Category Archives: Uncategorized

Fighting Fire with Fire—What is the Point of a Limited Attack on Syria?

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I can’t help but wonder what President Obama hopes to accomplish.

Are we taking military action simply to “send a message”?   If so why not use words rather than weapons?

Obama can be a powerful orator. Why not take to the bully pulpit and explain, to the world, the horrors of what is happening in Syria? .

A few days ago, New York Times columnist Charles M . Blow asked a provocative question: “Is America’s moral leadership in the world carved out by the tip of its sword?”

Wouldn’t it be better to demonstrate our “moral leadership” in some other, wiser way?  Can anyone point to an instance where a limited military action brought an end to violence?

Over at the Guardian Michael Cohen insists that we must attack in order to “enforce global norms”—in this case, the rule that the use of chemical weapons is simply beyond the pale. http://www.theguardian.com/commentisfree/2013/aug/29/liberal-case-for-striking-syria  Cohen claims the taboo dates back to World War I.

Has he forgotten about our use of Napalm in Vietnam?  Is he simply too young to remember the photo of a 9-year-old girl, wailing “too hot, too hot,” as she runs down the road, “naked after blobs of sticky napalm melted through her clothes and layers of skin like jellied lava.” http://news.yahoo.com/ap-napalm-girl-photo-vietnam-war-turns-40-210339788.html

Writing for the Atlantic, James Fallows quotes budget-policy expert, Mike Lofgren: “The US has in the recent past violated international norms on aggressive war, torture, rendition of POWs, assassination, use of chemical weapons (phosphorous, napalm, etc.), land mines, ad infinitum.” http://www.theatlantic.com/politics/archive/2013/09/your-labor-day-syria-reader-part-1-stevenson-and-lofgren/279254/
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Under Obamacare, Will You Receive a Subsidy to Help You Buy Your Own Insurance? We Now Have Real Numbers That Will Let You Calculate How Much You Will Receive

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Note to Readers: A longer version of this post appeared yesterday on HealthInsurance.org.

Up until now, when Obamacare’s supporters and reform’s opponents squabbled over what insurance will cost in 2014, they had to rely on estimates and national averages. But now we have real numbers.

Eleven states have announced the rates that insurers will be charging in their Exchanges-marketplaces where individuals who don’t have employer-sponsored coverage can shop for their own insurance.

Subsidies Will Be Based On the Cost Of A Silver Plan Where You Live,

Middle-income as well as low-income people buying coverage in the Exchanges will be eligible for government subsidies that will come in the form of tax credits. Anyone earning between 100 and 400 percent of the federal poverty level (FPL) (now $11,490 to $45,960 for a single person, and up to $126, 360 for a family of six) will qualify.

Most people who are forced to buy their own insurance earn less than 400% of FPL. More affluent Americans usually work  for companies that offer comprehensive coverage.

The graph below shows average Silver plan rates in the eleven states that have disclosed premiums. (Note that these are only state averages. Premiums vary widely within a state: In some cities and counties silver plan rates will be much lower, even before you apply the subsidy.

Silver plan premiums

It’s worth noting that in these 11 states the least expensive Silver Plan costs 18% less than the non-partisan Congressional Budget Office projected last year. 
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The Employer Mandate is Postponed: What Does This Mean For Obamacare? Is Ezra Klein Right–Should the Employer Mandate Be Repealed?

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The administration has announced that employers with more than 50 employees will not be required to offer insurance to their employees until 2015.

Originally, reform legislation said that these employers would have to offer affordable, comprehensive insurance next year—or face penalties of $2,000 to $3,000 per worker

                              Proof that Obamacare is Not Working?

Without missing a beat, Republicans have stepped forward to say that the delay is evidence that Obamacare is faililng.

