the same customers try to contact Anthem, they are met with arrest.

• Crystal Lee Sutton, the union organizer who inspired the movie "Norma Rae," died from cancer this week, after a protracted battle with the disease - and her health insurer.

As Daily Kos blogger hissyspit points out, last year Sutton gave an interview to the press where she described a struggle with her health insurer over treatment. The Times-News in Burlington, North Carolina, wrote in 2008:

[Sutton] went two months without possible life-saving medications because her insurance wouldn’t cover it, another example of abusing the working poor, she said.

“How in the world can it take so long to find out (whether they would cover the medicine or not) when it could be a matter of life or death,” she said. “It is almost like, in a way, committing murder.”

She eventually received the medication, but the cancer is taking a toll on her strong will and solid frame.

• In eight states and the District of Columbia, insurance companies define domestic violence as a pre-existing condition. The theory goes that a victim of abuse is more likely to be abused again, and would require medical treatment for those beatings.

Words cannot describe the sheer inhumanity of this claim. It serves as yet further proof that our insurance system is broken, destroyed by the profit-mongering of the very companies whose sole purpose should be to provide Americans with access to care when they need it most. In 1994, an informal survey conducted by the Subcommittee on Crime and Criminal Justice of the United States Senate Judiciary Committee revealed that 8 of the 16 largest insurers in the country used domestic violence as a factor when deciding whether to extend coverage and how much to charge if coverage was extended.

• The same insurance interests who deny coverage to victims of domestic violence, who deny claims for cancer patients, who arrest those who dare to question them, have spent $585 million dollars in the past 2 1/2 years, and $700,000 a day, lobbying Congress to ensure that any reform bill protects their profits. They have scored with at least one committee, Max Baucus' Senate Finance Committee, which produced a bill that CIGNA whistleblower Wendell Potter calls an absolute gift to the insurance industry.

Potter argued that the lax employer requirements would shift the cost and risk of coverage onto the individual and maintained that the bill’s “network of cooperatives” would be unable to compete in today’s concentrated health insurance markets. “The co-ops won’t stand a chance,” he concluded.

Reform must also do more to regulate insurers, who have agreed to accept applicants with pre-existing conditions but are insisting on benefit and rate flexibility. Potter argued that the benefit package standards in the Exchange and the high deductible option for younger beneficiaries would allow insurers to design almost anything that they can sell in the health market place and push the country towards consumer driven health care.

Under the Baucus legislation, private insurers could also charge older individuals up to five times more for coverage. “You’re just using age as a proxy for health status,” Uwe Reinhardt, an economics professor at Princeton University told the New York Times. Reinhardt estimates that “Senator Baucus’s age-rating plan would allow insurers to cover roughly 70 percent of the additional risk they’d take on by being required to accept all comers, regardless of health.”

Some, like Nancy Pelosi, have vowed not to pass the "Insurance Industry Profit Protection And Enhancement Act," as she called it. But they are under tremendous pressure from powerful interests to enact just such a giveaway. Reform groups like Health Care for America Now understand that attacking this industry, and devaluing their influence, is a means to getting a bill that truly helps all Americans obtain quality and affordable health care.

The Huge Looming Fight Over Financial Regulations

Today's the anniversary of 9-11, I guess. Why don't they just make it the following Monday and give us all a three-day weekend?

But another anniversary looms around this same time. On September 14, 2008, Lehman Brothers collapsed, and it sparked the biggest financial crisis since the Great Depression. America and other countries committed trillions in resources to keep the biggest banks afloat, and as a result we have rescued the system without fundamentally changing it or ensuring that the same bubble-and-crash couldn't happen again. Instead of taking advantage of the crash and responding to the bailout by immediately moving to financial regulatory reform, to prove that the banksters weren't getting free reign, the Administration waited, and is now trying to move forward without the urgency created by the crisis. Which is why you see high-fiving in the financial media that this regulatory reform effort will not succeed.

Large staffs of lobbyists with powerful financial interests behind them will use time-honored techniques to water down or kill anything that would drain profits and force the banksters to stop gambling with our money. The same interests killed a proposed Consumer Protection Agency in the 1970s with irrational fears about how it would harm ordinary Americans. And in the Senate, that same kind of coalition is forming to kill the Consumer Financial Protection Agency proposed by the Administration.

Nonetheless, I have a couple reasons to be optimistic, as this article in The Hill was the other day. First of all, the push to empower the Fed as a single regulator for a banking sector that it basically is enjoined to has faded rapidly.

The Obama administration's vision for revamping the nation's financial regulatory system could face significant revisions in the Senate, where proposed reform legislation departs from the White House proposal on several key points, according to staff members, lobbyists and a lawmaker briefed on the plans.

