Latest Entries »

Ronald Reagan Socialized Medicine Quotes — The Hill Blog — NYT Economix  (Socialized Medicine) — WSJ (Critical Condition) — Ronald Reagan/Milton Friedman You Tube Videos


rr_c7825-9A


  • Freedom is never more than one generation away from extinction. We didn’t pass it on to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same, or one day we will spend our sunset years telling our children what it was once like in the United States when men were free.
    • Address to the annual meeting of the Phoenix Chamber of Commerce, (1961-03-30).
    • Later variant : Freedom is a fragile thing and is never more than one generation away from extinction. It is not ours by inheritance; it must be fought for and defended constantly by each generation, for it comes only once to a people. Those who have known freedom and then lost it have never known it again.
      • California Gubernatorial Inauguration Speech (1967-01-05).

rr_c30622-6A


  • Back in 1927, an American socialist, Norman Thomas, six times candidate for President on the Socialist Party ticket, said that the American people would never vote for socialism but he said under the name of liberalism the American people would adopt every fragment of the socialist program.
    • Ronald Reagan Speaks Out Against Socialized Medicine (recording) (1961)

rr_c28244-18a


  • But at the moment I’d like to talk about another way because this threat is with us and at the moment is more imminent. One of the traditional methods of imposing statism or socialism on a people has been by way of medicine. It’s very easy to disguise a medical program as a humanitarian project. . . . Now, the American people, if you put it to them about socialized medicine and gave them a chance to choose, would unhesitatingly vote against it. We have an example of this. Under the Truman administration it was proposed that we have a compulsory health insurance program for all people in the United States, and, of course, the American people unhesitatingly rejected this.
    • Ronald Reagan Speaks Out Against Socialized Medicine (recording (1961)

rr_c34118-23


  • The doctor begins to lose freedom. . . . First you decide that the doctor can have so many patients. They are equally divided among the various doctors by the government. But then doctors aren’t equally divided geographically. So a doctor decides he wants to practice in one town and the government has to say to him, you can’t live in that town. They already have enough doctors. You have to go someplace else. And from here it’s only a short step to dictating where he will go. . . . All of us can see what happens once you establish the precedent that the government can determine a man’s working place and his working methods, determine his employment. From here it’s a short step to all the rest of socialism, to determining his pay. And pretty soon your son won’t decide, when he’s in school, where he will go or what he will do for a living. He will wait for the government to tell him where he will go to work and what he will do.
    • Ronald Reagan Speaks Out Against Socialized Medicine (recording (1961)

C22149-32


  • Government is like a baby. An alimentary canal with a big appetite at one end and no responsibility at the other.
    • Joke during his 1965 campaign for Governor of California, as quoted in The New York Times Magazine (14 November 1965), p. 174
    • Government is like a baby. An alimentary canal with a big appetite at one end and no sense of responsibility at the other.
      • As quoted in The Reagan Wit (1981) by Bill Adler, p. 30

rr_c8454-18


  • Welfare’s purpose should be to eliminate, as far as possible, the need for its own existence.
    • Interview, Los Angeles Times (1970-01-07)

rr_c36715-16


If it’s to be a bloodbath, let it be now.

Appeasement is not the answer…


rr_c23491-27


hill_blog_masthead2

Five things you need to know about the House Democrats’ health care bill (Rep. Cynthia Lummis)

July 29th, 2009

1. New Government Run Plan to “Compete” with Private Companies

* Doctor Payments Based on the Medicare Model. Plan would reimburse providers at Medicare payment rates for at least the first three years, with a 5% bonus payment. After that, reimbursement could be no more than Medicare rates. The Secretary of Health and Human Services could coerce doctors to participate in the program by tying participation to other government run health programs.

* Lawsuits. Bill exposes employers operating group health plans to state law remedies and private causes of action, but the government run plan can only be sued in federal court.

* Rationing. A new Health Care Commissioner would have unprecedented authority to determine what is “acceptable” health care coverage and set all the rules for what an health care coverage must include in addition to what treatments patients could receive and at what cost.

* The “Invisible” Government Run Plan. Requires private insurers to comply with new coverage and underwriting rules in order to offer insurance products both inside and outside of the new national and state insurance exchanges.

rr_c27320-6

2. Costs Go Up for the Government and Everyone Else

* CBO Director Elmendorff said on July 16th that, “…the legislation significantly expands the federal responsibility for health care costs… The way I would put it is that the [cost] curve is being raised…”

* Bigger Deficits. CBO estimates that the bill will increase the deficit by $239 billion in the first ten years. Even this is misleading though, since the tax increases in the bill start immediately, but the new spending is delayed. Once the spending fully starts, the bill adds over $60 billion a year to the deficit.

* New Tax on Individuals of 2.5% if they don’t purchase “acceptable coverage.”

* Many Currently Insured Individuals Will Face More Expensive Insurance Premiums based on new rules for “acceptable” insurance coverage.

* Expands Medicaid eligibility to all individuals up to 133% of poverty and “low income” subsidies” can go to a family of four making more than $88,000.

rr_c6640-4A

3. Pay or “Play” Employer Mandate

* An 8 percent Payroll Tax on: Employers who can’t afford to offer health insurance to their employers; employers who do the right thing and offer health coverage to their employees but it’s deemed “insufficient” by the government; and employers who aren’t paying at least 72.5% of an employee’s premium (65% for family coverage).

* Fines of up to $500,000 on employers who make an honest mistake, thinking they had provided what the government deemed “sufficient” coverage.

rr_c25979-24A

4. If You Like What You Have, You Can’t Keep It

* 2 out of 3 Workers will Lose Coverage. Independent analysis by the Lewin Group shows that 2 out of every 3 people would lose their current coverage, including over 114 million people who receive health benefits through their employer or other current coverage.

* 11 million Seniors will Lose Medicare Advantage Plans

* More than 8 million Health Savings Accounts not deemed “acceptable coverage.”

* It will be Illegal to Renew your Current Health Insurance and you will be left only with plans approved by a new federal regulator—plans that can’t compete with a new government run plan.

rr_c5276-9A

5. Raises Taxes on Small Businesses through Surtax Increase

* Filers making $280,000 ($350,000 joint) will be hit with a 1% surtax, filers making $400,000 ($500,000) will be hit with a 1.5% surtax and filers making $800,000 ($1,000,000) will be hit with a 5.4% surtax. The Democrats imbedded an automatic tax increase in their bill by doubling the 1% and 1.5% small business tax in 2013 continuing their revenue grab from small businesses.

* Of taxpayers who file in the top brackets more than half of them are small business. The Democrat plan, according to a study by the Tax Foundation, would raise the top tax rate in 39 states to more than 50%.

* According the National Association of Manufactures, an industry hit hard by the economy, 68% of manufactures file as S-corporations with an average income of $570,000, well above the $350,000 base the Democrats have set for the surtax.


rr_c15871-21A


nytlogo153x23

economix_post

What Is ‘Socialized Medicine’?: A Taxonomy of Health Care Systems

Uwe E. Reinhardt is an economics professor at Princeton.

With another “national conversation” about health reform upon us — as it is every decade or so — we will hear a lot of derisive talk about the evils of “socialized medicine.”

The term is regularly confused with “social health insurance,” which is not at all the same concept. The chart below may be helpful in appreciating the distinction.

reinhardt0508

Socialized medicine refers to health system in which the government owns and operates both the financing of health care and its delivery. Cell A in the chart represents socialized medicine.

Social health insurance, on the other hand, refers to systems in which individuals transfer their financial risk of medical bills to a risk pool to which, as individuals, they contribute taxes or premiums based primarily on ability to pay, rather than on how healthy or sick they are.

Socialized medicine is one form of social insurance. More typically, however, social insurance is coupled on the health-care delivery side with a mixture of government-owned facilities (e.g., municipal hospitals), private nonprofit hospitals (roughly 90 percent of all American hospital beds) or private for-profit facilities (investor-owned hospitals, private medical practices, pharmacies and so on). It follows that one cannot simply treat social insurance as socialized medicine. In principle, one could have social insurance with 100 percent private for-profit delivery facilities.

Under private commercial insurance, individuals also transfer the financial risk of bills for health care to a risk pool, but the premium the individual contributes to the risk pool reflects that individual’s health status. These premiums are, as actuaries put it, “medically underwritten” and “actuarially fair.” The risk pools under private insurance can be operated by not-for-profit or for-profit insurers. And like social insurance, private insurance typically is coupled with a mixed private and public delivery system.

In the chart, cells A, B, C jointly represent single-payer social insurance — e.g., traditional Medicare. Cells D, E, F jointly represent multiple-payer social insurance — e.g., Medicaid Managed Care. Cells G to L jointly represent individually purchased private insurance with actuarially fair premiums. Finally, cells M, N and O represent the uninsured or the cost-sharing portion of insured persons.

In between these distinct systems falls employment-based health insurance.

Large employers typically self-insure and use private insurers only to procure health care on behalf of employees (e.g., negotiate fees with the providers of health care) and administer claims. Other employers do not self-insure and instead purchase so-called group health insurance policies for all their employees jointly, as if they were one large family. The premium for a group policy is “experience rated” over the covered group of employees, which means that they reflect the average actuarial cost of all of one company’s employees.

The individual employee’s own contribution toward his or her employment-based insurance, however, is divorced from the individual’s (or the attached family’s) health status. In this sense, then, employment-based insurance could be described as “private social insurance,” as distinct from “government-run social insurance.

Former Mayor Rudolph Giuliani of New York has exemplified the perennial confusion in this country over socialized medicine. In his ill-fated presidential bid, and subsequently as a supporter of Senator John McCain’s bid for the presidency, Mr. Giuliani routinely decried as socialized medicine (or “socialist”) any proposal presented by Democratic candidates, because typically the latter advocated tax-financed subsidies toward the purchase of health private insurance or expansions of public insurance programs. But technically none of them advocated socialized medicine.

Perhaps Mr. Giuliani was unaware that Americans all along the ideological spectrum reserve the purest form of socialized medicine — the V.A. health system — for the nation’s veterans. I find this cognitive dissonance amusing. Indeed, if socialized medicine is so evil, why didn’t Republicans privatize the V.A. health system when they controlled both the White House and the Congress during 2001-06?

Mr. Giuliani also seems to forget that, in 1996, he found social health insurance a perfect solution to the financial problems faced by former Mayor John V. Lindsay, who fell on financially hard times during the 1990s as a result of chronic illness.

In a fit of compassion, then Mayor Giuliani rushed to his friend’s assistance with — you guessed it — taxpayers’ money, rather than with a private sector solution. He did so by appointing Mr. Lindsay to two no-show city jobs that came with tax-financed municipal health insurance and a tax-financed pension.

It seems fair, then, to ask Mr. Giuliani why it was perfectly fine to bail out a financially distressed man who had been wealthy enough in his younger years to provide adequately for his old age, when proposals to extend the same kind of assistance to hard-working, uninsured members of lower-income families are decried by him as “socialism.”

One can only hope that our members of Congress and the typical American voter can make the right distinctions.


C44356-35


wsj_images

Critical Condition

A transcript of the weekend’s program on FOX News Channel.

Paul Gigot: Up next:

President Obama: We will pass reform that lowers cost, promotes choice, and provides coverage that every American can count on, and we will do it this year.

Gigot: President Obama’s health-care scramble amid falling poll numbers and Democrats in disarray. Will he get the bill he wants when he wants it? Plus, your stake in the overhaul. Can you really keep your current insurance plan, and will the middle class get stuck paying the bill? We’re breaking down the policy and the politics of health care on this special edition of “The Journal Editorial Report.”

1086891579_4815

Gigot: Welcome to “The Journal Editorial report.” I’m Paul Gigot.

Well, from a prime-time press conference to a town-hall meeting in Ohio, it was a full-court press by President Barack Obama this week to sell his health-care reform plan to an increasingly skeptical public. A new FOX News/Opinion Dynamics poll shows that nearly half of all Americans, 45%, think the quality of their family’s health care would be worse under the proposed reforms. Just 29% think it would be better. Are they right to be worried?

Former New York lieutenant governor Betsy McCaughey is a patient advocate and chairman of the Committee to Reduce Infection Deaths. She joins me now.

Good to have you back again.

McCaughey: Thank you.

Gigot: Now, you wrote this week that seniors could be the biggest losers under this health-care reform plan that’s emerging in Congress. How so?

McCaughey: Certainly seniors bear the brunt under this bill, the House bill, and under the companion Senate bill, produced largely by Sen. Kennedy’s staff, for several reasons. One is–first, they will pay for with it cuts to Medicare. The $1 trillion to $1.6 trillion price tag on these bills will be paid for by tax hikes. Everybody’s heard about those.

Gigot: Right.

McCaughey: But by at least $500 billion to $550 billion in cuts to Medicare.

Gigot: Estimated over 10 years.

McCaughey: That’s right, and that’s about a 10% cut in the Medicare budget at the same time that Medicare enrollment will be increasing by about 30% as the baby boomers reach Medicare age.

Gigot: Well, this is fascinating to me, because how can they cut Medicare spending–because doctors are already complaining they get reimbursed by Medicare, only 20% or 30% less than the real costs of their procedures. Hospitals as well.

McCaughey: It’s going to mean reductions in hip replacements, knee replacements, bypass surgery, angioplasty–the major procedures that have enabled this generation of the elderly to–

Gigot: Lead better lives.

McCaughey: –avoid disability, avoid deteriorating in nursing homes, and instead lead active lives.

Gigot: Well, wait a minute. How is that going to happen? I mean, doctors are not going to stop prescribing these things. How is that–what is that mechanism?

McCaughey: Well, they will have to. They will have to. Tucked into the stimulus package that was signed into law on Feb. 17 was a provision for computers to be in doctors’ offices and hospitals at bedside–computers that would deliver protocols to doctors electronically on what the government deems cost-effective and appropriate care. And there will be penalties built-in for doctors who are not meaningful users of this system. In March, the president appointed Dr. David Blumenthal national coordinator of health information technology, and he’s going to oversee ensuring that doctors obey these protocols. In fact, on April 9 in The New England Journal of Medicine, he wrote an article describing how he’s going do it. And he said he does anticipate some push-back, some rebellion from doctors who don’t like losing their autonomy over what’s good for their patients.

Gigot: I would think push-back too from Congress. Do you really think that this is something that the American public is going to stand for? Won’t Congress push back?

McCaughey: Well, that’s why Peter Orszag, head of the Office of Management and Budget–again, part of the White House–went to Congress earlier this week and asked for permission to really remove those decisions from Congress. He asked Congress to delegate the authority to make these decisions about what Medicare covers and how doctors are paid instead to a body outside of Congress, either MedPAC–a body that already exists, an advisory board–or a council created within the White House.

Gigot: This MedPAC idea–the president really, really hit this hard at his press conference this week. And this would be a group, a council of wise men and women, medical experts presumably, who would propose protocols for spending–for saving costs, in particular, trying to be more effective, they say, with their medical procedures–then present those as a package to Congress, which could vote up or down. And what’s wrong with that? Why shouldn’t we turn this away from these political types in Congress and give it to a panel of experts?

McCaughey: Well, Congress is accountable, and seniors would certainly raise a lot of fury if suddenly they could not avoid the crippling affects of arthritis by getting a knee replacement. And the fact is that the president likened this proposal to a base-closing commission so it would be immune from those popular impacts.

But the fact is, I don’t believe we can count on the doctors that would be appointed to this to make the right decisions because, for example, the doctors that the president has already chosen to be his chief health advisers are ardent advocates of limiting care for the elderly. Dr. Ezekiel Emanuel, for example–brother of president’s chief of staff, Rahm Emanuel–highly educated man who has written extensively on his views that the elderly should get less care, that Americans are too enamored with high-tech care, and that people who have incurable illnesses–and he uses specifically the example of dementia–should not be guaranteed health care because they no longer contribute to society. These are views that most of us don’t share.

Gigot: All right. Well, we certainly need a debate about this. But let’s get another clip of the president on this point.

Obama: Overall, our proposals will improve the quality of care for our seniors and save them thousands of dollars on prescription drugs, which is why the AARP has endorsed our reform efforts.

Gigot: Why wouldn’t the American Association of Retired Persons oppose this if what you say is in fact going to happen?

McCaughey: Paul, I am shocked at the AARP’s behavior, and frankly, to me they’ve betrayed seniors. I’m amazed that seniors continue to pay their dues to the AARP. The AARP says that they support universal coverage. Well, seniors already have that. And they have so much to lose under this.

One of the other things that’s very dangerous to seniors in this legislation is the dramatic shift in funding for–away from specialty medicine to primary care, on the misconception that Americans overuse specialists and drive up health costs in the process. But study after study showed that people with heart disease who rely on primary-care medicine are frequently misdiagnosed and incorrectly treated.

Gigot: Cardiologists are better at heart care.

McCaughey: That’s right. They are readmitted to the hospital far more often, and they die sooner.

Gigot: All right, Betsy. Thanks so much.

We’re going to have much more. When we come back, the House and Senate health care plans up close. What exactly is in the proposed legislation, and how do they plan to pay for it? Our panel breaks it down and answers the big questions, next.

1086635422_3276

Obama: If you have health insurance, the reform we’re proposing will provide you with more security and more stability. It will keep government out of health-care decisions, giving you the option to keep your insurance if you’re happy with it.

Gigot: Perhaps the biggest concern for many Americans, being able to keep their current health-care plan. President Obama says you can. But for how long?

We’re back with Betsy McCaughey. Also joining the panel, Wall Street Journal assistant editorial page editor James Freeman, senior editorial page writer Joseph Rago and Washington columnist Kim Strassel.

All right, Joe, let’s take them one by one. Let’s start with that claim you will be able to keep your health plan if you want to. Can you? Is that true?

Rago: Well, no. I don’t think so at all. First, you’re going to have a government insurance option, like Medicare but open to the middle class, that will pay doctors and hospitals submarket rates, undercut private insurers. Private insurers will be regulated to within an inch of their life basically. And then you’ve got the government mucking around with some of these rules that allow large employers to offer coverage to their employees.

Gigot: And avoid state mandates and state rules because they have national plans.

Rago: And a lot of federal rules, too. So now this will be sort of be subject to a Health Choices Administration that will gradually make employer-sponsored coverage work just as poorly as the rest of the insurance markets.

McCaughey: It’s not a matter of speculation, however, or even prediction. The letter of the bills say that you will be able to keep your existing plan. You will be forced to move into a managed-care plan that restricts your access to specialists and diagnostic tests.

If you look on the Senate bill, page 15 through 17, or in the House bill–excuse me, the House bill, 15 to 17, the Senate bill, 56 to 58–you will see that you are required to enroll in a qualified plan. That means a plan that the government deems appropriate. And it has to be managed care. That’s spelled out in the bill. If you get your insurance through your employer–if you get your insurance through your employer, as most Americans do, your employer will have a grace period in which to move you into managed care. If you buy your insurance individually, through a broker, for example, you won’t have a grace period. As long as anything changes in your current contract, your co-pay changes–

Gigot: So once the contract changes, then you go into this government–new government regulation, OK.

McCaughey: So it’ll be in a few months, right, because usually those things change every year.

Gigot: All right, but what about the fact that you have these union plans that are done, that are the product of collective bargaining done in good faith, that are often very, very good health care. Are they really going to abrogate these contracts?

McCaughey: Some of the union plans are exempted under these bills. But most employers will only have the grace period to move their employees, all of them, into these lower-grade HMOs, because the point of these bills is not to just cover the uninsured. It’s to limit everyone’s health care consumption–and using managed care will do that–and to ensure that everyone has the same health-care experience regardless of ability to pay. They don’t want executives or people who go out and buy more-expensive plans to have a different health-care experience.

Gigot: All right, James, let me ask you about this–the public option. Because the president says, Look, all this is, is going to compete with the private plans, keep them honest. The insurers are making a lot of money right now. We need to keep them honest.

Freeman: Right, and I think the beauty of this is we don’t need to guess or estimate or just posit what might happen, because the people of Massachusetts since 2006 have been running the experiment for all of us, and we can go to school on it.

Gigot: Thanks to Mitt Romney, former Republican governor.

Freeman: That’s right.

