TheHotSpring.net :: Generative economics is rooted in a simple insight: that economic activities can have corrosive or generative impacts on future available resources. The dynamics of an economic environment can add another layer of corrosive or generative potential to the activities in question. Analysis can be subtle, however, because generative qualities are often not the focus of conventional thinking or play out over the long term.

New trends in corporate benefits offerings show evidence of the substantial generative potential of health and fitness benefits for employees. Even as major corporations have cut jobs and reduced pension offerings, major employers have increased funding for employee access to fitness facilities. And there appears to be substantial value added, over time, from doing so.

The clear motivation is the increased productivity of healthier employees and the resulting reduction in long-term health spending. The human resources of these corporations are enhanced and magnified by fitness. The benefits of individual health and fitness translate into company-wide benefits.

Even as the recession and its prolonged legacy of sparse and hard-to-access credit, elevated joblessness and slumping investment in housing, continue to slow many businesses, health benefits that include fitness facilities, have remained in place or been expanded.

According to the Washington Post:

The number of companies with 20,000 or more employees that provided fitness centers, subsidies or discounts grew by 11 percent from a year earlier, according to a 2010 national survey by Mercer, a benefits consulting firm. Another survey, by the Society for Human Resource Management, shows that the proportion of companies offering gym benefits has held steady since 2007. During the same period, many employers were paring retirement and other financial benefits because of the recession.

The reason, according to many studies, is that wellness benefits provided in the workplace yield more productive employees who require less health care. That translates into savings on health insurance for companies and workers.

According to a 2010 article in the Harvard Business Review:

Doctors Richard Milani and Carl Lavie demonstrated that point by studying, at a single employer, a random sample of 185 workers and their spouses. The participants were not heart patients, but they received cardiac rehabilitation and exercise training from an expert team. Of those classified as high risk when the study started (according to body fat, blood pressure, anxiety, and other measures), 57% were converted to low-risk status by the end of the six-month program. Furthermore, medical claim costs had declined by $1,421 per participant, compared with those from the previous year. A control group showed no such improvements. The bottom line: Every dollar invested in the intervention yielded $6 in health care savings. [Emphasis added.]

There is controversy over how this value translates on a smaller scale. There is not a lot of evidence about how such programs affect smaller enterprises, in part because smaller enterprises often cannot afford benefits programs that include fitness, and tend not to have on-site fitness facilities.

The Congressional Budget Office has also expressed a need to find more data relating to this kind of health benefit spending. But for CBO, the calculation may be different, in the short term, as much government health spending deals with more vulnerable individuals and more long-term care, undermining somewhat the ease with which the 1:6 cost-to-benefit ratio can be reached.

IndependentsOfPrinciple.com :: A federal appeals court has ruled that Congress acted within its Constitutional authority when it passed the Patient Protection and Affordable Care Act into law, last year. Importantly, the three judge panel voted two to one, with one Republican nominee and former Scalia law clerk in the majority, that the individual mandate is in line with Congressional authority to regulate interstate commerce.

It is the first time a Republican judge has sided with the individual mandate, in the ongoing wave of legal challenges to the law, and many conservatives see the ruling as a setback. Others say the challenge to the individual mandate will continue until it reaches the Supreme Court. But critics of that view warn there may be unintended consequences of pushing the challenge too far, consequences which might require more, not less, government intervention.

The individual mandate, of course, like the “public option”, started out as a Republican idea meant to accomplish two main goals: to give the insurance industry a cushion against some of the more severe stresses of the marketplace, and to expand coverage without replacing private insurance with a new blanket government-run single-payer system.

In both instances, the intention was to contain government intervention in the private markets, and allow insurers to extract the better profits, at a volume and of a kind closer to what they prefer. If the individual mandate is successfully challenged as an unconstitutional mandate to purchase a commercial product, in an environment in which Congress has the authority to enact such regulatory measures, Congress would be forced to finance coverage for any consumers who might find themselves in the insurance affordability “doughnut hole”.

That would mean one of two things: a robust public option to complement low-cost private insurance policies on a coverage exchange, or a requirement that private insurers meet universal coverage cost requirements, at their own expense. That could mean the president will get the full, original blueprint for health insurance reform, including a public option on the low-cost exchanges, after all.

By far the more useful and meaningful aspect of the Patient Protection and Affordable Care Act is the ban on discrimination based on health conditions. Such discrimination not only costs tens of thousands of lives and billions in taxpayer dollars, each year, it distorts the insurance industry’s business model and props up unsustainable practices by biasing healthcare insurance companies against paying for healthcare.

The legal argument may come to that: the question of whether there is a commercial right, in the Constitution, to sell health insurance but be structurally organized to avoid providing it. That is an argument the industry does not want to have and could likely not win. In fact, it is unlikely the justices would even accept such an argument for hearings, unless they saw an overriding need to rule on that point to clarify related and pending disputes.

In any case, this latest bipartisan ruling on the legality of the individual mandate appears to be the middle ground that lines up with precedent and prevailing jurisprudence: the government can require economically favorable actions, so long as its requirement does not infringe on other rights. A public option that would help provide coverage to those for whom the mandate might prove prohibitively costly might become a requirement, so that all persons receive equal treatment before the law.

At present, the private healthcare sector is struggling to achieve anything like an economically favorable framework for providing universal care: one example is the experimental cancer drug Avastin, recently rejected by the FDA after several studies showed it had no proven benefit to patients but posed serious risk of side effects.

The drug cost as much as $88,000 per year per patient, and the drug maker offered a not very generous cost reduction plan, to just $57,000 annually for patients earning under $100,000 per year. After taxes, of course, that is almost the entire net income of someone earning that amount; nevermind the vast majority earning far less.

With so much upheaval in the still troubled US economy, and increasing talk among cost-conscious Tea Partiers that they bear no allegiance to the Republican party, the cost question in healthcare may soon become a right to life question, which is what so many reform-minded and patients’ rights groups have so long held it to be.

It now looks increasingly unlikely the partisan/industry challenge to the nation’s health insurance reform plan will succeed. And that means insurers have to plan more seriously for the coming changes, or they may face a deeper, more serious challenge: a challenge to their right to operate as insurers while actively investigating ways to avoid acting as insurers.

Adaptation is a wiser long-term strategy for insurance providers, than having an unwinnable fight over their strained and unsustainable profit-making model. To compete in the new marketplace will mean being the best at providing top-quality open access to genuine health treatment and preventive care, at rates everyone can afford.

IndependentsOfPrinciple.com :: There is a myth that is often put forth as evidence that conservatives are unserious about democracy, which is that they favor rapacious capitalist behemoths. Many do, especially those for whom conservatism means capitalism. But most conservatives are ordinary people who want the little guy to be free of the imposing will of major power interests. It confuses matters to assert that all conservatives are interested in promoting big business interests.

As a good friend of mine often says, it matters more what people hear than it does what you say. When most conservatives hear talk about business, they don’t think about how wonderful it would be to promote the infinite expansion of multinational corporations, and they don’t hear their own vocabulary as promoting oligarchy.

Conservatives hear enterprise, business, entrepreneurship, and they think about ordinary people opening genuinely small businesses, family businesses with two or five or ten employees: restaurants, barber shops, fishing tackle shops, even insurance offices and local newspapers.

Those of us who oppose the unbridled expansion of transnational corporate interests and oligarchic impunity need to stop equating conservatism with corporatism, because it’s the corporatists, not the conservatives, and certainly not the liberals, who benefit from that false conflation of ideological focus.

From the mid 20th century to the present day, we have seen a vast expansion of corporate power in the landscape of American politics. Wealth has become concentrated in fewer and fewer hands, to a degree not seen since the decade before the Great Depression, possibly since the legendary corruption of the so-called Gilded Age. Ordinary people are distanced from the levers of power in ways that most of us find disconcerting.

It has become increasingly common for major enterprises to seek to use their influence and their economic might to force their entry into markets to which they have nothing to offer, even as they box out more able competitors with less quality performance. Defense contractors, notoriously, have sought to manage welfare programs; chemical and agribusiness companies have sought to join forces; commercial banks have sought to take over financial markets, which are their natural rivals.

General Electric (an industrial juggernaut) and Vivendi (a French water utility) have taken huge positions in the media business. Publishers and bookstore chains have merged, then been taken over by content-starved internet service providers. Financial companies have sought to profit from “financial instruments” whose only function is to allow financial companies to expand their wealth claims, without producing any substantive benefit to anyone else.

Parasitism has become a celebrated corporate virtue: the more you can make while doing less to the constructive benefit of others, the better. The problem has become so pervasive that the Patient Protection and Affordable Care Act had to 1) stop Wall Street from rewarding insurers for providing less coverage and 2) stop insurers from taking money while refusing to provide the service promised.

It’s vitally important that we note, as part of this analysis, that not all corporate interests operate in this way. There is an important, and demonstrable, difference between enterprises that seek to profit by bleeding others of productive value and businesses that seek to profit by providing them with it. This is where we should draw the line and the metric by which we should try to measure value.

Small businesses, especially those with only one retail location —”mom and pop” shops, local restaurants and cafes, diners, and the like— have to do something people want or can benefit from, in order to get paid. Large businesses, however, have become adept at moving money around, restructuring their own spectrum of activities, and gambling on projected future activity, to gather wealth to themselves that has little to do with their productive role in the marketplace.

Major oil companies, the most profitable enterprises in the history of the planet, still claim to be so commercially immature as to be unable to survive, or at least to play a constructive role in the marketplace, without tens of billions of dollars in free giveaways from taxpayers. A significant portion of their business model is now made up of the quest for subsidies, which they seek and accept in multiple countries simultaneously.

We need to think more intelligently about what kind of society we aim to build: if we want a society in which free people are rewarded for creativity and for worth and dignity, then we should not reward those who seek to undermine the capacity of others or to siphon away the productive value of economic activity for which they are not responsible. In short, parasitic enterprise is not in keeping with the ideals of a democratic society.

Everyone understands when someone is trying to “pull a fast one”, to get away without being seen doing what in fact they are doing. When enterprise becomes a shell game, moving the money around so that no one can verify what exactly anything is worth, it is not enterprise anymore in the legitimate sense. One of our central goals as a civilization in this century should be to free ourselves of parasitic monopolies and their less massive but equally corrosive kin.

We cannot overcome a crisis of valuation, if we continue to let pirates, mercenaries and parasites, determine what milk and honey are worth. Some very abstract financial investment tools are legitimate, because they generate real value for the wider marketplace. But no fashion or fad within any industry can be worth our forfeiting our capacity, as individuals or as a civilization, to innovate to solve problems, to invent to build a better future, to be free and strong enough to decide what comes tomorrow.

Democracy must come first.

The new Republican plan to amend the Affordable Care Act to institute a form of “backdoor ban” on abortion procedures would give legal protection to doctors who let women die without needed treatment, and impose a severe tax on any business that seeks to provide full health coverage to its employees. The original language of the plan specified that only in cases of “forcible rape” would a woman be entitled to treatment where abortion might be the only way to save her life.

The widespread national outrage at the proposed legal language stemmed from the fact that the odd phrasing “forcible rape” implied that many women subjected to sexual violation might somehow be classified as something other than victims of rape, in order to serve the ideological agenda of a Republican fringe. Republican leaders apparently helped to negotiate a change in the language, but the fact remains: the proposal would allow doctors to violate federal laws requiring live-saving treatment, even if that criminal act were to lead to a woman’s death.

What’s more, the radical expansion of the power of government to prohibit a procedure the Supreme Court has long ago ruled cannot be prohibited, would result in the imposition of a stiff tax on any business that wants to provide complete health coverage to its female employees. They would be barred from accessing not only any plan paid for or subsidized with public funds, but any plan offered by any firm which provides such a policy to anyone else anywhere else.

This would price them out of the most affordable plans, have the effect of forcing millions of employers to choose between buying coverage that puts their female employees’ lives at risk, paying exorbitant prices for fully private coverage or refusing coverage, thereby derailing the entire nationwide effort to cover more people and get costs under control.

The generalized economic effect of that feature of the proposal would be to drive costs up for every person who buys insurance, no matter by what means, as still more people are pushed out of the private healthcare market. It would also, likely, result in the dramatic expansion of costs for government programs, further inflating budget deficits.

It would also subject both government agencies and any doctor or hospital involved in such a denial of treatment case to hugely expensive legal defense and in the case of doctors, malpractice insurance premium increases. The bill is, in short, a huge cash giveaway to for-profit insurers, with a provision written in that would threaten the lives of female patients.

Perhaps worse than all of this is the fact that the legislation would bring the logic of anti-abortion terrorists into the logic of federal law: the killing of abortion clinic workers and doctors in bombings and assassinations has repeatedly been justified by the notion that a higher cause is being served, when in fact the cause being served is the vanity and narcissism of the violent actor; according to this legislation, the personal vanity of individual physicians, unwilling to provide life-saving treatment required by law, and by their oath, would be held as more valuable than the lives of women in need of care.

Whether because, it would allow women to die, or allow doctors to knowingly violate the law in ways leading to patient death, or because it brings the logic of domestic terrorists into the legal infrastructure of our healthcare system, this proposal is a disgrace and a stain on the moral character of all who support it.

But fiscal conservatives also need to be aware that what is being proposed is a significant tax increase on small businesses, a new cost burden that will likely exacerbate the health insurance crisis and derail the cost-reducing provisions of the Affordable Care Act, raising costs for all Americans, impeding job creation and significantly increasing the federal budget deficit.

So, while this provision would 1) violate federal law, 2) encourage the violation of federal law by others, 3) contravene the Supreme Court’s ban on abortion bans as unconstitutional, 4) lead directly to patient death by denial of life-saving care, 5) impose a heavy tax on employers, 6) inflate costs for all Americans, 7) inflate the federal budget deficit, and force more people into the ranks of the uninsured or onto government programs, the Republican party sees fit to push it in furtherance of a radical partisan agenda.

They are playing “gotcha” politics in a way that directly threatens human life, encourages criminal behavior, and gives billions of dollars in undue profits to underperforming insurers. Whether the massive national outcry against this legislative atrocity is enough to disrupt the legislation will be a measure of how healthy our civic engagement really is.

Ruling ignores precedent, is logically incoherent, ideologically driven and damaging to the Constitutional rights of ordinary Americans

Judge Roger Vinson, a federal judge in Florida, has ruled the entire Patient Protection and Affordable Care Act of 2010 “unconstitutional”, accepting without trial the argument put forward by 26 states’ attorneys general that the “individual mandate” requiring that Americans purchase insurance or face penalties was not only unconstitutional but was “unseverable” from the rest of the law. Judge Vinson’s ruling is fraught with fictions and distortions and appears to be designed to help insurers avoid facing any new regulation.

The ruling flagrantly resists conferring with prevailing law or precedent, and implicitly ignores the fact that the individual mandate is not the heart of the law, but rather an added measure designed to help make the new marketplace more sustainable for private insurers. The real heart of the law are specifics like:

• a ban on using “pre-existing conditions” to deny or drop coverage or to refuse needed treatment;
• a requirement that health insurers devote 80% of premium revenues to healthcare payments;
• a ban on rating the stock value of health insurers according to their willingness to reduce benefits;
• lower prescription drug costs for Medicare patients;
• major new tax credits to small businesses to help them cover their employees;
• low-cost health insurance policy exchanges where those too “affluent” for Medicaid can shop for competitively priced private health plans;
• tax incentives for community health clinics and continuing preventive care;
• preventive care coverage for Medicare patients…

But Vinson’s ruling ignores both the intent and the wording of the law. Vinson, who found that the individual mandate —originally a Republican proposal for how to avoid expanding government health insurance policies— falls beyond the reach of the Constitutional powers of Congress. In order to effectuate his ruling, he then “voided” the entire healthcare law, saying it “cannot be reconciled with a limited government of enumerated powers”.

Federalist Activism

The phrase “limited government of enumerated powers” is not Constitutional law or judicial precedent, but an ideologically driven phrase penned by Vinson himself, in order to make new law and pursue “strict constructionist” activism from the bench. Vinson seems to argue, as did the defenders of slavery and later of segregation, that the particular institution in question —health insurance management— is not a form of “interstate commerce”, but that those who would profit from or perpetuate the status quo have a right against any federal regulation or interference with their modus operandi.

The ruling also raises questions about political corruption and collusion among the 26 states’ attorneys general who brought this suit, and whether there was illegal “venue shopping” involved in bringing the case in Florida, in order to secure a favorable ruling from Judge Vinson. The ruling is being called “judicial activism on steroids” and part of an “extremist” agenda to guarantee that private health insurers maintain near total control over the live-and-death treatment decisions of sick Americans.

The ruling will be appealed and will likely end up being decided in the United States Supreme Court. On other issues, where similar examples of extreme bias or activism were used to challenge major new federal initiatives, like Social Security, civil rights laws or Medicare, the Supreme Court has ultimately corrected the lower-court rulings, but with two federal judges now having ruled in favor of the law and two against, there is concern that the more conservative justices now on the Court may side with the activist conservative view.

Several prominent legal thinkers have issued statements supporting the ruling, many of them making vague references to the intentions of the founders or to “powers reserved to the states”. The Constitution does not reserve to the states the power to determine whether people buy insurance, yet states force people to buy insurance if they want to drive an automobile. In that case, less affluent state residents are forced to help more affluent residents, who could afford to go without insurance, fund their insurance against theft or inadvertent harm to others.

Flawed Statements of Support

Stephen B. Presser, a professor of legal history at Northwestern University, wrote an opinion piece for CNN, laced with ideological prejudice and fundamental distortions of what the law and the ruling mean for the legal framework of the United States. For instance, Presser writes:

Vinson’s opinion is a simple and clear reminder that ours is still a federal government of limited and enumerated powers. Not only has Vinson vindicated those state officials who participated in the litigation, he has also vindicated those of us who believe in the rule of law and believe that the Constitution is not an infinitely plastic document.

Vinson’s opinion is not simple or clear; it is a 78-page muddle of rambling and circular logic, assigning to himself powers other judges would not so hastily assume. It is a rationalization of an ideological view that is not supported by history or by the founding documents. The ruling begins like a college paper on civics, with quotes from The Federalist Papers, a worthy and meaningful document, but not a law and not judicial precedent.

Presser explains that:

If the federal government could force Americans to buy health care insurance, as many Americans understood, ours would have been a federal government with unlimited powers to force us to buy any commodity or engage in almost any activity.

This is an incredible claim: any specific product the federal government asks individuals to give money for is unconstitutional? The framers might agree on at least one point. The framers were opposed to a “standing army”, believing it was the hallmark of tyranny and undemocratic government. Our government now spends more than $600 billion a year on the military, including specific hardware that is written into legislation. If anyone seeks to avoid funding the purchase of that hardware by refusing to pay taxes, that individual is subject not only to fines, but to property seizure and to jailtime.

But there is ideology in the view supporting the plaintiffs, whether it is Presser’s view or Vinson’s or the Republican party’s view or the insurance industry’s. And that ideology is not opposed to bringing financial interests of the powerful into this argument. For the powerful, this is a matter of liberty; for everyone else, it is a matter of Constitutional order. And we cannot “defend” the Constitution without forcing our citizens to pay for billion-dollar weapons systems, so that will not be made relevant.

In fact, the entire “limited government” argument is made meaningless by the fact that when the very powerful federal government uses taxpayer dollars to buy stealth bombers, using legislation to mandate that this take place and enriching private interests in the process, the power of the federal government is materially and factually expanded, while by requiring that private insurers cover more people, it is not.

Relevant History: Theory, or Injustice?

Vinson quotes Federalist 45, which reads, in part: “[t]he powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite.” He gets the matter right, in part, and wrong in spirit. The Constitution does not actually give “numerous and indefinite” powers to the states, but rather to the people, who retain every right and every power not enumerated in the Constitution.

The states do enjoy some authority beyond the specific powers enumerated as belonging to the federal government, but this fact arises from a loophole: no law in any state can run afoul of the reasoning of the Constitution itself. So, for instance, were slavery banned by the Constitution, no state would have been empowered to undertake it. For nearly a century, slave-owning states fought to persuade the courts that the federal government had no authority to regulate or restrict the practice of slavery, because they wanted the right to assign at the local level to their states that power.

It was an absurd argument, and it is still, to this day, tragic that it went so long unchallenged by truly decent men. It is tragic that for more than 70 years after the establishment of our Constitution, that feeble, and flagrantly false argument. Section 8 of Article I of the Constitution grants to Congress the power “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes”.

It is a widely held view that the personal bias of judges, and the ever-present threat of secession and/or civil war, is what allowed the argument to last so long, that “slavery” was “an issue of states’ rights”. It was not. Slavery was always a trade that existed between the United States and foreign nations and between and among “the several States” themselves. It was for Congress to decide how it was implemented or if it was impermissible.

That said, it is also a widely held view that it was the southern states’ foolish act of launching a civil war that allowed Abraham Lincoln the power to decree the end of slavery, as a means of weakening an enemy, due to his powers as commander-in-chief in a time of war. In the interim, Congress was subject to a system that was deliberately rigged to favor southern slave-owners, so that the far more populous districts of northern representatives would not ban a practice the southern representatives wanted to uphold.

The Patient Protection and Affordable Care Act of 2010 is not “big government” and it is not an affront to Madisonian ideals of limited government. The Affordable Care Act does not intervene in the marketplace in ways that are not already done by the government; it merely seeks to make the marketplace a more level playing field, a fairer and more just place.

That insurance companies seek to divide the national marketplace up into 50 isolated markets in order to avoid regulation, or that states conspire with them, in order to more closely regulate —and derive revenues from— their local insurance markets, does not mean that the wider insurance market is not a form of commerce “among the several States” or that the federal government has no authority over whether that industry behaves in a way that is fair and constructive or rapacious and abusive.

While the states involved in the lawsuit closely regulate insurance within their borders, and very deliberately restrict what entities from other states are allowed to do inside their borders, while they mandate that certain types of insurance must be purchased, under penalty of law, they argue that this very practice violates fundamental constitutional rights. Vinson ignores the contradiction, and for clearly ideological reasons, sides with the states, whose view he appears to share for partisan as well as ideological reasons, but which he cannot support through the deeply flawed legal reasoning of his ruling.

Meaningfully, Vinson does cite the 10th Amendment: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” But Vinson’s ideology interferes with the legal reasoning he assigns to the meaning of that Constitutional amendment.

For Vinson, the states retain all powers not granted to the federal government. But this is not the meaning of the 10th Amendment. While included in the Bill of Rights ostensibly to ensure the sovereignty of individual states —which at the time viewed their local governments, their respective cultures and their sovereign legal authority much the way European countries now do, when squabbling over whether Brussels should be allowed to control issues of law, government process, taxation, budgeting or domestic and inter-state commerce—, and to allow slave states to control their “peculiar institution”, the language cunningly maintained the logic of the Constitutional order:

The people are the source of political power, and the spirit of the federal Constitution is the “supreme Law of the Land”. What powers it does not specify devolve to the states, should their people see fit to allow the states those powers. However, no state can engage in any exercise of authority once it has been ruled unconstitutional in federal courts.

That subtle “or to the people”, almost an afterthought, is what gives legal meaning to the 10th Amendment, and poses such a serious challenge to the reasoning of Vinson’s ruling. He would have the nation’s future, the very personal and intimate futures of tens of millions of American citizens, determined by the unsubstantiated claim that while the federal government does not have the power to set rules of basic fairness in the insurance marketplace, the states do have the power to force individuals to buy a product at an unaffordably high rate or face long-term physical harm as a consquence of not having purchased that product.

In other words, Judge Vinson would ignore the Constitution’s mandate of equal treatment and simply “void” the entirety of a law whose sole aim —if ideologues like Vinson believe there is a governmental interest in “expanding” the powers of the federal government in the law— is to require that people seeking to profit from the illness or potential illness of others do so in a way where vulnerable individuals, our wider economy, and our government budget, are not gravely harmed by their actions.

A Matter of Law, not of Justice?

Perhaps one of the most serious and worrying deficiencies in Judge Vinson’s reasoning lies in what Judge Vinson himself must believe is actually a sign of his rigor: he alleges that:

this case is not about whether the Act is wise or unwise legislation, or whether it will solve or exacerbate the myriad problems in our health care system. In fact, it is not really about our health care system at all. It is principally about our federalist system, and it raises very important issues regarding the Constitutional role of the federal government.

The judge commits one of the great intellectual sins of American history, that of reflexively siding with politically interested plaintiffs who argue that he should not consider the moral or practical implications for real people, actual personal freedom or quality of life for individuals, or matters of fundamental fairness, even where complementary and supporting laws come into play, but only a very narrowly construed intellectual proposition regarding what certain like-minded ideologues believe certain men, who lived 200 years ago, would have thought with respect to a certain abstract question about legal process.

This argument was routinely used during the dark times when our nation’s courts and government were used to justify first slavery and later segregation. It was not, the argument went, a matter of morality, but of strict and narrow definitions of legal authority. What separates a case where the right of the federal government to imprison individuals without evidence or trial from a case like this is that in the former, the issue is very much one of morality and justice.

There is an underpinning of profound and committed moral urging supporting the structure of our founding laws, and to pretend that in order to service a partisan political agenda and the financial interests of an abusive industry, the courts can pretend that no moral —or even factual everyday physical, social and economic— consequences are relevant to a given ruling is an affront to our entire system of laws.

Abusive practices, whether sustained by individuals or by the government, are anathema to the logic of our system, so it was necessary that over time, the inhuman abuse of slavery had to be ended, and women had to win the right to vote, and segregation had to be ended. Vinson and the plaintiffs have this point right: the American system of democracy was set up to limit the right of the powerful to abuse their station to the detriment of the vulnerable, but they have the roles reversed in this instance.

While pretending to defend the interests of ordinary Americans, they support returning to a system that severely threatens their liberty and wellbeing. While pretending to have a foundation of Constitutional law for their argument, they seek to establish that the states may engage in unconstitutional abuses but the federal government may not. While pretending to have some legitimate reason for being in the courtroom at all, they then seek to argue that there is no question of morality or justice at issue.

Vinson’s carefully worded refusal to consider the impact on actual human beings is also disturbing for another reason, however: he is adopting the logic of the plaintiffs, almost as if he were arguing the case himself. It is a rhetorical choice suggestive of deep and prior bias and which, when lined up with the unfounded aggression of his verdict —to “void” an entire law about which he effectively ruled on only one provision— should steal our breath and require severe introspection. Can we allow our children and our children’s children to be subjected to the most abusive practices of a national industry, because unprincipled ideologues want to score political points or have an intellectual debate in place of a moral one?

