October 26, 2009

Federal Intimidation of Opposing Voices

by Harold Gershowitz

Comments Below

It Has Happened Before.
It Is Happening Again.

Free speech, many would say, is the most precious of all our rights. It is embodied in the very first of the Bill of Rights, the First Amendment to the Constitution. Generally, it has been the most widely quoted and understood of all of our rights….generally, but not always. Periodically, when the level of dissent threatens to become too widespread and the stakes are very high, Senators and Congressmen, with the tacit approval of Presidents… and sometimes Presidents acting with the tacit approval of no one, have taken steps to quash dissent as though there were no First Amendment. It is an abuse with a long pedigree.

Recently, Henry Waxman, D-Ca., Chairman of the House, Energy and Commerce Committee, Senator Patrick J. Leahy, D-Vt., and Rep. John Conyers Jr., D-Mich., Chairmen of the Senate and House Judiciary Committees respectively, have tried to intimidate opponents of their party’s major legislative initiative through thinly disguised, heavy-handed threats to silence the nation’s health insurance industry. While their recent tactics to intimidate opponents of Democratic plans to overhaul our health care system (or, as the spinmeisters say, “reform health insurance”) pale compared to the even more heavy-handed and dangerous attempts at stifling dissent practiced by the Nixon White House during the Viet Nam War, (the Nixon Administration being the modern index for measuring presidential abuse of power) or for that matter by Woodrow Wilson during WWI or even John Adams who simply didn’t suffer dissent lightly, their actions are nothing short of outrageous.

When there is enough political currency at stake, or when perceived threats to our security are great enough, the stench of intimidation rises out of Washington like so much marsh gas from the Okefenokie swamp.

During the Adams Administration (and under cover of the then newly passed and odious Sedition Act) well-respected, but highly critical newspaper editors, were arrested like pickpockets at Mardi Gras. Eleven in all were indicted, including Benjamin Franklin’s grandson, Benjamin Franklin Bache, for simply being critical. Thomas Jefferson, who arguably championed free speech above all else, pardoned them all as soon as he was elected President.

The often venerated Woodrow Wilson was not against throwing dissenters in jail whether they were opposed to the country’s entry into World War One or the manner in which the Wilson administration was handling the influenza epidemic of 1918.

Nixon’s coterie of hatchet men (think Colson and Dean) constructed a list of twenty “enemies” of the Nixon Administration which quickly grew to a list of thirty thousand. Their version of “you’re either with us or against us” identified more Americans to be silenced than there are people in Lubbock Texas.

But we digress. Today, we want to comment on the machinations of Congressmen Waxman and Conyers, Senator Leahy and some senior members of the White House staff. Mr. Waxman’s recent epistle fired off to the top fifty two insurance companies demanded an accounting of: all meetings held outside of their corporate headquarters; where employees were lodged; what employees attending these meetings ate and drank; as well as a breakdown of compensation paid to their key management people. This was the Congressman’s way of firing a shot across their bow to discourage those opposed to him from getting out their side of the story.

The recent announcement by Congressman Conyers and Senator Leahy that they were taking steps to repeal the half-century-old McCarran-Ferguson Act, which exempted insurance companies from federal anti-trust laws wherever the industry was (and is) subject to state regulation is nothing more than bald retribution for the recent release of a report by PricewaterhouseCoopers which presents a pretty strong analysis of the projected costs of the government health-care programs currently under consideration by the House and Senate. The PricewaterhouseCoopers analysis presents a far more troubling, and perhaps more realistic, assessment of the costs inherent in the legislation than have the White House or the Democrats in Congress.

Now, our purpose isn’t to defend the long-standing anti-trust exemption. There were, and are, certainly sound reasons for the exemption. Likewise, there may be sound reasons for taking another look at the exemption as Senator Leahy has, indeed, proposed in the past. After all, a half century is a long time. Nevertheless, simple research makes clear that the original purpose of the Act was to allow the states instead of the federal government to regulate the insurance industry and to allow companies to share risk data among themselves so that risk could be managed utilizing the best available information. There have been no charges, of which we are aware, of price fixing or territory allocation among insurance companies, so the motivation to end McCarran-Ferguson certainly appears, to say the least, suspect.

