By Nitya

Aug 8, 2009 11:49am

What Did The White House Know About the PhRMA Deal?

In June, the Senate Finance Committee and the White House jubilantly announced that they'd come to a deal with the pharmaceutical industry. But as details of that deal have come out, the White House has issued mixed and conflicting messages as to what they knew and what they'd signed off on.

At the time, Sen. Max Baucus, D-Mont., chair of the Senate Finance Committee, announced that pharmaceutical companies had agreed to a deal as part of an overall health care reform package, where the companies will provide, as Baucus put it, "affordable prices on prescription drugs when Medicare benefits don't cover the cost of prescriptions," as well as kicking in some money for health care reform efforts.

President Obama said in a paper statement that "the agreement reached today to lower prescription drug costs for seniors will be an important part of the legislation I expect to sign into law in December. This is a tangible example of the type of reform that will lower costs while assuring quality health care for every American."

But on Thursday the New York Times' David Kirkpatrick reported that under pressure from pharmaceutical industry lobbyists, the White House "assured drug makers that the administration stood by a behind-the-scenes deal to block any Congressional effort to extract cost savings from them beyond an agreed-upon $80 billion."

On the campaign trail, then-Sen. Obama had supported measures to allow the government to re-negotiate drug costs, but apparently this deal would preclude such a move.

Former House Energy and Commerce chairman Bill Tauzin, R-La., now the head of Pharmaceutical Research and Manufacturers of America, or PhRMA, told the Times, "We were assured: ‘We need somebody to come in first. If you come in first, you will have a rock-solid deal.' Who is ever going to go into a deal with the White House again if they don’t keep their word? You are just going to duke it out instead.”

“They wanted a big player to come in and set the bar for everybody else,” Tauzin told the Times, asserting that in terms of contributions from the pharmaceutical industry, "$80 billion is the max, no more or less. Adding other stuff changes the deal.”

Tauzin said that after the deal was reached with Baucus, he confirmed the terms of the deal with White House Chief if Staff Rahm Emanuel, deputy Chief of Staff Jim Messina, and health care reform czar Nancy-Ann DeParle.

“They blessed the deal,” Tauzin told the Times. "As far we are concerned, that is a done deal. It’s up to the White House and Senator Baucus to follow through.”

On Wednesday, Messina seemed to confirm this deal, emailing the Times: “The president encouraged this approach. He wanted to bring all the parties to the table to discuss health insurance reform.”

But after the Times story appeared, some Democrats on the Hill expressed disappointment that the White House and Senate Finance Committee had made this deal with the lobbying group without consulting them, eliminating a way to help pay for the health care reform legislation and save money for the government.

Now the White House seems to be distancing itself from the notion it entered into any deal.

"The White House, Senate Finance Committee and PhRMA agreed that PhRMA would contribute $80 billion to lower costs as part of the health insurance reform legislation that the President expects to sign this year," Linda Douglass, the communications director of the White House Office of Health Reform, told ABC News Saturday.

Asked if the deal precludes the government engaging in direct negotiations for the Medicare prescription drug benefit, Douglass said "that issue was not discussed" during the White House negotiations with PhRMA.

The Times reported today several Senate Democrats said that "in a private meeting, White House officials had told them there was no such deal, sowing yet more confusion…" And White House officials told the Times that Messina "had not intended to confirm that the deal ruled out price negotiations."

But Messina was not the only one who seemed to confirm the deal.

On Friday, before the White House officially backed off the notion of a deal, White House press secretary Robert Gibbs seemed to confirm the deal, telling CNN's Ed Henry during the briefing, "we feel like $80 billion is — is an appropriate amount.  And I think the — I don't have the statistic in front of me, but I think the House bill has $85 billion in it, so I would argue that we're all in the same ball park."

Henry said, "there is a deal that you won't squeeze any more?"

Said Gibbs: "Well, I hate to blow our cover here, but we announced it publicly."

"But there had been some reports saying you privately told Democratic senators that there is no such deal," Henry said.

"I don't know where that's coming from," Gibbs said. "I don't what that's being based on."

The confusion is complicated even further by the fact that in June, reporter Tommy Christopher, now with Mediaite, asked if the deal with PhRMA included a promise to not pursue Medicare negotiating prices with the pharmaceutical industry.

Gibbs' initial response: "Well, look, again, the structure of part of that agreement was to use a portion of that $80 billion to pay up to — for the pharmaceutical industry to pay up to 50 percent of the cost for a name brand drug for a senior that falls between the point at which Medicare Part D stops providing help, and when catastrophic coverage — I think it is $6,500, a little bit more than $6,500 — level kicks in. So filling in that — what’s commonly known as — ironically, in health care — the doughnut hole, about — that up to 50 percent of the name brand — the price for that name brand drug would be paid for, and I think that provides a hefty discount that will bear appreciable benefits for seniors all over the country."