Gigot: Or no thanks to Mitt Romney.

Freeman: And it’s very clear what happens. Private insurance goes away, more people go on the public plan, costs explode, more costs go onto small business, and people lose their jobs or they get salary freezes.

McCaughey: That’s a very important point that more and more people are losing their jobs in Massachusetts. I was reading about an employer just today, who had to close up part of her business, close one office, sell a couple of trucks, and lay off an employee in order to meet the government requirement to pay for health insurance.

Gigot: OK, Kim Strassel, let me ask you about the cost question, because that’s an important one. CBO said–the president of the Congressional Budget Office said the president’s proposal–the House proposal will not save money. But can you save money overall, somehow, if you cover more people, if you cover 44 million more people? How do you save money?

Strassel: Well, the argument that the White House has always made is that if you did that and you had more competition and you somehow managed to get more efficiency across the board, that you could lower costs in the long term. The CBO has blown that up. They have done an initial analysis of the House bill. It says that there’s going to be about $820 billion in new taxes, most of them on families and small businesses. And even with that, there’s still going to be another $250 billion of more deficit spending over the next 10 years. And even then, that doesn’t count in the fact that both of these bills, bear in mind, are designed to hide a lot of the costs that are going to come up front, and only have them start to kick in toward the end of the bill. So what we’re actually looking at is trillions in new spending over the upcoming years.

Joe, I want to give the House Democrats credit for one thing. By raising, by proposing–putting this tax increase on the table, a 5.4-percentage-point surtax, they’ve at least showed people this is not going to be a free lunch, that somebody is going to have to pay for it. Now they claim that it’s only going to be the wealthy will have to pay that, to the tune of $550 billion. But this thing is going be enormously expensive.

Rago: Yeah, I mean, all government health programs start small and grow over time.

Gigot: That was the experience with Medicare.

Rago: Experience with Medicare. And this is sort from the same playbook. On the taxes, you know when you’ve got some states–California, New York–with top rates pushing 50%–.

Gigot: Sixty percent.

Rago: Sixty pecent.

Gigot: Higher than Sweden! Federal-state combination: Oregon, California, New York, New Jersey would have top marginal tax rates higher than almost all of Europe.

Rago: Yeah, and the truth is you can’t finance health care for 98% of the population with tax increases on 2%.

Gigot: On 2% of the population.

Rago: So eventually this is just going to have to reach down into the middle class. There’s just no way to make the money work.

Gigot: All right, thank you all.

Still ahead, the politics of health-care overhaul. Amid the president’s falling numbers and Democratic disarray, all eyes are on Republican senator Chuck Grassley. We’ll tell you why when we come back.

rr_c51664-20A

Gigot: We’ll get to the Republicans in a minute. But as the president touts his health-care overhaul and his plan to tax the rich to pay for it, he’s finding he can’t even count on some members of his own party. There’s the so-called Blue Dog Coalition that met with President Obama this week at the White House, and some freshmen Democrats from the nation’s wealthiest congressional districts are balking at the plan as well.

All right, Kim, so, what’s the problem the president has with these Democrats? Or maybe, what problem do the Democrats have with his plan?

Strassel: The problem that he has is that he stepped back and let some of the most liberal members of Congress write the bills that have come out of both the House and the Senate, so Ted Kennedy in the Senate and Nancy Pelosi and Henry Waxman in the House. And what has happened is these bills that have come out with these soaring taxes, these business mandates, individual mandates, the lack of choice for consumers, have scared a lot of Blue Dog and freshmen Democrats. Remember, Mrs. Pelosi’s margin was based on winning a lot of seats in very conservative districts over 2006 and 2008. These guys do not want to go home and say they voted for a bill that looks like this. So he cannot get his caucus together.

Gigot: So what the president’s saying now to get the Blue Dog Democrats on board, who care a lot about costs, is, he’s talking about MedPAC, which Betsy and I talked about before, which is this idea that a council of wise men and women would somehow propose things that would keep costs down. Is that kind of cover going to work for them, Joe?

Rago: Well, it might. I mean, the Blue Dogs are always looking for a reason to roll over–

Gigot: Roll over and vote for it, yeah.

Rago: –and vote for what they said they weren’t going to.

And I think the larger issue is that Congress tries all sorts of schemes like this all the time, and it never happens, so spending continues to rise. The only thing that would prevent that from happening is when the liabilities are just so large that they’re swamping the entire federal budget.

McCaughey: I predict that there will be real rebellion to the decisions of this MedPAC commissioner or other commissions, because baby boomers are not going to want to live their later years in pain.

Gigot: But will that happen before this passes, Betsy? That’s the question. The Blue Dogs are looking for political cover, and the president is trying to give it to them by saying we have this commission that will solve everything.

McCaughey: You know, I’m curious about why the Republicans have not much more aggressively proposed a fix-what’s-broken-leave-the-best-alone alternative that reaches out to provide coverage for the 24.7 million or so people who are involuntarily uninsured–they can’t afford a health care plan; they earn too much to be eligible for Medicaid or Schip–and we could take this issue of the uninsured simply off the table in a compassionate way and say we’ve fixed the problem.

Gigot: But the Republicans have proposed some ideas like that, through a refundable tax credit, for example. Now, they haven’t gotten a lot of publicity because everybody is focused–rightly so, I think–on what the Democrats, who run Congress and the White House, are proposing. So there are some other ideas out there that could–you’re saying, solve this problem in a more humane and less costly way.

McCaughey: Oh yes, it would cost $28 billion to $49 billion a year, depending on the level of coverage provided to uninsured individuals in this income group–lower-middle-income families who are struggling to pay for health insurance. And it could be implemented quickly, because in all 50 states, debit-card technology has enabled state governments to deliver purchasing power to families, even people who need it temporarily. And 22% of the uninsured are just in a temporary dilemma.

Gigot: All right, I think that those are excellent points. But that’s not going to happen in Congress unless–right now, because the president is focused on these current efforts that we’ve been describing. That’s where the Republicans come in.

Freeman: Yeah, he’ll have to abandon them, and these alternatives are going to start to get a lot more attention, because right now his sales pitch is higher taxes, less care for the elderly, and Washington’s going to decide whether your kid gets a tonsillectomy. This is not a winner as a political sales pitch. So these alternatives–using the tax code, fixes to encourage more people to get insurance–are going to start to get more attention.

Gigot: But in the immediate term, as he’s dealing–trying to get through this Congress–Kim Strassel, what you’re seeing is the president really trying to work with some Republicans in the Senate, particularly Iowa Republican Chuck Grassley, senior Republican on the Senate Finance Committee, to get him to sign on with Senate Democrats and maybe some other Senate Republicans to some kind of compromise they can then get through the Senate, get the 60 votes they need. And so they’re looking for that Republican cover. What role do you think Grassley’s playing?

Strassel: Well, up to now, I mean–and you’re right, this is all about cover. They need Grassley to bring along both a handful of Republicans and reassure their conservative Democrats. But the role he is playing here is–I mean, Chuck Grassley is increasingly the guy who is either going to blow up some of these bad ideas–and he has the power to do that by stepping back and saying no–or the guy who may become the Republican known for delivering the nation socialized health care. So he’s really in the middle. He’s been working very hard with Max Baucus to try and get a compromise. We don’t know what’s happening in those negotiations. They now have an extension of time because the president has basically said he’ll step back and wait to see what happens after the August recess.

Gigot: So the president hauled in the CBO director, Doug Elmendorf, who had given that bad score that–brought him in with a phalanx of White House aides. Was that subtle pressure?

Rago: I don’t think it was subtle at all. It sort of put LBJ to shame. But you know, I think what the Republicans really have to do now is kill this thing as it is, so that opens up the space for other alternatives. Otherwise, they’re just going to be providing a bipartisan gloss on what is really a terrible plan.

Gigot: But Republicans can’t kill it. Democrats have to kill it. If every Republican voted against this, it could still pass.

McCaughey: When Democrats go home, they will hear loud and clear from their constituents that people don’t want to give up the health plans they have now for the rigors of managed care. They rejected it in the 1990s, and they want to stick with the health plans they have.


rr_av473-18


Related You Tube Links:

Ronald Reagan speaks out on Socialized Medicine – Audio

Ronald Reagan on Capitalism and Socialism – Audio

Milton Freidman – Socialism vs. Capitalism

The Power of Choice – Milton Friedman

Charlie Rose – An Appreciation of Milton Friedman

Other Related Links:

Dick Morris And Eileen McGann:  SOCIALISM DOESN’T WORK – EVEN IN CHINA


End

Congressional Budget Office
Additional Information Regarding the Effects of Specifications
in the America’s Affordable Health Choices Act Pertaining to
Health Insurance Coverage
July 26, 2009
The Congressional Budget Office (CBO) and the staff of the Joint Committee on
Taxation (JCT) recently completed a preliminary analysis of the specifications related to
health insurance coverage that are reflected in the America’s Affordable Health Choices
Act. That analysis, which was transmitted in a letter to the House Committee on Ways
and Means, was released on July 14, 2009; subsequent analysis, which took into account
the other parts of the legislation that would raise taxes or reduce other spending, was
released on July 17. Among other things, those specifications would establish a mandate
for most legal residents to obtain health insurance, significantly expand eligibility for
Medicaid, regulate the pricing and terms of private health insurance policies, set up
insurance “exchanges” through which certain individuals and families could receive
federal subsidies to reduce the cost of purchasing insurance, and offer a “public plan”
option similar to Medicare through those exchanges.
This report provides additional information about the effects of the specifications in that
act regarding health insurance coverage. In particular, it examines their likely effects on
enrollment in private coverage, in the new public plan, and in Medicaid; the effects on
private-sector insurance premiums and the labor market; the longer-term cost of the plan;
and the allocation of its net budget impact between outlays and revenues. For reference,
the table released on July 14 summarizing the preliminary analysis of the coverage
specifications is included in this report. The report, however, does not represent a formal
or complete cost estimate for the draft legislation.
Effects on Enrollment in Private Coverage
Compared with what would happen under current law, the legislation would induce some
people to move out of employment-based coverage and others to move into employmentbased
coverage, and our estimate of the net effect of those changes is shown in the
attached table. A number of questions have arisen about that estimate—particularly
regarding our conclusion that only a small share of firms would choose to stop offering
health insurance to their workers once the new subsidies became available in the
insurance exchanges. Several factors contribute to that conclusion:
• Workers who get insurance through their employer receive a significant subsidy
because the cost of that insurance is not treated as taxable earnings for the worker and
thus avoids both income and payroll taxes. In most cases, that exclusion applies to the
portion of the premium that workers pay as well as the amount the employer
2
contributes. On average, that tax exclusion gives workers a subsidy of roughly
30 percent for purchasing insurance through their employer—a subsidy that would be
forgone if the employer chose not to offer coverage and the workers instead obtained
coverage in the new insurance exchanges.
• In general, firms that decided to stop sponsoring insurance coverage for their workers
would not be able to reduce their operating costs because, in a competitive labor
market, they would have to offer higher wages and other forms of compensation
instead. Indeed, workers might be particularly motivated to demand such increases
under the proposal because they would be required to obtain insurance. That added
compensation would generally be taxable. (This consideration and the preceding one
help explain why most workers are offered health insurance by their employers
today.)
• Under the proposal, nearly 90 percent of workers would be employed by firms that
would either have to offer qualified coverage and contribute a significant share
toward the premium or pay a tax equal to 8 percent of their total payroll. That “playor-
pay” penalty would constitute a substantial portion of the average cost of providing
insurance coverage, which has been estimated at about 12 percent of payroll currently
(but which would rise over time). In dollar terms, the penalty would obviously vary
depending on a firm’s payroll; for example, a firm with average wages of $40,000 per
year that did not offer qualified coverage would have to pay a penalty of $3,200 per
worker. Moreover, that penalty would make no direct contribution to those workers’
insurance costs; they would then need to obtain coverage from another source in
order to fulfill the individual mandate.
• Many firms have a mix of employees with differing levels of individual or family
income—some of whom would qualify for relatively generous subsidies in the new
insurance exchange and some of whom would not. Consistent with the available
evidence, we anticipate that an employer would generally take into account the
effects on all of its workers in deciding whether or not to offer coverage. In most
cases, having their employer offer coverage would be the best option for the
workforce overall, even with the new insurance exchanges.
• Finally, the available evidence indicates that in making decisions about offering
insurance, many firms are not very responsive to the availability of outside options
for their workers to obtain coverage; in particular, that responsiveness tends to
decline as firm size increases. One reason is that larger firms have relatively low
administrative costs that would generally make it advantageous for their workers to
keep that coverage rather than pay higher administrative costs for a plan in an
3
insurance exchange. Because larger firms account for the lion’s share of all
employment-based coverage, that lack of responsiveness limits the likely extent of
any erosion in coverage.1
In most cases, the combination of the subsidy from the current tax exclusion and the
penalty for firms that did not offer qualified coverage would provide a strong financial
inducement for employers to continue offering coverage to their workers.2 To give an
example in today’s terms, the average employment-based health insurance plan currently
has a premium of about $5,000 for single coverage and $13,000 for family coverage. The
subsidy provided by the tax exclusion is thus worth about $1,500 for single coverage and
about $4,000 for family coverage, on average. For a firm with average wages of $40,000,
the $3,200 penalty combined with the subsidy from the tax exclusion would roughly
equal the total amount of the single premium and would constitute more than half of the
typical cost of family coverage. Only workers who would receive larger percentage
subsidies in the exchanges would be better off if their employer stopped offering
coverage—and that would be a distinct minority of workers.3
Taking those considerations into account, some firms would probably decide not to offer
coverage, CBO and the JCT staff estimate. That option would be most attractive to firms
with lower-wage workers—both because the play-or-pay penalty for not offering
coverage would be smaller in dollar terms and because their workers would be eligible
for larger subsidies in the insurance exchanges (or through Medicaid). An additional
factor is that smaller firms (those with an annual payroll of less than $400,000) would
either be exempt from the play-or-pay penalty or would pay a lower tax rate. However,
an offsetting consideration is that small employers with low-wage workers would be
eligible for a tax credit covering up to 50 percent of the employer’s contribution toward
health insurance premiums. On balance, CBO and the JCT staff estimate that, in 2016,
about 3 million people (including spouses and dependents of workers) who would be
covered by an employment-based plan under current law would not have an offer of
coverage under the proposal.
Other people would have an offer of coverage from an employer but would choose to
make use of the subsidies that would be available in certain cases through the exchanges.
1 For further discussion of the factors affecting employer coverage, see Congressional Budget Office, Key
Issues in Analyzing Major Health Insurance Proposals (December 2008), pp. 4–8 and 43–48; and CBO’s
Health Insurance Simulation Model: A Technical Description, Background Paper (October 2007).
2 In the legislation considered by the Senate Committee on Health, Education, Labor, and Pensions, the
penalty amounts per worker are much smaller. However, that proposal would also provide less inducement
for employers to stop offering coverage, because it would provide no new subsidies for insurance coverage
for individuals with income below 150 percent of the federal poverty level.
3 Over time, as the costs of health care rose more rapidly than payrolls, the penalties would gradually
decline in importance relative to the tax exclusion and exchange subsidies. That evolution is incorporated
in CBO’s analysis and helps explain why the estimated effect of the proposal on employer coverage
changes gradually over time.
4
In 2016, nearly 3 million people who would be covered under an employment-based plan
under current law—and who could be covered by that plan under the proposal—would
choose instead to obtain coverage in the exchanges because the employer’s offer would
be deemed unaffordable and they would therefore be eligible to receive subsidies through
the exchanges. In addition, some part-time employees, who could receive subsidies via an
exchange even though they had an employer’s offer of coverage, would choose to do so.
All told, we estimate that, in 2016, about 9 million people who would otherwise have had
employer coverage would not be enrolled in an employment-based plan under the
proposal.
The net effect of the proposal on employment-based health insurance reflects larger
changes in the other direction, however. We estimate that about 12 million people who
would not be enrolled in an employment-based plan under current law would be covered
by one in 2016, largely because the mandate for individuals to be insured would increase
workers’ demand for insurance coverage through their employer. On net, therefore, about
3 million more people would have their primary coverage through an employer under the
proposal than under current law (as shown in the attached table).
Enrollment in the Public Plan
A related question concerns how many firms would provide coverage to their workers but
would do so by letting their workers purchase coverage in the insurance exchanges—and,
in particular, how many of those enrollees would end up in the new public plan. Under
the proposal, firms with 20 or fewer workers would be given the option to let their
workers buy coverage through the insurance exchanges starting in 2014, and the official
overseeing the exchanges would be allowed to let larger employers purchase coverage in
that way starting in 2015. In those cases, the workers would not receive exchange
subsidies but would instead be subsidized through the tax exclusion as under current law;
as a result, CBO’s table showing the effect of the proposal on sources of insurance
coverage counts those enrollees as being covered by employment-based insurance rather
than as exchange enrollees.
For the preliminary estimate of the proposal, CBO and the JCT staff assumed that only
firms with 50 or fewer employees would be permitted to buy coverage through the
exchanges, and we estimated that about 6 million workers and their dependents would
obtain coverage in that way. We also estimated that about one third of those enrollees
would choose the public plan—an assessment that is consistent with our overall estimate
of the share of people in the exchanges choosing that plan.
What options employers would have under the proposal depends on whether the official
overseeing the insurance exchanges would give larger firms access to the exchanges, and
predicting what that official would do is difficult. On the one hand, workers at some
firms would find that option attractive, particularly in areas where the public plan has
relatively low premiums, and they might apply pressure to be admitted to the exchanges.
On the other hand, providers of health care and private insurers might be opposed to
expanding access to the public plan, and they might apply pressure to keep larger firms
5
out of the exchanges. In addition, the official might be concerned about the potential for
adverse selection into the exchanges, which could arise if employers choosing to take
advantage of the option had older or less healthy workers.
If we assumed that workers at larger firms would be allowed to purchase coverage
through the exchanges, our estimate of the number of enrollees involved would
undoubtedly be greater than 6 million, but we have not estimated the magnitude. Analysts
at the Lewin Group recently estimated that if all employers were given access to the
insurance exchanges, more than 100 million people would end up enrolling in the public
plan.4 For several reasons, we anticipate that our estimate of the number of enrollees in
the public plan would be substantially smaller than the Lewin Group’s, even if we
assumed that all employers would have that option.
One consideration that would affect our analysis is that large employers would generally
have lower administrative costs for health insurance than would plans offered in the
exchanges, because (under the proposal) those plans would need to sign up enrollees
individually; as a result, employees of large firms would be less likely than those of small
firms to find the option of purchasing coverage through the exchange attractive, holding
other factors equal. Although we assumed that the public plan would have somewhat
lower administrative cost per enrollee than would private plans in the exchanges, the
public plan would probably have to incur much of the same cost in order to attract and
retain members.
More generally, the Lewin analysis uses a much larger gap than does our analysis
between the premium of the public plan and the premiums of the private plans against
which it would be competing. As indicated in our letter of July 14, we estimate that the
public plan’s premium would, on average, be about 10 percent lower than that of a
typical private plan offered in the insurance exchanges. That estimate is based in part on
available data from the Medicare Advantage program about the difference in costs
incurred by private plans and the traditional Medicare plan to provide the same set of
benefits. Indeed, the most recent analysis of that difference concluded that the costs of the
traditional Medicare plan were only 2 percent lower, on average, than the costs of private
plans participating in Medicare to provide the same benefits (though that difference
varied geographically and by the type of private plan that was offered).5
Another factor relevant to our estimate is our assessment that some providers would
choose not to participate in the public plan, which would discourage some enrollees from
choosing that plan despite its lower average premium. Even so, we expect that the
4 Statement of John Sheils, Vice President, The Lewin Group, before the House Committee on Energy and
Commerce, The Impact of the House Health Reform Legislation on Coverage and Provider Incomes (June
25, 2009).
5 See Medicare Payment Advisory Commission, Report to the Congress: Medicare Payment Policy (March
2009), Chapter 3. CBO’s larger estimate of the gap in premiums between the public plan and private plans
under the proposal also incorporates expected differences in such factors as benefit management and
providers’ payment rates.
6
provider network would be large enough to attract a sizable minority of participants in the
exchanges.
Because all of these factors are uncertain, estimating enrollment in the public plan is
especially difficult—as we emphasized in our earlier letter. Given our assessment of the
likely difference in premiums, however, offering more firms the option of letting their
workers purchase insurance through the exchanges would probably have a limited effect
on the proposal’s net budgetary impact. As noted above, workers with employment-based
insurance who obtained coverage through the exchanges would receive no exchange
subsidies and would have the same tax preference as if they had obtained coverage
outside the exchanges. Thus, if more employers purchased coverage through the
exchanges than we anticipate and purchased somewhat less expensive insurance via the
public plan, the principal effect on federal deficits is that those employers would end up
increasing their workers’ taxable compensation and thereby would generate slightly
higher tax revenues. Greater enrollment in the public plan would also increase the plan’s
outlays and premium collections, which would be included in the federal budget, but as
long as the public plan charged premiums that covered its costs (as it is supposed to do
under the proposal), those amounts would be offsetting.
Effects of the Proposed Medicaid Expansion
A further question is the number of people who we estimate would enroll in Medicaid
under the proposal that would have private coverage under current law. CBO does not
anticipate a substantial shift from private insurance to Medicaid. Specifically, we
estimate that about 1 million people who would otherwise have employment-based
insurance or individually purchased coverage would end up enrolling in Medicaid in
2016. We also estimate that about 10 million people would newly enroll in Medicaid
under the proposal, but the great majority of them would be people who would otherwise
be uninsured rather than privately insured. As a result, our estimated rate of crowd-out—
that is, the share of people gaining Medicaid coverage who would otherwise be insured
privately—is about 10 percent under this proposal.
Although the proposal would sharply increase the number of people eligible for
Medicaid, several factors help to explain the relatively low rate of crowd-out of private
insurance that we expect:
• The expansion of Medicaid would encompass relatively poor people (including some
childless adults whose income is well below the poverty level), who are less likely
than people with higher income to have private insurance coverage. Our analysis
indicates that only about a quarter of the people who would be made newly eligible
for Medicaid under the proposal would have private coverage under current law.
• Unlike prior expansions of public coverage on which estimates of crowd-out are
generally based, this proposal would impose a considerable penalty on employers that
did not offer qualified insurance and contribute a substantial share of the premium.
7
Those requirements would help offset the incentives under the proposal for employers
to cease offering coverage as a result of the expansion in Medicaid eligibility.
• Unlike past expansions of Medicaid, the proposal would include a requirement for
people to obtain insurance. As a result, those who would be eligible for Medicaid
(whether under current law or because of the expansion) and who would otherwise be
uninsured would be more likely to enroll in that program.
In sum, because of the specific features of the proposal, the number of people who might
leave private coverage for Medicaid would be relatively small, and the number of people
who would newly enroll in Medicaid would be relatively large—so together, those
features of the proposal would reduce the expected rate of crowd-out.6
Effects on Private-Sector Premiums
Many observers have asked about the effect of the proposal on health insurance
premiums in the private sector outside the insurance exchanges. After 2012, all newly
issued policies purchased by individuals would have to be bought through the insurance
exchanges; as a result, the proposal’s effects on premiums outside the exchanges would
be seen in premiums for coverage provided by or through employers (which is the
predominant source of insurance for the nonelderly population under current law and
would remain so, in our estimation, under this proposal). The proposal contains a number
of elements that could affect those premiums, both directly and indirectly—some of
which could cause the premiums to increase and some of which could cause them to
decrease. Although the direction of the overall impact is not certain, the magnitude of the
effect on average premiums would probably be modest.
Effects on the Risk Pool
One concern that has been expressed about proposals to establish and subsidize coverage
through the new insurance exchanges is that firms would see their relatively young or
healthy enrollees switch to those plans. If that happened, the average costs for covering
the remaining enrollees would be higher. Under the proposal, however, full-time workers
with an offer of coverage from their employer would generally be prohibited from
receiving subsidies through the exchanges—a restriction known as a “firewall,” which we
believe would be largely effective.7 Moreover, the proposal would allow premiums in the
insurance exchanges to vary only by age and then only to a limited degree, so the plans
available in the exchanges might not be substantially more attractive to younger and
6 For more information about the potential effect of expanding public insurance coverage on the number of
people with private insurance, see Congressional Budget Office, The State Children’s Health Insurance
Program (May 2007), pp. 7–13.
7 An exception would be granted for full-time workers who had to pay more than 11 percent of their
income for their employer’s insurance. In addition, part-time workers could receive subsidies via the
exchanges regardless of the availability or cost of coverage through their employers. As noted above, CBO
and the JCT staff estimated that several million workers would take advantage of those exceptions.
8
healthier workers than they would be for other workers—reducing the incentive to
circumvent the firewall.
At the same time, CBO and the JCT staff estimate that several million more people, on
balance, would enroll in employment-based insurance than is projected under current
law. The resulting pool of enrollees would be somewhat healthier, on average, than is the
pool of enrollees in employment-based insurance today; as a consequence, the average
cost of covering those enrollees would be several percent lower than under current law
(holding other factors equal). The extent and manner in which that change would affect
premiums for employment-based coverage is more difficult to determine; for example,
that effect might be seen primarily in the premiums for single coverage (rather than
family coverage) because most of the younger and healthier enrollees who would sign up
for employment-based coverage as a result of the proposal would choose that type, but
how premium costs are allocated within firms is less clear. Also, the main reason some
people would be paying less for their coverage is because newly enrolled people would
be making premium payments they would not otherwise have made—so the changes in
premiums would largely represent a transfer among workers rather than an improvement
in the efficiency of employment-based insurance plans.
The proposal’s restrictions on insurance markets could also affect premiums for
employment-based coverage. In particular, the proposal would prohibit insurers from
varying the premiums charged to employers to reflect differences in the health status or
likely costs of their employees. Existing policies would be exempt from that requirement
through 2017 but would then have to come into compliance with that prohibition.
(Insurers would still be permitted to adjust premiums, albeit to a limited degree, to reflect
the age of the enrollees.) That change would not apply to employers who chose to bear
the financial risk of providing health insurance to their workers, but it would affect
employers who purchased such coverage from an insurer. Relative to current law (under
which relatively few states impose the same restrictions on variation in premiums), those
limits might not have a substantial effect on the average premium paid by employers, but
they would tend to increase premiums for firms with relatively healthy workers and
decrease them for firms with relatively unhealthy workers.
Effects of Cost Shifting
A less direct way in which the proposal could cause private-sector premiums to change is
by affecting the extent of “cost shifting”—a phenomenon in which lower rates paid to
health care providers for some patients (such as uninsured people or enrollees in
government insurance programs) can lead to higher payment rates for others (privately
insured individuals). The proposal would have opposing effects on the pressures for such
cost shifting to occur.
On the one hand, the proposal’s expansion of eligibility for Medicaid and other
provisions would substantially increase enrollment in that program (by an estimated
10 million to 11 million people in the latter part of the 2010–2019 period). In addition,
many provisions of the proposal would reduce payments to hospitals and other providers
9
under Medicare. Furthermore, the legislation would establish a public plan to be offered
in the insurance exchanges; that plan would be set up by the Secretary of Health and
Human Services and pay Medicare-based rates to providers of health care. By
themselves, those changes would tend to increase the pressure on providers to shift costs
to private payers.
On the other hand, we estimate that the proposal would ultimately reduce the uninsured
population by roughly two-thirds, which would greatly attenuate the pressure to shift
costs that arises today when uncompensated or undercompensated care is provided to
people who lack health insurance. One recent estimate indicates that hospitals provided
about $35 billion in such care in 2008—an amount that would grow under current law but
would be expected to decline considerably under the proposal. (Recent evidence also
indicates that physicians collectively provide much smaller amounts of uncompensated or
undercompensated care, so all else held equal, the overall impact of expanded insurance
coverage on their payments rates would also be smaller.)
The net effect of those opposing pressures would thus depend on their relative magnitude
and also on the degree to which cost shifting occurred in each case. Given the size of the
annual decline in undercompensated care that seems likely to ensue, the adverse effects
on hospital finances stemming from greater enrollment in Medicaid, cuts in Medicare
payment rates, and enrollment in the public plan would also have to be substantial to
offset those savings for hospitals as a group. (The net effect would differ from hospital to
hospital.) As for the extent of cost shifting, CBO’s assessment of the evidence is that
some does occur but that it is not as widespread or extensive as is commonly assumed.
Well-designed studies have found that a relatively small share of the changes in payment
rates for the government’s programs is passed on to private payment rates, and the impact
of changes in uncompensated care is likely to be similar.8 Overall, therefore, the effect
the proposal would have on private-sector premiums via cost shifting is unclear.
Changes in Payment Methods
In addition to proposed changes in Medicare’s payment rates, the proposal would also
alter some of Medicare’s payment methods—or at least test such changes—which might
ultimately reduce private insurance costs to a limited degree. For example, the proposal
would establish a demonstration project to examine the use of “accountable care
organizations” and would make other modifications that could encourage reductions in
health care spending.9 To the extent that future steps to implement such changes in a
more aggressive way also changed how doctors treated privately insured patients, some
benefits could “spill over” to the private sector. However, such effects would probably
represent a small fraction of privately insured medical costs over the next 10 years,
8 For a more extensive discussion of this issue and the evidence about its effects, see Congressional Budget
Office, Key Issues in Analyzing Major Health Insurance Proposals (December 2008), pp. 112–116.
9 For an explanation of how accountable care organizations might reduce Medicare spending, see Option 37
in Congressional Budget Office, Budget Options, Volume 1: Health Care (December 2008), p. 72.
10
paralleling the relatively small effects in Medicare itself as a proportion of total program
spending in that period.
Impact on the Labor Market
This proposal, like others to reform the health insurance system, could affect labor
markets in several ways.10 In general:
• Requiring employers to offer health insurance—or pay a fee if they do not—would be
likely to reduce employment, although the effect would probably be small.
• Providing new subsidies for health insurance that decline in value as a person’s
income rises could discourage some people from working more hours.
• Increasing the availability of health insurance that is not related to employment could
lead more people to retire before age 65 or choose not to work at younger ages. It
might also encourage other workers to take jobs that better match their skills, because
they would not have to stay in less desirable jobs solely to maintain their health
insurance.
Under the proposal, employers with annual payroll above specified levels would be
required to offer health insurance to their workers and contribute a significant share
toward the premium or pay a tax equal to as much as 8 percent of their total payroll. For
the firms that chose not to offer qualified insurance, that penalty would increase the cost
of employing each worker by somewhat less than 8 percent (because total compensation
generally exceeds the taxable payroll to which this fee would apply). The overall impact
on employment would probably be muted, however, because employers would be
expected to pass the costs of such fees on to workers in the form of lower wages than
would otherwise be paid—just as the costs paid by employers for health insurance are
generally passed on to workers. Because the requirement would not be instituted until
2013, employers would be able to plan for its implementation; CBO also projects that the
economy will have largely recovered from the current recession by that date.
Nonetheless, such a change would tend to reduce the hiring of workers at or near the
minimum wage, because their wages might not be able to decline by the full amount of
the fee (or by the costs of the health insurance that would have to be provided to avoid
the fee). Still, the impact of the proposal on low-wage workers would probably be small
because studies suggest that moderate increases in the minimum wage generally have
limited effects on employment. An 8 percent increase in the cost of hiring a worker
10 For a more extensive discussion, see Congressional Budget Office, Effects of Changes to the Health
Insurance System on Labor Markets, Issue Brief (July 13, 2009). The overall impact of health reform
proposals on labor markets is difficult to predict. Although economic theory and experience provide some
guidance as to the effect of specific provisions, large-scale changes to the health insurance system could
have more extensive repercussions than have previously been observed and could also involve numerous
factors that would interact—affecting labor markets in significant but potentially offsetting ways.
11
making the minimum wage—which was just increased to $7.25 per hour—would amount
to roughly $0.60 per hour, which is also about the size of the increase in the minimum
wage that just took effect. Moreover, firms with an annual payroll below $250,000 would
be exempt from the play-or-pay requirement.
Another feature of the proposal relevant to labor markets is that the subsidies for
insurance coverage offered via the exchanges would phase out as enrollees’ income rose,
effectively reducing the compensation they would receive for each additional hour
worked. That effect, which is an “implicit tax,” can lead people to work fewer hours than
they otherwise would, in the same way that income and payroll taxes can. Specifically,
the proposal would provide subsidies to help cover the costs of purchasing insurance and
would phase out those subsidies as income increased from 133 percent to 400 percent of
the federal poverty level. Over that range, the share of income that enrollees would have
to pay in premiums for coverage in the exchanges would increase from 1.5 percent to
11 percent, and the extent of coverage that would be subsidized would also decline so
that enrollees with higher income would pay higher out-of-pocket costs as well. With
limited exceptions, the subsidies would not be available to the vast majority of workers
who had a qualified offer of health insurance from their employer; in addition, some
workers who would not have employment-based insurance would have income above
400 percent of the poverty level. As a result, changes in the work hours of people affected
by this implicit tax would have a much smaller proportionate effect on total hours worked
in the U.S. economy.11
To express those effects in round terms using current levels of premiums and income, the
subsidy might decline from roughly $5,000 to zero for single adults over an income range
of about $30,000, and from roughly $13,000 to zero for a family of four over an income
range of about $60,000. Thus, the implicit tax rate over that income range—that is, the
extent to which those subsidies would decline as income rose—would be around
20 percent (but would vary somewhat across income levels because the subsidies would
not phase out in a uniform way).12 A proposal that phased out subsidies more quickly
would yield even higher implicit tax rates; for example, the implicit tax rate would range
from about 28 percent to about 35 percent if the same subsidies were phased out
uniformly between 133 percent and 300 percent of the federal poverty level. Conversely,
those implicit tax rates could be reduced by extending the subsidies further up the income
scale, but doing so would expand the number of people affected by this implicit tax and
would also increase the budgetary cost of the proposal. In any event, the implicit tax rates
created by the phase-out of subsidies would come on top of existing income and payroll
tax rates.
11 The proposal would also raise tax rates on higher-income taxpayers through a surcharge. This report does
not address the effects of that surcharge.
12 Over time, as the costs of health care rose more rapidly than income, the implicit tax rate would increase.
12
Through the insurance exchanges and expanded eligibility for Medicaid, the proposal
would enhance access to health insurance for people who are not employed and would
provide subsidies for insurance to people with income below 400 percent of the federal
poverty level who do not have employment-based coverage. Those provisions could
encourage more people to retire before age 65, and they might lead some people to
choose not to work at younger ages. The provisions might also lead to better matches
between workers and jobs, because workers would not have to stay in less desirable jobs
solely to maintain their health insurance.
Longer-Term Costs of the Proposal
Estimating the effects of major changes to the health care and health insurance systems
over the next 10 years is very difficult and involves substantial uncertainty; generating
longer-term estimates is even more challenging and is fraught with even greater
uncertainty. As a result, CBO does not provide formal cost estimates beyond the 10-year
budget window. However, we have said that in evaluating proposals to reform health
care, the agency will endeavor to offer a qualitative indication of whether they would be
more likely to increase or decrease the budget deficit over the second decade.13
The starting point for such an analysis of the recent House proposal is our estimate of the
proposal’s impact on the federal budget deficit in the first 10 years. As discussed in
CBO’s letter of July 17, we estimate that the proposal as a whole would increase federal
deficits by $239 billion over the 2010–2019 period. That estimate has three major
components: the net effect of the coverage specifications, which affect both spending and
revenues and which would add an estimated $1,042 billion to cumulative deficits over
that period; the effect of other provisions, primarily regarding Medicare, that would
reduce direct spending by a net $219 billion; and the effect of still other provisions
(primarily, an income tax surcharge on high-income individuals) that would increase
revenues by $583 billion. Under the proposal, federal spending on health care would
increase by approximately the difference between the net cost of the coverage
specifications and the reductions in direct spending.
Looking ahead to the decade beyond 2019, CBO tries to evaluate the rate at which the
budgetary impact of each of those broad categories would be likely to change over time.
The net cost of the coverage provisions would be growing at a rate of more than 8 percent
per year in nominal terms between 2017 and 2019; we would anticipate a similar trend in
the subsequent decade. The reductions in direct spending would also be larger in the
second decade than in the first, and they would represent an increasing share of spending
on Medicare over that period; however, they would be much smaller at the end of the
10-year budget window than the cost of the coverage provisions, so they would not be
likely to keep pace in dollar terms with the rising cost of the coverage expansion.
Revenue from the surcharge on high-income individuals would be growing at about
5 percent per year in nominal terms between 2017 and 2019; that component would
13 For discussion of our approach to developing such qualitative information, see the CBO Director’s Blog,
“The Effects of Health Reform Legislation beyond the Next Decade” (July 24, 2009).
13
continue to grow at a slower rate than the cost of the coverage expansion in the following
decade. In sum, relative to current law, the proposal would probably generate substantial
increases in federal budget deficits during the decade beyond the current 10-year budget
window.
Under any proposal that provided new federal subsidies for the purchase of health
insurance, the rate of growth in federal spending would depend importantly on how the
subsidies were indexed over time. As long as overall spending for health care continued
to expand as a share of the economy, people’s share of insurance costs would continue to
rise faster than their income, or the government’s subsidy costs would continue to rise
faster than the tax base, or both. The proposal limits the share of income that eligible
people would have to pay when they purchased coverage in the insurance exchanges, and
that share of income would not change over time. In addition, insurance plans offered
through the exchanges would be required to pay a specified share of costs for covered
services (on average), and that share also would not change over time. Combining those
provisions, increases in health care spending in excess of the rate of growth in income
would be borne entirely by the federal government in the form of higher subsidy
payments—because those payments would have to cover the entire difference between
the total premium for insurance coverage and the capped amount that enrollees would
pay. Those factors help explain why the costs of the coverage provisions would continue
to grow rapidly in the decade after 2019.
Allocation of the Net Budgetary Impact Between
Outlays and Revenues
On July 14, CBO and the JCT staff provided preliminary estimates of the effects of the
proposal’s specifications regarding insurance coverage on the federal budget; the relevant
table from that letter is attached for reference. Those estimates included the major cash
flows that would affect the budget and the net effects on the budget deficit during the
2010–2019 period, but they did not allocate the net budgetary impact into changes in
outlays and changes in revenues. Moreover, the preliminary estimates did not include all
of the cash flows that would appear in a formal and complete cost estimate.
The amounts shown in the table for new federal spending on Medicaid and the Children’s
Health Insurance Program would be outlays, as would the spending for subsidies to
purchase insurance coverage through the new exchanges. Those two streams of outlays
would amount to an estimated $1,211 billion over 10 years.
All of the other flows of funds shown in the table would represent changes in revenues,
netting to a projected increase in federal revenues of $169 billion over 10 years. Increases
in revenues would include the payments by employers to the exchanges for workers who
received coverage there (amounting to $45 billion); payments of penalties by uninsured
individuals ($29 billion); and payments of play-or-pay penalties by employers
($163 billion). Together, those provisions would increase federal revenues by a total of
$238 billion over 10 years. Other flows would represent decreases in revenues. Under the
14

Politico (WH Marine Evening Parade) — Washington Post (Marshall Plan for Protocol Chief) — China Daily (Chinese Flag To Be Flown At WH) — Woody’s Place Video Link


o10_19279387

Mr President — Your Attention Please

Only one flag besides the Stars and Stripes that represents the United States has ever flown over the White House in Washington, DC.   Only one flag is ever displayed in the U.S. Capitol Rotunda.  That flag is not one that represents an individual state, branch of service, or other select group.   It is the POW/MIA (Prisoners of War/Missing In Action) Flag that calls to mind the sacrifice and plight of those Americans who have sacrificed their own freedom, to preserve liberty for all of us.  It’s presence serves to remind us that, while we enjoy the privileges of freedom, somewhere there are soldiers who have not been accounted for and may, in fact, be held against their will by the enemies of Freedom.


POLITICO_logo

POTUS and FLOTUS at the Marine Corps Evening Parade

By CAROL E. LEE | 7/25/09

POTUS and FLOTUS at the Marine Corps Evening Parade, where POTUS was the guest of honor.