What they apparently doesn’t know (or doesn’t want you to realize) is that a delay in  the employer mandate will affect only a fraction of employers, and very few employees

First, the majority of large companies already offer health insurance that includes the benefits that the Affordable Care Act labels “essential.” (The only exceptions tend to be large restaurant and retail chains)

The mandate will have the biggest impact on small companies that today, may offer insurance, but often don’t provide “comprehensive” coverage. The postponement means that these firms will have another year to think about whether they want to expand coverage—or pay a penalty,

But their employees will not be hurt by the delay.  If either a restaurant chain or a small firm doesn’t offer benefits next year, both full-time and part-time workers be able to buy their own coverage in the Individual Exchanges where the majority will be eligible for generous tax credits. The coverage available the Exchanges will be just as good as the insurance their employers will be required to offer in 2015.

As former White House health policy adviser Zeke Emanuel pointed out today on MSNBC’s “Morning Joe”:  “The delay of implementation of the employer mandate will impact a limited number of companies. I actually don’t think this is that big a deal,” .

Emanuel went on to point out that the “the provision only applies to employers who have 50 or more employees. He estimated that there are ibkt  200,000 total employers in the U.S. [who would be] impacted and that “94 percent already offer health insurance” to employees.

Emanuel’s estimate may be high: “You’ve got 5.7 million firms in the U.S.,” says Wharton’s Mark Duggan, who served as the top health economist at White House’s Council of Economic Advisers from 2009 to 2010. “Only 210,000 have more than 50 employees. So 96 percent of firms aren’t affected.

“Then if you look among those firms with 50 or more employees, something on the order of 95 percent offer health insurance. So it’s basically 10,000 or so employers who have more than 50 employees and don’t offer coverage. Those companies probably employ around one percent of American workers.”

 To Judge the Success of Obamacare , Don’t Over-React to Day by  Day Headlines

Emanuel  also urged taking a long-term view of what the Affordable Care Act is going to accomplish, saying: “We need to look for 2020 rather than moment to moment for changes in the system.”

I couldn’t agree more. Reforming U.S. healthcare is an enormous undertaking. As I have said in the past, it will be a process, not an event. Along the way, there will be glitches. Each time, reform’s opponents will jump up and down, insisting that the End is Nigh. Obamacare is dead.  We must  ignore them—take the long view, and forge ahead.

I am hopeful that by 2020  reform’s goals will be realized. Even then, we will continue to modify and improve reform legislation over a period of years, just as we have revised Medicare.

The notion that we must “rush” to implement every aspect the ACA is misguided. When attempting to enforce the employer mandate, an emphasis on “speed” could lead to the “train wreck” that Republicans predict. 

What is crucial is that the “Patient Proteciton and Affordable Care Act” protects as many  Americans as possible, as soon as possible, while making medical care affordable by giving those who must buy their own insurance the subsidies they need. In 2014, this will be happening.

In the meantime, we already have begun to rein in health care costs, slowing healthcare inflation from 7% or 8% a year to roughly 3%. This is only a start, but a very good start.                               

                         How Will the Delay Effect the Mid-Term Election?

Predictably, some conservatives are crowing that the delay represents a “huge set back” for Obamacare. “The Obama administration has undermined its sole claim to greatness and delivered a blow to Democrats on the ballot in 2014,” writes Washington Post conservative columnist Jennifer Rubin. /

 In truth, this is far from a major setback for reform. Apparently Rubin doesn’t realize how few employers will be affected, and perhaps she doesn’t understand that without the employer mandate, even if these employers don’t offer benfits, the majority of their workers will be eligible for tax credits in the Indivudal Exchanges,

As for the effect on candidates running in 2014, even Fox News recogizes that Republicans, not Democrats are most likely to be hurt. 

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If You Buy Your Own Insurance in the Exchanges, Will You Receive a Government Subsidy? How Much Will it Be for Couple, or a Family of Five?

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ACA tax credits

 

 

 

 

 

 

Source:

No doubt you have read that if you are single, and earn less than 400% of the Federal Poverty threshhold (roughly $46,000 for an individual or $94,200 for a family of four) you will be eligible for a tax credit to help you cover the cost of insurance premiums.

But most of us don’t fit into one of those two categories. What if you are a couple, or a family of three? What happens if you have four kids?.

As the table above reveals, if a couple has  four children  and earns less  than $126,360 (400% of the FPL), they will be elibigle for the tax credits. Note: these credits are available only if you are self-employed, unemployed, or work for a company that does not offer affordable, comprehensive insurance. “Affordable” is defined as individual coverage that costs less than  9.5% of your income.

