Just because companies are profiting from it doesn’t make it a ‘free-market’ policy

[Originally posted at Beltway Confidential]

The Economist has a condescending, ungrounded piece today that has this interesting claim:

For example: the new health-care-reform law passed in March is an entirely private-insurer, free-market-based reform.

Michael Cannon at Cato has a very good takedown of this whole blogpost on how close-minded conservatives are, but I wanted to expand on the use of the phrase “free-market” in a description of a bill that, as Cannon writes, expands Medicaid, creates new insurance subsidies, the price controls, and places new mandates on individuals and employers.

We see Lefties roll this canard elsewhere when they want to paint as extreme the opposition to a big-government program.

Lee Fang, a liberal blogger at the Center for American Progress wrote recently:

The right has attacked Crist for voicing support for cap and trade, a free market idea to address global warming.

So:

Q. What’s in common between (1) government mandates and subsidies for private insurance, and (2) government requirements that businesses use tradable carbon credits before burning their own fuel?

A. Some private business is making money.

So, for some lefties, that appears to be the definition of “free-market.” Of course, they are ignoring the “free” half of the phrase. Yes, cap-and-trade would create a market, and yes, newly mandatory, heavily subsidized, heavily regulated insurers will compete under ObamaCare — that’s a market, just not a free one.

Similarly, Lefties sometimes use “free-market” as a label on anything that both (a) involves profit, and (b) is bad. See Thomas Frank’s work for a gazillion examples.

To be fair, this confusion — that private profit is the same as free markets — is shared by many on the Right, who defend corporate welfare, thinking (or claiming) that it’s part of the free market.

Obama’s ‘juggling act’ of big business, big government, populist posturing

[Originally posted at Beltway Confidential]

The New York Times’ Jackie Calmes mulls over what she sees as a quandary — a “juggling act” by President Obama:

He has mixed, for example, condemnation of “Wall Street greed” with opposition to government caps on financiers’ bonuses, and criticism of oil companies’ profits with a recent call (now in abeyance) to expand offshore drilling.

This is a “juggling act,” no more than it’s a juggling act for a preacher to condemn gambling and drinking in public and then spend his nights boozing it up at the casino. It’s really called “saying one thing and doing another.” Or “being dishonest.”

So Calmes sees puzzles where a simple explanation exists, and a contradiction where none exists:

It is enough to give rise to the equally contradictory criticisms he endures, from longtime enemies on the right crying socialism and from disillusioned supporters on the left who lament what they see as Mr. Obama’s pro-business bias.

Is “socialism” contradictory to a “pro-business bias”? I don’t think so. I actually think Obama has blended the two perfectly, increasing government control of the economy in a way that benefits the biggest businesses — his support for the Wall Street bailout, a record-breaking spending bill (the stimulus) favored by the business lobby, a health-care bill that benefits the drug industry and makes private insurance mandatory… and I could go on.

Grateful for ObamaCare, drug lobby goes to bat for Harry Reid

[Originally posted at Beltway Confidential]

Remember when President Obama thanked Majority Leader Harry Reid and the Senate for “standing up to the special interests?” If you don’t, go watch this video, just the first 25 seconds is enough to get the idea. And remember that Obama said that same sort of thing a dozen times.

Then watch this video.

You catch that part at the end, where the ad for Harry Reid, facing the toughest reelection of his life, was paid for by PhRMA — the drug lobby. And check these numbers from 2009, showing that PhRMA spent more than any single-industry lobby — or the numbers from 2010’s first quarter showing the same thing.

Of course, we already knew PhRMA liked the bill, and that it will be very profitable for the drug industry. But this Reid ad brings into focus the magnitude of the President’s mendacity:

Obama thanks the Reid for “standing up to the special interests” by passing the bill. Then the single biggest industry lobby also thanks Reid for passing the bill, with a big-money TV ad.

This episode should be enough to make every discerning person ignore the President every time he claims to be taking on “special interests.

