Browsing the blog archivesfor the day Thursday, February 1st, 2007.


Senate Passes Minimum Wage Hike

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Congress, workers

See Bob Geiger for details.

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Insurance Industry v. Katrina

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Congress, Hurricanes

More than a year past the devastating hurricane season of 2005, the U.S. insurance industry is getting nervous. Class-action lawsuits and rebellious state legislatures are bad enough, but now some U.S. senators of both parties are threatening to revoke the McCarran-Ferguson Act, which exempts insurance companies from federal antitrust laws.

Yesterday Senate Majority Leader Harry Reid told bloggers on a conference call that “The insurance industry is the enemy.”

The problem is that the insurance industry is the enemy of most everything we do today. They have an anti-trust exemption from the Depression era that was supposed to last only a few years [the McCarran-Ferguson Act] but is still with us today. This exemption allows the industry to do harmful things to the country. They are fixing prices, which would ordinarily be a violation of the Sherman Anti-Trust Act, but there is nothing we can do.

McCarran-Ferguson is under fire from a prominent Republican Senator also. When State Farm rejected a claim for the loss of a $400,000 home in Mississippi, the company wasn’t considering the political connections of the owner, Trent Lott. Lott, who is the Senate Minority Whip, announced last week he wants to revoke McCarran-Ferguson as well. Maria Reico writes for the Mississippi Sun-Herald (January 25, 2007):

Senate Minority Whip Trent Lott, R-Miss., intends to introduce legislation shortly to remove insurers’ antitrust immunity, along with Senate Judiciary Committee Chairman Patrick Leahy, D-Vt. In the House, Rep. Gene Taylor, D-Bay St. Louis, is working with Rep. Pete DeFazio, D-Ore., on a similar bill.

“I don’t know what this means for me personally,” Taylor, a litigant in the suit, said in an interview. “Given my experience with State Farm, I’ll believe it when a certified check is deposited in my checking account.”

Taylor said his campaign to eliminate the insurance industry’s antitrust immunity, push for all-perils insurance and secure federal oversight of the state-regulated industry will continue. “I can assure you that effort does not go away. They have hurt too many of my friends.”

Taylor said he was motivated by what he believes is the insurance industry’s ability to fix rates and settle claims. “I’m convinced the big guys did call each other and say ‘don’t pay claims.’ It’s perfectly legal to do so.”

Lott spokesman Lee Youngblood said, “We expect to have hearings early this year.” Lott, who is also a litigant against State Farm, “was surprised to learn they were exempt and he would like to see them subject to laws like everybody else.”

The legislation would repeal the exemption in the McCarran-Ferguson Act of 1945 and bring the property/casualty insurance industry under federal oversight of the Federal Trade Commission.

Leahy, who has sponsored repeal legislation in other sessions of Congress, “is going to introduce it soon,” said Senate Judiciary Committee spokeswoman Tracy Schmaler. The panel will hold a hearing, she said.

Last week State Farm announced a mass settlement with more than 600 Mississippi homeowners who sued the company for refusing to pay damages from Hurricane Katrina in August 2005. The company also made an agreement with Mississippi Attorney General Jim Hood to reopen and pay other disputed claims.

However, today a U.S. District Judge slashed the jury’s award of $2.5 million in punitive damages down to $1 million. Michael Kunzelman of the Associated Press reports,

U.S. District Judge L.T. Senter Jr. in Gulfport, Miss., reduced the award to $1 million even though the judge said State Farm acted in a “grossly negligent way” by denying the claim filed by policyholders Norman and Genevieve Broussard, whose Biloxi home was destroyed by the August 2005 storm.

Louisiana has been facing another insurance crisis. After it became clear that the state’s largest commercial insurer was planning to drop all commercial property coverage in the New Orleans, Lafayette and Lake Charles areas, Louisiana Governor Kathleen Blanco took action. She and state Insurance Commissioner Jim Donelon intervened. The two Louisiana officials briefed St. Paul Travelers Cos. Inc. on levee improvements and coastal restoration efforts, and Travelers modified its plans.

But this week high-level executives of the insurance industry invited the Louisiana governor to California for an intervention of their own. Governor Blanco addressed the quarterly board meeting of the Property and Casualty Insurers Association of America, asking them to come to Louisiana to write policies. And the insurers are interested in working with Louisiana.