A bill taking shape in the Senate Banking Committee could give the Federal Reserve far less authority than the administration sought in the reform proposal it unveiled in June. Senators on both sides of the aisle have expressed a lack of confidence in the Fed in the wake of the financial crisis, challenging everything from the central bank's transparency to its ability to protect consumers.

Some lawmakers oppose giving the Fed responsibility for monitoring systemic risk in the economy, as proposed by the administration, favoring instead vesting that authority with a council of regulators.

"We really do take what the administration did as advisory. We have our own ideas," said one Democratic staff member familiar with the legislation who was not authorized to speak on the record. "We've been thinking about this a long time."

The second reason why I'm sanguine is that the Justice Department is finally stepping up with enforcement - and I think AIG represents the beginning, not the end.

U.S. investigators are probing the former head of American International Group Inc's (AIG.N) Financial Products unit, Joseph Cassano, and other executives for securities fraud, a law enforcement source familiar with the case said on Friday.

The source said that a grand jury may be impaneled this month in New York to consider potential charges that executives failed to disclose the value of toxic assets to the bailed-out insurance company's outside accountants and shareholders.

"The investigation is really who knew what and when about these assets," said the source, who asked not to be identified because the probe was ongoing. "They were holding toxic credit default swaps and may not have disclosed their real worth."

I don't think there's a single part of this sector that couldn't be probed in the same way. Look at this horrow show of overdraft fees on debit cards, for example. You cannot literally promise lighter enforcement in exchange for tighter regulation, but I think the firms get the message.

This actually will be a more expensive fight than health care reform in terms of lobbying, once everyone gets down to it. Chris Dodd's centrality to it while he fights for his political life is a bit worrying, but he's not the real problem here. It's the Mark Warner types who can deep-six anything meaningful.

...Yves Smith is not so hopeful.

Yacht Party Member Equal In Value To An Empty Chair

As Robert notes in an update, OC Assemblyman and noted utility lobbyist spanker Mike Duvall resigned his seat effective immediately.

Looking past for a moment the hilariousness of the family values Republican bragging about his multiple mistresses, and the very serious allegations of sex-for-favors with lobbyists, which should be investigated by the Ethics Committee and state prosecutors, there's a point to be made about the 2/3 requirement here.

Duvall's resignation reduces the number of lawmakers in the Assembly by one. Democrats now hold 50 seats, Republicans 28, with Juan Arambula as a Dem-leaning independent. However, because you need 2/3 voting affirmatively to pass a budget or tax increases, not 1/3 voting negatively to block it, this changes nothing in Sacramento. Duvall's seat being empty is pretty much the same as him voting no on everything. So unless Democrats can capitalize and win the seat (and I highly doubt it in that district), it's not useful from a voting perspective.

Just thought you should know, being a Yacht Party member is literally the same as not existing.

When Industry VPs Write Laws

Max Baucus' plan had the name of Liz Fowler, a former WellPoint VP who now works for the Finance Committee, in the metadata. When you have WellPoint personnel instrumental in writing the laws, you get little provisions like this:

Interstate Sale of Insurance. Starting in 2015, states may form “health care choice compacts” to allow for the purchase of non-group health insurance across state lines. Such compacts may exist between two or more states. Once compacts have been formed, insurers would be allowed to sell policies in any state participating in the compact. Insurers selling policies through a compact would only be subject to the laws and regulations of the state where the policy is written or issued.

This is something that conservatives have been begging to do for years. Even the most outgunned conservative on a talking head debate can vomit up "let people take their insurance across state lines to increase competition!" It sounds reasonable. But there's a very good reason why it would quickly turn into a nightmare, and you can see it in the examples of Delaware and South Dakota.

Both of those states have essentially no regulations on credit card companies. When legislation passed allowing banks to issue credit cards across state lines, some states started wildly deregulating their credit card markets in a race to the bottom. South Dakota and Delaware won. And now practically all credit cards are issued from those two states.

This would be precisely what would happen to the health insurance market under these "health care choice compacts," which could go national, based on this language. Right now, insurance companies can sell their coverage "across state lines," they just have to be accountable to the laws of the state where they sell it. Under this plan, insurers would be allowed to ignore the regulations in the state where individuals purchase insurance, and only subject to the laws where they issue it. Insurance regulations vary widely in the states, and would do so more under this compact. Anti-government legislatures could gut insurance regulation to entice insurers into setting up their corporate HQs there. States with regulations in place might prefer to lighten their regulatory case load, in this era of budget struggles, and let some other state deal with it. The insurance exchanges would presumably put a stop to this practice, but crucially, they only have a state-level framework and not a national one.

Consumer Watchdog jumped on this today, claiming that this race to the bottom could be expanded.

