Mayor Gray, Veto the D.C. Living Wage Bill!

July 22, 2013July 22, 2013Danny Vinik 1 Comment

It’s been almost two weeks since the D.C. council passed it’s living wage bill and Mayor Vincent Gray will have to decide soon whether to veto the measure. The law would require large retailers – defined as having operating revenues of $1 billion or more and store size of at least 75,000 square feet – to pay their employees a minimum of $12.50 an hour. The current D.C. minimum wage is $8.25/hour. The law is aimed directly at Wal-Mart, which had been planning on opening six stores in the D.C. region, but has since threatened to scrap most of those plans if Gray signs the bill.

Wal-Mart may cancel its D.C. stores.

He should veto it.

The new stores will bring in 1,800 jobs to the region which still faces high unemployment. While D.C. proper’s unemployment rate is low (PDF), the entire region’s is still at 8.5% (PDF). Those jobs would be very helpful for those unemployed workers. And you should take Wal-Mart’s opposition to the bill seriously. They aren’t bluffing. If Gray signs the bill and Wal-Mart still opens the stores, it will be a sign to every other city in the country to follow a similar tactic. Wal-Mart simply cannot afford to be bluffing here.

So that leaves Gray with two options.

1. Veto the bill and Wal-Mart will open its stores.

2. Sign the bill and Wal-Mart will walk away.

On CNN this morning, D.C. council member Vincent Orange justified the law by saying that Wal-Mart’s low wages force the government to pay more in benefits and thus cost taxpayer’s money. But in Orange’s alternate scenario where Wal-Mart doesn’t open the stores in D.C., those 1,800 workers are unemployed and are entirely dependent on the government for food stamps, unemployment benefits, etc. That costs taxpayers more than if Wal-Mart opened its stores.

Now, if the labor market were at full employment, things would be different. Those workers could find jobs elsewhere, but they may be at the minimum wage ($8.25/hour) as well. The government would have to pick up the tab anyways. And if those jobs weren’t at the minimum wage? Well, then Wal-Mart couldn’t hire those workers at $8.25/hour even if there was no law against it. Any worker making more than the minimum wage isn’t going to switch to a minimum wage job at Wal-Mart. The company would soon find itself facing labor shortage when it opened its new stores and would have to offer higher wages anyways.

With unemployment high, the living wage bill eliminates 1,800 potential jobs and forces the taxpayers to pay more.

With unemployment low, the living wage bill causes those 1,800 workers to take jobs at a different firm at either the minimum wage (leaving the government with the same financial responsibilities) or at a higher wage (which would’ve forced Wal-Mart to raise wages anyways).

The choice is clear: Mayor Gray should veto the bill.

Medicare Payment for End of Life Care

July 22, 2013July 22, 2013Danny Vinik Leave a comment

Representative Earl Blumenauer (D-OR) has reintroduced his bill that would allow Medicare to pay doctors for having talks with their patients about their preferred end of life care. It has bipartisan support in the House and a similar bill is being drafted in the Senate by Mark Warner (D-VA) and Johnny Isakson (R-GA).

From Politico:

The heart of the Blumenauer bill is simple: Doctors and patients should talk about aging and about how a disease is likely to progress so that the patient can make clear and informed choices, and the doctor can understand and respect them. Those conversations can and should take time.

Doctors are paid well for doing procedures, Blumenauer said. They should also be paid for the time they talk to a patient about something this important. The bill calls for Medicare to reimburse the physician for one such conversation with the patient every five years, more frequently if the patient’s health deteriorates.

Every time Blumenauer brings up the bill, conservatives immediately start screaming “death panels” and rally opposition against it. But this is just silly.

There’s no good reason Medicare shouldn’t pay doctors to have these talks with patients. As people near the end of their lives, they should understand what they’re going through, different options they have and ensure that their wishes are respected. That’s the role of a medical professional and Medicare should be reimbursing them for it.

This reminds me of another agency that Republicans have been screaming “death panels” about – the Independent Payment Advisory Board (IPAB). IPAB is a 15-member board that analyzes Medicare reimbursement rates and finds ways to cut spending while not reducing quality of care or eligibility. The American Medical Association notes the many restrictions the agency has in its cost-cutting mission:

The IPAB is prohibited from submitting proposals that would ration care, increase revenues, change benefits, modify eligibility, increase Medicare beneficiary cost sharing (including Parts A and B premiums), or change the beneficiary premium percentage or low-income subsidies under Part D.