POTUS, FLOTUS and a Marine got into the limo outside the White House residence at 7:45 p.m. Motorcade arrived at Marine barracks in southeast DC at 7:53 p.m.

POTUS addressed a small group of Marines and family after arriving. Pool was not permitted to be present for his remarks, which our handlers said have same press procedures as Embassy staff visits, which are traditionally closed press. Pool could vaguely hear a well-miked POTUS from the 5-by-30 foot patch of grass where we were set, but was unable to make out anything he said.

POTUS and FLOTUS, along with the Commadant of the Marine Corps, Gen. James T. Conway, and his wife, entered the yard where the parade was held at 8:50 p.m.

POTUS, FLOTUS and the Conways walked down the center walk, flanked with grass, to their front row seats in the bleechers. POTUS’s seat was second one in from the walkway. POTUS greeted Gen. James Jones, whose seat was directly behind POTUS’s. FLOTUS gave Jones a kiss on the cheek.

Conway sat next to POTUS on the left, then FLOTUS, then Conway’s wife. In the seat to POTUS’s right was the Colonel of the DC barracks, Col. Andrew H. Smith.

First the President’s Own Marine Band performed. Their opening number was titled Chicago Tribune, which made POTUS smile – and the audience laughed – when it was announced. Then they played Stars and Stripes Forever.

After they finished and the lights dimmed, POTUS leaned in to say something to the Colonel of the barracks and stuck his hand out. They shook hands and chatted briefly – your pooler, still on the swathe of grass a short distance away, couldn’t hear anything that was said.

Then there was the presentation of the colors. POTUS did not salute as the color guard took its place, as Conway and Smith did.

There were drill routines and more tunes from the Commandant’s Own Marine Band. And, a cameo from Lance Corporal Chesty XIII – the English bulldog mascot of the barracks.

At 10:03 POTUS walked out to the center walk with Colonel Smith and Commandant Conway for the Commandant’s review. The band played the National Anthem. POTUS put his hand on his heart.

During the review POTUS seemed to struggle to figure out if he should salute when the Commandant and Colonel did. At first he went to lift his right hand but stopped. The next time the Commandant and Colonel saluted POTUS saluted quickly, like he does when boarding Marine One, while the Commandant and Colonel held theirs. At one point the Commandant and Colonel saluted, and POTUS did quickly. But this time the Commandant and Colonel held their salute for a long time. POTUS kept his hand at his side for a bit. Then at one point he put his hand on his heart. Then it was back by his side.

At 10:18 the parade ended and POTUS and FLOTUS greeted the Color Guard and other Marines in the center walk.

POTUS and FLOTUS even bent down to pet the mascot, Lance Corporal Chesty XIII.

POTUS and FLOTUS posed for a photo and exited to cheers at 10:25 p.m.

Motorcade was moving at 10:39 p.m., arriving back at the White House about 8 minutes later.

We have a lid. Your pooler apologizes in advance for any military terminology she screwed up in this report.


o17_11575620


THE WHITE HOUSE

Office of the Press Secretary
__________________________________________________________
For Immediate Release                                 May 13, 2009

President Obama Announces More Key Administration Posts

WASHINGTON, DC – Today, President Barack Obama announced his intent to nominate the following individuals for key administration posts: Capricia Penavic Marshall, Chief of Protocol, with the rank of Ambassador during her tenure of service, Department of State; Evan Segal, Chief Financial Officer, United States Department of Agriculture; and Rocco Landesman, Nominee for Chairman of the National Endowment for the Arts. The President also announced that he will be designating Gregory B. Jaczko, currently a Commissioner at the U.S. Nuclear Regulatory Commission, as Chairman of the U.S. Nuclear Regulatory Commission.

President Obama said, “This impressive group of people will add valued voices to my administration as we work to tackle the many challenges our nation faces. I am grateful for their decision to serve, and I am confident they will work hard as we put our country on a path towards prosperity and security.”

President Obama announced his intent to nominate the following individuals today:

Capricia Penavic Marshall, Nominee for Chief of Protocol, with the rank of Ambassador during her tenure of service, Department of State

Capricia Penavic Marshall has had an extensive career in public service. In 1992, after graduating from Case Western University School of Law, she joined Governor Bill Clinton’s Presidential campaign as Special Assistant to Hillary Rodham Clinton. Upon entering the White House in 1993, Marshall served as Special Assistant to the First Lady, traveling extensively and coordinating her agenda, meetings and public appearances. In October 1997, at the age of 32, Marshall was appointed Deputy Assistant to the President and Social Secretary to the White House, becoming the youngest Social Secretary in recent history. Marshall’s official responsibilities included the planning and execution of all White House international and domestic events. Marshall continued working with President Clinton helping to advance his work in policy, politics and community initiatives. In 2001, she began working as a consultant to a number of nonprofit and private sector organizations. In 2006, Marshall joined the re-election efforts for Senator Hillary Clinton, and subsequently joined Senator Clinton’s 2008 presidential campaign. As Senior Advisor, she led the Surrogate Speakers Program and helped coordinate women’s outreach. In 2008, Marshall became Executive Director of Hillpac and Friends of Hillary and is currently overseeing the closure of both committees. A first generation American and native of Cleveland, Ohio, Marshall graduated from Purdue University with a Bachelor of Arts in Political Science and International Studies. She studied at the University of Madrid for a year and traveled extensively through Europe. Marshall holds a law degree from Case Western Reserve University School of Law.

chinton_china


iwp1_mages

A Marshall Plan for Protocol Chief

marshall15By The Reliable Source | May 15, 2009

After months of waiting, the White House sent Capricia Marshall’s name to the Hill this week for the plum chief of protocol slot — but it’s not quite the job it used to be.

If confirmed, the former White House social secretary and Hillary Clinton confidante gets the title of ambassador, but not necessarily the usual seat on Air Force One when POTUS travels abroad, reports our colleague Al Kamen. President Obama plans to name someone he knows better to be at his side on foreign visits.

It’s a big change for the high-profile post, which typically had three main duties: babysitting the diplomatic corps, handling U.S. visits by foreign leaders and accompanying the president on official trips abroad. On those trips, it was the chief’s job “to interface with his or her counterpoint in the host country — to smooth over glitches, but basically to keep the show on the road,” said Ambassador Donald Ensenat, chief of protocol from ’01 to ’07. Ensenat joined his Yale roommate George W. Bush on 40 trips, working with almost every major foreign leader. “I loved it,” he told us yesterday. “Best thing I’ve ever done.”

Some big names have held the job: Shirley Temple Black, tobacco heir-diplomat Angier Biddle Duke, billionaire Leonore Annenberg, social titans Lucky Roosevelt and Lloyd Hand. In many ways, the glamorous and energetic Marshall — a JD with an MD husband, popular in both social and political circles — fits the profile.

However: While on paper the job is part of Clinton’s State Department, its primary focus is White House diplomacy. Which is why most presidents handpick close friends for the gig. Marshall, though, is a longtime soldier in Clinton’s camp, a veteran of her Senate and presidential campaigns.

But one administration official, speaking on the condition of anonymity, denied the change represents a slight by the White House. “It’s a different dynamic. … She’s going to have a much higher workload” from State because of Clinton’s reliance on her and Clinton’s own busy travel schedule. Marshall said she can’t talk to the media during her confirmation process.


o26_84819402


logo_chinadaily

China’s national flag to go up in White House on Sept 20

By Hou Lei (chinadaily.com.cn)

Updated: 2009-07-13 16:45

The national flag of the People’s Republic of China (PRC) will be hoisted at the South Lawn of the White House in Washington on September 20, media reported Sunday.

Chinese associations in the United States had applied to hold a ceremony in front of the US President’s residence to celebrate the 60th anniversary of the founding of PRC.

Chen Ronghua, chairman of Fujian Association of the United States, told reporters that their application was approved not only because of the sound Sino-US relations but also because China is a responsible country.

“Many Americans admire China due to the success of last year’s Beijing Olympics,” said Chen.

More than 1,000 people will attend the ceremony and the performances held after it, according to Zhao Luqun, who will direct the performances.

Zhao said the performances will demonstrate the friendship, magnanimous spirit and kindness of modern Chinese people.

800px-Flag_of_the_People's_Republic_of_China.svg


PH2007110101368

From Wiki:

The final design was red with a large golden five-pointed star and four smaller golden five-pointed stars (arranged in a vertical arc toward the middle of the flag) in the upper hoist-side corner. The color red symbolizes the spirit of the revolution, and the five stars signify the unity of the people of China under the leadership of the Chinese Communist Party. The flag was officially unveiled in Beijing’s Tiananmen Square on October 1, 1949, the formal announcement of the founding of the People’s Republic of China.

… The current design uses red as its background and golden for its stars. The red background symbolizes the blood of heroes who died during the revolution. The golden colour mainly symbolizes the glorious history and culture of the Chinese people and was partly inherited from the colours of the flag of Soviet Union, which was also a combination of red and gold, in which case the gold symbolizes the brightness of the communist future.

The larger star symbolizes the leadership of the Communist Party of China and the four smaller stars that surround the big star symbolize the four classes of Chinese that were considered unitable by Mao at that historical time (from one of Mao’s work: On The People’s Democratic Dictatorship); these are the Workers, Peasants, Petty Bourgeoisie (i.e. Small Business Class), and National Bourgeoisie (i.e. Chinese non-governmental businessmen). The most popular modern interpretation is the four stars represent the four occupations most esteemed by the Communist Party of China, which are farmers, workers, teachers, and soldiers. An interpretation under a more historical context is the four stars represent the traditional four categories of the people in the state, which are Workers (gōng, 工), Farmers (nóng, 农), Intellectuals (shì, 士), and Businessmen (shāng, 商) (see also Four occupations). It is worth noticing that the color of the Chinese flag, red, used to be the symbolic color of the mighty Han dynasty. The Chinese people are known as ” the Han people” in Chinese language.”Five stars rising on the east” was considered a bless to the dynasty in old Chinese culture. It is also worth noticing that the color of the stars on the flag, yellow, was the symbolic color of another great dynasty in Chinese history, the Tang dynasty.

It is sometimes stated that the five stars of the flag represent the five largest ethnic groups.[1][2] This is generally regarded as an erroneous conflation with the “Five Races Under One Union” flag, used 1912–28 in the early Republic of China, whose different-colored stripes represented the Han, Manchus, Mongols, Hui/Uyghurs, and Tibetans.[1][3]

  • ^ a b Shambaugh, David (June 1994). “Book reviews”. The China Quarterly (CUP for SOAS) (No. 138): 517–520.
  • ^ Mayall, James (1998). “Nationalism”. The Columbia History of the 20th Century. ed. Richard W. Bulliet. Columbia University Press. pp. 186. ISBN 0231076282.

·  ^ Zarrow, Peter Gue (2005). “Revolution and Civil War”. China in War and Revolution, 1895-1949. Routledge. pp. 363. ISBN 0415364485.

466px-United_States_POW-MIA_flag.svg


Related Links

HotAir:  Shocker: New Obama appointee has a tax problem & Obamateurism of the Day

The Tax Lawyers’ Blog:  Obama the Tax Gap Closer Hires Another Tax Gap Widener

NYT:  Obama’s First Ride on Marine One

Breitart TV: Air Force Vet Convicted for Ripping Down Mexican Flag on College Campus

US Flag FAQ:  Betsy Ross Homepage Flag Rules and Regulations

LB YouTube VideoObama-HandshakeSnub

Woody’s Place:  A Fallen Soldier’s Homecoming (Video) “The good people of Georgia give respect to one of their fallen soldiers returning home from Afghanistan”  WARNING **BE PREPARED TO CRY**


05blog-marineone6


Update:  Added Woody’s Place Video Link

END

La Depeche — Blog Citizen Of A Former Captain Folha Online — France 24 Video — Eurocockpit


AF447_Chronology

AF 447 : a Synopsis of a Synopsis

“I’m sure that Airbus and EADS and the FAA (as well as Thales) are now quietly aware that they each played their part in this accident. How? Well they never studied the possible ramifications of a Thales pitot icing event at high level – and what sort of confusion and control problems it could lead to. They came up with a quite innocuous Service Bulletin and a fatuous homespun procedure for pilots to simply fly “power and attitude” once the speed indication becomes suspect and the ADIRS turns introspective.”

pitot_blocage_procedure

… now in case of a serious incident related to the pitot probes. In fact, (ref BEA Report Annex 5), in this case, the crew must perform 9 ECAM procedures, 1 procedure and 3 procedures QRH paper, hence the need for a single procedure “BLOCKING PITOT”Les dossiers noirs du transport aérien (Records of Black Aviation)

Blog Citizen Of A Former Captain


lgo-folha_online-210x45-ffffff-2

da Folha Online 23/07/2009 – 17h17 (English Translation)

Identified 49 of the 50 recovered bodies of victims of the Air France flight 447

The Secretariat of Social Defense of Pernambuco announced on the afternoon of Thursday that six more bodies of victims of the accident with the aircraft of Air France – which fell into the Atlantic Ocean on May 31 this year, when 447 was the flight from Rio to Paris – were identified.

Therefore, up to 49 the number of bodies identified by the IML (Instituto Médico Legal) from Recife, a total of 50 bodies and rescued by Navy Aeronautics.

According to the Bureau, identified the six victims were male, three Brazilians and three foreigners. Three occupants were identified exclusively from DNA tests and the other three also with the aid of dental examinations.

Only one body has not yet been identified, a male victim. At the request of families, the names of the occupants of the plane of Air France identified are not disclosed. The nationalities of the three foreigners were not informed.

According to [Secretariat of Social Defense of Pernambuco], work to identify the six bodies were completed on the last Tuesday (21), but released only today.

afribbon



ladepeche_logo

Crash of flight AF 447 – Published on 25/07/2009 07:56 | File Gil Bousquet

The CEAT has unveiled yesterday the remnants of the returnees Airbus in Toulouse.

The expertise will begin in August

It is in the quiet lobby of the 42 test center near Aviation Balma de Toulouse (CEAT) that are now stored the debris of the Airbus flight Rio-Paris. Yesterday, for the first time, investigators have released the 650 elements of the A330, which arrived by convoy on the outskirts of Toulouse last week for technical expertise. The first work of the investigators is the identification of various debris and the sealing of each of them. The soldiers of the gendarmerie of the air (GTA) who conduct the investigation under the authority of Lieutenant-Colonel Xavier Mulot (see below) are supported by five to eight people in the Investigations Section after the incident or accident CEAT . Also with the help of four including two forensic experts were present at Balma, the dozen investigators begin toulousains expert “in the month of August.”

200907251131_w350

Second convoy in August

These experts will analyze the documents carefully to try to understand what happened. The bending, deformation, breaks and cuts from different parts of the aircraft will be investigated through metallurgical tests and then used to develop hypotheses to explain the crash. The experts also looking for possible signs of combustion including electrical circuits. If doubts about traces of explosives appear, leave the room for the criminal research institute in Paris. In their work, investigators have attempted to reconstruct the skeleton of the plane wreck gathered Wednesday Through a serial number inscribed on the coins or their composition, the experts are able to determine what part of the plane corresponds debris.

They are among 650 (recovered by the Brazilian Army) in August which added 450 new pieces collected by the french ship Le Mistral. This second wave of parts arrive at Toulon in August and will be transported to Toulouse by road convoy. The personal items of passengers on the Airbus had already been repatriated at Roissy by diplomatic pouch. But a tiny part of the aircraft was recovered. It is especially lightweight often trade (galleys, seats …) that do not provide a decisive. The building blocks such as landing gear, wings and the nose of the aircraft are based by 3 000 to 5 000 meters deep. This investigation was entrusted to an elite aviation investigators with powerful tools coordinated by the policeman who led the investigation into the crash of the Concorde.

The slopes of the investigation

Without the black boxes (see above, against), experts have unfortunately little elements. In total, 1 100 debris collected represent only 2 to 3% of the A330 damaged at sea, at most. With so few elements, we will do that probabilities can not deduct any reliable scenario, “said Ronan Hubert, Director, Office of Archives of aircraft accidents (BAAA). Messages Accars who reported 24 outages in four minutes before losing contact with the Airbus will be very valuable. “It happened something very unusual” says a source close to the investigation. One of the specialties of CEAT is the resistance of the systems and subsystems for various electromagnetic attacks like lightning that could strike the aircraft. The BEA will continue to investigate the pitot probes.

The black boxes

Research continues on the area of the crash of the Airbus. Even if the transponders are no longer the objective of the research teams is to locate the wreckage of the aircraft. Housed in the rear part of the Airbus, the black boxes may be obtained through the submarine Ifremer and its arms. “It is quite feasible, it still must find the wreckage,” says one aviation expert. To find it, we must explore deep and relief using a sonar. Problem: The area to cover supposed to be the impact of aircraft on the water is immense and reaches 16 000 km2. The new grid will last four to six weeks. A sonar survey of the terrain is towed marine cable at the end of 1 500 meters long on the “Why not? “To locate the wreckage.

Air France : anger pilots

Four unions of pilots of Air France Tuesday wrote to the boss of the company to demand action “visible” to improve security in the daily operation of the airline. After the trauma created by the accident of flight AF447 Paris-Rio on June 1 which was 228 dead, Alter, R’Way, SPAF and Unpl believe it is “urgent and precautionary measures visible prior to more profound reform of the functioning of the company. Pilots talk of “failure of the company” on the flight safety and are demanding that the management of flight safety is directly linked to the Chief Executive. “Now it is a sub-fife who has no power” as the leader of one of the unions.

The families of victims

According to a judicial source, the National Federation of victims of disasters (Fenvac) and 36 families of victims have made civil parties in the investigation into the accident of flight AF 447 Rio de Janeiro-Paris.

Lawyers for the families and the Fenvac will have access to file and will be able to make requests for investigative action. Counsel for the first family Civil Party, Me Sophie Bottai, had said in June that “some families of victims felt that the whole truth was not known” and “see a manifest filtering of information” . Since opening on June 5 in Paris of the investigation against X for manslaughter, no request for damages was rejected by one of the judges, Sylvie Zimmerman. The President of the Union of Air France pilots, Gérard Arnoux, who wants to Civil Party, has stated that it “did not believe the unions are welcome in this case” and feared that the trail of “the human error “is preferred.


france24_logo

Investigators piece together wreckage from doomed Air France jet (Contains Investigation Video)

France 24 – July 25, 2009

The French bureau leading the technical side of the investigation into the crash of Air France flight 447 on June 1 said this month that an initial study of crash debris showed the plane was intact when it hit the Atlantic Ocean. The cause of the crash, however, is still unknown.

The flight’s black boxes have never been found. Over the next few months, four experts will be analyzing all the wreckage, which thus far includes 650 pieces of debris.

According to Lieutenant-Colonel Xavier Mulot, chief investigator for AF flight 447, “We’re expecting a lot from this study because, thanks to the way the debris was broken and traces of burns, it’ll eventually allow us to understand what happened.”

Aeronautical specialists are combing through hundreds of pages of documents, examining everything from flight records to mechanical inspections.

They are also reviewing a map showing where the passengers were seated during the flight, with the seat assignments of the 51 bodies recovered marked in colour.

Since the tragedy occured, investigators have come up with more than 200 documents for their files.

Families of the victims of last month’s crash have registered as civil plaintiffs in the French courts to gain access to the case files, officials said on Thursday.

The head of an association representing families of those killed in the crash of flight 447 had earlier this month accused Air France of keeping relatives in the dark about the accident.


logo_fr24EN

English Version:  According to Lieutenant-Colonel Xavier Mulot, chief investigator for AF flight 447, “We’re expecting a lot from this study because, thanks to the way the debris was broken and traces of burns, it’ll eventually allow us to understand what happened.”  The video also stated  there were 650 pieces of aircraft and another 450 to arrive in August.

Caution: Most pilot forums have concluded that “Lieutenant-Colonel Xavier Mulot did not say that trace of burn were actually observed, only that he was merely exploring possibilities and… another BEA technical expert was interviewed (on other TV channels) and they were more cautious about this study given the available data.”  Other French TV (France2) channels apparently show a part of the landing gear were also recovered.