Why the change of attitude? Rebecca Mowbray wrote in the New Orleans Times-Picayune (January 29, 2007),

In a special legislative session on insurance this month in the nation’s most hurricane-prone state, newly elected Republican Gov. Charlie Crist and the Republican-controlled legislature did a 180-degree turn away from the pro-business efforts to help the insurance industry that have dominated since Hurricane Andrew in 1992. They approved a spate of consumer-oriented reforms that one Florida newspaper described as “Ralph Nader-esque.”

Insurers say Florida destroyed its insurance market by rolling back rate increases for the state’s insurer of last resort and increasing the obligations of the state-run catastrophe reinsurance pool without adequate financing, essentially putting the state in competition with the private market. Insurers say the state’s credit rating is now in jeopardy, and that the experiment will have dire consequences and ultimately will prove anticonsumer.

The insurance industry didn’t see it coming, and rattled insurers want to make sure the revolt doesn’t spread to other states.

Hence, a sudden interest in the insurance needs of Louisiana.

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Pawns

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Bush Administration, Dick Cheney, Valerie Plame

I haven’t been blogging about the Libby trial, because other bloggers closer to the action are blogging everything that needs to be blogged. But I do recommend Sidney Blumenthal’s “How Libby Became Cheney’s Pawn” as a nice refresher on what the trial is about.

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Emboldening

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Bush Administration

Today Sen. Joe Biden, chairman of the Senate Foreign Relations committee, endorsed a non-binding resolution by Republican Sen. John Warner opposing Bush’s “plan” to send 21,500 more troops to Iraq. This is in spite of the fact that Biden had co-authored a more strongly worded resolution. Susan Cornwell of Reuters reports,

“Now we have a real opportunity for the Senate to speak clearly” on Bush’s plan, said Biden, a candidate for the 2008 Democratic presidential nomination.

Debate on the Warner resolution is expected to start in the Senate on Monday. Although it is not binding, it would be hard for Bush to ignore, Biden told his committee.

“If the majority of the Congress and the majority of the American people speak loudly, it’s very difficult I think for the president to totally dismiss that,” Biden said.

President Bush will, of course, dismiss it.

Bob Geiger has the text of the Warner resolution here. Also, Moveon.org’s Tom Matzzie endorsed the resolution as a good “first step” in an emailed press release. He wrote,

The compromise language would not constrain the Congress from using all of its powers to stop the escalation and force President Bush to implement an exit plan. The “power of the purse” has been wrongly caricatured as “cutting off the troops.” That has never happened in U.S. history nor should it. However, Congress has several times used its powers to stop a president’s use of military force.

If, after the vote, the president fails to respond to the will of a bipartisan majority in Congress, the American people and the Iraq Study Group then the Congress must without hesitation use all of its powers to stop President Bush and get America out of Iraq.

Noam N. Levey of the Los Angeles Times writes that

Senate Democratic leaders indicated they would back the Warner proposal as well. “I believe we have a better chance now,” said Sen. Richard J. Durbin of Illinois, the No. 2 Democrat.

Senate Majority Leader Harry Reid (D-Nev.) said there was “near unanimity” among Democrats, adding that he wanted to make the Warner proposal the basis for debate Monday, when the Senate is expected to consider the issue.

Senator Russ Feingold is not on board, however, because he thinks the resolution is too weak.

[Update: I have word via email that Sen. Chris Dodd also opposes the Warner resolution as being way too wussy.]

At The Guardian, Ed Harriman gloomily predicts the U.S. will not leave Iraq no matter what Congress does.

The unpleasant truth is that George Bush, James Baker’s study group and many who support them agree that Iraq is much too important to American interests to be trusted entirely to the Iraqis. They also agree that US troops are going to stay in Iraq to fight on their own and to run the Iraqi army. Which means the war will get worse. Which means there are going to be a lot more dead Iraqis even if – and it’s a big if – there are fewer body bags carrying dead US soldiers by the next American elections.

Related:

At Newsweek, Michael Isikoff and Mark Hosenball write,

The Senate Intelligence Committee and the CIA may be headed for a new confrontation over an old issue: why an internal report documenting the agency’s failures in the run up to the September 11 terror attacks is still being withheld from the public.

