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Robert Borosage

By Robert L. Borosage
Co-Director Campaign for America’s Future

A crisis that demands fundamental change. A president with a mandate to drive it. A Congress, controlled by Democrats, ready to act. Now comes the hard part – actually getting something real done.

These are salad days for Democratic lobbyists, because deep pocket interests – health insurance companies, Big Pharma, oil and gas and coal companies, the utilities and, of course, the banks – are buying them up to help harness the gale winds of change. Get ready to be dazzled – the strategies employed will reflect the imagination of Washington’s most clever operators.

For example, the health care lobby has employed one basic theme in trying to stop health care: scare the hell out of Americans by decrying a “government takeover” of health care. But in the age of Obama, they want to be seen as part of the solution, not simply part of the problem.

So last week, the leading health care trade associations – -the lobbies for insurance companies, doctors, hospitals, drug companies, plus a union – stood with the president to pledge dramatically to “do our part” to reduce the rate of soaring health care costs by 1.5% a year over the next decade, a promise that if fulfilled would save some $2 trillion from the cost of care. Not surprisingly, the president – eager to show that his efforts to give everyone a seat at the table were bearing fruit – was happy to hail that promise.

The lobbies got national coverage that their clients were for reform and would make a real contribution to it. This bolstered their argument that while regulation might be in order, we don’t need a public plan like Medicare to provide a choice for businesses and individuals. Give us time to fulfill our promises (and for this reform moment to pass), they argue. If we fail, then consider a public plan (when the president may be less popular and the Congress more conservative). Word was Senator Grassley, a Republican Senator actually looking for bipartisan accord, thought that the argument made a lot of sense.

Outside the photo op, however, the reality was very different. A new report released today by Health Care for America Now, a leading citizens’ coalition pushing for comprehensive health care reform, put the industry claims in sharp relief.

The HCAN report shows that after 400 mergers involving health insurers over the last 13 years, concentration has gone up in local markets across the country. The single largest provider of small group coverage (for small businesses, for example) controlled a median market share of 47% in 2008. The AMA says 94% of insurance markets in the US are highly concentrated.

The result, of course, is soaring prices – with premiums up, on average, more than 87% over the past six years. Profits at 10 of the country’s largest publicly traded health insurance companies in 2007 rose from $2.4 to 12.9 billion (428%) from 2000 to 2007. The CEOs of these companies in 2007 alone collected an average compensation of $11.9 million each. Nice work if you can get it.

As then Senator Barack Obama said in September 2007, “These changes (mergers) were supposed to make the industry more efficient, but instead premiums have skyrocketed.”

Insurers use their position to pass rising costs onto the insured. And, not surprisingly, Medicare does better. A recent study by University of California professor Jacob Hacker for the Institute for America’s Future (which I co-direct) shows that from 1997 to 2006, private health insurance spending per enrollee grew at an annual rate of 7.3% while that of Medicare was at 4.6%, or more than one-third less.

The concentration of insurance markets and the lack of private competition provide compelling reasons for the Congress to establish a public plan like Medicare as an option for those seeking insurance. Give consumers a real choice. The public plan would provide both a benchmark for private plans and much needed competition in what are now perversely concentrated markets.

That certainly offers better hope for bringing down prices than the voluntary promises of the hospital, drug and insurance company lobbies, made without detailing how they would go about fulfilling those promises. (promises that many of them began to wiggle away from two days after the press conference when the TV lights were no longer on).

HCAN and other citizen groups are scrambling to counter the calumnies, claims and cash of the health insurance lobby – but of course, they can’t match the industry’s firepower. What they do have is the best moment for serious reform since the sixties when Johnson ushered Medicare into existence. And the possibility of rousing citizens to put their legislators on notice that they are paying attention, want real reform, and aren’t going to be distracted by the health care lobby.

Robert Borosage

By Robert L. Borosage
Co-Director Campaign for America’s Future

 “And the banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill. And they frankly own the place”

That was Sen Richard Durbin, the powerful Senate Democratic whip, irate as the banking lobby, with foreclosures soaring across the nation, blocked a core reform for beleaguered homeowners that would give judges the right to modify mortgages in bankruptcy court.

But it isn’t just the banks. Agribusiness is protecting its obscene subsidies. The insurance companies are deploying legions of lobbyists to gut the public plan in health care reform, the heart of the Obama plan. The utilities are carving out exceptions for coal plants. Multinationals are clearly on way to disemboweling Obama tax proposals. The military industrial lobby is a good bet to frustrate DOD Secretary Gates modest procurement reforms.

This isn’t about America being a “center-right country,” the myth that pundits still peddle about the American people. This is about Congress being bought and sold, pure and simple. Each night, Washington slurps on political fund-raisers. Each day, the deals get cut; the favors get done. Now with Republicans lining up lemming-like to obstruct anything Obama, Congress can be bought on the cheap. The lobbies have only to enlist (suborn, bribe, seduce, finance) a few of what the press insists on describing as “moderate Democrats” in the Senate to stop any reform they don’t like.

What’s often forgotten in this squalid exchange is that the very Americans the legislators preen to represent are the victims of their various corruptions.

For example, with the swine flu alert sweeping the country, President Obama and the Centers for Disease Control urge people with flu symptoms to stay home. This is a common sense measure to limit the spread of what might be a dangerous virus.

Only one problem, as the New York Times reminds us in an editorial this morning. About 60 million Americans don’t have paid sick leave. Many can be fired if they stay home. And if not fired, many simply can’t afford to lose the hours.

43% of private sector American workers have no paid sick days at all. And needless to say the most vulnerable have the least protection. A 2007 EPI study showed that workers at the bottom of the wage scale, those making less than $7.38 an hour, are five times less likely to have sick days than workers at the top of the scale, those making greater than $29.47 an hour. Only 16% of low-wage workers have access to paid sick days.

