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1
Advantage 1 is the economy
Two internal links---first is coverage:
US is locked into slow growth crisis now -- upward trends are short-
term
John Ross 17, Senior Fellow at Chongyang Institute for Financial Studies, Renmin
University of China, former Professor at Shanghai Jiao Tong University, 6/12/2017,
“Why the US economy remains locked in slow growth,”
http://ablog.typepad.com/keytrendsinglobalisation/2017/06/why-the-us-economy-
remains-locked-in-slow-growth.html
The latest US economic data confirms the US remains locked in a prolonged period
of slow growth with major consequences for geopolitics and destabilising consequences for US
domestic politics. ¶ The latest US economic growth data¶ Almost no international issue is more crucial
for economic and geopolitical strategy than economic trends within the US. It is therefore crucial
to have an accurate analysis of these. Regarding such a serious issue and such powerful forces there is no merit in ‘pessimism’,
underestimating US growth, and no merit in ‘optimism’, overestimating US growth – there is only a virtue in realism. ¶ This article
therefore analyses the latest US GDP data. The conclusion is clear. The dataconfirms the US fundamentally
remains in a period of medium/long term slow growth which will last for at least a minimum of
several years.¶ Strikingly, taking a period of 15 years after the beginning of the international
financial crisis, average US growth will be slower than after the beginning of the
Great Depression in 1929. Analyses which appear in parts of the media claiming the
US is entering a significant new period of rapid growth are fundamentally in error – for
reasons analysed in detail blow.¶ Such slow US growth necessarily has major geopolitical
consequences and provides a backdrop for continuing instability and turns in US
politics. The recent period within US politics has already seen:¶ Trump selected as Republican Party Presidential candidate
against the wishes of that Party’s establishment, and elected President against the opposition of the overwhelming major of the US
mass media.¶ Since Trump’s election sharp clashes have continued within the US political establishment with leaks against the
President by the US security services, the President’s sacking of the FBI head, investigations by the US Congress and US police of
close aides to the President, and open campaigns to force the President to change policies or to remove him from office by major US
media such as the New York Times and CNN.¶ Within the Democratic Party a serious challenge mounted to the Party
establishment’s candidate Clinton by the first figure declaring themselves to be a socialist to receive major US public support for
almost a century – Sanders.¶ As US medium/long term slow economic growth will continue sharp turns and tensions in US politics
will not disappear but are likely to continue. ¶ The consequences for US relations with China flowing from this situation, and
geopolitical tensions between the US and its traditional allies such as Germany shown for example at the recent G7 summit, are
analysed at the end of this article. The conclusion is that China’s constructive approach to the Trump administration is clearly
correct but that the risk of sharp turns in the situation must be taken into account due to the tensions within the US created by its
historically low growth.¶ This prolonged period of slow growth in the US, and in the advanced economies in general, combines with
China’s own transition to ‘moderate prosperity’, and then to a ‘high income’ economy by World Bank international standards, to
create under Xi Jinping a qualitatively new period in China’s development. ¶ The Great Stagnation¶ Starting with the global
background to the latest US economic data, a
defining feature of the present overall international
situation is extremely slow growth in the advanced Western economies.¶ In nine years
since the 2008 international financial crisis average growth in the advanced Western economies is already almost as slow as during
the ‘Great Depression’ of the 1930s and by the end of 2017 it will be significantly slower . By 2016, total
GDP growth in the advanced economies in the years since 2007 was only 10.1% and by the end of 2017, on IMF projections, the
growth in the advanced economies after 2007 will be lower than in the same period after 1929 – total growth of 12.3% in the 10 years
after 2007 compared to 15.1% in the 10 years after 1929. ¶ Even more strikingly IMF
data projects that future
growth in the advanced Western economies, following the international financial
crisis, will be far slower than in the same period after 1929 . IMF projections are that by 2021,
fourteen years after 2007, total growth in the advanced economies will be less than half that in the 14 years after 1929 – average
annual growth of only 1.3% compared to 2.9%, and total growth of 20.6% compared to 49.8%. ¶ This data is shown in Figure 1. An
aim of this article is instead to carry out the necessary factual checks that the latest US data does not represent a break with long-
term trends.¶ US GDP growth¶ In the 1st quarter of 2017 US GDP was 2.0% higher than in the first quarter of 2016.[1] To evaluate
this 2.0% growth, given that a market economy inherently displays business cycles, it is necessary to separate purely cyclical trends
from medium/long term ones. Failure to do so leads to false analysis/statistical trickery – comparing a peak of the business cycle
with the trough will exaggerate growth, while comparing the trough of the business cycle with the peak will understate growth. Such
cyclical effects may be removed by using a sufficiently long term moving average that cyclical fluctuations become averaged out and
the long term structural growth rate is shown. Figure 2 therefore shows annual average US GDP growth using a 20-year moving
average – a comparison to shorter term periods is given below. ¶ Figure 2 clearly shows that the fundamental trend of the US
economy is long-term slowdown. Annual average US growth fell from 4.4% in 1969, to 4.1% in 1978, to 3.2% in 2002, to 2.2% by 1st
quarter 2017. That is, the most fundamental long term growth trend in the US economy is that it has been slowing for half a century.
The latest US GDP growth of 2.0% clearly does not represent a break with this long term US economic slowdown but is in line with
it.¶ Per capita¶ US per capita GDP growth follows the same falling trend. Figure 3 shows a 20-year moving average for US per capita
GDP growth. Annual average US per capita GDP growth fell from 2.8% in 1969, to 2.7% in 1977, to 2.4% in 2002, to 1.2% by the first
quarter of 2017. The latest US data shows no break with this trend of long term slowdown - it is in line with it and continues these
long term trends.¶ This data
shows clearly claims the US economy is currently ‘dynamic’
driven by a ‘wave of innovation’ are therefore factually false – a pure propaganda myth repeated by
US media such as Bloomberg with no connection with factual trends. US per capita
growth has in fact fallen to a low level.¶ This fall of US per capita GDP growth to a low level clearly has major political
implications within the US and underlies recent domestic political events. Very low US per capital growth, accompanied by
increasing economic inequality, has resulted in US median wages remaining below their 1999 level – this prolonged stagnation of US
incomes explaining recent intense political disturbances in the US around the sweeping aside of the Republican Party establishment
by Trump, the strong support given to a candidate for president declaring himself to be a socialist Sanders, current sharp clashes
among the US political establishment etc.¶ Cycle and trend¶ Turning from long term trends to analysis of the current US business
cycle it may be noted that a 5-year moving average of annual US GDP growth is 2.0%, a 7-year moving average 2.1% and the 20-year
moving average 2.2%. Leaving aside a 10-year moving average, which is greatly statistically affected by the severe recession of 2009
and therefore yields a result out of line with other measures of average annual growth of only 1.4%, US average annual GDP growth
may therefore be taken as around 2% or slightly above. That is, fundamental structural factors in the US economy create a
medium/long term growth rate of 2.0% or slightly above. Business cycle fluctuations then take purely short term growth above or
below this average. To analyse accurately the present situation of the US business cycle therefore recent growth must be compared
with this long-term trend.¶ Figure 4 therefore shows the 20-year moving average for US GDP growth together with the year on year
US growth rate. This shows that in 2016 US GDP growth was severely depressed – GDP growth in the whole year 2016 was only 1.6%
and year on year growth fell to 1.3% in the second quarter. By the 1st quarter of 2017 US year on year GDP growth had only risen to
2.0% - in line with a 5-year moving average but still below the 20-year moving average. ¶ As US economic growth in
2016 was substantially below average a process of ‘reversion to the mean’, that is a
tendency to correct exceptionally slow or exceptionally rapid growth in one period
by upward or downward adjustments to growth in succeeding periods, would be
expected to lead to a short-term increase in US growth c ompared to low points in 2016. This would
be purely for statistical reasons and not represent any increase in underlying or medium/long US term growth. This normal
statistical process is confirmed by the acceleration in US GDP growth since the low
point of 1.3% in the 2nd quarter 2016 – growth accelerating to 1.7% in 3rd quarter
2016 and 2.0% in 4th quarter 2016 and 1st quarter 2017. ¶ President Trump’s administration may of
course claim ‘credit’ for the likely short term acceleration in US growth in 2017 but any such short-term shift is
merely a normal statistical process and would not represent any acceleration in underlying US growth. Only
if growth continued sufficiently strongly and for a sufficiently long period to raise
the medium/long term rate average could it be considered that any substantial increase in
US economic growth was occurring. The latest US growth data, 2.0% year on year, however does not represent
any acceleration in US growth compared to longer term averages and is therefore in line with the pattern of US slow growth and does
not represent a break with it.

Increasing coverage is key to faster growth –it solves workforce

productivity, job lock, and bankruptcies
Liam Malloy 16, Ph.D. in Economics from the University of Maryland, Assistant
Professor in the Economics Department at the University of Rhode Island, et al., 2016,
“State Sponsored Health Insurance and State Economic and Employment Growth,”
http://digitalcommons.uri.edu/cgi/viewcontent.cgi?
article=1004&context=ecn_facpubs

We find that in both panels increased health insurance coverage is associated with faster
economic growth . In the United States, we find evidence that Medicaid coverage increases both macroeconomic growth
and employment growth. However, our results also suggest that in their efforts to capitalize on the economic benefits of expanding
health insurance, legislators would be wise to implement policies that control per-enrollee costs. To the extent that the economic
implications of increased state-supported health care coverage are a key aspect of the ongoing debate in the health insurance policy
arena, our findings could inform future reforms.¶ Social Policy and Economic Growth¶ Previous studies of the
relationship between social policies and state economic growth find inconsistent
effects (see e.g., Blair and Premus 1987; Crain and Lee 1999; Dye 1980; Erickson 1987; Fisher 1997; Helms 1985;
Jiwattanakulpaisarn et al. 2009; Jones 1990; Jones and Vedlitz 1988; Newman 1983; Schneider 1987). Some find positive
relationships between spending and economic growth, others a negative relationship, and still others find no relationship at all.2
Work on the specific relationship between health spending and economic growth is very limited. For example, a report issued by the
Department of Health and Human Services (2008, 47) reviewing the literature on government health spending and economic
growth concluded that “[g]iven that most
of the literature in this area is based on anecdotal
reports or descriptive evidence, there is significant scope for improving the
current methods by using longitudinal data and more rigorous empirical
analysis .” Their own empirical tests using a panel dataset including 13 years of state spending data suggested a positive
relationship between government expenditures on health and state economic growth, a result contrary to that found in Jones
(1990).¶ Because health problems worsen when unaddressed, cities paying for emergency care of uninsured populations may pay
significantly more for the health problems that result from putting off care than places that pay upfront for preventative care
(Baicker and Chandra 2006 Baker, Fisher, and Wennberg 2008; Bamezai and Melnick 2006). In fact, Baicker and Chandra (2004,
184) find that spending and health outcomes are inversely related perhaps because “the use of intensive, costly care…crowds out the
use of more effective care.” Scholarship on the relationship between health care spending in health outcomes suggests a complex
relationship. Fisher and others (2007) find that additional spending on Medicare patients tends to be associated with higher
numbers of procedures rather than improved health outcomes. Other research suggests that health care spending does produce
improved outcomes but only in particular populations (i.e., infants due to a decrease in infant mortality) (Gallet and Doucouliagos
2015). While the relationship between health care spending and health outcomes is complex, the relationship between spending on
health insurance and health care outcomes may be more straightforward. Health insurance may lead to more desirable health care
outcomes directly (through care which addresses extant diseases/infirmities) and indirectly (through preventative care), and
healthcare spending is not a simple proxy for the prevalence of health care insurance (see Anderson and Frogner 2008; Anderson
and Poullier 1999).¶ Over the last decade, there has been an increase in attention to assessing social programs to see if they “work.”
In the health care policy arena, these assessments tend to focus on one of two primary criteria: (1) health outcomes, or (2) fiscal
efficiency. If health insurance is supposed to make people healthier, we can evaluate Medicaid (for example) based on the health
related outcomes of program participants (e.g., Baiker et al. 2013). But states (and politicians) also have to weigh if a program is
“worth the cost” given that there are other calls on the public purse. These assessments focus more on if a program saves more
money than it spends over time or leads to economic growth that helps the state recoup its costs (in terms of making up lost or
increasing tax revenue for example) or an increase in employment growth that makes the state economy stronger. If providing public
health insurance strengthens the economy and reduces the net cost of the program, it should enjoy broader support. Policy experts
disagree about the net costs of existing state-sponsored health insurance programs, the focal point of this article. Below, we review
these arguments. ¶ Pro: Expanding State Sponsored Health Insurance is Worth the Cost ¶ First, increasing
access to
health insurance could positively affect labor supply and demand . Access to health
insurance increases the ability of people to remain in the workforce because it
keeps them healthier and increases the likelihood that they will be available for
work. While this can increase overall lifetime earnings and decrease employee
turnover, it also could reduce the number of people reliant on other government
social programs such as social security, food stamps, housing assistance , etc.
Moreover, access to health insurance, particularly through the government may
eliminate “job lock ” and encourage entrepreneurial activities such as starting a
new business or investing in research that could create more jobs for others (see e.g.,
Sterret, Bender, and Palmer 2014). ¶ Likewise, larger government sponsored programs could alleviate some inequalities in the
system (Sterret, Bender, and Palmer 2014). For example, under an employee-sponsored health insurance regime, firms with more
elderly or disabled employees, pregnant women, and so on, pay more for health care than firms who have employees that are
cheaper to cover. The financial incentives generated by this insurance regime may encourage firms to either discriminate against
certain workers (American Civil Liberties Union 2002), decrease wages (Gruber 1994) and investments, or decrease hiring
additional workers (especially new full time workers) (Baicker and Chandra 2006) as health care costs become a larger percentage
of labor costs. For these reasons, increasing government sponsored health insurance could increase employment and economic
growth by increasing the labor supply and eliminating market inefficiencies. ¶ Looking specifically at Medicaid, some evidence
suggests that expanding Medicaid coverage could increase economic and employment growth. Baiker and others (2013) harnessed
he unique “experimental” expansion of Medicaid in Oregon to test how Medicaid coverage affected individual health outcome and
economic security. While Medicaid access did not improve all health outcomes, “Medicaid coverage decreased the probability of a
positive screening for depression, increased the use of many preventive services, and nearly eliminated catastrophic out-of-pocket
medical expenditures” (Baiker et al. 2013). A related study demonstrated that those participating in the Medicaid expansion had
“lower out-of-pocket medical expenditures and medical debt (including fewer bills sent to collection), and better self-reported
physical and mental health than the control group” (Finkelstein et al. 2012).3 ¶ State-sponsored health insurance
may boost economic growth through other means as well. Providing lower income
individuals with state health insurance can increase tax revenues by keeping
families and individuals out of debt that would otherwise keep them from paying
their taxes. For example, as the cost of health care has increased in the United States, lack of health insurance
has become the largest driver of bankruptcy (Himmelstein et al. 2009). Expenses associated
with significant health issues also decrease the ability of families to invest in activities
that would increase their economic position and thus increase taxable income . For
example, a study by Collins and others (2012) found that 36 percent of young adults had medical debt, and of those 31 percent had
put off education and career plans, 28 percent were unable to meet their basic financial obligations because of medical bills, and 32
percent could not make their student loan or tuition payments. ¶ A
third mechanism through which state sponsored
health insurance could bolster economic growth is as a direct economic stimulus (see e.g., Pauly 2003):
expenditures on health care increase both wages and the number of jobs in the
health care sector. To the extent that expenditures on health care lead to new treatments and cures that decrease
morbidity and infirmity, spending can result in a large financial gain for the country. (Aaron
2003; Murphy and Topel 2006).z

Coverage gaps threaten economic decline – stabilizing insurance

markets is key
Sara Rosenbaum 10, JD from Boston University, Jonathan Gruber, Buying Health
Care, the Individual Mandate, and the Constitution, The New England Journal of
Medicine, http://www.nejm.org/doi/pdf/10.1056/NEJMp1005897
From an economics standpoint, pose of the ACA is to regulate how Americans buy health care, which is clearly economic conduct.
Above all, the ACA’s fundamental goal is to stabilize the vast U.S. market for health care services — which accounts for 17.5% of the
gross domestic product, according to Congress — along with the health insurance system on which nonelderly Americans rely as a
principal means for financing their health care. The law’s goal is revealed through extensive legislative findings that are set forth in
the ACA. The goal also can be seen in the act’s provisions that collectively are aimed at
making the insurance market work for millions of Americans who, because of
their income, health status, or both, have been locked out of affordable, accessible,
and stable coverage and must therefore try to pay for care at the point of service. ¶
The existing system has broad economic implications for both the insured and the uninsured. Far
from being passive and noneconomic, the uninsured consume more than $50
billion in uncompensated care, the costs of which are passed through health care
institutions to insured Americans. Moreover, medical expenses not covered by
insurance are one of the leading causes of bankruptcy in the United States, and the
costs of resolving those bankruptcies are borne throughout the U.S. economy . In
addition, the lack of health insurance leads to poorer health, which can, in turn,
reduce workplace productivity. Even the possibility of losing health insurance
makes many workers afraid to leave their jobs for more productive positions
elsewhere, so the current system reduces the over all productivity of the U.S. labor
force.¶ The changes made by the ACA to stabilize the insurance market are fundamentally economic. The legislation’s core is its
mandate to end pervasive discriminatory insurance practices while making care affordable. But such change is not
possible without an individual mandate. If people who are in better health can opt
out of the market and effectively gamble that they can pay for whatever health care
they need at the point of service, prices rise for those who are in poorer health,
leading to an “adverse selection” spiral that raises insurance prices for all. This is
not an idle conjecture . Five states have tried to undertake reforms of the nongroup insurance market like those in the
ACA without enacting an individual mandate; those five states are now among the eight states with the most expensive nongroup
health insurance.¶ In the end, the
ACA is all about altering individual economic conduct, and
its importance lies in the way it changes the when and how of health care
purchasing. By ensuring access to affordable coverage for most Americans, the law
seeks to rationalize our economic behavior while providing the regulatory and
subsidization tools to make this rationalization possible . To characterize the ACA as a law aimed at
anything other than individual economic conduct is to fundamentally miss the point of the legislation.

Second is small businesses:

Uncertainty and poor ACA implementation threatens job lock and
crush small businesses – they’re key to the economy
Jeanne Shaheen 17, MA in Political Science from the University of Mississippi,
6/29/2017, Small businesses are collateral damage in healthcare chaos,
http://www.nhbr.com/July-7-2017/Small-businesses-are-collateral-damage-in-
healthcare-chaos/
The Republican plan to overhaul our healthcare system is causing anxiety for millions
of Americans and uncertainty for small businesses and entrepreneurs who are the
backbone of our economy.¶ The Senate bill was drafted in secret by Republican senators with no input from the
public, no testimony from doctors or hospitals and no public hearings. This backroom maneuvering follows passage of the House
Republican healthcare plan, which even President Trump has called “mean.” ¶ These bills roll back protections for people with pre-
existing conditions, raise out-of-pocket costs and strip coverage from millions of people. They also slash Medicaid — our nation’s
program for insuring children, people with disabilities, seniors in nursing homes, and people with substance use disorders — by
nearly half.¶ I recognize that the
A ffordable C are A ct needs changes. I believe we should focus on
improving the law, keeping what works and fixing what’s not working, while
helping to level the playing field for small businesses.¶ But instead of fixing it, the Trump
administration is systematically undermining the ACA by cutting outreach and
enrollment efforts, suggesting it won’t enforce the law and refusing to commit to
making cost sharing reduction payments essential to the ACA-created health
insurance marketplaces for more than a month at a time. President Trump has made clear his desire
to see the system fail, saying: “The best thing we can do politically speaking is let Obamacare explode.”¶ That’s irresponsible, and
treats small businesses as collateral damage.¶ While some small businesses buy health insurance in the small group market, many
entrepreneurs, sole proprietors and people working for small firms purchase their insurance on the individual market through an
ACA marketplace.¶ According to the nonpartisan Congressional Budget Office, the
chaotic, incoherent and
secretive process in Washington is creating “substantial uncertainty about how the
new law would be implemented [and] could lead insurers to withdraw from or not
enter the non-group [individual] market” for insurance purchased individually on
ACA marketplaces.¶ In 2014, one in five individuals who purchased healthcare on an ACA marketplace was a small
business owner, self-employed, or both. Before passage of the ACA, small businesses paid an average 18 percent more for coverage
than large businesses.¶ Data from the Centers for Medicare and Medicaid Services says the average yearly premium increase in the
small group market was 10.4 percent between 2008 and 2010 (pre-ACA), but dropped by half between 2011 and 2015. The number
of uninsured small business employees (those working at firms with fewer than 50 workers) dropped by more than four million
between 2013 and 2015.¶ The
ACA also enabled many Americans to consider
entrepreneurship by ending the disincentive known as “job lock ,” which kept
many Americans in jobs they didn’t want because they feared losing their health
insurance.¶ David Lucier, owner of Claremont Spice & Dry Goods in Claremont, said: “Before the ACA, insurance costs were
more than a third of my business expenses. Now, they’re less than an eighth. The ACA made it possible for me to go out on my own
and realize my dream of starting a small business.Ӧ Citing
the uncertainty and the general
unpredictability of the legislative process in Washington, insurers are departing
the exchanges . This is especially damaging for sole proprietors and small
businesses that rely on the ACA and its affordable insurance options .¶ Without the
ACA, millions of Americans will lose their insurance , and small businesses will face
the prospect of closing or shifting health costs to employees.¶ New Hampshire is a small
business state. Small businesses employ more than half our private workforce and are a

job creating engine . They need certainty so they can make prudent decisions about
payroll, budgets and product development.¶ Running a small business is hard enough. The current
chaos in Washington makes it that much more difficult.¶ Instead of tearing down the ACA
and taking health coverage away from people and small businesses, we should be
building on the gains and achievements of healthcare reform and work together on
a bipartisan basis to fix what’s not working.¶ The ACA has had a positive impact all across

America, but it needs commonsense repairs and strengthening . My message to Republican leaders in
Congress and President Trump is: stop undermining the ACA, and let’s work together to improve America’s healthcare system.

