Tag: Congress

Guns, Germs, and Drugs Are Largely Responsible for the Decline in U.S. Life Expectancy

Mary Pat Campbell

Link: https://reason.com/2024/01/08/guns-germs-and-drugs-are-largely-responsible-for-the-decline-in-u-s-life-expectancy/

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Excerpt:

The Post reported that some politicians pointed to the rising death toll from “lethal drug overdoses” as a significant factor in declining U.S. life expectancy. The Post did, however, acknowledge that drug deaths “are not solely responsible for the decline in life expectancy.” It is worth noting that opioid overdose deaths began truly soaring after 2010 when users turned to illicit heroin and fentanyl after the introduction of Food and Drug Administration–approved abuse-deterrent formulations.

So how much do drug overdose deaths contribute to the recent decline in U.S. life expectancy? A 2021 comprehensive review of factors affecting mortality trends in the U.S. between 1999 and 2018 found that average life expectancy would “have been 0.3 years greater were it not for increases in unintentional drug poisoning.” In a 2023 preprint article, two Johns Hopkins University researchers calculated that opioid overdose deaths between 2019 and 2021 reduced U.S. life expectancy by 0.65 years. If politicians and policy makers really want to make increasing life expectancy a priority, one huge step would be to actually end the war on drugs. A cease-fire in the drug war would likely reduce gun deaths too.

Author(s): Ronald Bailey

Publication Date: 8 Jan 2024

Publication Site: Reason

A Huge Threat to the U.S. Budget Has Receded. And No One Is Sure Why

Mary Pat Campbell

Link: https://www.nytimes.com/interactive/2023/09/05/upshot/medicare-budget-threat-receded.html?smid=url-share

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Excerpt:

For decades, runaway Medicare spending was the story of the federal budget.

Now, flat Medicare spending might be a bigger one.

Something strange has been happening in this giant federal program. Instead of growing and growing, as it always had before, spending per Medicare beneficiary has nearly leveled off over more than a decade.

The trend can be a little hard to see because, as baby boomers have aged, the number of people using Medicare has grown. But it has had enormous consequences for federal spending. Budget news often sounds apocalyptic, but the Medicare trend has been unexpectedly good for federal spending, saving taxpayers a huge amount relative to projections.

….

Some of the reductions are easy to explain. Congress changed Medicare policy. The biggest such shift came with the Affordable Care Act in 2010, which reduced Medicare‘s payments to hospitals and to health insurers that offered private Medicare Advantage plans. Congress also cut Medicare payments as part of a budget deal in 2011.

But most of the savings can’t be attributed to any obvious policy shift. In a recent letter to the Senate Budget Committee, economists at the Congressional Budget Office described the huge reductions in its Medicare forecasts between 2010 and 2020. Most of those reductions came from a category the budget office calls “technical adjustments,” which it uses to describe changes to public health and the practice of medicine itself.

Older Americans appear to be having fewer heart attacks and strokes, the likely result of effective cholesterol and blood pressure medicines that became cheap and widely used in recent years, according to research from Professor Cutler and colleagues. And drug makers and surgeons haven’t developed as many new blockbuster treatments recently — there has been no new Prozac or angioplasty to drive up spending. (Medicare is currently barred by statute from covering the new class of expensive anti-obesity drugs.)

….

Medicare may even wind up saving money because of Covid-19 — because the older Americans who died from the disease tended to have other illnesses that would have been expensive to treat if they had survived, according to an analysis from the Medicare actuary.

Author(s): Sanger-Katz, Margot; Parlapiano, Alicia

Publication Date: 5 Sept 2023

Publication Site: NY Times

Fitch Downgrades U.S. Credit Rating

Mary Pat Campbell

Link: https://www.wsj.com/articles/fitch-downgrades-u-s-credit-rating-56c73b89?mod=hp_lead_pos1

Excerpt:

Fitch Ratings downgraded the U.S. government’s credit rating weeks after President Biden and congressional Republicans came to the brink of a historic default, warning about the growing debt burden and political dysfunction in Washington.

The downgrade, the first by a major ratings firm in more than a decade, is evidence that increasingly frequent political skirmishes over the U.S. government’s finances are clouding the outlook for the $25 trillion global market for Treasurys. Fitch’s rating on the U.S. now stands at “AA+”, or one notch below the top “AAA” grade.

….

Few investors believe that Fitch’s downgrade will immediately challenge that role. Still, it is the first time a ratings firm lowered its headline assessment of the U.S. government’s propensity to pay its bills on time since Standard & Poor’s in 2011 lowered its rating one notch below the top grade. That decision followed another tense debt-ceiling standoff in Congress.

Moody’s, the other member of the three big U.S. ratings firms, continues to give the U.S. its strongest assessment.