This is a barbarity that is dangerous to your health. Women — who tend still to be disproportionately in part-time and low wage work — are particularly at risk.

More than 160 countries, the Times tells us, have laws that ensure all their citizens receive paid sick leave and more than 110 of them guarantee paid leave from the first day of illness. The US does not. The reason goes no further than the influence of money on politics.

We once provided much of our social contract through the corporation rather than the Congress. Strong unions could negotiate a family wage, health care, overtime pay, paid sick leave, paid vacations, and pensions. Many non-union employers offered benefits similar to those provided by union companies. But over the last decades of this conservative era, as unions grew weaker under attack, more and more corporations simply shredded those agreements.

Now we’ll have to enact these basic guarantees — central to what Franklin Roosevelt called the Economic Bill of Rights — in law. But each reform will have to overcome the resistance of entrenched lobbies, buying the protection of compromised legislators.

In 2005, Senator Ted Kennedy and Rep. Rosa DeLauro introduced a bill entitled the Health Families Act that would mandate up to seven paid sick days for employees in firms with more than 15 employees (and pro-rated leave for part-time employees). You’d think this would be a no brainer. It never came to a vote in the Senate. Obama pledged to support seven day paid sick leave in his campaign. Many Democratic lobbyists will dine well off of that pledge.

In area after area, Americans are suffering from the accumulated corruptions of our moneyed politics. In the fifth labor of Hercules, an arrogant king tries to demean the hero by hiring him to clean out the Augean stables in a day. The stables containing the largest herd of cattle in civilization, had never been cleaned. Hercules, with a little help from Athena, changes the path of two rivers and quickly washes out the accumulated filth. But no one is about to change the course of the Potomac to cleanse the backrooms and lobbies of Capitol Hill. The only current strong enough to do that is an aroused public angry enough to sweep away those who stand in the way. Despite rumblings, despite growing awareness of the damage wrought by a sordid and selfish era, we aren’t there yet.

Robert Borosage

Robert L. Borosage

Co-Director Campaign for America’s Future

We are headed into the most ambitious era of progressive economic reform since the New Deal. The crisis leaves little alternative, as job losses mount across the country and the world. The Obama administration has hit the ground running, pushing to pass an $800 billion plus recovery plan, scrambling to put together a new plan for banks still on life support, and cobbling together an initiative to help millions of families on the verge of losing their homes.

But recovery, however daunting, is not enough. Even as the administration struggles to fend off a full-scale depression, it faces the task of constructing the foundations of the new economy out of the ashes of the old.

Republicans, still grousing about more tax cuts and less spending, are clueless. But even many Democrats seem to assume that if we just get the economy going, bail out the banks, add a dash of regulation, we can go back to business as usual.

But that is neither possible nor desirable. That old economy was founded on stagnant incomes and unsustainable debt. Families struggled to keep their heads above water by taking money out of their homes and assuming ever higher levels of student, car, credit card and consumer loans. The country served as the consumer of last resort for the world by borrowing staggering sums — $2 billion a day over the last years – from creditors abroad, largely Japanese and Chinese central bankers. That economy was floated on asset bubbles like that in housing which has now exploded in our faces. We can’t resuscitate the old economy – and should not want to.

The next economy must seek to provide a sustainable and a widely shared prosperity, one where the American dream remains in reach for working people. That will require new thinking and bold reforms. A group of progressive organizations have joined together to kick off this discussion. (For the first conference on “thinking big, thinking forward — already oversubscribed — go here.)

But many of the changes needed are clear — and the initial struggles over signature reforms are already teed up.

What is needed to insure to every person a job with a decent wage, a world class public education, affordable health care, and retirement with dignity? This is the pledge Franklin Roosevelt made when he laid out his Economic Bill of Rights in the midst of World War II. It was echoed in Obama’s inaugural address. Surely that new economy must include:

1. A new public social compact — affordable health care, pensions above Social Security — to replace the promises that the corporations have shredded. The signature fight over health care reform will begin this year. 

2. Sustained public investment in areas vital to a maintaining a high wage path in a global economy — world class schools, affordable college, 21st century infrastructure, cutting edge science, research and development. The first volleys of the signature battle — over whether we will sustain expanded public investment after the economy regains its footing or short-change it –are already being exchanged. 

3. A new global economic strategy — featuring a new industrial policy — that enables the US to balance its trade, while creating global rules that protect workers, consumers and the environment, rather than threaten them. The initial struggle over making the transition to renewable energy the centerpiece of economic reform is beginning. 

4. Restructuring and regulation of the financial sector, making banking a boring occupation again, devoted to making loans to the real economy, not hawking exotic instruments in operatic speculative ventures. The signature reform — taking over and breaking up the major banks that are on life support — is likely to be fought out in the next months. 

5. An aggressive wage policy that empowers workers to organize and bargain collectively, raises the minimum wage, and mandates basic benefits and safety standards. The donnybrook will begin this Spring over the Employee Free Choice Act. 

These are fundamental choices threatening entrenched interests. Health care reform requires taking on the drug and insurance companies. Sustaining public investment requires defeating the military lobby and the wealthy whose taxes will rise. A new global strategy challenges the multinationals that profit from the old order. Getting Wall Street under control threatens the largest political donors. The business lobby promises Armageddon if the Employee Free Choice Act moves forward.

President Obama has already signaled his intention to go forward with the core reforms in this agenda. So forget about a new era of bipartisan consensus and get ready to rumble. We’re headed into pitched battles that will succeed only with massive popular mobilization. We won’t have this opportunity again, and we dare not blow it.