Small businesses are key to reverse economic stagnation – solves

weak job growth and labor outflows
Boyd Nash-Stacey 16, Economist at BBVA Compas, MA in Economics from the
University of Houston, 6/22/2016, Running on fumes: remaining gap in Beveridge
Curve a matter of structural forces, https://www.bbvaresearch.com/wp-
content/uploads/2016/06/160622_US_EW_RunningOnFumes.pdf
As the U.S. economy enters its 28th consecutive quarter of expansion (4th longest
since the great depression), there is ongoing debate as to whether labor markets,
and for that matter, the broader economy is nearing the end of the expansion cycle.
While there is evidence that expansions do not die of old age, there are signs that the labor market
recovery is nearing retirement, similar to a growing share of the labor force. 1 For
example, a recent report from the BLS suggested that job growth was the lowest in six
and half years. Moreover, the auspicious signs of strong flows back into the labor force
reversed course dramatically. While these measures can be volatile, there are many signs that
cyclical recovery is nearing its peak at a moment when conditions remain below
the economy’s pre-crisis potential.¶ That being said, a broad view of the labor market suggests that conditions
could not be better. The economy has added an average of 226K jobs per month since 2014, and the unemployment rate now stands
at 4.7%—the lowest rate in nine years. In addition, the number of people choosing to re-enter the labor force and begin work was at
an all-time high in April, pushing up the labor force participation rate, a trend that had coincided with wage gains and tighter labor
market conditions. ¶ To assess if there is remaining slack in the labor market or if the remaining headwinds are structural in nature,
we exploit the empirical relationship between the unemployment rate and jobs vacancies, known as the Beveridge Curve (BC), and a
time-series derivation of the gap in the BC referred to as the “curve shifter.” Theory suggests that higher levels of unemployment
(larger pool of job seekers) is associated with a lower number of vacancies given that a higher supply of job seekers and greater
demand for employees will increase the likelihood of employers finding a match for their vacant positions. As a result, traditional
business cycles produce movements along the curve. However, during the recession and recovery, there
has been a persistent outward shift in the curve, which is unlikely to be explained
by normal cyclical forces.¶ To put this into perspective relative to the pre-crisis, for
any given job vacancy rate, there was a 2pp higher unemployment rate (UR). For
sectors most acutely impacted by the crisis, such as construction and
transportation and utility, the gaps were 5.1pp and 2.3pp larger, respectively.
Although there have been some indications of improvements, based on a
derivation of this gap or shift in the BC, there appear to be remaining frictions .¶
Using this reduced form representation of the curve shifter, we confirm previously established relationships between productivity
(Lubik 2012), uncertainty (Liu & Leduc 2015), and secular shifts in labor force activity a la Bova et al (2016). However, we find that
access to credit, in addition to significant fiscal policy tightening, are the key elements in the breakdown of labor market matching.
Moreover, we find heterogeneous impacts across firm size and age, and industries. In fact, the reduced form representation of the
factors that can “shift the curve” a la Pissarides (2000) and Liu & Leduc (2015) shows that despite a handful of cyclical indicators
suggesting vast improvements in the labor market, there remain significant structural forces at play. ¶ Usual suspects explain
remaining gap in labor market¶ After controlling for changes in unemployment benefits (extension of unemployment insurance
claims) due to the financial crisis, we found that there were three key factors that explain the significant and persistent outward shift
in the BC: labor force outflows of those 55 and older, cyclical fiscal policy tightening and credit availability. In fact, over a four year
cycle, increased willingness of banks to lend in the commercial and industrial (C&I) and commercial real estate loans (CRE) spaces
explains 35% of the shift, while cyclical fiscal policy shocks explain 31% of the movement, productivity explains 15%, and retiree
outflows from the labor force explain an additional 13%. Unlike Liu & Leduc (2015), we find that policy uncertainty explains only a
small portion of the shift (3.0%). On a short time horizon (four quarters), however, productivity plays a more important role in
matching, explaining nearly 50% of the shift, with labor force outflows explaining an additional 17%. ¶ These results
imply
that factors that are cyclical by nature can have lasting effects on broader labor
market activity. A process sometimes referred to as hysteresis. For example, fiscal policy shocks and credit availability tend
to ebb and flow with the business cycles, leading to predictable movements along the BC. However, without offsetting shocks to
other determining factors, e.g. lower uncertainty or higher productivity, the impact can persist for years, and in some cases never
fully recover. In addition, to the extent that credit and fiscal policy have experienced a permanent shift, and the fact that monetary
policy is becoming a less effective tool, it will be hard to envisage any significant reduction in the gap in the medium-term. ¶ In
addition, we tested the impact hiring rates have on BC across firm age, size and industry. In the short run, large and incumbent firms
have the largest impact on the BC. However, after six quarters, the
impact that startups and small firms
have on the BC is more significant and persistent. In fact, at 16 quarters, the impact that
startup hiring has on BC compared to old firms is 10 times greater ; for small
firms, in a similar vein, the impact is 250% greater at 16 quarters versus four
quarters from the initial shock. With this in mind, creating an environment that
encourages small business formation and risk taking could counteract headwinds
plaguing the labor market. ¶ Firms at all levels are susceptible to credit cycles and cash flow volatility. However, these
factors are amplified for new entrants or small firms, imparting a larger influence on the broader labor market, particularly in
keystone sectors such as retail, real estate and construction. In other words, hiring slowdowns in these sectors have the largest and
most persistent effect on the BC shifter. For instance, a one standard deviation drop in the hiring rates in these sectors would shift
the BC outwards by approximately 10%. To put this into perspective, in the aftermath of the crisis, the BC shifter increased by 30%
from peak-trough. Moreover, unlike other industries that are more apt at weathering cycles and have greater access to credit such as
manufacturing, these industries are generally slow to respond and as a result, accumulate losses over a longer time period, and in
some cases, never recover.¶ This finding has substantial implication for the health of the
broader economy given the fact that small and new firms are the dominant force in net
job creation in the U.S.; whereas, larger (500+ employees) and older (11+ years) firms are historically net job
destroyers. Moreover, startups and small businesses hire at a rate between 1 to 2.5 times
higher than older and larger firms. Labor-intensive service sectors such as retail also have persistently higher
levels of hiring, in some cases 50-75bp higher than other sectors. More specifically, startup hiring rates in industries such as finance
and insurance, manufacturing and information are 380%, 330% and 270% higher, respectively, than their industry peers. Small and
young firms in arts and entertainment, agriculture and accommodation hire at rates 200%-400% higher than the national average.
Research has also shown that only 3% of businesses can be classified as “high
growth businesses,” but they are responsible for a disproportionate share of
growth. Moreover, small businesses are essential parts of U.S. supply chains
given that can lower logistical costs, are nimble problem solvers and are better
equipped to partner on joint innovations. ¶ There is additional upside to targeting
small businesses and startups given that as outflows from the labor market
intensify, there could be adverse effects for aggregate productivity as new entrants
take time to develop skills. As a result, focusing on new business hires could help to
accelerate the demographic transition.

Small businesses solves competitiveness – reverses offshoring

Karen Mills 13, MBA from Harvard Business School, SBA’s Karen Mills: U.S.
competitiveness hinges on the strength of small business suppliers, The Washington
Post, https://www.washingtonpost.com/business/on-small-business/sbas-karen-mills-
us-competitiveness-hinges-on-the-strength-of-small-business-
suppliers/2013/05/06/03f517b8-b412-11e2-9a98-4be1688d7d84_story.html?
utm_term=.86664a9b8ab1
¶However, according to Gary Pisano and Willy Shih of Harvard Business School, for decades, companies
operating in the United States were steadily outsourcing development and
manufacturing work to specialists abroad and cutting their spending here at
home. Over time, this outsourcing moved up from low value tasks to more
sophisticated engineering and manufacturing.¶ ¶ This has hurt America’s
competitiveness and our ability to innovate .¶ ¶ Economy & Business Alerts¶ Breaking news about
economic and business issues.¶ Sign up¶ But the trend is shifting, and across the Obama administration, we have put
in place programs that attract more production, more investment and more jobs back to our shores. ¶ ¶ Caterpillar, GE and Ford, for
example, are among those that have recently announced they are shifting some manufacturing operations back to the United States. ¶
¶ The reasons are clear. In an article about onshoring GE’s appliance manufacturing to Kentucky, CEO Jeff Immelt wrote that

“engineering and manufacturing are hands-on and iterative, and our most
innovative appliance-design work is done in the United States. At a time when
speed to market is everything, separating design and development from
manufacturing didn’t make sense.”¶ ¶ This trend is likely to continue as companies
recognize higher U.S. worker productivity, rising labor and energy costs abroad
and logistical advantages here at home. Couple that with global demand for high quality American-made
products, and it is hard not to be bullish about America’s long-term opportunities. ¶ ¶ The key now is building
capacity and investing in our country’s small business supplier base so that these
firms can better support global manufacturers and help bring more jobs back to
the United States — and both the government and the private sector have a role to
play in making this possible.¶ The United States has some of the world’s most
innovative small suppliers and entrepreneurs. We have the types of small
businesses that, with the right support, can go toe-to-toe with China (particularly
on the higher end of the value chain) or with Germany’s famed Middlestand companies.¶
Businesses around the world are taking notice. Foreign companies like Lenovo,
Ikea, Nissan, Airbus, Siemens are starting or growing U.S. operations, and they
are looking for networks of U.S.-based suppliers to support them. ¶ So how do we build on
this momentum?¶ Related: How to land contracts with corporate clients ¶ Today, U.S.-based, forward-thinking
companies are looking at their supply chains very differently. They are working
together to co-innovate, they are helping supply the capital and skills their small
suppliers need, and they are operating as partners.¶ At the U.S. Small Business Administration, we
are leading a government-wide effort called the American Supplier Initiative to support small suppliers. ¶ Between 250,000 and
750,000 U.S. businesses are part of commercial and government supply chains. We are using our experience and the best practices
we have developed overseeing the federal government’s $100 billion small business contracting program to help more small firms be
successful commercial suppliers. Here’s how:¶ Making connections: We are connecting small and large businesses together through
matchmaking activities and through public private partnerships like IBM’s Supplier Connection, a portal that makes it easier for
small businesses to connect to supply chain opportunities. ¶ Access and opportunity: The Washington Post highlighted a recent
Massachusetts Institute of Technology (MIT) report that concluded that the “future of manufacturing will consist of smaller firms
that may not always have enough money to train workers, commercialize new products and procure financing on their own.” ¶ Our
agency has a $100 billion loan portfolio to help get capital to these businesses. We also train and counsel more than a million
business owners each year. And, as I highlighted in the second blog in this series, the president’s budget proposes $40 million for
intensive entrepreneurial training to support established firms that are well positioned for growth. The training is tailored to ensure
that entrepreneurs get the skills, resources, counseling and long-term business planning advice they need to be part of corporate
supply chains.¶ Creating ecosystems: A key component of a thriving manufacturing base is a network of nimble suppliers. At the
SBA, we launched the first official federal government cluster initiative in 2010; today, the federal government is invested in more
than 50 clusters across the country.¶ The goal of these clusters is to leverage, integrate and better align all of a region’s assets (local
industries, skill base of local workforce, economic development agencies, universities and community colleges). These ecosystems
are a proven tool for attracting and strengthening regional manufacturing and for boosting exports. ¶ In addition, as part of the
American Supplier Initiative, the SBA is supporting efforts to fund supply chain mapping techniques. ¶ This is only the beginning. All
across the country there
are small suppliers ready, able and willing to make America’s
corporations more productive, more innovative and more globally competitive. As
those supplier networks grow and connect, they will serve as a magnet to bring
more manufacturing and more jobs back to our shores.¶ That’s how we can
accelerate economic growth , strengthen the middle class and make America
more globally competitive.

Strengthening US growth key to US leadership---solves global war

Richard N. Haass 13, President of the Council on Foreign Relations, 4/30/13, “The
World Without America,” http://www.project-syndicate.org/commentary/repairing-
the-roots-of-american-power-by-richard-n--haass
Let me posit a radical idea: The most critical threat facing the United States now and for the foreseeable future is not a rising China, a reckless North
the biggest
Korea, a nuclear Iran, modern terrorism, or climate change. Although all of these constitute potential or actual threats,
challenges facing the US are its burgeoning debt, crumbling infrastructure, second-rate primary and secondary schools,
outdated immigration system, and slow economic growth – in short, the domestic foundations of

American power. Readers in other countries may be tempted to react to this judgment with a dose of schadenfreude, finding more than a
little satisfaction in America’s difficulties. Such a response should not be surprising. The US and those representing it have been guilty of hubris (the US
may often be the indispensable nation, but it would be better if others pointed this out), and examples of inconsistency between America’s practices and
its principles understandably provoke charges of hypocrisy. When America does not adhere to the principles that it preaches to others, it breeds
resentment. But, like most temptations, the urge to gloat at America’s imperfections and struggles ought to be resisted. People around the globe should
be careful what they wish for. America’s
failure to deal with its internal challenges would come
at a steep price. Indeed, the rest of the world’s stake in American success is nearly as
large as that of the US itself. Part of the reason is economic. The US economy still accounts for
about one-quarter of global output. If US growth accelerates, America’s capacity to
consume other countries’ goods and services will increase, thereby boosting
growth around the world. At a time when Europe is drifting and Asia is slowing,
only the US (or, more broadly, North America) has the potential to drive global economic
recovery . The US remains a unique source of innovation. Most of the world’s citizens communicate
with mobile devices based on technology developed in Silicon Valley; likewise, the Internet was made in America. More recently, new technologies
developed in the US greatly increase the ability to extract oil and natural gas from underground formations. This technology is now making its way
around the globe, allowing other societies to increase their energy production and decrease both their reliance on costly imports and their carbon
emissions. The US is also an invaluable source of ideas. Its world-class universities educate a significant percentage of future world leaders. More
fundamentally, the US has long been a leading example of what market economies anddemocratic politics can accomplish. People
and
governments around the world are far more likely to become more open if the
American model is perceived to be succeeding. Finally, the world faces many serious
challenges , ranging from the need to halt the spread of w eapons of m ass
d estruction, fight climate change, and maintain a functioning world economic order that
promotes trade and investment to regulating practices incyberspace, improving global health, and preventing armed
conflicts . These problems will not simply go away or sort themselves out. While Adam
Smith’s “invisible hand” may ensure the success of free markets, it ispowerless in the world of geopolitics. Order requires the
visible hand of leadership to formulate and realize global responses to global
challenges. Don’t get me wrong: None of this is meant to suggest that the US can deal effectively with the world’s problems on its own.
Unilateralism rarely works. It is not just that the US lacks the means; the very nature of contemporary global problems suggests that only collective
responses stand a good chance of succeeding. But multilateralism
is much easier to advocate than to
design and implement. Right now there is only one candidate for this role: the US.
No other country has the necessary combination of capability and outlook. This brings me
back to the argument that the US must put its house in order – economically , physically, socially, and
politically – if it is to have the resources needed to promote order in the world. Everyone should
hope that it does: The alternative to a world led by the US is not a world led by China, Europe, Russia, Japan, India,
or any other country, but rather a world that is not led at all. Such a world would almost certainly
be characterized by chronic crisis and conflict. That would be bad not just for Americans, but
for the vast majority of the planet’s inhabitants .

The US-led liberal order is key to solve global conflict – economic

foundations are key
Robert Kagan 17, Senior Fellow in Foreign Policy, Project on International Order and
Strategy, Brookings Institution, “The twilight of the liberal world order,” 1/24/17,
https://www.brookings.edu/research/the-twilight-of-the-liberal-world-order/
However, it is the two great powers, China
and Russia, that pose the greatest challenge to the
relatively peaceful and prosperous international order created and sustained by
the United States. If they were to accomplish their aims of establishing hegemony in their
desired spheres of influence, the world would return to the condition it was in at
the end of the 19th century , with competing great powers clashing over inevitably
intersecting and overlapping spheres of interest. These were the unsettled, disordered conditions
that produced the fertile ground for the two destructive world wars of the first half
of the 20th century. The collapse of the British-dominated world order on the oceans, the disruption of the uneasy
balance of power on the European continent due to the rise of a powerful unified Germany, combined with the rise of Japanese
dissatisfied great
power in East Asia all contributed to a highly competitive international environment in which
powers took the opportunity to pursue their ambitions in the absence of any power
or group of powers to unite in checking them. The result was an unprecedented global

calamity. It has been the great accomplishment of the U.S.-led world order in the 70 years since the end of the Second World
War that this kind of competition has been held in check and great power conflicts have been avoided.

The role of the United States, however, has been critical. Until recently, the dissatisfied great and medium-size
powers have faced considerable and indeed almost insuperable obstacles to achieving their objectives. The chief obstacle has been
the power and coherence of the order itself and of its principal promoter and defender. The
American-led system of
political and military alliances , especially in the two critical regions of Europe and East Asia, has
presented China and Russia with what Dean Acheson once referred to as “situations of strength”
in their regions that have required them to pursue their ambitions cautiously and
in most respects to defer serious efforts to disrupt the international system. The system has served
as a check on their ambitions in both positive and negative ways. They have been participants in and for the most part beneficiaries
of the open international economic system the United States created and helped sustain and, so long as that system was functioning,
have had more to gain by playing in it than by challenging and overturning it. The same cannot be said of the political and strategic
aspects of the order, both of which have worked to their detriment. The growth and vibrancy of democratic government in the two
decades following the collapse of Soviet communism have posed a continual threat to the ability of rulers in Beijing and Moscow to
maintain control, and since the end of the Cold War they have regarded every advance of democratic institutions, including
especially the geographical advance close to their borders, as an existential threat—and with reason. The continual threat to the basis
of their rule posed by the U.S.-supported order has made them hostile both to the order and to the United States. However, it has
also been a source of weakness and vulnerability. Chinese rulers in particular have had to worry about what an unsuccessful
confrontation with the United States might do to their sources of legitimacy at home. And although Vladimir Putin has to some
extent used a calculated foreign adventurism to maintain his hold on domestic power, he has taken a more cautious approach when
met with determined U.S. and European opposition, as in the case of Ukraine, and pushed forward, as in Syria, only when invited to
do so by U.S. and Western passivity. Autocratic rulers in a liberal democratic world have had to be careful.

The greatest check on Chinese and Russian ambitions, however, has come from the combined military power of the United States
and its allies in Europe and Asia. China, although increasingly powerful itself, has had to contemplate facing the combined military
strength of the world’s superpower and some very formidable regional powers linked by alliance or common strategic interest,
including Japan, India, and South Korea, as well as smaller but still potent nations like Vietnam and Australia. Russia has had to
face the United States and its NATO allies. When united, these military powers present a daunting challenge to a revisionist power
that can call on no allies of its own for assistance. Even were the Chinese to score an early victory in a conflict, they would have to
contend over time with the combined industrial productive capacities of some of the world’s richest and most technologically
advanced nations. A weaker Russia would face an even greater challenge.

Faced with these obstacles, thetwo great powers, as well as the lesser dissatisfied powers, have had to hope
for or if possible engineer a weakening of the U.S.-supported world order from within . This
could come about either by separating the United States from its allies, raising doubts
about the U.S. commitment to defend its allies militarily in the event of a conflict, or by various means wooing
American allies out from within the liberal world order’s strategic structure. For most of the past decade, the reaction of American
allies to greater aggressiveness on the part of China and Russia in their respective regions, and to Iran in the Middle East, has been
to seek more reassurance from the United States. Russian actions in Georgia, Ukraine, and Syria; Chinese actions in the East and
South China seas; Iranian actions in Syria, Iraq, and along the littoral of the Persian Gulf—all have led to calls by American allies and
partners for a greater commitment. In this respect, the system has worked as it was supposed to. What the political scientist William
Wohlforth once described as the inherent stability of the unipolar order reflected this dynamic— as
dissatisfied
regional powers sought to challenge the status quo, their alarmed neighbors
turned to the distant American superpower to contain their ambitions .

The system has depended, however, on will, capacity, and coherence at the heart of
the liberal world order . The United States had to be willing and able to play its part as
the principal guarantor of the order, especially in the military and strategic realm. The order’s
ideological and economic core —the democracies of Europe and East Asia and the Pacific— had to remain

relatively healthy and relatively confident . In such circumstances, the combined political, economic, and
military power of the liberal world would be too great to be seriously challenged by the great powers, much less by the smaller
dissatisfied powers.