Washington, D.C. -- The consumer group that pioneered the most successful insurance premium regulation law in the nation, which has saved California drivers $62 billion on auto insurance rates since 1988, released a report today outlining the deep flaws in the proposed Senate Finance Committee health reforms. The report calls on Congress to adopt "prior approval" health insurance rate regulation and block insurance industry efforts to gut state consumer protection laws.

A "framework plan" released today by the so-called "Group of Six" Senators negotiating a health reform bill headed by Senator Max Baucus (D-MT) would open the door to gutting state laws. The plan would result in a "race to the bottom" in health care regulation by allowing insurance companies that participate in "health care compacts" to choose the weakest state law to govern all their policies, regardless of which state the policies are sold in. Currently, insurance companies must abide by the state laws of any state where they sell insurance. The Baucus plan resembles an industry proposal carried by Mike Enzi (R-WY) in 2006 discussed below [...]

** Loss of state benefit mandates would allow exclusion of preventive treatments and exams, prevent early diagnosis of disease and evade Patient Bill of Rights laws passed in nearly every state. Denying access to such basic preventive care makes treatment more costly to the policyholder and ultimately to taxpayers, who pick up the bill when individuals cannot pay outrageous out-of-pocket costs.

** State laws providing consumers the right to appeal a coverage denial to an independent panel of physicians, a right to a second opinion, and assistance from state regulators when coverage is denied would all be lost under the Enzi approach.

** Individual patients who currently have the ability to hold insurers financially accountable for injuries caused by the denial or delay of necessary care would lose those rights if they joined the Enzi co-op.

This is what you get when industry VPs write your laws.

Not Really "Le Mieux"

We have a new United States Senator to replace Florida's Mel Martinez. He's the former chief of staff of the Governor who appointed him, who is also seeking the job in 2010.

Gov. Charlie Crist chose trust and loyalty Friday over Washington experience or potential political gain in choosing former chief of staff George LeMieux to replace Republican U.S. Sen. Mel Martinez.

State Rep. Jennifer Carroll, who was considered for the position, said Crist told her he is choosing LeMieux. LeMieux is Crist's closest political adviser and the governor's pick shows he wants someone who thinks like him to hold the Senate seat Crist hopes to win in the November 2010 election.

As LeMieux said after interviewing for the position: "I'm a Charlie Crist Republican."

Technically, this is a caretaker position, albeit one that lasts a year and a half. And I think it shows the pitfalls associated with gubernatorial appointments, especially in this case, where the Governor in question is running for the seat. Crist is basically putting in a sock-puppet, who can be expected to follow his wishes to a T. During Crist's primary with conservative Marco Rubio, we can expect LeMieux to protect Crist's right flank by voting straight down the conservative line. As soon as Crist wins the primary, LeMieux will get religion and start voting in a moderate fashion, to prove Crist's moderate bona fides. I'd almost guarantee it.

With the Kennedy situation still fluid, I think that a potential Massachusetts law would be the best of all possible worlds - a quick appointment because of the outsized importance of Senate representation, along with a quick-strike special election within 4-5 months. Certainly better that a Governor putting in his sock-puppet while running for the seat himself.

By the way, LeMieux is also a former and possibly current registered lobbyist, but he's also a Republican, so that's somewhat redundant.

Kendrick Meek, the Democrat running for Senate, came out swinging:

From the moment Senator Martinez announced his retirement, Governor Crist placed his ambitions over Florida's needs. Floridians require a Senator working to ease their economic pain and achieve comprehensive health insurance reform, not a political appointee who serves the monied special interests.

The Governor added another edition to his campaign team at taxpayers' expense. George LeMieux doesn't represent Floridians facing economic challenges - he represents privileged clients with expense accounts far removed from the realities Floridians are facing.

Governor Crist was afforded a high responsibility with this appointment. Instead, he treated this process like a mockery, politicizing his selection by flying around the state at taxpayers' expense, touring major media markets and drawing this selection out. Well respected Floridians with a wealth of elected service experience from Congressman Clay Shaw to Mayor John Delaney to various Hispanic leaders were in a position to hit the ground running if appointed, but that possibility is now nonexistent.

By appointing George LeMieux, Governor Crist's inner circle was rewarded with a U.S. Senate seat and Floridians are left lacking the representation they deserve.

I like the "Charlie Crist choose a Senator tour" that apparently accompanied this selection. And in the end, he put his campaign manager and chief of staff in the seat. That probably could have happened without the fanfare.

Cracking Down On Tax Havens

A couple days old, but this is very interesting.

In the latest setback to Switzerland’s tradition of banking secrecy, UBS, one of the nation’s largest banks, agreed on Wednesday to turn over information on more than 4,400 American clients suspected by the Internal Revenue Service of using Swiss accounts for tax evasion.