When pressed as to whether there was a deal, Gibbs said, "I don’t know the answer." He said he would "check on it," but Christopher says he never got back to him.

When asked Friday by ABC News as to why he avoided answering the question about such a deal in June, Gibbs said, "You're asking me to recall why I didn't remember something in June.  I — I — that I don't know the answer to. Obviously, the agreement that we have is — is in the confines of health insurance reform that's being worked on right now."

A few hours after that, the White House disputed the notion of any deal.

At the time of the deal, Tauzin referred to, in an interview with ABC News, "an old political adage, you come to the meal or you become the meal."

-jpt

User Comments

As usual, he sets things in motion then denies knowing anything about it.
He really did learn well from his predecessor(s). Backroom deals, lies, distortions, repressing opposition, doing what he wants with impunity. Well, actually I think he was born with the talents. Bush the Bad had nothin’ on him.
Okay, let’s hear from the peanut (supporter) gallery…

Posted by: Eyes Open | August 8, 2009, 12:11 pm 12:11 pm

Does Gibbs ever get back to the press core on questions that he “doesn’t know” and “will check on”?
The press is too distracted by new and shiny to follow up on their own questions in a reasonable amount of time.

Posted by: WhereWasThePress? | August 8, 2009, 12:42 pm 12:42 pm

“core”, as in apple core, the part you throw out. LOL
It should read corps or maybe corpse would be more accurate.

Posted by: WhereWasThePress? | August 8, 2009, 12:44 pm 12:44 pm

Jake, you have provided a very interesting post supported with quotes from several of the principals involved. It’s easy to make promises. It’s harder to govern. There is a certain chicken with their heads cut off quality about what is going on now with the administration’s various spokesmen and negotiators. This can’t be good. Obama doesn’t have a lot of leeway to get out of this, either. Pelosi calling Big Pharma “villains” just a few weeks after the President praised them to the skies for “coming to the table” as an important leg of health care reform is a little skitzo, no? No wonder poor Gibbs gets confused.

Posted by: Croation | August 8, 2009, 1:02 pm 1:02 pm

So … it’s an 80-billion-dollar bribe to Obama, to keep fleecing the people in general? That sounds about right.

Posted by: Bet Noir | August 8, 2009, 1:26 pm 1:26 pm

“The Obama administration had never spelled out the details of the agreement,” Kirkpatrick writes.
Guess it’s time to “flag” HIM, huh? :^|

Posted by: Bet Noir | August 8, 2009, 1:29 pm 1:29 pm

“There is a certain chicken with their heads cut off quality about what is going on now with the administration’s various spokesmen and negotiators. This can’t be good. Obama doesn’t have a lot of leeway to get out of this, either.”
If the chicken’s head’s cut off, how come He’s STILL talking?
How long will it take for Obama to make a statement that they’re ALL mistaken?

Posted by: Bet Noir | August 8, 2009, 1:34 pm 1:34 pm

Kirkpatrick (NYT) quotes Tauzin:
“Who is ever going to go into a deal with the White House again if they don’t keep their word?”
Who indeed . . .

Posted by: Bet Noir | August 8, 2009, 1:38 pm 1:38 pm

“Is this man for real?”
Obviously NOT. The Democrats had better impeach Him — for lying to Congress and turning over the Treasury to the corporations — while they still have the shell of a political party.
It’ll be embarrassing for the Dems, but not as embarrassing as a revolution.

Posted by: Bet Noir | August 8, 2009, 1:43 pm 1:43 pm

Back door deals?
I thought Obama said this would be the most transparent administration ever!
And where are those health care debates on C-Span?

Posted by: larry | August 8, 2009, 1:49 pm 1:49 pm

Obama fights for the little people like lawyers, lobbyist, CEO’s, Wall Street, Hollywood stars.
He’s so wholesome and refreshing…

Posted by: bailey | August 8, 2009, 1:51 pm 1:51 pm

Sounds very fishy…

Posted by: rick | August 8, 2009, 1:52 pm 1:52 pm

Gibbs:
Um Um Uh
I think what I really meant to say….

Posted by: marley | August 8, 2009, 1:56 pm 1:56 pm

Isn’t this the anniversary date of Nixon’s resignation?
Obama is just as sneaky.

