Editorial December 2, 2016

Hamilton on Congress

A Sobering Look Beyond the Election

By Lee H. Hamilton

Hamilton

Hamilton

This campaign year has been full of twists and turns. We don’t know what’s going to happen tomorrow, let alone on November 8. So talking about what comes afterward seems premature. But it’s been on my mind a lot, because I’m worried.

This is not about who wins the presidency. I’m concerned about the aftermath of this campaign season and how hard it’s going to be for our next set of elected officials, from the President on down, to govern.

Let’s start with the belief expressed by a lot of people – including some candidates – that the system is “rigged.” This is a perilous way to treat the country’s political system; it sows distrust in future election results, de-legitimizes winners, and undermines the government’s credibility. If the charge takes hold, it will put political stability at risk.

We all have criticisms to make of the system. We know it doesn’t work perfectly and that there’s no shortage of challenges the nation needs to address. But to convey the impression that the whole system is rigged is dangerous and risky. Without a basic foundation of trust, representative government crumbles.

Instead of taking aim at “the system,” we could instead focus our criticism on a more substantive target: politicians, including the two presidential candidates, who have failed to serve us well in their debate on the economy.

Much of the debate has revolved around immigration, trade, and other issues of the moment. These are not unimportant, but they’re not the heart of the matter. The real issue – the one that politicians have proffered few solutions for – is that the economy is not working for most people. True, there’s been some improvement in the lot of middle-income earners, but the fundamental issue that economists of all stripes have been warning us about remains. This is that we face significant structural problems, driven not so much by foreign competition and immigrant workers, but by advancing technology and globalization.

Our real economic challenge, in other words, is how to provide meaningful work and good wages to tens of millions of clerks, accountants, factory workers and service providers whose jobs are disappearing because of robots, machine learning, and other irreversible changes in how work is accomplished.

Politicians need to place much more emphasis on economic growth, which is the key that unlocks many doors and is the preferred course to ease the anxiety and cynicism abroad in the country. Growth should be the central aim of economic policy, and how to achieve it should be the focus of the policy debate.

The problem is, this election isn’t providing us with a substantial policy debate. We’ve heard plenty about personality, vision, and the alleged dirty dealing of people on the other side. Serious debate about policy approaches has been replaced by sound bites signifying… well, not very much.

Indeed, if anything characterizes this election, it’s the politics of personal destruction. Demonizing the opponent has become the central concern of many campaigns, up and down the political ladder. This approach is toxic for democratic institutions and political culture. We have to be able to disagree in this country on matters of great import and controversy without tearing into and trying to destroy the opposition.

We have always had – and should have – vigorous partisanship. But today, politicians prefer hunkering down with their fellow believers and party members and circling the wagons. This makes it very hard to get negotiations going, which is the only way to make the system work.

All of this – the attacks on the system, the lack of meaningful debate about improving Americans’ economic future, the generally substance-free nature of the campaign, the politics of demonization – will make it very hard for whoever wins office to govern well. The anger, frustration, cynicism and outright pessimism that we’re seeing in this election cycle will not miraculously dissipate on Election Day.

It used to be that when a president came into office, a substantial majority of the American people gave him the benefit of the doubt, and with it an extended period in which to get things done. I don’t believe that’s going to happen after this election. And all Americans will be worse off as a result.

Lee Hamilton is a Senior Advisor for the Indiana University Center on Representative Government; a Distinguished Scholar, IU School of Global and International Studies; and a Professor of Practice, IU School of Public and Environmental Affairs. He was a member of the U.S. House of Representatives for 34 years.

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The House 2017 Legislative Schedule

Rep. Steny Hoyer (D-MD-5th) Minority Whip

Rep. Steny Hoyer (D-MD-5th) Minority Whip

“Today, House Republicans released the legislative schedule for 2017. While the House is scheduled to be in session more days than any other year since Republicans took the majority, what matters is what we do with those days. With their party now controlling the House, the Senate, and the White House, House Republicans will no longer be able to blame Democrats for not enacting their agenda; instead, they will have the responsibility to do the hard work of governing.