The agreement is likely to unnerve American customers of UBS who do not know if their names will be divulged, and could deter others from opening Swiss accounts in the future.

Whether the deal will change the Swiss banking industry’s culture of secrecy remains to be seen. Smaller Swiss banks say they are confident that they can blunt its effects and continue to profit by finding new, more elaborate ways to protect the privacy of clients. But American authorities have made clear that their pursuit of tax evaders will not stop at UBS.

I would hope it does unnerve UBS customers from opening Swiss bank accounts, considering that those accounts violate US law. I would say that rich people ought to think twice before starting their own offshore tax havens.

By the way, if the President wants to recapture some of his liberal base, he could do worse than emphasizing this outcome. People are justifiably angry that the banks appear to have gotten away with almost destroying the global economy and taking hundreds of billions from the US Treasury. I know that class warfare is messy and all, but showing that a Democratic government does their job and ferrets out rich tax cheats would at least play against this hardening belief that all politicians funnel money to the wealthy. Foreign lobbyists are trying hard to get the DoJ to back off, but if the Administration remains vigilant in the face of that pressure, they can really announce this as a victory. I would like to see conservatives argue in favor of the uber-rich stashing away their cash in offshore tax havens. Really, go ahead.

...Apparently Switzerland knows when to get out of the tax cheat business: they're selling their stake in UBS.

Dumping The Astroturf

Ed Markey keeps finding forged letters sent to members of Congress, sent to moderate Dems and made to look like citizen groups opposed the climate and energy bill that passed the House. So the clean coal front group who hired the astroturfers just had to fire them.

The American Coalition for Clean Coal Electricity (ACCCE) is dumping Bonner & Associates, the Astroturf firm that forged letters to Congress attacking clean energy legislation on its behalf. Bonner, an organization with a long record of deceptive practices, sent letters this June purporting to be from black, Hispanic, women’s and senior citizen’s groups to several members of Congress telling them to vote against the American Clean Energy and Security Act. ACCCE spokesman Joe Lucas told National Journal that his organization “did nothing wrong”:

"We will not be working with Mr. Bonner again. ACCCE did nothing wrong. Looking back, there would be many things we would do differently."

ACCCE did plenty wrong. They hired a known astroturf group with a history of this behavior and tried to keep quiet about it when they were informed of the forging.

I hope this doesn't stop the ongoing investigation into Bonner and Associates, nor should it stop criminal investigations (is this mail fraud?). Can't Bonner have their lobbyist registration stripped at this point?

Rebel Outsider

There's now a slightly lower percentage than the six lobbyists per lawmaker working on health care reform, as Dick Armey has to take his ball and go home. This is an epic whine:

Dick Armey, the former House Majority Leader, is leaving his job with top Washington lobbying firm DLA Piper, citing negative attention that the firm is receiving thanks to the role of Armey's corporate-backed outfit, FreedomWorks, in turning out protesters to shut down town hall meetings on health care.

It is painful and frustrating to see a good, decent, able and effective partnership of honorable men and women and their clients attacked for things in which they are not involved simply because of their association with me. One would expect a higher degree of competence and professionalism from members of the media than spurious attacks on innocent bystanders.

Let me be perfectly clear about DLA Piper. It is a fine firm with good, competent people. It has been my privilege to be associated with them, and I will miss them. I am leaving the firm with regret but also with anticipation of being more fully engaged in the nation's struggle and without having attacks on me being directed at others.

It is imperative for me, within the context of my life's work in the defense of personal liberty against the encroachments of big government, to give my undivided attention to the work we do at FreedomWorks. In short, the threat to personal liberty in America is so serious and imminent at this time that it requires the full commitment of my efforts. While I consider it a personal sacrifice to leave DLA Piper, it is a sacrifice I must make in light of the important work I am committed to at FreedomWorks.

Poor, poor Dick Armey. His job as a corporate lobbyist was getting all mixed up with his work to turn people against health care reform and toward a position backed by corporate interests! I can't see how anyone would possibly make the connection.

Now that the former House majority leader and lobbyist has resigned, I'm sure people will see FreedomWorks for what it is - a noble, completely organic upspring coming from the depths of the grassroots to impact the corridors of power at the highest levels. Given that Armey is now such an outsider, it's amazing he was even invited on Meet The Press to lie about Moveon.org and his role in the extremism of town hall meetings. Must be all that amazing grassroots organizing.

And finally, now that it's obvious that Armey said things he knows are untrue on national television, any chance he'll be barred from returning? Will bookers conclude that Armey shouldn't be invited onto television news programs, since he's obviously willing to lie to the public? No, that's not how the game is played, which is why hacks like Armey feel comfortable lying in the first place -- there are no consequences.