Posted by: jack | August 8, 2009, 2:00 pm 2:00 pm

Nancy Pelosi suggests protestors are Nazis. The DNC says we’re an angry mob. Rep. Russ Carnahan of MO says we’re trying to thwart the democratic process.
***
Nancy Pelosi suggested that protesters were carrying swastikas. And guess what? Photos from a town hall in Colorado shows she was right. The DNC description of the “angry” mob is also spot on in some instances. And guess what? In some cases, demonstrators are trying to thwart the democratic process. (“Rattle them, do not engage in intelligent debate– and don’t let anyone else either” said the emailed instructions.)
I’m not 100% behind how the issue is being handled, but to deny the actions of some of the more extreme protesters is disingenuous.

Posted by: Alyson | August 8, 2009, 2:04 pm 2:04 pm

I have to admit that this whole Pharma deal issue is very confusing and more details would be helpful. I thought the WH had acknowledged the deal when President Obama said in a town hall:“To their credit, the pharmaceutical companies have already agreed to put up $80 billion.” Thanks for looking into it, Jake, and keep us posted. I understand trying to gain industry support to move reform forward, but everybody does not appear to be on the same page– and all of us, regardless of party affiliation or political stripe, want transparency!!

Posted by: Alyson | August 8, 2009, 2:16 pm 2:16 pm

I just have to laugh and shake my head when I hear about stuff like this. They can’t make up their mind about whether they agreed to a deal or not, but I remember it being touted that way by the White House and the pharmaceutical companies in June. When you are running the country and try and make promises to everyone like you do in a campaign, it just doesn’t work. Everyone expects politicians to lie in a campaign promise, but everyone expects the president to keep his word when he makes a deal as president, otherwise his credibility is gone.

Posted by: Jason | August 8, 2009, 2:26 pm 2:26 pm

Obama, 2007: I don’t think we’re going to be able to eliminate employer coverage immediately. There’s going to be potentially some transition process. I can envision [single payer] a decade out or 15 years out or 20 years out.”
Obama, 2003 to the AFL-CIO:; I happen to be a proponent of single-payer, universal health-care coverage. . . . That’s what I’d like to see.

Posted by: Janet | August 8, 2009, 2:31 pm 2:31 pm

Mixed messages from the White House? Now there’s a shocker.

Posted by: JM Hanes | August 8, 2009, 2:33 pm 2:33 pm

But to preserve her credibility she needs to correct her statement and urge supporters not to perpetuate her error as well.
*** thanks Croatian. That’s interesting. On the photos I saw the slash wasn’t clear, if it was there, but thank you for telling me about that because I’m in complete agreement about the hot button imagery, language and so on– and I’ll definitely take another look so I’m not one of those perpetuating the mistake.

Posted by: Alyson | August 8, 2009, 3:02 pm 3:02 pm

Exactly how has Obama improved America’s image since he took office.
GITMO will not close, troops will stay in Iraq, a surge in Afghanistan, he is in bed with big corporations
protesters are called Nazis for standing up to big government, the elderly called mobsters because they want freedom of choice….
This is an improved image?

Posted by: jack | August 8, 2009, 3:22 pm 3:22 pm

They should go back get their facts straight reveal the details to congress and to American citizens. No deception like text that eliminates eligibility for perhaps 8 million illegal immigrants without health insurance than blocks any provision to actually check applicants immigration status. With deception like this no wonder Americans feel they can’t trust congress and increasingly Obama.

Posted by: merchantilist | August 8, 2009, 3:29 pm 3:29 pm

Okay, so now, I’m hearing that Sen. Sherrod Brown (D-Ohio)has asked David Axelrod, Jim Messina and Max Baucus if the administration has cut a deal with PhRMA that would prevent Congress from using the government’s clout to negotiate for lower drug prices and they all say there’s no deal like that.
I’m confused?!

Posted by: Alyson | August 8, 2009, 3:32 pm 3:32 pm

jack | Aug 8, 2009 3:22:30 PM – Actually Jack, it’s the “protesters” that are calling Pres. Obama that. Please don’t rewrite facts. They have pictures! What cracks me up is many of the “protesters” are on Medicare! What do they think that is?

Posted by: Try the truth | August 8, 2009, 3:37 pm 3:37 pm

jack: “This is an improved image?” – All of those things were going on before, to an even worse degree. But just the pledge to stop torture and close Gitmo is important to our image, even if it is mostly symbolic. Symbolism IS important, and so is the way you talk to people, and at least pretend that you are interested in what they have to say.

Posted by: jock59801 | August 8, 2009, 3:37 pm 3:37 pm

The art of deflecting a direct question is being turned into a science by this Administration. They promised change, and then double down on more of the same.
(Should it become necessary, I reserve the right to claim I was misquoted)

Posted by: Michael Farenholtz | August 8, 2009, 3:54 pm 3:54 pm

Actually Jack, it’s the “protesters” that are calling Pres. Obama that. Please don’t rewrite facts.
Posted by: Try the truth | Aug 8, 2009 3:37:31 PM
***Exactly. I looked up the photos, and the imagery is loaded, and it’s pretty clear who started it, although Croatian was right that there are very faint lines through the swastikas.

