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16.12.10

Obama panel voices sour grapes at Jindal berm success

Hindsight is 20/20, but politics always is in focus and dominating the behavior of the Pres. Barack Obama Administration, as Louisiana politicians have discovered.

Obama’s commission to investigate the oil spill that dominated the political environment in Louisiana for three months earlier this year, despite being packed with those sympathetic to special interests normally allied with Obama, has been an uneven tool for the president in his quest to cast blame upon everybody but his administration for the slow resolution of it (such as in its revelations that the Obama Administration politicized the drilling moratorium response). A report issued yesterday by the body reinforces this theme, making an attempt to dish out criticism of critics of Obama during this time period but doing so in a way that also in passing denigrates Obama’s leadership skills.

Most pertinent in the exercise, the panel concludes, lead by Republican Gov. Bobby Jindal Democrat Obama apparently got bludgeoned into supporting the Jindal-backed idea of building sand berms to catch oil. Critics derided the idea because they were overly concerned about the environmental impact and thought the money, being supplied completely by well-owner BP, could be spent on what they asserted were more productive enterprises – even as many including the federal government thought the berms then could be very effective.

Yet Jindal argued all along that even if, after all was said and done the berms didn’t catch much oil, that the possibility that a lot could be coming onshore outweighed other considerations – that is, the harm potentially would be so catastrophic that an uncertain protective measure such as this was justified, a point lost among almost all of the critics. Nobody apparently knows how many barrels got caught, at least several hundred and if that were all then as the sole use of this money it would have been deemed cost-effective only if the potential harm had not been so great – but that was not the situation at the time.

The commission frames the series of events as Jindal and others pressuring the federal government which seemed skeptical on his plan, but then Obama himself seemed to cave into the pressure and bureaucrats followed. Interestingly, the report leaves out one crucial determinant of the decision-making process – that between the time Louisiana officials cranked up the lobbying intensity and the decision being made to go with the berm idea, the initial “Top Kill” strategy to close the leak – which would go on for two more months – failed. Thus, likely in the minds of all involved including Obama and scientists, a tidal wave of oil very realistically could have hit the Louisiana coast where Jindal and the others argued for the berms to be built.

In that respect, the commission failed to understand the gravity and uncertainty of the situation – after all, if someone is being ravaged with cancer, typically doctors go for the most aggressive treatment possible even if its cost is tremendous, it may not be effective, and even if so treatment of much reduced severity and cost may have worked just as well. If the choice was an ecological disaster or not constructing berms, at least the berms had some chance of stopping some oil whereas not building them would give no chance of that outcome, regardless of how much oil might make it to that part of the shoreline. That the report claimed the use of funds for building berms “is not a compelling cost-benefit tradeoff” is absurd on its face in any realistic assessment of the threats at the time the decision.

That enormous risk alone made the building of the berms – at no expense to the taxpayer – justifiable, which the report grudgingly acknowledges in its admission that this review is hindsight. However, for the nation as a whole and especially for Louisiana taxpayers the berm building ended up being a masterstroke by Jindal, because they were built from the beginning in mind as the initial foray into a coastal restoration project. Craftily, Jindal leveraged an emergency protection measure into one that promises long-term protection against coastal erosion, putting the state light years ahead of where it otherwise would be on this priority in these cash-strapped times.

American taxpayers and, in particular, Louisianans should be grateful at the foresight Jindal and his team had on this issue, but the report barely makes reference to this in its haste to try to make Obama look better by criticizing those who carped about his lack of leadership on the issue. And with Jindal hanging around as a burgeoning national figure that can send liberalism and Democrats further into retreat no doubt added to the myopic bluster of this exercise.

Another switch confirms homing in for political advantage

As more elected state Democrats leave the sinking ship, understand the motivations aren’t really because of changing views or that their former party has suddenly lurched even more to the left, but of cool, political calculation to do what’s best for their careers.

