Health Care's Biggest Test Still to Come

“While failures in launching the federal insurance Web site and online exchanges have thrust the Department of Health and Human Services to the center of public attention,” the Washington Post notes that “the IRS also has a huge role in carrying out the law, including helping to distribute trillions of dollars in insurance subsidies and penalizing people who do not comply.”

“None is more crucial than enforcing the requirement that all citizens secure health insurance or pay a penalty. But those efforts have been hampered by a one-year delay in applying new insurance regulations to large employers. Those employers had been expected to provide insurance coverage information that the IRS would use to help identify who has insurance and who does not.”

“The lawmakers who drafted the health-care law intentionally barred the IRS from using its customary tools for collecting penalties — liens, foreclosures and criminal prosecution. The only means of collecting the fine is to essentially garnish tax refunds for people who overpaid their taxes.”

The good news: “IRS officials say that they are on track to meet the law’s requirements and that their computer systems are performing as hoped.”

HealthCare.gov is the Case for Single-Payer

Nancy Folbre: “The malfunctioning website has magnified problems inherent in coordinating enrollment across many different companies in many different exchanges in cooperation with many different government agencies. The harmonization challenges are orders of magnitude greater than those faced by a single company or a single state, making streamlining difficult.”

“A single-payer insurance system, whether based on an extension of Medicare or on the Canadian model, promises many profoundly important benefits. Right off the mark, it promises simplicity.”

Banks Threaten to Charge Depositors if Fed Turns Rates Negative

As the Federal Reserve considers ways to begin tapering asset purchases without signaling withdrawal from monetary stimulus, the Financial Times reports that banks are not happy with at least one option.

“Executives at two of the top five US banks said a cut in the 0.25 per cent rate of interest on the $2.4tn in reserves they hold at the Fed would lead them to pass on the cost to depositors. Banks say they may have to charge because taking in deposits is not free.”

“About half of the reserves come from non-US banks that do not have to pay the deposit insurance fee. Their favourite manoeuvre is to take deposits from money market funds and park them overnight at the Fed, earning millions of dollars risk-free. Cutting the interest on reserves would stop that.”

EPA Rule Could Produce Fire Hydrant Shortage

Reps. Bill Johnson (R-OH) and Paul Tonko (D-NY) “introduced legislation this week to block an Environmental Protection Agency (EPA) rule that would require fire hydrants to use lead-free pipes starting next year,” The Hill reports.

“Johnson says that ruling would cause an immediate shortage of fire hydrants across the country, as any that are ready for installation would not meet the EPA’s new requirement… The law requires drinking water to be transported in lead-free pipes, and the guidance said the EPA would apply this same requirement to water that comes out of fire hydrants.”

Sequestration Will Be Worse in 2014

Government Executive highlights a new report by the Center for American Progress finding that “the tactics federal agencies used to reduce furloughs in fiscal 2013 are, in many cases, no longer available” for 2014.

From the Introduction: “There are four factors making next year’s sequester even more damaging than this year’s. First, and most simply, the sequester makes larger cuts in 2014 than it did in 2013. Second, many of the cuts that were legally made this year have not actually been implemented yet. Third, one-time fixes that mitigated sequestration’s worst impacts in 2013 cannot be used again next year. Fourth, sequestration made cuts to little-noticed but critical functions of government—cuts that will be particularly devastating if they are not reversed soon.”

Two New Obamacare Delays

CNBC reports that the Obama administration has announced that two deadline extensions for the health care reform law.

“One extension gives consumers eight extra days, to Dec. 23, to enroll in Obamacare plans that kick in Jan. 1, and gives them until Dec. 31 to actually start paying for those plans. The other extension delays by one month, to next Nov. 15, the opening of enrollment for insurance beginning in 2015. That extension also will give consumers another week on the back end of that enrollment period, which now will close Jan. 15, instead of Dec. 7.”

“The second extension means that many consumers may not see the premium prices for plans until after congressional elections in early November 2014. But administration officials said the delay will give insurers more time to evaluate their first-ever experience offering coverage on the government-run individual plan exchanges, and set their prices accordingly for the next year to reflect that.”

The Weekly Numbers

Here are the economic data highlights for this week, along with consensus predictions, via Bill McBride and the Financial Times. This week’s highlights include home sale and house price data. All times are Eastern Time.

Monday, November 25
10:00 AM: Pending Home Sales Index for October. The consensus is for a 1.1% increase in the index.

Tuesday, November 26
9:00 AM: FHFA House Price Index for September 2013… The consensus is for a 0.4% increase.
9:00 AM: S&P/Case-Shiller House Price Index for September… The consensus is for a 13.1% year-over-year increase in the Composite 20 index (NSA) for August.
Note: The Census Bureau has postponed housing starts data for October until December 18.

Wednesday, November 27
8:30 AM: Durable Goods Orders for October from the Census Bureau. The consensus is for a 2.0% decrease in durable goods orders.

Thursday, November 28
Markets closed for the Thanksgiving Holiday.

Friday, November 29
Markets close early following the Thanksgiving Holiday.

House Panels Battle Over NSA Reform

The Hill reports that the two House committees with jurisdiction over the National Security Agency’s surveillance programs — the Permanent Select Committee on the Intelligence and the Judiciary Committee — can’t agree on the path forward for the agency.

“The leaders of the Intelligence Committee want to preserve the NSA’s sweeping powers, while Judiciary members are likely to push legislation that will more aggressively rein it in… The House Intelligence Committee had planned to vote on an NSA reform bill Thursday… But it is now unclear whether leadership has made any decisions about which committee’s bill will receive a floor vote.”

What the Nuclear Option Means for the Economy

Now that Senate Democrats have detonated the “nuclear option” and removed the filibuster for presidential nominees, Matt Yglesias explains what the future may hold and why that matters for the economy.

“I would think ending filibusters for presidential nominees makes it more likely that a future Senate will curb filibustering of legislation… somewhat reducing the massive status quo bias of the U.S. legislative system. That makes basically any big legislative reform—whether it’s a conservative plan to privatize Social Security or a liberal plan to introduce a public option to the Obamacare exchanges—more likely.”

Could Filibuster Reform Make Things Worse?

While President Obama is sure to have an easier time getting his nominees through the Senate now that it only takes a simple majority, Jonathan Weisman speculates that the move “could usher in an era of rank partisan warfare beyond even what Americans have seen in the past five years.”

“Republicans may not be able to muster the votes to block Democrats on procedure, but they can force every nomination into days of debate between every procedural vote in the Senate book — of which there will be many. And legislation, at least for now, is still very much subject to the filibuster.”

But the Washington Post sees things differently: “The Senate vote…should make it easier for President Obama to accomplish key second-term priorities, including tougher measures on climate change and financial regulation, that have faced intense opposition from Republicans in Congress.”