French TV (Videos) (JT video appears to be same as France24)(AF 447 begins approx 12-15 in middle of broadcast)

JT de 13h http://jt.france2.fr/player/13h/index-fr.php?jt=20090724&timeStamp=739

JT de 20h http://jt.france2.fr/player/20h/index-fr.php?jt=20090724&timeStamp=663

France 3 http://jt.france3.fr/player/soir3/index-fr.php?jt=20090724

af447_landing_gear

Disclaimer:  The following information is based on the above France 24 video and is speculative, however most respected pilot forum commenters have concluded based on the assumption the aircraft seated 219 passengers, and 216 passengers were on board, leaving 3 seats vacant:

Seats 29B and 39B are colored white and may have been vacant.

Assuming that 29B and 39B were vacant, the numbers are:

  • forward cabin: 8 of 40 seats is 20.0%
  • midships: 9 of 75 seats is 12.0%
  • aft: 21 of 102 seats is 20.6%
  • Aisles A,B: 8 of 58 seats is 13.8%
  • Aisles J,K 16 of 62 seats is 25.8%
  • Center aisles D,E,F,G: 14 of 97 seats is 14.4%
  • Starboard/Right side: 24 of 108 seats is 22.2%
  • Port/Left side: 14 of 104 seats is 13.5%

af447_hydro

Additional Pilot Forum Questions/Comments:

  • Where was the third vacant seat?
  • The Galley is from further back and not from the 2nd door area as we thought.
  • What I find interesting: “more in the section just rear of doors L3/R3… Which is where a split might occur in a nose up low forward velocity “pancake fall”… but then, maybe just a coincidence.”

AF447_Seating_Investigation1


AF447_Seating_Investigation

France24 Video Close-up of Identified Passengers/Seating


eurocockpitbanner-g

AF 447: The crew of Air France had long warned …

Eurocockpit (English Translation)

BEA has launched the press on a siding track conditions of the impact of the plane, we can now avoid to address the conditions that led to the impact of the aircraft. Thus, the consequences of losing control of the aircraft that are preferred to the cause of this loss of control. The management of Air France is beginning to suggest that the crew could not know how to use his radar. The BEA and Air France and converge slowly towards the fault of the crew would have embedded in the huge huge storm, which seems to fix all the world … While Pitot probes have always temporary ban (permanently) to be the cause of the accident … While this fact of the failure of the Pitot is proved (ACARS) and that its consequences are already known, seems to be undertaken to be absolutely rejected.

According to the BEA and Air France, Pitot failure would be “a cause” but “not the cause” of the main accident … What would be so then the “other causes” and “THE” original cause another? Nobody said … It is just obviously necessary that there be other causes, or that asserts without evidence that there are others, because if only the Pitot as the main origin of this accident the responsibilities may be overwhelming for many …

We understand much better what obsessive behavior – to exclude any cost Pitot – the crew of Air France had previously warned the company by reporting incident particularly detailed. Clearly, they were not taken into account as they should have been.

These incident reports are called ASR (Air Safety Report) and the regulations are sent to the airline but also on BEA and the Authority (DGCA, EASA). The ASR should enable those entities to identify potential risks that reveal the reported situations and take preventive measures to avoid these risks. In addition, the RAS should be used to prevent the occurrence of similar incidents or accidents which reported the incident could be a precursor …

In retrospect of the occurrence of the AF 447 and given the formal role of these reports of an incident, it is more qu’édifiant to read the ASR previously created and transmitted … obviously for nothing …

Therefore, measuring the willingness to declare that the cause of the accident, allegedly unknown, can not and will never be the failure of the Pitot tube. One thing is certain in this investigation long, complicated and clear: this is not what we do not whether this, or anything but out of pity, not Pitot!

“Chronicles of a reported accident” has tragically been the title of each ASR Eurocockpit which delivers a prime example.

This is a flight of Air France, Paris (CDG) to Antananarivo (TNR) xx/08/2008 on the Airbus A340, registration F-GNIH.

Thus it is forbidden to think, except at the risk of criminalizing Pitot …, the sequence of ACARS messages for this flight – and they reflect failures – is the same as the AF 447 … Also on the flight day, the duration of the incident is about 4 minutes …

The crew was faced with the alarm stall (STALL) – announcing that the flight was driving dangerously affected – but did not appear voluntarily CLB and the power base of 5 ° – Cabrera – provided by the “Actuation of emergency.” Instead of responding as well, the captain brought the aircraft down. Moreover, the crew was fortunate to recover quickly enough indication of correct speed … What may be missed in the middle of the night, with the AF 447.

R is “translated” into plain language or accompanied by comments as to its place when it can facilitate our understanding for lay readers. For a better understanding of the situation, we suggest to all our readers to extinguish the bright lights, putting himself in a night and read the ASR in less than 4 minutes …

IMPORTANT NOTE: it is “in the right circles” that there were actually 10 ASR (not 6) written on the subject. Everyone will understand the exceptional collection of work that the profession must do if we do not want the BEA “forgets” a little too quickly on these issues Pitot probes. It is the honor of the profession, the memory of our colleagues and that of their passengers. If you have written, or if you know a colleague who wrote a RAS on the subject, if you have access to such a document, please contact us. We guarantee the anonymity of our sources, never betrayed a guarantee for 10 years now. crew@eurocockpit.com.


PFDreconf

Symbol Number 1: Note “Director” does not disappear!

PFD Special characters (Restrictions) are replaced by Orange Crosses!


AIR SAFETY REPORT – 1/6

FGNIH AF908 CDG – TNR – STALL ALARM INFORMATION AND LOSS OF SPEED ON THE PFD

CBD PF in the left seat and OPL XXXXX PNF in the right seat, OPL XXXXX rest.

The captain sits on the left seat, he is the driver function (PF) on this trip, a co-pilot seat is right and responsible tasks of the pilot not in function (PNF), while a other rests.

At FL 370 with a SAT to -51 ° C and a wind from 080 to about 18 Kts on AWY UB612 with an OFFSET 1R, between the OBD and MLK in radio contact with Khartoum, as we were at the edge of cloud with some slight turbulence, I tied PAX. We were at dusk with low brightness.

The aircraft was 000 feet at 37, moved along a nautical mile on the right of the route followed, in accordance with existing regulations in this region to prevent the risk of collision with other aircraft using the same route in reverse . The term “limit layer” means that the flight took place just above a cloud layer.

Then we entered the layer, and soon after we started having a slight burning smell that lasted about twenty seconds and that did not appear to be of volcanic origin (no smell of rotten eggs), but rather electrical smell to me and smell the air conditioning for the OPL. Then the smell has disappeared. The odor was confirmed by the PAX booth and PNC between rows 3 and 14 thereafter.

The aircraft did not change altitude, entering the cloud layer due to the diffuse and irregular aspect thereof, parts of which are higher than others.

We had the weather radar in motion on calibrated without echoes still apparent in the layer and approximately one minute after the smell of burning, we had severe turbulence. I did the message “Here the cockpit sitting PNC Attached turbulence. I reduced the speed of Mach 0.80 (a little over green dot).

The weather radar was no storm. When the aircraft entered a zone turbulence, the captain made the announcement for the rest of the crew sit and focus, the passengers having been preventively the same record in lighting of the light signal. The captain then slightly reduced speed (Mach) of the aircraft to bring it below the maximum recommended speed in turbulence. The captain pointed out that this reduction in speed brought the aircraft to fly with a low margin of speed over the speed called “green dot” corresponding to the minimum speed to meet operating and calculated according to a report to stall speed “down”.

A few seconds after the indication of speed on the PFD passes abruptly OPL 280 Kts to 100 Kts in the red band and it lasted for many seconds. At the same time on the PFD variation CBD high speed with speed 15Kts green dot less speed and a trend at least 50 Kts.

The speed shown on the screen of the first moves suddenly and abruptly from 280 knots (518 km / h) at 100 knots (185 km / h) and remains at this value for many seconds. At the same time on the screen of the Commander, the speed begins to vary with a very high amplitude, reaching a value of less than 15 knots at the minimum speed “green dot”. The display of the speed trend “(indication of the trend calculations speed) is below 50 knots, which means that the speed will be lower than 50 knots within 10 seconds if the force of acceleration (which is ie a deceleration) remains constant.

At the same time (it was 15:10 GMT) Red Alarm A / P OFF and then in the wake alarm amber ADR Disagree, IAS DISCREPENCY, ALTN LAW LOST PROT, W REAC / S FAULT DET.

15h11 monitoring of the alarm RUD TRV LIM amber FAULT.

At the same time, at 15.10 UTC, the autopilot disconnects and multiple alarms appear on the central screen. Editor’s note: These alarms are also messages on ACARS flight AF 447 …

Followed immediately by the alarm STALL STALL STALL (without the associated alarm cricket) with TOGA LK. As I always speed trend within 50 Kts, I steered the plane manually, with a call for light downhill and turn right to exit the AWY. The aircraft responding very weakly with the CBD several regressions PFD speed in the lower red stripe. At the same time I asked the OPL to send a MAYDAY. During the descent noise impact (hail?) Heard in the cockpit.

The stall alarm “STALL” immediately sounds and a message appears indicating that the engine thrust is fixed to the value of maximum thrust (TOGA). The captain pilot in the aircraft manual and the aircraft is descending into account the loss of speed which, if true, would only stall. In this logic, it must be down to try and retrieve speed. It also urges a turn to leave the route and avoid the risk of collision with a device located in a lower flight level on the same road.

Descent to FL 340. The aircraft speed is correct again I disconnected the ATHR out of TOGA LK. The rate is similar side CBD and OPL, but down 2 on the PFD speed scale indication SPD LIM red remained until the end of the flight.

Descent to FL 340. The aircraft speed is correct again I disconnected the ATHR out of TOGA LK. The rate is similar side CBD and OPL, but down 2 on the PFD speed scale indication SPD LIM red remained until the end of the flight.

After being in the emergency management of the aircraft, the crew focuses on the “IAS DOUBTFUL. Then, the speed seemed again consistent Commander rehire mechanics.

At no time have we had ice detection alarm.

I woke up the second OPL was at rest, then we addressed the ECAM checklist.

Descent to FL 330 and then cancel the MAYDAY and continued flight at this level.

The aircraft fell in ALT LAW (MAX IAS 330Kts/M.82) I have a favorite beach area expanded flight and continued the flight at Mach 0.80.

The deterioration of the Steering Law (Alternate Law) and the resulting loss of protection caused by this event led the Commander to increase its speed margin in relation to stall high and low. He therefore decided to continue the flight at a lower altitude (33 000 feet instead of 37 000 feet at the time of the incident) and at a speed of Mach 0.80.

At the balance sheet:

ALT LAW aircraft confirmed by the status and crosses on the PFD amber;

  • REAC W/S DET FAULT;
  • ALT LAW PROT LOST;
  • ADR DISAGREE et F/CTL RUD TRV LIM FAULT (2 NOGO);
  • FOR LDG USE FLAP 3.

The messages of failure and the aircraft configuration match what the messages reveal ACARS flight AF 477

It is important to note that the indication on the circuit of the screen SD of RUDDER TRAVEL LIMITER was amber, but halfway between neutral and full deflection rudder. Contact with the CCP for what was the state of the cabin and PAX. Only the strong turbulence was felt by PAX. I called SAT COM maintenance to further research the issues and their subsequent recommendations we reset all the computers VOL PRIM and SEC without any result. (at that time we had the fuel for a return to NCE or FCO).

The crew finds that the excess deflection of the rudder is fixed at a value between neutral and full deflection. The loss of RUD TRV LIM (Editor’s note: also present in the messages of ACARS 447) led the blocking of excess travel. The Commander shall contact the Chief Cabine Principal to inquire about the situation in the cabin. The contact with the satellite communication services now resulted in the suggestion of an attempt to “reset” of computers to control flight (PRIM and SEC), which does not recover the operating system inoperative.

The crew finds that the excess deflection of the rudder is fixed at a value between neutral and full deflection. The loss of RUD TRV LIM (Editor’s note: also present in the messages of ACARS 447) led the blocking of excess travel. The Commander shall contact the Chief Cabine Principal to inquire about the situation in the cabin. The contact with the satellite communication services now resulted in the suggestion of an attempt to “reset” of computers to control flight (PRIM and SEC), which does not recover the operating system inoperative.  New call SAT COM QB who has not found any additional explanation on the difference in steering component, then the CCO to see them for the theft and troubleshooting of the aircraft, the return to Europe n ‘as much as possible with the remaining fuel, the problem then the decision to continue on TNR or divert to RUN. Decision to continue on TNR with a request for me to postpone the revival of colleagues who had to return the aircraft in view of CDG 05h00 minimum fault-finding to TNR.

The crew finds a contradiction between two checklists to be applied (Editor’s note: one more!), One seeking to land with the flaps in position 2 and the other with the flaps in position 3 (robberies involving different speeds and distances different landing …). Contacts with maintenance services (QB) do not provide an explanation. Editor’s note: The crew will have to “cope”. It provides a diversion to La Reunion (RUN) and decides to continue on Antananarivo.’’

We have continued the flight with the pitot heat on and on radar calibration MAX.

Is doubt as to the origin of the problem, but apparently in suspecting the Pitot …, the crew continued the flight with starting the manual heating Pitot probes, to overcome any possible malfunctioning of automatic heating and using the radar on the maximum sensitivity, to overcome a possible malfunction of the radar gain setting “calibrated”.

Is important to note that the indication on the circuit of the screen SD of RUDDER TRAVEL LIMITER was amber, but halfway between neutral and full deflection rudder. Contact with the CCP for what was the state of the cabin and PAX. Only the strong turbulence was felt by PAX. I called SAT COM maintenance to further research the issues and their subsequent recommendations we reset all the computers VOL PRIM and SEC without any result. (at that time we had the fuel for a return to NCE or FCO).

The crew finds that the excess deflection of the rudder is fixed at a value between neutral and full deflection. The loss of RUD TRV LIM (Editor’s note: also present in the messages of ACARS 447) led the blocking of excess travel. The Commander shall contact the Chief Cabine Principal to inquire about the situation in the cabin. The contact with the satellite communication services now resulted in the suggestion of an attempt to “reset” of computers to control flight (PRIM and SEC), which does not recover the operating system inoperative.

On the checklist developed for F / CTL ALTN LAW (PROT LOST) could be read to APPR PROC FOR USE LDG FLAP 3. (There is no indication in the QRH on the table of correction after failure) by the developed against the F / CTL RUD TRV LIM in APPR PROC FAULT FOR USE LDG FLAP 2, which is confirmed by the QRH in the table of correction fail. As it appeared that discrepancies between the QRH requesting arise part 2 and the status which requires us to ask strands 3 and it was therefore necessary to conduct further research and therefore the decision of a later call to QB. New call SAT COM QB who has not found any additional explanation on the difference in steering component, then the CCO to see them for the theft and troubleshooting of the aircraft, the return to Europe n ‘as much as possible with the remaining fuel, the problem then the decision to continue on TNR or divert to RUN. Decision to continue on TNR with a request for me to postpone the revival of colleagues who had to return the aircraft in view of CDG 05h00 minimum fault-finding to TNR.

The crew finds a contradiction between two checklists to be applied (Editor’s note: one more!), One seeking to land with the flaps in position 2 and the other with the flaps in position 3 (robberies involving different speeds and distances different landing …). Contacts with maintenance services (QB) do not provide an explanation. Editor’s note: The crew will have to “cope”. It provides a diversion to La Reunion (RUN) and decides to continue on Antananarivo.

We continued the flight with the pitot heat on and on radar calibration MAX.

In doubt as to the origin of the problem, but apparently in suspecting the Pitot …, the crew continued the flight with starting the manual heating Pitot probes, to overcome any possible malfunctioning of automatic heating and using the radar on the maximum sensitivity, to overcome a possible malfunction of the radar gain setting “calibrated”.

It should be noted that throughout the down ALT LAW, the aircraft was not responding to my request regression speed via the control of the FCU SPD (we were in the Open), and I therefore disengage the AP for reducing speed. Piloting the plane gave me the impression of an airplane flying very soft, which was not the feeling of flying during takeoff and climb. Because of the difference between the QRH and status, so I followed the status and we laid 3 strands.

During the final descent to Madagascar, the pilot of the aircraft had to be manually taken in light of the failure modes as a result of the degradation of the Act Steering Alternate Law. The captain reported a feeling of a lack of response from the aircraft to the stresses on the flight.

Looking ACMS we saw indications of Pitot 1 & 2, 2 and 3 & 1 & 3 to 15h10TU fault.

A post-flight, reading the ACMS system of the aircraft (Aircraft Condition Monitoring System = system that monitors and records the malfunction of the plane), reveals the primary failure, one that has triggered first at 15.10 UTC PITOT 1 & 2, 2 & 3, 1 & 3 FAULT. Editor’s note: this is the primary message was transmitted ACARS flight AF447 …

In post flight report

  • 15h07 : BMC 3
  • 15h10 : AUTO FLIGHT AP OFF REAC W/S DET FAULT
  • IAS DISCREPENCY
  • NAV ADR DISAGREE
  • 15H11 : F/CTL RUD TRV LIM FAULT

Editor’s note: the message PFR (Post Flight Report) reports the same messages of alarms that were sent successively by ACARS flight AF447 in CFR (Current Flight Report).

I did the tour of the aircraft with one of the OPL and both the radome pitot that appeared intact. Only the side impact sensor OPL was heavily tilted nearly vertical. There was no evidence of impact or scratches on the paint of the radome and on the windshields. I did, after meeting all the crew (TFN / PNC) a debriefing to explain what we had lived and reassure everyone and answer questions.

In matters of the DM

Flight to FL 370 not experienced wind shear (wind 080/18Kts) wind was stable for more than a half hour in strength and direction. Flight at mach 0.80 as slight turbulence (PAX Attached) No audible presence of hail in the early incidents (but we have heard during the descent of noise impacts to the cockpit (hail ???). SAT Temperature -51 ° C (we have never had ice detection alarm). No thunderstorms phenomenon (no weather radar was not calibrated and a flash of lightning visible). Top of strong turbulence to 15h09 followed alarms cited above and 15h11 to 15h10 GMT the speedometer OPL later rose from 280 to 100 Kts Kts in the red band and remained in as many seconds.

CBD side the speed is increased from green dot – 15 Kts with a speed trend to -50 Kts. STALL alarm (no alarm cricket) series with several incursions of speed shown in the lower red stripe. Stabilization aircraft at FL340 and continued flight to FL 330. Duration estimated 3 to 5 minutes.

Duration estimated 3 to 5 minutes.

Commander summarizes the conditions under which the incident that he is analyzed retrospectively by the Company – including maintenance services – for the Authority (DGAC / EASA) and the BEA . The ASR, like RAS, was used as feedback to generate a study of risks and prevent the occurrence of a new incident of same type, even a possible accident for which the incident could be harbinger …

Unfortunately, it did not happen …

published on 2009-07-19 17:59 by EuroCockpit.


LOGO AFVV447-2

Family Website Portuguese (Under Construction) Informações no e-mail.: Info@afvv447.org


Updated Close-up pics (Landing Gear France3 — Hydraulics France24)

END

Symbol Number 1: Note “Director” does not disappear!

PFD Special characters (Restrictions) are replaced by Orange Crosses!

Andrea Tantaros — Telegraph — Business Group Letter — Politico — CBO Letter


730px-Napoleon's_exile_to_Elba3


It has been a really bad week for the President.  He has just about pissed off the entire country except for the people that would vote for him even if he was born on Mars.  Was Jim DeMint right about this being the President’s Waterloo?

I’m beginning to really believe the President has surrounded himself with idiots.  After six months in office, his administration is starting to look like the “Bad News Bears”.  Is this the beginning of the “Seventh Coalition” against OBamaCare? The Liberals are so mad they can’t even spell.  The liberals will also soon learn about “Tea Parties“.