Vinson First Negates Plaintiffs’ Arguments

Vinson stipulates that “In Count I, all of the plaintiffs challenge the “individual mandate” set forth in Section 1501 of the Act, which, beginning in 2014 will require that everyone (with certain limited exceptions) purchase federally-approved health insurance, or pay a monetary penalty.” He acknowledges that he himself disagrees, as does every other federal judge to rule so far on the matter, with the plaintiffs claim that the “penalty” is not technically a “tax”.

That disagreement is, in fact, grounds enough for dismissing the complaint outright, because the federal government is not overstepping its powers of taxation by requiring that instead of handing money to the government, the money be used constructively to pay for insurance, which diffuses the costs of healthcare and makes it easier for everyone, collectively, to shoulder that burden without risk of bankruptcy or impending economic chaos.

But again, Vinson’s wording is dramatic and disturbing: his suggestion —in total alignment with the plaintiffs— that it is unconstitutional for the government to “require that everyone (with certain limited exceptions) purchase federally-approved health insurance, or pay a monetary penalty”. The words “federally-approved” suggest that there is some form of public-private corruption inherent in that provision of the law, but those words are there for a very different reason, in fact.

They are born of the insurance industry’s desire to avoid regulation that would benefit or protect vulnerable patients. The words “federally-approved” actually refer, under the law in question, to requirements that private insurers meet certain standards of fairness and of coverage for treatment. It is a veiled assault on the power of the federal government to protect the people it represents.

The Medicaid Provision

Vinson notes that, while there are four accepted general restrictions on what spending is Constitutional, there is also one objection banning “coercive” provisions. To his credit, he finds that:

as I stated in my earlier order after describing Dole’s four general restrictions: “The plaintiffs do not appear to dispute that the Act meets these restrictions. Rather, their claim is based principally on [the coercion theory].” Apparently expanding that argument, the state plaintiffs now argue (very briefly, in less than one full page) that the Act’s Medicaid provisions violate the four general restrictions. See Pl. Mem. at 44-45. This belated argument is unpersuasive. The Act plainly meets the first three of Dole’s spending restrictions, and it meets the fourth as long as there is no other required activity that would be independently unconstitutional. Thus, the only real issue with respect to Count IV, as framed in the pleadings, is whether the Medicaid provisions are impermissibly coercive and effectively commandeer the states.

The coercion complain, however, is hardly a Constitutional argument. The states, Vinson notes, argue that they cannot afford to cover even their share —with federal matching funds— of expanding Medicaid. Vinson notes that the plaintiffs “present a bleak fiscal picture”. Indeed, chronic mismanagement of state funds, often including the use of unaffordable tax cuts as fodder for political campaigns, is being used to justify denial of aid to the most vulnerable.

Again, to his credit, Judge Vinson finds that “there is simply no support for the state plaintiffs’ coercion argument in existing case law.” The states argue that while the law specifies that participation in Medicaid is voluntary, they “cannot exit” the program. This amounts to a political complaint on the part of individuals and interests who oppose the very idea of Medicaid, and who are frustrated, practically and politically, by the fact that the program appears necessary to deal with the health insurance crisis in their states.

Vinson not only cites three separate legal and judicial phrasings of the voluntary nature of Medicaid —”Medicaid is a cooperative federal-state program [and] participation in the program is voluntary”, “No state is obligated to participate in the Medicaid program”, and states “always retains [the] option’ to withdraw)]”—, he also notes that several of the plaintiff states are actually considering withdrawal even as they argue it is not possible before the court.

Distortions from the States

Vinson cites action taken by the states to challenge the Constitutionality of the Affordable Care Act. Specifically, he quotes an Idaho state legislative resolution, which “declared that … every person within the state of Idaho is and shall be free to choose or decline to choose any mode of securing health care services“. The meaning is clearly intended to be that Idaho does not recognize the authority of the federal government to enact the individual mandate as part of the Affordable Care Act, but the specific wording suggests the state of Idaho will guarantee that every resident enjoy equal access to every level of health service.

The state of Idaho has never taken any such action to guarantee that every resident enjoy the liberty to choose, simply as a matter of personal freedom and individual will, whichever available insurance policy or level of health coverage or treatment the market may see fit to make available for purchase. Vinson errs by ignoring the intellectual immaturity of this phrasing, and by holding it up as a solid legislative challenge to the Affordable Care Act.

Utah, he cites as having resolved to object to the federal government “requiring a person to enroll in a third party payment system [and] imposing fines on a person who chooses to pay directly for health care rather than use a third party payer.” This is a flagrant distortion of the economic reality: people do not choose to have zero access to affordable healthcare; they are denied access by overpriced insurance monopolies abusively extracting huge profits they fund by denying adequate coverage and care.

Interstate Commerce

Historically, Judge Vinson argues that insurance policies were not even considered a form of commerce, a notion that is obviously entirely outdated. He cites the New Deal period and the Supreme Court’s finding that even activities that are “intrastate” in nature can be regulated by the federal government under the interstate commerce clause, because they “could be said to have a ‘substantial effect’ on interstate commerce.”

Health insurance policies, for instance, have a direct impact on the pricing of goods and services related to the provision of treatment and care. When the companies in one state are identical to the companies in another, operating on a “branch office” or in-state incorporation and subsidiary model, there is a direct impact on interstate commerce through the many wider relations of the wider enterprise, if not through the economic reach of all of its attendant clients and service providers.

The ability of one enterprise to market-shop —denying service to state whose regulations are too consumer-friendly— by engaging in such activity does not, in fact, render the enterprise other than interstate in nature. Judge Vinson quotes precedent finding that “if [such activities] have such a close and substantial relation to interstate commerce that their control is essential or appropriate to protect that commerce from burdens and obstructions, Congress cannot be denied the power to exercise that control.”

The judge discusses Wickard v. Filburn, which found that the federal government had the power to take action to regulate even local activities that could have the effect of forcing wheat prices to dangerously low levels —bankrupting farmers and driving a glut of competition that would lead to another Dust Bowl. Vinson quotes the ruling:

[E]ven if appellee’s activity be local and though it may not be regarded as commerce, it may still, whatever its nature, be reached by Congress if it exerts a substantial economic effect on interstate commerce and this irrespective of whether such effect is what might at some earlier time have been defined as “direct” or “indirect.”

Clearly, the question of whether the activity at issue is relevant to federal powers under the interstate commerce clause is clear: Congress has the power to regulate such activities. The only remaining question, then, is whether a refusal to purchase insurance is a form of economic “activity”.

Or, so goes Vinson’s reasoning. But this is owing to the fact that he fundamentally agrees with the plaintiffs’ agenda and is applying an interpretive matrix of evolved federalist biases to questions of fact, while ignoring many of the facts at issue. The most important of those facts is whether the “inactivity” the plaintiffs would have us believe is inherent in the “refusal” to buy insurance is really a willing and decisive “refusal”, or whether it is the result of a prohibitive market environment that coerces non-participation.

Arbitrary Judicial Overreach

Judge Vinson used dubious constitutional reasoning to find against the individual mandate, but he engaged in arbitrary judicial overreach of astonishing proportions, by finding that the provision is “not severable” from the rest of the law, most of which has no direct practical, legislative or regulatory relationship to the individual mandate. By making that finding, Vinson was able to rule that the entire Patient Protection and Affordable Care Act is unconstitutional.

This was the aim, clearly, as evidenced by Vinson’s over-reliance on non-legislative and non-judicial language and his editorializing tone, throughout the ruling. Vinson deliberately distorts the language of the defense. The government had argued that the individual mandate was a “necessary and essential” provision of the law, but never argued that it was absolutely necessary and essential for the other provisions of the law to function as intended.

For instance, the ban on using “pre-existing conditions” is simply a regulatory measure: there is no need for special provisions to expand the market in order impose that regulation, which is perfectly well within the Constitutional authority of the Congress. The terms “necessary” and “essential” relate to the law’s relevance to effecting positive change to benefit individual citizens and to achieve better outcomes economically and medically, and to help the private insurance market to overcome some of its deepest and most detrimental pathologies.

That a regulation is “necessary and essential” to achieving specific responsibilities of the government —such as the need to regulate and/or subsidize farming interests in order to keep prices from falling too low and bad land-use practices from creating a Dust Bowl, as happened in the 1930s or the need to write specific products into budget legislation in order to adequately “provide for the common defense”— means that it can and should have the effect of expanding specific Constitutional authorities.

This is a matter of judicial precedent, and Judge Vinson’s misuse of the terminology to strike down every single provision of the Affordable Care Act, no matter how irrelevant to the question of the Constitutionality of the individual mandate, is grossly irresponsible and abusive. It is further evidence of a partisan and/or ideological bias that has infused the ruling with incoherent logic and bad legal reasoning.

Severely Problematic Implications

The most problematic implications of Judge Vinson’s ruling reach far beyond the fate of the major healthcare insurance reform law he seeks to eliminate. The reasoning he has used, if upheld by the United States Supreme Court, puts our system of government at risk in a number of ways, and should either lead to the outlawing of several key practices of the federal government or the institutionalization of an arbitrary and activist judiciary, empowered to depart from both law and precedent and act without substantive support to serve narrow interests, no matter the impact on the wider Constitutional order or the people it serves.

Among the most severely problematic implications:

• The federal government cannot use any form of taxation to require citizens to fund the purchase of any product;
• The federal government must cease to provide any form of medical insurance coverage;
• The federal government must cease to require the collection of revenues specifically destined to pay for Social Security;
• State governments may be empowered to enact any rule, regulation or law, they desire, as powers reserved to them are “numerous and indefinite”;
• The interests of the people cannot outweigh the interests of narrow profit-making enterprises, regardless of questions of justice or fairness;
• The US military may need to be deprived of a majority of its funding, due to the logic of prohibiting forced purchase of specific products;
• The federal government will be stripped of its power to protect the people from abusive private interests…

These are extreme outcomes not likely to materialize, but they are all suggested by the very reckless and unfounded reasoning used by Judge Vinson to substantiate his ruling. His reminiscence about the notion that the commerce clause “does not give Congress carte blanche” is romantic, and relevant, but does not automatically amount to a justification for his sweeping overreach or his use of ideological thought experiments in an effort to undermine the interest of ordinary citizens’ right to be sheltered from injustice and abuse.

A Principled Citizens’ Response

The flagrant and abusive nature of the wording of Judge Vinson’s ruling, the haphazard patchwork of non-legal reference chosen to support an ideologically biased judgment, should raise the concern of all decent and thoughtful citizens of this open democratic republic. The judge’s summary judgment in favor of the plaintiffs is so deeply and pervasively full of philosophical ramblings showing deep sympathy for their political agenda that the nature of the 26-state lawsuit itself should be called into question.

There should be an independent federal-level investigation of all contacts between the various offices of each of the state governments and the court over which Judge Vinson presides, as well as into whether Judge Vinson has had personal ex-parte contact with any of the political figures or conservative activist groups involved in the lawsuit or whose states or colleagues are involved. This should be a basic freedom-of-information fact-finding mission, unless and until evidence of wrongdoing emerges.

Citizens interested in effecting positive change in their local insurance markets should immediately begin seeking alternatives to the private, for-profit insurance sector. Forming non-profit public-private partnerships, community-based insurance pools or cooperatives, and low-cost non-profit interstate policies that line up with the regulatory provisions of the Affordable Care Act could be a grassroots, entrepreneurial response capable of neutralizing the impact of Judge Vinson’s ruling, whether or not it is upheld.

In the meantime, citizens of every state should begin campaigning within their state to require that no insurer be allowed to sell health insurance that violates any of the regulatory improvements included in the Affordable Care Act, i.e.:

• a total ban on recisions or denial of coverage due to pre-existing conditions;
• a ban on assessing the value of insurance stock in negative proportion to their spending on care;
• a ban on spending less than 80% of premiums on delivery of care;
• a ban on instituting lifetime caps on insurance coverage for healthcare;
• major tax incentives for small businesses to help them afford coverage for employees;
• allowance for young people up to 26 years of age to remain on parents’ healthcare insurance policies;
• incentives for doctors that privilege healing over billing-by-procedure;
• lower costs for Medicare patients buying prescription drugs;
• no-cost full coverage for certain preventive care;
• 100% Medicaid coverage for any family or individual living at 133% of poverty or below;
• statewide or regional exchanges for low-cost health insurance…

And, citizens of all ages, of all socio-economic backgrounds and political persuasions, should push for state-level legislation instituting criminal prosecution for insurance company bureaucrats who interfere with administration of care in such a way that leads to injury, damaging and irreversible long-term health impact, or death, for any patient.

There is a reason Judge Vinson had handed down this ruling, and it is not the matter of whether the individual mandate is or is not Constitutional in nature; it is because our health insurance market is severely deficient in its ability provide what it promises: affordable coverage for all necessary medical expenses for all people. A market that cannot reach all of its constituents is a failing market, and we need to starting thinking more creatively every day of our lives about how to make our society more just, more functional, and more resilient.

Judge Vinson has nothing to say about this, because it is not his concern; his concern was to make the Federalist case for his ideological fellow travelers. It is the concern of real people to actually have some chance at obtaining and benefiting from affordable healthcare insurance. We should get working on solving that problem together, with or without the help of the Affordable Care Act specifically.

Representative Paul Ryan, the chairman of the House budget committee, gave a vague and meandering response to Pres. Obama’s address, first saying Republicans want to work with the president, then defaming him as a spendthrift socialist bent on destroying American prosperity. He laced his remarks with Republican talking points from the 2010 election cycle, repeating key distortions that have been discredited in the mainstream press.

He suggested that because of the Patient Protection and Affordable Care Act, “millions of people will lose the coverage they currently have”. He also alleged that job-creation is being stifled, as businesses beg for relief, even as businesses enjoy a major new tax credit for buying health insurance coverage for their employees. He continued the biting partisan tone of his address, charging that ”The president’s law is accelerating our country toward bankruptcy.”

He is the man who introduced the of gutting vital government programs like Social Security, replacing Medicare with coupons to get a discount from private insurers who would be free to deny coverage for “pre-existing conditions”. At the time he released his “Roadmap for America’s Future”, Republicans were reported to have determined it was a “roadmap for political disaster”.

Today, the Republicans in the House of Representatives voted to give Rep. Ryan unilateral power to set all levels for government spending for an entire year, should the two houses fail to agree on a comprehensive federal budget after one attempt. He artfully masked his radical agenda, saying that he wanted to “to secure our borders, to protect innocent life, to uphold our laws,” adding that Republicans want to “provide a safety net for those who cannot fend for themselves”.

He then went on to argue that social safety nets have made “this is a century in which we will transform our social safety net into a hammock”, lulling generations of Americans into a comfortable luxury, paid for by taxpayer dollars. The absurdity of this remark is only made more severe by the fact that Mr. Ryan is arguing that our nation is already incapable of paying even for the relatively limited amount offered through those programs he aims to slash.

In fact, his reasoning is that the programs must be slashed in part because they cannot be paid for anyway. Where would the vast sums come from that would provide so much wealth and comfort as to lull a generation into a lazy sleep?

He recognized that the American people treat both parties with great suspicion, and urged viewers to “Hold all of us accountable.” He then followed this pledge to be worthy by claiming that in 2010, the Democratic Congress was responsible for an “unprecedented failure”, when it did not pass a budget for the president to sign—a failure which actually resulted from unprecedented Republican obstruction, by way of filibuster, in the Senate.

Throughout his remarks, Ryan’s tone was condescending and patronizing, as if he expected his audience was 1) not very bright, 2) not able to understand the challenges of government, and 3) easily susceptible to flowery innuendos about who is right and who is wrong in the ideological debate about budget policy.

He suggested that it was government that wasted money, “broke our trust” and ruined a booming economy, though it was the same laissez-faire policies he now calls for that allowed the Bush administration to balloon the deficit, fund two trillion-dollar wars and give rise to the financial crash of 2008.

“Limited government and free enterprise have helped make America the greatest nation on Earth,” he said. He added a wink to the right-wing need to believe in an “exceptional” America. This was a partisan attack, commonly used by Republicans and conservatives who argue that Democrats are not patriotic and that their wish to see an America that lives up to all of its values means that they do not believe in “American exceptionalism”.

The attack is doubly vicious, however, when one recognizes that it relies on his assumption that the conservative ideologues to whom he is speaking are incapable of understanding that to be exceptional is to be uniquely virtuous or talented, while “exceptionalism” means a stubborn unwillingness to obey the laws of common decency we expect of all humanity.

It should be seen as being in extremely poor taste for Ryan to have revived this tired and unthinking argument, especially given the unifying and forward-thinking tone of Pres. Obama’s address. But Rep. Ryan favors ending Social Security as we know it for everyone 55 and younger, and so he cloaked that agenda in vague and misleading language apparently intended to suggest he loves everything we all love and would never hurt anyone who is vulnerable, even as he used the official Republican response to slander the president, lie to the American people and muddy the mood of a new year in which innovation and collaboration could be the watchwords.

The following is an official White House transcript of Pres. Obama’s 2011 State of the Union address, as prepared for delivery in the well of the House of Representatives, 25 January 2011:

Mr. Speaker, Mr. Vice President, Members of Congress, distinguished guests, and fellow Americans:

Tonight I want to begin by congratulating the men and women of the 112th Congress, as well as your new Speaker, John Boehner. And as we mark this occasion, we are also mindful of the empty chair in this Chamber, and pray for the health of our colleague — and our friend — Gabby Giffords.

It’s no secret that those of us here tonight have had our differences over the last two years. The debates have been contentious; we have fought fiercely for our beliefs. And that’s a good thing. That’s what a robust democracy demands. That’s what helps set us apart as a nation.

But there’s a reason the tragedy in Tucson gave us pause. Amid all the noise and passions and rancor of our public debate, Tucson reminded us that no matter who we are or where we come from, each of us is a part of something greater — something more consequential than party or political preference.

We are part of the American family. We believe that in a country where every race and faith and point of view can be found, we are still bound together as one people; that we share common hopes and a common creed; that the dreams of a little girl in Tucson are not so different than those of our own children, and that they all deserve the chance to be fulfilled.

That, too, is what sets us apart as a nation.

Now, by itself, this simple recognition won’t usher in a new era of cooperation. What comes of this moment is up to us. What comes of this moment will be determined not by whether we can sit together tonight, but whether we can work together tomorrow.

I believe we can. I believe we must. That’s what the people who sent us here expect of us. With their votes, they’ve determined that governing will now be a shared responsibility between parties. New laws will only pass with support from Democrats and Republicans. We will move forward together, or not at all — for the challenges we face are bigger than party, and bigger than politics.

At stake right now is not who wins the next election — after all, we just had an election. At stake is whether new jobs and industries take root in this country, or somewhere else. It’s whether the hard work and industry of our people is rewarded. It’s whether we sustain the leadership that has made America not just a place on a map, but a light to the world.

We are poised for progress. Two years after the worst recession most of us have ever known, the stock market has come roaring back. Corporate profits are up. The economy is growing again.

But we have never measured progress by these yardsticks alone. We measure progress by the success of our people. By the jobs they can find and the quality of life those jobs offer. By the prospects of a small business owner who dreams of turning a good idea into a thriving enterprise. By the opportunities for a better life that we pass on to our children.

That’s the project the American people want us to work on. Together.

We did that in December. Thanks to the tax cuts we passed, Americans’ paychecks are a little bigger today. Every business can write off the full cost of the new investments they make this year. These steps, taken by Democrats and Republicans, will grow the economy and add to the more than one million private sector jobs created last year.

But we have more work to do. The steps we’ve taken over the last two years may have broken the back of this recession — but to win the future, we’ll need to take on challenges that have been decades in the making.

Many people watching tonight can probably remember a time when finding a good job meant showing up at a nearby factory or a business downtown. You didn’t always need a degree, and your competition was pretty much limited to your neighbors. If you worked hard, chances are you’d have a job for life, with a decent paycheck, good benefits, and the occasional promotion. Maybe you’d even have the pride of seeing your kids work at the same company.

That world has changed. And for many, the change has been painful. I’ve seen it in the shuttered windows of once booming factories, and the vacant storefronts of once busy Main Streets. I’ve heard it in the frustrations of Americans who’ve seen their paychecks dwindle or their jobs disappear — proud men and women who feel like the rules have been changed in the middle of the game.

They’re right. The rules have changed. In a single generation, revolutions in technology have transformed the way we live, work and do business. Steel mills that once needed 1,000 workers can now do the same work with 100. Today, just about any company can set up shop, hire workers, and sell their products wherever there’s an internet connection.

Meanwhile, nations like China and India realized that with some changes of their own, they could compete in this new world. And so they started educating their children earlier and longer, with greater emphasis on math and science. They’re investing in research and new technologies. Just recently, China became home to the world’s largest private solar research facility, and the world’s fastest computer.

So yes, the world has changed. The competition for jobs is real. But this shouldn’t discourage us. It should challenge us. Remember — for all the hits we’ve taken these last few years, for all the naysayers predicting our decline, America still has the largest, most prosperous economy in the world. No workers are more productive than ours. No country has more successful companies, or grants more patents to inventors and entrepreneurs. We are home to the world’s best colleges and universities, where more students come to study than any other place on Earth.

What’s more, we are the first nation to be founded for the sake of an idea — the idea that each of us deserves the chance to shape our own destiny. That is why centuries of pioneers and immigrants have risked everything to come here. It’s why our students don’t just memorize equations, but answer questions like “What do you think of that idea? What would you change about the world? What do you want to be when you grow up?”

The future is ours to win. But to get there, we can’t just stand still. As Robert Kennedy told us, “The future is not a gift. It is an achievement.” Sustaining the American Dream has never been about standing pat. It has required each generation to sacrifice, and struggle, and meet the demands of a new age.

Now it’s our turn. We know what it takes to compete for the jobs and industries of our time. We need to out-innovate, out-educate, and out-build the rest of the world. We have to make America the best place on Earth to do business. We need to take responsibility for our deficit, and reform our government. That’s how our people will prosper. That’s how we’ll win the future. And tonight, I’d like to talk about how we get there.

The first step in winning the future is encouraging American innovation.

None of us can predict with certainty what the next big industry will be, or where the new jobs will come from. Thirty years ago, we couldn’t know that something called the Internet would lead to an economic revolution. What we can do — what America does better than anyone — is spark the creativity and imagination of our people. We are the nation that put cars in driveways and computers in offices; the nation of Edison and the Wright brothers; of Google and Facebook. In America, innovation doesn’t just change our lives. It’s how we make a living.

Our free enterprise system is what drives innovation. But because it’s not always profitable for companies to invest in basic research, throughout history our government has provided cutting-edge scientists and inventors with the support that they need. That’s what planted the seeds for the Internet. That’s what helped make possible things like computer chips and GPS.

Just think of all the good jobs — from manufacturing to retail — that have come from those breakthroughs.

Half a century ago, when the Soviets beat us into space with the launch of a satellite called Sputnik, we had no idea how we’d beat them to the moon. The science wasn’t there yet. NASA didn’t even exist. But after investing in better research and education, we didn’t just surpass the Soviets; we unleashed a wave of innovation that created new industries and millions of new jobs.

This is our generation’s Sputnik moment. Two years ago, I said that we needed to reach a level of research and development we haven’t seen since the height of the Space Race. In a few weeks, I will be sending a budget to Congress that helps us meet that goal. We’ll invest in biomedical research, information technology, and especially clean energy technology — an investment that will strengthen our security, protect our planet, and create countless new jobs for our people.

Already, we are seeing the promise of renewable energy. Robert and Gary Allen are brothers who run a small Michigan roofing company. After September 11th, they volunteered their best roofers to help repair the Pentagon. But half of their factory went unused, and the recession hit them hard.

Today, with the help of a government loan, that empty space is being used to manufacture solar shingles that are being sold all across the country. In Robert’s words, “We reinvented ourselves.”

That’s what Americans have done for over two hundred years: reinvented ourselves. And to spur on more success stories like the Allen Brothers, we’ve begun to reinvent our energy policy. We’re not just handing out money. We’re issuing a challenge. We’re telling America’s scientists and engineers that if they assemble teams of the best minds in their fields, and focus on the hardest problems in clean energy, we’ll fund the Apollo Projects of our time.

At the California Institute of Technology, they’re developing a way to turn sunlight and water into fuel for our cars. At Oak Ridge National Laboratory, they’re using supercomputers to get a lot more power out of our nuclear facilities. With more research and incentives, we can break our dependence on oil with biofuels, and become the first country to have 1 million electric vehicles on the road by 2015.

We need to get behind this innovation. And to help pay for it, I’m asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies. I don’t know if you’ve noticed, but they’re doing just fine on their own. So instead of subsidizing yesterday’s energy, let’s invest in tomorrow’s.

Now, clean energy breakthroughs will only translate into clean energy jobs if businesses know there will be a market for what they’re selling. So tonight, I challenge you to join me in setting a new goal: by 2035, 80% of America’s electricity will come from clean energy sources. Some folks want wind and solar. Others want nuclear, clean coal, and natural gas. To meet this goal, we will need them all — and I urge Democrats and Republicans to work together to make it happen.

Maintaining our leadership in research and technology is crucial to America’s success. But if we want to win the future — if we want innovation to produce jobs in America and not overseas — then we also have to win the race to educate our kids.

Think about it. Over the next ten years, nearly half of all new jobs will require education that goes beyond a high school degree. And yet, as many as a quarter of our students aren’t even finishing high school. The quality of our math and science education lags behind many other nations. America has fallen to 9th in the proportion of young people with a college degree. And so the question is whether all of us — as citizens, and as parents — are willing to do what’s necessary to give every child a chance to succeed.

That responsibility begins not in our classrooms, but in our homes and communities. It’s family that first instills the love of learning in a child. Only parents can make sure the TV is turned off and homework gets done. We need to teach our kids that it’s not just the winner of the Super Bowl who deserves to be celebrated, but the winner of the science fair; that success is not a function of fame or PR, but of hard work and discipline.

Our schools share this responsibility. When a child walks into a classroom, it should be a place of high expectations and high performance. But too many schools don’t meet this test. That’s why instead of just pouring money into a system that’s not working, we launched a competition called Race to the Top. To all fifty states, we said, “If you show us the most innovative plans to improve teacher quality and student achievement, we’ll show you the money.”

Race to the Top is the most meaningful reform of our public schools in a generation. For less than one percent of what we spend on education each year, it has led over 40 states to raise their standards for teaching and learning. These standards were developed, not by Washington, but by Republican and Democratic governors throughout the country. And Race to the Top should be the approach we follow this year as we replace No Child Left Behind with a law that is more flexible and focused on what’s best for our kids.

You see, we know what’s possible for our children when reform isn’t just a top-down mandate, but the work of local teachers and principals; school boards and communities.