Continued slow growth causes diversionary conflict with China

John Ross 17, Senior Fellow at Chongyang Institute for Financial Studies, Renmin
University of China, former Professor at Shanghai Jiao Tong University, 7/10/2017,
“Trump's economy - cyclical upturn and long term slow growth”,
http://ablog.typepad.com/keytrendsinglobalisation/2017/07/trumps-economy-cyclical-
upturn-and-long-term-slow-growth.html

It is crucial for both economic and geopolitical perspectives to have an accurate analysis
of trends in the US economy. The publication of the latest revised US GDP figures is therefore important as it
provides the latest opportunity to verify these developments. This data confirms the fundamental trends in the US economy under
Trump:¶ The US remains locked in very slow medium and long-term growth – particularly in
terms of per capita GDP growth.¶ Due to extremely weak growth of the US economy in 2016 a purely short-term
cyclical upturn is likely in 2017 - but any such short-term cyclical upturn will be far
too weak to break out of this fundamental medium and long-term trend of US slow
growth.¶ This article analyses these economic trends in detail, considers some of their geopolitical consequences, and their
impact on domestic US politics.¶ US GDP and per capita GDP growth¶ In the 1st quarter of 2017 US GDP was 2.1% higher than in the
first quarter of 2016. Making an international comparison to other major economic centres: ¶ US total GDP growth of 2.1% was the
same as the EU’s 2.1%.¶ Making a comparison to the largest developing economies, US 2.1% growth was far lower than China’s 6.9%
or India’s 6.2%.¶ This data is shown in Figure 1¶ However, in terms of per capita GDP growth the US was the worst performing of the
major international economic centres, because the US has faster population growth than any of these except India. US annual
population growth is 0.7%, compared to 0.6% in China and 0.4% in the EU – India’s is 1.3%. The result therefore, as Figure 2 shows,
is that US per capita GDP growth in the year to the 1st quarter of 2017 was only 1.3% compared to the EU’s 1.7%, India’s 4.9% and
China’s 6.3%.¶ In summary US per capita GDP growth is very weak – only slightly above 1%. ¶ Figure 1¶ image¶ Figure 2¶ image¶ ¶
Business cycle¶ In order to accurately evaluate the significance of this latest US data it is necessary to separate purely business cycle
trends from medium/long term ones – as market economies are cyclical in nature failure to separate cyclical trends from long term
ones may result in seriously distorted assessments. Purely cyclical effects may be removed by using a sufficiently long term moving
average that cyclical fluctuations become averaged out and the long term structural growth rate is shown. Figure 3 therefore shows
annual average US GDP growth using a 20-year moving average – a comparison to shorter term periods is given below. ¶ Figure 3
clearly shows that the fundamental trend of the US economy is long-term slowdown. Annual average US growth fell from 4.4% in
1969, to 4.1% in 1978, to 3.2% in 2002, to 2.2% by 1st quarter 2017. The latest US GDP growth of 2.1% clearly does not represent a
break with this long-term US economic slowdown but is in line with it. ¶ Figure 3¶ image¶ ¶ Cycle and trend¶ Turning from long term
trends to analysis of the current US business cycle, it may be noted that a 5-year moving average of annual US GDP growth is 2.0%, a
7-year moving average 2.1% and the 20-year moving average 2.2%. Leaving aside a 10-year moving average, which is greatly
statistically affected by the severe recession of 2009 and therefore yields a result out of line with other measures of average annual
growth of only 1.4%, US average annual GDP growth may therefore be taken as around 2% or slightly above. That is, fundamental
structural factors in the US economy create a medium/long term growth rate of 2.0% or slightly above. Business cycle fluctuations
then take purely short-term growth above or below this average. To analyse accurately the present situation of the US business cycle
therefore recent growth must be compared with this long-term trend. ¶ Figure 4 therefore shows the 20-year moving average for US
GDP growth together with the year on year US growth rate. This shows that in 2016 US GDP growth was severely depressed – GDP
growth in the whole year 2016 was only 1.6% and year on year growth fell to 1.3% in the second quarter. By the 1st quarter of 2017
US year on year GDP growth had only risen to 2.1% - still below the 20-year moving average. ¶ As
US economic growth
in 2016 was substantially below average a process of ‘reversion to the mean’, that
is a tendency to correct exceptionally slow or exceptionally rapid growth in one
period by upward or downward adjustments to growth in succeeding periods,
would be expected to lead to a short-term increase in US growth compared to low
points in 2016. This would be purely for statistical reasons and not represent any
increase in underlying or medium/long US term growth. This normal statistical process is
confirmed by the acceleration in US GDP growth since the low point of 1.3% in the 2nd quarter 2016 – growth accelerating to 1.7% in
3rd quarter 2016, 2.0% in 4th quarter 2016 and 2.1% in 1st quarter 2017. ¶ Given the very depressed situation of the US economy in
2016 therefore some increase in speed of growth may be expected in 2017 for purely statistical reasons connected to the business
cycle.¶ Figure 4¶ The economic and domestic US political conclusions of the trends shown in the latest US data are therefore clear ¶
US economic growth in 2016 at 1.6% was so depressed below even its long term
average that some moderate upturn in 2017 is likely. President Trump’s administration may of
course claim ‘credit’ for the likely short-term acceleration in US growth in 2017 but any such short-term shift is merely a normal
statistical process and would not represent any acceleration in underlying US growth .
Only if growth continued
sufficiently strongly and for a sufficiently long period to raise the medium/long
term rate average could it be considered that any substantial increase in
underlying US economic growth was occurring.¶ This fall of US per capita GDP
growth to a low level clearly has major political implications within the US and underlies
recent domestic political events. Very low US per capita growth, accompanied by increasing economic inequality, has resulted in US
median wages remaining below their 1999 level – this prolonged stagnation of US incomes explaining recent intense political
disturbances in the US around the sweeping aside of the Republican Party establishment by Trump, the strong support given to a
candidate for president declaring himself to be a socialist Sanders, current sharp clashes among the US political establishment etc. ¶
Even a short-term cyclical upturn in the US economy, however, is likely to be translated into increased economic confidence by US
voters. This may give some protection to Trump despite current sharp political clashes in the US with numerous Congressional
investigations of President related issues and virtually open campaigns by mass media such as the New York Times and CNN to
remove the President. The latest opinion poll for the Wall Street Journal showed that men believed the economy had improved since
the Presidential election by 74% to 25%, while women believed by 49% to 48% that the economic situation had not improved. ¶ In
terms of geopolitical consequences affecting China:¶ The short term moderate cyclical upturn in the US economy which is likely in
2017 will aid China’s short term economic growth – particularly as it is likely to by synchronised with a moderate cyclical upturn in
the EU. Both trends aid China’s exports¶ Nevertheless, due
to the very low medium and long-term US
growth rate the US will not be able to play the role of economic locomotive of the
G20. In addition to economic fundamentals IMF projections are that in the next five years China’s contribution to world growth
will be substantially higher than the US. It is therefore crucial China continues to push for economic progress via the G20 and China
has the objective possibility to play a leading role in this. ¶ Very
slow growth in the US in the medium and longer
term creates a permanent temptation to the US political establishment to attempt to

divert attention from this by reckless military action or ‘China bashing’ . China’s foreign
policy initiatives to seek the best possible relations with the US are extremely correct but the risks from such

negative trends in the US situation, and therefore of sharp turns in US foreign policy,
must also be assessed.

US-China tensions rising now – aggressive actions escalate to nuke

war
Polina Tikhonova 17, Reporter, MA from Oxford University, citing Bruce G. Blair, the
National Bureau of Asian Research, and Union of Concerned Scientists, 7/27/2017, “If
Trump Orders A Nuclear Strike On China, Here’s What Happens”,
https://www.valuewalk.com/2017/07/trump-orders-nuclear-strike-china/
The fact that Trump now has the obedience of the U.S. Pacific Fleet chief in the
hypothetical, yet possible, decision to launch nuclear strikes against Beijing makes
the whole let’s-nuke-China scenario even faster and easier to execute.¶ Less than
five minutes. This is the approximate time that would elapse from President
Trump’s decision to launch a nuclear strike against China to shooting
intercontinental ballistic missiles out of their silos, according to Bloomberg
estimations. The publication, citing former Minuteman missile-launch officer Bruce G. Blair, also estimates
that it would take about 15 minutes to fire submarine missiles from their tubes.¶ While the expert predicts that
there might be some minor hiccups in the let’s-nuke-China scenario – like some of the top brass trying to talk Trump out of
launching a nuclear strike – it appears that it
would be easier for the President to nuke an enemy
than expected now that he has the public support from the commander of the U.S.
Navy’s Pacific Fleet.¶ US vs China Tensions Rising, But Is Nuclear War Imminent?¶ The mere thought of a nuclear war
between the U.S. and China – the world’s two biggest militaries – sounds intimidating. Amid strained relations
between Washington and Beijing, and with Trump recently giving U.S. Navy more
freedom in South China Sea, the territory that China considers vital to its national
and security interests, the possibility of the two nations going to a nuclear war
cannot be ruled out anymore.¶ With Trump pledging to rein in China’s aggressive
territorial expansion in the South China Sea during his presidential campaign, the Trump administration
has made quite a few moves that could be pushing the two nations to the point of
no return . In May, Trump ordered the U.S. Navy to conduct a f reedom- o f-
n avigation op eration in the disputed area, which Beijing claims in its entirety
despite the Philippines, Malaysia, Brunei, Vietnam and Taiwan also claiming parts
of the disputed region.¶ Earlier this month, the Trump administration sent an even
scarier war message to Beijing to challenge its military buildup on the artificial
islands in the South China Sea. A U.S. destroyer passed through the international flashpoint in the South China
Sea, a move that prompted a furious response from Chinese President Xi Jinping, who warned his American counterpart of
“negative factors” in U.S.-China relations. The Chinese Foreign Ministry lambasted the incident as a “serious political and military
provocation.”¶ US vs China War Would Be ‘Disastrous For Both’¶ Just last week, Trump approved the Pentagon’s plan to challenge
Chinese claims in the South China Sea, where Beijing has been actively building reefs into artificial islands capable of hosting
military planes. Breitbart News’s Kristina Wong exclusively reported that the President approved the plan to check China over its
ongoing militarization of and actions in the South China Sea, a move that will most likely further stain U.S.-China relations. ¶ The
latest heated exchange of hostile gestures between Beijing and Washington cannot
but make experts wonder: what would happen if the U.S. and China went to war?
That would be “disastrous for both sides – politically, economically, and
militarily,” according to VICE citing senior vice president for political and security
affairs at the National Bureau of Asian Research, Abraham Denmark.¶ While the
two nations continue working together to prevent a potential nuclear threat from
China’s neighbor – North Korea – it seems like an even bigger nuclear conflict is
brewing between Washington and Beijing .¶ ‘Increased’ Possibility of Nuclear War¶ In ValueWalk’s recent
comparison of the U.S., Chinese and Russian militaries, it was concluded that the outcome of any war involving the U.S. and China is
quite impossible to predict, as there’s no telling what would be the scope and duration of the military confrontation and if nuclear
weapons would be used.¶ It’s also unclear if Russia would join forces with its arguably one of the biggest allies – China. If it did,
China’s chances of winning a war against Washington would considerably soar. After all, there are plenty of potential flashpoints in
the relations between Washington and Beijing, notably Taiwan and the South China Sea. The U.S. has in its possession about 6,800
nuclear warheads – the world’s second largest nuclear arsenal after Russia – while China has only 270 nukes, according to recent
estimations by the Arms Control Association.¶ According to a report by the U nion o f C oncerned
S cientists, published last year, the U.S. going to “nuclear war with China is not
inevitable – but the possibility that it could occur has increased .” However, with Washington
and Beijing not being able to find common ground on such a vital issue for China’s national and security interests as the South China
Sea, and with
Trump ordering more actions that further strain U.S.-China relations,
the risk of nuclear war between the world’s two biggest militaries could
skyrocket .

Cost and certainty on the individual exchanges is key to solve job lock
– studies
Bradley T. Heim 17, Professor in the School of Public and Environmental Affairs at
Indiana University, PhD in Economics from Northwestern University, Lang Kate Yang,
4/272017, The impact of the Affordable Care Act on self-employment, Health
Economics, accessed via Wiley Online Library
It is well known that the cost and availability (or lack thereof) of health insurance has the
potential to impact self-employment decisions, since leaving a wage and salary job
often entails the loss of employer sponsored health insurance. Further, surveys
performed by the National Federation of Independent Business find that the rising
cost of health insurance is perennially a top concern among small business
owners. 1 As a result, laws that reform the health insurance market, particularly for those
who are self-employed, may impact the level of self-employment in the United
States. In this paper, we use data from the Current Population Survey to provide evidence on whether the most recent of such reforms, the Affordable Care Act (ACA), has impacted the level of self-
employment in the United States.¶ ¶ Self-employed individuals who do not receive an offer of employer-sponsored or government insurance 2 (either directly or through a spouse) and who wish to purchase
insurance generally must do so in the nongroup health insurance market. Prior to the ACA, even healthy insurance seekers on the private nongroup market often faced high premiums due to adverse selection in
the market, and those with poor health or preexisting conditions generally faced even higher risk-rated premiums or were unable to purchase a policy altogether. ¶ ¶ The ACA makes several federal-level changes to
regulations in the private nongroup health insurance market. 3 For health insurance policies that begin in January 2014, it implements modified community rating regulations, which limit the extent to which
insurance companies may charge different premiums based on health status, and guaranteed issue regulations, which prevent insurance companies from excluding anyone based on preexisting conditions. In
addition, it contains subsidies for low-income taxpayers with family income up to 400% of the federal poverty level (FPL) to purchase health insurance and for small firms to provide health insurance for their
employees. Beginning on October 1, 2013, these insurance policies were offered on health insurance exchanges, some of which were operated by individual states and some of which were operated by the federal
government.¶ ¶ The first year of exchange operation was marred by numerous well-publicized difficulties in the function of the federal exchange and many state exchanges, but the second year of exchange
operation went more smoothly. 4 However, numerous state and federal lawmakers have called for repeal of the ACA. In addition, a number of markets have recently experienced decreased participation by
insurers as some large insurers have pulled out of participating in the exchanges, 5 and a number of state cooperative insurers have become insolvent, 6 which may call into question the long-term viability of the

Thus, for an individual contemplating self-employment and securing

exchanges.¶ ¶

coverage through an exchange policy, the availability of guaranteed issue and

community rated insurance in the nongroup market would be expected to make
health insurance coverage more accessible and affordable, increasing the
attractiveness of self-employment. However, the poor functioning of the
exchanges in the first year of operation, combined with uncertainty surrounding whether the law will remain in effect and whether the exchanges will
continue to be viable over the long term, would tend to temper such effects. Further, it may take time for individuals to switch from wage and salary employment to self-

employment, which may delay any effect.¶ ¶ In this study, we analyze data from the 2010 to 2015 Current

Population Survey (CPS) to provide evidence on the impact of the ACA on the level
of self-employment. The CPS is a nationally representative survey of U.S.
households and is administered every month. Its timeliness and inclusion of labor
force participation information make CPS an appropriate data source for
analyzing changes in self-employment upon the implementation of the ACA .¶ ¶ We pursue two
identification strategies. In the first, we utilize the fact that the pre-ACA individual health insurance environment differed across states regarding community rating and guaranteed issue regulations. To identify
the impact of the ACA on self-employment, we compare the change in self-employment rates pre- and post-ACA implementation in states that had no such regulations (or had a subset of these regulations) and for
which the ACA is a substantial change in policy, to states that had regulations similar to the ACA regulations and for which the ACA is a smaller change in policy. The former group constitutes the treatment states,
while the latter the comparison states.¶ ¶ In the second identification strategy, we utilize differences across individuals in whether they had employer-sponsored health insurance (ESI) prior to 2014, and examine,
among those who had such insurance, whether having a characteristic (spousal coverage, older age, or a large family) that would make them more (less) likely to be insurable if they left their job is associated with
higher (lower) levels of transitions to self-employment. Such a relationship has previously been interpreted as evidence of entrepreneurship lock. 7 We test this difference-in-differences analysis in the pre-ACA
period (from November 2010 to December 2013) and the results confirm the expected impact of the aforementioned individual characteristics on entrepreneurship lock. We then adopt a triple-differences strategy
with pre- and post-ACA implementation as the third level of difference to investigate whether the estimated prevalence of entrepreneurship lock has declined following the implementation of the ACA. ¶ ¶ Our
results suggest that the implementation of the nongroup market reforms and establishment of health insurance exchanges due to the ACA in 2014 did not lead to an overall increase in self-employment in states
that lacked similar provisions in their individual health insurance markets prior to 2014. We also do not find that the ACA differentially increased self-employment among individuals who may have been likely to
face entrepreneurship-lock in the pre-ACA period. We do, however, find statistically significant positive impacts in states that lacked the ACA nongroup market provisions in the second year of implementation

results
(when exchanges functioned properly and people had sufficient time to adjust their employment status) among individuals eligible for insurance subsidies. Taken together, these

suggest that the ACA led to increased self-employment only in cases in which the
uncertainty surrounding the exchanges was sufficiently reduced (due to the exchanges functioning properly),
the cost of insurance was sufficiently low (among low- and moderate-income individuals who qualified for subsidies), and individuals had time to
adjust.

Strengthening the mandate is key to make insurance markets

financially viable
Paul Demko 16, Healthcare Reporter for Political, former Washington Bureau Chief
for Modern Healthcare, 7/13/2016, Obamacare’s sinking safety net,
http://www.politico.com/agenda/story/2016/07/obamacare-exchanges-states-north-
carolina-000162
Even so, many of those insurers
lost tens of millions of dollars on their Obamacare
policies last year — and now they're seeking big rate hikes.¶ The ACA’s strength and
its weakness is that it was built atop America's private insurance system : rather than
creating new government health plans, it depends on competition among companies to offer affordable insurance to people who
it also means the
need it. In a nation dominated by private-sector health care players, this made it politically possible–but
system works only if insurers find Obamacare to be a desirable business. What has
happened instead in North Carolina and many other states is that insurers are finding the Obamacare
business to be a swamp.¶ Nationwide, an analysis by McKinsey found that insurers
lost $2.7 billion on individual customers in 2014, the only year since Obamacare coverage expansion for
which full numbers are available–with 70 percent of carriers sustaining losses. Those losses are
after government payments intended to help plans with high-cost customers.
Preliminary data from 2015 suggest the rate of losses likely doubled , according to McKinsey.¶ The

red ink has led to the collapse of two-thirds of 23 new nonprofit health plans that
were established with federal loan dollars to increase competition in the state
exchanges where customers shop for policies. And UnitedHealth Group is largely
getting out of the Obamacare business because of anticipated losses of $650
million this year. “ The individual market is a mess ,” Brian Webb, health policy
manager for the National Association of Insurance Commissioners, told a recent
briefing on Capitol Hill.¶ As Obamacare approaches its fourth season of enrollment, and prepares to enter the post-
Obama era, it's hitting an inflection point —and, in states like North Carolina, that point could

become a crisis. Millions are now being covered through the law, but they're
older, sicker and more expensive to insure than anyone anticipated. To
compensate, health plans are raising premiums, in some cases by a lot —the largest insurer
in Texas wants to jack up rates for individual plans by an eye-popping 60 percent next year. ¶ A close look at what's really keeping the
exchanges underwater suggests that some of the problems are self-inflicted wounds by Obama and his administration; others are the
handiwork of Republican saboteurs, who undercut the safeguards intended to help companies weather the uncertainty of the new
law. And overall, the system has been weighed down by one big miscalculation: Health
insurance amounts to a
guess about how much customers’ health care is going to cost in the long run, and
in many states Obamacare health insurers guessed wrong. ¶ None of the problems are
insurmountable, but if they aren’t fixed, the law could find itself in a mounting crisis—

