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Chum in the Water

The groovy health care plan that will “bend the cost curve” is being put together by the brilliant and thoughtful planners as we sleep soundly tonight:

Employer groups – particularly those representing low-wage industries – want to keep benefits fairly basic. Since the government is going to be subsidizing coverage for millions of people, a generous plan will drive up costs for taxpayers, they argue. But consumer and patient advocacy groups that helped pass the overhaul law want to make sure their priorities are included.

The health care law requires that essential benefits include outpatient, hospital, emergency, maternal, newborn and children’s care, prescription drugs, mental health and substance abuse treatment, rehabilitation, labs, prevention and wellness. But Congress gave the administration lots of leeway to determine the specifics.

When there are hundreds of billions of dollars at stake, people will come out of the woodwork to “get their share.” I’m just so excited to see someone telling me that my health insurance must cover mental health and substance abuse treatment. Fantastic. Exactly how my clothing provider works.

UPDATE: here is David Henderson reviewing (the recommended) All the Devils are Here:

How did Fannie Mae get such political clout? This is one of the best-told stories in the book. McLean and Nocera tell how a well-connected Democrat named Jim Johnson made Fannie Mae almost invulnerable politically. Johnson, who had been Vice President Walter Mondale’s executive assistant during Jimmy Carter’s presidency and had run Mondale’s failed presidential campaign in 1984, was the chairman and chief executive officer of Fannie Mae from 1991 to 1998. During that time, he turned Fannie Mae into one of the most powerful lobbies in Washington, using that lobbying power to defend its government-granted privileges. The most important privilege was government backing.While the U.S. government did not explicitly back Fannie Mae — a government-sponsored enterprise rather than a government enterprise — everyone assumed, it turns out correctly, that it did.

To get powerful congressmen on board, Johnson set up “partnership offices” in their congressional districts. The first such office was in San Antonio, in the district of Henry Gonzalez (D, Texas), then-chairman of the House Banking Committee. These offices were staffed, the authors write, “by someone close to power — the son of a senator, a governor’s assistant, a former congressional staffer.” Expenditures on such offices don’t even count as lobbying. But Fannie Mae also lobbied, spending $170 million between 1997 and 2006.

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