The credits are designed to make sure that no one who purchases their own insurance is forced to spend more than 9.5% of their income on health care. For instance, according to the Kaiser Family Foundation’s (KFF’s) new subsidy calculator, coverage for a 35-year-old couple with three children might cost $13,101./(This is an estimate; actual premiums will vary depending on where you live. Healthcare is much more expensive in some states than in others. ) If the parents earned roughly $100,000 a year, they would be asked to pay $9,500 toward their insurance and would receive a tax credit of $3,626.

This assumes that they purchase a “silver plan” which pays for an average of 70% of covered benefits. The family would owe the other 30% in  the form co-pays and deductibles. But keep in mind that preventive care is free, there are no co-pays and the deductible does not apply.

Assuming they need care other than preventive care, total out-of-pocket spending would be capped at $12,750, even if the entire family wound up in a car accident, three of them were hospitalized, and two needed surgery.

If they preferred, the family could purchase a less expensive Bronze plan which would pay for 60% of covered benefits. Their co-pays and deductible would be higher, but once again, preventive care would be free, total cost sharing still would be capped at $12,700, and the premium for a Bronze plan would be lower: KFF estimates that a family of five earning $100,00 would still receive a subsidy of $3,626 and their share of the premium would be just $7,253.

Why is the Government Subsidizing Households That Earn more than $125,000?

 If people choose to have four children, that certainly is their business. But why should I help pay for their healthcare?

The answer is two-fold:

First, people don’t necessarily choose to have 4 children –or more. Some couples are surprised (not to mention overwhelmed) when they disccover that they are having twins or triplets. 

Secondly as a society, we care about children. We don’t want any child to go without needed care.

But there also is a pragmatic reason for supporting large families. If those children don’t receive preventive care such as dental checks as well as  timely treatments when they are sick, down the road, we as a society will pay the price. The health of the population will play a major role in determining how productive we, as a nation, are.  

 

 

 

 

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Haggling for Health Care

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Below, a guest post by Naomi Freundlich. Long-time readers will remember Naomi as the person who helped me write HealthBeat before we both left The Century Foundation in 2011. She now has her own excellent blog,  Reforming Health

In this piece, she describes what it is like to live with a high-deductible health plan and find yourself bargaining with doctors when trying to get care.

Let me add that beginning in January of 2014, comprehensive, affordable insurance will be available in the Exchanges– along with subsidies. This should mean that no one will have to sign up for a plan with a $4,000 deductible ($8,000 out of network) plus co-pays.

(Though I realize that some upper-middle-class families who earn just a little to much to qualify for a subsidy may have a hard time finding affordable insurance in the Exchanges. But so far, the pricing in states like California and Colorado is encouraging. I’ll write more about this as we find out more about how much insurance will cost in other state Exchanges) 

Nevertheless, next year some health care providers may try to charge patients more than the insurer will pay. This is called “balance billing.” In that case, patients will need to shop for physicians who accept the insurers’ reimbursement as payment in full.

My guess is that most heatlh care providers will discover that there just are not enough very wealthy patients out there (even in New York City), able and willing to pay more than either Medicare or an insurer will pay.  

by Naomi Freundlich

I’m not a big fan of bargaining and my half-hearted attempts to get a better price for a used car, garage sale find or contractor’s service have been mostly unsuccessful. There’s always that nagging feeling that the seller is laughing with delight once I’m gone, thinking, “I really pulled one over on that rube!”

And so it has come as somewhat of a shock to me that medical care has become the new garage sale, as far as haggling goes.

First we found out that hospitals have “chargemasters” that hold the list prices for everything from knee replacements to aspirin tablets, and that these prices differ wildly between hospitals; even those in the same city. We also know that insurers, both private and Medicaid and Medicare, never pay these list prices but instead bargain with hospitals to pay substantially discounted prices. The only ones not getting in on the discounts are the uninsured or under-insured people who get hit with the full list price of hospital care.