what observers call a “death spiral”— in which competition vanishes, costs skyrocket, and a dwindling pool of
insurers offer policies so expensive that health insurance is as out of reach as it ever was. ¶ Politically, the repair job isn’t trivial: It
requires a bipartisan decision to stabilize the Obamacare markets, a consensus that has been unattainable in the politically toxic
atmosphere on Capitol Hill since the law was passed six years ago without a single Republican vote. With this year’s enrollment
season set to open just one week before Election Day, the turbulence in the exchanges could be a wildcard in the presidential
contest–and threaten Obama’s signature domestic achievement. ¶ The
gulf between Obamacare's success
covering citizens and its failures on the insurance front isn't just an accidental side
effect: It's a direct result of the key selling point of the law, that coverage is now
accessible to all Americans. Health care finance experts point to a handful of policy changes that could bolster the
exchanges and ensure that people in states like North Carolina can still buy health insurance five and 10 years from now. That would
require an honest reckoning with what’s gone wrong–and the legislative resolve to enact fixes. “There’s
plenty to be
worried about,” said Don Taylor, a health policy expert at Duke University who has tracked Obamacare in his home state
of North Carolina and across the country. “The answer is more policy—not doing nothing.” ¶ So just
what is that new policy supposed to look like? ¶ ANY LAW AS ambitious and complex as the ACA is going to be a work in progress.
Almost from the moment Medicare passed in 1965, Congress has been revising it, and even now it undergoes changes every year.
Most insurance companies say they remain committed to offering Obamacare plans, and as long as they stay in the business, the
exchanges are unlikely to implode.¶ In some states, such as California and Washington, the system is working fine. More than 9 in 10
health plans made money selling Obamacare policies to individuals during the first year of enrollments, according to McKinsey’s
analysis. But in states like North Carolina, it's becoming increasingly clear that the assumptions the law was built on just haven't
held up. “The pool is far less healthy than we forecast,” said Brad Wilson, CEO of Blue Cross Blue Shield of North Carolina, in an
interview with POLITICO. “We need more healthy people.” ¶ North Carolina’s Obamacare story started out just as the administration
hoped it would: More than 350,000 people signed up for insurance the first year it was offered. Just two insurance companies were
offering polices through the state's "insurance exchange"—the marketplace that lets individuals without workplace coverage buy
their own coverage–but in 2015 they were joined by a third carrier, UnitedHealth Group. Sign-ups that year surged above 550,000.
This year, the state saw another 10 percent bump, topping 600,000. ¶ But as those customers demanded health care, costs started to
mount. In 2014, medical claims in the individual market for both Blue Cross Blue Shield of North Carolina and Aetna exceeded 90
percent of premiums paid, according to financial filings. Last year, those costs soared above 100 percent of premiums for all three
carriers competing in North Carolina. Altogether,
medical claims hit $3.2 billion–nearly $100
million more than premiums the insurers collected. Throw in administrative costs
on top of that, and it becomes clear that the insurers lost tens of millions of dollars
on their individual market business, most of it coming through the exchange. This
year, all three insurers stopped paying commissions to brokers for selling
individual plans, hoping to suppress enrollments and limit their losses. ¶ The companies
are still analyzing how and why their initial estimates for setting their rates and writing policies were so off the mark. The largest
insurer, the nonprofit Blue Cross Blue Shield of North Carolina, has repeatedly stated it can’t continue to sustain the losses it
endured during the first two years of Obamacare enrollment, and it is currently weighing whether it will continue competing on the
exchange at all for 2017. Though the insurer has submitted plans to do business again in every county in the state, it plans to hike
rates nearly 20 percent on average. A final decision on 2017 participation won’t be made until August. ¶ “All options are on the table,”
Wilson said—even getting out of the Obamacare business. ¶ If Blue Cross Blue Shield does decide to abandon the North Carolina
exchange— which most observers believe is unlikely this year—it would potentially leave just two companies, Aetna and Cigna,
offering Obamacare policies in the state. And neither of those companies intend to compete statewide in 2017, instead offering
policies in select counties. The worst-case scenario is that residents of some North Carolina counties would be left with just one–or
even zero–insurers. Nobody knows precisely what that would mean for consumers at this point, but at the very least exchange
shoppers would have fewer choices and higher prices.¶ “That would be very scary for lots of people,” said Ciara Zachary, health
policy analyst at the North Carolina Justice Center, a liberal advocacy group. ¶ The troubles in North Carolina’s exchanges are not
unique. POLITICO’S analysis of financial filings for exchange carriers in a dozen states shows continued struggles in 2015.
Health plans competing on the exchanges in Colorado and Oregon, for example,
collectively paid out at least 20 percent more in medical costs on their individual
customers than they received in premiums, leaving insurers tens of millions of
dollars in the red.¶ In New York, most plans are losing money, including the much ballyhooed startup insurer Oscar,
which has attracted hundreds of millions in venture capital funding by promising to shake up the insurance market with tech-savvy
innovations. But Oscar sustained medical claims of $180 million on its roughly 50,000 New York customers last year. That’s nearly
$1.50 paid out in medical claims for every $1 collected in premiums–a burn rate that is clearly unsustainable. ¶ Not all exchange
markets have proven to be financial quagmires. The exchange market in Florida, for example, appears to be on a path toward
financial stability. Fewer than half of competing carriers operated in the black in 2014, according to McKinsey’s analysis. But of the
nine competing plans for which 2015 data were available, just one–UnitedHealth–had medical claims that exceeded premiums on
its individual market business. Among the remaining plans, medical claims accounted for 86 percent of premiums. That’s right
where insurers need to be to at least break even.¶ There are no simple explanations for the huge difference in financial performance
for Obamacare insurers competing in different states. Though it's a national law, health insurance varies widely from state to state:
the populations are different, the medical cultures are different, and each state has its own business landscape. The local political
responses have been different, too, but that's not always the main story: both Florida and North Carolina enrolled a lot of people
despite having a state government that strongly opposed the health law. ¶ One likely factor is the amount of competition among
hospitals, doctors and other health care providers, which determines their ability to dictate reimbursement rates. In southeastern
Minnesota, for example, where the Mayo Clinic is the dominant provider, the cheapest midlevel plan available to a 40-year-old
through the state’s exchange this year was $329 per month. That’s roughly 20 percent higher than in the rest of the state. ¶ “The more
competition you have, the better the pricing,” said Mario Molina, CEO of Molina Healthcare, which is selling exchange plans in nine
states. “In some markets where there’s very little competition it’s difficult to get the prices that health plans need.” ¶ But looming over
the whole conversation is the blunt question of just who signs up for Obamacare in each state, and how sick they are. In the dry
language of insurance companies, customers are called their “risk pool”—and when it comes to Obamacare, the pool is way riskier
than they wanted.¶ SO WHAT WENT wrong? Like all insurance, Obamacare is built on the idea of shared risk: A small number of
customers with big medical bills needs to be offset by a much wider group who pay monthly premiums but rarely access care.
The biggest problem plaguing the
Theoretically, they balance out, and insurers collect their profits off the top. ¶
exchanges is that for many states, the balance has turned out to be way off. Fewer
individuals signed up for coverage than projected, and they’ve proven sicker and
more expensive than insurers had expected.¶ Before the ACA, there were a handful of ways insurers could
balance their risk pool. One big tactic was just to avoid covering sick people, filtering out individual customers who appear likely to
need lots of expensive medical care. But Obamacare made that type of discrimination illegal: One big selling point of the law was
that everyone would be eligible to sign up.¶ In
the new insurance landscape, where carriers must
take all comers, no matter how sick and costly, the simplest way to ensure a viable
risk pool is to make it as large and diverse as possible. ¶ For Obamacare, that has turned out to be a
bigger problem than anyone anticipated. Three years ago, the Congressional Budget Office projected that 24 million Americans
would be enrolled in exchange plans in 2016. The reality: barely half that number signed up this year–and that number is certain to
erode as people stop paying their insurance bills or find jobs that include coverage. The Obama administration’s stated goal is now
just 10 million enrollments by the end of 2016.¶ Why so low? In part, it's because fewer people got kicked off their work plans than
expected. Initially, the architects of the plan thought many employers would stop offering insurance and let people buy their own on
the Obamacare market. That didn't happen. “Employers have not ‘dumped’ employees to the extent that some people feared and
predicted,” said Ceci Connolly, CEO of the Alliance of Community Health Plans. It was good news for those workers, but not so good
for the exchanges’ actuarial health.¶ And in part the small size of the Obamacare pool is because of a self-inflicted wound by Obama
himself. For years, in selling the ACA, Obama had been repeating a talking point: "If you like your health care plan, you can keep it."
But in late 2013, as the first open-enrollment season loomed, millions of Americans received notices that their plans were being
canceled because they didn’t meet the coverage requirements of the health care law. Republicans relentlessly mocked the president’s
failure to keep his pledge. PolitiFact called it the 2013 “Lie of the Year.” ¶ In response to the blowback, the administration decided
that those old plans didn’t have to be canceled after all–people could keep them through 2017, even if they didn’t comply with the
new rules. That move may have quelled the political uproar, but it also cut off a potential flow of millions of customers who may
otherwise have signed up for new plans in the fledgling Obamacare exchange markets. ¶ Not all states extended those plans, and
some insurers phased them out on their own. But McKinsey estimates that heading into the 2016 enrollment season, 3.7 million
Americans were still in those old individual plans. And it’s likely that an awful lot of them are quite healthy, given that they were able
to obtain coverage even when health plans were free to discriminate against people with pre-existing conditions. ¶ A viable risk pool
also needs healthy customers. The most desirable customers are young, from 18 to 34—the so-called young invincibles—who might
not want to sign up at all, because they don't think they'll need health care. ¶ To
encourage all Americans to sign
up, Obamacare includes a cudgel: You have to pay a tax penalty if you aren't
covered in a qualified health plan. In reality, there are numerous exemptions–and
the penalty has proven too low to induce younger Americans to buy insurance. The
fine maxed out this year at $695, or 2.5 percent of income, whichever is higher.
Healthy, younger people (some of whom may be eligible for subsidies but not
realize it) often figure it’s cheaper to pay the fine than shell out money on health
insurance that they don’t think they’ll need. That may or may not make financial sense for them as
individuals, but it's hurting the broader system. For markets to be sustainable financially, experts
estimate that 35 percent of customers should be between the ages of 18 and 34. In
reality, right now, just 28 percent of customers fall in that group.¶ Obamacare also includes a
restriction on timing: Exchange customers are supposed to sign up only during the annual open-enrollment period. That’s designed
to prevent people from gaming the system and getting insurance only when they need medical care. But there are exceptions to the
timing rule--you can sign up for Obamacare when you've switched jobs and lose your work coverage, for instance. And insurers
complain that these exceptions are far too numerous and easy to game. Most troubling to insurers, there’s been no rigorous
verification process to corroborate that Obamacare customers are truly eligible for special enrollment periods—that they really did
change jobs, that they weren’t just claiming to have done so because they had just gotten a scary diagnosis or banged up their knee
and now wanted health care. Many health plans have found that customers who come in through special enrollments run up bigger
medical bills than other people. Pennsylvania’s Independence Blue Cross, for example, says people who enroll outside the standard
window have 30 percent more medical expenses.
 2
Weak ACA implementation is driving growth in medical tourism –
strengthening the mandate key
Renee-Marie Stephano 12, JD in Health Law, Villanova University School of Law,
7/9/2012, US HealthCare Reform’s Effect on the US Medical Tourism Marketplace,
http://medicaltourismassociation.com/en/us-healthcare-reform-s-affect-on-the-us-
medical-tourism-marketplace-white-paper.html
The United States has been in a healthcare crisis for years. It is estimated that
more than 50 million Americans and growing are without health insurance and over
120 million are without dental insurance. A common misperception is that the average American without health insurance does not
have the financial means to purchase health insurance, but it is estimated the average American without health insurance makes
approximately $50,000 dollars per year. Those Americans who do not have the financial means to purchase health insurance are
typically provided coverage, called Medicaid, by the state and federal government. The definition of an uninsured American varies
and has become a political debate as different political parties argue different definitions and numbers. ¶ At
the end of
March 2010, the Patient Protection and Affordable Care Act (PPACA) and the
reconciliation bill were passed into law. US Healthcare Reform should have a very positive impact on the
growth of outbound medical tourism leaving the United States while having no impact on the continued growth of both foreign
patients coming into the US for healthcare treatment (inbound medical tourism), or on American healthcare consumers who travel
regionally throughout the US for healthcare treatment (Domestic medical tourism). ¶ Healthcare Reform
will most
likely drive up the costs of health insurance in the US to an unsustainable level. It is
estimated that in 2020, health insurance costs for a family could range from $30,000 to $40,000 per year. Under Healthcare
Reform, these health insurance costs should be higher. While
Healthcare Reform’s intention is to
insure more Americans, it may have the opposite effect of creating more
uninsured due to high health insurance costs. Healthcare Reform is pushing more
employers, insurers and health insurance agents to examine implementing
medical tourism. With health insurance and healthcare costs in the US rising at a
much faster pace under Healthcare Reform, the medical tourism industry is
expected to see growth in 2013 and very strong growth occurring in 2014, as the
major parts and mandates of Healthcare Reform are implemented and health
insurance cost increases are felt more clearly.¶ The passage of Healthcare Reform has made sweeping
changes and has changed healthcare as we know it in America. Very few people in the US, including government officials, employers
and insurance companies, understand its true impact or have even read the entire Healthcare Reform legislation. Unfortunately,
even after reading the Healthcare Reform bill, there are many unanswered questions because the bill creates new governmental
entities whose duties will be to create new regulations, rules and guidelines of how Healthcare Reform will work and what the actual
defined benefit levels will be. It will take several years for industry participants to fully understand the full effect Healthcare Reform
will have on their business.¶ To complicate the matter of the lack of understanding of Healthcare Reform’s true effect, one must
understand the law, and the cost of understanding and complying with the law and the layers of government involvement within it.
The Healthcare Reform Law is almost 3,000 pages, and there are almost 13,000 pages of regulations. In drafting regulations and
interpretations the IRS, Health and Human Services, and many other agencies have not really even gotten started yet on creating
those regulations, rules and interpretations. There are approximately 180 government committees, bureaus, commissions, boards,
within the different agencies involved in providing the rules, regulations, interpretations and enforcement of the law. One can only
imagine how many years and the amount of analysis and education it will take for employers, insurance companies and individual
healthcare consumers to fully understand the law and its impact. ¶ Healthcare Reform did not create a public option or a government
plan, so the insurance marketplace will still be run by private industry, specifically the fully insured and self-funded health plans.
Some of the major changes in Healthcare Reform will be the waiving of pre-existing conditions, the elimination of annual and
lifetime limits, the expanding of dependant coverage to age 26 (Caterpillar Inc, when the law was first passed in 2010, estimated that
expanding the dependant age to 26 will cost the company $20 million per year more), providing level or equal premiums for those
who are sick or healthy, the creation of “essential benefits,” the creation of health insurance exchanges (where Americans can
purchase health insurance) and mandating the purchase of health insurance by Americans or a penalty must be paid. Healthcare
Reform also lowers the insurance premiums for elderly Americans artificially and raises it for younger Americans, specifically at a
three to one ratio, where elderly Americans cannot be charged more than 3 times that of a younger American even though actuarially
they should be charged five to six times the price of a younger American. ¶ Preventative Services¶ Healthcare Reform required that
preventative services be included for newly enrolled insured plans by the fall of 2010 or within six months of enactment of the bill
for existing health insurance plans. Specifically, the following benefits must be included: ¶ ¶ Evidence-based items or services with a
rating of ‘A’ or ‘B’ in the current recommendations of the United States Preventive Services Task Force; ¶ Immunizations
recommended by the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention with respect
to the individual involved;¶ For infants, children and adolescents, evidence-informed preventive care and screenings provided for in
the comprehensive guidelines supported by the Health Resources and Services Administration; ¶ For women, additional preventive
care and screenings provided for in comprehensive guidelines supported by the Health Resources and Services Administration; ¶ For
women, the recommendations issued by the United States Preventive Service Task Force regarding breast cancer screening,
mammography and prevention shall be considered the most current other than those issued in or around November 2009. ¶ For
those qualified health plans that will be required to provide this preventative coverage without cost-sharing for preventive services
that are rated ‘A’ or ‘B’ by the U.S. Preventive Services Task Force, these services could be recommended immunizations, preventive
care for infants, children and adolescents and additional preventive care and screenings for women. ¶ Pre-Existing Conditions¶ The
waiving of pre-existing conditions will have both positive and negative effects on the health insurance industry. The waiving of pre-
existing conditions clauses, which started in 2010 for children and will begin in 2014 for adults, will drive up the costs of health
insurance in the US. For those who are sick and have health conditions this can be a positive step forward, because there are many
Americans who were previously denied health insurance because of a pre-existing condition or who could not afford to purchase
health insurance because of the high premiums. For many of these Americans that health insurance and health care were
inaccessible for, they could not afford to receive the proper medical care, which resulted in the worsening of their health conditions
and, later in life, much higher medical expenses. Also, many of these Americans did not have access to preventative services to catch
For these
serious health conditions at an early stage, due to lack of access to proper or affordable health care.
Americans, the waiving of the pre-existing conditions clauses and the lowering of
health insurance premiums, which will be subsidized by healthy Americans that
will have their insurance rates increased, will provide them access to more
affordable healthcare for the first time.¶ Unfortunately there are also some
negative side effects to this. Even though pre-existing conditions clauses will be
waived starting in 2014, with the costs of a family health insurance plan rising to
$30,000 to $40,000 a year by 2020 or earlier, many of these sick Americans with
pre-existing conditions may not be able to afford to pay the health insurance
premiums. Also, insurance premiums for individuals who are healthy will increase in order to subsidize sicker Americans who
have pre-existing conditions. This is because the law requires healthy and sick people to pay the same health insurance premiums.
The only variations allowed in the charging of health insurance premiums are for age, tobacco use and geographic location.¶
Healthcare Reform does not properly incentivize Americans to purchase health
insurance. The fines for not purchasing health insurance in 2014 start at $95, and increase each year. Compared to
rising health insurance costs in the next 10 years, the fines, which were originally
meant to force the majority of Americans to buy health insurance, are small and
will fall short of their intended goal. This would mean many Americans can make
the decision to not purchase health insurance, not engage in healthy lifestyles or
behaviors or focus on preventative medicine and instead wait until they are sick
and then purchase guaranteed-issue health insurance with no pre-existing
conditions clauses at a “fair price subsidized by the healthy. ” This penalizes Americans who have
engaged in healthy behavior and lifestyles and who have planned and paid for health insurance every month in anticipation of one
day possibly becoming ill or sick. People who have always paid for health insurance and maintained a healthy lifestyle are in
actuality being penalized in the form of their health insurance premiums increasing. An example of this is as follows:¶ In 2014, Joe,
who is 45 and whose health insurance costs $1,200 a month makes a decision to not pay for health insurance and instead to pay the
$95 fine for the year. He chooses not to buy health insurance because he knows when he does get sick with a major health condition
he can purchase health insurance at any time and immediately be covered. Joe smokes a pack of cigarettes per day, drinks alcohol
each day, eats fast food for meals and does not exercise.¶ Jane is 45, healthy and her health insurance costs in 2014 would be $1,200
a month. She pays her premiums each month. She exercises five times per week, eats healthy food and does not drink or smoke.
Under Healthcare Reform, Jane and Joe’s health insurance premiums must cost the same. Joe will eventually develop serious health
conditions because of his lifestyle and when he buys health insurance later in life it will automatically cover everything at the same
price as Jane. Starting in 2014, Jane’s insurance premiums will have to increase significantly for the eventuality and potential of
people like Joe waiting until they are very sick and need health insurance to purchase it.¶ The
rise of health
insurance premiums will have a very positive effect on the medical tourism
industry. Because of the potential for skyrocketing health insurance costs, many employers and insurance companies will
start to implement medical tourism as one of the only means to lower healthcare costs .
The waiving of pre-existing
conditions and requiring sick and healthy Americans to pay the same price for
health insurance destroys the underwriting process and can put an employer or
insurance company in a difficult position of potentially losing a significant amount
of money, meaning medical claims incurred by the insurance carrier or employer
exceed insurance premiums collected. Medical tourism provides a
“hedge”/protection against this because if an insured utilizes the medical tourism
benefit it will lower medical claims costs .

Medical tourism threatens international medical apartheid – exporting

care undermines public health systems in South East Asia specifically
Glenn Cohen 11, Assistance Professor and Co-Director of the Center for Health Law
Policy, Biotechnology and Bioethics, Harvard Law School, JD from Harvard Law,
Medical Tourism, Access to Health Care, and Global Justice, Virgina Journal of
International Law, Vol 52(1),
http://www.vjil.org/assets/pdfs/vol52/issue1/Cohen_Final.pdf
Medical tourism — the travel of patients who are residents of one country (the
“home country”) to another country for medical treatment (the “destination
country”) — represents a growing and important business. For example, by one estimate, in 2004, more
than 150,000 foreigners sought medical treatment in India, a number that is
projected to increase by fifteen percent annually for the next several years.1
Malaysia saw 130,000 foreign patients in the same year.2 In 2005, Bumrungrad
International Hospital in Bangkok, Thailand, alone saw 400,000 foreign patients, 55,000 of whom were
American (although these numbers are contested).3 By offering surgeries such as hip and heart valve
replacements at savings of more than eighty percent from that which one would
pay out of pocket in the United States, medical tourism has enabled underinsured
and uninsured Americans to secure otherwise unaffordable health care.4 The title of a
recent Senate hearing — “The Globalization of Health Care: Can Medical Tourism Reduce Health Care Costs?” — captures the
promise of medical tourism.5 U.S. insurers and self-insured businesses have also made
attempts to build medical tourism into health insurance plans offered in the
United States, and states like West Virginia have considered incentivizing their
public employees to use medical tourism .6 There have even been calls for Medicaid and Medicare to
incentivize medical tourism for their covered populations.7¶ Although hardly new, in recent years, the dramatic
increase in the scope of the industry and the increasing involvement of U.S.
citizens as medical tourists to developing countries have made pressing a number
of legal and ethical issues.8 While the growth of medical tourism has represented a boon (although not an unqualified one9) for
U.S. patients, what about the interests of those in the destination countries ? From

their perspective, medical tourism presents a host of cruel ironies . Vast medico-
industrial complexes replete with the newest expensive technologies to provide
comparatively wealthy medical tourists hip replacements and facelifts coexist with
large swaths of the population dying from malaria, AIDS, and lack of basic
sanitation and clean water. A recent New York Times article entitled “Royal Care for Some of India’s Patients,
Neglect for Others,” for example, begins by describing the care given at Wockhardt Hospital in India to “Mr. Steeles, 60, a car dealer
from Daphne, Ala., [who] had flown halfway around the world last month to save his heart [through a mitral valve repair] at a price
he could pay.”10 The article describes in great detail the dietician who selects Mr. Steele’s meals, the dermatologist who comes as
soon as he mentions an itch, and Mr. Steeles’s “Royal Suite” with “cable TV, a computer, [and] a mini-refrigerator, where an
attendant that afternoon stashed some ice cream, for when he felt hungry later.”11 This treatment contrasts with the care given to a
group of “day laborers who laid bricks and mixed cement for Bangalore’s construction boom,” many of whom “fell ill after drinking
illegally brewed whisky; 150 died that day.”12 “Not for them [was] the care of India’s best private hospitals,” writes the article’s
author; “[t]hey had been wheeled in by wives and brothers to the overstretched government-run Bowring Hospital, on the other side
of town,” a hospital with “no intensive care unit, no ventilators, no dialysis machine,” where “[d]inner was a stack of white bread, on
which a healthy cockroach crawled.”13¶ These kinds of stark
disparities have prompted intuitive discomfort and
critiques in the academic and policy literatures. For example, David Benavides, a
Senior Economic Affairs Officer working on trade for the United Nations, has
noted that developed and developing countries’ attempts at exporting health
services sometimes come “at the expense of the national health system , and the local
population has suffered instead of benefiting from those exports.”14 Rupa Chanda,
an Indian professor of business, writes in the World Health Organization Bulletin that medical
tourism threatens to “result in a dual market structure , by creating a higher-
quality, expensive segment that caters to wealthy nationals and foreigners, and a
much lower-quality, resource-constrained segment catering to the poor.”15 While
the “[a]vailability of services, including physicians and other trained personnel, as
well as the availability of beds may rise in the higher-standard centres,” it may
come “at the expense of the public sector, resulting in a crowding out of the local
population.” 16 FOOTNOTE 16 BEGINS… 16. Id.; see also MILICA Z. BOOKMAN & KARLA K. BOOKMAN, MEDICAL
TOURISM IN DEVELOPING COUNTRIES 176 (2007) (“Medical Tourism can thus create a dual market structure in which one
segment is of higher quality and caters to the wealthy foreigners (and local high-
income patients) while a lower quality segment caters to the poor . . . [such that]
health for the local population is crowded out as the best doctors, machines, beds,
and hospitals are lured away from the local poor.”). FOOTNOTE 16 ENDS… Similarly, Professor Leigh
Turner suggests that “ the greatest risk for inhabitants of destination countries is that

increased volume of international patients will have adverse effects upon local
patients, health care facilities and economies.” 17 He explains that the kinds of
investments destination-country governments must make to compete are in
“specialized medical centres and advanced biotechnologies” unlikely to be
accessed by “most citizens of a country [who] lack access to basic health care and
social services.”18 Furthermore, higher wages for health care professionals resulting
from medical tourism may crowd out access by the domestic poor.19 Thus, “[i]nstead of
contributing to broad social and economic development, the provision of care to patients from other
countries might exacerbate existing inequalities and further polarize the richest and poorest members”
of the destination country.20¶ The same point has also been made in several regional
discussions: Janjaroen and Supakankuti argue that in Thailand, medical tourism threatens to
both disrupt the ratio of health personnel to the domestic population and “create a
two-tier system with the better quality services reserved for foreign clients with a
higher ability to pay.”21 Similarly, the Bookmans’ claim that in Cuba, “only one-fourth of the beds
in CIREN (the international Center for Neurological Restoration in Havana) are
filled by Cubans, and . . . so-called dollar pharmacies provide a broader range of
medicines to Westerners who pay in foreign currency.”22 They describe a medical
system so distorted by the effects of medical tourism as “ medical apartheid,
because it makes health care available to foreigners that is not available to
locals.” 23 Numerous authors have made similar claims about medical tourism in
India.24 Similar concerns have even been raised as to medical tourism in developed countries. For example, an investigation by
the Israeli newspaper Haaretz concluded, “medical tourists enjoy conditions Israelis can only dream of, including very short waiting
times for procedures, the right to choose their own doctor and private rooms . . . [a]nd these benefits may well be coming at the
expense of Israeli patients’ care,” and suggested that allowing medical tourists to move to the front of the line on waiting lists for
services meant that “waiting times for ordinary Israelis will inevitably lengthen — especially in the departments most frequented by
medical tourists, which include the cancer, cardiac and in vitro fertilization units.”25