Lobbyist bundling: Money pipeline for Democrats

The Center for Public Integrity has compiled a list of the top lobbyist-bundlers -- volunteer fundraisers, that is. My column today explores the data:

Lobbyists bundling campaign contributions, often from clients, to pass on to powerful politicians is exactly the sort of corruption Democrats came to power promising to fight. But the lobbyists doing the most bundling, and the politicians pocketing the cash, tend to be Democrats, a recent study shows.

A study by the Center for Public Integrity finds that the top four lobbyists in terms of bundling contributions for federal candidates and committees are powerful Democrats who contributed and raised cash exclusively to elect Democrats. These lobbyists' big business clients stand to benefit from Democratic policies on health care, the environment and trade.

Health-care ‘reform’ coauthor cashes out to K Street

[Originally posted at Beltway Confidential]

When the health-care bill passed in March, I wrote that the health-care lobbying was just beginning and that: “You’ll also see the Democratic staffers who wrote the bill rewarded with plush lobbying gigs.”

It didn’t take long for me to be proven right. Akin Gump, whose clients include Aetna, Pfizer, General Electric, and the Pharmaceutical Researchers and Manufacturers of America, has hired a top staffer to House Speaker Nancy Pelosi — a staffer who played a key role in passing the health-care bill.

From Akin Gump’s press release:

Arshi Siddiqui, senior policy advisor and counsel to House Speaker Nancy Pelosi (D-CA), will join Akin Gump Strauss Hauer & Feld LLP as a partner in the policy practice in Washington….

Since joining Rep. Pelosi’s leadership staff in 2003, Ms. Siddiqui has provided counsel on numerous legislative initiatives, including the historic comprehensive health insurance reform legislation, the economic recovery package, and the financial recovery and stimulus bills.

Her work on health-care was so important, Pelosi thanked her by name on the House floor.

But check out Siddiqui’s portfolio as listed by Akin Gump — it’s a compendium of corporate welfare: the bailout, the stimulus, and a health-care bill that mandates private health insurance and subsidizes drug companies until they blush.

Not to question Siddiqui’s motives, but to point out the incentives that exist on Capitol Hill, imagine a staffer who pushed through a bill that removed regulations on insurers, repealed subsidies, and generally got government out of the hair of hospitals, device-makers, insurers, and drug companies. That result would probably be companies reducing their lobbying.

But write a bill that injects government into every decision — as a regulator and a funder — and you make lobbyists more important. And who better to help you navigate the maze of new handouts and rules that the people who wrote the rules?

This is why Obama cannot simultaneously increase government control over the economy and reduce the influence of K Street and special interests. Big Government is the mother’s milk of the special interests.

Me on health-care reform

Below is a video interview (a good one, I think) in which I discuss the health-care legislation, specifically the special-interest role in crafting it.

Big Business, Big Government, and Libertarian Populism

The Cato Institute has posted online a paper titled "Big Business, Big Government, and Libertarian Populism," which is really a distillation of my book event at Cato for Obamanomics.
Below is the video of this event, and here is a podcast I recorded afterwards.

The tangled web of the ObamaCare write-downs

There's been plenty of confusion, teeth-gnashing, and finger-pointing about the effect ObamaCare is having on the future earnings of major corporations. My column today sets the record straight:

There are no good guys in this story. The bad guys are the Republicans who made a new entitlement for drugs, and Waxman who menaces companies for making Democratic legislation look bad.

The moral: Sticking government hands into the economy -- through new subsidies, taxes, and regulations -- creates bad situations where there are no right answers.

Health-care lobbying now a chronic condition in Washington

So, if you think we're done with the lobbying scrum over health care, think again. My column sounds a dark warning:

If you're an insurer, a drug maker, a hospital, a doctor, a device maker, a pharmacist, an employer or a union boss, you don't know what the future will hold.

Maybe Congress will boost the fine on individuals and employers for not buying your product. Maybe Congress will raise or lower the special new excise tax they've levied on your industry. Maybe they'll require insurers to cover your procedure, or maybe they won't.

The one thing you know for sure: Government will never again leave you alone.

As the once and future Ways and Means Committee Chairman Charlie Rangel likes to put it, "Everything is on the table." That means you'd better pay your admission: hire Henry Waxman's legislative director as your lobbyist, contribute to Max Baucus' re-election or Charlie Rangel's legal defense fund, retain Tom Daschle as your consultant, or become a stage prop for President Obama's next "jobs bill."