Fitch said Tuesday that the downgrade reflects an “erosion of governance” in the U.S. relative to other top-tier economies over the last two decades.

“The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management,” Fitch said.

Author(s): Matt Grossman and Andrew Duehren

Publication Date: 1 Aug 2023

Publication Site: WSJ

Covid National Emergency Ends

Mary Pat Campbell

Link: https://kelleyk.substack.com/p/covid-national-emergency-ends

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Excerpt:

Biden signed H.J.Res. 7, which ended the national emergency for Covid. Both the text of the bill, and the corresponding press release from the White House are short and sweet. The White House recently said Biden “strongly opposes HJ Res 7,” but that he would sign the bill if it passed. It passed with bipartisan support in both the House.

One thing that is tied to the national emergency is an extension of COBRA deadlines for people who are out of work. These deadlines are extended during the “outbreak period” which ends 60 days after the end of the national emergency.

The DHS rules for vaccine mandates for foreign travelers at land border crossings from Canada and Mexico rely on the national emergency as their legal basis, so theoretically they will end with the national emergency. But there has been no official actions to lift those rules, and I suspect the White House expects this vaccine mandate to continue for at least another month. (See section on travel vaccine mandates further down for more details.)

Author(s): Kelly K

Publication Date: 11 April 2023

Publication Site: Check Your Work

Barney Frank blames crypto panic for his bank’s collapse. Elizabeth Warren blames Trump.

Mary Pat Campbell

Link: https://www.politico.com/news/2023/03/13/barney-frank-signature-bank-collapse-warren-trump-00086765

Excerpt:

From his front-row seat, [Barney Frank] blames Signature’s failure on a panic that began with last year’s cryptocurrency collapse — his bank was one of few that served the industry — compounded by a run triggered by the failure of tech-focused Silicon Valley Bank late last week. Frank disputes that a bipartisan regulatory rollback signed into law by former President Donald Trump in 2018 had anything to do with it, even if it was driven by a desire to ease regulation of mid-size and regional banks like his own.

“I don’t think that had any impact,” Frank said in an interview. “They hadn’t stopped examining banks.”

But Warren, a fellow Massachusetts Democrat who designed landmark consumer safeguards that ended up in Frank’s 2010 banking law, is placing the blame firmly on the Trump-era changes that relaxed oversight of some banks and says Signature is a prime example of the fallout. Warren argues that, had Congress and the Federal Reserve not rolled back stricter oversight, Silicon Valley Bank and Signature would have been better able to withstand financial shocks.

Author(s): ZACHARY WARMBRODT

Publication Date: 13 Mar 2023

Publication Site: Politico

The End Is Near for Outdated Government Financial Reporting

Mary Pat Campbell

Link: https://www.route-fifty.com/finance/2023/02/end-near-outdated-government-financial-reporting/382747/

Excerpt:

By way of a few paragraphs inserted into the recently enacted 4,000-page 2023 National Defense Authorization Act, Congress mandated that state and local governments prepare their annual financial statements in a standardized format that is electronically searchable. The provision effectively drags state and local governments kicking and screaming into the 20th century, if not the 21st.

As worthy an accomplishment as this appears to be, it was resisted mightily by the state and local government financial community. Most prominently, they argue, the measure can potentially result in a major transfer of accounting and reporting regulatory authority from states to the federal government, thereby undercutting what many consider a fundamental principle of federalism. Moreover, state and local officials see it as one more costly unfunded mandate imposed upon their governments.   

The opposition by state and local governments is understandable. But they have no one to blame but themselves. To this day they are wedded to a technological past. In a perverted way, they may be getting their just desserts. The act requires them to do little more than what they should have done years ago on their own for the benefit of their investors and other stakeholders.  

Implicit in the act is that governments will have to prepare their financial statements using XBRL (eXtensible Business Reporting Language) or some comparable reporting framework. This is the format that the Securities and Exchange Commission, which would be charged with implementing the new provision, currently demands corporations use in their financial filings. XBRL requires all entities to classify each of the elements of their financial statements (e.g., assets, liability, revenues and expenses) by identical rules and in machine readable form.    

Author(s): Michael Granof and Martin J. Luby

Publication Date: 8 Feb 2023

Publication Site: Route Fifty

EBSA Secretary Defends ESG Rule as Legislative, Litigation Battles Continue

Mary Pat Campbell

Link: https://www.ai-cio.com/news/ebsa-secretary-defends-esg-rule-as-legislative-litigation-battles-continue/

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Excerpt:

The Department of Labor’s assistant secretary of labor for employee benefits security, Lisa Gomez, defended the DOL’s final rule allowing the consideration of ESG factors in retirement plan investments at a webinar hosted Monday by Ceres, a sustainability advocate.