Why does Steve Benen hate ordinary Americans like Dick Armey having a voice in the public debate? I mean, they have no other resources.

The K Street Lynch Mobs

Jane has the deets on Freedomworks, the lobbyist-funded group activating the teabag rallies at health care town halls across the country. Somehow CBS, with its large cadre of producers and researchers, put a Freedom Works spokesman on its air last night without disclosing their ties, but a blogger with virtually no staff can uncover all this useful information about the organization.

Freedomworks isn't some "organic grassroots" outfit. It's run by former Republican House Majority Leader Dick Armey -- corporate lobbyist, global warming denier and ladie's man. The President and CEO of Freedomworks is Matt Kibbee, who was trained by Lee Atwater. Kibbe was behind the attempt to get Ralph Nader put on the ballot in Oregon in 2004, prompting a complaint to the FEC of illegal collusion with the GOP.

Steve Forbes is on the FreedomWorks board. As Paul Krugman noted, their money comes from the Koch, Scaife, Bradley, Olin nexus, as well as other reliable funders of right wing infrastructure including Exxon Mobil.

Freedomworks has a long history of skunk works. In 2004, a woman who identified herself as a "single mother" in Iowa, Sandra Jacques, appeared at a George Bush town hall and gushed about his plan to privatize Social Security. She left out the part about being an employee of Freedomworks, who were lobbying on the issue at the time.

David Koch is also Chairman of the other major outfit heavily involved in these "organic" uprisings, Americans for Prosperity, whose members lynched Democrat Frank Kratovil in effigy. Koch is the 19th richest man in the world. They recently renamed the New York State Theater in Lincoln Center the David H. Koch Theater.

These aren't just some organizations that these guys gave money to. They run them.

Americans for Prosperity, incidentally, are on the record about busing their people to rally against reform in 13 states.

Brian Beutler of TPMDC - again, with resources not nearly as large as CBS - has a lot more. He notes the role of Conservatives for Patients Rights, founded and funded by Rick Scott, a disgraced former head of the Columbia/HCA health-care company who paid the largest fine in US history, $1.7 billion dollars, for overcharging state and federal health plans. This guy has sunk millions of dollars of health industry money into anti-reform ads, and if you read Beutler's piece, they are clearly orchestrating this "organic" uprising among the teabaggers.

The people on the ground may have their own extremist, anti-government beliefs. But they are being activated by corporate lobbyist-backed astroturf groups.

UPDATE: This is a very, very good point from Ezra, and I've noticed this too at most of the meetings I've attended:

I've been attending health-care panels and events on a pretty regular basis for four or five years now. Each event, of course, is its own precious snowflake, with its own set of graphs and bullet points and dweebish jokes. But one thing is perfectly predictable: The Q&A session will be dominated by single-payer activists asking about HR 676.

There's not a mystery as to why this happens: Single-payer activists are very well organized, and they make a point to dispatch their people to these events and get their members to the microphone and ensure that their perspective is heard. But as the bills under consideration suggest, politicians have had no problem ignoring the single-payer grassroots. Max Baucus ruled out their participation on day one. The media hasn't shown the slightest inclination to cover their presence at event after event after event.

To extend this a bit, 15 million people protested the Iraq war and the coverage was virtually nil. Lobbyists bus 100 people into a Congressional town hall and the media hypes the "Tehran-like" atmosphere of them. Groups of people at town hall meetings are not perfect indicators of the overall attitudes of a population, and even among the town halls, traditional media highlights and politicians respond to very selective segments of those groups.

Constituent Letter Grifting

Last week, we learned about astroforging, the practice of corporate lobbyists forging letters from local advocacy groups that line up with corporate goals. More evidence has been uncovered today showing the widespread nature of this practice.

Joseph Richardson received a letter from Sen. Kent Conrad (D-ND) in reply to a letter that he never sent:



Richardson never wrote such a letter, and he never would. Calling himself a “vocal member” of the North Dakota Alliance for Renewable Energy, Richardson told ThinkProgress that he is an ACES supporter and even wrote a letter to Rep. Earl Pomeroy (D-ND) calling on the congressman to support clean energy reform.

Bonner and Associates, the company nailed initially, has been engaged in this deception for well over 20 years. And as long as they got away with it, I'm sure they'd continue. It turns out that Bonner is linked to the clean coal lobby:

The Sierra Club today urged Attorney General Eric Holder to launch an investigation into the activities of a lobbying firm that has been linked to fake letters urging Rep. Tom Perriello (D-Va.) to vote against the climate bill [...]

The request stems from a newspaper report last week that Bonner & Associates sent letters to Perriello's office that were made to look as if they came from Creciendo Juntos, a Charlottesville-based Hispanic advocacy group. Perriello staffers also received similarly worded letters that were designed to look as if they came from the Albemarle-Charlottesville branch of the National Association for the Advancement of Colored People.