Posted by: Alyson | August 8, 2009, 3:56 pm 3:56 pm

More proof that Obama is just a figurehead that turns all the big decisions over to his henchmen, while he stays in campaign mode.
He’s a weak ineffective leader.

Posted by: max | August 8, 2009, 4:29 pm 4:29 pm

“Billy Tauzin, the former Republican House member from Louisiana who now leads the pharmaceutical trade group, said Wednesday. “Who is ever going to go into a deal with the White House again if they don’t keep their word? You are just going to duke it out instead.”” — Kirkpatrick, NYT
So … how’s NBC going to get Obama out of THis one?

Posted by: Bet Noir | August 8, 2009, 5:05 pm 5:05 pm

“More proof that Obama is just a figurehead that turns all the big decisions over to his henchmen, while he stays in campaign mode.”
Kind of a cross between the Revlon Girl and Richard Nixon.

Posted by: Bet Noir | August 8, 2009, 5:20 pm 5:20 pm

Did they extort 80B or did they accept an 80B payoff. The Chicago Way!

Posted by: ubu1991 | August 8, 2009, 5:58 pm 5:58 pm

So … Obama made a deal with Tauzin, and neglected to tell the Democrats about it — at the SAME time the White House is encouraging the riff-raff to turn in “fishy” into to the palace?
What He lacks in other areas he makes up in treachery and gall. No wonder Clinton’s having a ball.

Posted by: Bet Noir | August 8, 2009, 6:31 pm 6:31 pm

more from Kirkpatrick/NYT, “Obama Reverses Stand on Drug Industry Deal”:
“WASHINGTON — Caught between a pivotal industry ally and the protests of Congressional Democrats, the Obama administration on Friday backed away from what drug industry lobbyists had said this week was a firm White House promise to exclude from a proposed health care overhaul the possibility of allowing the government to negotiate lower drug prices under Medicare.”

Posted by: Bet Noir | August 8, 2009, 6:36 pm 6:36 pm

Remember the outrage we used to hear whenever the Bush administration dared listen to an industry group, let alone cut a secret deal with them?
People at the grassroots level are beginning to wake up to how their government, under this administration, wants to intrude itself into every aspect of their lives.
It’s gonna get ugly, and it’s gonna be lots of fun. And let’s start by not letting Nancy Pelosi get her fleet of Gulfstreams.

Posted by: Fructuoso Solano-Revuelta | August 8, 2009, 6:58 pm 6:58 pm

President Obama studied for years under the principles of Saul Alinsky. Obama also spent years teaching workshops on the Alinsky method. From 1985-1988 Obama worked for the group Developing Communities Project (an Alinskyite group). Then he worked for ACORN and its offshoot Project Vote–both created by the Alinsky network.
President Obama is a devout Alinskyite–through the core of his body.
Now here are two excerpts from Saul Alinsky’s book, “Rules for Radicals,” in the first chapter, “The Purpose,” on page 10 is:
“A Marxist begins with his prime truth that all evils are caused by the exploitation of the proletariat by the capitalists. From this he logically proceeds to the revolution to end capitalism, then into the third stage of reorganization into a new social order of the dictatorship of the proletariat, and finally the last stage — the political paradise of communism.”
On pages 10-11 is:
“An organizer working in and for an open society is in an ideological dilemma to begin with, he does not have a fixed truth — truth to him is relative and changing; everything to him is relative and changing…. To the extent that he is free from the shackles of dogma, he can respond to the realities of the widely different situations…”
IF IT QUACKS LIKE A DUCK…

Posted by: James Danley | August 8, 2009, 7:03 pm 7:03 pm

“IF IT QUACKS LIKE A DUCK…”
Obama is no Marxist: in “the exploitation of the proletariat by the capitalists”, He’s ALWAYS on the side of the corporations — emptying the Treasury into their pockets, making deals with PhRMA that he didn’t bother to tell the Democratic “leadership” about, and so on.
He quacked, briefly, like a populist when that served His electoral purpose.
Since then, He’s never mentioned the American poor — except to channel Bill Cosby a couple of times, sternly suggesting that the poor all play Noah’s Ark in Ozzie and Harriet style.
It’s pretty important to be able to tell a corporate fascist from a “communist”.

Posted by: Bet Noir | August 8, 2009, 7:17 pm 7:17 pm

Obama might not be a communist in the pure sense. There are many types of communism and “ways to get there”. He is more communist in the cult-of-personality bent. In other words a strong leader with almost total power is necessary for the “revolution”. Likewise his adherent while never allowed to eclipse his power are granted special status in the regime. Same with businesses who support him- at least until the revolution is finalized.