What began as a trickle, with state Rep. Simone Champagne taking the plunge just after the end of the 2010 session of the Legislature, became a cannonball competition after the midterm election wipeout for national Democrats. State Rep. Walker Hines jumped next, followed by state Sens. John Smith and John Alario, and now state Rep. Fred Mills has joined them. But were we to compare their actual voting behavior over the past three years with their new identification we would conclude it’s simply a case of them coming home.

Using the Louisiana Legislature Log’s ideology/reformism scorecard, from 2008 we can calculate each legislator’s average score (where 100 means conservative/reform votes on all issues, weighed proportionally, used in the index) and compare it to the average Republican and Democrat score in each chamber. Doing so presents the following rank ordering, House members first:

Champagne: 76.67

Hines: 75.00

Republican House Avg.: 71.96

Mills: 71.67

Democrat House Avg.: 44.10

Smith: 71.67

Alario: 67.33

Republican Senate Avg.: 61.13

Democrat Senate Avg. 43.83

As shown, only Mills even is a trace below the typical Republican, and all score far more conservative/reform than their Democrat colleagues. If anything, with their switches they have brought their identities into conformity with their expressed beliefs. Yet the larger question is why switch now and the answer is politics. In the past they maintained identifications aberrant with their views because of the electoral and political advantages conveyed. For three reasons, for these politicians those have eroded.

Consider that, because of the blanket primary system that provides no incentive for registered voters to align their own identifications with beliefs, the historical hangover of Democratic registration advantage continues to exist in many legislative districts. Only a handful of legislative districts, by the numbers, even have a Republican plurality. And even if weakened by the perverse incentives of the blanket primary system, party identification still is a meaningful cue for many voters. (It’s no accident that all but one of these switches have occurred from the West Bank west through Acadiana, where the state’s greatest divergence is seen between districts’ national contest voting behavior and overall identifications.)

However, the imperative is dramatically empowered in the case of black voters. Conditioned by elites that, for whatever reason, they trust, many black voters won’t consider voting for anybody but a Democrat. This gave a tactical advantage to candidates who voted more conservative/reform than not who would call themselves Democrats as these votes would disappear had they labeled themselves otherwise – especially as they did not have to compete in a closed primary system where the incongruence between identification and belief would catch them out competing in a Democrat primary consisting of a much more liberal/populist electorate.

So, part of the motivation is that they now figure they can overcome the disadvantage they are going to give themselves among black voters relative to where they are now, and a much smaller one among non-blacks, with at least some additional Republican voters. But also regarding the timing is that they see (dramatically borne out by the Democrat midterm fiasco) within the year Republicans will control, perhaps comfortably, both chambers of the Legislature. Party is not as important in the distribution of power in the Louisiana Legislature as it is in Congress, but it matters for things like committee and leadership assignments which are of strategic importance to legislators in their careers and in providing material to stay in office or to advance to others.

Finally, with redistricting approaching and it becoming increasingly clear that Republicans will control the process, jumping on the winning team will enhance the chance that their districts get drawn favorably for reelection purposes. (As a public service announcement, Louisiana redistricting will be a topic of discussion at the Southern Political Science Association 2011 Annual Meeting in New Orleans at 4:45 PM Friday, Jan. 7, where I and other political scientists will take up the matter. Inquiries may be made here.)

Therefore, these switches represent not rank, obvious opportunism against (at least recent) type, but, rather, subtle moves to continue to follow a tide they largely have been riding with for some time – even as you should not be fooled by generic explanations about “how the Democrats left me” as their voting behaviors show they left that party some time ago.

15.12.10

Jackpot justice exposes unwanted sunlight on Caldwell

It appears that sunlight isn’t to Attorney General Buddy Caldwell’s liking. A tersely-worded, if not somewhat misleading, statement from his office was the only comment upon national attention being focused on jackpot justice being sponsored under Caldwell’s auspices.

Caldwell and some contracted lawyers of his department’s got the unwelcome attention when the American Tort Reform Association publicized the actions of a Caldwell lawsuit in its annual report on jurisdictions which had issued unwarranted and outrageous decisions on lawsuits. This dealt with an October decision in St. Landry Parish, where lawyers hired by Caldwell using taxpayer dollars got a jury to fine Johnson and Johnson $257.7 million dollars for sending out letters and making sales calls.