Obama gives sugar plums to the special interests

Obama signed health-care reform, and the special interests won. My column:

"Tonight," President Obama intoned near midnight Sunday, after the House had passed two health care bills, "we pushed back on the undue influence of special interests. ... We proved that this government -- a government of the people and by the people -- still works for the people."

But even before the president spoke, the Pharmaceutical Researchers and Manufacturers of America -- whose $26.1 million lobbying effort in 2009 was the most expensive by any industry lobby in history -- hailed the health package as "important and historic."

The second-biggest industry lobby in America, the American Medical Association, also cheered, as did the American Hospital Association, the No. 5 industry lobby. Throw in the goliath senior lobby AARP and Beltway powerhouse General Electric, and you realize Obama's underdog tale is all bark and no bite.

Student loans get the ObamaCare treatment

It's fitting that student loans would be nationalized in a bill that lays out subsidies for the private health sector while paving a road to its elimination. My column today discusses the pairing:

In Chicago, the legend goes, whenever Mayor Daley needed a quick infusion of cash, he would order a "street sweeping." After the evening rush hour, city workers would post signs warning of a street sweeping at dawn the next day -- any car parked on the street would be slapped with a ticket.

Congressional Democrats' version of "street sweeping" is nationalizing an industry and folding its profits into the budget, thus partly paying for some radical expansion of government -- health care reform in this case.

The budget reconciliation bill being used as a sidecar to the Senate health care bill also contains a federal takeover of the student loan industry....

Over the next decade, between reduced subsidies to private lenders and interest collected from students, the expected profit is $60 billion. Student aid would be increased by about $40 billion, leaving the U.S. Treasury $19.4 billion in the black thanks to this takeover. That profit gets counted toward the reconciliation bill's score from the Congressional Budget Office, and voila! more deficit reduction from the health care reform bill.

If only Democrats had thought of this trick back in the spring, they could have budgeted in the nationalization of other profitable industries. Throw the porn industry into the Department of Health and Human Services and nationalize Exxon Mobil, and your budget score looks even better.

Why not put Goldman Sachs on the budget so that Goldman CEO Lloyd Blankfein, in a reversal of roles, would be working for Treasury Secretary Tim Geithner?

Dems tap drug maker millions for PhRMA-friendly bill

Obama keeps talking as if "the special interests" are battling against his "reform." That's simply not true. My column tells the true tale:

Of all the single-industry lobbies in Washington, the largest is the Pharmaceutical Researchers and Manufacturers of America. PhRMA spent $26.2 million on lobbying last year — that's nearly three times as much as the insurance lobby, America's Health Insurance Plans, which spent $8.9 million.

If you include individual companies' lobbying, pharmaceuticals blow away the competition, beating all other industries by 50 percent, according to data at the Center for Responsive Politics.

Given this Big Pharma clout, it's unsurprising that the bill Obama's whipping for — Senate bill — has nearly everything the drug companies wanted: prohibiting reimportation of drugs, preserving Medicare's overpayment for drugs, lengthy exclusivity for biotech drugs, a mandate that states subsidize drugs under Medicaid, hundreds of billions in subsidies for drugs, and more.

PhRMA chief Billy Tauzin, who was vilified by Obama on the campaign trail, worked out much of this sweetheart deal in a West Wing meeting with White House Chief of Staff Rahm Emanuel. Tauzin visited the White House at least 11 times. He left his imprint so deeply on the current bill that it should probably be called BillyCare rather than ObamaCare....

This week, PhRMA, through a front group called Americans for Stable Quality Care, is rolling out millions of dollars in advertisements for the Democrats' jury-rigged package consisting of the BillyCare bill and some as-yet-undetermined "budget reconciliation" measure. The ads reportedly will target wavering Democrats.

With reform dead, health care debate becomes pure politics

What are Obama's latest health-care proposals about? My column delves into that question:

Question: When should you start suspecting President Obama isn't serious about a health care proposal?

Answer: When he doesn't have the pharmaceutical industry on his side.