“As we look ahead to next year, Republicans should remember that they do not have an overwhelming mandate – in fact, more Americans voted for Hillary Clinton. Democrats will represent the plurality of Americans and resist Republican efforts to pursue a divisive, controversial agenda. We will strongly oppose efforts to take health care away from 20 million Americans and to end the Medicare guarantee; to deny women access to the full range of health care choices; to offer new tax giveaways to the wealthy at the expense of working Americans; to destroy the economic safety net for American families; and to dismantle worker, consumer, and environmental protections. Americans want a government that works and one that is focused on creating economic opportunities for all. House Democrats stand ready to work to accomplish that goal.”

View the schedule for the U.S. House of Representatives for calendar year 2017.

How to Repeal Obamacare: A Road Map for the GOP

From the Heritage Foundation, a conservative think tank

Over the past few years, pundits have dismissed the Republican Party’s chances of repealing and replacing Obamacare. But with President-elect Donald Trump’s victory Tuesday and the GOP’s successful effort to keep control of Congress, conservatives now have a real chance to eliminate the health care law. The question is how to do it.

Three years into its implementation, the Affordable Care Act has clearly failed. The law has wrecked the individual market for health insurance—premiums have soared, coverage has been canceled en masse, and choices have been drastically curtailed. The cost of the law’s major coverage provisions—Medicaid expansion and subsidies for plans purchased through the exchanges—have soared. In fact, the per enrollee cost of the Medicaid expansion is nearly 50 percent above estimates.

Trump and the Republican Party have long argued that Obamacare is a failure, and they campaigned on repealing and replacing it. While not the only factor in Trump taking the White House and the Republican Party maintaining control of Congress, severe problems caused by Obamacare certainly played an important role. According to exit polls, 47 percent of voters thought the law went too far and only 18 percent thought the law was just right. That gives Republicans a mandate to pass legislation to repeal and replace the law as soon as possible next year.

It won’t be easy, and Republicans should be under no illusion that Democrats will help them undo President Barack Obama’s chief legislative legacy. But with majorities in both the House and the Senate, they have a pathway to do so. It starts by using an arcane legislative maneuver known as reconciliation. While Democrats can filibuster most legislation in the Senate, reconciliation requires just a simple majority, giving Republicans a chance to avoid a filibuster.

Last year, Congress failed to pass a budget for fiscal year 2017, creating an opportunity for Congress to pass two budgets next year, rather than just one. This gives Republicans two shots at getting filibuster-proof reconciliation bills to Trump.

The first budget is simple. The spending and tax levels include one assumption: The ACA is repealed. That ACA repeal budget should also include instructions to the relevant committees in Congress. Congress should be able to easily pass a budget resolution with these criteria with simple majorities in each chamber and begin the process of work on the reconciliation bill before Inauguration Day. This will set up the ability for Congress to pass a reconciliation bill repealing all the budgetary components of the ACA immediately after Trump is sworn into office.

Congress should build off last year’s reconciliation bill. That bill, which Obama vetoed, sunset the ACA’s subsidies and Medicaid expansion after 2017. It also repealed the ACA’s 20 new or higher taxes, including the individual and employer mandates. Finally, the reconciliation bill maintained the ACA’s Medicare budget savings, using those funds to shore up the program’s rapidly depleting trust fund.

The main problem with last year’s reconciliation bill is that it maintained the ACA’s insurance market regulations. These include the rules that all insurance meet or exceed Washington-dictated standards for what benefits they cover, as well as pricing rules that substantially raised the price of insurance for younger and healthier people. These rules have resulted in ACA plans proving attractive only to people who qualify for large taxpayer-funded subsidies and have led many to wait until they need medical care to purchase coverage.

The repeal effort therefore must address these insurance market regulations. One way would be to include the repeal of those regulations in the reconciliation bill. The reason they were not included in the first place is because all provisions of a reconciliation bill must have a nontangential budgetary impact. Congress chose not to litigate that issue with the Senate parliamentarian last year. But it is clear that those rules are inseparable from the rest of the ACA’s structure. In fact, the Obama administration argued this before the Supreme Court in King v. Burwell, the case over whether enrollees who buy insurance through the federal exchange are eligible for subsidies. As a result, Congress may repeal those regulations via reconciliation.