The letters, which urged Perriello to oppose the House climate bill ( H.R. 2454 ), used the letterhead of the two groups but were signed by individuals who are not affiliated with the organizations ( E&ENews PM , July 31).

The group American Coalition for Clean Coal Electricity acknowledged this afternoon that it had contracted Bonner & Associates earlier to perform "limited outreach," but the advocacy group denounced the firm's actions.

It's insane that Democratic lawmakers are going out of their way to label the August recess as "consequential" for health care based on the reaction of constituents in districts, when this nasty little episode shows how it's all just theater and lies.

UPDATE: Think Progress has corrected this story. Conrad's office miscategorized their response letter. The Perriello set of letters, however, are certainly real, which is to say fake. Brad Johnson has more.

The Sticking Fingers In Ears And Yelling "La-La-La" Strategy

Both sides have decided to mobilize in member districts throughout August over health care policy. Democrats have settled on banging the hell out of the insurance companies - mostly with the insurance companies' blessing, I'm sure, if the end result is an individual mandate and a forced market for 46 million new policies without a public option to contend with. The Republican strategy is literally to yell at the top of their lungs.

Who needs civility and intelligent discourse when we have confused mobs of far-right activists organized by corporate lobbyists?

The House has been in recess for only a few days, but we're already seeing the results of the right-wing efforts.

This past weekend, Rep. Lloyd Doggett (D-TX) was the latest victim of the right's strategy, where protesters followed him and chanted "just say no" to health care.

Texas has the highest uninsured rate in the nation and stands to be among the most to gain from Obama's health care plan. "[N]early 6 million Texans, including the one in six U.S. uninsured children who live there, could get health insurance for the first time if the plan is enacted." [...]

An angry crowd also exploded at Sen. Arlen Specter (D-PA) and Secretary of Health and Human Services Kathleen Sebelius. The Philadelphia Daily News reports, "They wore bumper stickers on their foreheads. They carried signs. They shouted insults at notable American figures -- and each other. Loudly."

This isn't just about intimidating lawmakers, it's also about exercising something of a heckler's veto -- if the mob can prevent an honest discussion of health care reform, people who'll benefit from the legislation won't learn what it's in it for them and why the conservative arguments are wrong.

This is the culmination of decades of the devolution of American discourse, through talk radio and cable news, that now results in consideration of the most momumental policy in a generation being reduced to sloganeering and loud chants. The corporate lobbyists funding and directing the right wing know that they can take advantage of chaos and push through lies and distortions much easier. And they figure they can set the wobblier Democratic members to the ground just by shouting at them.

Sadly, they're probably right.

Astroforging

Creating fake grassroots organizations to show presumed local support for typically corporate initiatives is known as astroturfing. Corporate lobbies forging letters from local groups to show that same fake support should be called... I don't know, astroforging?

As U.S. Rep. Tom Perriello was considering how to vote on an important piece of climate change legislation in June, the freshman congressman’s office received at least six letters from two Charlottesville-based minority organizations voicing opposition to the measure.

The letters, as it turns out, were forgeries.

“They stole our name. They stole our logo. They created a position title and made up the name of someone to fill it. They forged a letter and sent it to our congressman without our authorization,” said Tim Freilich, who sits on the executive committee of Creciendo Juntos, a nonprofit network that tackles issues related to Charlottesville’s Hispanic community. “It’s this type of activity that undermines Americans’ faith in democracy.”

The faked letter from Creciendo Juntos was signed by “Marisse K. Acevado, Asst Member Coordinator,” an identity and position at Creciendo Juntos that do not exist.

The person who sent the letter has not been identified, but he or she was employed by a Washington lobbying firm called Bonner & Associates.

Staffers found five forged letters of this type, including one from the local chapter of the NAACP, just in Perriello's correspondence. So you know there are lots more. This seems like the uncovering of a scam that's been going on for years. Ed Markey wants an investigation from his perch in the Global Warming subcommittee.

Obviously the power of lobbyists has grown so much to become completely divorced from the Constitutional mission of petitioning government for redress of grievances. Lobby shops have funded and supported the teabaggers, and they're offering training sessions on how to approach town hall meetings during the August recess. They are busing people around the country to different town halls. Members of Congress somehow still think these meetings reflect the considered opinions of constituents. They should look at Tom Perriello's mail.

Tax-Free Ads

The more we wade into this health care debate, the more we uncover things that simply astound. In an article about curbing prescription drug ads on television, there's this nugget:

Meanwhile, Representative Jerrold Nadler, Democrat of New York, has introduced a bill called the Say No to Drug Ads Act. It would amend the federal tax code to prevent pharmaceutical companies from deducting the cost of direct-to-consumer drug advertisements as a business expense.