Posted by: Ed | August 8, 2009, 7:46 pm 7:46 pm

To: Union Thugs
From: Barack Obama
Subject: Townhall Meetings
First, let me be clear: you guys are off to a great start in busting a few heads among those folks who don’t quite understand which communities are supposed to organize and which are not.
But let me offer a little constructive criticism: from now on, it probably wouldn’t be a good idea to show up wearing T-shirts with “SEIU” on them.

Posted by: Fascist Hyena | August 8, 2009, 7:47 pm 7:47 pm

How is it that nobody seems to care about the “deal” he made with Immelt?
The SEC fines GE $50 million but at the same time Oblahblah has immelt on his board of economic advisors and also gives GE $139 million??? …how do you spell corruption?… how much did ACORN, Fannie & Freddie, etc.etc. get???

Posted by: Badboy | August 8, 2009, 8:20 pm 8:20 pm

Bet Noir, I personally wouldn’t say that President Obama is a friend of Corporate America. Yes, he did give huge amounts of bailout money to some corporations. But I believe that was more towards controlling and placing limitations on those corporations than to actually bail them out so that they could resume their capitalist ways.
Remember, President Obama has already admitted that he wants to redistribute the wealth. That is not the actions of a capitalist.

Posted by: James Danley | August 8, 2009, 8:29 pm 8:29 pm

Badboy wrote: “…how much did ACORN, Fannie & Freddie, etc.etc. get???”
Did you notice that Fannie Mae is seeking another $10.7 billion after posting a 2nd quarter loss of $15.2 billion?

Posted by: James Danley | August 8, 2009, 8:37 pm 8:37 pm

“Remember, President Obama has already admitted that he wants to redistribute the wealth.”
Well, the McCain campaign found an interview from 2001 that ALMOST said something about “redistributive justice. Oblabla disavowed it, in any case.
This is a guy who, at an early age for mansion-shopping, wanted a mansion enough to go to the mob to get it. He’s no communist.

Posted by: Bet Noir | August 8, 2009, 8:38 pm 8:38 pm

James, redistributing the wealth has always been a capitalist objective. You could say that is what capitalism is all about.
Aside from capitalism being essentially a system of theft that benefits one class over another, it is also necessarily to mitigate its worst effects. Pure capitalism doesn’t work because it inevitably leads to poverty so severe as to be unsustainable.
Sometimes it is necessary to take back some of the wealth taken from the workers in order to save the system itself. This generally happens in periods of severe crisis, such as during depressions and wars.

Posted by: Flash Override | August 8, 2009, 8:41 pm 8:41 pm

I feel the need to wash my hands after reading this report

Posted by: TB | August 8, 2009, 9:30 pm 9:30 pm

There was a report in the NYT that Tapper mentions and there was a paragraph in there that says the White House believes that the dems can go after Pharma in a seperate bill. This guy and administration is just such a two-faced manipulative bunch of thugs! Promise the world and deliver it completely broken!

Posted by: Hope | August 8, 2009, 9:56 pm 9:56 pm

No, people just tend to hear about the high cost ones, so it scares them away from looking. There are scholarships available to that help.
Private schools are often considerably less then public schools cost across funding levels, the cost of a good private school can often be half the cost of a public school.
Skip asked:
That is an exception instead of the rule is it not? It sounds like you have a very reasonably priced private school near you.

Posted by: winz | August 9, 2009, 2:07 am 2:07 am

A quick correction– a couple of those photos were from tea parties.

Posted by: Alyson | August 9, 2009, 3:02 am 3:02 am

David from WI, and don’t forget the voter intimidation charges that were dropped against the Black Panther Party in Philadelphia. The charges “wouldn’t hold up?” Even without the many witnesses, any jury would have convicted these guys by just looking at the video clips.
Now we have the President of the United States telling the American people–specifically those who “created the mess”–to “stop talking” and “get out of the way.” And union thugs being sent to town hall meetings.
So this is the change that you voted for?

Posted by: James Danley | August 9, 2009, 9:06 am 9:06 am

Oh and don’t forget, President Obama still hasn’t formed his 1.2 million strong national civilian thug-army with its $500 billion budget!

Posted by: James Danley | August 9, 2009, 9:09 am 9:09 am

John Nichols, editor, Capital Times (Madison, Wisconsin):
“Barack Obama promised when he sought the presidency to usher in a new era of openness and transparency. “We’ll have the negotiations televised on C-SPAN, so that people can see who is making arguments on behalf of their constituents, and who are making arguments on behalf of the drug companies or the insurance companies,” candidate Obama declared at a Pennsylvania campaign stop two months before the 2008 election.
Now, he is doing the opposite.
Worse yet, he is perpetuating the foul practices of the most corrupt administration in American history.”