Last week, in a conference call with something called the “Natiional Tea Party Patriots,” Sen. Jim DeMint told the patriots that if they could defeat health care reform, it would “break” Pres. Obama and be his “Waterloo.” Liberty Street Blog


800px-Wellington_at_Waterloo_Hillingford


andrea_T_imgandrea_t_header_text

Obama’s Healthcare Fiasco Making Him Sick

…Say what you want about George Bush, the guy got things done in his first term and lead. From education reform to Medicare Part D to his tax cuts, Bush signed his agenda into law despite congressional gridlock. Agree or disagree, that’s not a weak Commander-in-Chief.

Obama is just the opposite.

The President has showcased an appalling lack of leadership. He has sent no bill to the Hill. He takes no specific positions on the five bills in the House and Senate. All he has done thus far is give flowery calls to action. Either he thinks he is still a Senator or he is Chauncey Gardner.

What the President lacks in leadership he makes up for in arrogance. For the President to think that he can bully Congress and the American people into rolling over in a mere matter of weeks as he seeks to completely overhaul 20 percent of our entire economy is most disgustingly presumptuous. It is this arrogance that is preventing him from recognizing the potential fallout with Americans as portrayed thru moderate Democrats. He is bowing to the far left, and this will cost him. If he passes universal healthcare he will alienate moderate America and eventually suffer because of what it will ensue. It he doesn’t pass it, he’ll appear a failure, specifically with him base…


dailytelegraph_logo

Barack Obama’s oratory loses its oomph

The President’s eloquent yet vague rhetoric is not enough to drive through difficult health care reform – and there is a lesson here for David Cameron, says Janet Daley.

America is discovering the truth about universal health care: it isn’t cheap. And Barack Obama is discovering the truth about the power of oratory: it can only get you so far. There is a lesson here for us all.

Opposition to the president’s health care reform is gathering a startling head of steam that threatens to engulf his presidency in early onset disillusionment. Health care is now being described as a potential “Waterloo” for the administration, and Mr Obama’s personal poll ratings are dropping in tandem with the declining popularity of his health care policy.

The momentum of this resistance is not a simple partisan matter, although to hear Mr Obama tell it at town hall meetings, you would think that his proposal was being sabotaged purely by Republican wreckers. In fact, the most trenchant and indefatigable critics are within his own party: the “Blue Dog” Democrats who come from states where working people resent increased taxes and federal interference as much as they fear being caught without health insurance.

What the Democratic congressmen have been demanding more and more vociferously is “clarity” about how the public (state-funded) option of Obama health care is to be paid for: which is to say, who is going to do the paying.

Thus far, Mr Obama’s response has been judged rather unsatisfactory: the approach he has taken is the one that worked so well for him during the presidential campaign. He makes yet another eloquent speech that is long on general principle and short on concrete detail. He gives another prime-time press conference – he has held four of these in the six months he has been in the White House, which is as many as George W Bush held in eight years – in which his answers are emotionally engaging, articulate and vague…


thehillblog_logo_top

Business groups blast healthcare reform

By Eric Zimmermann

A coalition of business groups released a letter today panning the healthcare reform legislation pending in Congress.

The letter, addressed to members of Congress, was signed by seemingly hundreds of business groups across the country, including the U.S. Chamber of Commerce. (The letter is one page; the list of signatories is 35 pages long.)

“Collectively, we are dedicated to improving our nation’s health care system, especially in terms of lowering health care costs, improving the quality of care, and making sure every American has access to affordable coverage,” the letter says. “However, we believe that the legislation currently being considered would not improve the system, but jeopardize the parts of the system that currently work.”

Specifically, the business groups cited the employer mandate as a cause for concern.

“This ‘pay or play’ mandate is especially bad because employers are also required to pay the majority of employee premiums,” the letter reads. “Even with some exemptions, this provision will kill many jobs.”

Read the whole letter here. (pdf)

National Organizations

American Bakers Association
American Benefits Council
American Farm Bureau Federation
American Hotel & Lodging Association
American Petroleum Institute
American Rental Association
American Trucking Associations, Inc.
Associated Builders and Contractors, Inc.
Associated General Contractors
Associated Wire Rope Fabricators
Business Roundtable
Corporate Health Care Coalition
Direct Marketing Association
ERISA Industry Committee
HR Policy Association
Independent Electrical Contractors
Industrial Minerals Association- North America
International Dairy Foods Association (IDFA)
International Foodservice Distributors Association
International Franchise Association
Motor & Equipment Manufacturers Association
National Association for Surface Finishing
National Association of Convenience Stores
National Association of Health Underwriters
National Association of Home Builders
National Association of Manufacturers
National Association of Wholesaler-Distributors
National Coalition on Benefits
National Council of Textile Organizations (NCTO)
National Federation of Independent Business
National Franchisee Association
National Grain and Feed Association
National Retail Federation
National Roofing Contractors Association
National Stone and Gravel Association
Printing Industries of America
Retail Industry Leaders Association
Society for Human Resource Management
U.S. Chamber of Commerce


POLITICO_logo

CBO deals new blow to health plan

By CHRIS FRATES

For the second time this month, congressional budget analysts have dealt a blow to the Democrat’s health reform efforts, this time by saying a plan touted by the White House as crucial to paying for the bill would actually save almost no money over 10 years.

A key House chairman and moderate House Democrats on Tuesday agreed to a White House-backed proposal that would give an outside panel the power to make cuts to government-financed health care programs. White House budget director Peter Orszag declared the plan “probably the most important piece that can be added” to the House’s health care reform legislation.

But on Saturday, the Congressional Budget Office said the proposal to give an independent panel the power to keep Medicare spending in check would only save about $2 billion over 10 years- a drop in the bucket compared to the bill’s $1 trillion price tag.

“In CBO’s judgment, the probability is high that no savings would be realized … but there is also a chance that substantial savings might be realized. Looking beyond the 10-year budget window, CBO expects that this proposal would generate larger but still modest savings on the same probabilistic basis,” CBO Director Douglas Elmendorf wrote in a letter to House Majority Leader Steny Hoyer on Saturday.

The proposal’s meager savings are a blow to Democrats working furiously to bring down costs in order to win support from their party’s fiscally conservative Blue Dogs, who have threatened to vote against the bill without significant changes. The proposal was heralded as a breakthrough on Tuesday after Blue Dogs and House Energy and Commerce Chairman Henry Waxman emerged from the White House with agreement on giving the independent panel, rather than Congress, the ability to rein in Medicare spending.

Saturday’s CBO analysis caps a tough week of blown deadlines, partisan bickering and fierce intra-party fighting among Democrats. On Friday, the tension between the Blue Dogs and Waxman exploded when Waxman threatened to bypass his committee and bring the reform bill straight to the House floor without a vote. The move infuriated Blue Dogs who have used their crucial committee votes to leverage changes to the bill.

But by late Friday, Waxman said their colleagues had pulled the two groups “back from the brink” and back to the negotiating table.

Still, Hoyer said there was little chance that that the House would pass a health reform legislation before Friday when lawmakers are expected to leave Washington for summer recess.

Prussian_Attack_Plancenoit_by_Adolf_Northern


cbo_logo

CONGRESSIONAL BUDGET OFFICE                                                                                                         Douglas W. Elmendorf, Director
U.S. Congress
Washington, DC 20515

July 25, 2009

Honorable Steny H. Hoyer
Majority Leader
U.S. House of Representatives
Washington, DC 20515

Dear Mr. Leader:

As you requested, the Congressional Budget Office (CBO) has analyzed some possible approaches for giving the President broad authority to make changes in the Medicare program. Under those approaches, any changes the President decided to implement would be based on recommendations from an advisory council and subject to Congressional disapproval.

Expanding the authority of the President to effect change in the Medicare program might lead to significant long-term savings in federal spending on health care. The available evidence implies that a substantial share of spending on health care contributes little, if anything, to the overall health of the nation. Therefore, experts generally agree that changes in government policy have the potential to significantly reduce health care spending—for the nation as a whole and for the federal government in particular—without harming people’s health. However, achieving large reductions in projected spending would require fundamental changes in the financing and delivery of health care.

Considerable consensus exists among experts about the types of changes that are likely to make the health sector more efficient: moving away from a fee-for service system toward one that pays providers for value, perhaps through fixed payments per patient, bonuses based on performance, or penalties for substandard care; providing stronger incentives for both providers and patients to control costs, through higher cost-sharing requirements or tighter management of benefits; and facilitating good decisionmaking on the part of providers and patients by equipping them with more information about the effectiveness of different treatments and the quality of care delivered by different providers. Those changes in the flow of money and information would spur and facilitate other changes in the organization and delivery of health care.

To ensure that current legislation puts the federal budget on a more sustainable path will probably require creating a framework for federal health care spending that imposes ongoing pressure to increase efficiency over time—particularly, but not exclusively, in the case of providers. Such pressure could be imposed in several ways, including reducing Medicare’s payment updates automatically to take into account expected productivity gains; reducing Medicare payments in areas of the country with higher spending; giving an official in the executive branch broad discretion to change Medicare to produce savings (especially if there was also an across-the-board reduction in payments to providers if savings are not achieved in other ways); and limiting the growth of Medicare’s implicit subsidy of premiums. (CBO discussed a number of such approaches in a June 16 letter to Senators Conrad and Gregg.)

This letter focuses on proposals to give the President broad authority to make changes in the Medicare program, subject to Congressional disapproval. Such proposals could enhance the prospects for additional long-term cost control, but they would also entail shifting some power from the Congress to the executive branch.

Ewart_WaterlooIn particular, CBO reviewed draft legislation transmitted to the Congress by the Administration on July 17, 2009, titled the Independent Medicare Advisory Council Act of 2009. CBO estimates that enacting the proposal, as drafted, would yield savings of $2 billion over the 2010–2019 period (with all of the savings realized in fiscal years 2016 through 2019) if the proposal was added to H.R. 3200, the America’s Affordable Health Choices Act of 2009, as introduced in the House of Representatives. This estimate represents the expected value of the 10-year savings from the proposal: In CBO’s judgment, the probability is high that no savings would be realized, for reasons discussed below, but there is also a chance that substantial savings might be realized. Looking beyond the 10-year budget window, CBO expects that this proposal would generate larger but still modest savings on the same probabilistic basis.

This letter describes the considerations that underlie CBO’s estimate and identifies ways in which such proposals could be structured to garner significantly more savings—especially in the years beyond 2019. In particular, if legislation were to provide an independent advisory council with broad authority, establish ambitious but feasible savings targets, and create a clear fall-back mechanism for instituting across-the-board reductions in net Medicare outlays, CBO believes such a council would identify steps that could eventually achieve annual savings equivalent to several percent of total spending on Medicare. Achieving such savings, in addition to those estimated to result from the provisions in H.R. 3200 that govern Medicare’s payment rates, would probably require significant changes in the program’s coverage, benefit design, and payment and delivery systems—and a council with the clear mandate, independence, and resources to propose such changes.

The Proposed Independent Medicare Advisory Council

The Administration’s proposal calls for an Independent Medicare Advisory Council (IMAC) consisting of five members who are either physicians or have specialized expertise in medicine or health care policy. Those individuals would be appointed by the President and subject to confirmation by the Senate.

Beginning with fiscal year 2015, IMAC would be charged with making annual recommendations to the President for changing federal payments for various services covered by Medicare. Under the Administration’s proposal, each annual package of recommendations would have to be designed so that implementation would not be expected to increase aggregate Medicare spending over the subsequent 10-year period, as compared with expected spending in the absence of those proposed changes. Determination of the effect of the council’s recommendations on net Medicare spending would be made by the Chief Actuary of the Centers for Medicare & Medicaid Services (CMS). In addition, the council could make recommendations for reform of the Medicare delivery system (but those recommendations would not have to be provided annually).

The President would have to approve or disapprove the council’s recommendations as a package. If the President approved a set of recommendations, implementation would commence no sooner than 30 days after that approval unless the Congress enacted a joint resolution to disapprove the package of recommendations. (It would generally take far longer than 30 days to fully implement the council’s recommendations.) Under the proposed legislation, the first potential reductions in spending would not go into effect until fiscal year 2016.

Estimated Savings

Sunken-road-at-waterlooThe estimated savings of $2 billion over the 2016–2019 period reflect CBO’s assessment of the likely scope of the proposals that the council would make and the probability that its recommendations would be implemented by the President. (The possibility that the Congress might enact future legislation to disapprove those recommendations is not relevant to CBO’s estimate of the savings that would arise from enacting the IMAC proposal into law; instead, the impact of legislation disapproving the recommendations would be reflected in CBO’s cost estimate for that subsequent legislation. See the section “Budgetary Treatment” below.) Under H.R. 3200, as introduced, payment rates for nearly all Medicare services would grow more slowly than anticipated inflation. Thus, CBO considers it unlikely that IMAC would recommend substantial additional savings (relative to savings already expected under H.R. 3200) through further reductions in Medicare payment rates. In addition, several specific features of the legislation in its current form would reduce the likelihood that the council would recommend reductions in payment rates or reforms in the delivery system for Medicare services that would yield much greater budgetary savings:

• The proposed legislation states that IMAC’s recommendations cannot generate increased Medicare expenditures, but it does not explicitly direct the council to reduce such expenditures nor does it establish any target for such reductions.

• As proposed, the composition of the council could be weighted toward medical providers who might not be inclined to recommend cuts in payments to providers or significant changes to the delivery system.

• Some types of fundamental program changes would probably require study and experimentation before they could be implemented, and it is not clear what resources the council would have to develop recommendations involving such changes. Under the proposal, IMAC might have limited access to the resources of CMS and its Office of the Actuary for directing the study of reform ideas that could offer some promise of significant budgetary savings.

• Significant changes in the way payments to providers are made and in the incentives facing beneficiaries would probably be necessary to obtain substantial savings. Outside influence on the council and the President, however, might make it politically difficult to recommend and implement reforms that could be viewed as undesirable by interested parties. Medical providers, beneficiaries, and Members of Congress would probably exert considerable pressure on both IMAC and the President to balance recommendations for savings against beneficiaries’ concerns about the costs and availability of medical services and the interests of those receiving Medicare payments for delivering services.

• Finally, the first year of potential savings under the proposal is 2016. The five-year start-up period (and one-year lag in implementation) called for by the draft legislation would give the council some time to study reform proposals. However, concrete new evidence upon which to base some kinds of large-scale reforms might not be available for some time thereafter.

Waterloo-French_cavalryAs noted earlier, the estimated savings of $2 billion over the latter half of the 2010–2019 period represent a probabilistic assessment of a range of possible outcomes. On the one hand, savings might not be realized at all because the proposal specifies a process without specific goals for savings or a “fall-back” plan for ensuring spending reductions if the combination of annual IMAC recommendations and Presidential approval does not produce hoped-for savings. (A fall-back plan might, for example, specify certain automatic reductions in payment rates and increases in beneficiaries’ premiums or copayments if the process did not otherwise produce a certain amount of projected savings.) On the other hand, there is a small chance, in CBO’s judgment, that the council would propose and the President would approve significant changes to Medicare that would reap substantial savings.

Expected savings from the IMAC proposal would grow after 2019, but many of the above points would still apply, reducing the likelihood of attaining large annual savings. The considerable uncertainty about the amount of savings that might occur within the first 10-year projection period would compound in future decades. Although it is possible that savings would grow significantly after 2019, CBO concludes that the probability of this outcome is low for the proposal as drafted, particularly because there is no fall-back mechanism to ensure some minimum level of spending cuts beyond those already included in H.R. 3200.

Budgetary Treatment

Under this proposal, once the President had approved a set of recommendations, CBO would assume that, in the absence of Congressional action, the Administration would implement those recommendations. Upon that approval, CBO would modify the baseline used for scoring legislation to reflect that assumption. Consequently, for Congressional scorekeeping purposes, a resolution to disapprove those recommendations would be charged with the cost of canceling any expected Medicare savings from a set of IMAC recommendations that had been approved by the President.

French_cuirassiers_vs_Nassauers

Options for Generating Greater Savings

You requested that CBO identify ways in which the IMAC proposal or other similar proposals might be structured to garner significantly more savings. Features that would maximize the likelihood that a new council would recommend changes that would achieve greater reductions in spending for Medicare (and possibly other federal health care programs) include the following:

• Setting explicit and feasible quantitative goals for reducing outlays in the Medicare program.

• Providing clear authority for the council to recommend broad changes in coverage, benefit design, and payment and delivery systems.

• Incorporating an explicit fall-back mechanism (such as an across-the board reduction in payments) if goals for cost reduction are not met.

• Requiring independent verification of the expected reduction in program spending from implementing the recommendations.

• Expanding the direction and authority of the council to include making recommendations for changes to Medicaid and other government health care programs, with specific goals set for each program.

• Expanding the council’s mandate to include making recommendations for changes to the broader health care system. (Some such changes might be implemented through federal regulation, while others might require future legislation.)

• Ensuring that the composition of the council is heavily weighted toward medical and other health policy experts who will actively seek to improve the efficiency of the health care system.

• Ensuring the council’s access to the resources necessary to develop and test ideas for cost reduction. These resources would include access to appropriate program data, the ability to tap technical expertise available through the Department of Health and Human Services (HHS), and explicit authority to coordinate such work with the Secretary of HHS.

• Providing mandatory funding to enhance the independence of the council.

An IMAC-type proposal that incorporated some or all of the features outlined above would generate larger expected savings over the next 10 years than the $2 billion estimate for the proposal as initially drafted. However, the short time frame for action would still limit the likely savings.

Dernier_carre_de_la_Garde_-_gen_Hill

Looking beyond 2019, a much stronger IMAC-type proposal could reap considerably more savings, depending on which specific features identified above were included and how those features were crafted in legislation. In particular, if the legislation were to provide IMAC with broad authority, establish ambitious but feasible savings targets, and create a clear fall-back mechanism for instituting across-the-board reductions in net Medicare outlays, CBO believes the council would identify steps that could eventually achieve annual savings equal to several percent of Medicare spending. In the absence of a fall-back mechanism, CBO expects that the probability that the President would approve recommended changes that would lead to such significant savings would be lower.

Several percent of annual Medicare spending would amount to tens of billions of dollars per year after 2019. By that point, H.R. 3200, as introduced, would already be on track to achieve tens of billions of dollars in Medicare savings each year, primarily as a result of provisions that would reduce payments to Medicare providers relative to those projected in the current-law baseline. (Total federal resources devoted to health care programs would increase under the introduced version of that bill, however, because of the provisions aimed at making health insurance available to more people.) Substantial additional savings from an IMAC-type proposal would probably require significant changes in coverage, benefit design, and payment and delivery systems aimed at reducing the quantity and intensity of services provided. Some of the savings that could be expected from such changes are probably already captured in CBO’s assessment of the long-term savings that would result from provisions of H.R. 3200, but it is difficult to assess the extent of that overlap.

I hope this information is helpful to you. If you have further questions about CBO’s analysis, we would be happy to address them. The CBO staff contacts are Holly Harvey and Tom Bradley.

Sincerely,

Douglas W. Elmendorf
Director

cc: Honorable John Boehner
Minority Leader

Honorable Charles B. Rangel
Chairman
House Committee on Ways and Means

Honorable Dave Camp
Ranking Member
House Committee on Ways and Means

Honorable Henry A. Waxman
Chairman
House Committee on Energy and Commerce

Honorable Joe Barton
Ranking Member
House Committee on Energy and Commerce

Honorable George Miller
Chairman
House Committee on Education and Labor

Honorable John Kline
Ranking Member
House Committee on Education and Labor

Honorable Edward M. Kennedy
Chairman
Senate Committee on Health, Education, Labor, and Pensions

Honorable Michael B. Enzi
Ranking Member
Senate Committee on Health, Education, Labor, and Pensions

Honorable Max Baucus
Chairman
Senate Committee on Finance

Honorable Charles E. Grassley
Ranking Member
Senate Committee on Finance


hotair_getyourfill_large

by Pundette

The Washington Post featured this in today’s paper as one of the better cartoons of the week:

JIM DEMINT

DeMint portrayed as assassin in political cartoon

Is it okay to portray Sen. Jim DeMint (or anyone else) as a sniper? And what, or whom, is he aiming at?

Supposedly the target is “healthcare,” but the cartoon obviously refers to DeMint’s remark about breaking Obama. It’s not much of a jump to believe that the cartoonist intends us to imagine that DeMint’s target is Obama.