There is nothing ambiguous, however, regarding the attack the gentlemen from Michigan and Vermont are mounting. It is sheer federal retribution against an industry exercising its right to make its case during a very public debate about legislation which aims to reform or, may we say, control, every company that provides health insurance in the United States.

And then there is the case of the infamous gag order by Medicare administrators to force Humana to cease advising its Medicare Advantage enrollees that the Administration’s planned spending cuts would result in reduced coverage and, in some cases, the loss of coverage for some participants. This was no secret as the Congressional Budget Office had drawn the same conclusions. It seems, however, that Humana and other insurers were being more transparent than the health-care overhaul proponents were willing to tolerate.

So what exactly caused the congressional assault on the insurance industry? It seems the analysis performed by PricewaterhouseCoopers determined that family health-care premiums would be increased by $1,700 a year in 2013 and another $4,000 a year by 2019 under the recent Senate committee-approved Baucus Bill. This has the government health-care proponents caught on the proverbial horns of a dilemma. Congress can either stay the course by broadly applying the penalty (read tax) for those who choose not to buy health insurance, or, as the Senate Committee has done, greatly scale back the penalty provision. The dilemma, of course, is that compliance (that is, the purchase of health insurance) will be diminished as the penalty for non-compliance is scaled back.

But what excuse could the White House give for its unprecedented assault on the Fox Network? No one denies that its talk show hosts present conservative viewpoints. However, the comments by Anita Dunn, the White House Communications Director, declaring Fox News persona non grata, and parroted thereafter by Chief of Staff, Rahm Emanuel and Senior Advisor, David Axelrod on Sunday talk shows a week ago that Fox is no longer considered a news network would be laughable if it weren’t so ominous. That these high officials, in concert, have taken such a stand makes clear that they are authorized to do so by the President of the United States

We eschew much of the hysteria some right wing commentators aim at President Obama, but one has to wonder just how dedicated our president is to his soothing talk about “crossing the aisle” and being inclusive if his staff is so totally contemptuous of speech and press freedom. Their actions regarding Fox are more akin to the actions one would expect from the lieutenants of leaders like Putin, Chavez or Ahmadinijad.

What Americans are discovering, hopefully not too late, is that, in a sense, Congress and the Administration are being hoisted on their own petard. They have proposed a health-care plan that represents the largest expansion of government since Lyndon Johnson’s Great Society and the War on Poverty, yet have been loath to present much in the way of detail regarding how it will work, what it will cost and how it will be paid for. The answers that have been given to the questions being raised do not seem to bear much scrutiny, even by the impartial Congressional Budget Office. To make matters worse, any consternation evidenced by the public is chalked up by them to misinformation campaigns, misunderstandings and manipulation of public meetings by opponents of the proposed program. Rather than answer opponents on the merits, they prefer to focus on intimidation.

What we do know about the Baucus Bill, which we assume mirrors the Administration’s wishes, does raise very reasonable questions. Unfortunately, there is more that we don’t know than we do know because the Bill is conceptual, that is, deliberately short on detail. We do know, however, that the Bill imposes a forty percent penalty (actually, an excise tax) on those company-provided policies with premiums valued in excess of $21,000 for families. Fair enough, given that the estimated average premium cost per family is around $19,000. But (and here comes a big “but”) if implementation is deferred, as planned, for three years, won’t premium inflation drive the average cost over $21,000 by the time the program is effective and snag most families into the newly taxed category…sort of like the unindexed AMT (Alternative Minimum Tax) snags millions of taxpayers for whom the AMT was never intended? And, on the other hand, if insurance companies price their policies, by whatever means they can, to keep the annual premium under the $21,000 threshold, won’t the government then be denied a huge chunk of the revenue it requires (about 50% of the revenue), to keep the program “deficit neutral” as promised (one of the more astounding promises ever made, even for politicians)?