The rule, which took effect on January 30, permits, but does not require, the use of ESG considerations in investment selection by retirement plan fiduciaries. There is a pending lawsuit in Texas challenging the legality of the rule.

Gomez explained that this rule is “not a per se requirement” to use ESG and clarifies that ESG factors may be considered as part of a fiduciary’s ordinary risk-return analysis. She also explained that this new rule does not allow fiduciaries to sacrifice the financial health of a plan to pursue other goals: A fiduciary may consider the risks and opportunities of climate change and other ESG factors.

Gomez dubbed the rule “a return to neutrality.”

According to Gomez, the previous rule, passed during the administration of President Donald Trump, which required only “pecuniary factors” to be used in investment selection, had a “chilling effect” on the consideration of ESG factors. Gomez said the word “pecuniary” neither appears in the text of the Employee Retirement Income Security Act, the governing statute for both rules, nor does it occupy a “long-standing place in employee benefits law.”

Gomez briefly discussed one of the more nebulous provisions of the new rule when she said participant preferences for investments can be considered in menu selection on the grounds that it can increase plan participation and deferral rates, thereby increasing retirement security. She did not comment on how fiduciaries should determine adequate participant interest or how much economic gain could be compromised in exchange for increased participation, if any.

Eric Pitt, a climate finance consultant at Ceres who moderated the webinar, asked Gomez how a fiduciary should consider a hypothetical ESG large-cap stock fund for a plan menu: Should the fiduciary compare it to other similar ESG funds or the entire universe of large-cap funds? Gomez answered that there is no special treatment for ESG funds, and a fiduciary should look generally at the risk and return for any and all large-cap equity funds available, whether they use ESG considerations or not.

Despite the branding of the rule as neutral, Republicans in Congress have increased their organized opposition to the use of ESG considerations in retirement-plan investing.

Representative Patrick McHenry, R-North Carolina, chairman of the House Financial Services Committee, announced the creation of a “Republican ESG working group” on Friday. The purpose of the working group is to “combat the threat to our capital markets posed by those on the far-left pushing environmental, social, and governance (ESG) proposals.”

Author(s): Paul Mullholland

Publication Date: 6 Feb 2023

Publication Site: ai-CIO

What Happens if US Debt Defaults? Just Short-Term Pain, Sages Say

Mary Pat Campbell

Link: https://www.ai-cio.com/news/what-happens-if-us-debt-defaults-just-short-term-pain-sages-say/

Excerpt:

So what is likely to occur this year?

Everything will be settled without a big problem for investors, predicts Robert Hunkeler, International Paper’s vice president of investments.

“I guess Congress and the White House will eventually finish their game of chicken, and the debt limit will be raised,” he opines. “There might be a little more drama and brinksmanship this time around, because there are more cooks in Congress than usual, and that’s saying a lot. Either way, I wouldn’t change my investments because of it.”

To Kostin and his Goldman staff, the risk that Congress fails to boost the debt limit by the deadline is “higher than at any point since 2011,” but “the team believes it’s more likely that Congress will raise the debt limit before the Treasury is forced to delay scheduled payments.”

If the debt ceiling is not raised in time to make those payments, in Goldman’s estimate, the economy would shrink by about $225 billion per month, or 10% of annualized gross domestic product. That’s provided that the Treasury does what policy wonks call, “prioritize,” meaning somehow continuing to pay interest on the national debt, but to stop payment on other obligations.

For Thomas Swaney, CIO for global fixed income at Northern Trust Asset Management, another credit downgrade for the government is possible.

“The practical implications of a credit downgrade are not entirely clear,” he writes in a report. “But we don’t expect a modest downgrade to result in market disruptions for Treasuries, U.S. agency debt or overnight repurchase agreements.”

Author(s): Larry Light

Publication Date: 6 Feb 2023

Publication Site: ai-CIO

GOP-led House committee launches working group to combat ESG proposals

Mary Pat Campbell

Link: https://www.pionline.com/washington/republican-led-house-committee-launches-anti-esg-working-group

Excerpt:

Congressional Republicans on Friday took another step in their quest to dismantle the Biden administration’s environmental, social and governance rule-making initiatives.

The House Financial Services Committee has formed a working group to “combat the threat to our capital markets posed by those on the far-left pushing environmental, social and governance proposals,” the committee’s Chairman Patrick McHenry, R-N.C., announced.

The group will be led by Rep. Bill Huizenga, R-Mich., and include eight other Republican committee members.

Among its priorities, the group will examine ways to “rein in the SEC’s regulatory overreach;” reinforce the materiality “standard as a pillar of the nation’s disclosure regime;” and hold to account market participants who “misuse the proxy process or their outsized influence to impose ideological preferences in ways that circumvent democratic lawmaking,” according to a news release.

