Archive for February, 2010

Health summit: Heated talk, little agreement (AP)

Thursday, February 25th, 2010 | Finance News

WASHINGTON – With tempers flaring, President Barack Obama and congressional Republicans clashed in an extraordinary live-on-TV summit Thursday over the right prescription for the nation's broken health care system, talking of agreement but holding to long-entrenched positions that leave them far apart.

"We have a very difficult gap to bridge here," said Rep. Eric Cantor, the No. 2 House Republican. "We just can't afford this. That's the ultimate problem."

With Cantor sitting in front of a giant stack of nearly 2,400 pages representing the Democrats' Senate-passed bill, Obama said cost is a legitimate question, but he took Cantor and other Republicans to task for using political shorthand and props "that prevent us from having a conversation."

And so it went, hour after hour at Blair House, just across Pennsylvania Avenue from the White House.

Obama and his Democratic allies argued that a sweeping health overhaul is imperative for the nation's future economic vitality. With the marathon policy debate available from start to finish to a divided public, Obama cast the health care crisis as "one of the biggest drags on our economy," tying his top domestic priority to the issue that's even more pressing to many Americans.

"This is the last chance, as far as I'm concerned," Rep. Louise Slaughter, D-N.Y.

Obama lamented partisan bickering that has resulted in a stalemate over legislation to extend coverage to more than 30 million people who are now uninsured. "Politics I think ended up trumping practical common sense," he said.

And yet, even as he pleaded for cooperation — "actually a discussion, and not just us trading talking points" — he insisted on a number of Democratic points and acknowledged agreement may not be possible. "I don't know that those gaps can be bridged," Obama said. "If not, at least we will have better clarified for the American people what the debate is all about."

With hardened positions well staked out before the meeting, the president and his Democratic allies prepared to move on alone. Politically, it would be an all-or-nothing gamble in a midterm election year for Democrats bent on achieving a goal that has eluded lawmakers for a half-century.

Leaving the site during a lunch break, Obama was asked by waiting reporters if he thought the debate was engendering a lot of interest across the country.

"I don't know if it's interesting watching it on TV," he responded. But Obama also said, "I think we're establishing that there are actually some areas of real agreement. And we're starting to focus on what the disagreements are."

"If you look at the issue of how much government should be involved," he said, "the argument that the Republicans are making really isn't that this is a government takeover of health care but rather that we're ensuring the ... We're regulating the insurance market too much. And that's a legitimate philosophical disagreement."

One option is to try to pass a comprehensive plan without GOP support, by using controversial Senate budget reconciliation rules that would disallow filibusters. Alexander asked Democrats to swear off a jam-it-through approach, while Senate Majority Leader Harry Reid, D-Nev., defended it. Obama weighed in with gentle chiding, asking both sides to focus on substance and worry about process later — a plea he made repeatedly throughout the day with little success.

A USA Today/Gallup survey released Thursday found Americans tilt 49-42 against Democrats forging ahead by themselves without any GOP support. Opposition was even stronger to the idea of Senate Democrats using the special budget rules, with 52 percent opposed and 39 percent in favor.

Obama's skepticism about reaching consensus was vindicated as soon as the first Republican spoke — in opposition to the mammoth bills that have passed the House and Senate and in favor of a much more modest approach. Sen. Lamar Alexander of Tennessee said Congress and the administration should start over and take small steps, including medical malpractice reform, high-risk insurance pools, a way to allow Americans to shop out of state for lower-cost plans and an expansion of health savings accounts.

"We believe we have a better idea," Alexander said. "Our views represent the views of a great many American people."

Disagreements were not always expressed diplomatically.

Alexander challenged Obama's claim that insurance premiums would fall under the Democratic legislation. "You're wrong," he said. Responded Obama: "I'm pretty certain I'm not wrong."

As with much in the complicated health care debate, both sides had a point. The Congressional Budget Office says average premiums for people buying insurance individually would be 10 to 13 percent higher in 2016 under the Senate legislation, as Alexander said. But the policies would cover more medical services, and around half of people could get government subsidies to defray the extra costs.

Obama and his 2008 GOP opponent for the presidency, Sen. John McCain of Arizona, had a barbed exchange. McCain complained at length about what he said was a backdoor process to produce the original bills that resulted in favors for special interests and carve-outs for certain states.

"We're not campaigning anymore. The election's over," responded a clearly irritated Obama.

"I'm reminded of that every day," McCain shot back, adding that "the American people care about what we did and how we did it."

Said Obama: "We can have a debate about process or we can have a debate about how we're actually going to help the American people at this point. And I think that's — the latter debate is the one that they care about a little bit more."

Generally, polls show Americans want solutions to the problems of high medical costs, eroding access to coverage and uneven quality. But they are split over the Democrats' sweeping legislation, with its $1 trillion, 10-year price tag and many complex provisions, including some that wouldn't take effect for eight years.

The Democratic bills would require most Americans to get health insurance, while providing subsidies for many in the form of a new tax credit. The Democrats would set up a competitive insurance market for small businesses and people buying coverage on their own. Democrats also would make a host of other changes, which include addressing a coverage gap in the Medicare prescription benefit and setting up a new long-term-care insurance program. Their plan would be paid for through a mix of Medicare cuts and tax increases.

