Friday, January 05, 2007

First up, Thomas Friedman has a dream. Unrealistic but worth dreaming….

Now that President Gerald Ford has been buried with all the honors he deserved, it is time to discuss a proper memorial. I would suggest the Gerald Ford Energy Independence Act.

Few people remember today, but “Gerald Ford was the first U.S. president to really use the levers of the presidency to try to break our addiction to oil,” said the energy economist Philip Verleger Jr. “He was way ahead of his time.”

Well, his time has come again — and then some.

The greatest thing George Bush could do — for President Ford’s legacy and his own — would be to dedicate his coming State of the Union address to completing the energy independence agenda that Mr. Ford initiated 32 years ago in the wake of the 1973 Arab oil embargo and energy shock.

As the page titled “Energy” from the Ford presidential library Web site reminds us: “Early in his administration, President Ford said that he would not sit by and watch the nation continue to talk about an energy crisis and do nothing about it. Nor, he said, would he accept halfway measures which failed to change the direction that has made our nation so vulnerable to foreign economic interests. The president proposed firm but necessary measures designed to achieve energy independence for the U.S. by 1985, and to regain our position of world leadership in energy.”

In his 1975 State of the Union speech, President Ford laid out his vision: “I have a very deep belief in America’s capabilities. Within the next 10 years, my program envisions: 200 major nuclear power plants; 250 major new coal mines; 150 major coal-fired power plants; 30 major new [oil] refineries; 20 major new synthetic fuel plants; the drilling of many thousands of new oil wells; the insulation of 18 million homes; and the manufacturing and the sale of millions of new automobiles, trucks and buses that use much less fuel. ... In another crisis — the one in 1942 — President Franklin D. Roosevelt said this country would build 60,000 military aircraft. By 1943, production in that program had reached 125,000 aircraft annually. They did it then. We can do it now.”

Obviously, President Ford’s emphasis on coal and domestic oil came in age when most people were unaware of climate change. Still, Mr. Ford wasn’t just all talk on energy. He used his presidential powers to impose a $3-a-barrel fee on imported oil to reduce consumption. That was a big deal, noted Mr. Verleger, because the average cost of imported crude at the time was only $10.76 a barrel.

Yes, you read that right. A Republican president actually imposed an import fee on oil to curb consumption! Yes, President Bush, it can be done! The republic survived!

Thanks to the Energy Policy Conservation Act of 1975 and other measures, Mr. Ford’s energy legacy includes: the creation of the Strategic Petroleum Reserve for use in an emergency; the phasing out of domestic price controls on oil to encourage more exploration; major investment in alternative energy research; assistance to states in developing energy conservation programs; and, most important, the creation of the first compulsory mileage standards for U.S. automobiles.

Those mileage standards have barely been tightened since 1975 — because some idiotic congressmen from Michigan, who thought they were protecting Detroit, have blocked efforts to raise them. So, Japanese automakers innovated more in that area, and the rest is history — or in the case of Detroit, obituary.

Every 10 years we say to ourselves, “If only we had done the right thing 10 years ago.” Well, President Bush has a chance in his State of the Union to call on Americans to honor Mr. Ford by completing his vision. But it means asking Americans to do some hard things: accepting a gasoline or carbon tax; inducing Detroit to make more fuel-efficient cars, trucks and plug-in hybrids; setting a national requirement for utilities to provide 20 percent of their electricity from renewable wind, solar, hydro or nuclear power by 2015; and, finally, making large-scale investments in mass transit.

It is stunning that since 9/11 the Bush team has never mounted a campaign to get Americans to conserve energy.

“Ford called for zero oil imports by 1985,” said Mr. Verleger. “Instead, we imported five million barrels a day then. In 2006, imports will average almost 14 million barrels a day. Had we achieved everything Ford proposed, the price of oil today would be $20 a barrel, not $60, the polar ice caps might not be melting, the polar bear might still have a chance, and our children would have a future.”

Next up, Paul Krugman looks for a way to do less harm.

Universal health care, much as we need it, won’t happen until there’s a change of management in the White House. In the meantime, however, Congress can take an important step toward making our health care system less wasteful, by fixing the Medicare Middleman Multiplication Act of 2003.

Officially, of course, it was the Medicare Modernization Act. But as we learned during the debate over Social Security, in Bushspeak “modernize” is a synonym for "privatize.” And one of the main features of the legislation was an effort to bring private-sector fragmentation and inefficiency to one of America’s most important public programs.

The process actually started in the 1990s, when Medicare began allowing recipients to replace traditional Medicare — in which the government pays doctors and hospitals — with private managed-care plans, in which the government pays a fee to an H.M.O. The magic of the marketplace was supposed to cut Medicare’s costs.

The plan backfired. H.M.O.’s received fees reflecting the medical costs of the average Medicare recipient, but to maximize profits they selectively enrolled only healthier seniors, leaving sicker, more expensive people in traditional Medicare. Once Medicare became aware of this cream-skimming and started adjusting payments to reflect beneficiaries’ health, the H.M.O.’s began dropping out: their extra layer of bureaucracy meant that they had higher costs than traditional Medicare and couldn’t compete on a financially fair basis.

That should have been the end of the story. But for the Bush administration and its Congressional allies, privatization isn’t a way to deliver better government services — it’s an end in itself. So the 2003 legislation increased payments to Medicare-supported H.M.O.’s, which were renamed Medicare Advantage plans. These plans are now heavily subsidized.

According to the Medicare Payment Advisory Commission, an independent federal body that advises Congress on Medicare issues, Medicare Advantage now costs 11 percent more per beneficiary than traditional Medicare. According to the Commonwealth Fund, which has a similar estimate of the excess cost, the subsidy to private H.M.O.’s cost Medicare $5.4 billion in 2005.

The inability of private middlemen to win a fair competition against traditional Medicare was embarrassing to those who sing the praises of privatization. Maybe that’s why the Bush administration made sure that there is no competition at all in Part D, the drug program. There’s no traditional Medicare version of Part D, in which the government pays drug costs directly. Instead, the elderly must get coverage from a private insurance company, which then receives a government subsidy.

As a result, Part D is highly confusing. It’s also needlessly expensive, for two reasons: the insurance companies add an extra layer of bureaucracy, and they have limited ability to bargain with drug companies for lower prices (and Medicare is prohibited from bargaining on their behalf). One indicator of how much Medicare is overspending is the sharp rise in prices paid by millions of low-income seniors whose drug coverage has been switched from Medicaid, which doesn’t rely on middlemen and does bargain over prices, to the new Medicare program.

The costs imposed on Medicare by gratuitous privatization are almost certainly higher than the cost of providing health insurance to the eight million children in the United States who lack coverage. But recent news analyses have suggested that Democrats may not be able to guarantee coverage to all children because this would conflict with their pledge to be fiscally responsible. Isn’t it strange how fiscal responsibility is a big concern when Congress is trying to help children, but a nonissue when Congress is subsidizing drug and insurance companies?

What should Congress do? The new Democratic majority is poised to reduce drug prices by allowing — and, probably, requiring — Medicare to negotiate prices on behalf of the private drug plans. But it should go further, and force Medicare to offer direct drug coverage that competes on a financially fair basis with the private plans. And it should end the subsidy to Medicare Advantage, forcing H.M.O.’s to engage in fair competition with traditional Medicare.

Conservatives will fight fiercely against these moves. They say they believe in competition — but they’re against competition that might show the public sector doing a better job than the private sector. Progressives should support these moves for the same reason. Ending the subsidies to middlemen, in addition to saving a lot of money, would point the way to broader health care reform.

0 Comments:

Post a Comment

<< Home