-Caveat Lector- ------- Forwarded Message Follows ------- Date sent: Mon, 4 Oct 1999 10:36:18 -0400 The DLC Update Monday, October 4, 1999 ************************************************************************* Discuss the Idea of the Week at the DLC Idea Exchange at http://www.dlc.org/idea/discussion.htm ************************************************************************* ***Idea of the Week: Third Way CAFE*** Back during the energy crisis of the 1970s, Congress directed the Environmental Protection Agency (EPA) to tell Detroit and foreign automakers doing business in the United States to make their cars more fuel efficient. The idea was to get gas guzzlers off the road and cut U.S. demand for foreign oil. Neither objective has been met. The EPA developed the standards of 27.5 miles per gallon (mpg) for cars and 20.6 mpg for light trucks. They called them "corporate average fuel economy standards" or CAFE, because the standards were averaged over an automaker's entire fleet. Unfortunately, the CAFE standards are not working as they were intended, in part because of the recent American craze for Sports Utility Vehicles (SUVs) and pick-up trucks, both subject to the lower 20.6 mpg standard, and both producing more pollution than regular cars. Another flaw with CAFE is that standards are averaged over too many types and models of cars with very different costs of increasing fuel efficiency. A manufacturer of many big and some small cars could have a hard time achieving the standard, but a maker of only small cars wouldn't have any problem at all, even if the former produced a more fuel efficient small car than the latter. The standard wouldn't necessarily encourage either manufacturer to build a more fuel-efficient small car. There are two simple ways to fix CAFE. The first is to abandon the "A" in CAFE, throwing out fleet averages and setting standards by specific classes of vehicles. But an even more important reform would be to institute tradable "credits" for fuel efficiency, similar to the tradable emissions allowances that helped reduce acid rain. Makers of more fuel efficient vehicles could sell credits to competitors who couldn't make the grade. All manufacturers would have a continuous economic incentive to innovate and improve fuel efficiency. Taking the "A" for average out of CAFE, and instituting tradable fuel efficiency credits, represent a Third Way on CAFE that could help get Congress out of a current gridlock on this subject, as reflected in last week's close Senate vote against lifting a congressional ban on tougher standards. With OPEC back in the price-fixing business for oil and with the roads clogged with SUVs and light trucks, it's time to act, but in a way that gives carmakers credit for their willingness to make a better buggy. ***A Third Way Toward Universal Health Coverage*** Three weeks ago, Vice President Al Gore announced a plan to regain the lost momentum toward universal access to health insurance, based on a dual strategy of rewarding states for implementation of the Child Health Insurance Program (CHIP), and a refundable tax credit to help adults buy health insurance in private markets. This week, Gore's challenger for the Democratic presidential nomination, former Senator Bill Bradley, announced his long-awaited plan for universal health coverage, which actually replaces both Medicaid and CHIP with a system of premium subsidies and tax credits for the purchase of private health insurance by the poor and the uninsured. It's striking that both candidates have embraced the central element of health care reform that the Progressive Policy Institute (PPI) has promoted for years: universal private health insurance bought through purchasing alliances with government subsidizing premiums through the tax system for those in need. Both candidates have also decisively broken with the old liberal alternatives of expanding government-provided or -controlled health coverage, or creating a Canadian-style nationalized insurance system. Gore deserves extra credit for proposing an incremental plan that could actually be adopted in the near future without endangering fiscal discipline. Bradley deserves extra credit for embracing PPI's longstanding proposal to let uninsured individuals buy into the Federal Employee Health Benefit Plan (FEHBP) the best current model for a health system in which insurers compete for business on the basis of both cost and quality--and for his willingness to get rid of the bureaucratic structure of programs like Medicaid and CHIP. Both candidates have essentially adopted a New Democrat approach to universal health coverage. And both offer an implicit challenge to Republican front-runner George W. Bush, who has said nothing on the subject, and whose own state of Texas has been slow to take advantage of existing federal incentives to cover uninsured children. If this is an example of the policy debate that both Gore and Bradley say they want to undertake during the 2000 nominating process, then more power to them. ***The Leisure Class Fight for the Little Guy*** As Al Gore and Bill Bradley laid out competing New Democrat paths to universal health coverage, they--and we--were verbally scorched by a potential candidate who says we need a "real Democrat" in the race who will "fight for the little guy." According to actor-director Warren Beatty, in a speech to the Americans for Democratic Action, that means enacting a Canadian-style health insurance system, stopping the globalization of the economy (though presumably not stopping trade in motion pictures), "massively" reducing defense spending, repealing welfare reform, redistributing wealth to the poor, publicly financing political campaigns, and proudly reclaiming the mantle of "tax-and-spend Democrats." The drift of the Democratic party away from this agenda, he suggested, was due in part to the evil influence of the DLC, which he called "Democrats for the Leisure Class". To be sure, nobody knows more about the leisure class than Warren Beatty. But the big star does not have a clue about the views of the "little guy." Many "little guys" helped elect a Republican Congress in 1994 in part because they thought the Clinton Administration was drifting toward government- controlled health care. "Little guys" aren't noticeably upset with the current economy. "Little guys" support welfare reform as much if not more than other segments of the population. "Little guys" absolutely hate proposals to take their tax dollars to finance political campaigns, and "little guys" were abandoning the Democratic party by the millions when it was perceived as the party of "tax and spend." You gotta admire Beatty's sheer chutzpah in striking a populist pose before an audience of Hollywood celebrity plutocrats at that well-known working man's hangout, the Beverly Hilton. But it makes you wonder: Is he a real Democrat, or a surreal Democrat? ***"Stop Thief!" Cried the Burglar*** The game of one-upmanship between the two parties in claiming to "save Social Security" took a decidedly deceitful turn this week as congressional Republicans struggled like Houdini to escape the budgetary lock box they have so eagerly constructed for themselves. Recognizing that they cannot fund current-year appropriations without borrowing from the Social Security surplus, despite a variety of laughable accounting gimmicks that don't count spending as spending, Republicans decided to make a preemptive strike, blaming their own inability to keep their word on the President and Democrats. Standing under a banner reading "Stop Robbing Social Security," House Minority Whip Tom DeLay (R-TX) announced a "Stop the Raid" television ad campaign targeted to closely contested congressional districts. The ads will depict Republicans as manfully struggling to hold down spending and keep Social Security surpluses off-limits against dastardly Democratic efforts to loot seniors and pump up government. Within hours of the DeLay announcement, the Congressional Budget Office released estimates that the Republicans' own spending plans required dipping into the Social Security surplus to the tune of $18 billion. Congressional Republicans are the ones who insisted on making the "Social Security lock box" a partisan issue this year. They are the ones who have refused to admit their own spending plans exceed the budget "caps" which they have publicly embraced and privately deplored. By seeking to shift responsibility for their own fiscal ineptitude to Democrats, congressional Republicans are in danger of turning a series of little fibs into a big lie. ### -------------------------------------------- Subscribe and Unsubscribe -------------------------------------------- You may subscribe to this list at any time by sending an e-mail to [EMAIL PROTECTED] with "SUBSCRIBE NEWDEMNEWS" in the body of the message. You may leave the list at any time by sending an e-mail to [EMAIL PROTECTED] with "SIGNOFF NewDemNews" in the body of the message. ---------------------------------------------------------------- Membership is your key to unlocking doors to the DLC-PPI world of people and ideas. 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