“This group will develop a comprehensive approach to ESG that protects the financial interests of everyday investors and ensures our capital markets remain the envy of the world,” Mr. McHenry said in the news release. “Financial Services Committee Republicans as a whole will continue our work to expand capital formation, hold Biden’s rogue regulators accountable, and support American job creators.”

Author(s): Brian Croce

Publication Date: 3 Feb 2023

Publication Site: Pensions & Investments

More and Better Uses Ahead for Governments’ Financial Data

Mary Pat Campbell

Link: https://www.governing.com/finance/more-and-better-uses-ahead-for-governments-financial-data

Excerpt:

In its lame duck session last month, Congress tucked a sleeper section into its 4,000-page omnibus spending bill. The controversial Financial Data Transparency Act (FDTA) swiftly came out of nowhere to become federal law over the vocal but powerless objections of the state and local government finance community. Its impact on thousands of cities, counties and school districts will be a buzzy topic at conferences all this year and beyond. Meanwhile, software companies will be staking claims in a digital land rush.

The central idea behind the FDTA is that public-sector organizations’ financial data should be readily available for online search and standardized downloading, using common file formats. Think of it as “an http protocol for financial data” that enables an investor, analyst, taxpayer watchdog, constituent or journalist to quickly retrieve key financial information and compare it with other numbers using common data fields. Presently, online users of state and local government financial data must rely primarily on text documents, often in PDF format, that don’t lend themselves to convenient data analysis and comparisons. Financial statements are typically published long after the fiscal year’s end, and the widespread online availability of current and timely data is still a faraway concept.

…..

So far, so good. But the devil is in the details. The first question is just what kind of information will be required in this new system, and when. Most would agree that a complete download of every byte of data now formatted in voluminous governmental financial reports and their notes is overwhelming, unnecessary and burdensome. Thus, a far more incremental and focused approach is a wiser path. For starters, it may be helpful to keep the initial data requirements skeletal and focus initially on a dozen or more vital fiscal data points that are most important to financial statement users. Then, after that foundation is laid, the public finance industry can build out. Of course, this will require that regulators buy into a sensible implementation plan.

The debate over information content requirements should focus first on “decision-useful information.” Having served briefly two decades ago as a voting member of the Governmental Accounting Standards Board (GASB), contributing my professional background as a chartered financial analyst, I can attest that almost every one of their meetings included a board member reminding others that required financial statement information should be decision-useful. A key question, of course, is “useful to whom?”

Author(s): Girard Miller

Publication Date: 17 Jan 2023

Publication Site: Governing

How Medicare Advantage Plans Dodged Auditors and Overcharged Taxpayers by Millions

Mary Pat Campbell

Link: https://khn.org/news/article/medicare-advantage-auditors-overcharged-taxpayers/

Excerpt:

A review of 90 government audits, released exclusively to KHN in response to a Freedom of Information Act lawsuit, reveals that health insurers that issue Medicare Advantage plans have repeatedly tried to sidestep regulations requiring them to document medical conditions the government paid them to treat.

The audits, the most recent ones the agency has completed, sought to validate payments to Medicare Advantage health plans for 2011 through 2013.

As KHN reported late last month, auditors uncovered millions of dollars in improper payments — citing overcharges of more than $1,000 per patient a year on average — by nearly two dozen health plans.

Author(s): Fred Schulte and Holly K. Hacker

Publication Date: 13 Dec 2022

Publication Site: Kaiser Health News

Lawmakers Discuss How Financial Institutions Should Address Ties to Slavery

Mary Pat Campbell

Link: https://www.thinkadvisor.com/2022/12/12/lawmakers-discuss-how-financial-institutions-should-address-ties-to-slavery/

Excerpt:

Rep. Al Green, D-Texas, wants to develop legislation that could affect how insurers and other financial institutions address their historical involvement in slavery.

Green and other lawmakers talked about ideas for legislation related to slavery during a  recent hearing of the House Financial Services oversight subcommittee on the role of financial institutions in the horrors of slavery.

….

Berkshire Hathaway, for example, descends partly from The Valley Falls Company, a textile manufacturer owned by members of an abolitionist family, Rockman said.

But members of the abolitionist family “rarely paused to ask where their cotton came from,” Rockman said. “Virtually every cotton fiber they spun and wove would have been slave-grown and slave-picked.”

William Darity Jr., a public policy professor at Duke University, talked about the role of insurers in slavery. He noted that Aetna, AIG, Baltimore Life, Loews Corp., New York Life and Southern Mutual Insurance Company all descend from companies that protected slaveowners against the deaths of slaves.

Author(s): Allison Bell

Publication Date: 12 Dec 2022

Publication Site: Think Advisor