Market is nascent – further growth key – especially in Asia --

underinsurance drives demand
GMT 16, Globla Medical Tourism, magazine known as the “voice” of the medical
tourism industry, 10/6/2016, http://global-mtm.com/global-medical-tourism-market-
to-witness-increasing-influx-of-medical-tourists-in-asian-countries/
The increasing number of people travelling abroad to seek medical treatment
comprises a rising global trend. The exponentially rising healthcare cost in developed regions,
coupled with the availability of advanced yet cost-effective medical services in developing countries, is encouraging
people to travel abroad for treatment purposes that may also incorporate an extended holiday. This
trend is called medical tourism and has been showcasing definitive growth around the world
over the past few years .¶ Demand for Advanced and Cost-effective Medical Services Boosts Global Medical Tourism
Market¶ Medical tourism may include sophisticated treatments such as neurosurgery, cardiac surgery, orthopedics, elective
treatments such as cosmetic surgeries and dental care, or routine health check-ups. The
visibly rising cost of
healthcare services in developed countries is the prime factor bolstering the
market for medical tourism. According to a report published by Transparency Market Research,
approximately 50 million people in the U.S. alone are uninsured , while 139 million
Americans do not have dental insurance.¶ An estimated 1.6 million Americans opted for medical tourism in 2012, since the
treatment for the same disease in developing nations costs 20% to 30% less than that in developed countries. This helps patients and
their families save a substantial share of the cost even after accounting for the travel expenses. ¶ The
global medical
tourism market, therefore, sees lucrative opportunities in the forthcoming years with
an increasing number of people making it their preferred choice. Transparency Market
Research, in its latest report, pegs the overall value of the global medical tourism market at US$10.5 bn in 2012, and it is expected to
reach US$32.5 bn by the end of 2019. If the figures hold true, the global medical tourism market will exhibit an impressive CAGR of
17.9% between 2013 and 2018.¶ Asian Countries Witness Highest Influx of Medical Tourists ¶
With high-quality infrastructure and low costs, Asian countries have emerged as
the most prominent players in the market for medical tourism over the past few
years. Asia attracted over 5.6 million foreign patients in 2012, generating a revenue of a whopping US$6.4 bn from medical
tourism. The presence of popular tourist destinations in this region has also contributed to attracting an increasing number of
people from abroad.¶ India,
Thailand, Malaysia, Singapore, South Korea, and Taiwan are
among the Asian countries that witness the highest number of people travelling
from abroad to seek medical services. For instance, Thailand has emerged as the most popular destination for
medical tourists from Western Europe for cosmetic surgeries. In 2012, Thailand received over 2.5 million foreign patients that
accounts for almost 45% of the total number of foreign arrivals in Asia. Likewise, India and Singapore specialize in complex
procedures such as cardiac surgeries. In the meantime, Malaysia also has been attracting a large number of medical tourists due to
the presence of a modern healthcare infrastructure.¶ Favorable Government Policies May Boost Global Medical Tourism Market ¶
The medical tourism market is still in a nascent stage and requires substantial coordination among
healthcare providers, insurers, and governments to enjoy sustainable growth in the near future. With favorable government policies,
the organizations operating in the market can enjoy a competitive advantage. Some of the most prominent names operating in this
industry include Bumrungrad Hospital, Apollo Enterprise Ltd, Bangkok Medical Center, Prince Court Medical Center, Raffles
Medical Group, and others.
Public health inequality causes East Asian instability
James R Campbell 12, Professor at the College of Security Studies, Asia-Pacific
Center for Security Studies, 2012, Human Health Threats and Implications for Regional
Security in Southeast Asia*, in Human Security: Securing East Asia's Future,
https://link.springer.com/content/pdf/10.1007%2F978-94-007-1799-2_9.pdf
According to the World Health Organization (WHO), health is not only the absence of infi rmity and disease but also a state of
physical, mental and social well-being (WHO 1946 : 100). As
disease incidence (the number of new cases
of a particular disease within a population over time) increases, the burden on
individuals, local health care systems and other government agencies increases.
New or re-emerging infectious diseases, particularly diseases contracted from
exposure to infected animals (zoonotic disease) such as SARS, Nipah virus and
avian infl uenza spread quickly within a region, creating new, unpredictable crises
for national public health systems. For biological and epidemiological reasons not fully understood, most
of the new influenza viruses that spread globally each year originate in the
Southeast Asian region. Yet treatments may not be equitably shared between countries, and international relations can
quickly deteriorate. When Indonesia sought guarantees from the WHO that any vaccine against H5N1 infl uenza that was based on
Indonesian strains of the virus would subsequently be made available to Indonesia at an affordable price, the WHO was unable or
unwilling to convince the large pharmaceutical companies to provide such a guarantee (Current Concerns 2009 ) . As a result
Indonesia withheld critical virus strains from vaccine research and development, putting itself and the region at risk, for which it
was rebuked by much of the international health community. ¶ In 2005 the WHO updated and re-issued its International Health
Regulations (IHR), which specifi es mandatory infectious disease outbreak reporting requirements for the 194 state parties to the
agreement. However the fi nancial and technological burdens of increased disease surveillance inhibited compliance with the
regulations among many of the low and middle income nations in the region. In future outbreaks, under
authority of the IHR, the WHO may enter a country with regionally-placed teams
of experts and supplement that nation’s resources in order to protect global public
health (WHO 2005 ) . While the benefi ts of such a policy for regional and global public health are obvious, potential
disputes involving state sovereignty create emerging threats to regional security.
Diseases with pandemic potential are especially problematic to health security,
with the additional potential to cause political unrest and civil disorder, deplete
military forces, destabilize nations and contribute to state failure. These diseases
also affect regional health security indirectly, through strategic impacts on important
Asian neighbors like China. The most populous nation on Earth, China earned the enmity of the entire international
health community for its dilatory response to the global outbreak of Severe Acute Respiratory Syndrome (SARS) in 2003 (Maclean
2008 : 475). Because of the tremendous disparity between countries in planning and response capabilities for dealing with
pandemics, in any global pandemic such as the H5N1 avian infl uenza outbreak developing
countries in
Southeast Asia will likely experience proportionately more morbidity and
mortality than developed nations, due to limited access to any vaccines and anti-
viral medications like oseltamivir (Tamifl u). Ill-will generated by such health inequity and
perceived injustice could potentially damage international relations and impact
regional stability . ¶ In 2004 the Global Fund offered $100 million in grants to fi ght tuberculosis, malaria and HIV/AIDS
in Myanmar. However in 2005, because of serious concerns about governance in that country and the unwillingness of the ruling
military junta to respect the project’s safeguards and performance-based grant implementation the funds were rescinded (Global
Fund 2005 ) . As a result these highly infectious diseases rampant in Myanmar have returned as imminent health security threats to
neighboring countries. Border regions within Myanmar populated by ethnic minorities and marked by ongoing civil confl ict suffer
the highest national incidences of malaria. The ramifi cations for transnational health security are obvious, because regions within
India, Bangladesh, Laos, Thailand and China that border Myanmar all have signifi cantly higher incidences of malaria, tuberculosis
and HIV/AIDS than other regions of those countries (Beyrer and Lee 2008 : 2). Myanmar has one of the largest AIDS epidemics in
Asia, and this can be as destabilizing as war. The age demographic affected most directly by AIDS includes the most productive
segments of society, such as military and civil servants, business owners, teachers and parents. Higher mortality in
these sub-populations results in an increased proportion of the young and the old,
creating a less stable and more fragile social situation. By framing infectious diseases as a matter of
national security with regional implications, governments and their people will be better prepared to handle sudden outbreaks

that endanger human lives and threaten the existence and survival of nation-states
(Caballero-Anthony 2005 ) . ¶ Another factor that destabilizes regional human security is the large number of the
world’s poorest people residing in Southeast Asia who lack access to essential
medicines to treat these diseases, which argues strongly for health programs that emphasize prevention of
disease. Besides the expense factor, this lack of access is also due to poor infrastructure, lack of technical assistance and uncertain
quality of pharmaceuticals (International Dispensary Association 2009 ) . The production, distribution and use of counterfeit
medicines represent a thriving transnational crime in Southeast Asia. These fake drugs, either less than full strength or containing
no drug at all, also are an increasing public health problem for the region, often with tragic results (Fernandez et al. 2008 : 585,
Newton et al. 2008 : e32). Under-strength drugs are particularly insidious because they contain enough of the active compound to
foil screening tests yet not enough to treat the disease, while at the same time the reduced potency accelerates the evolution of drug
resistant strains of dangerous human pathogens.

Instability escalates – domestic pressures are a key determinant of conflict

Michael Auslin 17, PhD in History from the University of Illinois at Urbana-
Champaign, former associate professor of History at Yale The End of the Asian Century:
War, Stagnation, and the Risks to the World’s Most Dynamic Region, January 2017,
accessed via Kindle for Windows - no page numbers available
The regional demographics that we explored in chapter 3 spill over directly into domestic politics. Next to the failure of economic
How well its
reform, the political challenges facing Indo-Pacific nations are perhaps the largest risk area the region faces.
leaders deal with the demands of their populaces, be they modernized or
developing, may be the most important factor determining the future of the Indo-
Pacific. ¶ The real risk from domestic politics in Asia can be boiled down to one
idea: ever since the final Qing ruler abandoned his ivory-inlaid throne, Asia’s
political history has been one of unfinished revolution. From armed uprisings in
Japan in 1867 and in China in 1911 and 1949, through decolonization in India in
1947 and in Southeast Asia in the 1950s, to peaceful popular revolutions in the
Philippines in 1986 and in South Korea 1987, Asian politics has been one of
constant struggle.¶ It sounds odd to claim that Asia’s future is still threatened by
political revolution. After all, Japan seems an entirely stable mature democracy,
and the Vietnamese and Chinese Communist Parties maintain an iron grip on
power. But economic and social pressures inside all of Asia’s countries threaten
domestic political consequences. ¶ Equally, to turn a popular advertising slogan on its head, what happens inside
a country does not always stay there. An Asia whose political systems fail to provide stability ,
legitimacy, and growth is an Asia that will become increasingly troubled . The region’s

history is full of examples of domestic failure leading to wider dislocation . 2 At the

same time, embattled regimes have regularly sought to defuse tensions at home by

exporting instability abroad , even to the point of invading neighboring

countries .¶ In looking at the trends in domestic politics throughout the Indo-Pacific region, this chapter will chart the
challenges to democracy and authoritarianism alike. Few Westerners pay more than passing attention
to Asia’s politics. It sometimes may get a minute or two on the network newscasts, as
when Thailand’s military launched a coup in May 2014 or after the victory of Nobel
Peace Prize winner Aung San Suu Kyi’s democratic opposition party in Burma’s November 2015
election. Yet precisely because so many are not paying sufficient attention, we should be far more
sensitive to the hidden risks that roil domestic politics in the Indo-Pacific. ¶ The question of domestic political
stability leads to the larger issue of the future of politics throughout the region. Americans, whose nation originated in a war of
independence from a European colonial empire, see the spread of democracy as a natural condition. They believe that, given the
choice of self-determination or servitude, any people would prefer to choose their destiny. 3 Economic freedom and opportunity are
believed to follow naturally from and be guaranteed by political freedom. The collapse of the Soviet Union and the rapid
democratization of eastern Europe in the 1990s only reinforced the American belief in the ultimate victory of democracy. 4 While
most Americans understand that political development is not that simple, the moral superiority of democratic governance remains
an article of faith. Even in the face of frequent domestic political gridlock and economic crises, Americans still assume democracy is
a universal good toward which most peoples on earth aspire. To acknowledge this ideological predisposition is not automatically to
deny its validity.¶ Yet the Indo-Pacific continues to confound American understanding of the natural path of political development.
From totalitarian North Korea to authoritarian China on one side of the spectrum and from India’s dizzying democracy to Japan’s
often sclerotic politics on the other, Asia incorporates nearly every type of government known to humanity. Freedom and despotism
continue to battle for Asia’s political soul in another facet of unfinished revolution. ¶ It
is on this battleground that
the future of the Asia-Pacific will take shape. If democracy proves successful at
dealing with its domestic troubles, it will save its legitimacy, gain adherents, and
more likely ensure that it becomes the norm throughout the region. But if smaller
states waver in their commitment to democracy, the triumph of illiberal political
regimes may be assured, and the influence of power politics correspondingly will
grow.

Nuke war
Michael Auslin 17, PhD in History from the University of Illinois at Urbana-
Champaign, former associate professor of History at Yale The End of the Asian Century:
War, Stagnation, and the Risks to the World’s Most Dynamic Region, January 2017,
accessed via Kindle for Windows - no page numbers available
the Indo-Pacific
How close is Asia to seeing conflict erupt, and where? Not every dispute threatens peace, but today,

region is regressing to a nineteenth-century style of power politics in which might

makes right. With the world’s largest and most advanced militaries other than the
United States, and including four nuclear powers , a conflict in Asia could truly
destabilize the global economy and spark a conflagration that might spiral out of control .¶ If you
are lucky, you might be near Pearl Harbor in Hawaii when one of America’s aircraft carriers is in port. One afternoon not long ago, I
watched the USS Ronald Reagan slowly steam out of Pearl Harbor into the vastness of the Pacific Ocean. The Ronald Reagan is an
apt symbol of how security risk has been managed in Asia: the United States has underwritten regional stability since 1945.
Today, however, the post– World War II order instituted by the United States is
increasingly stressed, at the very time when Washington is finding it difficult to
respond to crises in Europe and the Middle East. The economic and political risks discussed here are not isolated from
these security trends.¶ The immediate cause of rising insecurity is simple: as China has grown stronger, it has become more
assertive, even coercive. Beijing has embraced the role of a revisionist power, seeking to define new regional rules of behavior and
confronting those neighbors with which it has disagreements. Japan and Taiwan, along with many countries in Southeast Asia, fear
a risingChina, as does India, though to a lesser degree. That fear,
fueled by numerous unresolved
territorial disputes in the East and South China Seas and by growing concern over
maintaining vital trade routes and control of natural resources, is causing an arms
race in Asia. The region’s waters have become the scene of regular paramilitary
confrontations. ¶ These fears and responses are triggering more assertive policies on the part of all states in the region,
which only raises tensions further. At
the same time, governments feel pressured at home to
demonize neighbors, encroach on territory, and refuse to negotiate on security
disputes. This is clearly what has happened in recent years in the Sino-Japanese relationship. We have already
gone through two turns of a “risk cycle”: uncertainty and insecurity , driven over the past
decade by China’s growing power and increasingly assertive and coercive behavior, and by the emergence of a de facto nuclear North
Korea. A third turn, to instability , could cause conflict and even war .¶ The “Asian
Century” thus may not turn out to be an era when Asia imposes a peaceful order
on the world, when freedom continues to expand , or when the region remains the engine of global
economic growth. What it imposes may instead be conflict and instability. The nations of the Indo-Pacific and
the world must prepare for the possibility of economic stagnation, social and
political unrest, and even armed conflict . The emergence of those would mark the end of the Asian Century.

Failing to invest in public health crushes Indian economy

T Sundararaman 16, Dean of the School of Health System Studies, Tata Institute of
Social Sciences, et al, 4/16/2016, No Respite for Public Health, Economic and Political
Weekly Vol 51(16), http://www.epw.in/journal/2016/16/budget-
2016%E2%80%9317/no-respite-public-health.html?0=ip_login_no_cache
%3D9366610247f77ea97304b0bae8cb5184
The second argument is the rationale advanced for routing public investments through the private sector, based on a claim that the
latter makes more efficient use of resources. There is little evidence to support such a claim, and much evidence that contradicts it.
But even if it were to be true, there
are many vital roles that relate to health as a public good—
disease surveillance and epidemic preparedness, for example, or the prevention of
the rising tide of non-communicable disease—where the private sector cannot
substitute for an effective public health system. ¶ As a result, despite a huge growth in
the private sector-based health services, age-standardised mortality rates for non-
communicable diseases are now far higher in India than in any developed nation
and there is still no universal primary healthcare programme in the public sector
that addresses this rising tide. Nor is there any effort to expand the very selective
packages of care that fund-constrained district health systems are providing
currently. The National Health Policy draft admits that current district and sub-district health
services address less than 15% of all morbidities, and this, more than any other
single factor, forces the public to seek care either in the private sector or in the
overcrowded mega public health hospitals .¶ One of the lessons that nations need to
learn from the Ebola crisis of Western Africa is that when nations fail to invest in
public health systems , they lay themselves open to deadly epidemics that could
threaten the health security and economy of a nation. The Ebola crisis ravaged precisely
those nations in Africa which had seen a decade of structural adjustment-driven reforms which had left
their public systems understaffed and dysfunctional.¶ The damage to industry and
growth rates that such an epidemic would do is mind-boggling. The finance ministry is
apparently responsive only to the needs of the industry, defence and economic growth rates. Without sounding alarmist, it would be
useful to remind the ministry that chronic and sustained under-financing of public health
systems over the last four years has now reached such critical levels , that there is a serious
threat to health security of the nation as well as to its economic growth— not only in the long run,
but also in the immediate—not only for the poor, but for everyone.
and clean cooking but also for livelihood activities.

Growth solves Indo-pak war

Marshall M. Bouton 10, Adjunct Professor of Political Science at Northwestern
University, President – Chicago Council on Global Affairs, July 2010, America’s
Interests in India, CNAS Working Paper,
http://www.cnas.org/files/documents/publications/CNAS_USInterestsinIndia_
Bouton.pdf
In South Asia, the most immediately compelling U.S. interest is preventing terrorist
attacks on the U.S. homeland originating in or facilitated by actors in South Asia,
particularly in Afghanistan and Pakistan. To avert that possibility, the United States also
has an interest in the stability and development of both countries. At the same time,
the United States has a vital interest in preventing conflict between Pakistan and
India, immediately because such a conflict would do great damage to U.S. efforts in
Afghanistan and Pakistan (such as the diversion of Pakistani military attention away
from the insurgency) and because it would pose the severe risk of nuclear
escalation. Finally, the United States has an interest in peace and stability in South
Asia as a whole. Instability and violence in nearly every one of India’s neighbors, not to
mention in India itself, could, if unchecked, undermine economic and political progress,
potentially destabilizing the entire region. At present, a South Asia dominated by a
politically stable and economically dynamic India is a hugely important
counterweight to the prevalent instability and conflict all around India’s
periphery. Imagining the counterfactual scenario, a South Asian region, including
India, that is failing economically and stumbling politically, is to imagine instability
on a scale that would have global consequences, including damage to the global
economy, huge dislocations of people and humanitarian crisis, increasing
extremism and terrorism, and much greater potential for unchecked interstate
and civil conflict

That escalates
Russ Wellen 14, editor of Foreign Policy In Focus’ ‘Focal Points’ blog for the Institute
of Policy Studies, 12/19/2014, “The Threshold for Nuclear War Between Pakistan and
India Keeps Dropping,” http://fpif.org/threshold-nuclear-war-pakistan-india-keeps-
dropping/
Most people think that, since the end of the Cold War, chances that a nuclear war will break out are
slim to none. Though some nervousness has surfaced since the Ukraine crisis, it’s true that, barring an accident, the United States and Russia are unlikely to attack each
other with nuclear weapons. Southeast Asia is another matter, as Gregory Koblentz warns in a report for the Council of Foreign Relations titled Strategic Stability in the Second
Nuclear Age. Interviewed about the report by Deutsche Welle, Koblentz pointed out: “The only four countries currently expanding their nuclear arsenals are China, India,
Pakistan and North Korea.” China, for example, is developing mobile intercontinental ballistic missiles to prevent its stationery ICBMs from becoming sitting ducks, as well as

by 2020, Pakistan could have enough nuclear

submarines capable of launching ballistic missiles. Meanwhile,

material to build 200 nuclear weapons, about as many as Great Britain currently has. Koblentz told Deutsche Welle: Altogether,
Pakistan has deployed or is developing eleven different nuclear delivery systems including
ballistic missiles, cruise missiles, and aircraft. As if terrorism , such as the
Mumbai attacks of 2008, and territorial disputes , such as over Jammu and Kashmir, don’t make relations
between Pakistan and India volatile enough, a new element has been introduced.
Pakistan is now seeking to develop low-yield t actical n uclear w eapon s (as opposed to
strategic ― the big ones) to compensate for its inferiority to India in conventional weapons and
numbers of armed forces. Koblentz told Deutsche Welle: Since the conventional military imbalance between India and Pakistan is expected to grow thanks to India’s larger

Pakistan’s reliance on nuclear weapons to

economy and higher gross domestic product (GDP) growth rate,

compensate for its conventional inferiority will likely be an enduring feature of the
nuclear balance in South Asia. What makes tactical weapons so dangerous is that,
by blurring the distinction between nuclear and conventional weapons , they turn
nuclear weapons from unthinkable to thinkable . Equally as dangerous, Koblentz explains: The introduction of
t actical n uclear w eapon s may lead Pakistan to loosen its highly centralized command and
control practices. Due to their short-ranges (the Nasr/Hatf-IX has a range of about 60 kilometers), these types of weapons need to be deployed close to the
Thus are lower-ranking officers granted “ greater authority
front-lines and ready for use at short-notice.

and capability to arm and launch nuclear weapons” which “raises the risk of
unauthorized actions during a crisis .” Another risk … is inadvertent escalation.
There is the potential for a conventional conflict to escalate to the nuclear level if
the commander of a forward-deployed, nuclear-armed unit finds himself in a ‘ use
it or lose it ’ situation and launches the nuclear weapons under his control before
his unit is overrun.” It’s all too vertiginous for words. Some in the United States might think that’s not our problem. Pakistan and India are digging their
own grave ― let them lie in it.” But, of course, nuclear war in Southeast Asia has the potential to turn the

entire world into a grave . To wit: Summary of Consequences of Regional nuclear war
between India and Pakistan (from studies done at Rutgers, the University of Colorado-Boulder and UCLA) If … • War is fought with 100
Hiroshima-size weapons (currently available in India-Pakistan arsenals), which have half of 1 percent (0.05%) of the total explosive power of all currently operational and

20 million people die from the direct effects of the weapons ,

deployed U.S.-Russian nuclear weapons •

which is equal to nearly half the number of people killed during World War II • Weapons

detonated in the largest cities of India and Pakistan create massive firestorms
which produce millions of tons of smoke • 1 to 5 million tons of smoke quickly rise
50 km above cloud level into the stratosphere • The smoke spreads around the
world , forming a stratospheric smoke layer that blocks sunlight from reaching the
surface of Earth • Within 10 days following the explosions, temperatures in the
Northern Hemisphere would become colder than those experienced during the
pre-industrial Little Ice Age … This cold weather would also cause a 10% decline in average global rainfall and a large reduction in the Asian
summer monsoon. • 25-40% of the protective ozone layer would be destroyed at the mid-

latitudes, and 50-70% would be destroyed at northern high latitudes.Massive

increases of harmful UV light would result, with significantly negative effects on
human, animal and plant life. • These changes in global climate would cause
significantly shortened growing seasons in the Northern Hemisphere for at least years. It would be too cold to grow wheat in most
 World grain stocks, which already are at historically low levels, would be completely depleted. Grain
of Canada. •

ensuing food shortages

exporting nations would likely cease exports in order to meet their own food needs. • Some medical experts predict that

would cause hundreds of millions of already hungry people, who now depend upon food imports, to
starve to death during the years following the nuclear conflict. When it comes to nuclear weapons, we truly
are all in it together. Many claim that whatever leadership the United States and the West might demonstrate in disarmament would be lost on Asian
nuclear-weapon states. But they fail to take into account how disarmament is becoming a norm all over the world including in Asia.
 3
The United States federal government should:
- significantly increase penalties for the requirement to maintain
minimum essential health coverage
- appropriate out-of-pocket financial assistance for the Health
Insurance Marketplace
- expand premium financial assistance on the Health Insurance
Marketplace
- commit enforcement and outreach resources to these actions
 4
The plan solves – strengthening the mandate, funding cost-sharing
and increasing subsidies is key to a balanced risk pool, higher
enrollement, competition, and lower premiums– working through
the ACA framework is key to stability
Cori Uccello 17, Senior Health Fellow at the American Academy of Actuaries, MA in
Public Policy from Georgetown University, Deep Banerjee, Director at Standard & Poor,
5/5/2017, The Individual Market at a Crossroads Transcript,
http://www.allhealthpolicy.org/the-individual-market-at-a-crossroads-5/
Let’s talk about the future a little bit. So, I’m
going to talk about two kinds of forecasts. One is
business as usual. What we mean by that is, everything stays with obviously some changes, but
no big overhaul to the rules of the marketplace . If that is the case, what do we expect? Well, we
expect 2017 to be a year when more insurance companies get to break even margin.
So, break even, zero percent , so no loss, break even margin . And then continued

improvement in 2018 where they get to small, single digit margins in this line of business. It
is still a very fragile market and it needs time to stabilize.