Nevertheless, Republicans have been screaming that it will ration care and throw grandma off a cliff. That’s not what the board does. It’s not about rationing care and explicitly cannot do so. The same is true with Blumenauer’s bill. It’s not about Medicare telling doctor’s to convince patient’s to forego expensive surgeries or prevent them from receiving desired treatments. It’s about abiding by their wishes and making them as comfortable as possible at the end of their lives. There shouldn’t be any opposition to that.

The Trouble Securing the GOP Nomination for Senate Republicans

July 19, 2013Danny Vinik Leave a comment

Ed Kilgore, Josh Marshall and Kevin Drum each had posts today basically declaring Marco Rubio’s (R-FL) 2016 presidential aspirations dead after immigration reform has stalled in the house. Marshall says so defiantly. Kilgore believes that, after “settling” for candidates that were too moderate in 2008 and 2012, the Republican base will stay away from Rubio in ’16. Drum agrees, but adds that Rubio is young and has potential in 2020 and 2024.

I agree with all of that, but I want to expand the scope of this beyond just Rubio. Every senator with presidential aspirations – from Rubio to Ted Cruz (R-TX) to Rand Paul (R-KY) – is going to face the same critique from the general public: you haven’t done anything.

Rubio’s 2016 presidential chances are falling.

It’s well known that Americans disapprove of Congress by large numbers. They also blame both sides for the gridlock, although the GOP gets slightly more of the blame in most polls. This presents a big problem for Republican presidential candidates over the next couple of years. How can they continue obstructing the Senate without continuing to seem like they’re the ones to blame? Rubio has seen over the past few weeks what happens when a senator steps across the aisle and tries to accomplish anything. Whatever passes the Senate is unacceptable to House Republicans, who are content to let the legislation die. Now Rubio faces the wrath of the base without anything to show moderates or Hispanics. That’s why Kilgore, Marshall and Drum have dug a grave for his 2016 presidential ambitions.

But Paul and Cruz are going to be expected to do more than shoot down every piece of legislation. Dave Weigel summed up Cruz’s six month in office today and his only accomplishments are disrupting lawmaking:

“That’s the story of Ted Cruz’s strategic acumen in the Senate. The paradox is that the theatrics that completely backfire in D.C. are embraced by activists in the bright world outside.”

We’re only six months into Cruz’s Senate career and it’s easy to rouse the base by refusing to compromise at the beginning. But at some point, most voters are going to want to see Cruz actually try to pass a law. The current Ted Cruz could certainly win the Republican primary, but he wouldn’t have a chance in the general election, because he won’t appeal to independents whatsoever. Three and a half more years of obstruction will just turn them off more.

That’s Republican senators’ problem: anyone in Congress will have trouble winning an election in 2016. It’s a lose-lose proposition for Republican Senators. If you support major legislation, help it get passed with bipartisan support and thus prove to moderates you’re willing to compromise, then the House will kill the bill (preventing you from taking credit), the Tea Party will withdraw their support and you will lose in a Republican primary. If you don’t support any legislation and just spend time arguing against all proposed policies, then independents will see you as an obstructionist who can’t govern. You’ll have Tea Party support, but moderate Republicans will be wary of your electability. If you do survive a primary, the Democratic candidate (likely Hilary Clinton) will beat you in the general election.

Rubio will top the list of 2016 Republican presidential candidates if immigration reform passes, but it’s unlikely it will. He took option one and lost. Cruz and Paul are eventually going to have to make a decision as well. Will they contribute to any policymaking and attempt to endear themselves to independents looking for compromise? Can they find a piece of legislation that is worth risking Tea Party support? Or will they continue to obstruct everything in the Senate, fight for support of the base and worry about pivoting in the future? That’s what makes any Republican congressman’s presidential campaign (pre-campaign in this case) so challenging. Anyone from the Senate faces structural political challenges that are nearly impossible to overcome. Rubio has already been taken down by them. Who will be next?