30 Apr 2012
By Bill Britt
Alabama Political Reporter
On Thursday the members of the Alabama House of Representatives unanimously passed HB245.
In a vote of 92-0 the house passed legislation that would establish a statewide healthcare exchange.
HB245 is a response to the Patient Protection and Affordable Care Act, also known as ObamaCare.
The Affordable Care Act mandates that all states must form their own insurance exchanges or fall under a system instituted by the federal government.
“A vote for this bill is a vote for AlabamaCare, and vote against ObamaCare,” said Dr. Jim McClendon (R-Springville) the Chairman of the House Health Committee.
The bill sponsored by Greg Wren (R-Montgomery) would set the parameters for an Alabama Heath Insurance Exchange.
Wren has worked diligently over the past two years to understand, write and champion a statewide system said in a recent interview, “This is a mandate that was thrust upon the state with tremendous obligations. We must act before the Federal government takes over.”
As a candidate Dr. Robert Bentley had made creating a healthcare exchange for Alabama a part of his campaign for governor. As governor he has worked to develop such an exchange but did not favor the passing of HB245.
According to McClendon a spokesman for the governor stated recently that the governor preferred to wait on a court ruling in June, which will be after the legislative session is over. McClendon publicly stated in a recent House Health Committee meeting that as Chairman of Health, he could not condone passively inviting the Feds to Alabama to commandeer decisions rightfully ours to make.
The Affordable Care Act gives states until December 31, 2012 to establish their own healthcare exchange or the Federal government will create a exchange for them.
Representative Joe Hubbard (D-Montgomery) said of the situation facing Alabama. “Whatever side of the Federal healthcare policy you line up on, the issue is that there is a mandate for the states to have in place a healthcare exchange by 12-31-2012,” said Hubbard. “If the a state does not have an exchange in place by that date the federal government will come in and set one up for them.”
In March, the US Supreme Court heard arguments to overturn The Affordable Care Act. The court even set aside an unprecedented three days to hear the case. Their decision is expected to be announced some time in late June Hubbard explains, “We only have six legislative days left in this session. If we are going to have an exchange in place the time is now.
The competing interests are keeping the federal government out of our healthcare system or waiting to see if the court overturns the exchange portion of the law.
If we wait on the Supreme Court and the court does not overturn the exchange portion of the law we are stuck with the feds having their hands in our healthcare system. That is an unacceptable option.”
Hubbard points out that if the court uphold the exchange portion of the Affordable Care Act and there is not a plan in place the legislators are faced with only two options, let the federal government dictate Alabama’s healthcare or call a special session of the legislative branch to write a heath care exchange law.
Almost a year and a half ago the Governor asked McClendon and others to establish a commission that would study and recommend the implementation of the statewide healthcare exchange in compliance with the the Affordable Care Act. Millions were spent on the governor’s commission and the report was delivered to the governor’s office in December.
McClendon who was a part of the governor’s commission is a firm supporter of HB245. “We the people of Alabama are capable of running our healthcare without carpetbaggers from Washington coming down here to tell us how to run our state,” said McClendon. “A failure to act on this legislation is like inviting General Sherman to stage another fiery march through Alabama.”
Many have been perplexed by the Bentley administration’s resistance to establishing an exchange ahead of the federal deadline.
Wren has stated numerous times that the guidelines for the Federal Exchange have yet to be written. “No one knows what it will look like. If Alabama does not act we will be stuck with whatever the Obama administration decides for Alabama,” said Wren. “I will turn over every rock in the Legislature to prevent that from happening. I will not stand by and let that happen even if we only as a defensive measure we need to have a bill in place. That builds and exchange through a governance board.”
While the governor’s office lobbied hard on Thursday to defeat HB245 the bill passed with complete and unanimous bi-partisan support. After the vote one legislator was heard saying "Let me summarize this defeat of the governor's effort to kill the bill: 'Legislature 92, Governor Zero.'"
The governor’s office has given considerable time, energy, effort and taxpayer dollars to creating a superior, state of the art healthcare exchange for Alabama.
But during the hearings of the House Health Committee there has been a constant resistance to HB245.
Alabama is among the states that have challenged the constitutionality of ObamaCare.
Many lawmakers hope to see the Affordable Care Act overturned by the Supreme Court in June.
Wren says he has worked to see ObamaCare repealed. He says that he is also completely supportive of the litigation that would overturn the Affordable Care Act but Wren says he also believes the state must be proactive.
“The sheer weight of the problem for Alabama and all states is that this is still the law of the land.”
Thursday’s vote seems to support the idea that Republicans and Democrats agree betting Alabama’s future on what the Supreme Court may or may not do, is a gamble too risky to make on the backs of the people of the state.