Probably the
more important discussion is business unusual or business interrupted
forecast. So, there is obviously a lot of pricing and insurer participation issues in the
marketplace today, going into 2018. One of the biggest things that we look at, is the
CSR, which there is some uncertainty about the future funding of that . The reason the
CSR is important — it’s not because just the dollar amount that goes towards it, but
more importantly it is paid to the insurance companies after the fact . So, the
insurance company on day one, accepts members who are CSR eligible and stop
paying out claims based on the fact that they will receive a CSR . The only receive
the federal government funding for the CSR later on . So, insurance companies don’t
want to be in the situation where they find out six months into the year, hey, guess
what, you don’t get that money anymore. What we expect to happen are two options available to insurance companies.
One, they would price with what we are calling an uncertainty buffer. So, let’s say they were expecting to price high single digit premium increases for
next year. They will probably tack on a little bit of this uncertainty buffer, because they don’t know what is going to happen. They can load the silver
plan with the CSR that they are not going to get. So, you will see the silver plan premiums go up. The second option, which is probably a little more
drastic, is they get more selective about participating. If
there is greater amount of uncertainty, they could
decide to pull out of certain counties or certain states. And the third one, which is probably important to
mention too, that the marketplace has a set of rules. If
the rules are changed after you are already playing
the game, it becomes harder to adjust. So, rules like the individual mandate or the special
enrollment periods, enforcement of that will also be critical for the future stabilization of
the marketplace. Perhaps we will talk about (indiscernible) later on, when questions come up.
SARAH DASH: Thank you so much, Deep, and let me turn it over to Cori Uccello. Thanks.

CORI UCCELLO: First I would like to thank Sarah and the Alliance for inviting me to participate today.

As others have already pointed out, we are in a different situation today then maybe we were a couple days ago, but I am going to still focus my remarks
at a fairly general level and discuss the kinds of actions that are needed to improve the stability and sustainability of the individual market. Before
getting to those potential improvements, I think it’s important for us to know what the goals are.

So first, I will talk about what

is necessary in order to have a stable and sustainable market.
First, we need enrollment levels that are high enough to reduce random
fluctuations and a balanced risk pool. In other words, we need enough healthy people so
we can spread the cost of the high cost people over a broader pool . Second, we need
a stable regulatory environment that facilitates fair competition. And that includes
not only a level playing field, but also consistent rules that are known in advance .
Third, we need enough insurers participating to have insurer competition and
consumer choice. And as Karen mentioned this, the correct – -the optimal number of insurers probably varies by area. Last, but no least,
because most premiums go toward paying medical claims, it’s important not to overlook the need for continuing to control healthcare spending and
improve quality of care.

So, how is the market doing compared to these criteria? Well, the ACA dramatically reduced uninsured rates
and participation in enrollment in the individual market increased. Nevertheless, in general, enrollment in the individual
market was lower than initially expected, and the risk pool was less healthy than
expected. Now, in the market, competing rules do generally face the same rules. There is pretty much a level playing field. But, the
uncertain and changing legislative and regulatory environment have contributed
to adverse experience among insurers. This has led to a decrease in the number of
participating insurers both in 2016 and 2017 and there is an indication there will
be a further reduction of insurers in 2018. Continued uncertainty could lead to
more insurer withdrawals, leaving consumers with fewer plan choices or
potentially none at all. And as Deep has alluded to, insurer experience has stabilized, but the market itself is still
fragile .

This leads me to the actions that should be taken to improve the market . I feel like I’m piling
on here, but first and foremost is the need to fund the cautionary reductions. Not paying for these

reductions or even uncertainty about whether they will be funded , could lead to higher

premiums. As Karen said, the Kaiser Family Foundation has estimated that on average, not paying for those CSRs could result in premium
increases of nearly 20%. That’s on top of the premium increases that will already occur due to medical inflation and other factors.

Second, the individual mandate needs to be enforced. The mandate is intended to

increase enrollment and encourage even healthy people to enroll . That’s what’s needed for a
balanced risk pool. As Karen mentioned, the mandate itself is already fairly weak, because the financial
penalty is low, many people are exempt from the penalty and enforcement itself is weak. But further weakening it, would make it less
effective and would lead to higher premiums. Strengthening it could improve the risk profile and put
downward pressure on premiums. But enforcement itself isn’t enough. I think there are a lot of people out there who don’t
even realize the mandate is still in play. And so, it also needs to be publicized in order to be effective. Alternatives to the mandate
are being explored, such as the continuous coverage requirements that were in the
house passed bill. But it’s difficult to structure those kinds of mechanisms, so that
they encourage healthy people to enroll sooner rather than later, while still providing
protections to people with preexisting conditions.
So, if the mandate is the stick to encourage enrollment, premium subsidies are the carrots. More
external funding in the
form of higher premium subsidies, or funding that will offset the cost of high cost
enrollees, such a through high risk pools or these invisible high risk pools, or
reinsurance, could help improve the pool. It’s important to note that there are many — we use the word “high risk
pools” a lot, but there are actually several different ways that high risk pools can be structured. In your packets, there is a paper from the academy that
talks about the different ways that that could be done. Like I said, they could be done in terms of the traditional high risk pools that were in place prior
to the ACA, they could be invisible risk pools so that the person enrolling in the private market stays in that plan, but their claims are paid through this
external funding, and that could be their eligibility for those risk pools, could be based on either having certain conditions or having spending that
exceeds a particular threshold.

Finally, it’s
important to not only take actions to improve the market, but also avoid
actions that could make things worse. So, for instance, allowing the sales of
insurance across state lines, or expanding the availability of association health
plans, could actually lead to market fragmentation and higher premiums . So, with that, I
will turn things over to Brian.

A stronger mandate is key – induces millions to enroll in individual

exchanges
Oliver Wyman 9, international management consulting firm , 10/14/2009, Insurance
Reforms Must Include a Strong Individual Mandate and Other Key Provisions to Ensure
Affordability, http://www.oliverwyman.de/content/dam/oliver-
wyman/global/en/files/archive/2011/Importance_of_Strong_Individual_Mandates_-
_Public_Memo.pdf
2. Without a strong mandate, premiums for purchasers in the new marketplace will
increase significantly: ¶ We estimate that without strong individual mandates, average annual medical
claims in the reformed individual market five years after reform are expected to be
50 percent higher compared to today, not including the impact of medical
inflation.¶ This would translate into premium increases of approximately $1,500 for single coverage for a year and $3,300 for
family coverage in today’s dollars for people purchasing new policies. Subsidies will entirely or partially offset these premium
increases for some individuals. Eight million current individual market members and 25 million uninsured earn between 100 and
400 percent of the federal poverty level and will have access to subsidies through the exchange. ¶ ƒ Adequate
subsidies
help participation, but are insufficient to drive effective coverage levels—both a
strong personal responsibility requirement and subsidies are needed. Over 18 million
people, including both currently uninsured and existing individual market members, are ineligible for subsidies based on the Senate
Finance Committee proposed subsidy schedules. For the very low income, below 200% of the federal poverty level (FPL), we believe
a large percentage of the uninsured will purchase insurance because of the
generous subsidies. However, take up rates will be much lower for those above
200% FPL without a meaningful penalty, since subsidies decline at higher income levels.¶ ƒ Weak
mandates result in more uninsured. Requiring insurers to guarantee issue
coverage regardless of preexisting conditions—without an effective mandate—
means that people can wait to purchase coverage until they need it, causing
premiums to increase for most new purchasers. We estimate that 12.6 million people will forego
coverage, relative to an effective mandate. ¶ 3. The impact of reform on the individual market will vary significantly by geography.
The vast majority of States have not enacted the reforms proposed in Federal bills. The states where twothirds of the United States
population reside will experience the highest premium increases. In these states, the reformed individual market claims are
estimated to be up to 60-73%1 higher than today with a weak individual mandate. ¶ 4. People with existing individual coverage may
not see significant impact from rating and benefit changes. The bills “grandfather” existing coverage, so that people can keep their
current coverage. These “grandfathered” policies will not be impacted by the rating changes described above. However, individuals
with “grandfathered” policies will not be eligible for the new subsidies. We estimate that as many as 4.6 million people will stay in
the “grandfathered” blocks after 5 years. However, these individuals would still be subject to premium increases as a result of insurer
fees included in the Senate Finance Committee bill. ¶ Key Findings: Small Group Market¶ Under reform, small group employers (2-
50 employees) will experience rating changes similar to those proposed for the individual market. Key findings include: ¶ 1. Average
premiums for small employers will increase: Under reform, small employers will experience premium increases as a result of rating
rule changes and minimum benefit requirements. We estimate that small employers purchasing new policies in the reformed
market, with an ineffective mandate, will experience premiums that are up to 19 percent higher in Year 5 of reform, not including the
impact of medical inflation. About 9.5 million small group employees who have coverage today will stay covered under the
“grandfathered” block in the initial post-reform years, but will face premium increases when the grandfathering phases-out. ¶ 2.
Overall, the number of small employers offering coverage will decline: Under reform and after accounting for small employer tax
credits, premium increases will lead to fewer small employers offering coverage. We estimate 2.5 million fewer members will be
insured through small employer policies. ¶ Overview of Modeling Approach and Methodology ¶ Oliver Wyman has developed a
comprehensive model to study the impact of different health insurance reform proposals on the individual and small employer
health insurance markets.¶ The
model is based on a database of actual claims, premium and
underwriting information from over 375,000 small groups, representing 4.2 million covered lives, and 1.24 million
individual policies, representing 1.6 million covered lives. The database includes blinded information on approximately 1-in-10
purchasers in the individual and small employer markets today. These data are representative of states across the country and reflect
the varying rating rules that are used today. This allows the model to provide insight into the impact of reform at the state level. ¶
The model differs from other models currently in use because it allows for the
analysis of how insurance reforms will impact actual insurance policies. This is
critical because most of the rating reform impact is felt at the “ends of the
distributions.” For example, the medical claims for the healthiest 10 percent of members
are typically less than a quarter of the average claims, and the sickest 10 percent
are often four to seven times more than the average . With actual insurance policy data, we can see
how much premiums will shift, and therefore how enrollment is likely to shift, across the full distribution of policies. ¶ Other
analyses generally use synthetic health insurance units developed from survey
data to evaluate the impact of reform. Because of this, other models may underestimate
the real-world impact of rating changes, in particular, because they do not evaluate the impact on
a distribution of actual policies.¶ Actuarial analysis is used to determine the premium impact of changes in rating
regulations and the differential impact across geographic regions. The model estimates premium changes and migration among
coverage categories over a five year period after reform is implemented. This multi-year view allows us to capture the impact of
adverse selection, which can drive up average prices in an environment with no or weak mandates. Adverse selection
theory holds that healthier individuals are more likely to drop or switch coverage
when faced with cost increases, leaving the remaining pool more expensive to
insure.¶ Our model estimates the costs of different coverage choices available in the market under a given reform scenario,
determines market reaction, and shifts between different potential sources of coverage (e.g., the individual market, small employer
market, large group market, government programs) and the uninsured. To evaluate the market reaction to different reform
scenarios, we
apply elasticities of demand for employers, employees, and consumers
that are consistent with the academic literature and ranges used by the Congressional Budget Office and
other models.¶ The elasticities, combined with the estimated cost changes to the employer or individual, allow us to determine how
many members will enter or exit the market. We are able to track the membership inflow and outflow based on the health status and
income levels of individuals. In addition to the rating changes, we also account for the savings individuals realize from subsidies and
the cost of declining coverage if an individual mandate penalty is in place. Stated more simply, we are able to estimate the number of
people that will be insured and their expected medical costs for any given reform scenario. ¶ Results Consistent with Actual Market
Experience¶ Theresults we see in the output of the model are consistent with the
experience observed in the market. Among the trends that are readily validated by actual market experience
are:¶ ƒ Less healthy individuals are more likely to take up coverage and less likely to

drop coverage when costs change.¶ ƒ Healthy individuals are more cost sensitive .
They are more likely to exit the market if costs increase and require stronger
inducements to take up coverage if they are uninsured.¶ ƒ Premiums will increase at a rate
higher than average medical inflation if the pool enters a risk spiral , which occurs when
the percentage of healthy members in the pool declines. ¶ Key Model Variables¶ Our analysis includes the major elements of the
Senate Finance Committee’s proposal, the “America’s Healthy Future Act of 2009” or AHFA, that will impact the cost of insurance in
the individual and small employer health insurance market. These key elements include the following: ¶ [Table Omitted] ¶ The AHFA
also includes changes to the insurance market that were not explicitly evaluated in our model. These include optional risk corridors,
which could protect certain plans from losses in the early years of reform, and the inclusion of a “young invincibles” product that
could have higher cost-sharing than permitted for other products. We do not expect these policy provisions to have a substantial
impact on average prices for new purchasers of health insurance coverage. ¶ The AHFA also includes a number of fees and taxes on
the health industry to help finance the proposal. These include a $6.7 billion annual assessment on insurers, assessments on drug
and medical device manufacturers, and other assessments that are likely to impact premiums in the individual and small group
health insurance market. The AHFA also imposed an excise tax on high cost benefit plans offered in the employer marketplace. The
analysis for this report does not include the impact of these fees and taxes on cost and coverage in the individual and small employer
markets. The excise tax on high cost benefit plans does not apply to the individual market and we estimate the impact on small
group policies to be negligible.¶ We have not explicitly modeled the impact of health insurance exchanges. However, Oliver Wyman
issued a report in 2008 on this subject that found that exchanges were unlikely to reduce health insurance premiums for individuals
and small employers2 . The Congressional Budget Office's analysis of the Senate Finance Committee proposal indicates that
exchanges could reduce premiums by 4-5 percent in the individual health insurance market3. ¶ We evaluated the impact of health
insurance reforms with and without including underlying medical cost inflation. The results of this report are presented in the
absence of medical trend to isolate the cost impact of specific reforms. While the Senate Finance Proposal includes provisions that
are intended to bend the cost curve over the long-term, the inclusion of medical trend would have increased our projected cost
increases over the five-year period we examined.¶ Additional Methodology Detail—Estimated Medical Costs for the Uninsured Once
They Become Insured¶ It is important to have an estimate of the expected utilization of healthcare services of the uninsured after
they become insured. There are a handful of academic studies that have examined this issue, and the Congressional Budget Office
has also estimated the potential cost of the uninsured. ¶ Our analysis is generally consistent with the approach used by CBO. We
estimate that the morbidity of the uninsured will be about 85 percent of the level of the current insured market - meaning the
uninsured are generally healthier than the current insured market. However, the insured market is comprised mostly of members
from the employer market. It is well known that the current individual market is generally healthier than the employer market in the
majority of the U.S.¶ We estimate that the average uninsured will have average medical utilization about 20 percent higher than the
current individual market. Given that many of the uninsured are likely to seek coverage in the reformed individual market, we expect
that the average claims in the risk pool of the reformed market will increase as a result. ¶ The uninsured are expected to have higher
medical costs than the current Individual market Expected Claims Cost (Indexed relative to current Individual Market) 100 120
Current Individual Market Current Uninsured On average, uninsured are estimated to have 20% more medical claims than current
Individual market once they become covered Based on our review of available information, we estimate that the morbidity of the
uninsured if given access to insurance would be essentially 85% of the currently insured. We note that this assumption is roughly
consistent with assumptions that the CBO used in its evaluation of the available data4 . Using premium, claims, and other available
information we estimate that the morbidity of those insured through the individual market is roughly 70% of the morbidity of the
entire universe of people insured through the individual, small group, and large group markets (including self-insured). This 70%
factor is the result of the fact that people insured through the individual market, in most states, are medically underwritten5 .
Combining these two estimates, the uninsured will have morbidity that is roughly 20% greater than those currently covered in the
Individual market. ¶ We also used the distribution of claims expenses in the individual market to estimate the distribution of
expected costs for the uninsured. We assume that the sickest 10 percent of the uninsured are estimated to have claims that are four
to six times higher than the average in the current individual market, which translates to annual claims of $9,000 to $10,000. This
amount is similar to the typical range observed in states’ high risk insurance pools. ¶ Impact of Insurance Reform on Today’s Market
¶ In most parts of the country today, insurers in the individual market are permitted to underwrite and design benefit plans with a
variety of price points. This flexibility enables a stable, competitive insurance market. Perhaps most importantly, it offers the
greatest affordability to attract younger and healthier members and helps encourage wider enrollment in health insurance. ¶ The
proposed insurance
reforms will increase claims costs significantly in the individual
insurance market. We estimate the average medical claims for the uninsured are 20 percent higher than claims in the
current individual market. This is because some have not been receiving regular medical care and some have been unable to obtain
coverage at an affordable price as a result of having chronic conditions. ¶ In addition, certain
segments with high
medical utilization who are now insured through other arrangements will enter
the individual market as a result of guaranteed issue and modified community
rating requirements. This includes people enrolled in state high risk pools, people on COBRA through their former
employers’ coverage and other group conversion policies. ¶ Our model assumes that people will generally act in their economic self-
interest.
Although individuals and families cannot predict their health care needs
precisely, they often have a relatively good idea of their short term needs.
Insurance reforms will tend to lower barriers and create stronger financial
incentives for unhealthy people to become insured. As individuals work to optimize the costs and
benefits of different coverage options, the market will become more prone to adverse selection
that will increase costs over successive years , especially if insurance reforms are not
coupled with an effective individual mandate.¶ Collectively, these factors will lead to a less
healthy “risk pool” in the individual market which ultimately leads to higher
average premiums. The rating reforms significantly alter the cost-to-value ratio that consumers will experience, and
younger members will bear a greater burden of subsidizing premiums for older members. The high degree of cross-
subsidization in the reformed market makes it imperative to have high levels of
participation among young people to subsidize the older population .¶ Impact of Age Bands¶
Eliminating medical underwriting, requiring guaranteed issue and requiring minimum benefit packages with 65 percent actuarial
value will increase premiums significantly for the youngest, healthiest 30 percent of members in the market today. Based on our
analysis of actual polices, the premium increases will be greater than 50 percent for this cohort in most of the country in the first
year of reform.¶ Forty-two states permit health plans to vary premiums based on age by 5:1 or more, with most of these allowing
rates to be based on actuarial justification. The Senate Finance Committee proposal to limit variations based on age of 4:1 is more
restrictive than all but 8 states today. This would create a strong disincentive for the young and healthy to participate even under the
4:1 age band in the AHFA.¶ In a previous analysis, Oliver Wyman, Inc. estimated that in most states, premiums for the youngest one-
third of the population would increase by 69 percent under a 2:1 age band called for in the House and Senate HELP Committee bills,
and by 35 percent under a 3:1 age band (being discussed as a compromise) relative to 5:1 age band. While these tighter age bands
will reduce premiums for older purchasers, at least initially, most people under the age of 50 will see their rates increase significantly
under tighter age bands.¶ The effect of tighter age bands on premiums compounds over time, and it becomes increasingly difficult to
attract younger members into the insurance market. Without
an effective mandate with meaningful
penalties, people with higher expected utilization of medical services will be much
more likely to purchase coverage, driving up premiums and reducing the number
of people who would be covered. On the other hand, the young and healthy will
have little incentive to maintain coverage as they know they can get insurance
when they anticipate a need6 . As a result, the risk pool will deteriorate and
premiums will rise without adequate cross-subsidies. This situation is not
conducive to a viable insurance market .¶ Impact of Benefit Changes¶ The bills before Congress would also
require that new purchasers buy health insurance products that meet certain minimum benefit requirements. The Senate Finance
Committee proposal requires insurers in the individual and small group markets to offer “Gold” and “Silver” policies, which have an
actuarial value (AV) of 80 percent and 70 percent respectively. The lowest actuarial value product that insurers could offer in this
market would be the “Bronze” package, with an AV of 65 percent.7¶ In addition to the minimum actuarial value of benefit, the bill
also includes a range of other changes that will impact the cost of benefit packages, including requirements to cover certain services
(maternity, mental health services, etc.), unlimited annual and lifetime maximums, and other limitations that will increase costs.
These changes do not directly affect the actuarial value of the plan, as described in the legislation, but will add to the actual cost of
the products.¶ Oliver Wyman, Inc. reviewed current benefit offerings in the individual and small group markets to understand how
the requirements proposed by the Senate Finance Committee legislation compare to benefit offerings today, and to assess the likely
impact of the bill’s requirements on premiums. The average actuarial value of coverage purchased in the individual health insurance
market today is close to 65 percent, similar to what the Congressional Budget Office has estimated, however, onehalf of individual
market policies are significantly below the proposed requirement. For the small group market, we estimate that the actuarial value of
products currently purchased is 75 percent, with about 20 percent of small groups having products with actuarial values below the
Senate Finance Committee minimum of 65 percent.¶ We estimate that compliance with the benefit requirements in the Senate
Finance Package would cause premiums for new purchasers to increase by approximately 10 percent in the individual market and 3
percent in the small employer market nationwide.¶ Reform Scenario Results—Impact of Strong Individual Mandates ¶ Each of
the major bills before Congress require individuals to purchase insurance
coverage or face potential penalties. The bills generally also include requirements for large employers to
purchase insurance or face a financial penalty. In general, the bills exempt the smallest employers from this requirement. In the case
of the Senate Finance Committee bill, firms with fewer than 50 employees would be exempt from the requirement to provide
coverage.¶ An amendment accepted during mark-up of the Chairman’s Mark in the Finance Committee substantially weakened the
bill’s individual mandate. This amendment eliminated penalties for not maintaining insurance entirely in the first year insurance
reforms become effective (2013). Modest penalties are phased in , reaching a maximum of $750
per adult in 2017. This maximum penalty is likely to be only about 15 percent of an
average premium in 2017, assuming current rates of medical cost inflation. The amendment also exempted
individuals whose premiums exceed 8 percent of their adjusted gross income. In 33 states, the average cost of health insurance
exceeds eight percent of median state income.8¶ Mandates
with meaningful penalites are highly
effective in encouraging a broad cross-section of the uninsured to purchase
coverage when combined with subsidies. For example, the RAND Corporation’s COMPARE model found
that an individual mandate would have the greatest impact on increasing insurance