At Slate, Fred Kaplan explains the Bush administration’s cockeyed strategy to promote sectarian conflict in the Middle East.

Farah Stockman reports for the Boston Globe on a report by the special inspector general for Iraq reconstruction, which says that Iraq’s ministries are struggling to perform basic governmental functions.

In the Senate today, Gen. George Casey defended Bush’s new “policy” to the Armed Services Committee. The General faced tough questions from senators, including John McCain.

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GOP Out of Touch

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Bush Administration

The Lizard is writing for the Washington Post these days. Although I am wary of anything The Lizard says, he often is a good source of information on what’s happening inside the GOP.

In today’s column he writes that the GOP leadership has lost it.

Pollster Frank Luntz for the past decade has issued warnings to his fellow Republicans that they did not want to hear, but never has he been so out of touch with them as he is today. “The Republican message machine is a skeleton of its former self,” Luntz told me. “These people have no idea how the American people react to them.”

Luntz sees a disconnect between Republicans and voters that projects a grim future for the party. That contradicts what House and Senate Republicans are saying to each other in closed party conferences. While Luntz views 2006 election defeats as ominous portents, the party’s congressional leaders see only transitory setbacks and now dwell on bashing Democrats.

Now dwell on bashing Democrats? Like that hasn’t been 90 percent of their message since the Yalta Conference?

Anyway, Novak goes on to say that there’ve been some bad vibes between Frank Luntz — a long-time Republican operative who works under the cover of being a “pollster” — and Rep. John A. Boehner, the Republican House Minority Leader.

Boehner, elected chairman of the House Republican Conference when the party took control in 1995, tried then to keep Luntz from addressing closed-door meetings but was overruled by Speaker Gingrich. When Luntz warned publicly in October 2005 of rejection by voters in 2006, he was forced to deliver an abject apology before he could speak at a retreat of House Republicans held at the Library of Congress. After seven straight years on the program, Luntz was kept off last week’s 2007 session at Cambridge, Md., by Boehner.

Some Republicans in Washington think the biggest scandal of their time is runaway federal spending. Others (like Boehner) think that the GOP’s only problem is that they haven’t bashed Democrats enough. After the midterm elections the Right Blogosphere went all-out promoting some reform candidates for the House Republican leadership. The righties soon learned how much clout they had in Washington — none. House Republicans kept Boehner (Ohio) and Roy Blunt (Missouri) as their respective Leader and Whip.

This week Boehner managed to piss off some of the biggest rightie toadies on the Blogosphere. Boehner has called for “strategic benchmarks” to measure the effectiveness of the President Bush’s “new” Iraq “strategy.” But righties have been well pickled in the propaganda that any metric or measure of Bush’s Folly is bad, because it emboldens the enemy. And why this theory is not an admission of failure is … well, never mind.

The Reptile continues,

Indeed, Luntz is not alone in his gloomy prognosis. Republican pollster Bill McInturff believes his party “underestimates” the 2006 outcome and thinks the outlook for Republicans is as dangerous as it has been “at any time since Watergate.” Sen. Jim DeMint, a reform Republican from South Carolina, says the newly minority Republicans are like the Israelites yearning for the fleshpots of Egypt. The question is whether the party will heed warnings or follow the route of its leaders, who mainly want to trash Nancy Pelosi.

The fact is that the Republican Agenda has been pretty much content-free for most of the past 50 years. If you look hard at how Republicans have gotten elected since 1960 or so, their campaigns are mostly about fear-mongering (Vote for the GOP or Communists / terrorists will get you), discrimination (Vote for the GOP or black / gay people will move into your neighborhood and sexually molest your children) and Dem bashing (Dems will tax you to death and give the money to Communists, terrorists, black welfare queens driving Cadillacs, or gay men planning lavish wedding receptions). They fancy themselves the “party of ideas,” but their ideas are mostly smoke for their seething resentments and greed.

Frank Luntz’s task has been to create and maintain the cover. But Boehner has been bashing Democrats for years and doesn’t see why he needs Luntz’s help to spin Democrat-bashing into something that looks like policy.

I think the operative word here is “self-destruct.”

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