The same thing happens with doctor bills. If you’ve ever compared what your doctor bills your insurer with what your insurer actually agrees to pay, it’s clear that there is a lot of bargaining going on. If the list price of an office visit is $125, the insurer pays $60; for a $200 lab test, the insurer reimburses $70, and so on.

A recent New York Times article,  “The 2.7 Trillion Medical Bill,”  focuses on the cost of colonoscopy to help explain how health care spending can be so much higher in the U.S. than other developed countries. In the article, patient bills for their colonoscopies ranged from a hefty $6, 385 to a whopping $19,438. Meanwhile, their insurers all negotiated the price down to about $3,500. As Elizabeth Rosenthal of the Times notes, ” this is still far more than the “few hundred dollars” that a routine colonoscopy costs in Austria or Italy.

Why do we have such price inflation here in the U.S.? Our for-profit health care industry has a lot to do with it, as does the maddeningly unregulated nature of the business.  Rosenthal writes: “A major factor behind the high costs is that the United States, unique among industrialized nations, does not generally regulate or intervene in medical pricing, aside from setting payment rates for Medicare and Medicaid, the government programs for older people and the poor.”

David Blumenthal, president of the Commonwealth Fund tells the Times; “In the U.S., we like to consider health care a free market.” He adds, “But it is a very weird market, riddled with market failures.”

Now back to haggling. In the last year, my family—like many others in the nation—has been covered by a high-deductible insurance plan. Before our plan kicks in to pay for doctor bills, prescription drugs or diagnostic tests, we must meet a $4,000 in-network deductible. After that, we still have co-payments and also face an out-of-network deductible of $8,000. Now responsible for so much out-of-pocket health spending, I’m face to face with Blumenthal’s “weird market.” It’s a market where no one tells you the price of office visits beforehand, doctors have no idea how much an MRI they’ve just ordered is going to cost, and you end up paying dearly for not being an aggressive shopper.
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A Doctor Confides, “My Primary Doc is a Nurse”

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Last week I interviewed a doctor who told me that his primary care doc is a “physician assistant”  who has been trained to deliver primary care.   He said it casually, dropping the fact into a long conversation.

Dr. David Kauff is an internist at Seattle’s Group Health Cooperative (GHC), an organization that has a fabulous reputation–both among patients and among physicians—for its primary care program.  One reason is that at Group Health, doctors, physicians assistants and nurse practitioners work together in teams. “The success of our model is based on the fact that everyone in this together; we are corralled by a common purpose,” says Kauff, who also serves as GHC’s  Medical  Director for Practice and Leadership. 

I’ll be writing more about Group Health Cooperative in a few days.

 In this post, I would like to focus on the growing role of Nurse Practitioners (NPs) and Physician Assistants (PAs) as clinicians.  NPs are registered nurses who have gone on to earn a master’s or a doctorate. Some specialize in areas such as anesthesiology, pediatrics (pediatric nurses) or Ob-Gyn (certified nurse-midwives). NP’s can run clinics; some run their own practices.     

By contrast, physician assistants (PAs) don’t usually work alone. While physicians may not be on-site, typically doctors oversee their work.  

PAs are formally trained to provide diagnostic, therapeutic, and preventive health care services.  They take medical histories, examine and treat patients, order and interpret laboratory tests and X- rays, and make diagnoses. In many cases, they did not begin their careers as nurses. They may have been  paramedics, respiratory therapists, or emergency care technicians (EMTs) before becoming PAs.  

Currently, 17 states, plus the District of Columbia, let nurse practitioners operate independently.  In 33 states regulations vary. As this map  reveals, in some places NPs are not allowed to prescribe medication. In others, they may have to consult with a physician when treating patients.

It’s worth noting that NPs enjoy greater freedom in the Northwest, the Upper Middle West, and Northern New England (areas that some healthcare reformers refer to as “Canada South” because these states are in the vanguard of reform) as well as in the Southwest, where many NP’s started working in group practices, and they went out and established their own clinics. Nationwide, about 6,000 nurses operate independent primary-care practices.                                               

                                              Why Physicians Object

Today, 14 states are debating whether NPs should be allowed to practice on their own.  Many emphasize the difference in education and years of training. Though in truth, the length of training is not so different. Becoming a primary care doctor requires four years of medical school plus three years of residency. A nurse practitioner  attends nursing school for four years, then spends two to three years in graduate school, depending on whether he or she is getting an M.A. or a Ph.D. (In 2015, all nurse practitioners will be required to earn a Ph.D.) 