Maybe I’m being touchy. It’s just a cartoon and it’s supposed to be edgy. But most Americans are quite sensitive to suggestions of presidential (or other) assassination, and particularly so when it involves a sniper taking aim from a tall building.

The Post showed terrible judgment when they chose to run this.

*Here’s a link to a photo of the tenements mentioned by commenters below, courtesy of a commenter at RedState.


Related Previous Posts:

Mr. President: Get Health Care Reform Right

Obamacare: Either It Is The Red Pill Or The Blue Pill?

Projected US Public/Private Medical Expenditures

AARP: A Big “Donut Hole” With Acorn Sprinkles?

Related Links:

CNN MONEY:  White House hits watchdog on Medicare plan

PJTV:  ObamaCare Yay Or Nay? The Truth About Canada! ***MUST SEE***

Rush Limbaugh: ‘The Press Has Met Their Waterloo and It’s Obama’

Christian Science Monitor: How Jim DeMint did Obama a favor

American Thinker: Useless Eaters

Hot Air (Ed): Joltin’ Joe whiffs on his own curveball & The OMB-CBO throwdown

SF Gate:  Obama shoots from the lip, misses in Gates flap

Freedom’s Lighthouse:  Health Care Advocate Says Senior Citizens to be Biggest Losers in ObamaCare – Video

Dick Morris And Eileen McGann: ELDERLY LEAD OPPOSITION ON OBAMA HEALTHCARE & ELDERLY SWING AGAINST OBAMA PLAN

Washington Post (David Broder):  Our New Medical Judges?


Updates:  Added New Links

END

Forbes — Wash Post — Video: Best Ford Commercial Ever — Motley Fool — 2009 SEC Fillings


ford_not_owned_by_america

Northside Ford - San Antonio, Texas


forbes_logo

Ford Trims Its Losses And Beats Expectations

Joann Muller

More important, the carmaker slowed the rate at which it has been burning cash.

DETROIT — Ford Motor narrowed its operating losses in the second quarter, as it reaped the benefits of cost savings and market share gains at the expense of its domestic rivals.

The Dearborn, Mich.-based automaker beat analysts’ estimates with a loss, excluding one-time items, of $638 million, or 21 cents a share. The consensus had been for a loss of 53 cents per share, according to Reuters Estimates, compared with a loss of 62 cents a year earlier.

Net income was $2.26 billion, or 69 cents a share, on accounting gains related to reducing debt, Ford said Thursday in a statement.

More important, Ford slowed the rate at which it has been burning cash to $1 billion from $3.7 billion in the first three months of the year. It ended the quarter with cash from automotive operations of $21 billion. Revenue fell to $27.2 billion from $38.2 billion.

Ford has done a good job of keeping its eyes on the road during a particularly difficult stretch, even as its domestic rivals veered off into bankruptcy.

In the second quarter, Ford picked up two points of market share, even as it cut the average incentive on its vehicles by about $1,100. It has managed to keep inventories low, too, so while General Motors (GMGMQ.PK news people) and Chrysler were forced to shut down their factories for long stretches in early summer, Ford recently said it is upping production for the first time in two years.

Some analysts are more bullish. Credit Suisse analyst Christopher Ceraso wrote in a note to clients that Ford could post a modest profit in 2010, a year ahead of company guidance. Michael Ward of Soleil Securities says Ford’s North American auto operations could post a pretax profit of $1 billion next year, based on the benefit of cost reductions, improved industry sales, new products and market share gains. Ford’s chief executive, Alan Mulally, is still calling for a return to profitability in 2011.

Ford’s pace of new product introductions is strong and could drive further market share gains at the expense of GM and Chrysler, according to Bank of America/Merrill Lynch, which published its annual “Car Wars” study this week. Among the new models Ford will be rolling out are a new Taurus flagship and two new fuel-efficient small cars designed in Europe, the Fiesta and a revamped Focus…

ford_escape


iwp1_mages

Ford Pushes Into the Black, Snapping Losing Streak

Bolstered by Cost Cuts, Automaker Moves In on Rivals

Washington Post Staff Writer

By Kendra Marr – Friday, July 24, 2009

Ford Motor on Thursday posted a surprise profit of $2.26 billion for the second quarter, ending a streak of four straight quarterly losses.

In recent months, the carmaker has claimed market share from its American rivals, General Motors and Chrysler, while those companies struggled to restructure their operations in bankruptcy court.

Ford executives now say the automaker is on track to return to annual profitability in 2011.

“Despite the challenges, Ford’s underlying business is getting progressively stronger as we launch great new products the customers want and value, while continuing to aggressively restructure our operations,” Ford chief executive Alan R. Mulally said in a conference call with analysts.

Ford’s gains were aided by rapid cost cutting in the second quarter. Ford reduced its debt obligations by $10.1 billion, which will save the company more than $500 million a year in interest expense. It raised $1.6 billion by issuing common stock. The company said it also cut “structural” costs by $1.8 billion, in part by eliminating 1,000 U.S. hourly jobs through buyouts.

“They’re leaner and meaner than they have been in past,” said George Peterson, president of research firm AutoPacific.

Ford said it is likely to make additional moves to raise cash and reduce debt. It is still looking for a buyer for its Swedish unit Volvo, which lost $231 million in the quarter.

Excluding special items, such as debt reduction, Ford would have lost $424 million in the second quarter. In comparison, the company lost $8.7 billion in the second quarter of 2008, the worst performance year in Ford’s history.

Ford last pulled itself out of the red in the first quarter of 2008, earning $100 million.

Ford shares jumped 9.4 percent Thursday, to close at $6.98.

Under Mulally, Ford appears to be building better cars and trucks, analysts said. The Ford Fiesta, which launches in the United States next year, is now Europe’s second-best-selling car.

“These are not cars built to the lowest common denominator anymore,” Peterson said.

Ford is also shifting its lineup toward smaller, more fuel-efficient vehicles. But some analysts warn that the automaker could face a challenge selling those new models if gas prices do not climb this summer.

“Clearly the road ahead remains challenging,” Mulally told analysts. “While we still expect the economy to begin to improve in the second half of the year, the recovery is likely to be more modest than many of us had hoped.”

ford_mustang



fool_logoTHE MOTLEY FOOL

Is Ford’s Profit for Real?

By John Rosevear – July 23, 2009

Ford (NYSE: F) — yes, that Ford — posted a profit of $2.3 billion for the quarter. That’s $0.69 a share, compared with a loss of $3.89 a share for the same period last year.

Think about that for a second.

If you’ve followed the tribulations of the American automakers over the last year — and unless you’ve been in a Zen monastery, the news has been hard to miss — the idea that one of the Once-Big Three turned a profit is hard to believe.

Should we believe it?

Well, no, not quite
To be fair, Ford’s press release is completely up-front about the fact that that $2.3 billion includes “special items” worth a net total of $2.8 billion. Without these special items — most of which are simply fancy ways of saying that Ford swapped some of its debt for equity and cash and made some one-time cuts — Ford lost $0.21 a share.

That’s not great in absolute terms, but it’s not bad — analysts were expecting a $0.50 per-share loss, and it’s way better than last year’s numbers. Ford has cut costs, gained market share with some great products, and has an impressive pipeline, and management is still predicting a return to (genuine) profitability by 2011.

So it’s a buy, then?
I’m skeptical. The company is a long way from being out of the woods. I think anyone considering an investment in Ford right now, much as I like it as a long-term recovery story, has to ponder a few points:

  • Supplier drama. Any interruptions in Ford’s parts supplies would stop its affected factory lines within hours, and many leading suppliers are in deep trouble. Seatmaker Lear and Ford spinoff Visteon are already in bankruptcy. Tier 1 giants Johnson Controls and Magna (NYSE: MGA) are so far faring better, but there’s drama brewing there as well.
  • Dilution. They’ve got to keep servicing all that debt, and — following the lead of companies from Dow Chemical (NYSE: DOW) to DryShips (Nasdaq: DRYS) — a stock offering may be on the way.
  • The competition. Nissan (Nasdaq: NSANY), Toyota (NYSE: TM), and Honda (NYSE: HMC) are all in better financial shape than Ford, and after their warp-speed trips through bankruptcy court, General Motors and Chrysler arguably are as well.


ford+stock


fool_logoTHE MOTLEY FOOL

3 Reasons to Buy Ford Today

By Dave Mock – July 13, 2009

Historically, tumultuous times offer some of the best opportunities to buy stocks, and the market’s current mess surely qualifies. Few industries — save for possibly the financial sector — have been gored as deeply as the automotive sector, but despite the dismal sales and bankruptcies at Chrysler and GM, some investors see many reasons to consider buying shares of automaker Ford (NYSE: F) today.

In our Motley Fool CAPS community, 7,335 investors have given a bullish or bearish opinion on Ford. Poring through the detailed information packed in pitches and other comments, I’ve dug up three of the top reasons why many members consider the stock a buy today:

1. Gaining market share: Since General Motors and Chrysler have been grinding their way through bankruptcy proceedings, Ford has seen its market share grow, and is even seeing big sales increases in China and Canada. Although auto sales continued to fall in June, Ford had its smallest monthly decline since July of last year and outsold Toyota (NYSE: TM) for the fourth straight month.

2. Boosting production: Ford recently reported tighter inventories, down 38% from a year ago. It plans to increase its third-quarter production after seeing more demand in June, a move companies like Alcoa (NYSE: AA) and AK Steel (NYSE: AKS) like to hear, and is floating the notion that the worst is behind it and that the industry could see modest improvement in the second half of this year.

3. Innovative lineup: The Fusion has recently been making big gains in the car market against rivals Toyota Camry and Honda (NYSE: HMC) Accord, validating Ford’s strategy to shift a larger percentage of sales from SUVs to cars. It plans to invest about $1.5 billion in new small-car facilities in emerging markets like China and India, where Tata Motors (NYSE: TTM) has seen continuing sales increases, and it plans to expand on its already successful Microsoft (Nasdaq: MSFT) Sync technology by launching it in Europe and around the world.

Of course, there’s a lot more devil in the details of these buy-side opinions, which is why CAPS is such a great resource to check and balance your own analysis. You can read the bullish and bearish sides to every stock. To see what the very best CAPS members are saying now about Ford, just click on over to Motley Fool CAPS and have a look.

More Foolishness:


3448052166_0be6ed3437


FORD CREDIT EARNS $413 MILLION IN THE SECOND QUARTER OF 2009*

Download Full 2Q Financial Release (PDF)

DEARBORN, Mich., July 23, 2009 – Ford Motor Credit Company reported net income of $413 million in the second quarter of 2009, an improvement of $1.8 billion from a net loss of $1.4 billion a year earlier.  On a pre-tax basis, Ford Credit earned $646 million in the second quarter, compared with a loss of $2.4 billion in the previous year.  Excluding the $2.1 billion impairment charge for operating leases in the second quarter of 2008, Ford Credit incurred a pre-tax loss of $294 million in the previous year.  On a pre-tax basis, Ford Credit earned $610 million in the first half of 2009.

The improvement in pre-tax earnings primarily reflected non-recurrence of the second quarter 2008 impairment charge to the North America operating lease portfolio, lower depreciation expense for leased vehicles due to higher auction values, net gains related to unhedged currency exposure from cross-border intercompany lending, a lower provision for credit losses, and lower operating costs.  These factors were offset partially by lower volume and non-recurrence of a gain related to the sale of approximately half of our ownership interest in our Nordic operations.

“We are pleased with our second quarter results as market conditions remain challenging around the world,” Chairman and CEO Mike Bannister said.  “With our solid business fundamentals and our focus on prudent lending, sound risk management and high-quality servicing, we continue to provide valuable support to Ford Motor Company, its dealers and its customers.”

On June 30, 2009, Ford Credit’s on-balance sheet net receivables totaled $99 billion, compared with $116 billion at year-end 2008.  Managed receivables were $100 billion on June 30, 2009, down from $118 billion on December 31, 2008.  The lower receivables primarily reflected lower North America and Europe receivables, mainly due to lower industry volumes, lower dealer stocks, and the transition of Jaguar, Land Rover and Mazda financing to other finance providers.

On June 30, 2009, managed leverage was 8.4 to 1.  During the second quarter of 2009, Ford Credit completed the cash tender offer, commenced in the first quarter of 2009, pursuant to which it purchased $3.4 billion principal amount of Ford Motor Company’s unsecured, nonconvertible debt securities for an aggregate cost of $1.1 billion including transaction costs.  Ford Credit transferred these debt securities to Ford Motor Company in satisfaction of $1.1 billion of tax liabilities to Ford Motor Company.

Ford Credit expects its second half results to be lower than its first half 2009 results.  Ford Credit does not expect the net gains related to unhedged currency exposures or improvements in lease residual losses in the amounts experienced in the second quarter of 2009 to continue.  A continuing decline in receivables will also contribute to lower second half 2009 results.

Ford Motor Credit Company LLC is one of the world’s largest automotive finance companies and has supported the sale of Ford Motor Company products since 1959.  Ford Credit is an indirect, wholly owned subsidiary of Ford.  It provides automotive financing for Ford, Lincoln, Mercury and Volvo dealers and customers.  More information can be found at http://www.fordcredit.com and at Ford Credit’s investor center, http://www.fordcredit.com/investorcenter.

— — — — —

  1. The financial results discussed herein are presented on a preliminary basis; final data will be included in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2009.

# # #


ford_fiesta


FORD POSTS SECOND QUARTER PRE-TAX OPERATING LOSS OF $424 MILLION+; GAINS MARKET SHARE, REDUCES CASH OUTFLOW++

Download Full Financial Release (PDF)

Download Slides (PDF)

  • Reported a pre-tax operating loss of $424 million, excluding special items, for the second quarter of 2009+ and net income of $2.3 billion, or $0.69 per share. Special items totaled a net gain of $2.8 billion, including a $3.4 billion gain related to debt-reduction actions
  • Reduced Automotive structural costs by $1.8 billion, including $1.2 billion in North America+
  • Strong new products drove market share gains in all regions – North America, South America, Europe and Asia Pacific Africa – while achieving further improvements in transaction prices and margins
  • Ford’s customer satisfaction with vehicle quality reached its highest level in North America and now equals Toyota; Ford, Lincoln and Mercury brand vehicles had the fewest “things gone wrong” among all automakers; Ford leads the U.S. industry in Insurance Institute for Highway Safety “Top Safety Pick” awards
  • Ended the second quarter with Automotive gross cash of $21 billion; operating-related cash outflow was $1 billion, an improvement of $2.7 billion from the first quarter of 2009+++
  • Raised $1.6 billion by issuing 345 million new shares of common stock; completed actions to reduce Automotive debt by $10.1 billion
  • Ford Credit reported a pre-tax profit of $646 million, compared with a pre-tax loss of $294 million a year ago+
  • Ford remains on track, based on current planning assumptions, to achieve its key 2011 financial targets
Financial Results Summary

Second Quarter

First Half

2009

O/(U) 2008

2009

O/(U) 2008

Wholesales (000)+

1,172

(390)

2,145

(948)

Revenue (Bils.) +

$ 27.2

$ (11.0)

$      52.0

$    (25.4)

Operating Results +

Automotive Results (Mils.)

$ (1,019)

$    (320)

$ (2,939)

$  (2,862)

Financial Services (Mils.)

595

929

533

803

Pre-Tax Results (Mils.)

$    (424)

$    609

$ (2,406)

$  (2,059)

After-Tax Results (Mils.) ++++

$    (638)

$    768

$ (2,430)

$  (1,501)

Earnings Per Share ++++

$   (0.21)

$    0.42

$   (0.90)

$    (0.48)

Special Items Pre-Tax (Mils.)

$    2,795

$ 10,821

$    3,157

$  11,583

Net Income/(Loss) Attributable to Ford

After-Tax Results (Mils.)

$    2,261

$ 10,958

$      834

$    9,461

Earnings Per Share

$      0.69

$     4.58

$     0.30

$      4.20

Automotive Gross Cash (Bils.) +++

$      21.0

$      (5.6)

$      21.0

$      (5.6)

See end notes on page 10.

DEARBORN, Mich., July 23, 2009 – Ford Motor Company [NYSE: F] today reported a pre-tax operating loss of $424 million in the second quarter of 2009, excluding special items – a $609 million improvement compared with the second quarter of last year – as cost reductions, net pricing, Ford Credit results and market share helped offset the continued impact of the severe global economic downturn. +

On an after-tax basis, excluding special items, Ford posted an operating loss of $638 million in the second quarter, or $0.21 per share, compared with a loss of $1.4 billion, or $0.63 per share, a year ago. +

Ford posted net income of $2.3 billion, or $0.69 per share.  These results compare with a net loss of $8.7 billion, or $3.89 per share, in the second quarter of 2008.†  The results for the second quarter 2009 include a special items net gain totaling $2.8 billion, or $0.90 per share, which includes a $3.4 billion gain related to Ford and Ford Credit’s recent debt-reduction actions.

Ford’s second quarter revenue was $27.2 billion, down $11 billion from the same period a year ago. +

“While the business environment remained extremely challenging around the world, we made significant progress on our transformation plan,” said Ford President and CEO Alan Mulally.  “Our underlying business is growing progressively stronger as we introduce great new products that customers want and value, while continuing to aggressively restructure our business and strengthen our balance sheet.”

In the second quarter, Ford completed several actions to strengthen its overall business, including:

  • Completing a series of transactions that reduced Automotive debt obligations by $10.1 billion, which will save the company more than $500 million a year in interest expense
  • Raising $1.6 billion through the issuance of 345 million shares of Ford common stock
  • Reducing Automotive structural costs by $1.8 billion, including $1.2 billion in North America
  • Reducing the U.S. hourly work force by approximately 1,000 through a buyout program

Ford reached agreement with the UAW, subject to court and other approvals, to allow Ford the option to fund up to half of its VEBA obligations with Ford common stock at market prices instead of fixed prices in 2009, 2010 and 2011.

Ford finished the second quarter with $21 billion in Automotive gross cash, compared with $21.3 billion at the end of the first quarter of 2009.  Automotive operating-related cash flow was $1 billion negative during the second quarter of 2009, an improvement of $2.7 billion from the first quarter of 2009. Automotive operating-related cash flow was $4.7 billion negative during the first half; on track with Ford’s plan. +++

“Ford delivered a very solid quarter, and our transformation plan remains well on track,” said Lewis Booth, Ford executive vice president and chief financial officer.  “We strengthened our balance sheet, reduced cash outflows and improved our year-over-year financial results despite sharply lower industry volumes.”