Then there is the issue of the up to $400 billion that is to be squeezed out of Medicare during the first ten years of the program. According to the Administration, none of this squeezing will involve cuts in benefits, only cuts in fraud and waste (but do we need any legislation to cut out fraud and waste?). There are currently about forty million people enrolled in Medicare which suggests that the government believes it can, on average, squeeze out about $1,000 of waste and fraud per year per Medicare enrollee. Moreover, what is to prevent Congress every year from cancelling any Medicare reductions then planned? That kind of legislative action happens routinely every year and there is no reason to believe Congress will change its habits. And, just last week the White House, Sen. Reid and Speaker Pelosi used a time-worn legislative procedure which shows they know perfectly well that Congress cancels Medicare cuts every year like clockwork. Accordingly, they tried, unsuccessfully, to redesign the health care bill by jettisoning the provision cutting Medicare reimbursements (scheduled to be a 21.5% reduction January 1, 2010) referring to it, instead, as a budgetary issue and not part of the health-care reform package. Voila, any future deficits inevitably arising from this action could not, in the future, be blamed on the health care bill. Small wonder tens of millions of citizens, not to mention the health-insurance industry, don’t exactly identify Congress with candor. It seems the chief tactic Congress has come to rely upon to avoid discussion of their sleight of hand tricks is to silence their critics. Imagine the justifiable outrage if a Republican Congress or Administration had engaged in such legerdemain.

As the industry that is going to be most affected by the so-called reform measures being advanced offers its own estimates of costs to the public, the reaction of the powerful Committee chairmen has been, in the House, to demand company records pertaining to meetings and compensation of executives and, in the Senate (and House) hastily drawn legislation to end the sixty-five-year-old anti-trust exemption accorded the insurance industry by the McCarran Ferguson Act.

What is sadly but abundantly clear is that (i) our lawmakers, by trying to silence their critics, are behaving more like members of a totalitarian government than American lawmakers who operate under a Constitution that incorporates a sacred right to free speech and (ii) the Obama Administration is making early strides up the Nixon index..

All comments regarding these essays, whether they express agreement, disagreement, or an alternate view, are appreciated and welcome. Comments that do not pertain to the subject of the essay or which are ad hominem references to other commenters are not acceptable and will be deleted.

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6 responses to “Federal Intimidation of Opposing Voices”

  1. Steve Marcus says:

    Very well done. It’s frightening regardless of which party is doing it. It’s interesting to me how often we hear about the “greedy insurance industry” without anyone ever bothering to ask “How have you determined that ?” I haven’t seen or heard any facts to either support or refute that, either from the press or from anyone in government. As a result we are all just assuming it to be so. (Unless profit is now considered to be a function of greed).

  2. Rosemary Lenners says:

    If the insurance companies are not trying to control territories, then why are only a few companies offered in various states? I heard people in a CA town hall meeting asking why only 6 insurance companies are allowed to do business in CA–one of the biggest states in the nation. Is the state not willing to regulate all the insurance companies? I know here in New Mexico my sister could not have the same insurance that she had in Arizona prior to moving here. Maybe the insurance companies to need some regulation, however, I certainly agree that the ham-fisted approach to Obama’s medical care overhaul is an attempt by the government to take this nation towards socialism which really scares me. Why is it an all or nothing approach. Why not incremental changes, giving the insurance companies a chance to clean up their acts? Chicago-style politics at work, obviously.

  3. Tom Autry says:

    Some of the tenets of Vladimir Lenin:
    Scapegoating the rich and all enemies of the regime
    Controling the media
    Demonizing the opposition
    Claiming absolute power, even if you don’t have it
    Never admit you are wrong (assign blame)
    Exploiting ethnic hatred

    John Milton, “A tyrant is he who regarding neither law not the common good, reigns only for himself and his faction”.

    I recall a story I read some years ago ( I don’t remember the source) about a father and his young son visiting the Nation’s Capital. They were standing in front of the White House and the father told his son that a very powerful man used to live in this house and that powerful man was forced to give up his power and leave his exalted position in this house, and most importantly not one shot was fired. Only in a free country is this possible.

    Tom Autry

  4. Mike Swirnoff says:

    Health insurers have ‘ignited the case’ for regulation, Lois Quam says
    By Casey Selix | Thursday, Oct. 29, 2009

    Former UnitedHealth Group executive Lois Quam said Wednesday that the health-insurance industry’s actions in the reform debate have “ignited the case” for federal regulation of the industry, including its governance, compensation and business practices.

    “It is simply a matter of when and what,” she told an audience at the Hubert H. Humphrey Institute of Public Affairs. “Insurers could have avoided this by demonstrating a consistent public spirit in this debate, but rather their actions have made these steps simply a matter of time.”

