The arguments about the relative merits of various plans, the depth of the problem, and even who is most to blame are almost beside the point. Certainly Atul Gawande’s take in the New Yorker’s June 1 issue in which he explained why McAllen, Texas is the nation’s second most expensive health care market is very persuasive in arguing that who pays is much less in important than in how medical care is coordinated. And in a follow-up this past week the New York Times front-paged a story about how McAllen, Texas is — shockers! — among a handful of much larger cities whose “citizens” have donated the most money to Congress in order to influence the health care debate. The story goes on to explain how the very things that Gawande identified as the reasons McAllen’s health care is so expensive have been preserved in the latest version of the House bill. Those doctors are getting a good ROI apparently. So much for reform.

Should we be surprised? Hell no. Harry and Louise may be on the side of reform this time around but the fact that they are back at all is a vivid reminder how incredibly difficult fixing our ridiculous system is. Which is where Obama’s arrogance has made things worse.

We didn’t need Hillary Clinton to tell us that if the U.S. health care system was to really be changed (and it is f*cked up: highest cost in the world producing middling results) a President had to have a war plan. The arguments from doctors, health insurance companies, free-market conservatives, Blue Dog Democrats, and Big Pharma were predictable. Their combined ability to drive the debate should have been worry #1 for the Obama team. ClintonCare was KO’d by a combination of White House hubris and a masterful public relations campaign from opponents. How could Obama not avoid following the same path?

The President apparently believed his mandate and his popularity ratings big enough to magnify his bully pulpit in such a way that he alone could counter the other side. He mistakenly thought that (as did the last Democratic President in the months after he was elected) and having a Democratic Congress was enough. But that was just silly from the start. As multiple reporters have pointed out over the past few months most Americans desperately want the health care system changed — just not in any way that will effect the way it currently works for them. I know that sounds absurd but it’s true.

Americans who have health insurance may complain about the costs but flash a little “socialized medicine” snake oil in front of them and see how fast they switch sides. That’s because even with their co-pays and premiums they don’t really pay anything like the full cost of their health care. Their employers pay a sizable chunk and then that’s subsidized by you and me through an outdated tax credit for health premiums. So Americans are paying twice as much as anyone else — it’s just hidden.

Americans without health insurance — as large and growing a group as that might be — are unfortunately less likely to vote and therefore have less political clout than those with care. So even if they buy into ObamaCare and aren’t persuaded by the RedsCare crowd, they don’t really have the juice to make a difference in the debate.

And look at all those talking heads. Last time around CNN was the only 24/7 cable news network and they actually did news. Now three networks (five if you count CNBC and FBC) spend all day talking about the news instead of the more expensive task of reporting it. Of course all of these fine people who gather to impart their wisdom have generous employer-funded taxpayer-subsidized health plans. In fact the on-air folks at NBC left their union several years back because some rebelled when the union health plan instituted premiums. Yep before 2006 they paid no premiums and they thought that was normal. That’s how out-to-lunch some of these all-day bloviators are.

So in the face of all this readily apparent information what does Obama do? Not a whole lot. His personal appeals and working with Congress aside, the President has done virtually nothing to successfully prepare for, or more importantly, preempt the predictable onslaught. His last minute prime time seminar was too lame too little too late. And so Congress slinks away for the rest of the summer having passed nothing, Obama is left to lick his wounds, and We the People are no closer to having a rational health care system.

Nice going O. The only hope we have is that he seems to learn from his mistakes. Let’s hope the horse hasn’t left the barn.

Columbia County

What happens this coming Tuesday in towns like Claverack and Surprise and Truthville is going to set insider Washington abuzz. That’s when voters in those and a few hundred other towns and villages in the 20th Congressional district of New York decide whether a Republican or Democrat replaces Kirsten Gillibrand as their Congressperson.

Special elections always give Beltway insiders something to talk about outside the proper campaign season and this one is especially rich, coming just 10 weeks (really!) after Barack Obama took office with sky-high public approval ratings. Everybody is prepared to spin this as something large and significant — something that speaks to a larger national truth. But will it? As someone who has a house in the district I would caution against jumping to any conclusions.