Posted by: Bet Noir | August 9, 2009, 9:45 am 9:45 am

Are these the same people who complain about the absence of due process for terrorist. It is okay for congress and the president to use the heavy hand of government to force submission to their will. This is inheriently unethical corrupt to teh core, by these Chicago Thugs. If you do not agree to their ever evolving terms they will have their congressional Thugs impose a special tax and send their ACORN and union thugs to harrass and humiliate United States Citizens at their home.

Posted by: ubu1991 | August 9, 2009, 11:43 am 11:43 am

From AP:
“The nation’s drugmakers stand ready to spend $150 million to help President Barack Obama overhaul health care this fall, according to numerous officials, a staggering sum that could dwarf attempts to derail Obama’s top domestic priority.”
Something is very wrong here.

Posted by: Sanger | August 9, 2009, 12:15 pm 12:15 pm

President Obama has already admitted that he wants to redistribute the wealth. That is not the actions of a capitalist.
Posted by: James Danley | Aug 8, 2009 8:29:40 PM
James, redistributing the wealth has always been a capitalist objective. You could say that is what capitalism is all about.
Aside from capitalism being essentially a system of theft that benefits one class over another, it is also necessarily to mitigate its worst effects. Pure capitalism doesn’t work because it inevitably leads to poverty so severe as to be unsustainable.
Sometimes it is necessary to take back some of the wealth taken from the workers in order to save the system itself. This generally happens in periods of severe crisis, such as during depressions and wars.
Posted by: Flash Override | Aug 8, 2009 8:41:11 PM
***
Awesome. I’ve been thinking about what drives me bonkers about the way some (I wrote “some”) conservatives and Republicans view Capitalism, and it really is that it’s overly simplistic. They love throwing around words like “socialist” or “Marxist” because from what I gather, to them, any attempt to address the inherent issues with capitalism and the market centralizes power in the hands of government and creates inefficiencies. Is this crazy? No. Attempts at Communism have led to dictatorships, inequality and so on. We get it. However, the over-the-top rhetoric used at times by some repeat and relentless offenders seems to complete miss the reality that when government doesn’t redistribute the wealth and regulate business, power and wealth slowly collect in the hands of bigwigs at corporations. Ideally, those bigwigs and those corporations would be the ones who utilized their resources best and that does initially occur, BUT the more that wealth and the power that goes with it concentrates in a few hands– wealth and power always seems to concentrate– the more it corrupts and the less likely it is that new players with new, possibly brilliant, ideas get a chance to start businesses or develop products or innovate. The wealthy get wealthier and lobby for laws to ensure it stays that way, the poor get poorer and the middle class shrinks– and as the wealthy get wealthier and the pool gets smaller as power concentrates more and more, the more likely you are that those folks will be incompetent and out of touch, and even more interested in protecting the status quo than doing what they once did best. So, governments do need to redistribute wealth more equitably, rather than simply upwards, and regulate the markets to some degree, for the market to work best. Governments also should provide a safety net for those who cannot afford food, shelter, and IMO, health care as well as a public education system, infrastructure, and police, military and emergency services. That is democratic capitalism which is what has made our country so great, no?
I’m really sick of the socialist, anti-capitalist stuff.

Posted by: Alyson | August 9, 2009, 12:35 pm 12:35 pm

WOW…. I need to check my spelling before I hit post…..LOL…..geeeeeshhh

Posted by: KMDay | August 9, 2009, 2:28 pm 2:28 pm

the White House has launched a new phase of its strategy designed to pass Obamacare: all Obama, all the time. As part of that effort, Obama hosted a conference call with leftist bloggers urging them to pressure Congress to pass his health plan as soon as possible.
During the call, a blogger from Maine said he kept running into an Investors Business Daily article that claimed Section 102 of the House health legislation would outlaw private insurance. He asked: “Is this true? Will people be able to keep their insurance and will insurers be able to write new policies even though H.R. 3200 is passed?” President Obama replied: “You know, I have to say that I am not familiar with the provision you are talking about.” (quote begins at 17:10)
Hmm, Section 102 of H.R. 3200 -is- rather vague.