Most NPs also have nursing experience. At the University of Michigan, for instance, the average candidate admitted to the NP program has 7 years of hands-on experience as a nurse.  But while the number of years spent training are not so different, as I explain below, traditionally ,the nature of that training has been very different.   

Doctors say that they are worried about patient safety. “I see it as physicians being true to their oath ”  Dr. Adris Hoven, president-elect of the American Medical Association recently told Marketplace Health Care’s Dan Gorenstein.   Hoven insists that doctors are “not threatened” by NPs.  “At the end of the day what they want to do is deliver the best healthcare possible.”  

Dr. John Rowe, a professor of Health Policy and Management at Columbia’s School of Public Health, doesn’t buy the argument.  As he points out, nurse practitioners are already working without primary care doctors: “The fact is this is going on in 16-17 states,” he told Gorenstein, “and there is no evidence that it’s not good for the patient.”  A recent Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation backs him up: “studies comparing the quality of care provided by physicians and nurse practitioners have found that clinical outcomes are similar.”

At the same time, Rowe understands why doctors are uncomfortable. “The physicians feel they have something special to offer,” he explains. “And being told there are individuals who are less well trained can do it as well as they could is a very difficult lesson for them.”                                    

When I last wrote about nurse practitioners, back in 2010, one physician/reader (“Sharon M.D.”) was exceptionally candid on this point:

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Obama to Boehner: “John, I’m Getting Tired of Hearing You Say That”

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This was President Obama’s reply, during fiscal cliff negotiations, when House Speaker John Boehner declared, for the umpteenth time, that “ The U.S. has a spending problem.” 

I can understand the president’s irritation. How could anyone believe that we have a “spending problem?’

Look around. Consider the state of our bridges, our roads and our crumbling inner city public schools. Are we spending too much on the nation’s infrastructure?

Next, think about unemployment. During this recovery we have lost 750,000 public sector jobs.  Republicans are intent on “starving the beast” (of government) and as a result Washington has not given states the financial support they need continue delivering public services. Across the nation, public school teachers have been laid off in droves, while class sizes increase at unprecedented rates.  Does this sound like government spending run amuck?

One in five American children now lives in poverty. Seventeen million children find themselves in homes where they can’t be sure of getting enough to eat.  (a.k.a. “food-insecure households.”)  At the end of the month, many kids go to bed hungry because the government Food Stamps program (now known as Supplemental Nutrition Assistance Program, or SNAP)  gives families less than $1.50 per person per meal. Are we being overly generous?

During the past two wars, we sent millions of American men and women to Iraq and Afghanistan –many went back for repeated tours. In some cases, their bodies were not  broken–but their minds were.  Now 1.3 million Vets seeking mental health services are told they must wait of 50 days before getting treatment.   A recent government report suggests that 22 Vets die by suicide every day – about 20 percent of all Americans who kill themselves. Are we spending too much on healthcare for Veterans?

Let me suggest that we don’t have a spending problem. We have a revenue problem. Current federal revenue levels are at their lowest levels since the 1950s. 

                      How Anti-Tax Pledges Have Weakened the Nation

In a recent post, Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities, nailed it: “The tax system doesn’t raise enough revenue.  And that’s not just the recession; it’s also tax policy and anti-tax pledges  . . . The system has become less progressive, with the largest declines in effective tax rates at the top of the income scale.

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Obama’s Proposals For Medicare — Do They Go Far Enough? Will They Become Law?