Take a school like Bruce Randolph in Denver. Three years ago, it was rated one of the worst schools in Colorado; located on turf between two rival gangs. But last May, 97% of the seniors received their diploma. Most will be the first in their family to go to college. And after the first year of the school’s transformation, the principal who made it possible wiped away tears when a student said “Thank you, Mrs. Waters, for showing … that we are smart and we can make it.”

Let’s also remember that after parents, the biggest impact on a child’s success comes from the man or woman at the front of the classroom. In South Korea, teachers are known as “nation builders.” Here in America, it’s time we treated the people who educate our children with the same level of respect. We want to reward good teachers and stop making excuses for bad ones. And over the next ten years, with so many Baby Boomers retiring from our classrooms, we want to prepare 100,000 new teachers in the fields of science, technology, engineering, and math.

In fact, to every young person listening tonight who’s contemplating their career choice: If you want to make a difference in the life of our nation; if you want to make a difference in the life of a child — become a teacher. Your country needs you.

Of course, the education race doesn’t end with a high school diploma. To compete, higher education must be within reach of every American. That’s why we’ve ended the unwarranted taxpayer subsidies that went to banks, and used the savings to make college affordable for millions of students. And this year, I ask Congress to go further, and make permanent our tuition tax credit — worth $10,000 for four years of college.

Because people need to be able to train for new jobs and careers in today’s fast-changing economy, we are also revitalizing America’s community colleges. Last month, I saw the promise of these schools at Forsyth Tech in North Carolina. Many of the students there used to work in the surrounding factories that have since left town. One mother of two, a woman named Kathy Proctor, had worked in the furniture industry since she was 18 years old. And she told me she’s earning her degree in biotechnology now, at 55 years old, not just because the furniture jobs are gone, but because she wants to inspire her children to pursue their dreams too. As Kathy said, “I hope it tells them to never give up.”

If we take these steps — if we raise expectations for every child, and give them the best possible chance at an education, from the day they’re born until the last job they take — we will reach the goal I set two years ago: by the end of the decade, America will once again have the highest proportion of college graduates in the world.

One last point about education. Today, there are hundreds of thousands of students excelling in our schools who are not American citizens. Some are the children of undocumented workers, who had nothing to do with the actions of their parents. They grew up as Americans and pledge allegiance to our flag, and yet live every day with the threat of deportation. Others come here from abroad to study in our colleges and universities. But as soon as they obtain advanced degrees, we send them back home to compete against us. It makes no sense.

Now, I strongly believe that we should take on, once and for all, the issue of illegal immigration. I am prepared to work with Republicans and Democrats to protect our borders, enforce our laws and address the millions of undocumented workers who are now living in the shadows. I know that debate will be difficult and take time. But tonight, let’s agree to make that effort. And let’s stop expelling talented, responsible young people who can staff our research labs, start new businesses, and further enrich this nation.

The third step in winning the future is rebuilding America. To attract new businesses to our shores, we need the fastest, most reliable ways to move people, goods, and information — from high-speed rail to high-speed internet.

Our infrastructure used to be the best — but our lead has slipped. South Korean homes now have greater internet access than we do. Countries in Europe and Russia invest more in their roads and railways than we do. China is building faster trains and newer airports. Meanwhile, when our own engineers graded our nation’s infrastructure, they gave us a “D.”

We have to do better. America is the nation that built the transcontinental railroad, brought electricity to rural communities, and constructed the interstate highway system. The jobs created by these projects didn’t just come from laying down tracks or pavement. They came from businesses that opened near a town’s new train station or the new off-ramp.

Over the last two years, we have begun rebuilding for the 21st century, a project that has meant thousands of good jobs for the hard-hit construction industry. Tonight, I’m proposing that we redouble these efforts.

We will put more Americans to work repairing crumbling roads and bridges. We will make sure this is fully paid for, attract private investment, and pick projects based on what’s best for the economy, not politicians.

Within 25 years, our goal is to give 80% of Americans access to high-speed rail, which could allow you go places in half the time it takes to travel by car. For some trips, it will be faster than flying — without the pat-down. As we speak, routes in California and the Midwest are already underway.

Within the next five years, we will make it possible for business to deploy the next generation of high-speed wireless coverage to 98% of all Americans. This isn’t just about a faster internet and fewer dropped calls. It’s about connecting every part of America to the digital age. It’s about a rural community in Iowa or Alabama where farmers and small business owners will be able to sell their products all over the world. It’s about a firefighter who can download the design of a burning building onto a handheld device; a student who can take classes with a digital textbook; or a patient who can have face-to-face video chats with her doctor.

All these investments — in innovation, education, and infrastructure — will make America a better place to do business and create jobs. But to help our companies compete, we also have to knock down barriers that stand in the way of their success.

Over the years, a parade of lobbyists has rigged the tax code to benefit particular companies and industries. Those with accountants or lawyers to work the system can end up paying no taxes at all. But all the rest are hit with one of the highest corporate tax rates in the world. It makes no sense, and it has to change.

So tonight, I’m asking Democrats and Republicans to simplify the system. Get rid of the loopholes. Level the playing field. And use the savings to lower the corporate tax rate for the first time in 25 years — without adding to our deficit.

To help businesses sell more products abroad, we set a goal of doubling our exports by 2014 — because the more we export, the more jobs we create at home. Already, our exports are up. Recently, we signed agreements with India and China that will support more than 250,000 jobs in the United States. And last month, we finalized a trade agreement with South Korea that will support at least 70,000 American jobs. This agreement has unprecedented support from business and labor; Democrats and Republicans, and I ask this Congress to pass it as soon as possible.

Before I took office, I made it clear that we would enforce our trade agreements, and that I would only sign deals that keep faith with American workers, and promote American jobs. That’s what we did with Korea, and that’s what I intend to do as we pursue agreements with Panama and Colombia, and continue our Asia Pacific and global trade talks.

To reduce barriers to growth and investment, I’ve ordered a review of government regulations. When we find rules that put an unnecessary burden on businesses, we will fix them. But I will not hesitate to create or enforce commonsense safeguards to protect the American people. That’s what we’ve done in this country for more than a century. It’s why our food is safe to eat, our water is safe to drink, and our air is safe to breathe. It’s why we have speed limits and child labor laws. It’s why last year, we put in place consumer protections against hidden fees and penalties by credit card companies, and new rules to prevent another financial crisis. And it’s why we passed reform that finally prevents the health insurance industry from exploiting patients.

Now, I’ve heard rumors that a few of you have some concerns about the new health care law. So let me be the first to say that anything can be improved. If you have ideas about how to improve this law by making care better or more affordable, I am eager to work with you. We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses.

What I’m not willing to do is go back to the days when insurance companies could deny someone coverage because of a pre-existing condition. I’m not willing to tell James Howard, a brain cancer patient from Texas, that his treatment might not be covered. I’m not willing to tell Jim Houser, a small business owner from Oregon, that he has to go back to paying $5,000 more to cover his employees. As we speak, this law is making prescription drugs cheaper for seniors and giving uninsured students a chance to stay on their parents’ coverage. So instead of re-fighting the battles of the last two years, let’s fix what needs fixing and move forward.

Now, the final step — a critical step — in winning the future is to make sure we aren’t buried under a mountain of debt.

We are living with a legacy of deficit-spending that began almost a decade ago. And in the wake of the financial crisis, some of that was necessary to keep credit flowing, save jobs, and put money in people’s pockets.

But now that the worst of the recession is over, we have to confront the fact that our government spends more than it takes in. That is not sustainable. Every day, families sacrifice to live within their means. They deserve a government that does the same.

So tonight, I am proposing that starting this year, we freeze annual domestic spending for the next five years. This would reduce the deficit by more than $400 billion over the next decade, and will bring discretionary spending to the lowest share of our economy since Dwight Eisenhower was president.

This freeze will require painful cuts. Already, we have frozen the salaries of hardworking federal employees for the next two years. I’ve proposed cuts to things I care deeply about, like community action programs. The Secretary of Defense has also agreed to cut tens of billions of dollars in spending that he and his generals believe our military can do without.

I recognize that some in this Chamber have already proposed deeper cuts, and I’m willing to eliminate whatever we can honestly afford to do without. But let’s make sure that we’re not doing it on the backs of our most vulnerable citizens. And let’s make sure what we’re cutting is really excess weight. Cutting the deficit by gutting our investments in innovation and education is like lightening an overloaded airplane by removing its engine. It may feel like you’re flying high at first, but it won’t take long before you’ll feel the impact.

Now, most of the cuts and savings I’ve proposed only address annual domestic spending, which represents a little more than 12% of our budget. To make further progress, we have to stop pretending that cutting this kind of spending alone will be enough. It won’t.

The bipartisan Fiscal Commission I created last year made this crystal clear. I don’t agree with all their proposals, but they made important progress. And their conclusion is that the only way to tackle our deficit is to cut excessive spending wherever we find it — in domestic spending, defense spending, health care spending, and spending through tax breaks and loopholes.

This means further reducing health care costs, including programs like Medicare and Medicaid, which are the single biggest contributor to our long-term deficit. Health insurance reform will slow these rising costs, which is part of why nonpartisan economists have said that repealing the health care law would add a quarter of a trillion dollars to our deficit. Still, I’m willing to look at other ideas to bring down costs, including one that Republicans suggested last year: medical malpractice reform to rein in frivolous lawsuits.

To put us on solid ground, we should also find a bipartisan solution to strengthen Social Security for future generations. And we must do it without putting at risk current retirees, the most vulnerable, or people with disabilities; without slashing benefits for future generations; and without subjecting Americans’ guaranteed retirement income to the whims of the stock market.

And if we truly care about our deficit, we simply cannot afford a permanent extension of the tax cuts for the wealthiest 2% of Americans. Before we take money away from our schools, or scholarships away from our students, we should ask millionaires to give up their tax break.

It’s not a matter of punishing their success. It’s about promoting America’s success.

In fact, the best thing we could do on taxes for all Americans is to simplify the individual tax code. This will be a tough job, but members of both parties have expressed interest in doing this, and I am prepared to join them.

So now is the time to act. Now is the time for both sides and both houses of Congress — Democrats and Republicans — to forge a principled compromise that gets the job done. If we make the hard choices now to rein in our deficits, we can make the investments we need to win the future.

Let me take this one step further. We shouldn’t just give our people a government that’s more affordable. We should give them a government that’s more competent and efficient. We cannot win the future with a government of the past.

We live and do business in the information age, but the last major reorganization of the government happened in the age of black and white TV. There are twelve different agencies that deal with exports. There are at least five different entities that deal with housing policy. Then there’s my favorite example: the Interior Department is in charge of salmon while they’re in fresh water, but the Commerce Department handles them in when they’re in saltwater. And I hear it gets even more complicated once they’re smoked.

Now, we have made great strides over the last two years in using technology and getting rid of waste. Veterans can now download their electronic medical records with a click of the mouse. We’re selling acres of federal office space that hasn’t been used in years, and we will cut through red tape to get rid of more. But we need to think bigger. In the coming months, my administration will develop a proposal to merge, consolidate, and reorganize the federal government in a way that best serves the goal of a more competitive America. I will submit that proposal to Congress for a vote — and we will push to get it passed.

In the coming year, we will also work to rebuild people’s faith in the institution of government. Because you deserve to know exactly how and where your tax dollars are being spent, you will be able to go to a website and get that information for the very first time in history. Because you deserve to know when your elected officials are meeting with lobbyists, I ask Congress to do what the White House has already done: put that information online. And because the American people deserve to know that special interests aren’t larding up legislation with pet projects, both parties in Congress should know this: if a bill comes to my desk with earmarks inside, I will veto it.

A 21st century government that’s open and competent. A government that lives within its means. An economy that’s driven by new skills and ideas. Our success in this new and changing world will require reform, responsibility, and innovation. It will also require us to approach that world with a new level of engagement in our foreign affairs.

Just as jobs and businesses can now race across borders, so can new threats and new challenges. No single wall separates East and West; no one rival superpower is aligned against us.

And so we must defeat determined enemies wherever they are, and build coalitions that cut across lines of region and race and religion. America’s moral example must always shine for all who yearn for freedom, justice, and dignity. And because we have begun this work, tonight we can say that American leadership has been renewed and America’s standing has been restored.

Look to Iraq, where nearly 100,000 of our brave men and women have left with their heads held high; where American combat patrols have ended; violence has come down; and a new government has been formed. This year, our civilians will forge a lasting partnership with the Iraqi people, while we finish the job of bringing our troops out of Iraq. America’s commitment has been kept; the Iraq War is coming to an end.

Of course, as we speak, al Qaeda and their affiliates continue to plan attacks against us. Thanks to our intelligence and law enforcement professionals, we are disrupting plots and securing our cities and skies. And as extremists try to inspire acts of violence within our borders, we are responding with the strength of our communities, with respect for the rule of law, and with the conviction that American Muslims are a part of our American family.

We have also taken the fight to al Qaeda and their allies abroad. In Afghanistan, our troops have taken Taliban strongholds and trained Afghan Security Forces. Our purpose is clear — by preventing the Taliban from reestablishing a stranglehold over the Afghan people, we will deny al Qaeda the safe-haven that served as a launching pad for 9/11.

Thanks to our heroic troops and civilians, fewer Afghans are under the control of the insurgency. There will be tough fighting ahead, and the Afghan government will need to deliver better governance. But we are strengthening the capacity of the Afghan people and building an enduring partnership with them. This year, we will work with nearly 50 countries to begin a transition to an Afghan lead. And this July, we will begin to bring our troops home.

In Pakistan, al Qaeda’s leadership is under more pressure than at any point since 2001. Their leaders and operatives are being removed from the battlefield. Their safe-havens are shrinking. And we have sent a message from the Afghan border to the Arabian Peninsula to all parts of the globe: we will not relent, we will not waver, and we will defeat you.

American leadership can also be seen in the effort to secure the worst weapons of war. Because Republicans and Democrats approved the New START Treaty, far fewer nuclear weapons and launchers will be deployed. Because we rallied the world, nuclear materials are being locked down on every continent so they never fall into the hands of terrorists.

Because of a diplomatic effort to insist that Iran meet its obligations, the Iranian government now faces tougher and tighter sanctions than ever before. And on the Korean peninsula, we stand with our ally South Korea, and insist that North Korea keeps its commitment to abandon nuclear weapons.

This is just a part of how we are shaping a world that favors peace and prosperity. With our European allies, we revitalized NATO, and increased our cooperation on everything from counter-terrorism to missile defense. We have reset our relationship with Russia, strengthened Asian alliances, and built new partnerships with nations like India. This March, I will travel to Brazil, Chile, and El Salvador to forge new alliances for progress in the Americas. Around the globe, we are standing with those who take responsibility — helping farmers grow more food; supporting doctors who care for the sick; and combating the corruption that can rot a society and rob people of opportunity.

Recent events have shown us that what sets us apart must not just be our power — it must be the purpose behind it. In South Sudan — with our assistance — the people were finally able to vote for independence after years of war. Thousands lined up before dawn. People danced in the streets. One man who lost four of his brothers at war summed up the scene around him: “This was a battlefield for most of my life. Now we want to be free.”

We saw that same desire to be free in Tunisia, where the will of the people proved more powerful than the writ of a dictator. And tonight, let us be clear: the United States of America stands with the people of Tunisia, and supports the democratic aspirations of all people.

We must never forget that the things we’ve struggled for, and fought for, live in the hearts of people everywhere. And we must always remember that the Americans who have borne the greatest burden in this struggle are the men and women who serve our country.

Tonight, let us speak with one voice in reaffirming that our nation is united in support of our troops and their families. Let us serve them as well as they have served us — by giving them the equipment they need; by providing them with the care and benefits they have earned; and by enlisting our veterans in the great task of building our own nation.

Our troops come from every corner of this country – they are black, white, Latino, Asian and Native American. They are Christian and Hindu, Jewish and Muslim. And, yes, we know that some of them are gay. Starting this year, no American will be forbidden from serving the country they love because of who they love. And with that change, I call on all of our college campuses to open their doors to our military recruiters and the ROTC. It is time to leave behind the divisive battles of the past. It is time to move forward as one nation.

We should have no illusions about the work ahead of us. Reforming our schools; changing the way we use energy; reducing our deficit — none of this is easy. All of it will take time. And it will be harder because we will argue about everything. The cost. The details. The letter of every law.

Of course, some countries don’t have this problem. If the central government wants a railroad, they get a railroad — no matter how many homes are bulldozed. If they don’t want a bad story in the newspaper, it doesn’t get written.

And yet, as contentious and frustrating and messy as our democracy can sometimes be, I know there isn’t a person here who would trade places with any other nation on Earth.

We may have differences in policy, but we all believe in the rights enshrined in our Constitution. We may have different opinions, but we believe in the same promise that says this is a place where you can make it if you try. We may have different backgrounds, but we believe in the same dream that says this is a country where anything’s possible. No matter who you are. No matter where you come from.

That dream is why I can stand here before you tonight. That dream is why a working class kid from Scranton can stand behind me. That dream is why someone who began by sweeping the floors of his father’s Cincinnati bar can preside as Speaker of the House in the greatest nation on Earth.

That dream — that American Dream — is what drove the Allen Brothers to reinvent their roofing company for a new era. It’s what drove those students at Forsyth Tech to learn a new skill and work towards the future. And that dream is the story of a small business owner named Brandon Fisher.

Brandon started a company in Berlin, Pennsylvania that specializes in a new kind of drilling technology. One day last summer, he saw the news that halfway across the world, 33 men were trapped in a Chilean mine, and no one knew how to save them.

But Brandon thought his company could help. And so he designed a rescue that would come to be known as Plan B. His employees worked around the clock to manufacture the necessary drilling equipment. And Brandon left for Chile.

Along with others, he began drilling a 2,000 foot hole into the ground, working three or four days at a time with no sleep. Thirty-seven days later, Plan B succeeded, and the miners were rescued. But because he didn’t want all of the attention, Brandon wasn’t there when the miners emerged. He had already gone home, back to work on his next project.

Later, one of his employees said of the rescue, “We proved that Center Rock is a little company, but we do big things.”

We do big things.

From the earliest days of our founding, America has been the story of ordinary people who dare to dream. That’s how we win the future.

We are a nation that says, “I might not have a lot of money, but I have this great idea for a new company. I might not come from a family of college graduates, but I will be the first to get my degree. I might not know those people in trouble, but I think I can help them, and I need to try. I’m not sure how we’ll reach that better place beyond the horizon, but I know we’ll get there. I know we will.”

We do big things.

The idea of America endures. Our destiny remains our choice. And tonight, more than two centuries later, it is because of our people that our future is hopeful, our journey goes forward, and the state of our union is strong.

Thank you, God Bless You, and may God Bless the United States of America.

The planned vote to repeal last year’s Patient Protection and Affordable Care Act [pdf], if successful, would increase the federal budget deficit by $230 billion over the next ten years, would leave 32 million Americans with no access to affordable healthcare insurance, would strip small businesses of tax credits they get to help cover employee health costs, and would increase the cost per insuree across the nation. The Congressional Budget Office has released a study showing the negative impact repeal would have on the federal budget, the welfare of average Americans and the economy more broadly.

Republicans favoring repeal have rejected the report, and say there is no way they will recognize to count the costs of repeal. No economic calculations are provided by the repeal effort’s backers, but the insistence that the legislation will “kill jobs” and “expand the role of government” appear to be the basis for much of their argument about the need to repeal the deficit-reducing law in order to reduce the deficit.

The Republican majority, determined to force the issue, has released a political report, with very little solid economic data sourcing or analysis, which was given the title “Obama-care: A budget-busting, job-killing health care law” and emblazoned with a chain and padlock. The Washington Post describes the report as “filled with the incendiary language the GOP has adopted to discuss the law”. Critics are urging the Republican leadership to desist in the relentless smear campaign brought to this issue and to examine specific provisions, as written (not as spun by strategists), and take seriously the meaning of the non-partisan budget analysis.

In at least one call to Speaker Boehner’s office, this reporter made the very revealing (if startling) discovery that the young staffer answering the phone had never heard of the Affordable Care Act. She knew the law only by one of two terms: “the healthcare law” or “Obamacare”. While anecdotal, and not true of all staffers at the new speaker’s office, that revelation would seem to confirm that an intensely partisan and ideological view has been taken of the law as a whole, with relatively little specific focus placed on the substance of the reforms.

David Cutler, a prominent health-focused economist from Harvard University, who advised Pres. Obama’s 2008 campaign, is scheduled to release a study Friday detailing the harmful impact repeal of the Affordable Care Act would have both on the cost of health insurance and on job-creation.

The repeal would, importantly, strip small businesses of major new tax breaks that allow them to cover employees, a cost-saving measure that, coupled with the projected long-term slowing of cost increases relating to healthcare insurance, will help small businesses better reinvest their revenues, cultivate a productive base of personnel and expand their operations, including with new hiring.

Republicans have insisted this cannot be the case, mostly making reference to vague ideological aspirations, which include the notion that only by reducing regulation, taxes AND “the size and scope of government” can any and/or all businesses in the United States prosper and grow, and only then can they hire. This philosophy is deeply ingrained in the Republican party’s ideological bent, but runs contrary to much of what market economics has actually demonstrated in practice.

In situations where a market is broken, as with the healthcare insurance market —private insurers provide full coverage to less than 40% of the American population, and actively seek ways to reject payment for treatment covered under the policies their own clients have purchased—, tax incentives and improved regulation are required to assist consumers and businesses, so that the overall economy can cope with the deficiencies of the market in question.

This is the logic of the Affordable Care Act, a bewilderingly complex law, with many imperfections. But the new CBO analysis shows how effective many of those measures are for slowing the expansion of healthcare costs and allowing the private market to expand its reach in a way that makes coverage more affordable and care more accessible for everyone.

Over the long term, those costs are expected to decrease significantly as a percentage of overall GDP, to levels that might become manageable if certain core inefficiencies in the health insurance marketplace are dealt with. Repeal would force prices higher, strip millions of coverage, put the long-term stability of Medicare at risk, make Medicaid more difficult for states to fund, and deny to small businesses across the country needed tax credits that will help them deal with the cost inefficiencies in the health insurance marketplace.

These effects, combined with a rapid escalation of the federal budget deficit burden ($230 billion over ten years, and accelerating after that), could lead to more than $1 trillion added to the federal budget deficit by 2031, and a significant slowing of the nation’s ongoing economic recovery. The budgetary impact would be severe enough that most of the Republicans’ planned spending cuts would actually result in no reduction in the budget deficit.

The Republican party has made a lot of promises, among them the pledge not to increase taxes and the promise to never increase the federal budget deficit, cutting as they go. Now, the first major legislative proposal of the House of Representatives, in the 112th Congress, is to inflate the budget deficit by at least $230 billion over 10 years and possibly more than $1 trillion over 2 decades. Their repeal will raise taxes on small businesses (their way of describing the lapse or repeal of tax cuts), and put millions of Americans under the most severe cost pressure possible in a troubled economic and jobs climate.

Ideology can help people to organize their thoughts in the midst of the complexity and adversity of the political sphere, but it is not sufficient to justify the kind of recklessness that is currently being undertaken. Pres. Obama is arranging his agenda for 2011-2012 with a mind to negotiating and working constructively in a bipartisan fashion, and the Republicans in the House are fighting last year’s battle, with a promise to do immediate economic harm to millions of their fellow citizens. We should hope they learn to see the folly in this, before they waste still more taxpayer money in a fool’s errand that will cost so much.

The United States government is facing historic budget deficits. A wave of new Republicans are going to Washington, DC, with the idea in mind they will slash “spending”, “shrink the federal workforce” and reduce benefits for “entitlements”, i.e. social programs. What they do not have a way to understand is that the entire budget deficit crisis is a direct result of specific policies enacted by former president George W. Bush and the Republican-controlled Congress of 2001-2006.

Rand Paul, senator-elect from Kentucky, who has risen to prominence making promises to a Tea Party base that the media say wants more than anything to slash government spending. Paul told CBS News’ ‘Face the Nation’ today that he wanted to cut spending for social programs, establish the Bush tax cuts for the wealthiest of the wealthy as a permanent feature of the American economy —despite their failure to create jobs— and hold off on cutting Defense Department waste, despite acknowledging this would be necessary to shrink the deficit.

Paul comes from a radical ideology that says that all government spending is inefficient. (One wonders if he will reject his government salary, on the grounds it has corrosive effects on the economy.) He offered not one single example of waste or inefficiency, but alleged the Obama administration had set about making itself an “enemy of business”, for saying those who commit crimes should be punished, so that markets are fair and law-abiding.

The plan the Republicans are putting forward would give the largest sums (proportionally far more than any other segment of the population) to the wealthiest of the wealthy, at a time when multimillionaires and billionaires have earned higher and higher profits and ordinary families are falling out of the middle class, in an historic wave of foreclosures and bankruptcies. The Democratic party is proposing a middle-class tax cut focused on the most productive segment of the American economy, and on preserving the rights and opportunities of middle-class families.

The American economy has been eroded by a decade of ill-advised plans, designed to make life easier for mega-corporations whose massive revenue streams are not enough to “meet expectations”, without a constant cycle of mergers and consolidation. Consolidation is seen as a smart move for a business aiming to “capture expanded market share”, but the view that consolidation is positive is egregiously short-sighted, because consolidation makes the wider marketplace sclerotic and inefficient, and strips consumers of much of their influence on the economic landscape that is supposed to meet their interests.

The Republicans need to move away from the billionaire-focused economic policies of the Bush administration. It is a fundamentally anti-liberal AND anti-conservative economic philosophy, and it is harming families, communities and small businesses and causing wages to fall, undermining our economic security. The fact is, a politics that privileges the most privileged economic entities over all others puts ordinary people, families and communities, at such a disadvantage that their ingenuity and hard work is no longer enough; their rights and opportunities are eroded as multinational behemoths capitalize on a pattern of consolidation-based growth.

The result has been a significant expansion of government spending, instigated by deliberately enacted policies of the Bush administration, which moved the budget from 20% of GDP to 25% of GDP. This does not demonstrate an ineffectiveness of public spending policy, but rather the ineffectiveness of Bush’s tax-cut policies for stimulating the growth of the private sector. Worse still, the basic underlying principle that is meant to justify the all-tax-cut philosophy, the two-pronged philosophy of wealth trickling down to everyone and of soaring government revenues, failed to play out.

That underlying principle was also shown to be massively ineffective. Yet the Republicans are now pushing an even more aggressive adherence to this radical ideology. It is radical, because it operates on ideological assumptions that are the root of its rhetoric and of the ferocity of its proponents, but those assumptions are just that, and have been contradicted fairly comprehensively by the economic trajectory of the decade of the 2000s.