“You should not be going to a doctor saying, ‘I have restless leg syndrome’ — whatever the hell that is — or going to a doctor saying, ‘I have the mumps,’ ” Mr. Nadler said in an interview. “You should not be diagnosed by some pitchman on TV who doesn’t know you whatsoever.” [...]

Representative Charles B. Rangel, Democrat of New York and chairman of the House Ways and Means Committee, said last month that legislators would consider ending the tax break for drug ads as a way to raise money to pay for the health care overhaul. But, after lobbying from broadcasters and newspapers, Mr. Tauzin said, legislators quickly abandoned the idea, concluding that such a measure would not raise significant money.

With lawmakers still fighting over how to finance health care reform, Mr. Nadler said he hoped his bill might find an audience.

“On First Amendment grounds, I am not going to say we will ban” drug advertising, said Mr. Nadler, who represents parts of Manhattan and Brooklyn. “But they should not be able to get taxpayers to subsidize it.”

Meanwhile, Representative Daniel Lipinski, Democrat of Illinois, is pushing his own bill that would end the tax deduction for drug company spending on advertisements.

Drug companies get a TAX DEDUCTION for running ads for their drugs. Is this true of Frosted Flakes? Audi? Xerox? Does any other company in America get subsidized for airing commercials to get America to buy their products? It's not "significant money," though, so ending this direct payout from taxpayers to drug companies got shelved.

Set aside for a second the hypochondria that a nightly barrage of ads telling you that you have restless leg syndrome or iron-poor blood or any of a thousand ailments induces. Set aside the self-medication and the boiling down of complex medical issues into 30-second spots showing couples running through a field. Set aside how drug ads increase demand for medications and thus the costs. Set aside that some of these ads run before the Food and Drug Administration even completes their studies of the side effects. You mean to tell me that I'm helping PAY for these things, too?

Fun fact in the article: only the United States and New Zealand allow direct-to-consumer drug advertisements.

...and here's the part where I revise and extend my remarks, as the deduction under discussion is about business expenses and not a straight tax deduction. Maybe I should put a big blinking banner at the top of this one saying IGNORE. They ain't all gems, folks. I will take solace in the fact that, contra Mitch Albom, I know what marginal tax rates are. But just a little solace.

I think the point of having advertisements for prescription drugs at all can still be debated, however, for reasons described above.

In Praise Of Lobbyists?

If you haven't been following the health care debate, this AP article will strike you as curious.

A strong force, perhaps as powerful in Congress as President Barack Obama, is keeping the drive for health care going even as lawmakers seem hopelessly at odds.

Lobbyists.

The drug industry, the American Medical Association, hospital groups and the insurance lobby are all saying Congress must make major changes this year. Television ads paid for by drug companies and insurers continued to emphasize the benefits of a health care overhaul — not the groups' objections to some of the proposals.

Why on Earth would the drug industry, insurance industry, hospital industry and the AMA be so interested in protecting the passage of health care reform? Because they would all grab some goodies in the process. As a result of all those meetings with health industry executives, the President secured their support for reform. But it came at a price. The drugmakers got to extend their patents for biologics and didn't have to completely fill the doughnut hole for Medicare Part D. The insurance industry got their individual mandate that will require millions of Americans to sign up for their coverage. The AMA got the sustainable growth rate (SGR) formula for Medicare physician reimbursement dumped, which will likely increase their payments. And hospitals are working hard for their piece of the pie as well. All of these deals, which constrict the ability for Congress to wring more costs out of the system, would fall apart if no reform bill passes, leaving these interests vulnerable. So of course they want the process to advance. Yet if you take the Blue Dogs at their word, that they are concerned about costs, these deals are INHIBITING progress, not promoting it.

Deals, of course, are made to be broken, and Nancy Pelosi, who didn't sign on to any of them, will not adhere to their guidelines if it risks cost control.

House Speaker Nancy Pelosi said Thursday that she doesn't feel bound by the $235 billion in deals that the White House and the Senate Finance Committee cut with hospital and pharmaceutical companies to defray costs of a new health-care plan, stating that she thinks the industries could do more.

"When we're trying to cut costs, certainly we know that there are more costs to be cut in hospitals and pharmaceuticals. . . . So we'll be subjecting everything to some very harsh scrutiny as we see whether we can get more savings," Pelosi said in a late-afternoon interview, shortly after she left a marathon negotiating session with White House Chief of Staff Rahm Emanuel and conservative "Blue Dog" Democrats, who have put the brakes on the House version of the health-care reform bill. "As we look, there may be some more ways to get money out of pharmaceutical companies."

Pardon me if I don't see the lobbyists as the key to real reform. I think Nancy Pelosi's calculus might have more to do with it.