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Not long ago, I wrote about the Center for American Progress’ (CAP’s) “Senior Protection Plan” —a report that aims to rein in Medicare “by $385 billion over ten years without harming beneficiaries.” In that post, I suggested that CAP’s proposals might well give us a preview of the “modest adjustments” that President Obama had said he would be willing to make to Medicare.  At the time, I highlighted three of CAP’s recommendations:

— increase premiums for the wealthiest 10% of Medicare beneficiaries (raising $25 billion);

— insist that drug-makers extend Medicaid rebates to low-income Medicare beneficiaries (saving $137.4 billion);

— prohibit “pay for delay” agreements that let “brand-name drug manufacturers pay generic drug manufacturers to keep generics off the market” (saving $5 billion).

Last week, in his State of the Union address, President Obama embraced the first two:  “Already, the Affordable Care Act is helping to slow the growth of health care costs,” he noted. “The reforms I’m proposing go even further. We’ll reduce taxpayer subsidies to prescription drug companies and ask more from the wealthiest seniors.”  (In time, I suspect that the administration also will call for a ban on those decidedly seamy “pay for delay” deals.)

“On Medicare,” he added, “I’m prepared to enact reforms that will achieve the same amount of health care savings by the beginning of the next decade as the reforms proposed by the bipartisan Simpson-Bowles commission.” The commission called for reducing Medicare spending by roughly $350 billion over 10 years–  a sum that is not far from CAP’s $385 billion target.

Are These “Adjustments” Too Modest ?

These may seem like small numbers. But keep in mind that this is on top of the $950 billion that the Affordable Care Act (ACA) saves by squeezing waste out of health care spending, while simultaneously raising new revenues. Of that $950 billion, some $350 billion comes in the form of Medicare savings achieved by:

—  Pruning over-payments to private sector Medicare Advantage insurers– $132 billion  

—  Containing Medicare inflation by shaving annual “updates” in  payments to hospitals and other large facilities by 1% a year for ten years, beginning in 2014– $196 billion

— Cutting disproportionate share hospital payments to hospitals that care for a disproportionate share of poor and uninsured patients over 10 years beginning in 2014 – $22 billion.

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The Mind Body Connection: Could Psychosomatic Disorders Account for 30% of Chronic Symptoms?

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Below, a guest-post by Dr. Clifton K. Meador, the author of well-known satirical writings on the excesses in our medical system, including “The Art and Science of Non Disease,” (the New England Journal of Medicine, 1965) and  “The Last Well Person,” an essay he published as an “Occasional Note” in NEJM  in 1994. HealthBeat readers may remember past guest-posts by Meador including “The Art of “Diagnosis” drawn from his book True Medical Detective Stories, and “The Unheard Heart: A Metaphor,” 

In this guest-post Meador writes about the importance of listening to patients—something that often doesn’t happen in a 15 minute office visit. I’m hopeful that under reform, more and more doctors will be able practice medicine full-time, leaving billing, hiring and firing of support personnel ,and all of the  other time-consuming details of running a business to others. Telemedicine also should open up some time: rather than coming in for a 15 minute appointment, patients who don’t have questions could ask for refills of routine prescriptions on the phone or via e-mail.

Eventually Health IT will be good enough that doctors will no longer spend hours tracking down lost Faxes. Finally, more physicians will be dividing their work with nurse-practitioners. In some cases, the nurse-practitioner might be especially effective when dealing with chronically ill elderly patients; in other cases he or she might excel in treating adolescents.

Ideally, restructuring how care is delivered will lead to longer appointments with some patients, giving the doctor the opportunity to truly listen—particularly when the cause of physical symptoms remains a mystery.

If a doctor had more time, what would he discover? Here, Meador offers what some may consider a radical thesis: 55 years of experience as a  primary care physician, combined with studying the medical literature, has convinced him that “between 30 and 40 percent of first contact  primary care visits are stress- related or are psychological in nature.”

I’m particularly intrigued by his description of “psychosomatic disorders” as described by Dr. John E. Sorno in The Divided Mind.

I haven’t yet read the book, but look forward to doing so. The reviews are impressive. As Meador makes clear, to say that an ailment is “psychosomatic” does not mean that “it’s all in your mind.”