What this year’s crop of Republican freshmen seem to fail to understand about government “spending”, perhaps more than any other freshman class, if we look at philosophical indicators in the rhetoric of the candidates and the bluster of nascent coalitions, is that 1) government spending is money given to the “private sector” (i.e. people and businesses who are not, in themselves, “the government”) and 2) “earmarks” are the Constitutional power given to Congress, with the alternative being vastly increased presidential power.

If the Republican rhetoric of the 2010 campaign plays out, two major things will happen in the course of the next two years: 1) sharp spending cuts will induce a downward spiral in local and national private-sector investment (we see this in communities where state and local funding has been slashed; further federal cuts will worsen the crisis) and 2) Congress will hand massive new spending authority to Pres. Obama.

Though there may be some hidden way in which this shows an implicit trust for the president’s sense of interpersonal and historic responsibility in dealing ably with fiscal crisis and generalized economic malaise, the more likely explanation is that the freshman class of the 2011 Congress simply does not understand the Constitutional meaning of their attack on Congressional spending authority.

Voters in 2012, however, will look with a less forgiving eye on Republican protests that “we did not understand how our philosophies would impact the economic fabric of the nation”. They will, instead, judge whether the Republicans in the House of Representatives 1) knew what they were doing, 2) acted responsibly, 3) committed to working with Pres. Obama and the Democratic Senate majority to solve the nation’s structural economic problems, and 4) whether they were honest in their intentions.

If the outcome of the Republicans rise in 2011 is perceived to be gridlock and a deepening of ongoing economic crisis, Pres. Obama is likely to see a shift back toward his 2008 agenda, in 2012. The Republicans may lose the ideological battle for a generation, if their tax-cut-for-billionaires philosophy again proves to undermine the security and prosperity of American middle-class households. Their intentions will be unimportant to voters, if their ideas turn out to be dangerous.

The Bush deficit crisis perplexes Republican freshmen, because they have been conditioning their minds to believe that Pres. Obama is a socialist and that tax cuts are the best way to fight socialism. They are wrong on both counts: first of all, Pres. Obama is not a socialist; he is an American Democratic president, committed to Constitutional principles and to the liberation of the middle class from declining wages and debt slavery. Second, tax cuts do not undermine socialist ideas; they undermine the effectiveness of both democratic government and middle-class capitalism, the failure of which leads to socialism.

History bears this out. When nations begin to fail, more forceful measures are implemented to rescue their economies from the corrosive impact of deep economic distortions. In Chile, the dictator Augusto Pinochet, who took power to prevent a slide into Scandinavian-style “socialism” ended up nationalizing industries and enacting even more forceful anti-market policies, in order to rescue Chile from the corrosive impact of a forced “free market” system that allowed consolidation and pro-wealth redistribution to threaten the sustainability of the nation’s marketplace.

Republicans have failed to notice so far that in many ways, they have a great ally in Pres. Obama, because cooperating on his reform agenda would allow them to liberate their party from the sordid policy record of the Bush years and to rebuild the vast middle class whose good sense and fair-mindedness they so long have proclaimed to be the most significant foundation for their core of pragmatic conservative ideals.

In 2011, they will begin to see two things they have not noticed in Pres. Obama to date: they will see him use a more forceful hand to negotiate with hostile House Republicans, and they will see him more engaged in constructive negotiation than they have imagined possible. It will be an opportunity for the House Republicans to contribute to historic reforms and the conservation of the American dream. Will they have the wisdom to take the opportunity? Or will they let it slip through their fingers?

An incoming Republican member of the House of Representatives, Alan Nunnelee of Mississippi, has said he would hold the U.S. government hostage in order to make sure millions of Americans are stripped of their health insurance and their healthcare rights. The Affordable Care Act, the most important reform to the health insurance markets since Medicare, and the most comprehensive reform in 100 years, bars insurers from denying coverage or treatment due to “pre-existing conditions”, it reduces the federal budget deficit and incentivizes the training of 20,000 new primary care physicians.

Mr. Nunnelee says it is “the worst piece of legislation” the nation has seen, and that it should never be allowed to go into effect. In fact, it already has gone into effect, and the first and most immediate consequence of the repeal Mr. Nunnelee and others in the Republican caucus are pushing would be the denial of coverage and the denial of care to sick children. Children dying of leukemia might find they have no way of getting treatment other than to bankrupt their parents, as the protection against health condition discrimination is repealed.

It seems Mr. Nunnelee has not actually read the legislation, and does not in fact know what he aims to repeal, despite the fact he is so adamant about this goal, he would rather shut down the entire United States government and put the nation and the Constitutional order in jeopardy, than see it implemented. He seems to be unaware that repeal would mean actively aiding and abetting Medicare fraud and abuse, which deprives senior citizens of needed resources for treatment, or that repeal would mean people currently getting well could have their treatment cut off.

He seems unaware that repeal would mean insurers could instantly force huge premium increases on small businesses, driving up costs far more rapidly than is sustainable and causing the economy to hemorrhage jobs. He seems unaware that repeal would mean inflating the federal budget deficit by over $1 trillion over the next two decades, making many other vital government services inviable and undermining our economic and military security. He seems unaware that repeal would mean reduced care for veterans, even as they come home with traumatic brain injuries, severe physical disabilities and post-traumatic stress disorder.

Mr. Nunnelee seems not to understand that repeal would mean reverting to the policies of the Bush years, where military families were seeing their benefits cut, because there was no program in place to make sure their medical needs could be met. Repeal of the Affordable Care Act would, simply put, make health insurance far less affordable for millions of Americans, many of whom are now able to be insured for the first time in years, or even decades.

Repeal would mean rolling back Medicaid and SCHIP coverage to a point where millions of families would see their healthcare taken away from them, with no remedy and no serious options for needed care. Repeal would mean significantly less chance the United States would be able to incentivize and fund the training and development of 20,000 cutting edge primary care physicians, whose success would mean reducing long-term health problems, catching potentially deadly illnesses earlier, and reducing overall healthcare costs relative to inflation.

Mr. Nunnelee seems to have no thoughts about any of these issues, and would simply rather smear the president and hurt the Democrats, by sabotaging a major reform the nation, the nation’s economy, and the nation’s children, families and communities, desperately need. In fact, the comprehensive irresponsibility of the repeal movement is clearly illustrated by his claim that “It’s the worst piece of legislation to pass the Congress in over a century”.

His view is so flippant and ill informed as to allow him to make the claim that the Affordable Care Act, which trains doctors, reduces the deficit, rescues tens of millions from the zero healthcare nightmare, and does so while spurring a more competitive, more complete insurance market, is worse than laws that upheld and propagated racial segregation, laws that were designed to codify and condone the treatment of one race as inferior, to intern Japanese civilians in concentration camps during WWII.

Is he really making that claim? Is the Affordable Care Act really a less laudable Congressional action than the Gulf of Tonkin Resolution or the acts that perpetuated an aimless war in southeast Asia which led to the deaths of millions of civilians? Is Representative-elect Nunnelee really arguing that the legislation that permitted the financial industry to run riot, creating a fictionalized universe of profit without underlying goods or services, and nearly bankrupt the entire global economy, is not “worse” than legislation that saves lives, reduces deficits and makes our healthcare system more sustainable?

So far, in fact, the Republican party has been able to put forth no serious reform proposals for the healthcare insurance system in the United States, aside from several which are already in the Affordable Care Act. For instance:

1. Buying insurance across state lines: Section 1333 allows for the creation of interstate compacts, where neighboring states can form common pools and share in the regulation of insurance policies. The traditional complaint about buying across state lines is that insurers seek this privilege in order to venue-shop in legal cases and avoid regulation. The Affordable Care Act does what Republicans want, but does it responsibly, so consumers are not put at a disadvantage against wealthy insurance giants.
2. Allow individuals, businesses and trade associations to pool their policies, the way unions do: Section 1312, which creates healthcare exchanges (where the public option was supposed to be one of a “menu” of options), does exactly this. The exchanges were put into the legislation precisely because Pres. Obama and the Democratic Congress wanted to use ideas that allowed the market to work for the benefit of consumers. Again, the exchanges allow for the Republican idea, but also do so in a way that gives consumers more security. Section 1101 provides for the creation of “high-risk” insurance pools, which allow for a market-based way to counter insurers’ unwillingness to cover those who are ill or unable to pay high premiums.
3. Ban health condition discrimination (pre-existing conditions): The Affordable Care Act, in Sections 2702-2705, bars insurers from denying coverage based on pre-existing conditions. Repeal of the Affordable Care Act would mean re-establishing insurers’ right to discriminate against people in need of care.
4. Bar insurers from imposing lifetime or annual caps on care: Section 2711 of the Affordable Care Act bars insurers from imposing lifetime limits on coverage, and starting in 2014 will bar insurers from imposing annual caps on coverage.
5. Ban non-fraud recisions: Section 2712 of the Affordable Care Act bars insurers from rescinding policies when a client becomes sick. No recision can occur, under the ACA, unless there is a deliberate and demonstrable act of fraud.
6. Allow states to innovate: Under Section 1332, states retain the right to have certain requirements of federal health insurance laws waived, if they are able to innovate in a way that reduces costs and improves the availability of health services for patients.
7. Conscience protections (for pro-life medical personnel): Section 1303 of the Affordable Care Act establishes “conscience protections”, which means that medical personnel (doctors, nurses, hospital staff) cannot be discriminated against based on their desire to avoid participating in abortion procedures.

There is a reason each of these provisions is in both the actual reform enacted into law and the Republican pledge to undo it: the first six are necessary for enacting real health insurance reform that “bends the cost curve down”, which we also commonly refer to as reducing costs. The reason for that language about “bending the cost curve” is that, so long as we continue to enjoy a market-driven private insurance system, we cannot reduce costs to below what they presently are; the market will not allow it.

Bending the cost curve refers to the impact on how costs rise in relation to inflation over time. Repealing the Affordable Care Act will cause healthcare costs to escalate far more rapidly, putting major federal programs, major American businesses, and families and communities, at far greater risk of financial collapse. The Affordable Care Act does nearly everything possible (except establish a public option on the affordable insurance exchanges) to bend the cost curve down, and this is why it reduces the deficit by nearly $200 billion over 10 years, and over $1 trillion over the following 10.

The only way to actually inflict on the system severe reductions in cost would be to either impose binding price controls (which no one in either party is proposing) or establish a single-payer insurance system. Single-payer is not, mind you, “socialized medicine”; it does not establish government control over healthcare treatment decisions… it only establishes a system wherein everyone is part of one pool, and one policy, which gives that insurer, a federal agency, far more negotiating power to keep prices low.

The Affordable Care Act does not in any way set the United States on a path toward single-payer, much less “socialized medicine”. In fact, numerous provisions are specifically designed to safeguard against insurers, bureaucrats or anyone else, interfering with the treatment choices made by patients and their doctors. The Affordable Care Act is, in truth, the first moment in American history where that is established in law.

So Mr. Nunnelee wants to undo all of this good that’s been done for our country and our economy, for our parents, and grandparents and children and grandchildren. He wants to turn at least 30 million people, perhaps more, loose to fend for themselves in a draconian and Darwinist marketplace where contracts are routinely violated, and the sick are denied treatment. He wants to return to a system where at least 45,000 fatalaties a year occur just because the consumer protections of the Affordable Care Act are not in place.

This position is untenable. It is an affront to the Constitutional order, wherein the government cannot haphazardly set about stripping people of their rights. It is a threat to our economic future and to the sustainability of a world-class medical care system. The Republican party is talking big about a hugely reckless gamble that will put lives in jeopardy and undermine every American’s personal freedoms, by pushing costs dramatically higher and making us less healthy.

We need to hope that public servants like Mr. Nunnelee of Mississippi can learn as they go, that they can come to understand the gravity of the decisions that face them and the serious responsibility they have to history, past and future, to get it right. We need to hope that a process of dialogue and shared interest in the health and prosperity of our republic will allow us to work with members of the new Congress, so that they come down on the side of the American people and not the insurance lobby that wants to evade responsibility for its promises.

Pres. Obama has signed the final bill that amends and updates the Senate version of healthcare reform, passed by the House and signed by the president last week. This fulfills the promises made between and among leaders of the Democratic party in both houses to ultimately reach a mutually agreed-upon package of reforms that would be immune to the Republican filibuster threat. It also ensures that Pres. Obama’s major legislative victory, in passing the first comprehensive health insurance reform package in the nation’s history, is not just victory in process, but also in substance.

The Republican party refused to participate in the process of amendment and debate, refused to sign on for constructive negotiations, refused to cast even one vote in favor of passage of a reform bill that contained many of their own best ideas for healthcare. It was a gamble, which observers are now saying has put them in what is potentially the weakest position of any major party in more than half a century: having suffered two consecutive wave election defeats and lost the presidency by a landslide, after a decade of disastrous mismanagement in economic and social policy, faced with the most important reform process in half a century, they simply bowed out.

They gambled that their opposition would make it impossible to pass any kind of meaningful reform and that such a defeat would cripple Pres. Obama for the rest of his first term. They based this idea on the strategy adopted in 1993, which led to their party taking the House in 1994, but did not undermine Pres. Clinton’s popularity or his chances for reelection in 1996. It is now clear that Pres. Obama’s victory in the grueling healthcare reform battle makes him one of the most formidable and effective presidents in terms of steering the nation’s legislative agenda and achieving major policy reforms. The Republicans will now have to run against that.

In fact, contrary to the Republicans’ nostalgic view of the period, the dynamics of the 1990s allowed Pres. Clinton to reestablish the Democratic party as the party of principled public policy, bold leadership and skilled negotiations, as he struggled with a hardline Republican insurgency in the Congress. What’s more, it left the Republican party increasingly divided between such pragmatists on its own side and the radicals who sought a “permanent majority”. That surge in radicalism now threatens to strip the party of its most valuable thinkers and most viable ideas.

The long-term fallout of the Republicans’ anti-civics scorched-earth strategy has been a persistent and spreading upwelling of intolerance-as-virtue throughout the party, marginalizing moderates and shrinking the party’s real demographic “base” of support, while the long-term effect of the Clinton-era Democratic approach to government would ultimately be the foundation for the 2008 campaign, in which many believe the real contest for the presidency was between Sen. Hillary Rodham Clinton and Sen. Barack Obama, who vied for the Democratic nomination and the right to be the president who would push through major social-program and regulatory reforms.

By signing the Health Care and Education Reconciliation Act of 2010, Pres. Obama was able to complete the process negotiated by the House and Senate leadership, which allowed a majority in both houses to agree to the collective reform package, as represented by the initial reform bill that passed the Senate last year, as amended by the “fixes” bill passed through budget reconciliation. The reconciliation package passed the House of Representatives by a 220-207 margin, marking an impressive show of strength for House Speaker Nancy Pelosi, and for Pres. Obama, who, as noted by Joe Kline in this week’s TIME, is apparently adroit at “herding cats”.

The Senate Democratic leadership faced a wave of Republican attempts to add “poison pills” to the reconciliation package, in hopes of preventing its passage. As reported by the Christian Science Monitor:

In a process dubbed vote-a-rama, the Senate voted down 29 Republican amendments to healthcare reform, on near-party-line votes. The votes, however, did put senators on record on issues ranging from tax hikes and back-room deals for certain states to gay marriage in the District of Columbia and whether to ban Medicare payments to cover Viagra for sex offenders.

Several of the Republican amendments were designed to defund the reform legislation itself, a move Democratic leaders were determined to counter, almost at any cost. Democrats called the Republican members’ proposals irresponsible, and sought to remind both wavering members and the general public that such amendments were designed, in part, to gut the very “deficit reduction” provisions that make this legislative fiscally responsible over the long term.

A central truth in the arduous national debate over health insurance reform legislation, throughout 2009 and up to passage in March 2010, has been the fact that major insurers are unable to provide coverage for the treatment needed by their patients. Either their business model is fundamentally flawed or there is a severe deficit of imagination as to how to implement the business model in a way that benefits all stakeholders.

The intense emotion on all sides of the debate is clearly linked to this problem: the debate was dominate by an extreme division between the views of those who defended the rights of private insurers to avoid paying for care and those who defended the rights of patients, insured or otherwise, to receive fully paid full-spectrum healthcare reform. The one band vehemently opposes any new restrictions on insurers or a shift toward public financing of healthcare, possibly because the insurance industry is not competitive enough in delivering both care and profit; the other refuses to accept that there should be any alternative to automatic full-spectrum care for all people.

The question that seemed to be absent from the debate was: whatever the reforms look like, how can we actually build a better insurance company? Can new health insurance reforms incentivize the creation of more humane, effective, health-oriented health insurance enterprises? Will cooperatives and non-profit insurers be viable? Use this discussion to explore ideas for creating viable insurance providers that do not refuse care or coverage.

• Join the discussion now on the Hot Spring Network

The following is a transcript of remarks delivered by President Obama and Dr. Jill Biden at Signing of Health Care and Education Reconciliation Act, at the Northern Virginia Community College, in Alexandria, Virginia

11:04 A.M. EDT

AUDIENCE MEMBER: Fired up!

THE PRESIDENT: Fired up! (Laughter.)

AUDIENCE MEMBER: Obama! (Laughter.)

DR. BIDEN: Good morning, everyone, and thank you for being here today. I’m Jill Biden and I am honored to be a community college instructor. (Applause.) I have been a teacher for almost three decades and a community college instructor for the past 16 years. In fact, I’m an English teacher right here on this campus. (Applause.) It’s my great pleasure to welcome you all to Northern Virginia Community College. (Applause.)

Last week, our President signed an historic health care bill that will provide quality, affordable medical care for millions of Americans. (Applause.) Today we are here to celebrate another historic piece of legislation — one that will make a college education a reality for millions of middle-class Americans. (Applause.)

All of us here today know that higher education is essential to the success of our children and vital to the economic future of our country. But too many American families, they’ve had to take on crushing debt to pursue a college degree. I see every day in my classroom just how hard my students work in order to pay their tuition bills. Often their family budgets are stretched to the limit. And when things get tough — someone loses a job or a family member gets sick — a college education is the first thing to go.

Thanks to the leadership of President Obama, our Vice President, and members of Congress here today, families across the country will find it a little easier to get to college and stay in college. (Applause.)

I am pleased to say that the reforms in this bill will make a huge difference to those Americans who need it most. The expansions in Pell Grants will provide critical financial support to millions of middle-class Americans who are struggling with the costs of college. The caps on student loan repayments will ensure that our students don’t go broke because they chose to pursue a college education. And I am particularly thrilled that this bill invests in community colleges across our country so that more students can gain the knowledge and technical job skills that they need to compete and succeed.

I have seen firsthand the power of community colleges to change lives and serve as a gateway to opportunity for students at all stages of their lives and careers. This bill increases investments in community colleges around the country to help these institutions do what they do best — prepare our students for the workforce of today and tomorrow.

The President has set an ambitious goal for higher education in this country. By 2020, we want America once again to have the highest proportion of college graduates in the world. (Applause.) To make this happen, we’ll need to invest in these students and invest in the colleges that they will attend.

The bill that President Obama will sign here today is a huge step forward toward meeting our goal. I can’t think of a better investment in America’s future.

I’m proud to be here as a community college instructor, and I am especially proud and honored to introduce a President who is making higher education a reality for millions more Americans.

Please welcome President Barack Obama. (Applause.)

THE PRESIDENT: Thank you, Alexandria! Thank you very much. (Applause.) Thank you. Thank you so much. Thank you, everybody. (Applause.) Please, have a seat.

Thank you, Dr. Biden, for that outstanding introduction and for putting up with Joe. (Laughter.) I want to also thank Dr. Biden for being one of the thousands of instructors all across the country who make such a difference in the lives of students each and every day. So we are very proud of you for that. (Applause.)

I want to thank President Templin and the entire NOVA Community College family for hosting us here today — you can applaud for that. (Applause.)

On stage we’ve got a couple of my outstanding Cabinet members: Secretary Sebelius and Secretary Arne Duncan — please give them a big round of applause. (Applause.) In the audience we’ve got Secretary Salazar of Interior; Secretary Donovan of HUD; and Ambassador Ron Kirk, our U.S. Trade Representative — please give them a big round of applause. (Applause.)

To all the outstanding members of Congress who made this day possible — and I’m going to mainly single out the amazing Speaker of the House, Nancy Pelosi. (Applause.)

Today, we mark an important milestone on the road to health insurance reform and higher education reform. But, more broadly, this day affirms our ability to overcome the challenges of our politics and meet the challenges of our time.

When I took office, one of the questions we needed to answer was whether it was still possible to make government responsive to the needs of everyday people, middle-class Americans, the backbone of this country; or whether the special interests and their lobbyists would continue to hold sway, like they’ve done so many times before. And that’s a test we met one week ago, when health insurance reform became the law of the land in the United States of America. (Applause.)

And it’s a test we met later in the week when Congress passed higher education reforms that will have a tremendous impact on working families — and America’s future. That’s two major victories in one week that will improve the lives of our people for generations to come. (Applause.)

Now, I’ve said before and I’ve repeated this week the health insurance reform bill I signed won’t fix every problem in our health care system in one fell swoop. But it does represent some of the toughest insurance reforms in history. It represents a major step forward towards giving Americans with insurance -– and those without -– a sense of security when it comes to their health care. It enshrines the principle that when you get sick, you’ve got a society there, a community, that is going to help you get back on your feet. It represents meaningful progress for the American people.

And today, I’m signing a bill that will make a number of improvements to these core reforms. We’ll increase the size of tax credits to help middle-class families and small businesses pay for their health insurance. (Applause.)

We’re going to offer $250 to seniors who fall in the Medicare coverage gap known as the doughnut hole to help them pay for prescriptions, and that’s a first step towards closing that gap completely. (Applause.)

We’ll make a significant new investment in community health centers all across America that can provide high-quality primary care to people who need it most. (Applause.) And we’ll strengthen efforts to combat waste and fraud and abuse, to make sure your dollars aren’t lining the pockets of insurance companies when they should be making your health care better. (Applause.)

Now, the debate on health care reform is one that’s gone on for generations, and I’m glad — I’m gratified that we were able to get it done last week. But what’s gotten overlooked amid all the hoopla, all the drama of last week, is what happened in education — when a great battle pitting the interests of the banks and financial institutions against the interests of students finally came to an end. (Applause.)

You see, for almost two decades, we’ve been trying to fix a sweetheart deal in federal law that essentially gave billions of dollars to banks to act as unnecessary middlemen in administering student loans. So those are billions of dollars that could have been spent helping more of our students attend and complete college; that could have been spent advancing the dreams of our children; that could have been spent easing the burden of tuition on middle-class families. Instead, that money was spent padding student lenders’ profits.

Now, it probably won’t surprise you to learn that the big banks and financial institutions hired a army of lobbyists to protect the status quo. In fact, Sallie Mae, America’s biggest student lender, spent more than $3 million on lobbying last year alone.

But I didn’t stand with the banks and the financial industries in this fight. That’s not why I came to Washington. And neither did any of the members of Congress who are here today. We stood with you. We stood with America’s students. (Applause.) And together, we finally won that battle.

I don’t have to tell folks here at NOVA why this victory matters. In the 21st century, when the success of every American hinges more than ever on the quality of their education, and when America’s success as a nation rests more than ever on an educated workforce that is second to none, we can’t afford to waste billions of dollars on giveaways to banks.

We need to invest that money in our students. We need to invest in our community colleges. We need to invest in the future of this country. We need to meet the goal I set last year and graduate more of our students than any other nation by the year 2020. And through the extraordinary leadership of Education Secretary Arne Duncan, that’s what the reforms I’m signing today will help us do. (Applause.)

By cutting out the middleman, we’ll save American taxpayers $68 billion in the coming years — $68 billion. That’s real money — (laughter) — real savings that we’ll reinvest to help improve the quality of higher education and make it more affordable.

Now, we’ve already taken a number of steps through the Recovery Act and through my budget to significantly increase the support provided to young people attending colleges and universities all across the country.

And I just — President Templin handed me a sheet just as I walked in. Just in case you’re wondering whether this makes a difference, so far this year — and the year isn’t over — right here at NOVA, Pell Grant recipients increased by 41 percent over last year. (Applause.) The total dollar amount of Pell Grants increased by 59 percent. The number of federally guaranteed loans increased by 43 percent and loan awards increased by 68 percent. That’s right here at this one community college, because of the steps that we had already taken. (Applause.)

So using the $68 billion that we’re saving, that had been going to the banks, here’s what we’re going to be able to do. First, we will reinvest a portion of those savings to upgrade our community colleges, which are one of the great, undervalued assets in our education system. (Applause.)

Community colleges like NOVA are incredibly important because they serve a varied group of learners, from recent high school grads seeking a pathway to a college degree, to adults seeking training for the jobs of tomorrow. By forging private sector partnerships, community colleges can offer students the education and training they need to find a good job when they graduate — and it helps offer businesses the assurance they need that graduates will be ready for the jobs that they’re hired to do.

And because community colleges like NOVA are so essential to a competitive workforce, I’ve asked your outstanding professor, Dr. Jill Biden — who does not have enough to do — (laughter) — to host a summit on community colleges at the White House this fall. And we’re going to bring everybody together, from educators to students, experts to business leaders. (Applause.) We are going to bring everybody together to share innovative ideas about how we can help students earn degrees and credentials, and to forge private sector partnerships so we can better prepare America’s workforce and America’s workers to succeed in the 21st century.

Now, to help open the doors of higher education to more students, we’ll also reinvest part of that $68 billion in savings in Pell Grants, one of the most popular forms of financial aid. Pell Grants once covered more than three-quarters of the cost of going to college. But now, because the cost of college has skyrocketed, the amount Pell Grants cover is about one-third.

Today, students hoping to attend college on a Pell Grant are going to be able to feel more secure, because not only are we going to offer over 800,000 additional Pell awards over the next 10 years, we’re also going to raise the amount they’re worth to almost $6,000, so that inflation doesn’t erode the value of your grant. (Applause.)

And we’ll put the entire Pell Grant program on firmer footing for years to come. Altogether, we are more than doubling the amount of Pell Grant funding that was available when I took office –- it’s one of the most significant investments in higher education since the G.I. Bill. (Applause.)

Now, third, we’re going to restore a measure of fairness to how students repay their loans. Today, two out of every three students graduates with help from a loan, and often they take on a mountain of debt as a result. Here in Virginia, the typical student carries almost $20,000 in debt. Across the country, the average student graduates with over $23,000 in debt. I know what that’s like. Michelle and I had big debts coming out of school — debts we weren’t able to fully repay until just a few years before I started running for office.