The following discussion of second quarter highlights and results are on a pre-tax basis and exclude special items.  See tables following “Safe Harbor/Risk Factors” for the nature and amount of these special items and any necessary reconciliation to U.S. GAAP.  Discussion of Automotive operating cost changes is at constant volume, mix, and exchange, and excludes special items.


mustang-splashimg


SECOND QUARTER HIGHLIGHTS

  • Ford gained market share in all regions compared with the second quarter 2008:
    • U.S. market share rose for Ford, Lincoln and Mercury by two points to 16.4 percent.  Canada and Mexico were both up, with increases of 2.8 and 1.1 points, respectively, helping Ford become Canada’s top-selling brand in June for the first time in 50 years
    • Ford’s share of the South American market improved one point to 10.4 percent
    • In Europe, Ford market share rose a half point to 9.0 percent, its highest second quarter level in the past 10 years
    • In the Asia Pacific Africa region, Ford market share was up one-tenth of a point
  • For the first time in the 28-year history of the Global Quality Research System (GQRS) study, U.S. Ford, Lincoln and Mercury brand vehicles had the fewest number of “things gone wrong” among all automakers.  Customer satisfaction with vehicle quality also continued to improve, reaching its highest level in North America and equaling Toyota
  • The company posted an eighth straight year of improvement in the J.D. Power Initial Quality Study.  Ford and Mercury brands placed among the Top 10 in initial quality
  • All Ford brands improved significantly in the J.D. Power APEAL study of customer satisfaction. The Ford F-150 and Ford Flex led their respective segments and were noted for their fuel efficiency and styling
  • Ford average vehicle transaction prices in the U.S. increased at a rate above the industry average, reflecting that customers are equipping these new products with high levels of content and features
  • Ford announced a $550 million investment to transform its Michigan Assembly Plant to build Ford’s next-generation Focus global small car and new battery-electric Focus
  • A new passenger car plant was launched in Thailand in partnership with Mazda to build Mazda2 and Ford Fiesta models, which will be exported throughout the Southeast Asian market beginning this fall
  • Ford qualified for $5.9 billion in loans from the U.S. Department of Energy for advanced fuel efficient vehicles. Ford plans to invest nearly $14 billion in the U.S. over the next seven years on advanced technology vehicles
  • Ford’s total sales in China were up 39 percent in the second quarter of 2009 aided by the strong launch of the new Ford Fiesta and continued strong sales of the Ford Focus
  • The new Ford Fiesta is now Europe’s No. 2-selling car, with more than 300,000 units sold since its introduction there last fall
  • The company successfully completed the European launches of the new Ford Transit Connect, Ford Ranger and Ford Transit ECOnetic
  • Began production of the 2010 Ford Taurus and the high-performance 2010 Ford Taurus SHO in North America.  Ford’s flagship sedan arrives soon in dealer showrooms
  • Production has begun for the 2010 Ford Transit Connect for North America, a purpose-built van for small businesses, which will debut this summer
  • Production is under way for the 3.5-liter V6 EcoBoost engine, which will be available this year on the Lincoln MKS, Ford Flex, Ford Taurus SHO and Lincoln MKT.  EcoBoost delivers the horsepower of a V8 with the fuel efficiency of a V6
  • The Lincoln MKZ, Ford Focus and Volvo C30 earned the “Top Safety Pick” award from the Insurance Institute for Highway Safety.  Ford has more IIHS “Top Safety Pick” awards than any other automaker

AUTOMOTIVE SECTOR +

Automotive Sector*

Second Quarter

First Half

2009

O/(U) 2008

2009

O/(U) 2008

Wholesales (000)

1,172

(390)

2,145

(948)

Revenue (Bils.)

$      24.0

$    (10.1)

$      45.4

$    (23.7)

Pre-Tax Results (Mils.)

$  (1,019)

$     (320)

$  (2,939)

$  (2,862)

*excludes special items

For the second quarter of 2009, Ford’s worldwide Automotive sector reported a pre-tax operating loss of $1 billion, compared with a pre-tax loss of $699 million a year ago.  The decline reflected lower industry volumes, actions to reduce dealer stocks, higher material costs and unfavorable exchange, largely offset by structural cost reductions, favorable net pricing and improved market share.

Worldwide Automotive revenue in the second quarter was $24 billion, down from $34.1 billion a year ago.  The decrease is primarily explained by lower volumes and unfavorable exchange, partly offset by favorable net pricing.  Total vehicle wholesales in the second quarter were 1,172,000, compared with 1,562,000 units a year ago.

Automotive structural cost reductions in the second quarter totaled $1.8 billion, including $1.2 billion in North America.  Manufacturing and engineering costs were $1.1 billion lower, largely reflecting the continued benefits of personnel actions in North America and Europe.  Overall, Ford reduced Automotive structural costs by $3.6 billion in the first half.

Net pricing was about $1.2 billion favorable, primarily explained by higher pricing in the U.S., reflecting the success of new products, including the Ford F-150, Ford Fusion and Ford Mustang, and the continuation of its disciplined approach on incentives.

North America: For the second quarter, Ford North America reported a pre-tax loss of $851 million, compared with a loss of $1.3 billion a year ago.  The improvement was primarily explained by structural cost reductions, favorable net pricing and improved market share, partly offset by lower U.S. industry volume, a reduction in dealer stocks, higher material cost and unfavorable exchange.  Second quarter revenue was $10.8 billion, down from $14.2 billion a year ago.

South America: For the second quarter, Ford South America reported a pre-tax profit of $86 million, compared with a profit of $388 million a year ago.  The decrease primarily reflects unfavorable exchange, higher commodity costs and lower volumes, partly offset by favorable net pricing and product mix.  Second quarter revenue was $1.9 billion, down from $2.4 billion a year ago.

Europe: For the second quarter, Ford Europe reported a pre-tax profit of $138 million, compared with a profit of $582 million a year ago.  The decline was primarily explained by lower industry volume, dealer stock reductions, higher material cost and unfavorable mix, partly offset by structural cost reductions, favorable net pricing and market share improvement.  European pre-tax results improved by about $700 million in the second quarter as compared to the first quarter of 2009.  This improvement primarily reflects higher industry volumes, a smaller decrease in dealer stocks, lower costs and favorable net pricing.  Second quarter revenue was $7.2 billion, down from $11.5 billion a year ago.

Volvo: Volvo is reported as an ongoing operation. The effects of “held-for-sale” accounting-related adjustments are reported as special items. For the second quarter, Volvo reported a pre-tax loss of $231 million, compared with a loss of $120 million a year ago.  The decline primarily reflected lower volumes, partly offset by continued progress on cost reductions and favorable exchange. Second quarter revenue was $2.9 billion, down from $4.3 billion a year ago.

Asia Pacific and Africa: For the second quarter, Ford Asia Pacific and Africa reported a pre-tax loss of $25 million, compared with a profit of $50 million a year ago.  The decline is more than explained by adverse market mix, partly offset by lower costs.  Second quarter revenue was $1.2 billion, down from $1.7 billion a year ago.

Other Automotive: Other Automotive, which consists primarily of interest and financing-related costs, reported a second quarter pre-tax loss of $136 million.  This included net interest expense of $271 million, partly offset by fair market value adjustments, primarily attributable to our investment in Mazda. †


ford_10_F150


FINANCIAL SERVICES SECTOR+

Financial Services Sector*

Second Quarter

First Half

(in millions)

2009

O/(U) 2008

2009

O/(U) 2008

Ford Credit Pre-Tax Results $      646 $      940 $      610 $      872
Other Financial Services (51) (11) (77) (69)
Financial Services Pre-Tax Results $      595 $      929 $      533 $      803
*excludes special items

For the second quarter, the Financial Services sector reported a pre-tax profit of $595 million, compared with a loss of $334 million a year ago.

Ford Motor Credit Company: Ford Credit reported a pre-tax profit of $646 million in the second quarter, compared with a pre-tax loss of $294 million a year ago.  The improvement primarily reflected lower depreciation expense for leased vehicles due to higher auction values, net gains related to unhedged currency exposures, a lower provision for credit losses and lower operating costs. These factors were partly offset by lower volume and non-recurrence of a gain related to the sale of approximately half of Ford Credit’s ownership interest in its Nordic operations.

Other Financial Services: Other Financial Services reported a loss of $51 million in the second quarter, compared with a pre-tax loss of $40 million a year ago. The decline is more than explained by a loss related to a real estate transaction.

OUTLOOK
Despite the severe global downturn, Ford said it continues to make progress on all four pillars of its plan:

  • Aggressively restructure to operate profitably at the current demand and changing model mix
  • Accelerate the development of new products that customers want and value
  • Finance the plan and improve the balance sheet
  • Work together effectively as one team, leveraging Ford’s global assets

Ford said it remains on track to achieve or exceed all of its 2009 financial targets and most of its operational metrics.

The company said it now expects full-year market share to improve compared to 2008 in the U.S. and Europe, reflecting share increases in the first half and strong reception to new product introductions.

Ford expects 2009 U.S. industry sales will be between 10.5 million and 11 million units, consistent with the outlook previously communicated by the company. Based on first half European industry volume, Ford now expects that Europe’s full-year industry sales will be in the range of 15 million to 15.5 million units, which is higher than the previous outlook.

Ford expects third quarter 2009 production to be up, compared with 2008 and second quarter 2009 production.  This increase is largely due to tightly controlled inventories and higher market demand for our products.

Ford remains on track to exceed its $4 billion Automotive structural cost reduction target for 2009.  Second half cost reductions, however, will be less than the first half, reflecting the significant cost reductions achieved during the third and fourth quarters of 2008.

Ford expects Automotive operating-related cash flows in the second half to improve from first half levels consistent with its current planning assumptions. However, due to substantial improvements in the second quarter, third quarter levels may not improve sequentially.

Ford Credit expects its second half 2009 results to be lower than its first half 2009 results.  Ford Credit does not expect the net gains related to unhedged currency exposures or improvements in lease residual losses in the amounts experienced in the second quarter 2009 to continue.  A continuing decline in receivables will also contribute to lower second half 2009 results.

Based on its current planning assumptions, Ford has sufficient liquidity to fund its product-led transformation plan and provide a cushion against the uncertain global economic environment.  In addition, Ford will continue to pursue actions to improve its balance sheet.

The company remains on track to achieve its key 2011 financial targets, based on current planning assumptions, including overall and North American Automotive pre-tax results being breakeven or better, excluding special items, and Automotive operating-related cash flow being breakeven or better.

“Our product-led transformation is working, and we are pleased with our progress in the second quarter,” Mulally said.  “While the economic environment remains challenging, I am more convinced than ever we are on the right path to create a healthy and profitably growing Ford.”

Download Full Financial Release (PDF)

Download Slides (PDF)

Related Articles


mulally-thumb

ALAN MULALLY

Title: President and CEO, Ford Motor Company – Joined Ford 2006

Alan Mulally is president and chief executive officer of Ford Motor Company. He also is a member of the company’s Board of Directors.

Prior to joining Ford in September 2006, Mulally served as executive vice president of The Boeing Company, and president and chief executive officer of Boeing Commercial Airplanes.  In that role, he was responsible for all of the company’s commercial airplane programs and related services. Mulally also was a member of the Boeing Executive Council and served as Boeing’s senior executive in the Pacific Northwest.

Mulally was named Boeing’s president of Commercial Airplanes in September 1998. The responsibility of chief executive officer for the business unit was added in March 2001.

Previously, Mulally served as president of Boeing Information, Space & Defense Systems and senior vice president of The Boeing Company. Appointed to that role in February 1997, he was responsible for Boeing’s defense, space and government business.

Beginning in 1994, Mulally was senior vice president of Airplane Development for Boeing Commercial Airplanes Group, responsible for all airplane development activities, flight test operations, certification and government technical liaison.

Earlier, Mulally served as Boeing’s vice president of Engineering, and as vice president and general manager of the 777 program.

Mulally joined Boeing in 1969 and progressed through a number of significant engineering and program-management assignments, including contributions on the 727, 737, 747, 757 and 767 airplanes.

Throughout his career, Mulally has been recognized for his contributions and industry leadership, including being named “Person of the Year” for 2006 by Aviation Week magazine and one of “The Best Leaders of 2005” by BusinessWeek magazine.

Mulally previously served as co-chair of the Washington Competitiveness Council, and sat on the advisory boards of NASA, the University of Washington, the University of Kansas, Massachusetts Institute of Technology and the U.S. Air Force Scientific Advisory Board. He is a member of the United States National Academy of Engineering and a fellow of England’s Royal Academy of Engineering.

He also served as a past president of the American Institute of Aeronautics and Astronautics (AIAA) and is a former president of its Foundation. Additionally, Mulally served as a past chairman of the Board of Governors of the Aerospace Industries Association.

Mulally holds bachelor’s and master’s of science degrees in aeronautical and astronautical engineering from the University of Kansas, and earned a master’s in management from the Massachusetts Institute of Technology as a 1982 Alfred P. Sloan fellow.

A native of Kansas, Mulally is a private pilot and enjoys tennis, golf and reading.


ford_10_MKT


sec_bannerTitle2009 Ford Motor Company Filings (Edgar Database)
SIC: 3711 – MOTOR VEHICLES & PASSENGER CAR BODIES
State location: MI | State of Inc.: DE | Fiscal Year End: 1231
(Assistant Director Office No 5)
Get insider transactions for this issuer.
Get insider transactions for this reporting owner.
Filings Format Description Filing Date File/Film Number
8-K [Documents] Current report, items 2.02 and 9.01
Acc-no: 0001140361-09-016804 (34 Act)
2009-07-23 001-03950
09958235
8-K [Documents] Current report, items 5.02 and 9.01
Acc-no: 0000950123-09-023094 (34 Act)
2009-07-17 001-03950
09950196
8-K [Documents] Current report, items 8.01 and 9.01
Acc-no: 0001140361-09-015599 (34 Act)
2009-07-01 001-03950
09922177
8-K [Documents] Current report, items 8.01 and 9.01
Acc-no: 0001140361-09-015392 (34 Act)
2009-06-29 001-03950
09916367
11-K [Documents] Annual report of employee stock purchase, savings and similar plans
Acc-no: 0000950123-09-017895 (34 Act)
2009-06-26 001-03950
09912902
11-K [Documents] Annual report of employee stock purchase, savings and similar plans
Acc-no: 0000950123-09-017886 (34 Act)
2009-06-26 001-03950
09912873
SC 13G/A [Documents] [Amend]Statement of acquisition of beneficial ownership by individuals
Acc-no: 0000070858-09-000248 (34 Act)
2009-06-10 005-30156
09884308
UPLOAD [Documents] [Cover]Acc-no: 0000000000-09-029961 2009-06-05
8-K [Documents] Current report, items 8.01 and 9.01
Acc-no: 0001140361-09-013720 (34 Act)
2009-06-02 001-03950
09868349
CORRESP [Documents] [Cover]Correspondence
Acc-no: 0001140361-09-012989
2009-05-21
8-K/A [Documents] [Amend]Current report, item 5.02
Acc-no: 0001362310-09-007967 (34 Act)
2009-05-20 001-03950
09842417
8-K [Documents] Current report, item 8.01
Acc-no: 0000950103-09-001104 (34 Act)
2009-05-14 001-03950
09824032
424B2 [Documents] Prospectus [Rule 424(b)(2)]
Acc-no: 0000950152-09-005168 (33 Act)
2009-05-13 333-151355
09822250
FWP [Documents] Filing under Securities Act Rules 163/433 of free writing prospectuses
Acc-no: 0000950103-09-001095 (34 Act)
2009-05-13 333-151355
09820272
8-K [Documents] Current report, items 8.01 and 9.01
Acc-no: 0001140361-09-011696 (34 Act)
2009-05-11 001-03950
09815438
FWP [Documents] Filing under Securities Act Rules 163/433 of free writing prospectuses
Acc-no: 0000950103-09-001074 (34 Act)
2009-05-11 333-151355
09815385
424B2 [Documents] Prospectus [Rule 424(b)(2)]
Acc-no: 0000950152-09-005081 (33 Act)
2009-05-11 333-151355
09815380
10-Q [Documents] Quarterly report [Sections 13 or 15(d)]
Acc-no: 0001140361-09-011558 (34 Act)
2009-05-08 001-03950
09810754
8-K [Documents] Current report, items 8.01 and 9.01
Acc-no: 0001140361-09-010766 (34 Act)
2009-05-01 001-03950
09788594
8-K [Documents] Current report, items 2.02, 2.06, and 9.01
Acc-no: 0001140361-09-010217 (34 Act)
2009-04-24 001-03950
09767992
SC TO-I/A [Documents] [Amend]Tender offer statement by Issuer
Acc-no: 0000950103-09-000780 (34 Act)
2009-04-08 005-30156
09739216
8-K [Documents] Current report, items 3.02 and 8.01
Acc-no: 0000950103-09-000779 (34 Act)
2009-04-08 001-03950
09739211
8-K [Documents] Current report, items 8.01 and 9.01
Acc-no: 0000950103-09-000756 (34 Act)
2009-04-06 001-03950
09734535
SC TO-I/A [Documents] [Amend]Tender offer statement by Issuer
Acc-no: 0000950103-09-000755 (34 Act)
2009-04-06 005-30156
09734531
DEF 14A [Documents] Other definitive proxy statements
Acc-no: 0000950152-09-003486 (34 Act)
2009-04-03 001-03950
09730115
UPLOAD [Documents] [Cover]Acc-no: 0000000000-09-017176 2009-04-02
8-K [Documents] Current report, items 8.01 and 9.01
Acc-no: 0001140361-09-008566 (34 Act)
2009-04-01 001-03950
09722951
PRER14A [Documents] [Cover]Preliminary Proxy Soliciting materials
Acc-no: 0000950124-09-000086 (34 Act)
2009-03-27 001-03950
09709730
UPLOAD [Documents] [Cover]Acc-no: 0000000000-09-015526 2009-03-26
8-K [Documents] Current report, items 5.02 and 9.01
Acc-no: 0001140361-09-007891 (34 Act)
2009-03-25 001-03950
09704453
PRE 14A [Documents] Other preliminary proxy statements
Acc-no: 0000950124-09-000080 (34 Act)
2009-03-24 001-03950
09701442
8-K [Documents] Current report, items 8.01 and 9.01
Acc-no: 0000950103-09-000600 (34 Act)
2009-03-23 001-03950
09698607
SC TO-I/A [Documents] [Amend]Tender offer statement by Issuer
Acc-no: 0000950103-09-000540 (34 Act)
2009-03-13 005-30156
09680839
8-K [Documents] Current report, items 1.01 and 8.01
Acc-no: 0001140361-09-006934 (34 Act)
2009-03-13 001-03950
09679326
8-K [Documents] Current report, items 8.01 and 9.01
Acc-no: 0000950103-09-000456 (34 Act)
2009-03-04 001-03950
09656222
SC TO-I [Documents] Tender offer statement by Issuer
Acc-no: 0000950103-09-000455 (34 Act)
2009-03-04 005-30156
09655874
8-K [Documents] Current report, items 8.01 and 9.01
Acc-no: 0001140361-09-005695 (34 Act)
2009-03-03 001-03950
09651497
S-8 [Documents] Securities to be offered to employees in employee benefit plans
Acc-no: 0000950152-09-001943 (33 Act)
2009-02-27 333-157584
09643116
10-K [Documents] Annual report [Section 13 and 15(d), not S-K Item 405]
Acc-no: 0001140361-09-005071 (34 Act)
2009-02-26 001-03950
09635521
SC 13G/A [Documents] [Amend]Statement of acquisition of beneficial ownership by individuals
Acc-no: 0000902219-09-000720 (34 Act)
2009-02-17 005-30156
09611293
SC 13G/A [Documents] [Amend]Statement of acquisition of beneficial ownership by individuals
Acc-no: 0001422848-09-000267 (34 Act)
2009-02-17 005-30156
09605575
SC 13G/A [Documents] [Amend]Statement of acquisition of beneficial ownership by individuals
Acc-no: 0000070858-09-000147 (34 Act)
2009-02-13 005-30156
09602101
SC 13G/A [Documents] [Amend]Statement of acquisition of beneficial ownership by individuals
Acc-no: 0001144204-09-007350 (34 Act)
2009-02-12 005-30156
09593622
8-K [Documents] Current report, items 2.03, 8.01, and 9.01
Acc-no: 0001140361-09-002613 (34 Act)
2009-02-03 001-03950
09565728
8-K [Documents] Current report, items 2.02 and 9.01
Acc-no: 0001140361-09-002047 (34 Act)
2009-01-29 001-03950
09552857
8-K [Documents] [Financial Viewer] Current report, items 8.01 and 9.01
Acc-no: 0001157523-09-000291 (34 Act)
2009-01-16 001-03950
09530902
S-8 [Documents] Securities to be offered to employees in employee benefit plans
Acc-no: 0000950152-09-000142 (33 Act)
2009-01-08 333-156631
09515835
S-8 [Documents] Securities to be offered to employees in employee benefit plans
Acc-no: 0000950152-09-000141 (33 Act)
2009-01-08 333-156630
09515784
8-K [Documents] Current report, items 8.01 and 9.01
Acc-no: 0001140361-09-000244 (34 Act)
2009-01-05 001-03950
09503847

Filings & Forms

All companies, foreign and domestic, are required to file registration statements, periodic reports, and other forms electronically through EDGAR. Anyone can access and download this information for free. Here you’ll find links to a complete list of filings available through EDGAR and instructions for searching the EDGAR database.

Quick EDGAR Tutorial


Search for Company Filings

Related Links

Bill Ford Tells CNNMoney How We Avoided Bankruptcy

Hot Air:  Shocker: Ford posts a profit

Consumer Reports:  Best and worst used cars

The Daily Crux:  Detroit must “revolt against Komrade Obama” to survive

Economist:  A stony road


END