The 20th has an odd recent history — despite being the most Republican House district in the state (here’s the list if you’re into that kind of thing) with 67,000 more registered Republicans than Democrats, Gillibrand was able to win the seat in 2006 as part of the nationwide Democrats-winning-Republican-seats midterm elections that threw control of the House to Dems.

Gillibrand was aided by an incumbent who to some degree took his reelection for granted and ran into last minute legal problems with claims that he had fought with his wife and that the State Police had helped cover it up. Still, Gillibrand was no shoe-in and only won by raising substantial funds and outworking John Sweeney throughout the campaign.

In November national Republicans targeted Gillibrand as a “must-remove” incumbent but ran a little-known (to voters) former state party chairman with an unfortunately patrician name (Sandy Treadwell) who outraised and outspent Gillibrand but was incapable of outshining her. It didn’t hurt that Obamamania was sweeping the country.

But that was then and this is now. Obamamania has diminished, especially among Republicans who actually voted for him. So the GOP has gone all-in on this race (new GOP chair Michael Steele has promised a victory) hoping to use a win here to make the case that the tide has turned and the bottom of the Republican market has been reached.

Democrats, on the other hand, are playing to win, sort of (Murphy has his own money but support from Obama as been limited to a mailing), but if they don’t they will argue that a loss means nothing. Nothing other than some very Republican-leaning districts are bound to be won back by Republicans eventually.

Should Democrat Scott Murphy win, of course, the roles will be reversed and Democrats will say this special election proves voters approve of all the party has done in Washington in these last 10 weeks. Republicans will simply have to lick their wounds. There is much greater downside risk here for the GOP.

None of these arguments are really as clean-cut as that though. As the Times front-paged Saturday, Murphy the successful businessman, may face anti-business backlash from voters incensed by the AIG bonus mess among other things. And Republican Jim Tedisco, who pitifully refused to support or oppose the stimulus plan (which is very popular in the 20th), might still be punished for being a career politician who spent the last 27 years in the loathed New York State legislature.

While national concerns may drive voters in this district it’s worth looking a bit deeper than the Rep/Dem split shown in the registration numbers. While there are about 181,000 registered Republicans and only 113,000 Democrats there are 127,000 independent or Independence Party voters (many people register for the Independence Party thinking they are registering as independents which are actually called “blank” voters in New York). Those independents hold the key to why the 20th is not such a simple nut to crack.

Looking over the results from 2006 and 2008 Gillibrand only lost one of the district’s 10 counties in 2006 and none in 2008. Murphy is not likely to repeat that performance but where Gillibrand won the most votes is telling. A district once dominated by Saratoga County (Tedisco’s home stomping grounds) is now more evenly split between Saratoga and a group of counties in the southern end of the sprawling district. Columbia, Dutchess, and Greene Counties total roughly the same vote produced in Saratoga and these counties have changed markedly in a decade.

Following 9/11 the exodus of New York City residents eager to find a simpler life led thousands to relocate to these counties. In Columbia County more than half my neighbors are transplants. Many weekenders even register to vote in these counties figuring their votes count more here than in the city. Then there are the new legion of highly-educated workers associated with Sematech who have moved to Rensselaer, Saratoga, and Warren Counties and brought their independent to liberal political beliefs with them. The 20th is not what it was and registration figures lag in accurately describing it.

If Murphy wins it probably does NOT mean the nation as a whole supports what Democrats are doing in Washington (they may but this race won’t prove it) any more than if Tedisco wins it means Americans have lost faith in the President and the Democrats.

The story here is more parochial and more basic. In a changing district, will the old guard maintain it’s mojo by turning out in big numbers? Or will the newcomers show their muscle as they become the new majority in a “new 20th”?

The fact that this is what this race is really about won’t stop the DC gang from drawing every other possible conclusion from the results but at least you are now forearmed and forewarned.

Amtrak Acela Train

Amidst the more than half a billion Federal dollars to be spent as stimulus (and another $287 million in tax breaks), there is great news for Amtrak but maybe not so great news for the people who ride it most — those in the Northeast Corridor.

The final stimulus bill will give Amtrak $850 million for capital projects — tracks, trains, stations — with an emphasis on projects that can be started quickly thereby putting people to work. But there’s one final proviso: No more than 50% can be spent on projects in the Northeast Corridor.