Today, we’re making it easier for responsible students to pay off their loans. Right now, if you’re a borrower, you don’t have to spend more than 15 percent of your income on loans. But starting in 2014, you won’t have to pay more than 10 percent of your income in repaying your student loans. (Applause.) That will make a meaningful difference for over one million more students. We’re also going to give students an incentive to do what’s right — if you pay your loans on time, you’ll only have to pay them off for 20 years. And you’ll only have to pay them off for 10 years if you repay them with service to your community, and to our country, as a teacher or a nurse or a member of our Armed Forces. (Applause.)

Finally, we’ll reinvest some of the $68 billion in savings to strengthen our Historically Black Colleges and Universities and Minority Serving Institutions. (Applause.) These are institutions that have struggled more than most in these tough economic times.

The reforms in this bill are significant, but they’re just part of a broader effort to strengthen our entire higher education system. We’re putting college tuition tax credits in the pockets of millions of students from working families to help them pay for college. We’ve taken steps to simplify the federal college assistance form -– called the FAFSA -– because it shouldn’t take a PhD to apply for financial aid. (Applause.) And we’re helping ensure that America’s high school graduates are ready for college. All of this is paid for. We’re redirecting money that was poorly spent to make sure we’re making investments in our future.

Now, this won’t solve all of our problems in higher education. We continue to expect colleges and universities to do their part to hold down tuition increases. (Applause.) That has to happen. We’ve got to work on that. And we also need to take greater initiative not only to help more students enter college, we’ve got to make sure that we see more students successfully earn a college degree. But what we’ve done over the past year represents enormous progress.

So I’ll close by saying this. For a long time, our student loan system has worked for banks and financial institutions. Today, we’re finally making our student loan system work for students and our families. But we’re also doing something more.
From the moment I was sworn into office, I’ve spoken about the urgent need for us to lay a new foundation for our economy and for our future. And two pillars of that foundation are health care and education, and each has long suffered from problems that we chose to kick down the road.

With the bill I signed last week, we finally undertook meaningful reform of our health care system. With this bill, and other steps we’ve pursued over the last year, we are finally undertaking meaningful reform in our higher education system. So this week, we can rightly say the foundation on which America’s future will be built is stronger than it was one year ago. (Applause.)

And so at the end of this extraordinary week, I want to acknowledge some of the people who made it possible. There isn’t time to single out everyone who’s here, the outstanding members of Congress, but I want to make sure I once again say this would not have happened had it not been for the leadership of Speaker Nancy Pelosi — (applause) — Senate Majority Leader Harry Reid — (applause) — Senator Dick Durbin and Congressman Steny Hoyer. All provided outstanding leadership that our nation needed. (Applause.)

On health care, Max Baucus, Chris Dodd, Henry Waxman, Charlie Rangel, and so many others offered invaluable expertise throughout the year. (Applause.) Congressmen George Miller, Jim Clyburn, Dale Kildee, Ruben Hinojosa led the way in the House on education reforms that I sign today. (Applause.)

Senator Tom Harkin’s dedication ensured that the Senate would include these reforms in this bill. (Applause.) Virginia’s own Bobby Scott, and an outstanding freshman, Tom Perriello helped to make this thing possible. (Applause.) We are grateful to them.

Courage is an essential ingredient in any landmark legislation, particularly when the attacks are as fierce and unrelenting — and inaccurate — (laughter) — as they have been over the past year. I just want to commend members of Congress who had the courage to do what’s right — (applause) — and to say a special thank you to all of the newer members. (Applause.)
The past couple of years have brought one challenge after another, and you’ve risen to the moment each time. I could not be prouder of the work that all of you have done. And it would not have happened had it not been for the incredible persistence and stick-to-itiveness of all the folks in the audience here today.

Ultimately, Congress responds to the voices that they’re hearing in their communities, and so many of you have written letters and come to meetings and let people know of the ordinary struggles that people are going through each and every day. You’re what provided members of Congress the courage that they needed to do what was right. And so on behalf of all of us who are serving in Washington, we want to thank you, the American people, for your outstanding leadership. (Applause.)

And with that, I’m going to sign this bill. Thank you very much. (Applause.)

(The bill is signed.) (Applause.)

END
11:32 A.M. EDT

Pres. Obama today signed into law the healthcare reform legislation he and the Democratic party have been crafting and defending for over one year. He noted, in his remarks, that while “a host of desperately needed reforms will take effect right away”, the bill will be phased in over four years in order that it be implemented as responsibly as possible. He said the new reforms are a sign of the nation’s ability to great things and to forge a path for social justice.

Tax credits for small businesses to help cover the costs of insuring their employees will take effect in 2010, as will a ban on exclusion from insurance based on pre-existing conditions. Those tax credits will help small businesses with their costs and make them more sustainable. The provision barring insurers from dropping insurees due to illness will also take effect, as will the restriction against capping lifetime benefits.

Senior citizens who currently fall into what’s known as the funding “doughnut hole” will now find that hole closed, their benefits secured, their costs covered. To senior citizens concerned that cutting waste and abuse from Medicare will result in their benefits being reduced, the president intoned firmly “These reforms will not cut your benefits”, adding that the reforms will extend the life of Medicare and help make sure quality of treatment is better and more comprehensive.

Over time, low-cost exchanges will be created, where individuals and small businesses can purchase comprehensive health insurance coverage at more affordable rates. In fact, the tax credits that will help individuals and businesses to buy into the exchanges amount to the single largest middle-class tax-cut in US history.

The president was introduced by the vice president, to a room filled with jubilation and excitement. After impassioned, coordinated chants of “Fired up! Ready to go! Fired up! Ready to go!” from the audience, Vice President Joe Biden honored Pres. Obama’s leadership in the healthcare reform:

Mr. President, you’ve done what generations of not just ordinary, but great men and women have attempted to do. Republicans as well as Democrats, they’ve tried before. Everybody knows the story. Starting with Teddy Roosevelt, they’ve tried. They were real bold leaders, but Mr. President, they fell short. You have turned, Mr. President, the right of every American to have access to decent healthcare into a reality for the first time in American history.

He thanked all those people who believed that “if you love this country, you can change it”. When he noted that many members of Congress “have taken their lumps” over the course of the heated national debate on healthcare reform, someone shouted out “Yes we did!” bringing a wide smile to the president’s face and a round of laughter from those gathered.

He honored Speaker Nancy Pelosi, calling her “one of the best Speakers the House of Representatives has ever had”. The applause for Pelosi turned into a rhythmic chant of “Madam Speaker, Madam Speaker”. He also thanked Senate majority leader Harry Reid, who received a chant of “Harry, Harry”.

He thanked Health and Human Services secretary Kathleen Sebelius and his White House healthcare reform coordinator and said he would sign the bill into law “on behalf of my mother”, who was forced to spend her dying days arguing about coverage with insurance companies. The president told the story of Marcellus Owens, in attendance, who lost his mother to an illness which could not be treated because she had no insurance.

He also recognized Natoma Canfield, who was forced to give up her insurance due to high costs, out of fear that covering a 40% increase in her costs would cause her to lose the home her parents had built. She chose to save the home and drop her coverage and is now ill, in hospital, hoping to get treatment without insurance coverage at rates that will not bankrupt her family.

He thanked “all the leaders” who have fought for reform thoughout the generations, “from Teddy Roosevelt to Franklin Roosevelt, from Harry Truman to Lyndon Johnson, from Bill and Hillary Clinton to one of the deans, whose been fighting this so long, John Dingell” —in attendance himself, and whose father helped begin the push for these reforms in 1914, when, as Dingell said the other day, “he was sent west to die of tuberculosis” without care—, “to Ted Kennedy”, who died last year when the fate of healthcare reform was still uncertain and who had devoted his life in public service to the cause of healthcare reform.

Sen. Kennedy’s widow, Vicky Kennedy, and his niece, Caroline Kennedy, and his son, Rep. Patrick Kennedy (D-RI), were in attendance, their presence calling forth a rousing applause in honor of the late senator. Pres. Obama observed that ”Our presence here today is remarkable and improbable”, because all the punditry and cynicism of Washington politics makes it so easy to doubt our ability as a nation to do something so complex or difficult.

Pres. Obama remembered Sen. Kennedy attending the White House stakeholders’ summit, in that very room, one year earlier, where Pres. Obama launched his campaign to achieve this comprehensive program of reforms. Noting the historical import of the new law, Pres. Obama affirmed, in memorable, poetic language, that:

Today we are affirming that essential truth, a truth every generation is called to rediscover for itself: That we are not a nation that scales back its aspirations; we are not a nation that falls prey to doubt or mistrust; we don’t fall prey to fear; we are not a nation that does what’s easy. That’s not who we are; that’s not how we got here. We are a nation that faces its challenges and accepts its responsibilities; we are a nation that does what is hard, what is necessary, what is right. Here in this country, we shape our own destiny; that is what we do; that is who we are; that is what makes us the United States of America. And we have now just enshrined, as soon as I sign this bill, the core principle, that everybody should have some basic security when it comes to their healthcare.

Marcellus Owens, the young man whose mother died due to lack of insurance coverage, and who has told his story around the country, stood to Pres. Obama’s right, with VP Joe Biden behind him, while the president signed healthcare reform into law. He used 22 pens, each of which were handed out to key supporters who helped pass the legislation. At 11:56 am EDT, Pres. Obama completed the signing and comprehensive healthcare reform became law.

The healthcare reform process has taken a full year of agonizing, sometimes gut-wrenching debate, or something popularly referred to as debate, but not properly qualifying. At times, the consensus of media punditry appeared to be leaning toward the notion that the healthcare reform process had already derailed Barack Obama’s young presidency. Cries of “socialism!” and “kill the bill!” never really died down, and Democratic leaders appeared at a loss for how better to explain the legislation than to explain it as it was and as its aims were.

Republicans found, perhaps, a more convenient way to frame their critique, however, due in large part to the fact that they did not have to come up with an explanation that would make sense across the entire range of services and interests the legislation would be required to address. They focused instead on the quality of life, questions of local competition, and a radical laissez-faire approach to cleaning up a broken market, that seems to have, as ever, duped millions into thinking this means they will be left an open field to prosper.

Of course, as ever, laissez-faire means the authorities will abandon their posts and leave the field open to the worst practices, no matter their effect on those who stubbornly strive to play by the rules. That simple argument —we can’t afford this, we have no obligation to do this, you will be worse off if we make the system more just— carried a surprising amount of weight in the year immediately following a very pro-progressive activist election.

But Pres. Obama did not waver. He did not back down, and he did not shy away from “the call of history”. He stuck to his guns, in assigning to the Congress, the legislature of the people, the job of writing this major legislation that will affect all Americans directly or indirectly. He did not disown the process; he did not disengage; but he let the work of reforming healthcare rise or fall on the merits of the ideas.

And after 12 long months of often hysterical departures from reason and labored attempts to find consensus, the president had not lost his cool, had not kowtowed to flash polling, had not let the punditocracy hijack the process. He took the reins when it was time, and marshaled the most significant piece of legislation in a generation through both Houses of Congress.

The great diversity of the Democratic party allowed him to in fact demonstrate his talent and his passion for consensus building, despite uniform opposition from the Republican party. The same complexity that so many times throughout 2009 led many to wonder if the Democratic party was Obama’s own worst enemy turned out to be the trait that allowed him to do what he does best: find the human story and build common ground.

Obama now plans to sign the measure into law on Tuesday, marking what may be the most important legislative victory of his presidency, and certainly of the last two decades. While Sen. Jim DeMint (R-SC) vowed to fight to repeal the reforms —including provisions that will ban denial of coverage or care to sick and dying children—, the number 3 Democrat in the House, James Clyburn, of South Carolina, declared the legislation “the Civil Rights Act of the 21st century”.

Pres. Obama framed the legislation in the sweep of progress toward social justice, observing: “We pushed back on the undue influence of special interests,” adding: “We didn’t give in to mistrust or to cynicism or to fear. Instead, we proved that we are still a people capable of doing big things.” For many supporters, both inside the political establishment and across the nation, the legislative victory was a vindication of Pres. Obama’s vast promise as a candidate for transformative change.

It is easy to underestimate, in retrospect, the enormous pressure placed on the first-term president, who only four years earlier had come to Washington, to give up on the major legislation that was the cornerstone of his campaign to reform and upgrade the dynamics of the American market economy. Yet he persisted, determined and lucid, confident that he could build the majority needed to achieve this historic breakthrough.

The bill’s critics say it will impose fines on small businesses that don’t buy health insurance for their workers. This is true, in a sense, but not entirely so. There may be fines for violations of the requirement to provide coverage, but there needs to be a market environment favorable to buying into coverage, and there will be subsidies for purchasing that coverage, as well as low-cost exchanges where insurance can be bought more affordably than at present.

According to the New York Times:

The budget office estimates that the bill would provide coverage to 32 million uninsured people, but still leave 23 million uninsured in 2019. One-third of those remaining uninsured would be illegal immigrants.

The new costs, according to the budget office, would be more than offset by savings in Medicare and by new taxes and fees, including a tax on high-cost employer-sponsored health plans and a tax on the investment income of the most affluent Americans.

The Republican party is gearing up for a year of campaigning against Obama’s signature accomplishment, and they have signaled they will seek to smear the president’s successes generally as socialist in nature and “dangerous” to America’s future. But Pres. Obama and the Democratic leadership plan to keep pushing ahead with bold reforms designed to right the wrongs left to them by Republicans, with financial regulatory reform coming to Congress and a new push for immigration reform.

The House of Representatives approved passage of the Senate’s version of healthcare reform, by a vote of 219 to 212, with the crucial 216th vote cast at 10:45 pm EDT. Republicans then proposed a motion to recommit, with instructions, an effort to use language relating to abortion policy to prevent the measure from being signed by the president.

Rep. Bart Stupak (D-MI) —who had put forward a controversial amendment seeking to bar funding for any health plan that covers abortion— not only voted to pass the bill, but gave an impassioned speech explaining that the Republican motion “does nothing to protect life” and is nothing but an extension of 98 years of systematic efforts to deny Americans the right to healthcare.

The motion failed, and shortly after, the House voted to pass reconciliation, officially ending the process and confirming final passage of comprehensive healthcare reform legislation. Pres. Obama can now sign legislation that has been passed by both houses of Congress, and signing may come as early as Monday.

At 11:45 pm EDT, with reconciliation passed, the legislation became eligible for signing, and at 11:47 pm EDT, Pres. Obama spoke from the White House to mark the occasion and explain the historic achievement. “Today’s vote answers the prayers of every American who’s hoped for something to be done to fix this broken healthcare system”, he said.

He reminded Americans that if they had insurance, they would have more control, because the bill includes the largest expansion of consumer protections in history, and that over time, it will bring costs down. He explained that it would cover over 30 million people who currently have no health insurance and shore up Medicare, extending it into the future and protecting services.

No fewer than seven presidents of the United States have tried, and failed, to pass comprehensive health insurance reform legislation. The issue has been considered dangerous to long-term political prospects. Noting the historic import of the legislation, he said “Tonight, we answered the call of history, as so many generations of Americans before us… we did not fear our future; we shaped it”.

CNN’s Wolf Blitzer reported at 8:50 pm EDT today that “the Democrats are going to win”, explaining the House is on the verge of passing the Senate version of the legislation, with the possibility of “tweaking” the legislation after the fact, and predicting that “Pres. Obama may sign healthcare reform into law within 24 hours”. Republican strategists have now begun talking about a new “repeal and replace” strategy, which they will use throughout 2010 to try to convince the American people that they should be elected to undo the reforms.

At 8:53 pm EDT, CNN cut to Dana Bash on Capitol Hill, whose report showed Speaker of the House Nancy Pelosi leaving her office and heading to the floor. Bash said “this signals the beginning of the end of the debate” and projected the vote would not be long in coming. The Democratic leadership invited prominent observers, stakeholders, citizens and activists, to observe the floor vote, which some experienced observers say is indicative of the leaders’ sense of the historic import of the vote and the success the reform program will be.

Speaker Pelosi herself is being credited with having done the heavy lifting to get this monumentally difficult reform program to pass. Seven presidents have tried and failed to pass comprehensive healthcare insurance reform legislation. There is talk some Democratic seats may be vulnerable, due to the perceived success Republicans have had in sowing doubts about the “cost of the bill” — a questionable critique, since the non-partisan Congressional Budget Office agrees with Democratic leaders and Pres. Obama that the bill is in fact “deficit neutral” and will help to reduce the deficit.

The Republican party appears to be set to cast zero votes for passage, which raises the question of who will ultimately “be on the right side of history”. While Republicans seek to sow doubts and fear regarding issues of cost and access, Democrats maintain the legislation will not increase the deficit and will in fact increase access to care, quality of care, all while reducing the average cost per person.

It appears Pres. Obama will achieve one of the most daunting goals any American politician has taken on, and Democrats will argue a fundamental piece of social justice legislation has finally been past. It continues to be only a step toward universal coverage. An estimated 32 million will be able to gain coverage through the current reform legislation, but by the year 2018 or 2020, another 20 million people beyond the 32 million likely to get coverage will find themselves excluded. This process may be just the first of many such steps to expand coverage.

At 9:11 pm EDT, Rep. Paul Ryan (R-WI) said the idea of passing legislation designed to expand access to quality, affordable healthcare, was a sinister attempt to undermine the American principle of expanding opportunity and to move the nation toward a world in which the government plans and determines “the results of people’s lives”. He called the legislation an affront to “the American idea” and said it was “condescending”, suggesting true respect for low-income families means government should not help to expand access to care.

That comment appears to set the stage for the coming year, in which Republicans will argue that by passing legislation to expand access to private-sector insurance, and by extension to affordable health treatment, the Democrats have in fact limited people’s opportunity and undermined their quality of life. It is a risky strategy, and reform proponents say suggestive of a fundamental disinterest in the need for or success of reforms designed to save lives, support sustainable prosperity and lessen the pressure of healthcare costs on the federal budget.

Perhaps the most memorable remark of the evening was delivered by Rep. James Clyburn (D-SC), who said at 9:26 pm EDT that “this is the Civil Rights Act of the 21st century”. While Republicans called the bill “deficit spending” and said it was not the time for reform, “when premiums are rising”, Democratic supporters of the legislation said it will immediately bar insurers from dropping sick children from coverage or denying coverage to children for pre-existing conditions; it will reduce average cost per patient, eliminate “burdensome” copays for seniors and, in the words of Rep. Allyson Schwartz (D-PA), “promote high-quality efficient delivery of care”.

UPDATE, 10:02 pm EDT: One after another Republican came to the floor to read from what appeared to be a predetermined script, saying “I rise to ask unanimous consent to revise and extend my remarks in opposition to this flawed healthcare bill”. As the debate came to an end, the minority leader and the Speaker of the House are scheduled to be the final speakers to address the House and end the debate, before a vote is called which will allow healthcare reform to pass by a simple majority.

UPDATE, 10:19 pm EDT: After House minority leader John Boehner (R-OH) angrily intoned against what he said was a process conducted “behind closed doors”, House Speaker Nancy Pelosi (D-CA) took the floor as her caucus applauded loudly. She said the evening’s vote was an historic advancement of American ideals that started with the Declaration of Independence and continued through Social Security and Medicare.

She thanked Pres. Obama saying, “We would not be here, for sure, without the extraordinary vision and leadership of Pres. Barack Obama. We thank him for his unwavering commitment to healthcare for all Americans, and this began over a year ago, under his leadership, in the American Recovery and Reinvestment Act”, which she noted included investments in healthcare reform and expansion of care, adding that Pres. Obama’s first budget did the same.

If the healthcare reform legislation currently going through the House of Representatives, in an effort to forge a unified House-Senate bill the president can sign, does not include a provision that immediately bans any and all discrimination based on “pre-existing conditions”, people will die. This is an undeniable and tragic fact of life in our country, and the United States Congress has to take far more seriously the real-world ramifications of the timelines they build into the legislation.

A study conducted by Harvard researchers found last year that 45,000 Americans die every year from the specific cause of lacking health insurance coverage. This implies a moral and technical failure of interests and individuals across the system, but indicates a clearly systemic problem. Other studies, reported by the Urban Institute and other think tanks, in recent years, suggest it may be necessary to look at other cases where the connection between uninsurance and death is more subtle or indirect, but real.

In those cases, lack of insurance means undertreatment, misdiagnosis, potential severe complications, which can become compounded, may go untreated or ignored, and where a combination of these factors ultimately leads to the acceleration of death or to entirely preventable deaths. Those figures, depending on how medical error is judged and counted, and whether it is linked to non-coverage, can run as high as 300,000 per year. People are dying, in massive numbers, because of the pre-existing condition exclusion.

The United States Congress has the power to change this. The insurance industry could change this at any time, but has resisted doing so, because, essentially, its accounting suggests its business model will not work if that special bonus (in terms of reducing costs) is taken away. Undercompetitive enterprises are putting our entire private-sector healthcare system at risk of collapse, bankrupting increasing numbers of American households and letting people die who should be treated and saved.

The legislation from the Senate was set to implement a correction of this practice within four years of passage, ostensibly to give insurers time to make the necessary adjustments to their business strategy, so that their own businesses don’t collapse under the weight of higher risk and obligatory contractual costs (insurance payouts promised by contract to paying customers). There is some realpolitik in this, which is reasonable and disheartening, in that people will die because insurers may not be able to insure anyone if they don’t have time to adjust, in which case more people will die.

There has been intense pressure from the progressive side of the Democratic party to implement the pre-existing condition correction immediately upon passage. There have been proposals to use government funding to help people afford the high rates insurers may charge in the time of transition, so that both insurers and insurees can make the necessary transition in a cost-effective way, and lives can be saved. But that might change the math of the proposal, and risk inflating the already exploding deficit.

Pres. Obama has come out in favor of implementing an immediate ban on discrimination for pre-existing conditions, but members of Congress are less willing to line up behind an immediate ban, because they fear pressure from lobbyists could push more Yes votes to No and the result could be an inflation of deficit projections, which might have the same effect, or worse, cause people to lose their seats in the next election.

The president has become more activist in his efforts to champion the legislation over the last weeks, finding his stride in the logic that says, we were elected to solve problems, and this problem has been put off for too long; now is the time to do what is right. There is pressure to ignore this way of thinking and do what is politically right, which means what one guesses is politically right, those guesses usually founded on the prediction that most people will never really learn about the virtues of what is being passed.

But doing the right thing need not be known to be right. One can sacrifice one’s seat, take political risks, base one’s actions on the principle that one was elected to serve the interests of constituents, whether those constituents understand those interests or not. It’s a fine line, and each member of Congress will have to choose according to his or her own conscience or calculation. But the fact is, if this provision does not take effect immediately, people will die during the interim; the only question is: do we have a responsible way to avoid that?

Today on Meet the Press, Republican strategist Ed Gillespie asked why has the United States Senate become so polarized, when Pres. Obama “ran as a post-partisan”. The association was deliberately disingenuous; there is nothing about Pres. Obama’s 1st year in office that suggests the climate should be brutally, relentlessly partisan, except the Republican party’s collective vow to oppose him everywhere they can, to undermine his presidency and the credibility of the Democratic majority.

Few presidents have made so many attempts to bring a virulent opposition into a process of bipartisan negotiation. His question-and-answer with the Republican House caucus was an historic vote in favor of engagement and dialogue. His 7-hour healthcare policy summit at Blair House, where the president actually presided over a far-reaching, frank and sometimes testy policy debate, was a major innovation in the process of negotiation and adversarial contest of ideas between the White House and the Congress.

But Mitch McConnell, the Republican Senate minority leader, has been steadfast in what amounts to an unbelievable determination to sabotage progress on all fronts. He has condoned or invited the most flagrant obstructionism seen in the history of the United States Senate. He protested not at all when Sen. Richard Shelby (R-AL) hijacked the federal government, opposing over 70 nominations, while demanding over $40 billion in payouts to private interests in his state.

McConnell has presided over his party’s radical distortion of Senate process, in which it is not nearly accepted that major legislation requires 60 votes for passage, though this is Constitutionally 100% untrue. Cloture requires 60 votes, which means that bringing the process of debate to an end requires 60 votes. The 60-vote threshold is supposed to apply only when one or more members literally refuse to stop talking during an open floor debate.

Once they leave the floor and relent, debate can end and a 50-plus-one simple-majority vote for passage can be held. The Democratic leadership have mysteriously and unfortunately caved to the Republicans’ strategy of procedural blackmail —we will oppose everything you do from now on, unless you allow our threat of a filibuster to actually be a filibuster—, lending credence to the idea that the Senate requires 60 votes for passage. But, this is a calculated defense against what amounts to a no-holds-barred assault on the Constitutional process of legislation.

Why Sen. McConnell is so committed to the slash-and-burn do-nothing let-nothing-be-done strategy —when the nation is facing two wars, a major economic crisis and over 50 million people with no health insurance, at least 45,000 of which die each year due to the abusive practices of underperforming for-profit enterprises, and the rise of new world powers like China—, why he would rather tell the lie that Pres. Obama is not tough on fighting terrorism than be part of a constructive security policy to keep Americans and innocents around the world safe from psychopaths, is hard to explain, but it seems to have something to do with an inability to lead.

Sen. McConnell has been utterly unable to marshall any sort of even tiny minority within his minority caucus to craft useful solutions that will fit into Democratic proposals and help protect the nation against the ravages of these major crises. He has relentlessly invested his party’s political capital in the idea that the failed policies of the last decade, which plunged the nation into these very crises, are the best way to escape them. He has overseen and promoted a process of defamation and absurdism, in which his party has accused the president of being an enemy of the people, a foreign conspirator, a terrorist sympathizer and a Bolshevik.

It would appear that the rank rhetorical chaos of the Republican assault on Pres. Obama and the Democratic agenda —chaos because there are so many conflicting an mutually exclusive wild-eyed lies involved, and because so much of it verges on violence and the desperate circular logic of hate— is rooted in a fundamental incapacity among the leadership to be part of constructive problem solving, i.e. government.

It is Sen. McConnell, whose term as Republican leader has seen a catastrophic collapse of the party’s electoral and legislative power, who appears to be at the center of a firestorm of irresponsible Pontius-Pilate leadership, washing his hands of egregious violations of process or common decency, all in an attempt to sabotage efforts to work for the good of the American people. So we must ask:

Is Sen. McConnell an ideological radical who would sacrifice human lives, American prosperity, the Constitutional process and our nation’s standing in the world, for the opportunity to push his fringe ideology? Or is he just so poor a leader and so unprincipled an individual that he would rather condone hate-speech and calls to armed rebellion, which have become hallmarks of Republican rallies over the last two years, than use a sense of pragmatic responsibility and imagination to help craft solutions that will make our nation’s future brighter?