“Now, the Governor has said, ‘Let’s wait and see what the Supreme Court decides,’ but if we do that then the only way for us to set up our own exchange is to call a special session to the tune to half a million dollars, to address that singular issue. To me that is fiscally irresponsible,” said Hubbard.
It has been suggested that the Bentley administration could enact a healthcare exchange by executive order.
This may be because on June 30, 1967, then Governor Lurleen B. Wallace signed Executive Order Number 8 official forming Alabama's Medicaid program.
An attorney inside the administration who would not speak on the record said, “If this is the advice the Governor is receiving I hope that are prepared for a fight with the Legislature. I don’t believe any governor would be allowed to get by with what Lurleen Wallace did, the times have changes since those days.” The attorney said that only the legislative body can appropriate money under the law and therefore it is erroneous to believe the executive has that kind of power.
Hubbard points out that there is no risk in passing HB245, “I have work with Representative Wren on this bill. The point is to have a piece of legislation in place in case the Supreme Court does uphold the exchanges so that we are ready to institute our own plan.”
Hubbard says there is a provision in the law that if the court strikes down the healthcare exchange portion of the Affordable Care Act then HB245 dissolves, it will in effect self-distruct.
The House has cast their vote unanimously to establish a health care exchange it will now be in the hands of the Senate to decide next steps. However with just six legislative days left in this session no one can be sure of the bill’s fate.
30 Apr 2012
By Brandon Moseley
Alabama Political Reporter
Senator Richard C. Shelby released a transcript of his remarks delivered in the Senate’s Committee on Banking, Housing and Urban Affairs. Senator Shelby was critical of the Obama Administration’s $45 billion Department of Housing and Urban Development’s (HUD) fiscal year 2013 budget. Federal spending has grown exponentially under President Barack H. Obama’s term while economic growth has been almost stagnant. Shelby said that the Federal Debt has reached 70% of GDP, levels that were last seen in the Second World War.
Senator Shelby said, “The Department has not taken sufficient action to address the growing risks to the budget and taxpayers presented by the Federal Housing Administration (FHA). Over the past 3 years, FHA’s portfolio has expanded from $500 billion to $1.3 trillion. It now insures more than 20 percent of all new mortgages. While some of this expansion was an appropriate response to the housing crisis, FHA’s growth has not been managed wisely.”
Sen. Shelby continued, “Even though the Administration’s public position called for reducing conforming loan limits, the President signed legislation to allow FHA to continue to insure mortgages of up to nearly $730,000. Prior to 2008, FHA could insure mortgages only up to $417,000. This means that FHA is now helping homeowners purchase million dollar homes. FHA should be focused on helping first-time and moderate-income homebuyers, not millionaires.”
Sen Shelby warned, “FHA insurance premiums are insufficient to cover losses and build up needed capital reserves. According to FHA’s own reporting, over the past year, FHA insurance premiums covered less than 80 percent of its $9.4 billion in net default losses. As a result of insufficient premiums, the President’s 2013 budget estimates that FHA would have needed a bailout to the tune of $688 million, if FHA had not received funds from the mortgage servicing settlement.” “The Congressional Budget Office has said that by not incorporating a market-risk premium, the HUD budget underestimated the cost of FHA’s single-family loan program in 2012 by about $8 billion.”
Sen. Shelby continued, “Wharton Professor Joseph Gyourko has argued that FHA’s accounting also greatly underestimates default risk and loan losses. After factoring in the huge growth of FHA’s portfolio, he predicts that FHA will ultimately need a bailout of $50 to 100 billion.” “It is clear that FHA needs to be reformed to prevent another taxpayer bailout. I would hope that we could all agree that the first place to start is by ensuring that FHA is properly accounting for the risks it assumes. I also hope that we could enact broader reforms before the problems at FHA grow larger and become more expensive to fix.”
Sen. Shelby said, “Last year, the Federal deficit reached $1.3 trillion. That’s the third year in a row of deficits over $1 trillion. These deficits have put the Federal debt at nearly $11 trillion, or about 70 percent of GDP, its highest level since World War II. We cannot continue to ignore our mounting fiscal problems. Instead, we must begin to address the issue by enacting budgets that curb the culture of spending in Washington and institute fiscal reforms.”
The federal government has taken on historic debts while also underwriting the mortgage industry. This exposes them to an even larger potential risk in the next economic downturn. In the first quarter of 2010, 96.5 percent of all home loans were backed by a Federal Government entity. When the lending power of the government starts to decrease and the government’s ability to subsidize the lending industry goes away, the potential risk to the housing market will increase.
To read Sen. Shelby’s statement in its entirety:
30 Apr 2012
By Armon Drysdale
MONTGOMERY – When Reform Alabama laid out its legislative agenda in January, the organization listed election law reform as a top priority for 2012. After several months of research and collaboration, the group’s first such bill was filed Tuesday in the Alabama Senate.