Another sweetheart deal tarnishes health 'reform'

Late health-care reform negotiations reportedly included a little favor a well-connected drug company. My column reports:

If the Democrats keep pressing their health plan, they will have to persuade the public to swallow another nasty nugget. It's a provision crafted to benefit one well-connected drug company by keeping generic competitors off the market for an additional 4 1/2 years, and it would cost patients and hospitals $1 billion.

What's at stake in Masschusetts? My column explains:

If Massachusetts Attorney General Martha Coakley, Democrat, hangs on to win the special election next week for Ted Kennedy's old Senate seat, she will have to thank the cadre of elite K Street lobbyists who hosted a high-powered, high-dollar fundraiser for her Tuesday night on Capitol Hill.

And if Coakley, as promised, delivers vote No. 60 for President Obama's package of health care regulations, taxes, subsidies, and mandates, these hired guns -- who have spent this year doing the bidding of drug makers, hospitals, and insurers -- will be fitting saviors of a health care "reform" that will enrich the special interests at the expense of consumers, taxpayers, and small businesses.

Coakley in Trouble? Pharma and HMO lobbyists to the rescue

[Originally posted at Beltway Confidential]

With Democrat Martha Coakley in trouble in the Massachusetts special election to fill Ted Kennedy's seat, Democrats could lose vote No. 60 for President Obama's health-care bill. In response, an army of lobbyists for drug companies, health insurance companies, and hospitals has teamed up to throw a high-dollar Capitol Hill fundraiser for Coakley next Tuesday night. The invitation is here.

Of the 22 names on the host committee--meaning they raised $10,000 or more for Coakley--17 are federally registered lobbyists, 15 of whom have health-care clients. Of the other five hosts, one is married to a lobbyist, one was a lobbyist in Pennsylvania, another is a lawyer at a lobbying firm, and another is a corporate CEO. Oh, and of course, there's also the political action commitee for Boston Scientific Corporation.

All the leading drug companies have lobbyists on Coakley's host committee: Pfizer, Merck, Amgen, Sanofi-Aventis, Eli Lilly, Novartis, Astra-Zeneca, and more. On the insurance side of things, Blue Cross/Blue Shield, Cigna, Humana, HealthSouth, and United Health all are represented on the host committee.

Those HMOs (like Aetna) or drug companies who don't have lobbyists in Coakley's top tier of fundraisers? They're covered, because the host committee includes four lobbyists representing the Pharmaceutical Researchers and Manufacturers of America (PhRMA), two representing America's Health Insurance Plans (AHIP), and one representing the Biotechnology Industry Organization (BIO)

So think of these top donors to health-care reform's 60th vote next time President Obama claims that he's battling the special interests in this battle. The army listed below is on Obama's side, and these clients will all benefit from "reform."

Here are some of Coakley fundraiser hosts with some of their current health care clients:

• Thomas Boggs, Patton Boggs: Bristol-Myers Squibb
• Chuck Brain, Capitol Hill Strategies: Amgen, BIO, Merck, PhRMA
• Susan Brophy, Glover Park Group: Blue Cross, Pfizer
• Steven Champlin, Duberstein Group: AHIP, Novartis, Sanofi-Aventis
• Licy Do Canto, Raben Group: Amgen
• Gerald Cassidy, Cassidy & Associates: U. Mass Memorial Health Care
• David Castagnetti, Mehlman, Vogel, Castagnetti: Abbot Labs, AHIP, Astra-Zenaca, General Electric, Humana, Merck, PhRMA.
• Steven Elmendorf, Elmendorf Strategies: Medicines Company, PhRMA, United Health
• Shannon Finley, Capitol Counsel: Amgen, Astra-Zeneca, Blue Cross, GE, PhRMA, Sanofi-Aventis.
• Heather Podesta, Heather Podesta & Partners: Cigna, Eli Lilly, HealthSouth
• Tony Podesta, Podesta Group: Amgen, GE, Merck, Novartis.
• Robert Raben, Raben Group: Amgen, GE.

If Coakley pulls it out, this is the crowd that will have brought her here. If health-care reform passes, this is the crew that will have won.