The issue dealt with the anti-psychotic drug Risperdal which the jury, joining federal regulators, decided had been misleadingly marketed. It had nothing to do with any effects from taking the drug. As Caldwell deemed this a violation of the state’s Medical Assistance Programs Integrity Law, he had lawyers ask for the maximum $10,000 per incident, with over 35,000 of them. The jury went with $7,250.

14.12.10

Jindal view may hold legally, will succeed politically

The intricacies and arcane nature of state government rulemaking has brought the Louisiana Legislature and Gov. Bobby Jindal into conflict – each having some plausible claim that the law supports their conflicted actions. However, one seems on more solid ground legally, even as the other has the means politically to impose its solution and likely triumphs in the court of public opinion.

The tussle comes over rules promulgated by the Department of Health and Hospitals over funding changes, mainly reimbursement reductions, made to stave off deficit in medical assistance programs. R.S. 49:953 specifically grants DHH the power to make these through issuance of emergency rules which bypass the normal review procedure. Instead, they go into effect immediately upon publication in the Louisiana Register, so these rules went into effect on Nov. 20 (starting on page 2463).

The statute then says they may be reviewed by appropriate legislative committees, designated in R.S. 49:968 as the House and Senate Health and Welfare Committees. Last Friday, the committees did so and, as R.S. 49:953 allows, issued an adverse report which then according to that statute means the rule must cease being enforced.

But the Jindal Administration said it could reject that report, citing R.S. 49:968(G). This statute does not differentiate between “regular” and “emergency” rules in giving the governor the power of veto of an adverse report, even as it presumes throughout the regular procedure is being followed, which means review occurs prior to rule issuance but after promulgation. Further eroding the claim that the governor can veto is that in the promulgations specific reference was made to R.S. 49:953 as the authority which identifies the committees’ decisions as final.

Still, even as the preponderance of evidence accrues to the non-veto interpretation to resolve this ambiguity, another factor is that constitutionally the state cannot remain in deficit. Theoretically, continual committee rejection of agency rules could produce that situation, so the Jindal Administration has a point when it says by necessity the veto power should exist across all rules, even as one statute implies that it does while another states it does not. As such, while the argument that the governor can’t veto probably has more weight, by no means is it definitive (and even the document prepared for legislators to explain aspects of state government is ambiguous on the question).

Politically, the advantage rests with Jindal. The law makes no recourse to a disputed interpretation, so presumably the next stop would be the 19th District Court. The Administration would continue with its adjustments designed to save $13 million and it’s unlikely even if a suit were filed that the Court would see such irreparable harm that it would expedite the case, assuming it even sees merit in the plaintiff position to grant injunctive relief. Meanwhile, the regular process already probably is being followed by DHH which means at most the process would take 90 days. By the time the court decides the proper interpretation, using the regular rule process the rule as desired by DHH will have been long in place. At worst, down the road the state may have to pay out extra money during the period after promulgation of the emergency rule and prior to enactment of the regular rule.

Yet even if it bulldozes its interpretation through, Jindal does run a risk that if there is a case, and if the court finds with plaintiffs, it will do him some public relations damage. Even if a case developed and the court sided with the Administration, in the upcoming session an easy way to make money would be to bet that a bill will go through resolving the ambiguity in favor of the Legislature, with criticism of Jindal throughout the process, setting up a situation where if he signs it he’s made to look like he did initially go against the intent of the Legislature, or his veto would bring a new round of disparagement and accusations of gubernatorial power run amok.

Thus, the real contest here is really political, not legal. On balance, the Jindal Administration wins here by arguing the easily-understood proposition that it upheld the Constitution, against the confusing minutiae of the Administrative Procedure Act claimed by opponents to the move.

13.12.10

Jindal threatens long run reform by his near-term timidity

Suggestions by Gov. Bobby Jindal for short-term revenue boosts to compensate for a forecasted upcoming large deficit in the 2011-2012 fiscal year indicate that Jindal’s go-slow remaking of state government may need some boldness and alacrity now for long-term success later.