Sen. Bryan Taylor, R-Prattville, is sponsoring SB551, which Reform Alabama wrote in consultation with the offices of the secretary of state and the attorney general, as well as the Alabama Ethics Commission. The bill addresses two omitted issues regarding campaign finance laws, one of which has only recently come to light in the wake of a December court ruling regarding PAC-to-PAC transfers. SB551 would require all PACs receiving funds from other PACs for the purposes of get-out-the-vote operations to establish accounts separate from those used to fund candidates.
The second part of the legislation addresses the monitoring and enforcement of violations of the Fair Campaign Practices Act, specifically:
•The act would require all PACs and candidates to file an annual registration fee to the secretary of state’s office, which will set the fee amount in consultation with the Alabama Ethics Commission. The secretary of state’s office would transfer all funds collected from those fees to the ethics commission, which would then use the money to completely fund a monitoring division. This division would monitor each registered candidate and PAC for compliance with FCPA laws.
•Any PAC or candidate which fails to file finance reports in a timely or compliant manner would then face a civil penalty ($500). A second offense would result in a higher penalty ($1,000), while a third and presumably intentional offense would be referred to the attorney general’s office for criminal action. The law provides for criminal action on first and second offenses if they are deemed intentional.
•The law would require every candidate and campaign committee to designate an individual or registered agent; all legal responsibility and liability would fall on that individual or agent.
Reform Alabama began researching enforcement mechanisms shortly after the end of the 2011 legislative session that enacted several crucial campaign finance and election reform laws. The group began dialogue in November with all three government offices involved and recently reached an agreement for the Alabama Ethics Commission to accommodate a monitoring division. The law would also resolve several concerns in a finding handed down by a Montgomery grand jury this month.
SB551 on Thursday received a favorable report from the Senate Constitution, Campaign Finance, Ethics and Elections committee; a Senate vote could come as early as next week.
30 Apr 2012
By Brandon Moseley
Alabama Political Reporter
United States Senator Jeff Sessions (R) from Alabama said that Sunday, April 29th, will mark the three year anniversary of the last time the Democrat led Senate has passed any budget. Sen. Sessions is the ranking member of the Senate Budget Committee.
Sen. Sessions said, “This Sunday marks exactly three years since the last time the Senate’s Democrat majority adopted a budget. For three years, in the midst of fiscal crisis, the party running the Senate refused to even attempt to produce their financial plan in willful and knowing defiance of the law. They have proven themselves unworthy to lead.”
Sen. Sessions said that President Obama (D) needs to “finally exercise managerial discipline and demand that his own party’s Senate leaders produce their plan for the country.” Sen. Sessions said that Barack Obama and the Senate can not ask the taxpayers pay any new taxes until the national government gets back on a budget. Sen. Sessions called the government “dysfunctional.”
Democratic Senate Majority Leader Harry Reid for Nevada has said, "There's no need to have a Democratic budget in my opinion." "It would be foolish for us to do a budget at this stage."
President Obama’s administration has submitted a budget to the Congress and the Republican controlled House of Representatives has passed its own budget. Sen. Kent Conrad (D) from North Dakota did introduce his own budget proposal to the Senate Budget Committee; but did not allow the budget committee to have the opportunity to make any amendments or vote on any of the three budget proposals. None of the three budget proposals have been even voted on by the Senate Budget Committee.
Sen. Sessions has said, “Senate Democrats are unable to translate their rhetoric into a plan that they can publicly defend and unite behind. As such, the Senate’s Democrat majority has proven themselves unworthy to lead at this dangerous hour for our Republic.”
The Chairman of the Senate Budget Committee, Sen. Kent Conrad said, “Many have suggested we will not be able to reach conclusion on a long-term plan until after the election. It may be that Democrats and Republicans will only be able to come together when the election is behind us and the fiscal train wreck of the pending sequester and expiring tax cuts is staring us in the face later this year. That may be the only time members on both sides of the aisle will be willing to move off their fixed positions.”
President Obama’s budget proposal, which was rejected unanimously by the House of Representatives, would increase our national debt from $15.7 trillion to $19.7 trilllion over the next four years. The Office of Management and Budget does not show a balanced budget in any of their projections over the next decade with the President’s budget despite massive tax increases. The federal government is currently spending $226 billion a year just on interest on the debt.
The likely Republican nominee for President, former Massachusetts Governor Mitt Romney said, “I can not fathom the argument that it’s fine to spend more than we earn year after year. Passing ever increasing debt on to our children is not just bad policy, it is morally wrong.”
To read Sen. Sessions statement in its entirety:
27 Apr 2012
Alabama Political Reporter