Either way, Mr. Gillespie’s suggestion that somehow it is Pres. Obama who has presided over the collapse of Senate collegiality is, beyond absurd, an affront to all reasonable minds. Mr. Gillespie makes that suggestion for the very reason that Sen. McConnell is unable to do anything but entertain a lust for the destruction of his political rivals, while Rome burns, so to speak. People are dying, while Mitch McConnell fiddles with one after another falsehood designed to undermine Senate process and kill needed legislation.

Whether or not the Republican party succeeds in sabotaging healthcare reform ultimately, or whether they succeed in making it more of a giveaway to insurers than a help to those in need or a fix to our nation’s perverse and parasitic system of selective insurance, Sen. McConnell has made a place for himself in the annals of the United States Senate, as a party leader who demonstrated the least commitment to any kind of collaborative working relationship or seriousness about doing the people’s business.

One can only hope he has conscience enough to mend his ways, before too much damage is done. Maybe the mystery of the Massachusetts senate contest for the late Ted Kennedy’s seat comes a little clearer, when we see that Scott Brown (R-MA) has already begun working closely with top Democrats, has crossed the aisle, voted with the majority on jobs, and is working on other key legislation as we speak. Maybe it is such figures, willing to demonstrate moderation and pragmatism, who might allow the Senate to build itself back to being the august body of committed public servants it has in the past been imagined to be.

On the morning of an historic House vote to pass Pres. Obama’s healthcare reform legislation, Democrats are reporting they are closing in on 216 votes needed to pass the legislation. After a week of vote-counting and vote-switching, with House members wavering between Yes and No, and trying to predict which vote will win them reelection in November, sources within the Democratic caucus are telling the press that the votes are there to pass the legislation.

CNN is reporting this morning that:

Democrats have the 216 votes needed to pass health care reform legislation in the House on Sunday, the chairman of the House Democratic Caucus told CNN.

“This is a historic day and we are happy warriors,” Rep. John Larson, D- Connecticut, told CNN’s “State of the Union.” He added, “We’ve got the votes.”

Another report suggested some House members have told Speaker of the House Nancy Pelosi (D-CA) that they would like to vote No if possible, “to save their jobs”, but that if the vote is absolutely necessary, they will vote Yes to support the Democratic majority and the president. Pres. Obama has won support from key dissenters, both liberal and conservative, including Dennis Kucinich, who had vowed to oppose the bill because it was not strong enough in guaranteeing universal coverage.

The Republican campaign against the bill has now turned to process. As the climate has appeared to shift toward one more favorable to Pres. Obama’s point of view, that this is must-do legislation with a moral component and that inaction would be fiscally irresponsible, reports from inside the Republican caucus suggest a new strategy to run against Democrats who pass the bill and to frame the process as undemocratic, secret and surreptitious.

Pres. Obama said with force on Friday that “I don’t know how healthcare reform will play politically, but I know it’s right. Teddy Roosevelt knew it was right; Harry Truman knew it was right; Ted Kennedy knew it was right.” He called on anyone who agrees that something needs to be done and that inaction is not an option to rally to the cause and to fight for passage.

While it is unclear what exactly a vote for passage today will mean, ultimately, for the healthcare reform process, the aim is to achieve passage of a framework proposal that helps adapt the House bill passed last year to the Senate bill, which over 50 House members had said they would not support. It is likely the Senate will also have to make adjustments to its legislation in order to satisfy the demands of the House majority, even in passage of legislation designed to merge with the Senate’s language.

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The following is a full transcript of the president’s remarks, as delivered to the House Democratic caucus, Saturday, 20 March 2010…

THE PRESIDENT: Thank you. Thank you. Thank you. Thank you. Thank you. Thank you, everybody. Thank you. Thank you very much. Thank you. Everybody, please have a seat.

To Leader Reid, to Steny Hoyer, John Larson, Xavier Becerra, Jim Clyburn, Chris Van Hollen, to an extraordinary leader and extraordinary Speaker of the House, Nancy Pelosi, and to all the members here today, thank you very much for having me. (Applause.) Thanks for having me and thanks for your tireless efforts waged on behalf of health insurance reform in this country.

I have the great pleasure of having a really nice library at the White House. And I was tooling through some of the writings of some previous Presidents and I came upon this quote by Abraham Lincoln: “I am not bound to win, but I’m bound to be true. I’m not bound to succeed, but I’m bound to live up to what light I have.”

This debate has been a difficult debate. This process has been a difficult process. And this year has been a difficult year for the American people. When I was sworn in, we were in the midst of the worst recession since the Great Depression. Eight hundred thousand people per month were losing their jobs. Millions of people were losing their health insurance. And the financial system was on the verge of collapse.

And this body has taken on some of the toughest votes and some of the toughest decisions in the history of Congress. Not because you were bound to win, but because you were bound to be true. Because each and every one of you made a decision that at a moment of such urgency, it was less important to measure what the polls said than to measure what was right.

A year later, we’re in different circumstances. Because of the actions that you’ve taken, the financial system has stabilized. The stock market has stabilized. Businesses are starting to invest again. The economy, instead of contracting, is now growing again. There are signs that people are going to start hiring again. There’s still tremendous hardship all across the country, but there is a sense that we are making progress — because of you.

But even before this crisis, each and every one of us knew that there were millions of people across America who were living their own quiet crises. Maybe because they had a child who had a preexisting condition and no matter how desperate they were, no matter what insurance company they called, they couldn’t get coverage for that child. Maybe it was somebody who had been forced into early retirement, in their 50s not yet eligible for Medicare, and they couldn’t find a job and they couldn’t find health insurance, despite the fact that they had some sort of chronic condition that had to be tended to.

Every single one of you at some point before you arrived in Congress and after you arrived in Congress have met constituents with heart-breaking stories. And you’ve looked them in the eye and you’ve said, we’re going to do something about it — that’s why I want to go to Congress.

And now, we’re on the threshold of doing something about it. We’re a day away. After a year of debate, after every argument has been made, by just about everybody, we’re 24 hours away.

As some of you know, I’m not somebody who spends a lot of time surfing the cable channels, but I’m not completely in the bubble. I have a sense of what the coverage has been, and mostly it’s an obsession with “What will this mean for the Democratic Party? What will this mean for the President’s polls? How will this play out in November? Is this good or is this bad for the Democratic majority? What does it mean for those swing districts?”

And I noticed that there’s been a lot of friendly advice offered all across town. (Laughter.) Mitch McConnell, John Boehner, Karl Rove — they’re all warning you of the horrendous impact if you support this legislation. Now, it could be that they are suddenly having a change of heart and they are deeply concerned about their Democratic friends. (Laughter.) They are giving you the best possible advice in order to assure that Nancy Pelosi remains Speaker and Harry Reid remains Leader and that all of you keep your seats. That’s a possibility. (Laughter.)

But it may also be possible that they realize after health reform passes and I sign that legislation into law, that it’s going to be a little harder to mischaracterize what this effort has been all about.

Because this year, small businesses will start getting tax credits so that they can offer health insurance to employees who currently don’t have it. (Applause.) Because this year, those same parents who are worried about getting coverage for their children with preexisting conditions now are assured that insurance companies have to give them coverage — this year. (Applause.)

Because this year, insurance companies won’t suddenly be able to drop your coverage when you get sick — (applause) — or impose lifetime limits or restrictive limits on the coverage that you have. Maybe they know that this year, for the first time, young people will be able to stay on their parents’ health insurance until they’re 26 years old and they’re thinking that just might be popular all across the country. (Applause.)

And what they also know is what won’t happen. They know that after this legislation passes and after I sign this bill, lo and behold nobody is pulling the plug on Granny. (Laughter.) It turns out that in fact people who like their health insurance are going to be able to keep their health insurance; that there’s no government takeover. People will discover that if they like their doctor, they’ll be keeping their doctor. In fact, they’re more likely to keep their doctor because of a stronger system.

It’ll turn out that this piece of historic legislation is built on the private insurance system that we have now and runs straight down the center of American political thought. It turns out this is a bill that tracks the recommendations not just of Democrat Tom Daschle, but also Republicans Bob Dole and Howard Baker; that this is a middle-of-the-road bill that is designed to help the American people in an area of their lives where they urgently need help.

Now, there are some who wanted a single-payer government-run system. That’s not this bill. The Republicans wanted what I called the “foxes guard the henhouse approach” in which we further deregulate the insurance companies and let them run wild, the notion being somehow that that was going to lower costs for the American people. I don’t know a serious health care economist who buys that idea, but that was their concept. And we rejected that, because what we said was we want to create a system in which health care is working not for insurance companies but it’s working for the American people, it’s working for middle class families.

So what did we do? What is the essence of this legislation? Number one, this is the toughest insurance reforms in history. (Applause.) We are making sure that the system of private insurance works for ordinary families. A prescription — this is a patient’s bill of rights on steroids. So many of you individually have worked on these insurance reforms — they are in this package — to make sure that families are getting a fair deal; that if they’re paying a premium, that they’re getting a good service in return; making sure that employers, if they are paying premiums for their employees, that their employees are getting the coverage that they expect; that insurance companies are not going to game the system with fine print and rescissions and dropping people when they need it most, but instead are going to have to abide by some basic rules of the road that exemplify a sense of fairness and good value. That’s number one.

The second thing this does is it creates a pool, a marketplace, where individuals and small businesses, who right now are having a terrible time out there getting health insurance, are going to be able to purchase health insurance as part of a big group — just like federal employees, just like members of Congress. They are now going to be part of a pool that can negotiate for better rates, better quality, more competition.

And that’s why the Congressional Budget Office says this will lower people’s rates for comparable plans by 14 to 20 percent. That’s not my numbers — that’s the Congressional Budget Office’s numbers. So that people will have choice and competition just like members of Congress have choice and competition.

Number three, if people still can’t afford it we’re going to provide them some tax credits — the biggest tax cut for small businesses and working families when it comes to health care in history. (Applause.)

And number four, this is the biggest reduction in our deficit since the Budget Balance Act — one of the biggest deficit reduction measures in history — over $1.3 trillion that will help put us on the path of fiscal responsibility. (Applause.)

And that’s before we count all the game-changing measures that are going to assure, for example, that instead of having five tests when you go to the doctor you just get one; that the delivery system is working for patients, not just working for billings. And everybody who’s looked at it says that every single good idea to bend the cost curve and start actually reducing health care costs are in this bill.

So that’s what this effort is all about. Toughest insurance reforms in history. A marketplace so people have choice and competition who right now don’t have it and are seeing their premiums go up 20, 30, 40, 50 percent. Reductions in the cost of health care for millions of American families, including those who have health insurance. The Business Roundtable did their own study and said that this would potentially save employers $3,000 per employee on their health care because of the measures in this legislation.

And by the way, not only does it reduce the deficit — we pay for it responsibly in ways that the other side of the aisle that talks a lot about fiscal responsibility but doesn’t seem to be able to walk the walk can’t claim when it comes to their prescription drug bill. We are actually doing it. (Applause.) This is paid for and will not add a dime to the deficit — it will reduce the deficit. (Applause.)

Now, is this bill perfect? Of course not. Will this solve every single problem in our health care system right away? No. There are all kinds of ideas that many of you have that aren’t included in this legislation. I know that there has been discussion, for example, of how we’re going to deal with regional disparities and I know that there was a meeting with Secretary Sebelius to assure that we can continue to try to make sure that we’ve got a system that gives people the best bang for their buck. (Applause.)

So this is not — there are all kinds of things that many of you would like to see that isn’t in this legislation. There are some things I’d like to see that’s not in this legislation. But is this the single most important step that we have taken on health care since Medicare? Absolutely. Is this the most important piece of domestic legislation in terms of giving a break to hardworking middle class families out there since Medicare? Absolutely. Is this a vast improvement over the status quo? Absolutely.

Now, I still know this is a tough vote, though. I know this is a tough vote. I’ve talked to many of you individually. And I have to say that if you honestly believe in your heart of hearts, in your conscience, that this is not an improvement over the status quo; if despite all the information that’s out there that says that without serious reform efforts like this one people’s premiums are going to double over the next five or 10 years, that folks are going to keep on getting letters from their insurance companies saying that their premium just went up 40 or 50 percent; if you think that somehow it’s okay that we have millions of hardworking Americans who can’t get health care and that it’s all right, it’s acceptable, in the wealthiest nation on Earth that there are children with chronic illnesses that can’t get the care that they need — if you think that the system is working for ordinary Americans rather than the insurance companies, then you should vote no on this bill. If you can honestly say that, then you shouldn’t support it. You’re here to represent your constituencies and if you think your constituencies honestly wouldn’t be helped, you shouldn’t vote for this.

But if you agree that the system is not working for ordinary families, if you’ve heard the same stories that I’ve heard everywhere, all across the country, then help us fix this system. Don’t do it for me. Don’t do it for Nancy Pelosi or Harry Reid. Do it for all those people out there who are struggling.

Some of you know I get 10 letters a day that I read out of the 40,000 that we receive. Started reading some of the ones that I got this morning. “Dear President Obama, my daughter, a wonderful person, lost her job. She has no health insurance. She had a blood clot in her brain. She’s now disabled, can’t get care.” “Dear President Obama, I don’t yet qualify for Medicare. COBRA is about to run out. I am desperate, don’t know what to do.”

Do it for them. Do it for people who are really scared right now through no fault of their own, who’ve played by the rules, who’ve done all the right things, and have suddenly found out that because of an accident, because of an ailment, they’re about to lose their house; or they can’t provide the help to their kids that they need; or they’re a small business who up until now has always taken pride in providing care for their workers and it turns out that they just can’t afford to do it anymore and they’ve having to make a decision about do I keep providing health insurance for my workers or do I just drop their coverage or do I not hire some people because I simply can’t afford it — it’s all being gobbled up by the insurance companies.

Don’t do it for me. Don’t do it for the Democratic Party. Do it for the American people. They’re the ones who are looking for action right now. (Applause.)

I know this is a tough vote. And I am actually confident — I’ve talked to some of you individually — that it will end up being the smart thing to do politically because I believe that good policy is good politics. (Applause.) I am convinced that when you go out there and you are standing tall and you are saying I believe that this is the right thing to do for my constituents and the right thing to do for America, that ultimately the truth will out.

I had a wonderful conversation with Betsy Markey. I don’t know if Betsy is around here. There she is right there. (Applause.) Betsy is in a tough district. The biggest newspaper is somewhat conservative, as Betsy described. They weren’t real happy with health care reform. They were opposed to it. Betsy, despite the pressure, announced that she was in favor of this bill. And lo and behold, the next day that same newspaper runs an editorial saying, you know what, we’ve considered this, we’ve looked at the legislation, and we actually are pleased that Congresswoman Markey is supporting the legislation. (Applause.)

When I see John Boccieri stand up proud with a whole bunch of his constituencies — (applause) — in as tough a district as there is and stand up with a bunch of folks from his district with preexisting conditions and saying, you know, I don’t know what is going on Washington but I know what’s going on with these families — I look at him with pride.

Now, I can’t guarantee that this is good politics. Every one of you know your districts better than I do. You talk to folks. You’re under enormous pressure. You’re getting robocalls. You’re getting e-mails that are tying up the communications system. I know the pressure you’re under. I get a few comments made about me. I don’t know if you’ve noticed. (Laughter.) I’ve been in your shoes. I know what it’s like to take a tough vote.

But what did Lincoln say? “I am not bound to win, but I am bound to be true.” Two generations ago, folks who were sitting in your position, they made a decision — we are going to make sure that seniors and the poor have health care coverage that they can count on. And they did the right thing.

And I’m sure at the time they were making that vote, they weren’t sure how the politics were either, any more than the people who made the decision to make sure that Social Security was in place knew how the politics would play out, or folks who passed the civil rights acts knew how the politics were going to play out. They were not bound to win, but they were bound to be true.

And now we’ve got middle class Americans, don’t have Medicare, don’t have Medicaid, watching the employer-based system fray along the edges or being caught in terrible situations. And the question is, are we going to be true to them?

Sometimes I think about how I got involved in politics. I didn’t think of myself as a potential politician when I get out of college. I went to work in neighborhoods, working with Catholic churches in poor neighborhoods in Chicago, trying to figure out how people could get a little bit of help. And I was skeptical about politics and politicians, just like a lot of Americans are skeptical about politics and politicians are right now. Because my working assumption was when push comes to shove, all too often folks in elected office, they’re looking for themselves and not looking out for the folks who put them there; that there are too many compromises; that the special interests have too much power; they just got too much clout; there’s too much big money washing around.

And I decided finally to get involved because I realized if I wasn’t willing to step up and be true to the things I believe in, then the system wouldn’t change. Every single one of you had that same kind of moment at the beginning of your careers. Maybe it was just listening to stories in your neighborhood about what was happening to people who’d been laid off of work. Maybe it was your own family experience, somebody got sick and didn’t have health care and you said something should change.

Something inspired you to get involved, and something inspired you to be a Democrat instead of running as a Republican. Because somewhere deep in your heart you said to yourself, I believe in an America in which we don’t just look out for ourselves, that we don’t just tell people you’re on your own, that we are proud of our individualism, we are proud of our liberty, but we also have a sense of neighborliness and a sense of community — (applause) — and we are willing to look out for one another and help people who are vulnerable and help people who are down on their luck and give them a pathway to success and give them a ladder into the middle class. That’s why you decided to run. (Applause.)

And now a lot of us have been here a while and everybody here has taken their lumps and their bruises. And it turns out people have had to make compromises, and you’ve been away from families for a long time and you’ve missed special events for your kids sometimes. And maybe there have been times where you asked yourself, why did I ever get involved in politics in the first place? And maybe things can’t change after all. And when you do something courageous, it turns out sometimes you may be attacked. And sometimes the very people you thought you were trying to help may be angry at you and shout at you. And you say to yourself, maybe that thing that I started with has been lost.

But you know what? Every once in a while, every once in a while a moment comes where you have a chance to vindicate all those best hopes that you had about yourself, about this country, where you have a chance to make good on those promises that you made in all those town meetings and all those constituency breakfasts and all that traveling through the district, all those people who you looked in the eye and you said, you know what, you’re right, the system is not working for you and I’m going to make it a little bit better.

And this is one of those moments. This is one of those times where you can honestly say to yourself, doggone it, this is exactly why I came here. This is why I got into politics. This is why I got into public service. This is why I’ve made those sacrifices. Because I believe so deeply in this country and I believe so deeply in this democracy and I’m willing to stand up even when it’s hard, even when it’s tough.

Every single one of you have made that promise not just to your constituents but to yourself. And this is the time to make true on that promise. We are not bound to win, but we are bound to be true. We are not bound to succeed, but we are bound to let whatever light we have shine. We have been debating health care for decades. It has now been debated for a year. It is in your hands. It is time to pass health care reform for America, and I am confident that you are going to do it tomorrow.

Thank you very much, House of Representatives. Let’s get this done. (Applause.)

The media are exploding with reports that explicitly declare that “the public opposes the current healthcare reform bills” passed by both houses of Congress. In fact, this is patently false, and any of the major polls on the subject bear this out, if one devotes the time necessary to understand the numbers. It is inaccurate to say “the public opposes”, because there is not one uniform majority of Americans opposing a specific set of initiatives in the pending reforms.

Lazy polling is a dangerous standard that sees pollsters simply ask direct questions that might work for an individual respondent, but cannot produce an accurate or useful number across an entire population. Instead of finding out why individual respondents oppose a proposed reform; pollsters simply ask: support or oppose? Maybe they add indifferent to the list of options, or go with a 5-point scale of strongly support, support, indifferent, oppose, strongly oppose.

The result is an infantile analysis of public opinion. When 60% of respondents choose oppose or strongly oppose, pollsters say “We have proof that a majority oppose ‘the president’s plan’”; they simply ignore the problem that of those 60, 15 may oppose the very idea of reform, 15 may oppose the president personally, 15 may be opposed to Democratic concessions to Republicans who nevertheless refused to support the legislation, and another 15 may be opposed because they want single-payer.

The flaws inherent in “approve/disapprove” polling are legion, and any intelligent discussion of the 2010 political landscape must take these inaccuracies into account. For instance, CNN reported on Sunday that only 34% of Americans say “most members of Congress deserve to be re-elected”, but 51% say their own member of Congress “deserves to be re-elected”. The fairest analysis of this poll is that the first number is totally meaningless, except in evaluating how deeply flawed-in-detail political reporting has come to be.

There can be no real meaning to a poll-question about an issue of great nuance, which by its nature implies an extreme diversity of viewpoints on a broad range of variables, if there is no nuance whatsoever in the question itself. If the poll on Congressional approval is so easily shown to be off by up to 17% —the poll provides no way of knowing whether any of the respondents are acquainted with “most members of Congress” or their actions, views, performance or integrity—, a poll on public opinion of the healthcare bill gives us no information about how that legislation might be improved.

For instance, when the specifics of Republican and Democratic proposals are polled, there is significant skepticism, even among Republicans unaware of the source of the proposal, of the potential for Republican proposals to have a significant impact on the uninsurance, denial-of-treatment and pricing crises. On the other hand, the specifics of the Democratic reform proposals in the House and Senate are, in fact, very popular.

In fact, until the Democrats in the Senate finance committee held up the legislation during the summer, then adopted major concessions to the insurance industry, the reform process enjoyed overwhelming majority support, and the anti-tax “tea party” movement was the main source of opposition. That convergence of facts needs to be considered in any reporting on public dissatisfaction with the reform process, which must also be distinguished from the specifics of the reforms as such. Dissatisfaction with the process and dissatisfaction with the underlying principles of reform are not coextensive and must be treated as separate political trends.

During the Blair House health summit, Pres. Obama mentioned, without being overly detailed about the point he was making, that for the majority to scrap its proposals entirely in favor of a new policy based entirely on the principles of the Republican minority, which is nowhere near a majority in either house of Congress, would simply make no logical sense as a way of building consensus. Whether Republicans like it or not, whether the press is willing to explore the complexities or not, the vast majority of Americans opposed the Republican platform and voted for the Democratic agenda in 2008, and this reform was central to Pres. Obama’s campaign.

The people want most of the specifics of this reform, and in fact, when the mechanics of specific policies are explained, the overwhelming majority also favor even the public option. It needs to be considered that if Democrats do not defend and re-adopt some of the aspects of reform that have been watered down or replaced, they will continue to struggle to win public approval. The media environment has imposed a false parallel between “bipartisan” cooperation with Republicans and “building consensus” with among the public at large.

Republican House minority whip Eric Cantor (R-VA) said today on Meet the Press that Republicans want healthcare reform, but they favor a “common-sense, modest, incremental approach”. The statement is sly and problematic: Cantor wants to imply that incremental is responsible, playing on the emotional fetish that brings many to conservative politics, but he is simply fudging the facts and reframing an historically irresponsible approach in order to attack the president. Incremental fixes to the pervasive healthcare crisis have so far failed to reverse the trend toward ever-higher costs and ever-less-competent insurers.

Faced with the criticism that Republican proposals would cover 3 million people at most —of a pool of uninsured estimated between 30 million and 52 million, depending how one counts the “eligible uninsured”—, Cantor did not take issue with the figures, but explained that this incremental plan would first and foremost bring down healthcare costs. The Republican plan contains no provision designed to alter the market dynamics that allow costs to continue escalating and, without guaranteeing that people cannot be dropped or denied coverage due to illness or pre-existing conditions, will not prevent the uninsurance crisis from exploding out of control.

Cantor’s “common-sense, modest, incremental approach” is a thinly veiled campaign of sabotage, very deliberately designed to ensure that the most abusive and unsustainable elements of the healthcare crisis need not face the pressure of serious reform. The fact is, every responsible economic analyst understands that serious, effective healthcare reform must be comprehensive, if it is to solve the problems of tens of millions of uninsured, pervasive arbitrary denial of treatment, and the pricing crisis, which is leading to record numbers of bankruptcies and putting the integrity of the healthcare system in danger.

The Republican party made a very public, very conscious decision, in early 2009, that uniform, persistent opposition to Pres. Obama’s campaign for comprehensive healthcare reform legislation would be their best lever to change the electoral dynamics of the nation and gain ground in the House and Senate in 2010. The revelations about this decision are not dissimilar from the Chinese Communist party’s decision, when President Hu Jintao took power, that it would relentlessly defend its stranglehold on power by way of a “smokeless war” against press, dissidents, spiritual groups, and occupied regions, like Tibet or Xinjiang.

This Machiavellian strategy has been well understood, and is implicit in the majority of reporting on the politics of healthcare reform, but until Pres. Obama began to challenge the Republicans’ do-nothing approach —in his State of the Union, his Q&A with the Republican House caucus, and the Blair House summit—, mainstream press reporting systematically ignored the fact that this political approach to the question of health insurance reform was, in itself, a way of saying the only good reform is dead reform.

Since the Blair House health reform summit, House minority leader John Boehner (R-OH), his whip, Mr. Cantor, and the Senate minority leader Mitch McConnell (R-KY) have struggled to maintain their hardline against comprehensive reform, which philosophical difference is now their reasoning for the demand to “scrap the bill and start from scratch”. It was, of course, Sen. Ron Wyden (D-OR) who noted the comprehensive/incremental philosophical divide, and the Republican leaders’ concession on this point almost appears to signify their walking straight into a rhetorical ambush.

“Incremental” sounds cautious, responsible, maybe even less expensive. “Common-sense” sounds like it’s meant to match up with the mindset of the average person. “Modest” is meant to sound sympathetic. But, in the context of health insurance reform, these words actually take on a very different meaning: “incremental” means defend the status quo and the insurers’ bottom line, “common-sense” means one views the American people as commoners not equipped to understand legislative complexity, and “modest” means not confident of our ability to help you.

Whether the media have understood this new Republican message crisis is unclear. But to watch Rep. Cantor unable to respond to Democratic House deputy House majority whip Debbie Wasserman Schultz (D-FL) is to see very clearly that not even the Republican leadership believe their own rhetoric. It is intellectually dishonest enough that it can only be defended by way of repetition of bullet-points, not with a reasoned response to specific points in conversation.

Wasserman Schultz explained the feeble 3-million covered number for the Republican plan and the Democrats’ 31-million covered figure, backed up with strong measures designed to make health insurance more affordable. She also noted that the legislation includes the single largest small-business tax-cut in American history, designed to make it more affordable for small businesses and their employees to participate in the private insurance market. The Republican bill does no such thing.

Cantor’s role on today’s Meet the Press was to be the spokesman for a floundering campaign of sabotage, and he balked. He could not find the words or the reasoning to defend the indefensible, and instead fell back on an attempt to say that doing nothing constructive is actually an attempt to eventually, over time, build up a series of non-actions that might amount to something constructive. Cantor could not provide a viable explanation for the failure of his incrementalism to amount to any substantive or effective reform. That is the story, and this Republican message crisis will help the Democrats get their bill through.