Another alternative if bipartisan agreement eludes Obama on Thursday is going smaller, with a modest bill that would merely smooth some of the rough edges from the current system. The Republican approaches, for instance, would help people now struggling with costs and coverage but probably not put the nation on a path toward coverage for all.

A month after the Massachusetts election that cost Democrats their Senate supermajority and threw the health legislation in doubt, the White House has developed its own slimmed-down health care proposal so the president will know what the impact would be if he chooses that route, according to a Democratic official familiar with the discussions. That official could not provide details, but Democrats have looked at approaches including expanding Medicaid and allowing children to stay on their parents' health plans until around age 26.

Obama himself hinted at a Democrats-only strategy. When asked by reporters as he walked to the summit site if he had a Plan B, he responded: "I've always got plans."

"Not only are lawmakers polarized, the parties' constituencies are far apart," said Robert Blendon, a Harvard University professor who follows public opinion trends on health care. "The president is going to use it as a launching pad for what will be the last effort to get a big bill passed. He will say that he tried to get a bipartisan compromise and it wasn't possible."

The summit was held at Blair House, the elegant presidential guest quarters across the street from the White House. Leaders of both parties spoke, with Obama steering the debate as moderator.

It wasn't a grand, or even particularly comfortable, setting. About 40 senators, representatives and administration officials were crowded shoulder-to-shoulder around a hollow square table, perched for the six-hour marathon on wooden chairs with thin cushions. Coffee breaks had been ruled out, so the only pause in the action came during lunch.

C-SPAN carried complete coverage, while news operations from cable networks to public broadcasting were making it the focus of their day.

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Associated Press writers Erica Werner, Ben Feller and Natasha Metzler contributed to this story.

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Health care cost-containment ideas mesh at summit (AP)

Thursday, February 25th, 2010 | Finance News

WASHINGTON – A consensus on how to rein in spiraling health care costs seems to be emerging at President Barack Obama's health care summit.

Obama agreed with assertions by Oklahoma Republican Sen. Tom Coburn that such waste and abuse now account for up to a third of the cost of entitlement programs like Medicare and Medicaid and is a major barrier to more widespread insurance coverage.

Coburn said cost is the chief reason millions of people don't have health insurance. House Democratic Leader Steny Hoyer of Maryland said he believed Coburn had a point. But he also said the proposals advanced by his fellow Democrats would accomplish just the kind of cost-containment the GOP says it supports.

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Toyota’s problems loom large even after hearings (AP)

Thursday, February 25th, 2010 | Finance News

WASHINGTON – Even as Toyota CEO Akio Toyoda wrapped up a grueling appearance before Congress, the head of the world's largest automaker wasn't leaving his problems behind.

Toyota faces a criminal investigation by federal prosecutors in New York. The Securities and Exchange Commission is investigating the company. Its beleaguered U.S. dealerships are facing repairs to potentially millions of customer vehicles that have been recalled. The company is offering customers new reimbursements for rental cars and other expenses.

Its lawyers are bracing for waves of death and injury lawsuits. The Senate will conduct a new hearing next week. And the cost to Toyota's reputation is only now starting to emerge.

"There is still a very large bull's-eye pinned to Toyota right now," said Aaron Bragman, an auto industry analyst with IHS Global Insight.

Despite back-to-back congressional hearings this week, left to be said were a better explanation for slow actions to deal with the defects and believable assurances that the problems that led to sudden, unintended accelerations will be fixed.

Toyoda said those changes were being made nearly around the clock, but during three hours of often tense questions and answers he repeated the company's insistence that there was no link to the cars' electronic systems.

Many drivers filing complaints with Toyota and the government say their acceleration problems had nothing to do with floor mat interference or sticky gas pedals — the culprits the company is pointing to. Outside experts have suggested electronic problems.

House lawmakers unleashed blistering criticism on Toyoda, the grandson of the company's founder.

"I am embarrassed for you, sir," Rep. John Mica, R-Fla., said as he brandished an internal Toyota document showing the automaker estimated it saved $100 million by avoiding a broad recall over unintended acceleration in 2007.

The National Highway Traffic Safety Administration is seeking records on Toyota's recalls and is conducting its own review on whether electronics were behind the vehicle defects. NHTSA also continues to look into steering complaints from drivers of the popular Corolla model.

Toyota has recalled 8.5 million vehicles, more than 6 million of them in the United States.

Back home in Japan, Toyoda's testimony in Washington was lauded. A crisis management expert at Kyodo Public Relations Co., Ryoichi Shinozaki, said Toyoda performed fine by Japanese standards. But Shinozaki said the company's problems were deepening.

"The hearing is over, but the crisis is only getting more serious," he said.

It may be a while before car buyers are convinced that Toyota really makes safe cars.

Toyota's January sales already fell 16 percent even as most other automakers rebounded from last year's dismal results. Analyst Koji Endo of Advanced Research Japan in Tokyo said he expects February sales, due out next week, to be down 30 percent to 40. Toyota's sales woes well could continue beyond that.

"It will take some time to feel the full effect of this," he said.

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Associated Press writers Ken Thomas, Tom Raum and Christine Simmons in Washington and Malcolm Foster and Yuri Kageyama in Tokyo contributed to this report.

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