    Insurers currently are regulated by individual states; in Minnesota, the Commerce Department polices the nonprofit industry.

    Quam’s remarks came during a lecture titled “Making Insurers Accountable: The Case for a Public Option in Health Reform.” The lecture was sponsored by the Center for the Study of Politics and Governance. Though the lecture was scheduled some weeks ago, it was especially timely because Senate Majority Leader Harry Reid, D-Nev., proposed an opt-out public option earlier this week.

    Views ‘have always differed’
    Quam, who now runs an incubator focused on health care and the green economy, said she’s well aware that her views on insurance reform and a public option “have always differed” from other UnitedHealth executives and the insurance industry as a whole.
    Lois Quam
    Lois Quam

    “Though I left the insurance industry several years ago,” she said, “I knew that this time the insurance industry had an opportunity to take a new course in the health-care reform debate — a different course than they had taken in the ’90s [during Clinton reform effort], a different course than they had taken when they opposed Medicare and Medicaid in the ’60s.”

    She said the industry’s recent release of a controversial PriceWaterhouseCoopers report, which claims reform proposals will increase the cost of private insurance, showed her that little has changed since the last reform effort. Insurers’ “efforts to protect themselves rather than build something for the American people” will lead to more reform than expected, she said, pointing to the recent revival of the public option.

    “As a result, with its behavior during the debate, the industry itself has made the case for public health insurance,” she said.

    Gaps showed need for programs
    Public programs like Medicare and MinnesotaCare came about because of gaps in health insurance coverage, said Quam, who led the effort to create MinnesotaCare, an insurance program for low-income residents.

    “The very reason Medicare had to be created in the 1960s was because the private health insurance market wasn’t offering affordable coverage to seniors,” she said.

    In a question-and-answer session afterward, Larry Jacobs, director of the Center for the Study of Politics and Governance, asked Quam whether she supported the opt-out public option proposed by Reid. Such a provision would allow states to decide whether or not they wanted to participate in the health-care program.

    “I’d much rather have a public option that does not include opt-out,” she said. “Having worked in health care for a long time, I’ve seen that some states like Minnesota do a good job (with public programs) and some states don’t.” She cited the Mississippi Medicaid program as one that does not work well.

    It was also during the Q&A that Quam said that the health-insurance industry’s tactics in the debate prompted more calls for ending a longtime anti-trust exemption.

    “Its actions in this debate have ignited the case for federal health-insurance regulation,” she said.

    Though individual states have regulated the industry, she said, insurers are growing into national concerns. Quam’s former employer, Minnetonka-based UnitedHealth, is the nation’s largest insurer.

    Health insurers could have made a better case for themselves in Washington, she said, by acknowledging their historic resistance to reform and indicating a willingness to work on universal access for all Americans, including a public option. “[They could have said] ‘we understand that reform is really important and that this is about the American people. It’s not about taking care of us; it’s about taking care of the American people, and we think we have a lot to offer and we would like to offer it.’

    “They could have supported a public option, and when the going got tough, it’s not attacking the people who are trying to make it work. That’s what it would have taken.”

    Casey Selix, a news editor and staff writer for MinnPost.com, can be reached at cselix[at]minnpost.com. Follow her on Twitter.
    Health | Thu, Oct 29 2009 8:14 am

  5. Gail S says:

    I was right with you until this:

    “The magic of America, since the nation’s inception, has been the internal gyroscopes of the people, free to gravitate toward each individual’s true north. That, to a great extent, is what American Exceptionalism is and has always been. And it is the Administration’s failure to understand this aspect of the American psyche that is perilous to all of us.”

    The current administration does understand this about America and perceives it as pure, unadulterated evil. The Administration is doing its very best with its little acknowledged illegal immigrant amnesty legislation to so overwhelm the American people with 3rd world foreigners who are submissive to statist abuses that we will be unable to stop them.

    The problem I have with every conservative analysis of this administration is the insistence that they are naive or ignorant. They are neither. They are on a full frontal assault of our liberty, our Constitution and our sovereignty, and it is not with good intentions.

    Best regards,
    Gail S
    http://backyardfence.wordpress.com/conservative-action-plan

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