Posted by: KMDay | August 9, 2009, 2:37 pm 2:37 pm

Alyson wrote: “Ideally, those bigwigs and those corporations would be the ones who utilized their resources best and that does initially occur…”
According to the latest IRS statistics–2007–the top 1% of the nation’s wage earners (representing 22.83% of the total Adjusted Gross Income) accounted for 40.42 % of the total federal income tax revenue. Yet the bottom 95% of the nation’s wage earners (representing 62.89% of the total Adjusted Gross Income) accounted for 39.37% of the total federal income tax revenue.
I’d say that the top 1% of the nation’s wage earners are paying more than their fair share of the federal income tax revenue. MORE than the entire bottom 95%! Of course the bottom 40% of the nation’s wage earners account for ZERO PERCENT of the total federal income tax revenue.
But besides the federal income tax revenues, wealthy individuals and corporations pay large percentages of the various state tax revenues (where applicable–some states have no income tax) and they contribute BILLIONS of dollars to charities. And now we have President Obama and Congress wanting to increase the rate for the top federal income tax bracket; then Congress wants to go even further by adding a surtax on those making over $300,000; and many states are raising taxes as well.
At some point, should the taxes on the wealthy continue to rise further, they may cut back on their charitable contributions, cut back on their spending even further (which results in lost jobs); or worse yet, they might move their businesses overseas–resulting in massive layoffs and huge losses in federal, state and local tax revenues.

Posted by: James Danley | August 9, 2009, 4:12 pm 4:12 pm

“At some point, should the taxes on the wealthy continue to rise further, they may cut back on their charitable contributions … ‘
“Charitable”?? The non-profit swamp — laundering money for the rich while removing every public function from public control, and putting policy and practice under the control of interlocking “boards” — makes a mockery of charity.
Note that Oblabla is biiiig on non-profits. It figures.

Posted by: Bet Noir | August 9, 2009, 5:02 pm 5:02 pm

Back door deals with Pharma.
Not exactly the transparent health care debates on C-Span that Obama promised.
Do sneaky backdoor deals qualify
as “fishy”.

Posted by: max | August 9, 2009, 5:12 pm 5:12 pm

We may need health care reform because Democrats make me sick.

Posted by: karen | August 9, 2009, 6:17 pm 6:17 pm

I think we should have a 100% tax on overpaid authors who write egomaniacal write that contribute to landfills. And on their spouses who get no-show jobs with hospitals to patient dump.

Posted by: karen | August 9, 2009, 6:19 pm 6:19 pm

egomaniacal books

Posted by: karen | August 9, 2009, 6:19 pm 6:19 pm

Per James, According to the latest IRS statistics–2007–the top 1% of the nation’s wage earners (representing 22.83% of the total Adjusted Gross Income) accounted for 40.42 % of the total federal income tax revenue. . . and so on.
____
Hello James. Truth be told, I find the whole federal income tax argument to be unconvincing, or flawed, or maybe it’s just that we see it differently. Here’s what I look at– While the individual income tax has been the largest single source of federal revenue since 1950, it still accounts for less than half of federal revenues, about 45% or so. Payroll taxes account for 36%. And corporate taxes, excise taxes and “other” account for the rest. While our tax system is progressive and the wealthiest do pay a larger dollar amount in taxes, they typically pay a smaller percentage of their income. I’m sure you’re familiar with the story Warren Buffett has told about compiling a data sheet of the men and women who work in his office. He had each of them make a fraction; the numerator was how much they paid in federal income tax and in payroll taxes for Social Security and Medicare, and the denominator was their taxable income. The people in his office were mostly secretaries and clerks, though not all. As we all know, Warren Buffett, with immense income from dividends and capital gains, paid less– much less–than the secretaries or the clerks or anyone else in his office when you looked at it as a fraction of his income. He has said that he was taxed at 17.7 % on the $46 million he made last in 2006 or 2007, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30%. He also said, If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.”