Once Obama's target, lobbyist Tauzin now his pet

My Examiner column follows Obama's turnabout on Billy Tauzin:

White House visitor logs dumped late in the week between Christmas and New Year's Eve show that Billy Tauzin, the top lobbyist for the prescription drug industry and once a favorite target of Barack Obama, visited the White House at least 11 times in Obama's first six months in office.

Drug lobby applauds Senate passage of health-care bill

[Originally posted at Beltway Confidential]

The Pharmaceutical Researchers and Manufacturers of America (PhRMA), is the largest single-industry lobbying group in America. It represents name-brand drug-makers. Considering this clout, and considering President Obama's claim Monday that the Senate, by passing the health-care bill, was "standing up to the special interests," it's noteworthy that PhRMA this morning celebrated the bill's passage.

Here's the PhRMA press release, with some emphasis added by me:

We applaud the Senate for taking an important and historic step toward expanding high-quality, affordable health care coverage and services to tens of millions of Americans, many of whom are struggling today financially. While considerable work remains to be done in reconciling differences between the Senate and House bills, we remain convinced that comprehensive health care reform, if done in a smart way, will benefit patients, our economy and the future of our nation.

Most importantly, the Senate bill recognizes the importance of medical progress in America. Innovative, cutting-edge medicines have dramatically increased life expectancy rates in the United States and have allowed patients with cancer, heart disease, diabetes and other devastating chronic diseases to live longer, healthier and more productive lives. We strongly believe that everyone in America should benefit from promising new advances in medical care.

By expanding coverage to more than 30 million uninsured Americans, the Senate is moving decisively in that direction. We embrace reform efforts which put an end to practices such as denying coverage because of pre-existing conditions or charging higher premiums because of gender. We also support expanding Medicaid eligibility to 133 percent of federal poverty – something we first proposed along with Families USA.

Our commitment to comprehensive health care reform is evident by our $80 billion pledge to reduce health care costs over 10 years. To that end, our companies agreed back in June to help most eligible seniors and disabled Americans who hit the so-called ‘donut hole’ in Medicare Part D cut their out-of-pocket expenses on brand-name medications in half as part of the Senate’s health care reform legislation. The remainder of our commitment will help the government expand health care coverage to millions of Americans.

In the final analysis, we believe the Senate bill provides the best blueprint for reform. It offers the kind of change that will benefit patients today without putting medical progress at risk in the future. Today, we believe the Senate voted with America’s best interests and future in mind.

Obviously, expanding Medicaid eligibility expands the pool of people who get taxpayer-funded subsidies for their drugs. For more explanation of drug-maker gifts in the bill, check my Wednesday column and my blog post from yesterday.

Another Big Pharma payoff? Health bill favors prescriptions, dings over-the-counter drugs

[Originally posted at Beltway Confidential]

John Berlau, my former colleague at the Competitive Enterprise Institute, adds to my list of the goodies big drug companies receive in the Senate health-care reform bill. Berlau flags the bill's provision prohibiting the use of pre-tax Health Savings Account money to buy over-the-counter drugs. This tax hike thus pushes more people to buy more expensive prescription drugs, which still, of course, get favorable tax treatment.

OTC drugs are much cheaper those available for prescription, but they could now be more expensive to individual consumers given that prescription drugs would still be eligible for favored treatment in the tax plans, and that insurance companies would be mandated to cover many of them. Consequently, any time a consumer has the slightest headache, the financial incentive would often be to see a doctor and get a prescription rather than go to the store and get medicine off the shelf. This could mean that billions will be wasted on the additional costs for prescription drugs in instances when OTC medicines could be just as safe and effective at treating the illness.

Christmas comes early for the big drug companies

My column reports on some of the many favors the health-care "reform" bill hands to the drug companies:

President Obama on Monday credited the Senate for "standing up to the special interests -- who've prevented reform for decades, and who are furiously lobbying against it now." But the health care "reform" bill, passed late Sunday night, provides the drug companies with billions in taxpayer-funded subsidies, government-sanctioned monopolies, and mandates forcing people to buy drug insurance. At the same time, the bill doesn't touch the industry's existing special favors that Obama had pledged to eliminate in the name of consumers.