Finally, Meador mentions that at this time, the medical profession denies the existence of psychosomatic illnesses. I’m baffled.  Both life experience and years of reading have convinced me that mind and body cannot be separated. I’d be interested in hearing from other physicians on this point. — MM

                                  The High Cost of Not Listening to Patients

by Clifton K. Meador, M.D.

www.cliftonkmeador.com   

www.doctorswholisten.net

             Author: True Medical Detective Stories and Symptoms of Unknown Origin  

Before we can understand the high cost of not listening, we need to examine in detail the diagnostic process. I am limiting my discussion to patients with chronic or recurring symptoms lasting several months. I am not discussing acute illnesses. They fall into completely different category.

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“Fiscal Cliff” Talks: An Update

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Today, for the first time since the election, President Obama and House Speaker John Boehner met alone, face-to-face, at the White House to discuss ongoing negotions over the budget.   (I can’t help but see the photo, which shows Obama with a hand on Boehnr’s shoulder, as a reference to the “Saturday Night Live” skit that appeared last night.  

I’m more and more hopeful about the budget negotiations. Recentlly, I wrote that Obama had “won round one,” explaining that I believed CNN’s report that  the Republicans and Democrats have reached a deal on taxes. “Both sides agree the wealthy will pay more, so now fiscal cliff talks come down to how much Republicans can wring out of the White House in return for giving in on taxes.”  Based on everything I know about the economics and the politics of the situation, this makes sense. /

Since then Boehner has said:  “No progress has been made.”

This does not change the story:  If, as CNN’s sources say, (and I believe) Republicans have conceded that taxes cuts for the top 2% must expire Janauary 1, while cuts for the remaining 98% will continue, that doesn’t mean they are ready to make the agreement public.

Understandably, Republicans are not willing to acknowledge that they lost round one of negotiations until they can also announce that they won something in round two.  Nor does  President Obama want to blind-side Boehner by letting it leak that a tax deal is in place. That would be counter-productive.

                          The Inside Story and the Outside Story

Recentlly, the Washington Post’s Ezra Klein reported:  “Right now, the fiscal cliff negotiations are proceeding on two tracks.

“One track includes the press releases, public statements and legislative tactics the two parties are deploying to prove the purity of their faith and their commitment to beating the other side to a bloody pulp. Watch these closely and it’s easy to get depressed.  . . ‘There isn’t a progress report;’ Republican House Speaker John Boehner sighed Friday, ‘because there’s no progress to report.’

“The other track includes the offers, counteroffers and red lines proposed by Boehner and President Obama. If you look at these closely, a deal is taking shape.”

 I agree with Ezra about the “two tracks”. But I don’t agree regarding the “shape” of the deal that is emerging.

First, I agree that  the majority of Republicans in Congress have accepted the fact that the Bush-era tax breaks for folks earning over $200,000 (and couples earning over $250,000) will have to expire. I won’t try to guess when politicians will complete the two stages of bargaining and be ready to announce a deal. We may go right up to the January 1 deadline.

Moreover, it is  possible that when it comes to cutting government spending, too many Republicans will remain stubbornly, and foolishly, intransigent — insisting on concessions that would inflict pain on the middle-class.

If that happens, I predict that President Obama will let us sail over the so-called “fiscal cliff.”  He knows this wouldn’t do any permanent damage to the economy.  As Rutgers reported today, even Wall Street does not seem panicked by the prospect: “Investors have peered over the cliff and realized they are looking at a gentle slope . . . . some investors say lawmakers still have time in early 2013 to strike a deficit-reduction deal without imperiling the economy. A survey of 62 Wall Street money managers released on December 5 showed market losses would be manageable if the U.S. goes over the fiscal cliff, even though worries still run deep.

Many on Wall Street understand that, early in the spring, the administration could undo Draconian spending cuts, while lowering tax rates for the 98%. Public pressure will ensure that happens. (In the meantime, the Treasury Secretary could lower withholding rates so that middle-class Americans didn’t suddenly see their paychecks trimmed.)

But taking a ride down that slope would do lasting damage to the GOP.  Polls show that voters would blame Republicans. This is why I think that, in the end, Republican leadership in Congress will do whatever it must to make a deal before January.  As I indicate in the post below. Tea Party extremists in the Republican party are being side-lined.

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