Posted by: Alyson | August 9, 2009, 9:17 pm 9:17 pm

Alyson,
arren Buffett makes it seem a lot simpler than it really is.
First of all, looking only at the payroll (FICA) tax for 2007. Warren Buffett’s secretary’s income of $60,000 would require her to pay 6.2% on all of her income (since she earned less than the cap of $97,500) for Social Security. That would be $3,720. She would also pay an additional 1.45% on all of her income for Medicare. That would be another $870. That’s a total of $4,590 FICA for the year.
NOW THEN Warren Buffett, as his secretary’s employer he would have to MATCH that amount. So he would have to pay another $4,590 in FICA tax for his secretary.
NOTE: Warren Buffett would pay the matching FICA tax for EVERY employee. I don’t know how many employees he has. Nor do I know if any of his employees earned more than the Social Security cap. But just for convenience sake, let’s say none do exceed the cap. That would mean that Warren Buffett would have to pay 7.65% of the total payroll for his share of his employees’ FICA tax. For simplicity sake, let’s say that he has 100 employees with their average income of $50,000. That would mean that Warren Buffett would have to pay 7.65% of $5,000,000 or $382,500 for the FICA for all of his employees.
Now as for Warren Buffett, himself, I don’t know for certain but it is my understanding that there is no cap on the Medicare portion of FICA. If that is the case, then Warren Buffett would have paid both shares of his Social Security tax–12.4%–up to the cap of $97,500, for a total of $12,090. He would then pay both shares of his Medicare tax–2.9%–for all of his income, $46,000,000, for a total of $1,334,000 for Medicare. His own total FICA tax would be $1,346,090.
So just considering the FICA tax: The secretary paid $4,590 on $60,000. (7.65%)
Warren Buffett paid $1,346,090 for his own FICA tax, but also $382,500 for his share of his employees’ FICA tax, that is a grand total of $1,728,590 on his $46,000,000 (3.76%)
So while he technically is paying 3.76% of his total income to FICA, he is paying an equal amount that each of his employee’s pay, plus his own.
Now when you include federal income tax, state income tax (where applicable), city income tax (where applicable), sales tax, corporate tax, capital gains tax, excise taxes, various gasoline taxes (oh does he smoke or drink?), Warren Buffett’s total tax percentage is not as low as he portrays it to be. Obviously the $46 million that he made in that year is not all taxable, for had it been then his federal income tax liability would have been $16,079,074 or 34.9%.

Posted by: James Danley | August 10, 2009, 1:28 am 1:28 am

Sorry, that should have been Warren Buffett.

Posted by: James Danley | August 10, 2009, 1:29 am 1:29 am

As a follow up. In 2007, the top 1% of the nation’s wage earners (those making over $410,096) paid an average federal income tax rate of 22.45%. The bottom 50% of the nation’s wage earners (those making less than $32,879) paid an average federal income tax rate of 2.99%.

Posted by: James Danley | August 10, 2009, 2:04 am 2:04 am

“Warren Buffett, with immense income from dividends and capital gains, paid less– much less–than the secretaries or the clerks or anyone else in his office when you looked at it as a fraction of his income.”
Ayson, do you really believe Warren Buffett does not “try to avoid paying higher taxes”? That is simply not true. His wealth is immense.
He has tax lawyers, trust managers and consultants structuring his wealth to avoid paying taxes. He could pay more in taxes (voluntarily) but chooses to avoid them.
That is the ultimate unfairness of Obama’s attack on the rich. He targets the strivers, the working “rich” who run small businesses and earn their income through salaries.
The truly WEALTHY, the Gates, Buffetts, Kennedys, Kerrys and Bushs do not earn their wealth from income and will not be touched in any serious way by Obama’s plans to “Tax the Rich.”
It’s all smoke and mirrors meant to protect the truly wealthy and keep others from attaining their status.

Posted by: Tsar Nicky | August 10, 2009, 9:00 am 9:00 am

James and Tsar Nicky,
I’m on my way out of town soon, so this will be briefer than my usual ramblings. On some things, maybe many things, we have to often just agree to disagree. My main point to James was that I find percentage of income a more persuasive figure, a more equitable figure, to use in these kind of discussions than a dollars to dollars comparison of income tax paid. I have read Warren Buffett’s books for years and find him to be a more honest and interesting source than others.
So here’s another quote:
“There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.”
Have a good week,
Alyson

Posted by: Alyson | August 10, 2009, 10:10 am 10:10 am

President of the United States and Office of Imaginary Information. $500 million for jet planes? 6 months to pick a dog? Medical with abortions at will? Kill off the old end to social security payments? CHANGE IS WHAT WE NEED NOW.

Posted by: dcrumpton | August 10, 2009, 12:13 pm 12:13 pm

“There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.”
Think Alyson, that is what I said. Obama and Congress continues to protect the truly wealthy while the strivers and small business owners are the ones getting hit the hardest.
The “war” being fought is between the truly wealthy (Gates, Soros, Buffett, Kerry, Kennedy, Bush and the like) and those on the way up, small and medium business owners, middle management and even farmers. Those making between $100,000 and a $1,000,000 on paper.
Sounds like a lot? It’s chump change to Warren and the boys.

Posted by: Tsar Nicky | August 10, 2009, 3:07 pm 3:07 pm

What is new about the fact this administration can’t keep its own stories straight.
The most common words that come from this Administration:
“He meant to say…..”
“He meant……”
“His intenetions were…..”

Posted by: Mike_C | August 10, 2009, 4:03 pm 4:03 pm

All the WH has to deal is release the video of the negotiations with PhRMA so that way the American people can see the terms of the deal. Obama said that all dealmaking would be televised on C-SPAN, so merely getting the recorded video of Obama’s dealmaking isn’t asking too much. Instead of the WH going back and forth on denials and non-denials, just clear everything up by showing the video!

Posted by: Dave | August 10, 2009, 6:48 pm 6:48 pm

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