Proposed last week, Jindal’s food for thought can provide some immediate savings, but not a whole lot. The obvious idea is to sell surplus state government property, netting an estimated nonrecurring $13 million. Also good is the contracting out of the current state worker health care plan, joining several other plans for state employees already operated in this fashion for a recurring savings of $100 million annually.

But other ideas are of limited merit. Going from contracting out to leasing from after a sale of prisons, which would net an nonrecurring estimated $13 million, only should be undertaken if a significant decline in the state’s prisoner rolls seems likely, because then a lack of flexibility could hamper correctional plans; for example, other states may pay more to house their prisoners and remove that space for use by Louisiana. Doing the same with state-owned office buildings poses reduced risk as downsizing of state government might create additional flexibility, but some space still will be needed and there must be a reasonable assurance that market rates wouldn’t go up dramatically to eliminate nonrecurring savings of $400 million. And while securitizing future lottery payments for a one-time estimated bonus of $250 million, much as the state did with the tobacco settlement of the 1990s that gave the state money then from a buyer that will have the state give its annuity payment to it for years to come, this creates a riskier difference here in that the state must make the money itself every year through the lottery and so any revenue below forecast could force the state to dip into operating funds to pay for it.

Even should these turn out cost effective, because all but the contracting of the health plan involves nonrecurring funds, the state’s Constitution would require that a quarter of that amount must go into the Budget Stabilization Fund. Then the remaining estimated $507 million only could be spent on non-recurring items, only one of which could translate into current revenues: paying down of debt, freeing up what would have been paid off in interest. On this sum of money, it might be $25 million. So, in reality, this strategy beyond the health care contracting part will yield little.

There would be additional recurring savings, such as personnel reductions for managing and maintaining buildings, but they won’t add up to a relatively large amount. Given these factors, why would Jindal even look at these four items with their gaudy numbers out front that after analysis and realistic appraisal of what could be shed might be less than the cost of a statewide election? Because Jindal, the cautious reformer, needs to buy time.

Jindal knows that if his initiatives come through – general privatization, Medicaid reform, civil service changes, and the like – Louisiana state government will work with increased efficiency, saving hundreds of millions of dollars yearly, maybe even higher. But it will take years for these to be fully realized and Jindal doesn’t have that luxury of time for the impending crisis.

This challenges Jindal as a leader as the past three years have demonstrated that Jindal has conservative reform instincts, but seems uncomfortable with spearheading bold, potentially difficult reform. Easy stuff like ethics he’ll pick off, but he has been hesitant to pursue vigorously when his agenda runs into stiffer opposition. Civil service changes to promote more efficient use of pay as an input and resource into better performance is a good example: he had an excellent idea here but he stalled out facing protracted resistance from political forces (and passed on a less-complete reform plan).

Jindal appears more comfortable when he sets up situations that force underlings to take dramatic steps. Thus he maneuvered higher education officials into finding their own sources of revenue, which as a strategy makes some sense as those closer to the actual service provision may have a better idea of what to do to close deficits. Yet for the broader budget the mostly marginal suggestions he gives for next year seem half-hearted, as if he wanted to provide evidence that he had some revenue ideas for the short-term. Still, the fact is that, as has been so obvious for so long, Louisiana has a spending, not revenue, problem, so the real solutions must come from the spending side. And that means taking on some powerful, entrenched interests, which is difficult.

The most helpful tactic Jindal could pursue would be amending the Constitution to take the state out of the straitjacket of dedicated funds that forces revenues to lower-priority areas at the expense of more important functions. However, this would require a special session of the Legislature and some considerable lobbying against the special interests that benefit from the dedications. So far, Jindal does not show he has the stomach for this fight. Nor does he seem inclined to get rid of big giveaways that cost taxpayers far more than they earn such as paying for empty beds in nursing homes and giving away money to make movies.