The Republican party’s Congressional leadership is participating in a bipartisan healthcare reform summit moderated by Pres. Barack Obama, at Blair House near the White House. The “square-table” discussion includes the leading budgetary and health policy partisans from the House and Senate, as well as Pres. Obama, Vice Pres. Biden and Sec. of Health and Human Services, Kathleen Sebelius. The president invited Republicans to “show me what you got”, and to lay out constructive alternative ideas for healthcare reform, in the interest of building consensus.

Much of the discussion so far has focused on the complaints of Republican opponents who are skeptical of the virtues of the Democratic healthcare reform bills already passed by both houses of Congress. Pres. Obama and Democratic leaders working on the specifics of how to achieve comprehensive health insurance reform have spent the day taking turns answering those Republican complaints with information and an invitation to continue working together and sharing ideas.

When Rep. John Boehner suggested the existing healthcare reform bill is “a dangerous experiment”, Pres. Obama chastised him for politicking. He noted that there is a vast range of issue on which Democrats and Republicans fundamentally agree, and that focusing on differences in such radical terms is more destructive than constructive. He also reminded his critics that the healthcare bill is not 2,700 pages because they wanted it to be complex, but because the issue itself is actually that complex, and failure to address that complexity has already proven to fail.

When Sen. John McCain (R-AZ) said medical malpractice is the single leading driver of rapidly escalating healthcare costs, Pres. Obama said it’s important to look at the numbers, and countered McCain’s claim with an important analysis of the figures. Obama noted that he and the Democrats take very seriously the need to reform how medical malpractice insurance works and its impact on costs for the average person.

The Congressional Budget Office, he noted, has looked at the problem and found that putting a cap on medical malpractice lawsuits could save up to $5 billion per year over ten years. That’s a tiny fraction, much less than one percent, of all the money spent every year on healthcare in the United States. So, while he and the Democrats care about making sure medical malpractice insurance and lawsuits do not drive up costs, they are clearly not anywhere near the leading factors.

Sen. Dick Durbin (D-IL) seconded Obama’s remarks and noted that he’s been working on the issue for decades. He explained that CBO not only projected capping judgments could save up to $5 billion per year, a minimal influence on the overall cost of healthcare, but that it would likely lead to 4,800 more deaths per year from medical malpractice, when that punitive oversight mechanism is taken away.

Pres. Obama noted: ”They’re not sultans from wherever; they’re folks who are left out… the vast majority of this 30 million people we’re talking about, they work. They work every day… and they can’t get healthcare. And it is a scary proposition for them. So, we can debate whether we can afford to help them, but we can’t debate whether they need help.”

When challenged to consider health savings accounts (HSA) as the way to solve the uninsurance crisis, Obama observed that “… members of Congress are in the top income bracket… health savings accounts are a good idea, but all the studies show that the people who use them are people who have a lot of disposable income; these people don’t.”

Rep. Joe Barton (R-TX) was very complimentary of the setting and said “Never before have so many members of Congress behaved so well in front of so many television cameras”, adding that “If we ever get to a conference committee, we may want you to be the moderator”. He then went on to insist that the president shift his focus entirely and more or less abandon the Democratic plan.

Sen. Ron Wyden (D-OR), as the meeting went past its extended 4:30 closing time, sought to frame the day’s debate as a contest of ideas between a Republican preference for incremental reform and a Democratic preference for broader, more comprehensive reform. He urged both sides to agree to “real reform”, adding that ”Real reform in particular changes the incentives that drive the system, and greatly empowers the consumer”.

Sen. Wyden also spoke of the need to allow every consumer in the US to “fire their insurance company” and to shop for better coverage and better care, if they are unsatisfied or mistreated. He urged both parties to focus on making sure that whatever philosophical differences there might be, the focus of reform be the goal of empowering the consumer.

Rep. John Dingell (D-MI) was one of the last members of Congress to speak. He said to Obama: “God bless you for your leadership on this issue. The country desperately needs you, and your leadership”. Dingell has been laboring for five decades to make this reform process happen, and no president and no Congress have gone as far as Pres. Obama and the current process.

Dingell, whose father was one of the leading proponents of healthcare reform, during and after the era of the Great Depression, said starting over is not an option. He quoted Gov. Arnold Schwarzenegger (R-CA), as saying “I think any Republican who says we should start over, I think that’s bogus, that’s partisan talk”.

Dingell said “We have before us a hideous challenge,” adding that “The last perfect legislation” came in the form of the Ten Commandments handed down to the Israelites, “written in the hand of God”. For that reason, he noted, it may look like bad politics for Republicans to join the Democrats and sign up to legislation that contains elements that run contrary to their political philosophy, and which is complicated and imperfect, but fundamentally necessary and good.

Dingell was not the only Democrat to use the notion of political courage to challenge the Republican participants. Pres. Obama repeatedly noted that he did not undertake this massive reform for its being “good politics”, but rather because hard things need to be done to fix an escalating long-term problem. House Speaker Pelosi, in language with a distinctly more partisan ring, suggested that all involved needed to have the courage to adopt the best policies, regardless of the image they want to convey to voters and pundits.

Nancy Pelosi (D-CA) noted how far the process has come, and thanked Pres. Obama for his leadership. She noted the low-cost healthcare exchanges were a Republican idea, adopted by the Democrats in an effort to ensure comprehensive reform would both involve the private market and privilege consumer choice.

Pelosi also chastised the insurance industry, saying they opposed the public option —an integral part of the plan for making the low-cost exchanges viable as both affordable and market-oriented— saying that “left to their own devices, they have behaved shamefully, and we must act on behalf of the American people”.

She also took issue with Minority Leader Boehner’s claim that the Democratic proposals seek to reverse federal law and institute public funding for abortions. “There is no public funding for abortions in these bills”, she said. She also took issue with Rep. Camp’s claim that measures designed to reduce waste and abuse in Medicare will “cut benefits”; “They do not”, she said firmly.

“This will take courage to do” said the Speaker, urging Democrats and Republicans to focus more on the work of finding common ground on the facts and on solving the problems facing the American people. Her view that Republicans would not be constructive participants was evident, though she appeared to defer to the president’s call for a focus on finding common ground.

At 4:59 pm ET, Pres. Obama began his closing remarks. He said he would take roughly ten minutes to give his summation of the days events and to answer some of the complaints raised by Republican opponents of the Democratic proposals before the Congress.

Obama went on to explain that several of the provisions Republicans have sought to oppose, on the grounds that they are “socialist” or a “government takeover”, are actually market-oriented reforms that in no way give the government control of patient care. In fact, as the president has noted at virtually every opportunity, the focus of the reforms before Congress is precisely to ensure that doctors and patients are able to make choices, without bureaucratic interference, from government or from private firms’ accounting divisions.

Obama noted that small businesses will actually receive a significant amount of the money devoted to low-cost exchanges, because it would be devoted to subsidizing the purchase of insurance for those who cannot otherwise afford it. “And that’s not a radical idea,” he added, “it’s consistent with the idea of a market-based approach”.

“I suspect that, if the Democrats and the administration were willing to start over, and then adopt John Boehner’s bill, we’d get a whole lot of Republican votes. I don’t know how many Democratic votes we’d get, but we’d get a lot of Republican votes.” He pointed out that many Democrats believe starting over means doing nothing.

He suggested that the goal needs to be to find common ground, to solve the “core problem of 30 million people without health insurance and dealing seriously with the pre-existing condition issue”. He urged Republicans to search their souls to see if there is something they can do to come to the table and be part of the reform process.

He said of the average Americans who “They don’t want us to wait; they can’t afford another five decades”. Democrats repeatedly emphasized tragic stories of the insurance system’s failures, while Republicans focused mainly on philosophical principles and the claim that the US healthcare system is “the best in the world”.

While Pres. Obama and Congressional Democrats have suffered in public opinion polls, as a result of the complexity and imperfection of the healthcare reform process, Republicans appear to be involved in a high-stakes gamble that the logical incoherence of arguing that reform is needed but none of the current reform can stand, and besides, the US has “the best healthcare system in the world”, will not become apparent to voters.

Anecdotal polling and commentary, on C-SPAN and related social networking sites, suggested Republican voters were frustrated by their party’s failure to put forward substantive proposals. The general reaction of independents appeared to be that Pres. Obama was responsive and knowledgeable, and the inability of Minority Leader Boehner and other leading Republicans to push their arguments reduced their credibility.

The media and the public appear to calling for some resolution of this great debate, though support for either side appears to remain entrenched among the already decided, and more confined to “wait-and-see” for independents and those who are not sure whether the reforms which have passed both houses of Congress would benefit them or not.

The other week, men and women across California opened up their mailboxes to find a letter from Anthem Blue Cross. The news inside was jaw-dropping. Anthem was alerting almost a million of its customers that it would be raising premiums by an average of 25 percent, with about a quarter of folks likely to see their rates go up by anywhere from 35 to 39 percent.

Now, after their announcement stirred public outcry, Anthem agreed to delay their rate hike until May 1st while the situation is reviewed by the state of California. But it’s not just Californians who are being hit by rate hikes. In Kansas, one insurance company raised premiums by 10 to 20 percent only after asking to raise them by 20 to 30 percent. Last year, Michigan Blue Cross Blue Shield raised rates by 22 percent after asking to raise them by up to 56 percent. And in Maine, Anthem is asking to raise rates for some folks by about 23 percent.

The bottom line is that the status quo is good for the insurance industry and bad for America. Over the past year, as families and small business owners have struggled to pay soaring health care costs, and as millions of Americans lost their coverage, the five largest insurers made record profits of over $12 billion.

And as bad as things are today, they’ll only get worse if we fail to act. We’ll see more and more Americans go without the coverage they need. We’ll see exploding premiums and out-of-pocket costs burn through more and more family budgets. We’ll see more and more small businesses scale back benefits, drop coverage, or close down because they can’t keep up with rising rates. And in time, we’ll see these skyrocketing health care costs become the single largest driver of our federal deficits.

That’s what the future is on track to look like. But it’s not what the future has to look like. The question, then, is whether we will do what it takes, all of us – Democrats and Republicans – to build a better future for ourselves, our children, and our country.

That’s why, next week, I am inviting members of both parties to take part in a bipartisan health care meeting, and I hope they come in a spirit of good faith. I don’t want to see this meeting turn into political theater, with each side simply reciting talking points and trying to score political points. Instead, I ask members of both parties to seek common ground in an effort to solve a problem that’s been with us for generations.

It’s in that spirit that I have sought out and supported Republican ideas on reform from the very beginning. Some Republicans want to allow Americans to purchase insurance from a company in another state to give people more choices and bring down costs. Some Republicans have also suggested giving small businesses the power to pool together and offer health care at lower prices, just as big companies and labor unions do. I think both of these are good ideas – so long as we pursue them in a way that protects benefits, protects patients, and protects the American people. I hope Democrats and Republicans can come together next week around these and other ideas.

To members of Congress, I would simply say this. We know the American people want us to reform our health insurance system. We know where the broad areas of agreement are. And we know where the sources of disagreement lie. After debating this issue exhaustively for a year, let’s move forward together. Next week is our chance to finally reform our health insurance system so it works for families and small businesses. It’s our chance to finally give Americans the peace of mind of knowing that they’ll be able to have affordable coverage when they need it most.

What’s being tested here is not just our ability to solve this one problem, but our ability to solve any problem. Right now, Americans are understandably despairing about whether partisanship and the undue influence of special interests in Washington will make it impossible for us to deal with the big challenges that face our country. They want to see us focus not on scoring points, but on solving problems; not on the next election but on the next generation. That is what we can do, and that is what we must do when we come together for this bipartisan health care meeting next week. Thank you, and have a great weekend.

Blue Cross has reportedly announced plans for a massive 39% rate-hike on hundreds of thousands of customers, despite earning record profits of $4.7 billion in 2009. The announcement has spurred outrage among healthcare rights activists and public interest groups and raised the ire of the president and the Congress of the United States. The progressive pressure group MoveOn.org has launched a campaign to demand an immediate reversal of the Blue Cross rate-hike.

A mass mailing sent out by MoveOn reads, in part:

Blue Cross has just announced that it’s immediately raising premiums charged to hundreds of thousands of individual customers by as much as 39%—even though their parent company’s profits soared to a record $4.7 billion last year.¹

Even worse, the insurer has so far refused to explain why they’re increasing their rates, and warned that they might do so again this year without warning.

The Obama administration is demanding answers from Anthem Blue Cross, and Congress has opened an investigation.² But Blue Cross is only going to respond if this story becomes a major public-relations problem for them.

So it’s time to turn up the heat. Let’s join the growing call for an explanation and send a powerful public message that these abuses by Big Insurance are unacceptable.

The investigation will likely look into possible illegal price gouging and questions of whether collusion among insurers might be permitting a broader trend in this direction. Insurers are immune to many provisions of anti-trust legislation, but laws against collusion are waived only to permit the sharing of information, not to permit collusion that might allow firms to engage in illegal market manipulation or price-fixing.

There is talk in the House of Representatives that a “reconciliation patch” could allow the US Senate to pass a small amendment to the Senate healthcare bill, in connection with a budget reconciliation measure, could allow the Senate to provide the House with an overall bill that could pass the House of Representatives. If the Senate is able to make those necessary adjustments, there could be a comprehensive healthcare reform package passed and signed into law in the coming weeks.

With all the rhetorical battling over what exactly that reform should consist of, it may be necessary to simplify the political conversation a bit. One way to do so would be to get back to basics: for a new healthcare reform package to be a success, it would have to accomplish a few key goals, many of which are far more serious and far-reaching than the more controversial and divisive “public option” issue. Here are just a few:

1. A definitive end to discrimination based on pre-existing conditions;
2. A total ban on dropping insurees from coverage due to illness or infirmity;
3. Strong, low-cost exchanges that allow consumers to buy high-quality, affordable health insurance;
4. Legal permission to open regulated multi-state insurance markets;
5. A reinstatement of all federal anti-trust laws against insurance monopolies or oligopolies;
6. A regulatory consumer protection mechanism to prevent collusion and price-fixing;
7. A legislative basis for launching non-profit insurers or publicly backed insurance plans;
8. A ban on linking stock value to “medical loss ratio” (rewarding denial of treatment)…

Any bill that does these things, whether it does so through heavily funded mandates, unfunded mandates, in conjunction with new taxes or by way of new agencies, consumer-protection staffing or existing anti-trust laws, will have a serious impact on the major price-inflating flaws in the American healthcare system. Markets can adjust to new cost projections, if circumstance requires them to adjust. The key to reform is making sure the new priorities are part of the markets that govern pricing, coverage and even treatment.

As Pres. Obama said in his exchange with the Republican Congressional caucus last week, “if you say, ‘We can offer coverage for all Americans, and it won’t cost a penny,’ that’s just not true. You can’t structure a bill where suddenly 30 million people have coverage, and it costs nothing.”

Republicans had claimed their proposal would do that; the fact is no “credible economists” would support the Republican claims, so in order to meet the goals of all those interested in healthcare reform, the bills passed by Congress have had to find ways to pay for reform; whether we like it or not, we can’t solve the healthcare crisis responsibly without something that helps to pay for it, and we can’t leave it unsolved. The early months of 2010 are the time when Democrats and Republicans have an absolute moral responsibility to find  a way to achieve the above-stated goals.

Pres. Barack Obama yesterday attended a first-of-its-kind question and answer session, as part of a Republican Congressional caucus conference in Baltimore. The president took some aggressive questions, classed by media analysts as “grandstanding”, from some Republicans who pushed the party line on the refusal of Democrats to deal with them. Obama adroitly and with a collaborative attitude dissected and refuted one after another Republican talking point. He admonished Republicans to put forth reasonable ideas that can work as part of passable legislation.

Obama was firm, but friendly and both sides described the debate as candid and constructive. Observers noted the event was an historic innovation in the American president’s engagement with both the Congressional opposition and the American people. It was noted also that this event was the closest the American people have come to enjoying some of the virtues of the British Parliament’s weekly Prime Minister’s Questions. The session is to be re-aired today on MSNBC, under the title President’s Question Time.

Among the remarks that stood out was Pres. Obama’s observation that Republicans have left themselves “very little room” to be bipartisan because they routinely tell their constituents that Obama’s “doin’ all kinds of crazy stuff that’s gonna destroy America”. The president was clearly not willing to accept that such rhetoric is fair in hardball partisan campaigning and urged his opponents to find a more honest, more reasonable way to talk about their policy differences, and leave themselves a little room to work with the other party.

On economics, Obama said “Now, im not a pundit, I’m juat a president, so take it for what it’s worth, but i don’t believe that the American people want us to be thinking about our job security; they want us to be thinking about there job security.” On healthcare reform, he said “The way you’ve been attacking this bill, you’d think it was some kind of Bolshevik plot.” He consistently addressed the need to moderate tone in order to actually speak truth and work together to solve problems.

It’s only through vigorous debate and honest disagreement, he said, that “bad ideas get tossed out” and good ideas come to prominence. While Mike Pence and some other questioners reiterated the Republican campaign point from 2009 that unless Obama adopts their ideas in place of his own he is not bipartisan, but Obama remained firm and was sincere, explaining he would not agree to policies he believes are not the best possible solution.

Rep. Pence specifically sought to suggest the president was at fault because the Recovery Act had been pitched as a way to keep unemployment at or below 8%, while unemployment would reach 10% in 2009. Obama retorted that this in no way reflects on the success of the Recovery Act, and pointed to how the eventually revised numbers for job losses in December 2008 and January and February 2009 were much more severe than anyone had predicted, pointing out that none of his policies could have taken effect before the job-losses were there to render the 8% prognosis obsolete.

The question-and-answer format allowed the president to not only demonstrate deep policy knowledge, but also a fundamental fairness I’m dealing with policy proposals and making executive judgments. He showed that he was aware of Republican proposals, had read them, and differed on substantive issues of long-term thinking and short-term responsibility. The forum laid out a clear demand for substantive engagement on specific and reasonable matters of public policy.

The following is an official transcript of Pres. Obama’s State of the Union Address, delivered to a joint session of Congress, on Wednesday, 27 January 2010, at the US Capitol…

9:11 P.M. EST

THE PRESIDENT: Madam Speaker, Vice President Biden, members of Congress, distinguished guests, and fellow Americans:

Our Constitution declares that from time to time, the President shall give to Congress information about the state of our union. For 220 years, our leaders have fulfilled this duty. They’ve done so during periods of prosperity and tranquility. And they’ve done so in the midst of war and depression; at moments of great strife and great struggle.

It’s tempting to look back on these moments and assume that our progress was inevitable -– that America was always destined to succeed. But when the Union was turned back at Bull Run, and the Allies first landed at Omaha Beach, victory was very much in doubt. When the market crashed on Black Tuesday, and civil rights marchers were beaten on Bloody Sunday, the future was anything but certain. These were the times that tested the courage of our convictions, and the strength of our union. And despite all our divisions and disagreements, our hesitations and our fears, America prevailed because we chose to move forward as one nation, as one people.

Again, we are tested. And again, we must answer history’s call.

One year ago, I took office amid two wars, an economy rocked by a severe recession, a financial system on the verge of collapse, and a government deeply in debt. Experts from across the political spectrum warned that if we did not act, we might face a second depression. So we acted -– immediately and aggressively. And one year later, the worst of the storm has passed.

But the devastation remains. One in 10 Americans still cannot find work. Many businesses have shuttered. Home values have declined. Small towns and rural communities have been hit especially hard. And for those who’d already known poverty, life has become that much harder.

This recession has also compounded the burdens that America’s families have been dealing with for decades –- the burden of working harder and longer for less; of being unable to save enough to retire or help kids with college.

So I know the anxieties that are out there right now. They’re not new. These struggles are the reason I ran for President. These struggles are what I’ve witnessed for years in places like Elkhart, Indiana; Galesburg, Illinois. I hear about them in the letters that I read each night. The toughest to read are those written by children -– asking why they have to move from their home, asking when their mom or dad will be able to go back to work.

For these Americans and so many others, change has not come fast enough. Some are frustrated; some are angry. They don’t understand why it seems like bad behavior on Wall Street is rewarded, but hard work on Main Street isn’t; or why Washington has been unable or unwilling to solve any of our problems. They’re tired of the partisanship and the shouting and the pettiness. They know we can’t afford it. Not now.

So we face big and difficult challenges. And what the American people hope -– what they deserve -– is for all of us, Democrats and Republicans, to work through our differences; to overcome the numbing weight of our politics. For while the people who sent us here have different backgrounds, different stories, different beliefs, the anxieties they face are the same. The aspirations they hold are shared: a job that pays the bills; a chance to get ahead; most of all, the ability to give their children a better life.

You know what else they share? They share a stubborn resilience in the face of adversity. After one of the most difficult years in our history, they remain busy building cars and teaching kids, starting businesses and going back to school. They’re coaching Little League and helping their neighbors. One woman wrote to me and said, “We are strained but hopeful, struggling but encouraged.”

It’s because of this spirit -– this great decency and great strength -– that I have never been more hopeful about America’s future than I am tonight. (Applause.) Despite our hardships, our union is strong. We do not give up. We do not quit. We do not allow fear or division to break our spirit. In this new decade, it’s time the American people get a government that matches their decency; that embodies their strength. (Applause.)
And tonight, tonight I’d like to talk about how together we can deliver on that promise.

It begins with our economy.

Our most urgent task upon taking office was to shore up the same banks that helped cause this crisis. It was not easy to do. And if there’s one thing that has unified Democrats and Republicans, and everybody in between, it’s that we all hated the bank bailout. I hated it — (applause.) I hated it. You hated it. It was about as popular as a root canal. (Laughter.)

But when I ran for President, I promised I wouldn’t just do what was popular -– I would do what was necessary. And if we had allowed the meltdown of the financial system, unemployment might be double what it is today. More businesses would certainly have closed. More homes would have surely been lost.

So I supported the last administration’s efforts to create the financial rescue program. And when we took that program over, we made it more transparent and more accountable. And as a result, the markets are now stabilized, and we’ve recovered most of the money we spent on the banks. (Applause.) Most but not all.

To recover the rest, I’ve proposed a fee on the biggest banks. (Applause.) Now, I know Wall Street isn’t keen on this idea. But if these firms can afford to hand out big bonuses again, they can afford a modest fee to pay back the taxpayers who rescued them in their time of need. (Applause.)

Now, as we stabilized the financial system, we also took steps to get our economy growing again, save as many jobs as possible, and help Americans who had become unemployed.

That’s why we extended or increased unemployment benefits for more than 18 million Americans; made health insurance 65 percent cheaper for families who get their coverage through COBRA; and passed 25 different tax cuts.

Now, let me repeat: We cut taxes. We cut taxes for 95 percent of working families. (Applause.) We cut taxes for small businesses. We cut taxes for first-time homebuyers. We cut taxes for parents trying to care for their children. We cut taxes for 8 million Americans paying for college. (Applause.)

I thought I’d get some applause on that one. (Laughter and applause.)

As a result, millions of Americans had more to spend on gas and food and other necessities, all of which helped businesses keep more workers. And we haven’t raised income taxes by a single dime on a single person. Not a single dime. (Applause.)

Because of the steps we took, there are about two million Americans working right now who would otherwise be unemployed. (Applause.) Two hundred thousand work in construction and clean energy; 300,000 are teachers and other education workers. Tens of thousands are cops, firefighters, correctional officers, first responders. (Applause.) And we’re on track to add another one and a half million jobs to this total by the end of the year.

The plan that has made all of this possible, from the tax cuts to the jobs, is the Recovery Act. (Applause.) That’s right -– the Recovery Act, also known as the stimulus bill. (Applause.) Economists on the left and the right say this bill has helped save jobs and avert disaster. But you don’t have to take their word for it. Talk to the small business in Phoenix that will triple its workforce because of the Recovery Act. Talk to the window manufacturer in Philadelphia who said he used to be skeptical about the Recovery Act, until he had to add two more work shifts just because of the business it created. Talk to the single teacher raising two kids who was told by her principal in the last week of school that because of the Recovery Act, she wouldn’t be laid off after all.

There are stories like this all across America. And after two years of recession, the economy is growing again. Retirement funds have started to gain back some of their value. Businesses are beginning to invest again, and slowly some are starting to hire again.

But I realize that for every success story, there are other stories, of men and women who wake up with the anguish of not knowing where their next paycheck will come from; who send out resumes week after week and hear nothing in response. That is why jobs must be our number-one focus in 2010, and that’s why I’m calling for a new jobs bill tonight. (Applause.)

Now, the true engine of job creation in this country will always be America’s businesses. (Applause.) But government can create the conditions necessary for businesses to expand and hire more workers.

We should start where most new jobs do –- in small businesses, companies that begin when — (applause) — companies that begin when an entrepreneur — when an entrepreneur takes a chance on a dream, or a worker decides it’s time she became her own boss. Through sheer grit and determination, these companies have weathered the recession and they’re ready to grow. But when you talk to small businessowners in places like Allentown, Pennsylvania, or Elyria, Ohio, you find out that even though banks on Wall Street are lending again, they’re mostly lending to bigger companies. Financing remains difficult for small businessowners across the country, even those that are making a profit.

So tonight, I’m proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat. (Applause.) I’m also proposing a new small business tax credit
-– one that will go to over one million small businesses who hire new workers or raise wages. (Applause.) While we’re at it, let’s also eliminate all capital gains taxes on small business investment, and provide a tax incentive for all large businesses and all small businesses to invest in new plants and equipment. (Applause.)

Next, we can put Americans to work today building the infrastructure of tomorrow. (Applause.) From the first railroads to the Interstate Highway System, our nation has always been built to compete. There’s no reason Europe or China should have the fastest trains, or the new factories that manufacture clean energy products.

Tomorrow, I’ll visit Tampa, Florida, where workers will soon break ground on a new high-speed railroad funded by the Recovery Act. (Applause.) There are projects like that all across this country that will create jobs and help move our nation’s goods, services, and information. (Applause.)

We should put more Americans to work building clean energy facilities — (applause) — and give rebates to Americans who make their homes more energy-efficient, which supports clean energy jobs. (Applause.) And to encourage these and other businesses to stay within our borders, it is time to finally slash the tax breaks for companies that ship our jobs overseas, and give those tax breaks to companies that create jobs right here in the United States of America. (Applause.)

Now, the House has passed a jobs bill that includes some of these steps. (Applause.) As the first order of business this year, I urge the Senate to do the same, and I know they will. (Applause.) They will. (Applause.) People are out of work. They’re hurting. They need our help. And I want a jobs bill on my desk without delay. (Applause.)