coverage.9 By itself, an individual mandate with a penalty of 80 percent of premiums

could increase the number of people with insurance by up to 34 million, a 75
percent reduction in the uninsured. However, RAND estimates the net newly insured would increase by only
8.7 million if there were no penalties and subsidies up to 200 percent of the federal poverty level.10 ¶ A recent survey designed by
Professor Joel C. Huber of Duke University, conducted by Knowledge Networks, and funded by the Blue Cross and Blue Shield
Association found that fewer than one third of the uninsured seeking individual coverage
and making between 200 percent and 300 percent of the f ederal p overty l evel
are likely to purchase coverage given the maximum penalty of $750 per year in 2017 under
the Senate Finance Committee proposal, even after subsidies are provided . Approximately one in five
uninsured making over 300 percent of poverty are likely to purchase unsubsidized
individual coverage with a penalty of $750 per year, according to the survey.¶ To further evaluate the
need for a strong individual mandate, we modeled two reform scenarios with different levels of
penalties for the mandate. The “High Mandate” and “Low Mandate” scenarios
illustrate the effect of individual mandates on affordability and total number of
uninsured. The number of uninsured is estimated to be approximately 12.6 million people higher with the weakened
mandate.¶ Further, with
weak mandates, the risk pool of the individual market will be less
healthy, have much lower participation among younger members, and experience
much higher premium increases. The average medical claims of members in the
reformed individual market will be 50 percent higher than the average in the market today (not
including medical inflation). This would translate into premium increases of approximately $1,500 for single coverage and
$3,300for family coverage in today’s dollars.11¶ Younger, healthier members are particularly vulnerable to rating reform. They will
experience premium increases greater than 50 percent relative to the current market in most of the U. S.
With weak
mandate penalties coupled with guaranteed issue, it will be less expensive for many people to
choose to buy insurance only when needed. Strong mandates will draw nearly 3
million more young and healthy members into the reformed individual market. The
healthier insurance pool will result in premiums lower than reform with weak mandates. ¶ Mandates serve to complement subsidies.
Subsidies will be most effective for individuals with low income levels . For the uninsured
earning 100-200 percent FPL, we estimate that more than 60 percent of them will purchase insurance because of subsidies.
However, more than 60 percent of the current individual market and about 20 percent of the uninsured have incomes above 300
percent FPL and will realize limited or no subsidy support. Over 18 million uninsured and existing individual market members are
ineligible for subsidies based on the proposed structures. Higher
income uninsured individuals are not
likely to take up coverage without a meaningful penalty .

Millions are paying the penalty now – strengthening the mandate

changes the incentive structure
Steve Walker 16, JD from George Washington University, former Vice President of
the Healthcare Investment Banking Division of Merril Lynch, 10/28/2016, Millions
choose to pay Obamacare fines rather than enroll; Simple solution–higher fines or…,
Monday Morning, http://mondaymorning.com/2016/10/28/millions-choose-to-pay-
obamacare-fines-rather-than-enroll-simple-solution-higher-fines-or/

The architects of the A ffordable C are A ct thought they had a blunt instrument to
force people–even the young and invincible–to buy insurance through the law’s
online marketplaces: a tax penalty for those who remain uninsured. It hasn’t
worked all that well, according to The New York Times, and that is at least partly to blame for soaring
premiums next year on some of the health law’s insurance exchanges. The full
weight of the penalty will not be felt until next April, says The Times, when those who have avoided
buying insurance will face penalties in the neighborhood of $700 a person. But even that might be

insufficient: For the young and healthy who are desperately needed to make the
exchanges work, it sometimes makes more sense for them to pay the Internal
Revenue Service than an insurance company charging large premiums, with huge
deductibles. “In my experience, the penalty has not been large enough to motivate people
to sign up for insurance ,” said Christine Speidel, a tax lawyer at Vermont Legal Aid. Some do sign up, especially
those with low incomes who receive the most generous subsidies, Ms. Speidel said. But others, she said, find that they cannot afford
insurance, even with subsidies, so “they grudgingly take the penalty.” The IRS says that 8.1 million returns
included penalty payments for people who went without insurance in 2014, the first
year in which most people were required to have coverage. A preliminary report on the latest tax-filing season, tabulating data
through April, said that 5.6 million returns included penalties averaging $442 a return for people uninsured in 2015. With the health
law’s fourth open-enrollment season beginning next Tuesday, Nov. 1, consumers are fretfully weighing their options, says The
Times. When Congress was drafting the Affordable Care Act in 2009 and 2010, lawmakers tried to adopt a carrot or stick approach:
subsidies to induce people to buy insurance and tax penalties “to ensure compliance,” in the words of the Senate Finance Committee.
But the requirement for people to carry insurance is one of the most unpopular provisions of the health law, and the Obama
administration has been cautious about enforcing it. The IRS portrays the decision to go without insurance as a permissible option,
not as a violation of federal law. The law “requires you and each member of your family to have qualifying healthcare coverage
(called minimum essential coverage), qualify for a coverage exemption, or make an individual shared responsibility payment when
you file your federal income tax return,” the IRS says at its website. Some consumers who buy insurance on the exchanges still feel
vulnerable. Deductibles are so high, they say, that the insurance seems useless. So some think that whether they send hundreds of
dollars to the IRS or thousands to an insurance company, they are essentially paying something for nothing, The Times points out.
Obama administration officials say that perception is wrong. Even people with high deductibles have protection against catastrophic
costs, they say, and many insurance plans cover common health care services before consumers meet their deductibles. In addition,
even when consumers pay most or all of a hospital bill, they often get the benefit of discounts negotiated by their insurers. The
health law authorized certain exemptions from the coverage requirement, and the Obama administration has expanded that list
through rules and policy directives. More than 12 million taxpayers claimed one or more coverage exemptions last year because, for
instance, they were homeless, had received a shut-off notice from a utility company or were experiencing other hardships. “ The
penalty for violating the individual mandate has not been very effective ,” said Joseph J.
Thorndike, the director of the tax history project at Tax Analysts, a nonprofit publisher of tax information. “ If it were
effective, we would have higher enrollment, and the population buying policies in
the insurance exchange would be healthier and younger.” “ If you make the
penalties tougher, you need to make financial assistance broader and deeper ,” said
Michael Miller, the policy director of Community Catalyst, a consumer group seeking health care for all. Steve’s Take: With the
exception of the “repeal and replace” camp, practically
everyone agrees that insurance companies
are a necessary ingredient in the exchanges for the ACA to function the way it was
intended. And, for insurance companies to remain in the exchange, they need more
healthy people, fewer sick people or a combination of the two. Both sides of the
aisle agree that insurance companies should not be able to reject people with pre-
existing conditions, which means sick people in need of care will remain,
according to Forbes. That means a stronger mandate is required to get healthy
people into the insurance pools . Unfortunately, neither party seems to be discussing this possibility.

Now is key -- insurers have to commit to selling plans by September

27th
Eric Levitz 9/7, Political Reporter at New York Magazine, former Visiting Lecturer at
Johns Hopkins University in writing, 9/7/2017, The GOP Must Make Obamacare
Sabotage-Proof by Month’s End, http://nymag.com/daily/intelligencer/2017/09/the-
gop-must-make-obamacare-sabotage-proof-by-months-end.html
Republicans can’t blame Donald Trump for their failure to repeal Obamacare. The president didn’t force the GOP to adopt heinously
unpopular priorities for health-care policy, or spend years lying to their voters about what those priorities were; nor did the mogul
force his party to attach draconian Medicaid cuts to their (sloppily drafted) Obamacare-replacement bills, or to reduce insurance
subsidies in a manner that disproportionately harmed parts of the Republican base. ¶ But Republicans
can blame
Trump for sabotaging the Affordable Care Act so shamelessly that their party must
now pass legislation strengthening the law, by the end of this month, or else suffer
political blowback from soaring premiums .¶ Under Obamacare, participating insurers are required to
keep deductibles and co-payments affordable for low-income people. In practice, this means that insurers must underprice the risk
of covering such individuals, and, thus, accept a financial loss. To make that proposition more appealing to these for-profit
companies, Obamacare provides them with “cost-sharing reductions” — subsidies that defray the insurers’ losses. ¶ But for
Trump
complicated reasons relating to a lawsuit that House Republicans brought against the Obama administration, Donald

can cancel those subsidies at will. And he has threatened to do just that, over and
over again , for months.¶ This was disconcerting to insurance providers. In mid-April, several of them
descended on Washington, in hopes of securing the White House’s assurance that
Trump’s rhetoric about withholding the subsidies was just a bluff. Seema Verma,
Trump’s head of Medicare and Medicaid Services, informed the insurers that it could be a bluff — if
they agreed to publicly support the president’s health-care bill. The insurers
refused to play ball. And the president has kept a gun pointed at his hostage ever
since.¶ So long as that remains the case, insurers will need to proceed on the assumption that
Trump is going to pull the trigger . Which is to say: They will need to either pull out of the
Obamacare exchanges, or else raise premiums high enough to offset the costs of
covering low-income enrollees without Uncle Sam’s help.¶ This week, two insurers passed through door number
No. 1, as Vox’s Dylan Scott notes:¶ First, Optima Health announced it would stop selling Obamacare plans in some Virginia counties
in 2018, citing in part uncertainty around the health care law’s cost-sharing reduction payments…Optima’s exit is expected to leave
tens of thousands of Obamacare customers without insurance options, unless a new carrier steps in. ¶ …Then on Thursday, it was
reported that Anthem would leave Maine’s marketplaces if the cost-sharing reduction payments were not guaranteed for 2018.
According to Vox’s tally, that would not leave any counties bare, but it would reduce the number of plans that customers in the state
could choose from.¶ Meanwhile, the Trump administration has decided to slash advertising for Obamacare open enrollment by 90
percent, and funding for “navigators” who help people sign up by 40 percent — even as Health and Human Services has spent public
funds on advertisements effectively discouraging participation in the law. ¶ Theseactions exacerbate the risk of
a premium hike. Sick people will seek out health insurance, whether or not they’re
exposed to advertising that encourages them to do so. But many healthy people
will not — especially when the administration has publicly suggested that it will not enforce Obamacare’s individual mandate.
And without a critical mass of healthy individuals purchasing coverage on the
exchanges, insurers will need to raise premiums to offset the costs of covering a
disproportionately sick population.¶ All of which is to say: If Congress doesn’t at least take the
gun out of Trump’s hand — and pass legislation guaranteeing that the c ost-
s haring r eductions will be paid — health care is going to become considerably
more expensive next year. And all available polling suggests that swing voters will blame the ruling party for that
development.¶ The good news for the congressional GOP is that Republican senator Lamar Alexander and Democratic senator Patty
Murray have been working on a bill that appropriates those cost-sharing reductions. The bad news is that, in
order to
avoid a spike in premiums, they’re going to need to pass that bill by September 27
— the deadline for insurers to commit to selling plans through Obamacare in 2018.
2AC
 Topicality
We meet – strengthens a legal requirement
Counterinterpretation – NHI requires two things – a requirement for
insurance and universality – the ACA currently fails this test but the
plan makes it NHI
Thomas Bodenheimer 16, MD, MPH, Founding Director of the Center for
Excellence in Primary Care, University of California-San Francisco; and Kevin
Grumbach, MD, Founding Director of the Center for Excellence in Primary Care,
University of California-San Francisco, 2016, Understanding Health Policy: A Clinical
Approach, Seventh Edition, p. 185-196

For more than 100 years, reformers in the United States argued for the passage of a n ational h ealth i nsurance program, a government guarantee that
every person is covered for basic health care. Finally in 2010, the United States took a major, though
incomplete , step forward toward universal health insurance.¶ The subject of national health insurance has seen six periods of
intense activity, alternating with times of political inattention. From 1912 to 1916, 1946 to 1949, 1963 to 1965, 1970 to 1974, 1991 to 1994, and 2009 to 2015 it was the topic of major national debate. In 1916, 1949,
1974, and 1994, national health insurance was defeated and temporarily consigned to the nation’s back burner. Guaranteed health coverage for two groups—the elderly and some of the poor—was enacted in 1965

with the passage of the Patient Protection and Affordable Care Act, also known as the Affordable Care Act (ACA) or “Obamacare,” the
through Medicare and Medicaid. In 2010,

stage was set for the expansion of coverage to millions of uninsured people. National
health insurance means the guarantee of health insurance for all the nation’s
residents —what is commonly referred to as “ universal coverage .” Much of the focus, as well as the political
contentiousness, of national health insurance proposals concern how to pay for universal coverage. N ational h ealth i nsurance proposals may also address
provider payment and cost containment .¶ The controversies that erupt over universal health care coverage become simpler to understand if one
the four basic modes of health care financing outlined in Chapter 2: out-of-pocket payment,
returns to

individual private insurance, employment-based private insurance, and government

financing. There is general agreement that out-of-pocket payment does not work as a sole
financing method for costly contemporary health care. N ational h ealth i nsurance involves the
replacement of out-of-pocket payments by one, or a mixture, of the other three
financing modes .¶ Under government-financed national health insurance plans, funds are collected
by a government or quasigovernmental fund, which in turn pays hospitals, physicians, health maintenance organizations (HMOs), and other health care
providers. Under private individual or employment-based n ational h ealth i nsurance, funds are
collected by private insurance companies, which then pay providers of care.¶ Historically, health care financing in the
United States began with out-of-pocket payment and progressed through individual private insurance, then employment-based insurance, and finally government financing for Medicare and Medicaid (see
Chapter 2). In the history of US national health insurance, the chronologic sequence is reversed. Early attempts at national health insurance legislation proposed government programs; private employment-based
national health insurance was not seriously entertained until 1971, and individually purchased universal coverage was not suggested until the 1980s (Table 15-1). Following this historical progression, we shall first

The ACA represents a pluralistic approach that

discuss government-financed national health insurance, followed by private employment-based and then individually purchased coverage.

draws on all three of these financing models: government financing, employment-

based private insurance, and individually purchased private insurance.¶ GOVERNMENT-FINANCED NATIONAL HEALTH INSURANCE¶ The
American Association for Labor Legislation Plan¶ In the early 1900s, 25 to 40% of people who became sick did not receive any medical care. In 1915, the American Association for Labor Legislation (AALL)
published a national health insurance proposal to provide medical care, sick pay, and funeral expenses to lower-paid workers—those earning less than $1,200 a year—and to their dependents. The program would
be run by states rather than the federal government and would be financed by a payroll tax–like contribution from employers and employees, perhaps with an additional contribution from state governments.
Government-controlled regional funds would pay physicians and hospitals. Thus, the first national health insurance proposal in the United States was a government-financed program (Starr, 1982). ¶ In 1910,
Edgar Peoples worked as a clerk for Standard Oil, earning $800 a year. He lived with his wife and three sons. Under the AALL proposal, Standard Oil and Mr. Peoples would each pay $13 per year into the regional
fund, with the state government contributing $6. The total of $32 (4% of wages) would cover the Peoples family. ¶ The AALL’s road to national health insurance followed the example of European nations, which
often began their programs with lower-paid workers and gradually extended coverage to other groups in the population. Key to the financing of national health insurance was its compulsory nature; mandatory
payments were to be made on behalf of every eligible person, ensuring sufficient funds to pay for people who fell sick. ¶ The AALL proposal initially had the support of the American Medical Association (AMA)
leadership. However, the AMA reversed its position and the conservative branch of labor, the American Federation of Labor, along with business interests, opposed the plan (Starr, 1982). The first attempt at
national health insurance failed.¶ The Wagner–Murray–Dingell Bill¶ In 1943, Democratic Senators Robert Wagner of New York and James Murray of Montana, and Representative John Dingell of Michigan
introduced a health insurance plan based on the social security system enacted in 1935. Employer and employee contributions to cover physician and hospital care would be paid to the federal social insurance
trust fund, which would in turn pay health providers. The Wagner–Murray–Dingell bill had its lineage in the New Deal reforms enacted during the administration of President Franklin Delano Roosevelt. ¶ In the
1940s, Edgar Peoples’ daughter Elena worked in a General Motors plant manufacturing trucks to be used in World War II. Elena earned $3,500 per year. Under the 1943 Wagner–Murray–Dingell bill, General
Motors would pay 6% of her wages up to $3,000 into the social insurance trust fund for retirement, disability, unemployment, and health insurance. An identical 6% would be taken out of Elena’s check for the
same purpose. One-fourth of this total amount ($90) would be dedicated to the health insurance portion of social security. If Elena or her children became sick, the social insurance trust fund would reimburse
their physician and hospital.¶ Edgar Peoples, in his seventies, would also receive health insurance under the Wagner–Murray–Dingell bill, because he was a social security beneficiary. ¶ Elena’s younger brother
Marvin was permanently disabled and unable to work. Under the Wagner–Murray–Dingell bill he would not have received government health insurance unless his state added unemployed people to the

government-financed health insurance can be divided into two

program.¶ As discussed in Chapter 2,

categories. Under the social insurance model, only those who pay into the program, usually
through social security contributions, are eligible for the program’s benefits. Under the public
assistance (welfare) model, eligibility is based on a means test; those below a certain
income may receive assistance. In the welfare model, those who benefit may not contribute, and those who contribute (usually through taxes) may not benefit
(Bodenheimer & Grumbach, 1992). The Wagner–Murray–Dingell bill, like the AALL proposal, was a social insurance proposal. Working people and their dependents were eligible because they made social
security contributions, and retired people receiving social security benefits were eligible because they paid into social security prior to their retirement. The permanently unemployed were not eligible. ¶ In 1945,
President Truman, embracing the general principles of the Wagner–Murray–Dingell legislation, became the first US president to strongly champion national health insurance. After Truman’s surprise election in
1948, the AMA succeeded in a massive campaign to defeat the Wagner–Murray–Dingell bill. In 1950, national health insurance returned to obscurity (Starr, 1982). ¶ Medicare and Medicaid¶ In the late 1950s, less
than 15% of the elderly had health insurance (see Chapter 2) and a strong social movement clamored for the federal government to come up with a solution. The Medicare law of 1965 took the Wagner–Murray–
Dingell approach to national health insurance, narrowing it to people 65 years and older. Medicare was financed through social security contributions, federal income taxes, and individual premiums. Congress
also enacted the Medicaid program in 1965, a public assistance or “welfare” model of government insurance that covered a portion of the low-income population. Medicaid was paid for by federal and state taxes. ¶
In 1966, at age 66, Elena Peoples was automatically enrolled in the federal government’s Medicare Part A hospital insurance plan, and she chose to sign up for the Medicare Part B physician insurance plan by
paying a $3 monthly premium to the Social Security Administration. Elena’s son, Tom, and Tom’s employer helped to finance Medicare Part A; each paid 0.5% of wages (up to a wage level of $6,600 per year) into
a Medicare trust fund within the social security system. Elena’s Part B coverage was financed in part by federal income taxes and in part by Elena’s monthly premiums. In case of illness, Medicare would pay for
most of Elena’s hospital and physician bills.¶ Elena’s disabled younger brother, Marvin, age 60, was too young to qualify for Medicare in 1966. Marvin instead became a recipient of Medicaid, the federal–state
program for certain groups of low-income people. When Marvin required medical care, the state Medicaid program paid the hospital, physician, and pharmacy, and a substantial portion of the state’s costs were

Medicare is a social insurance program, requiring individuals or families

picked up by the federal government.¶

to have made social security contributions to gain eligibility to the plan. Medicaid , in
contrast, is a public assistance program that does not require recipients to make

contributions but instead is financed from general tax revenues . Because of the rapid increase in Medicare costs,
the social security contribution has risen substantially. In 1966, Medicare took 1% of wages, up to a $6,600 wage level (0.5% each from employer and employee); in 2015, the payments had risen to 2.9% of all
wages, higher for wealthy people. The Part B premium has jumped from $3 per month in 1966 to $104.90 per month in 2015, higher for wealthy people. ¶ The 1970 Kennedy Bill and the Single-Payer Plan of the