Jindal has great potential for producing fundamental, beneficial, and lasting reform of Louisiana state government. Whether such necessary transformation can come only from tinkering to make government work better is the risk he continues to run until he asserts bold leadership.

12.12.10

Jindal Administration must promote LA Medicaid reform

The good news for the Gov. Bobby Jindal Administration in dealing with looming budgetary problems is it is doing a lot of the right things in the most expensive part of state spending for the long term. The bad news is that it has to deal with the near term as well where it has had difficulty in communicating the wisdom of its approach with the heat on to deal with the fallout from the forecast shortfall, which may sabotage all efforts.

Led by Department of Health and Hospital Secretary Bruce Greenstein, his approach to Medicaid reform in the state exemplifies the good. The current system rewards quantity over quality in caring for the indigent not just for private sector involvement, but also in that the state as direct provider plays a major roles in this provision which is the least effective means by which to encourage efficiency. Jindal has made this a priority to change since entering in office but has had to fight tremendous inertia throughout, leading to few realized benefits to date.

Epitomizing the difficulty in engineering positive change is the resistance being put up by some providers who are the biggest beneficiaries of the current system. The reform plan now piloted by Greenstein would move away from the fee-for-service system that almost every state has shelved in favor of one where the private sector would compete for business for health care dollars given to recipients to buy into insurance-like plans. This would reduce revenues going to many current providers so instead these interests have argued to modify the fee-for-service system along the lines of a government-managed regime that depends upon pushing more people into the system that would end up costing more overall (even if on a per-client basis it would be less), because they would raise more revenue that way.

To their credit, not only have Jindal and Greenstein resisted this, but Greenstein has shown flexibility to continue to improve on reform ideas. The biggest problem seen in a similar system in Florida has been confusion by clients over plans and services, so Greenstein wisely made modifications by capping the number of managers to run plans to reduce that. Originally, any certified manager could offer a plan; now, they will have to outbid others for a few slots. He also revised an idea from the competing model favored by some providers based upon a current practice in Louisiana to pay providers for overseeing care by introducing performance standards rather than scrapping it.

But opponents of changes have demonstrated the bad in doing their best to try to frame the debate as a reduction of care provision in order to save money. Some, usually among providers, don’t like that their margins will be lower, or that they’ll have to work harder without a guaranteed reimbursement for anything they do for any reason. Others, among politicians and special interests such as some media outlets, simply object the Jindal’s philosophy that government should be less the direct provider and more the facilitator in provision because it means smaller government. That constitutionally and statutorily the state’s fiscal structure disproportionately punishes health care in this period of budget retrenchment above all else has given them a perfect avenue by which to criticize the drive for efficiency as a reduction in care rather than an improvement in it to do more and better with less.

Only having recently taken his position, Greenstein now appears to be making an effort to prevent opponents of both the particular and the general from monopolizing the debate. For the past few weeks he has hosted public forums and sat down with policy agenda-setters to explain the wisdom of the long-term approach. Those without a vested interest in the system seem to come out of these supportive of the reform ideas.

That short-term budget difficulties exist creates both an advantage and disadvantage to this reform effort. The money shortage makes it easier to force changes in practices where having no sense of urgency could sap political will to do so. However, it also distracts from communicating the long-term benefits of the reform by introducing the noise of short-term of cries of pain real and fabricated – some of it because managing planned change usually turns out smoother than being compelled to do it. A campaign of demonstrating the current system’s inefficiencies, how reform will improve things, and that its opponents’ dire predictions are overblown, even as that would require great skill in explaining a very complex system, would assist Greenstein in overcoming this resistance.

Jindal also can help out his subordinate by spending some time and political capital by explaining that the downsizing discomfort being felt is a product of both an inefficient system and straitjacketed fiscal structure that also needs reform and is not a product of the reform effort, emphasizing that his reforms and changes to the state’s constitution and laws could create a better situation. Failure to do so allows the linking of his reforms with budget cutting for cutting’s sake, a mischaracterization that could discredit the larger, desirable goal of right-sizing a Louisiana state government too big to serve the state well.

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