But the truth is, these steps won’t make up for the seven million jobs that we’ve lost over the last two years. The only way to move to full employment is to lay a new foundation for long-term economic growth, and finally address the problems that America’s families have confronted for years.

We can’t afford another so-called economic “expansion” like the one from the last decade –- what some call the “lost decade” -– where jobs grew more slowly than during any prior expansion; where the income of the average American household declined while the cost of health care and tuition reached record highs; where prosperity was built on a housing bubble and financial speculation.

From the day I took office, I’ve been told that addressing our larger challenges is too ambitious; such an effort would be too contentious. I’ve been told that our political system is too gridlocked, and that we should just put things on hold for a while.

For those who make these claims, I have one simple question: How long should we wait? How long should America put its future on hold? (Applause.)

You see, Washington has been telling us to wait for decades, even as the problems have grown worse. Meanwhile, China is not waiting to revamp its economy. Germany is not waiting. India is not waiting. These nations — they’re not standing still. These nations aren’t playing for second place. They’re putting more emphasis on math and science. They’re rebuilding their infrastructure. They’re making serious investments in clean energy because they want those jobs. Well, I do not accept second place for the United States of America. (Applause.)

As hard as it may be, as uncomfortable and contentious as the debates may become, it’s time to get serious about fixing the problems that are hampering our growth.

Now, one place to start is serious financial reform. Look, I am not interested in punishing banks. I’m interested in protecting our economy. A strong, healthy financial market makes it possible for businesses to access credit and create new jobs. It channels the savings of families into investments that raise incomes. But that can only happen if we guard against the same recklessness that nearly brought down our entire economy.

We need to make sure consumers and middle-class families have the information they need to make financial decisions. (Applause.) We can’t allow financial institutions, including those that take your deposits, to take risks that threaten the whole economy.

Now, the House has already passed financial reform with many of these changes. (Applause.) And the lobbyists are trying to kill it. But we cannot let them win this fight. (Applause.) And if the bill that ends up on my desk does not meet the test of real reform, I will send it back until we get it right. We’ve got to get it right. (Applause.)

Next, we need to encourage American innovation. Last year, we made the largest investment in basic research funding in history -– (applause) — an investment that could lead to the world’s cheapest solar cells or treatment that kills cancer cells but leaves healthy ones untouched. And no area is more ripe for such innovation than energy. You can see the results of last year’s investments in clean energy -– in the North Carolina company that will create 1,200 jobs nationwide helping to make advanced batteries; or in the California business that will put a thousand people to work making solar panels.

But to create more of these clean energy jobs, we need more production, more efficiency, more incentives. And that means building a new generation of safe, clean nuclear power plants in this country. (Applause.) It means making tough decisions about opening new offshore areas for oil and gas development. (Applause.) It means continued investment in advanced biofuels and clean coal technologies. (Applause.) And, yes, it means passing a comprehensive energy and climate bill with incentives that will finally make clean energy the profitable kind of energy in America. (Applause.)

I am grateful to the House for passing such a bill last year. (Applause.) And this year I’m eager to help advance the bipartisan effort in the Senate. (Applause.)

I know there have been questions about whether we can afford such changes in a tough economy. I know that there are those who disagree with the overwhelming scientific evidence on climate change. But here’s the thing — even if you doubt the evidence, providing incentives for energy-efficiency and clean energy are the right thing to do for our future -– because the nation that leads the clean energy economy will be the nation that leads the global economy. And America must be that nation. (Applause.)

Third, we need to export more of our goods. (Applause.) Because the more products we make and sell to other countries, the more jobs we support right here in America. (Applause.) So tonight, we set a new goal: We will double our exports over the next five years, an increase that will support two million jobs in America. (Applause.) To help meet this goal, we’re launching a National Export Initiative that will help farmers and small businesses increase their exports, and reform export controls consistent with national security. (Applause.)

We have to seek new markets aggressively, just as our competitors are. If America sits on the sidelines while other nations sign trade deals, we will lose the chance to create jobs on our shores. (Applause.) But realizing those benefits also means enforcing those agreements so our trading partners play by the rules. (Applause.) And that’s why we’ll continue to shape a Doha trade agreement that opens global markets, and why we will strengthen our trade relations in Asia and with key partners like South Korea and Panama and Colombia. (Applause.)

Fourth, we need to invest in the skills and education of our people. (Applause.)

Now, this year, we’ve broken through the stalemate between left and right by launching a national competition to improve our schools. And the idea here is simple: Instead of rewarding failure, we only reward success. Instead of funding the status quo, we only invest in reform — reform that raises student achievement; inspires students to excel in math and science; and turns around failing schools that steal the future of too many young Americans, from rural communities to the inner city. In the 21st century, the best anti-poverty program around is a world-class education. (Applause.) And in this country, the success of our children cannot depend more on where they live than on their potential.

When we renew the Elementary and Secondary Education Act, we will work with Congress to expand these reforms to all 50 states. Still, in this economy, a high school diploma no longer guarantees a good job. That’s why I urge the Senate to follow the House and pass a bill that will revitalize our community colleges, which are a career pathway to the children of so many working families. (Applause.)

To make college more affordable, this bill will finally end the unwarranted taxpayer subsidies that go to banks for student loans. (Applause.) Instead, let’s take that money and give families a $10,000 tax credit for four years of college and increase Pell Grants. (Applause.) And let’s tell another one million students that when they graduate, they will be required to pay only 10 percent of their income on student loans, and all of their debt will be forgiven after 20 years –- and forgiven after 10 years if they choose a career in public service, because in the United States of America, no one should go broke because they chose to go to college. (Applause.)

And by the way, it’s time for colleges and universities to get serious about cutting their own costs -– (applause) — because they, too, have a responsibility to help solve this problem.

Now, the price of college tuition is just one of the burdens facing the middle class. That’s why last year I asked Vice President Biden to chair a task force on middle-class families. That’s why we’re nearly doubling the child care tax credit, and making it easier to save for retirement by giving access to every worker a retirement account and expanding the tax credit for those who start a nest egg. That’s why we’re working to lift the value of a family’s single largest investment –- their home. The steps we took last year to shore up the housing market have allowed millions of Americans to take out new loans and save an average of $1,500 on mortgage payments.

This year, we will step up refinancing so that homeowners can move into more affordable mortgages. (Applause.) And it is precisely to relieve the burden on middle-class families that we still need health insurance reform. (Applause.) Yes, we do. (Applause.)

Now, let’s clear a few things up. (Laughter.) I didn’t choose to tackle this issue to get some legislative victory under my belt. And by now it should be fairly obvious that I didn’t take on health care because it was good politics. (Laughter.) I took on health care because of the stories I’ve heard from Americans with preexisting conditions whose lives depend on getting coverage; patients who’ve been denied coverage; families –- even those with insurance -– who are just one illness away from financial ruin.

After nearly a century of trying — Democratic administrations, Republican administrations — we are closer than ever to bringing more security to the lives of so many Americans. The approach we’ve taken would protect every American from the worst practices of the insurance industry. It would give small businesses and uninsured Americans a chance to choose an affordable health care plan in a competitive market. It would require every insurance plan to cover preventive care.

And by the way, I want to acknowledge our First Lady, Michelle Obama, who this year is creating a national movement to tackle the epidemic of childhood obesity and make kids healthier. (Applause.) Thank you. She gets embarrassed. (Laughter.)

Our approach would preserve the right of Americans who have insurance to keep their doctor and their plan. It would reduce costs and premiums for millions of families and businesses. And according to the Congressional Budget Office -– the independent organization that both parties have cited as the official scorekeeper for Congress –- our approach would bring down the deficit by as much as $1 trillion over the next two decades. (Applause.)

Still, this is a complex issue, and the longer it was debated, the more skeptical people became. I take my share of the blame for not explaining it more clearly to the American people. And I know that with all the lobbying and horse-trading, the process left most Americans wondering, “What’s in it for me?”

But I also know this problem is not going away. By the time I’m finished speaking tonight, more Americans will have lost their health insurance. Millions will lose it this year. Our deficit will grow. Premiums will go up. Patients will be denied the care they need. Small business owners will continue to drop coverage altogether. I will not walk away from these Americans, and neither should the people in this chamber. (Applause.)

So, as temperatures cool, I want everyone to take another look at the plan we’ve proposed. There’s a reason why many doctors, nurses, and health care experts who know our system best consider this approach a vast improvement over the status quo. But if anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know. (Applause.) Let me know. Let me know. (Applause.) I’m eager to see it.

Here’s what I ask Congress, though: Don’t walk away from reform. Not now. Not when we are so close. Let us find a way to come together and finish the job for the American people. (Applause.) Let’s get it done. Let’s get it done. (Applause.)

Now, even as health care reform would reduce our deficit, it’s not enough to dig us out of a massive fiscal hole in which we find ourselves. It’s a challenge that makes all others that much harder to solve, and one that’s been subject to a lot of political posturing. So let me start the discussion of government spending by setting the record straight.

At the beginning of the last decade, the year 2000, America had a budget surplus of over $200 billion. (Applause.) By the time I took office, we had a one-year deficit of over $1 trillion and projected deficits of $8 trillion over the next decade. Most of this was the result of not paying for two wars, two tax cuts, and an expensive prescription drug program. On top of that, the effects of the recession put a $3 trillion hole in our budget. All this was before I walked in the door. (Laughter and applause.)

Now — just stating the facts. Now, if we had taken office in ordinary times, I would have liked nothing more than to start bringing down the deficit. But we took office amid a crisis. And our efforts to prevent a second depression have added another $1 trillion to our national debt. That, too, is a fact.

I’m absolutely convinced that was the right thing to do. But families across the country are tightening their belts and making tough decisions. The federal government should do the same. (Applause.) So tonight, I’m proposing specific steps to pay for the trillion dollars that it took to rescue the economy last year.

Starting in 2011, we are prepared to freeze government spending for three years. (Applause.) Spending related to our national security, Medicare, Medicaid, and Social Security will not be affected. But all other discretionary government programs will. Like any cash-strapped family, we will work within a budget to invest in what we need and sacrifice what we don’t. And if I have to enforce this discipline by veto, I will. (Applause.)

We will continue to go through the budget, line by line, page by page, to eliminate programs that we can’t afford and don’t work. We’ve already identified $20 billion in savings for next year. To help working families, we’ll extend our middle-class tax cuts. But at a time of record deficits, we will not continue tax cuts for oil companies, for investment fund managers, and for those making over $250,000 a year. We just can’t afford it. (Applause.)

Now, even after paying for what we spent on my watch, we’ll still face the massive deficit we had when I took office. More importantly, the cost of Medicare, Medicaid, and Social Security will continue to skyrocket. That’s why I’ve called for a bipartisan fiscal commission, modeled on a proposal by Republican Judd Gregg and Democrat Kent Conrad. (Applause.) This can’t be one of those Washington gimmicks that lets us pretend we solved a problem. The commission will have to provide a specific set of solutions by a certain deadline.

Now, yesterday, the Senate blocked a bill that would have created this commission. So I’ll issue an executive order that will allow us to go forward, because I refuse to pass this problem on to another generation of Americans. (Applause.) And when the vote comes tomorrow, the Senate should restore the pay-as-you-go law that was a big reason for why we had record surpluses in the 1990s. (Applause.)

Now, I know that some in my own party will argue that we can’t address the deficit or freeze government spending when so many are still hurting. And I agree — which is why this freeze won’t take effect until next year — (laughter) — when the economy is stronger. That’s how budgeting works. (Laughter and applause.) But understand –- understand if we don’t take meaningful steps to rein in our debt, it could damage our markets, increase the cost of borrowing, and jeopardize our recovery -– all of which would have an even worse effect on our job growth and family incomes.

From some on the right, I expect we’ll hear a different argument -– that if we just make fewer investments in our people, extend tax cuts including those for the wealthier Americans, eliminate more regulations, maintain the status quo on health care, our deficits will go away. The problem is that’s what we did for eight years. (Applause.) That’s what helped us into this crisis. It’s what helped lead to these deficits. We can’t do it again.

Rather than fight the same tired battles that have dominated Washington for decades, it’s time to try something new. Let’s invest in our people without leaving them a mountain of debt. Let’s meet our responsibility to the citizens who sent us here. Let’s try common sense. (Laughter.) A novel concept.

To do that, we have to recognize that we face more than a deficit of dollars right now. We face a deficit of trust -– deep and corrosive doubts about how Washington works that have been growing for years. To close that credibility gap we have to take action on both ends of Pennsylvania Avenue — to end the outsized influence of lobbyists; to do our work openly; to give our people the government they deserve. (Applause.)

That’s what I came to Washington to do. That’s why -– for the first time in history –- my administration posts on our White House visitors online. That’s why we’ve excluded lobbyists from policymaking jobs, or seats on federal boards and commissions.

But we can’t stop there. It’s time to require lobbyists to disclose each contact they make on behalf of a client with my administration or with Congress. It’s time to put strict limits on the contributions that lobbyists give to candidates for federal office.

With all due deference to separation of powers, last week the Supreme Court reversed a century of law that I believe will open the floodgates for special interests –- including foreign corporations –- to spend without limit in our elections. (Applause.) I don’t think American elections should be bankrolled by America’s most powerful interests, or worse, by foreign entities. (Applause.) They should be decided by the American people. And I’d urge Democrats and Republicans to pass a bill that helps to correct some of these problems.

I’m also calling on Congress to continue down the path of earmark reform. Applause.) Democrats and Republicans. (Applause.) Democrats and Republicans. You’ve trimmed some of this spending, you’ve embraced some meaningful change. But restoring the public trust demands more. For example, some members of Congress post some earmark requests online. (Applause.) Tonight, I’m calling on Congress to publish all earmark requests on a single Web site before there’s a vote, so that the American people can see how their money is being spent. (Applause.)

Of course, none of these reforms will even happen if we don’t also reform how we work with one another. Now, I’m not naïve. I never thought that the mere fact of my election would usher in peace and harmony — (laughter) — and some post-partisan era. I knew that both parties have fed divisions that are deeply entrenched. And on some issues, there are simply philosophical differences that will always cause us to part ways. These disagreements, about the role of government in our lives, about our national priorities and our national security, they’ve been taking place for over 200 years. They’re the very essence of our democracy.

But what frustrates the American people is a Washington where every day is Election Day. We can’t wage a perpetual campaign where the only goal is to see who can get the most embarrassing headlines about the other side -– a belief that if you lose, I win. Neither party should delay or obstruct every single bill just because they can. The confirmation of — (applause) — I’m speaking to both parties now. The confirmation of well-qualified public servants shouldn’t be held hostage to the pet projects or grudges of a few individual senators. (Applause.)

Washington may think that saying anything about the other side, no matter how false, no matter how malicious, is just part of the game. But it’s precisely such politics that has stopped either party from helping the American people. Worse yet, it’s sowing further division among our citizens, further distrust in our government.

So, no, I will not give up on trying to change the tone of our politics. I know it’s an election year. And after last week, it’s clear that campaign fever has come even earlier than usual. But we still need to govern.

To Democrats, I would remind you that we still have the largest majority in decades, and the people expect us to solve problems, not run for the hills. (Applause.) And if the Republican leadership is going to insist that 60 votes in the Senate are required to do any business at all in this town — a supermajority — then the responsibility to govern is now yours as well. (Applause.) Just saying no to everything may be good short-term politics, but it’s not leadership. We were sent here to serve our citizens, not our ambitions. (Applause.) So let’s show the American people that we can do it together. (Applause.)

This week, I’ll be addressing a meeting of the House Republicans. I’d like to begin monthly meetings with both Democratic and Republican leadership. I know you can’t wait. (Laughter.)

Throughout our history, no issue has united this country more than our security. Sadly, some of the unity we felt after 9/11 has dissipated. We can argue all we want about who’s to blame for this, but I’m not interested in re-litigating the past. I know that all of us love this country. All of us are committed to its defense. So let’s put aside the schoolyard taunts about who’s tough. Let’s reject the false choice between protecting our people and upholding our values. Let’s leave behind the fear and division, and do what it takes to defend our nation and forge a more hopeful future — for America and for the world. (Applause.)

That’s the work we began last year. Since the day I took office, we’ve renewed our focus on the terrorists who threaten our nation. We’ve made substantial investments in our homeland security and disrupted plots that threatened to take American lives. We are filling unacceptable gaps revealed by the failed Christmas attack, with better airline security and swifter action on our intelligence. We’ve prohibited torture and strengthened partnerships from the Pacific to South Asia to the Arabian Peninsula. And in the last year, hundreds of al Qaeda’s fighters and affiliates, including many senior leaders, have been captured or killed — far more than in 2008.

And in Afghanistan, we’re increasing our troops and training Afghan security forces so they can begin to take the lead in July of 2011, and our troops can begin to come home. (Applause.) We will reward good governance, work to reduce corruption, and support the rights of all Afghans — men and women alike. (Applause.) We’re joined by allies and partners who have increased their own commitments, and who will come together tomorrow in London to reaffirm our common purpose. There will be difficult days ahead. But I am absolutely confident we will succeed.

As we take the fight to al Qaeda, we are responsibly leaving Iraq to its people. As a candidate, I promised that I would end this war, and that is what I am doing as President. We will have all of our combat troops out of Iraq by the end of this August. (Applause.) We will support the Iraqi government — we will support the Iraqi government as they hold elections, and we will continue to partner with the Iraqi people to promote regional peace and prosperity. But make no mistake: This war is ending, and all of our troops are coming home. (Applause.)

Tonight, all of our men and women in uniform — in Iraq, in Afghanistan, and around the world –- they have to know that we — that they have our respect, our gratitude, our full support. And just as they must have the resources they need in war, we all have a responsibility to support them when they come home. (Applause.) That’s why we made the largest increase in investments for veterans in decades — last year. (Applause.) That’s why we’re building a 21st century VA. And that’s why Michelle has joined with Jill Biden to forge a national commitment to support military families. (Applause.)

Now, even as we prosecute two wars, we’re also confronting perhaps the greatest danger to the American people -– the threat of nuclear weapons. I’ve embraced the vision of John F. Kennedy and Ronald Reagan through a strategy that reverses the spread of these weapons and seeks a world without them. To reduce our stockpiles and launchers, while ensuring our deterrent, the United States and Russia are completing negotiations on the farthest-reaching arms control treaty in nearly two decades. (Applause.) And at April’s Nuclear Security Summit, we will bring 44 nations together here in Washington, D.C. behind a clear goal: securing all vulnerable nuclear materials around the world in four years, so that they never fall into the hands of terrorists. (Applause.)

Now, these diplomatic efforts have also strengthened our hand in dealing with those nations that insist on violating international agreements in pursuit of nuclear weapons. That’s why North Korea now faces increased isolation, and stronger sanctions –- sanctions that are being vigorously enforced. That’s why the international community is more united, and the Islamic Republic of Iran is more isolated. And as Iran’s leaders continue to ignore their obligations, there should be no doubt: They, too, will face growing consequences. That is a promise. (Applause.)

That’s the leadership that we are providing –- engagement that advances the common security and prosperity of all people. We’re working through the G20 to sustain a lasting global recovery. We’re working with Muslim communities around the world to promote science and education and innovation. We have gone from a bystander to a leader in the fight against climate change. We’re helping developing countries to feed themselves, and continuing the fight against HIV/AIDS. And we are launching a new initiative that will give us the capacity to respond faster and more effectively to bioterrorism or an infectious disease -– a plan that will counter threats at home and strengthen public health abroad.

As we have for over 60 years, America takes these actions because our destiny is connected to those beyond our shores. But we also do it because it is right. That’s why, as we meet here tonight, over 10,000 Americans are working with many nations to help the people of Haiti recover and rebuild. (Applause.) That’s why we stand with the girl who yearns to go to school in Afghanistan; why we support the human rights of the women marching through the streets of Iran; why we advocate for the young man denied a job by corruption in Guinea. For America must always stand on the side of freedom and human dignity. (Applause.) Always. (Applause.)

Abroad, America’s greatest source of strength has always been our ideals. The same is true at home. We find unity in our incredible diversity, drawing on the promise enshrined in our Constitution: the notion that we’re all created equal; that no matter who you are or what you look like, if you abide by the law you should be protected by it; if you adhere to our common values you should be treated no different than anyone else.

We must continually renew this promise. My administration has a Civil Rights Division that is once again prosecuting civil rights violations and employment discrimination. (Applause.) We finally strengthened our laws to protect against crimes driven by hate. (Applause.) This year, I will work with Congress and our military to finally repeal the law that denies gay Americans the right to serve the country they love because of who they are. (Applause.) It’s the right thing to do. (Applause.)

We’re going to crack down on violations of equal pay laws -– so that women get equal pay for an equal day’s work. (Applause.) And we should continue the work of fixing our broken immigration system -– to secure our borders and enforce our laws, and ensure that everyone who plays by the rules can contribute to our economy and enrich our nation. (Applause.)

In the end, it’s our ideals, our values that built America — values that allowed us to forge a nation made up of immigrants from every corner of the globe; values that drive our citizens still. Every day, Americans meet their responsibilities to their families and their employers. Time and again, they lend a hand to their neighbors and give back to their country. They take pride in their labor, and are generous in spirit. These aren’t Republican values or Democratic values that they’re living by; business values or labor values. They’re American values.

Unfortunately, too many of our citizens have lost faith that our biggest institutions -– our corporations, our media, and, yes, our government –- still reflect these same values. Each of these institutions are full of honorable men and women doing important work that helps our country prosper. But each time a CEO rewards himself for failure, or a banker puts the rest of us at risk for his own selfish gain, people’s doubts grow. Each time lobbyists game the system or politicians tear each other down instead of lifting this country up, we lose faith. The more that TV pundits reduce serious debates to silly arguments, big issues into sound bites, our citizens turn away.

No wonder there’s so much cynicism out there. No wonder there’s so much disappointment.

I campaigned on the promise of change –- change we can believe in, the slogan went. And right now, I know there are many Americans who aren’t sure if they still believe we can change –- or that I can deliver it.

But remember this –- I never suggested that change would be easy, or that I could do it alone. Democracy in a nation of 300 million people can be noisy and messy and complicated. And when you try to do big things and make big changes, it stirs passions and controversy. That’s just how it is.

Those of us in public office can respond to this reality by playing it safe and avoid telling hard truths and pointing fingers. We can do what’s necessary to keep our poll numbers high, and get through the next election instead of doing what’s best for the next generation.

But I also know this: If people had made that decision 50 years ago, or 100 years ago, or 200 years ago, we wouldn’t be here tonight. The only reason we are here is because generations of Americans were unafraid to do what was hard; to do what was needed even when success was uncertain; to do what it took to keep the dream of this nation alive for their children and their grandchildren.

Our administration has had some political setbacks this year, and some of them were deserved. But I wake up every day knowing that they are nothing compared to the setbacks that families all across this country have faced this year. And what keeps me going -– what keeps me fighting -– is that despite all these setbacks, that spirit of determination and optimism, that fundamental decency that has always been at the core of the American people, that lives on.

It lives on in the struggling small business owner who wrote to me of his company, “None of us,” he said, “…are willing to consider, even slightly, that we might fail.”

It lives on in the woman who said that even though she and her neighbors have felt the pain of recession, “We are strong. We are resilient. We are American.”

It lives on in the 8-year-old boy in Louisiana, who just sent me his allowance and asked if I would give it to the people of Haiti.

And it lives on in all the Americans who’ve dropped everything to go someplace they’ve never been and pull people they’ve never known from the rubble, prompting chants of “U.S.A.! U.S.A.! U.S.A!” when another life was saved.

The spirit that has sustained this nation for more than two centuries lives on in you, its people. We have finished a difficult year. We have come through a difficult decade. But a new year has come. A new decade stretches before us. We don’t quit. I don’t quit. (Applause.) Let’s seize this moment — to start anew, to carry the dream forward, and to strengthen our union once more. (Applause.)

Thank you. God bless you. And God bless the United States of America. (Applause.)

END — 10:20 P.M. EST

A recent NBC/WSJ poll shows rising frustration among voters with the failure to move major reforms through Congress. But while the media have repeatedly pushed the notion that Pres. Obama may be losing favor, the NBC/WSJ poll shows 48% of people say Republicans in Congress are to blame for the nation’s unsolved problems, for their relentless obstruction of Democratic proposals, while 41% blame the Democrats in Congress, and only 27% blame Pres. Obama.

Republicans took a big political gamble in 2009, which many say they were able to do, because they had so little to lose. But the media story that the d0-nothing gamble is paying off is called into question by various recent polls. As Thomas Frank reported in Tuesday’s Wall Street Journal, with remarkable good timing, a poll conducted by the AFL-CIO in Massachusetts shows the Senate election there to be a “working-class revolt”, characterized by large numbers of non-college-age Obama-supporting independents choosing the insurgent Republican.

As Frank notes:

The Progressive Change Campaign Committee, together with two other liberal groups, did a poll of Massachusetts voters who voted for Mr. Obama in 2008 and then for Mr. Brown last week. Health-care reform was, as everyone knows, the most important issue in the Massachusetts race, and yet if this poll is to be believed, an incredible 82% of these swing voters favor the late “public option,” a bête noir of the centrist punditry. Even if the poll is off by a few points, that number is shocking.

A third bit of data: A nonpartisan national poll of 800 voters who closely follow politics by Clarus Research Group in December found the Obama administration’s most prominent centrists—its economic team of Larry Summers and Tim Geithner—to be its only members whose “disapproval” numbers were higher than their “approval” ratings.

In a surprising burst of nuance, public anger over the slow pace of healthcare reform and stagnant job markets manifest itself in a working-class protest that both called for the president to stand up for his more liberal policies —reference: the 82% of swing voters angered by the failure to pass a public option for low-cost health insurance in the Senate— and put a Republican candidate in the Senate who might prove more of an obstacle than a help to Obama’s agenda.

The message such polls appear to communicate is the same mood reflected by public reaction to last night’s State of the Union address: independents are angered by how obstructionism and compromise have watered down and stalled reform in Washington. They are doing what they can by backing challenger candidates, but they are not turning away from the demands of the 2008 election cycle. Renewed focus on creating jobs, supplemented with sustained commitment to passing health insurance reform and financial regulatory reform, is what they are demanding.

Republicans run the risk, if they continue to stand between the people and those needed reforms, of coming to be seen not only as obstructionists but as defenders of the bad actors —and bad practices— that helped plunge the nation into crisis in the first place. Dr. Frank’s take on the polling is that Obama should have used his State of the Union to “pick a fight”; Obama chose a more characteristic approach: he used the occasion to frame the nature and the rules of the fight, and challenged friend and foe alike to rise to the challenge of governing.