That’s nuts!

Putting aside the lines Amtrak is paid to run by states (such as the commuter lines in California), nearly three-quarters of Amtrak’s paying riders use the Northeast Corridor (72%) while those trains cost less than 30% of Amtrak’s budget to operate. Put another way, the biggest share of Amtrak’s spending goes to routes that carry just 28% of the railroad’s passengers.

In fact long-distance lines lost $668 million dollars last year while the Northeast Corridor made Amtrak $94 million in profit. Imagine what would happen to ridership and revenue if Amtrak was able to actually invest money to improve the Northeast Corridor. But no. Not any time soon.

Instead of investing that $850 million where it’s really needed and where projects await (high-speed electrification, bridge rehabs, track improvements, etc), Amtrak is being forced to spend perhaps half of those funds on lines that lose money and have relatively little traffic.

Take the Sunset Limited (no one else is). A storied train that last year carried just 71,000 passengers. It’s just dumb. If Congress wants Amtrak to run long-distance money-losing routes it should fund them separately as some sort of “Rail-Buff Gift Act”.

Instead for years while some Republicans have said Amtrak should be broken up, Congress always ends up giving the railroad  just enough to keep going and just enough to run ruinously expensive cross-country trains through Congressional districts in states where rail travel is a quaint notion — not a realistic possibility.

So, thanks Congress for actually giving Amtrak at least a little of what it needs to run the railroad. But next time, put the money where it’s needed and where it will serve as an investment for future growth. Not on a line for tourists on a nostalgia binge.

Capitol Hill

Facts? Who needs facts when you can have Republicans and Democrats trading misleading charges about the stimulus plan? Republicans say the $825 billion plan is just a vast waste of money, filled with non-essential items that Democrats want to push through under the over of “crisis.” They add it will take way too long to effect the economy.

Democrats have a different take, defending every dollar as critical to the recovery. House leaders defended money for contraceptives as necessary to help states (45 of which are now running budget gaps) offset the cost of family planning services in these desperate times.

Now we have some real analysis by some real non-partisan numbers crunchers and it’s pretty enlightening. Remember late last week when it seemed like every cable news anchor repeatedly quoted a Congressional Budget Office study showing that only 38% of the money would actually be spent by September of 2010? Horrors! Proof the bubbly ones said that the Republicans “had a point.” Well, they didn’t.

That CBO “study” was not a study — it was a brief look at a portion of the stimulus package. Now the CBO has done a study on the whole enchilada and — quelle surprise — far more of the money gets spent upfront than Republicans were claiming. The full analysis shows that almost two-thirds of the money (64%) would be spent by Sep 2010 and therefore circulating in the economy.

In other words it’s pretty “stimulating” according to David Leonhardt writing in today’s NY Times. But it still falls short of Obama’s pledge to get 75% of the money out there fast. Keep in mind Federal “spending” in this case includes actual spending and tax cuts since they cost the government revenue.

Then there’s the report card put together by the non-partisan Tax Policy Center which grades the ten major tax cut components of the stimulus package as it appeared over the weekend (note: the package will change slightly as the Senate and House hammer out a compromise over their respective versions). The TPC looked at how much “bang for the buck” each dollar of Federal tax reduction will have on the economy in the short-term (which they unhelpfully fail to fully define although they seem to consider it the 2009-2010 timeframe).

Of the ten, only four get B+ or B grades and three of them are the ones Democrats have most vociferously championed. Those include the payroll tax reduction and an increase in the earned income tax credit — both of which would quickly put relatively small amounts of cash in the pockets of the working poor who are most likely to immediately spend it and thereby stimulate the economy.

The other 6 gets C’s or D’s including one of Obama’s pet projects (investment credits for renewable energy) and several business tax credits Republicans have loudly favored.

But getting back to the original argument here — does this package actually move money into the economy quickly? — the TPC report confirms the CBO’s findings showing that the tax cut portions do. The TPC’s four top-graded tax cuts will put $173 billion into the economy quickly while the six lowest-graded will provide just $42 billion in economic benefit over the longer term.

So while there’s plenty of room to debate what’s actually in the package — only $9 billion for mass transit? — the faux debate over whether it will work and work quickly has been settled. Let’s see if the cable newsies catch on.