Why Postponing Health Care Hurts Climate Change

Another factor to breaking for a three-week recess before finishing work on the health care bill is that it pushes everything back in the queue. There are serious efforts to arrive at legislation on financial regulation, as well as the Senate's version of a climate and energy bill already passed by the House, that now necessarily get moved aside. And in the meantime, energy and activist attention goes away from those priorities. It gives know-nothings like George Will more time to sow doubt and throw up meaningless statistics to make verifiably false claims about the condition of the planet. Even people who are on the side of doing something about climate change have contributed to this by raising unfounded fears about speculation in the cap and trade market and the dangers of Wall Street involvement (simply put, there are mechanisms to ban derivatives in Waxman-Markey, and the survival of the planet outranks the desire to deny profit to those trading carbon). It gives lobbyists more time to marshal their forces against anything but the status quo. And unlike with health care, where the progressive movement has focused for some time, on climate change the denialists are much further along in their activism, and delay actually will sap the fortitude of lawmakers.

The opposition to Waxman-Markey did a good job with phone calls to House members. They at least matched the calls that enviros and progressives delivered — though I’m told an analysis shows that most of their calls were out-of-state, while most of ours were in state. Still, that’s one reason we didn’t get more votes.

The climate destroyers are keeping up their attack on vulnerable House members — even if it means eating their own (see “Honey, I shrunk the GOP, Part 1: Conservatives vow to purge all members who support clean energy or science-based policy”).

The good news is that The Hill reports, “A coalition of labor, environmental and veterans groups is spending serious money to make sure Democrats who supported the cap-and-trade legislation have political cover.” Very important stuff, for sure — after all, the House is going to have to vote again on some House-Senate conference version of this bill in early 2010 assuming the Senate acts.

But we should be equaling, if not beating, calls to key senators right now. Heck, I’m told that Senators who aren’t even really swing votes are getting more than 100 calls a day opposing climate action. And those matter too, in terms of how even Senators on our side gauge public sentiment and how much they are willing to fight for the strongest possible bill.

That has a cumulative effect, even if members of the Senate want to pass good legislation. And hanging House members out to dry who voted for Waxman-Markey with nothing to show for it will damage them in 2010. Right now, the Senate is engaged in a zero-sum game, and at the end of the year, they might welcome having those three weeks back when they look at what they failed to produce.

Money For Nothing

I think Ezra Klein hits the saddest part of Max Baucus' largesse from the health care industry - the Montana Senator simply doesn't need the money.

Imagine that Baucus is, at best, bemused by the lobbyists and corporate chieftains autographing checks in a futile effort to purchase his affections. Why let them? Baucus is from Montana. It's one of the smallest states in the country. It has a cheap media market. And Baucus -- who faced no serious competition in his last campaign -- isn't up for reelection until 2014.

Baucus could have shut off his fundraising operation and avoided the appearance of any and all impropriety. Instead, on June 10, he held his "annual fly-fishing and golfing weekend in Big Sky, Mont., for a minimum donation of $2,500." Sometime this month he'll preside over "Camp Baucus," a "trip for the whole family" that touts horseback riding and hiking on the list of activities. The problem with this is not that it necessarily influences Baucus's thinking on health-care reform. It's that all this industry money reduces his credibility to make necessary concessions and hard decisions. And there's no reason for it. He doesn't need the money.

I would guess that Baucus takes the money because he's supposed to take it. It makes him a major player in Washington, someone whose boots the lobbyists have to lick. It probably flatters him to have all these rich folks plying him for attention. If he has higher designs - and I'm thinking Majority Leader, not President - that money will come in handy, considering he can pass it around to other Senators to make allies for the next four years. Like any politician, he relishes the power.

The people are trying to turn the tables on that this week.

Progressive groups are launching a new round of advertising against Senate Finance Committee Chairman Max Baucus, (D-Mont.), in an effort to persuade him to support a public option.

The Montana Democrat was the (unfortunate) winner of a contest sponsored by the Progressive Change Campaign Committee and Democracy for America, in which the groups allowed members to choose which senator to target in an ad campaign. Baucus has, at times, indicated he supports a government run plan but it is not certain if the proposal will make it into the final version of his committee's bill.

For this, 15,000 progressive voters determined that he should get an additional bit of political pressure. The ads being run against the senator, which will air in three media markets in Montana -- Billings, Butte-Bozeman, and Helena - are duplicates of an old PCCC spot. Only it is customized for Baucus, pointing to the $3.9 million he has taken from "health and insurance interests."

Baucus is holding up the bill over how to pay for it, and I'd prefer to see some progressive action on that. But putting money into opposing Baucus rather than flattering and fluffing him is certainly something I can get behind.