Critics of repeal will point out that repealing the ACA will undo a lot of popular changes—such as the law’s mandates that employers providing insurance cover all dependents up to age 26 and that insurers offer coverage to any applicant without varying premiums based on the applicant’s medical condition.

These are legitimate concerns and when Congress writes its replace plan, it will have to consider these issues as well as how to best subsidize health care for lower income people. A few principles should guide the congressional replacement plan.

First, Congress should weigh which actors are in the best position to make difficult decisions about economic tradeoffs. For example, economists estimate that the age 26 mandate results in a wage reduction of $1,200 for every worker regardless of whether they have dependents. Rather than a one-size-fits-all Washington mandate, employers and workers should decide whether the coverage is worth the wage reduction.

Second, Congress should ensure people who act responsibly are protected from developing an expensive medical condition. Congress should consider allowing states to develop different approaches in how to do this—allowing for the diversity and learning that comes from true federalism. One potential idea is guaranteed renewability—people with insurance must be able to renew their plan without the risk of a higher premium if they develop a medical condition.

Third, Congress must develop a better way to address the affordability of health care for lower income Americans. The Medicaid expansion has proved too costly and has provided too little benefit to enrollees to justify the cost. It has primarily benefited big insurance companies and hospitals. A far better approach is to deliver assistance more directly to people while freeing up the supply side of health care to provide people with lower-priced options.

Although repealing and replacing the ACA is closer than ever before, many important details will have to be worked out in the next few months. Moreover, much more needs to be done to put our nation’s health care entitlement programs on a sustainable path. Congress must now honor its commitment to free the country from the ACA and replace it with sensible reforms.

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Quotes on the Issues

H.R. 6392Systemic Risk Designation Improvement Act of 2016 (Rep. Luetkemeyer – Financial Services).  H.R. 6392 would scale back certain provisions of the Dodd-Frank Act that give federal financial regulators authority in regulating Systemically Important Financial Institutions (SIFIs) and would potentially exempt large regional banks from the type of oversight necessary to ensure the health and stability of our financial markets.  The bill is yet another…attempt to roll back important Dodd-Frank regulations that were designed to prevent the type of risky financial practices that led to the near-collapse of our financial system just 8 years ago.

In reaction to the 2008 financial crisis, Title 1 of Dodd-Frank provides that any large bank with assets over $50 billion be automatically designated a SIFI by the Financial Stability Oversight Counsel (FSOC) to ensure that financial regulators oversee their activities.  A significant finding in the aftermath of the 2008 financial collapse is that federal financial regulators did not use the authority available to them to monitor the health, safety, and risk management practices of large banks.  Under Dodd-Frank,  the Federal Reserve, as the primary regulator of bank holding companies, is required to examine any bank designated a SIFI for potential risk to the financial system and establish any appropriate regulatory standards.  While Republicans argue the $50 billion threshold is arbitrary and imposes excessive restraints, they are in fact justified considering banks above this threshold were found to have engaged in reckless financial practices that significantly contributed to the 2008 Great Recession. To ensure that banks of this size are appropriately and not excessively regulated, Dodd-Frank provided the Federal Reserve ample discretion to tailor any enhanced regulations based on the size, complexity, and varying risk profile of the SIFI.  For example, additional capital requirements only apply to banks with assets over $250 billion, and the toughest leverage requirements only apply to eight of the largest SIFIs that are designated as Global Systemically Important Banks (G-SIBs).

H.R. 6392 would completely repeal Dodd-Frank’s $50 billion asset threshold above which banks are automatically labeled SIFIs, and strictly limit automatic SIFI-designation to only the largest U.S. banks that have already been designated as G-SIBs subject to enhanced prudential standards.  As of November 2015, only 8 of the 33 U.S. banks designated as SIFIs under Dodd-Frank carry the G-SIB label.  All other bank holding companies would have to go through an extensive review process before being designated a SIFI subject to increased oversight by the FSOC, a lengthy and potential interminable case-by-case exercise.

With H.R. 6392, House Republicans are preventing regulators from applying enhanced prudential requirements for trillions of dollars of assets managed by dozens of the largest banks in the U.S., thereby exposing our country’s economy to unnecessary financial risk.  House Minority Whip


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