Many people believed that Medicare and Medicaid were a first step toward universal
1990s¶

health insurance. European nations started their national health insurance programs by covering a portion of the population and later extending coverage to more people. Medicare and
Medicaid seemed to fit that tradition. Shortly after Medicare and Medicaid became law, the labor movement, Senator Edward Kennedy of Massachusetts, and Representative Martha Griffiths of Michigan drafted
legislation to cover the entire population through a national health insurance program. The 1970 Kennedy–Griffiths Health Security Act followed in the footsteps of the Wagner–Murray–Dingell bill, calling for a
single federally operated health insurance system that would replace all public and private health insurance plans. ¶ Under the Kennedy–Griffiths 1970 Health Security Program, Tom Peoples, who worked for
Great Books, a small book publisher, would continue to see his family physician as before. Rather than receiving payment from Tom’s private insurance company, his physician would be paid by the federal
government. Tom’s employer would no longer make a social security contribution to Medicare (which would be folded into the Health Security Program) and would instead make a larger contribution of 3% of
wages up to a wage level of $15,000 for each employee. Tom’s employee contribution was set at 1% up to a wage level of $15,000. These social insurance contributions would pay for approximately 60% of the
program; federal income taxes would pay for the other 40%.¶ Tom’s Uncle Marvin, on Medicaid since 1966, would be included in the Health Security Program, as would all residents of the United States. Medicaid
would be phased out as a separate public assistance program. ¶ The Health Security Act went one step further than the AALL and Wagner–Murray–Dingell proposals: It combined the social insurance and public
assistance approaches into one unified program. In part because of the staunch opposition of the AMA and the private insurance industry, the legislation went the way of its predecessors: political defeat. ¶ In 1989,

government-financed national health insurance proposal. The plan came

Physicians for a National Health Program offered a new

to be known as the “ single-payer ” program, because it would establish a single government

fund within each state to pay hospitals, physicians, and other health care
providers, replacing the multipayer system of private insurance companies (Himmelstein &
Woolhandler, 1989). Several versions of the single-payer plan were introduced into Congress in the 1990s, each bringing the entire population together into one health care financing system, merging the social
insurance and public assistance approaches (Table 15-2). The California Legislature, with the backing of the California Nurses Association, passed a single-payer plan in 2006 and 2008, but the proposals were

vetoed by the Governor.¶ THE EMPLOYER-MANDATE MODEL OF NATIONAL HEALTH

INSURANCE ¶ In response to Democratic Senator Kennedy’s introduction of the 1970 Health Security Act, President Nixon, a Republican, countered with a plan of his own, the nation’s first
employment-based, privately administered national health insurance proposal. For 3 years, the Nixon and Kennedy approaches competed in the congressional battleground; however, because most of the
population was covered under private insurance, Medicare, or Medicaid, there was relatively little public pressure on Congress. In 1974, the momentum for national health insurance collapsed, not to be seriously

The essence of the Nixon proposal was the employer mandate, under which the federal
revived until the 1990s.

government requires (or mandates) employers to purchase private health insurance for
their employees.¶ Tom Peoples’ cousin Blanche was a receptionist in a physician’s office in 1971. The physician did not provide health insurance to his employees. Under Nixon’s 1971 plan,
Blanche’s employer would be required to pay 75% of the private health insurance premium for his employees; the employees would pay the other 25%. ¶ Blanche’s boyfriend, Al, had been laid off from his job in

No longer
1970 and was receiving unemployment benefits. He had no health insurance. Under Nixon’s proposal, the federal government would pay a portion of Al’s health insurance premium. ¶

was national health insurance equated with government financing . Employer

mandate plans preserve and enlarge the role of the private health insurance
industry rather than replacing it with tax-financed government-administered
plans. The Nixon proposal changed the entire political landscape of national health insurance, moving it toward the private sector.¶ During the 1980s and 1990s, the number of people in the United States
without any health insurance rose from 25 million to more than 40 million (see Chapter 3). Approximately three-quarters of the uninsured were employed or dependents of employed persons. In response to this

crisis in health care access, President Clinton submitted legislation to Congress in 1993 calling for universal health
insurance through an employer mandate . Like the Nixon proposal, the essence of the Clinton plan was the
requirement that employers pay for most of their employees’ private insurance
premiums. The proposal failed.¶ A variation on the employer mandate type of n ational h ealth i nsurance is the voluntary
approach. Rather than requiring employers to purchase health insurance for employees, employers are given incentives such as
tax credits to cover employees voluntarily. The attempt of some states to implement this type of voluntary approach has failed to significantly
reduce the numbers of uninsured workers.¶ THE INDIVIDUAL-MANDATE MODEL OF NATIONAL HEALTH

INSURANCE¶ In 1989, a new species of national health insurance appeared, sponsored by the conservative Heritage Foundation: the individual mandate. Just as many states require motor

the Heritage plan called for the federal government to require all US
vehicle drivers to purchase automobile insurance,

residents to purchase individual health insurance policies. Tax credits would be made
available on a sliding scale to individuals and families too poor to afford health insurance premiums
(Butler, 1991). Under the most ambitious versions of the individual mandate, employer-sponsored

insurance and government-administered insurance would be dismantled and

replaced by a universal, individual mandate program. Ironically, the individual insurance mandate shares at least one feature
with the single-payer, government-financed approach to universal coverage: Both would sever the connection between employment and health insurance, allowing portability and continuity of coverage as workers
moved from one employer to another or became self-employed.¶ Tom Peoples received health insurance through his employer, Great Books. Under an individual mandate plan, Tom would be legally required to
purchase health insurance for his family. Great Books could offer a health plan to Tom and his coworkers but would not be required to contribute anything to the premium. If Tom purchased private health
insurance for his family at a cost of $10,000 per year, he would receive a tax credit of $4,000 (i.e., he would pay $4,000 less in income taxes). Tom’s Uncle Marvin, formerly on Medicaid, would be given a voucher

With individual mandate health insurance, the tax credits may

to purchase a private health insurance policy.¶

vary widely in their amount depending on characteristics such as household income and how much of a subsidy the architects of individual mandate proposals build into
the plan. In a generous case, a family might receive a $10,000 tax credit, subsidizing much of its health insurance premium. Another version of individual health insurance expansion is the voluntary concept,
supported by President George W. Bush during his presidency. Uninsured individuals would not be required to purchase individual insurance but would receive a tax credit if they chose to purchase insurance. The
tax credits in the Bush plan were small compared to the cost of most health insurance policies, with the result that these voluntary approaches if enacted would have induced few uninsured people to purchase
coverage.¶ The Massachusetts Individual Mandate Plan of 2006¶ Nearly 20 years after the Heritage Foundation’s individual mandate proposal, Massachusetts enacted a state-level health coverage bill

The Massachusetts plan, enacted under Republican Governor Mitt Romney, mandated that every
implementing the nation’s first individual mandate.

state resident must have health insurance meeting a minimum standard set by the
state or pay a penalty. The law provided state subsidies for purchase of private health insurance coverage to individuals with incomes below 300% of the federal poverty level if
they are not covered by Medicaid or through employment-based insurance. The law did not eliminate existing employer-based or

government insurance programs for those already covered by those mechanisms.

Prefer our interp:

Overlimiting – the only way a legal requirement actually causes every
single person to be covered is through single payer or public option –
anything else is functionally an incentive structure -- that causes
innovation to be tapped out by Wake – debate gets its value from
refining new arguments --- but our topic still has limits based on basic
care

Ground – the most balanced topic is centered on whether greater

government intervention in insurance is good or bad, which still
builds in neg ground while they limit core topic discussions like the
ACA

Reasonability -- centering debates on the best interpretation of the

topic creates a moral hazard to go for topicality
States
 2AC – States CP
States fail---can’t predict Trump actions, cover less people, can’t solve
CSRs and public perception
Nathaniel Weixel 17, Health Reporter at The Hill, 8-13-2017, "States enter the breach
to protect ObamaCare," The Hill, http://thehill.com/policy/healthcare/346256-states-
enter-the-breach-to-protect-obamacare

State officials are using every tool at their disposal to try to keep their insurance
marketplaces stable in the face of uncertainty from the Trump administration over
the future of ObamaCare.¶ Insurance commissioners are working with providers, advocates and insurance companies to help keep
the system running, but it’s an uphill climb. ¶ Insurers are skittish and pleading for certainty from
Washington . They want assurances that they will continue to receive cost-sharing
reduction (CSR) payments from the federal government, which total about $7 billion this year.
Those payments reimburse insurers for providing discounted insurance to low-income ObamaCare enrollees. ¶ They also
want assurances that the administration will enforce the mandate requiring
people to have insurance or pay a penalty.¶ States don’t have a lot of options , but some officials
are actively trying to make sure the public is shielded as much as possible from the consequences if Trump follows through on his
there’s not a whole lot they can do , because states
promise to let ObamaCare “implode.”¶ “In general
don’t have any more information about what the Trump administration is doing
than insurance companies,” said Cynthia Cox of the Kaiser Family Foundation.¶ Some states are letting plans file
multiple sets of rates to account for the uncertainty. The strategy can work, Cox said, if all insurers are on the same page. ¶ “The
concern is that one company assumes the worst case scenario and adds 40 percentage points on for uncertainty, and another
assumes the best case and prices significantly lower,” Cox said. ¶ The
administration has been sending
mixed signals about whether it will take the dramatic step of ending payments to
insurers. The CSRs have been paid on a monthly basis, but the administration has not promised that will continue. ¶ If the
administration does cut off the CSRs, some states will add a surcharge onto certain plans to cover the cost of losing those payments.
¶ California, North Carolina and Pennsylvania, for example, say they will increase the cost of all the mid-level “silver” health plans
that consumers can buy on the exchange. ¶ The idea is that by making the silver plans more expensive, the other plans will be
cushioned from the price increase. If the price of a silver plan increases, tax credits that help customers purchase insurance will also
increase.¶ But states will have to educate consumers about why the change is taking place. ¶ “Customers are going to be confused and
[insurance] carriers will have to explain” why one plan is so much more expensive than the others, Katherine Hempstead, senior
adviser to the executive vice president at Robert Wood Johnson Foundation, said. ¶ So-called “silver loading” isn’t a new idea,
Hempstead said, but if states decide they can’t wait for the administration to make a decision, it becomes “more and more likely this
is the situation states are going to be in.” ¶ Pennsylvania is telling insurers to price as if there was no uncertainty, but
Pennsylvania Insurance Commissioner Teresa Miller told The Hill that may have to change.¶ “We
were hoping we could keep rates in single digits but if we don’t get certainty [from
the administration] we will have to let [insurers] build it in,” she said¶ If the CSRs
were funded, rates would only increase an average of 8.8 percent in the state’s plans.
Without CSRs, Miller said rates would rise over 20 percent on average. ¶ States are also
preparing for the possibility that the administration stops spending money to promote enrollment in the exchanges. ¶ The Obama
administration ran advertisements to encourage enrollment, but Trump officials have signaled that promotion effort might come to
an end. If that happens, states could spend their own money on outreach and promotion. ¶ Some states are better prepared for such a
campaign than others; blue states with an insurance department that supports the law are likely to have more resources available. ¶
Miller said her state is planning a massive outreach effort. ¶ The goal is “to encourage Pennsylvanians to enroll in coverage and
highlight the benefits if they do,” Miller said. "We’re working with various stakeholders to develop and coordinate messaging.” ¶
Miller said she wasn’t sure the state could reach as many people as the fed eral
government . ¶ “If all of us have the same messaging, the same materials ... the hope is that we can reach a lot of people . I
don’t know if we can fill this gap completely , but we’re going to do everything we can,” she said. ¶ Michelle
Osborne, chief deputy insurance commissioner of North Carolina, said the state’s General Assembly would have to appropriate
money for the department to engage in outreach, but wouldn’t speculate if that might happen. ¶ One thing states can’t
do anything about is the possibility that the Trump administration will stop
enforcing the individual mandate.¶ Without a mandate, insurers fear that only
sick people would remain in the market, causing premium increases.¶ According to a
recent Kaiser Family Foundation analysis, insurers factoring in the possibility that the
administration will not enforce the individual mandate increased their rates an
additional 1.2 to 20 percent. ¶ Cox said part of the problem is public perception.¶ “It’s
not just that insurers assume [the mandate] won’t be enforced, it’s a public
perception that it won’t be. That’s a harder issue for states to address ,” she said.

Double penalties are a nightmare – cause policy confusion – turn

solvency
Linda J Blumberg 12, Phd in Economics from the University of Michigan, former
Health Policy Advisor to the Clinton Admnistration, Senior Fellow in Health Policy at
the Urban Institute, Lisa Clemans-Cope, December 2012, RECONCILING THE
MASSACHUSETTS AND FEDERAL INDIVIDUAL MANDATES FOR HEALTH
INSURANCE: A COMPARISON OF POLICY OPTIONS,
http://www.urban.org/sites/default/files/publication/26301/412718-Reconciling-the-
Massachusetts-and-Federal-Individual-Mandates-for-Health-Insurance-A-Comparison-
of-Policy-Options.PDF
Keeping the state’s individual mandate in place alongside the federal mandate beginning in 2014 would avoid all of the concerns
detailed above that are associated with the elimination of the MCC standard. However, the potential for double
penalties
could be widely perceived as being unfair or overly punitive. The different penalties
and their application under different circumstances—for example, an individual
could satisfy the federal requirements but still face a state penalty— could create
significant confusion , particularly if the federal government pursues strong public outreach and education related to
the federal law as 2014 approaches. Relying on federally provided information, some
households might believe they are complying with all relevant laws when in fact
they are not meeting state requirements . Explaining the intersection of the two
sets of rules and their components to a broad audience is likely to be challenging.¶
Specifically, relating to the five policy objectives:¶ Simplicity for the public: This approach ranks low, as it imposes two separate sets
of rules on households, leading to potential confusion and complexity in compliance. ¶ 2. Political acceptability: The approach ranks
low on this measure as well, as it will lead to double ¶ penalties for some families, reducing perceived fairness relative to today. This
approach does¶ not differ from the current approach in terms of equity across and within levels of income. ¶ 3. Ease of state
administration: Administration would be similar to that under current Massachusetts law, except that some additional interactions
related to public confusion are likely to occur.¶ 4. Impact on state revenues: State revenues are unlikely to change appreciably. ¶ 5.
Minimizing disruption of the current system: This approach ranks high in maintaining the strong state incentives to enroll in
coverage and comply with the MCC standards, as it leaves current Massachusetts requirements in place in their entirety. ¶
MAINTAIN THE MASSACHUSETTS MANDATE STRUCTURE BUT REDUCE STATE PENALTIES BY ANY AMOUNT PAID FOR
FEDERAL PENALTIES¶ This policy option differs from the previous one in that it reduces any state individual mandate penalties an
individual or family owes by the amount that the tax unit owes to the federal government for the ACA’s individual mandate
penalties. Residents for which the federal penalty exceeds the state penalty would only face the federal penalty. Those
whose
state penalty exceeds the federal penalty would pay the federal penalty and pay the
state the amount by which the state penalty exceeds the federal penalty. In the latter case,
federal plus state payments equal the original computed state penalty. ¶ Under this approach, if the resident enrolls in coverage that
satisfies the federal requirements but does not meet Massachusetts requirements (e.g., the policy purchased does not satisfy the
MCC standard), the resident owes the full state penalty. In this way, the state’s standards would not be undermined, and no one
would pay more in aggregate than the greater of the federal or state computed amount. ¶ While this strategy addresses the issues of
fairness and maintenance of state standards, confusion
over having two sets of individual mandate
rules would likely occur. Taxpayers would still need to compute penalty amounts
for both the state and federal penalties on their tax forms, and they would have to
compute the federal amount before the state amount to accurately determine the
amount owed. In addition, this approach is likely to significantly reduce the revenue currently collected by the state through
the penalty.
 Zakheim
Status quo failure on health care destroys Trump’s international
credibility---causes a laundry list of hotspot impacts---the plan is key
to reverse it
Dov Zakheim 17, former Under Secretary for Defense, 3/27/17, “The Dangerous
National Security Implications of Trump’s Obamacare Fiasco,”
http://foreignpolicy.com/2017/03/27/the-national-security-implications-of-trumps-
obamacare-fiasco-china-iran/
Whatever his staff might say, however much the White House finger may be pointed at Speaker Paul Ryan, it is President Donald
Trump who is the biggest loser in the Republican failure to bring Obamacare repeal to a vote in the House of Representatives.
Trump promised America’s voters that he would rid them of Obamacare. He asserted that only he , as an outsider,
had the ability to negotiate a replacement for the health care program. He has
failed , at least for now, and his credibility has taken a major jolt .
Beyond the Obamacare defeat, for that is what it is, the president has yet to make good on his new immigration proposals. A single
judge in Washington state stopped his first executive order, and two judges, in Hawaii and Maryland stopped his second. The
decision not to have a vote on a replacement for Obamacare renders problematic Trump’s ability to bring about tax reform or
modernize America’s aging infrastructure, two more of his critical priorities.

The collapse of the Republican effort to reform Obamacare has international

ramifications , as well. Though he kept his promise to withdraw from the Trans Pacific Partnership (TPP), Trump has yet to
offer a substitute of any kind. He has thereby opened the door for China to create an alternative trading bloc that excludes the
United States. He has yet to declare China a currency manipulator. He has yet to renegotiate NAFTA, or the Transatlantic Trade and
Investment Partnership. He is unlikely to be moving the American embassy from Tel Aviv to Jerusalem. And he has yet to explain
how he will fund a wall with Mexico, for which that country certainly will not contribute as much as a peso.

Clearly, Trumphas a credibility problem that goes far beyond his tweets, which foreign leaders
have begun to recognize that they can simply ignore. Whereas until now it
appeared that America’s NATO partners were being frightened into spending 2
percent of GDP on defense needs, they may no longer have to do so. The Chinese
may feel more confident about maintaining, or even building upon, their aggressive
posture in the S outh C hina S ea. The Israelis may now look for clever ways to circumvent the
president’s admonition not to build more settlements, knowing that their support in Congress —
where Trump’s influence clearly has taken a blow — will remain as solid as ever. The Russians may surmise that

they have little incentive to reach an understanding over Ukraine, Syria, or

anywhere else . The Iranians may act on their threat to abandon the so-called Joint Comprehensive

Plan of Action ( JCPOA ) if, as expected Congress passes new sanctions against the Tehran regime. And, most dangerously, the
mad Kim Jong Un may conclude that Secretary of State Rex Tillerson’s threats of military
action are baseless , and that he has nothing to fear from an administration that
cannot even mobilize its own party in Congress to pass the president’s high-
priority legislation .
The House non-vote also has serious ramifications for the administration’s national security budget proposals. The administration’s
budget reflected the president’s priorities: it called for a $25 billion increase in the Fiscal Year 2017 budget and a $54 billion increase
in the Fiscal Year 2018 national security budget, of which $52 billion was allocated to the Department of Defense, while reducing the
budgets of dozens of domestic programs. Congressional opposition to the president’s proposals, emanating from some Republicans
as well as Democrats, was mounting even before the Obamacare debacle. In its aftermath, there will be more resistance to the
domestic program cuts, which in turn will mean either that the defense budget be reduced, or that the sequester be lifted. The latter
prospect has just become more difficult, meaning that the president’s promises to bolster America’s forces also may ring hollow.
Should that be the case, it will fuel international cynicism about the president’s ability to deliver on his promises.

Congressional inaction on Obamacare was clearly a defeat for the president , but
having only been in office less than 100 days, he
certainly has time to recover . There question is
whether he, or his advisors, will recognize that blaming the speaker of the House is not the solution, and that the
true “art of the deal,” is to tone down the rhetoric and begin to find real ways to find
common ground with the Congress, including moderate Democrats , at least insofar as
international security is concerned. This will not be an easy transformation for President Trump. Nevertheless, unless he stops
reveling in his outsider image, his fate will be that of that other outsider president — Jimmy Carter, whose record in the White
House was nothing short of dismal. It is a prospect that the president and his aides surely will wish to avoid at all costs.

All those crises risk global nuclear escalation

Michael T. Klare 17, professor of peace and world security studies at Hampshire
College, 1/17/17, “Escalation Watch,” http://www.tomdispatch.com/blog/176231/
Within months of taking office, President Donald Trump
is likely to face one or more major
international crises , possibly entailing a risk of nuclear escalation . Not since the
end of the Cold War has a new chief executive been confronted with as many
potential flashpoints involving such a risk of explosive conflict . This proliferation of crises
has been brewing for some time, but the situation appears especially ominous now given Trump’s pledge to bring American military
force swiftly to bear on any threats of foreign transgression. With so much at risk, it’s
none too soon to go on a
permanent escalation watch , monitoring the major global hotspots for any sign of
imminent flare-ups, hoping that early warnings (and the outcry that goes with them) might help
avert catastrophe.

Looking at the world today, four areas appear to pose an especially high risk of sudden
crisis and conflict: North Korea, the S outh C hina S ea, the Baltic Sea region, and the
Middle East. Each of them has been the past site of recurring clashes, and all are primed to explode early in the Trump
presidency.

Why are we seeing so many potential crises now? Is this period really different from earlier presidential transitions?

It’s true that the changeover from one presidential administration to another can be a
time of global uncertainty, given America’s pivotal importance in world affairs and
the natural inclination of rival powers to test the mettle of the country’s new
leader. There are, however, other factors that make this moment particularly worrisome, including the changing nature of the
world order, the personalities of its key leaders, and an ominous shift in military doctrine.

Just as the United States is going through a major political transition, so is the planet at large. The
sole-superpower
system of the post-Cold War era is finally giving way to a multipolar, if not increasingly fragmented,
world in which the United States must share the limelight with other major actors,
including China, Russia, India, and Iran. Political scientists remind us that transitional periods
can often prove disruptive, as “status quo” powers (in this case, the United States) resist challenges to their
dominance from “revisionist” states seeking to alter the global power equation. Typically, this can entail proxy wars
and other kinds of sparring over contested areas , as has recently been the case in
Syria, the Baltic, and the S outh C hina S ea.
This is where the personalities of key leaders enter the equation. Though President Obama oversaw constant warfare, he was
temperamentally disinclined to respond with force to every overseas crisis and provocation, fearing involvement in yet more foreign
wars like Iraq and Afghanistan. His critics, including Donald Trump, complained bitterly that this stance only encouraged foreign
adversaries to up their game, convinced that the U.S. had lost its will to resist provocation. In a Trump administration, as The
Donald indicated on the campaign trail last year, America’s adversaries should expect far tougher responses. Asked in September,
for instance, about an incident in the Persian Gulf in which Iranian gunboats approached American warships in a threatening
manner, he typically told reporters, “When they circle our beautiful destroyers with their little boats and make gestures that... they
shouldn’t be allowed to make, they will be shot out of the water.”

Putin’s
Although with Russia, unlike Iran, Trump has promised to improve relations, there’s no escaping the fact that Vladimir
urge to restore some of his country’s long-lost superpower glory could lead to
confrontations with NATO powers that would put the new American president in a distinctly awkward position.
Regarding Asia, Trump has often spoken of his intent to punish China for what he considers its predatory trade practices, a stance
guaranteed to clash with President Xi Jinping’s
goal of restoring his country’s greatness. This should,
in turn, generate additional possibilities for confrontation , especially in the contested South China Sea.
Both Putin and Xi, moreover, are facing economic difficulties at home and view foreign adventurism as a way of distracting public
attention from disappointing domestic performances.

These factors alone would ensure that this was a moment of potential international crisis, but something else gives it a truly
dangerous edge: a growing strategic reliance in Russia and elsewhere on the early use of nuclear weapons to overcome deficiencies
in “conventional” firepower.

For the United States, with its overwhelming superiority in such firepower, nuclear weapons have lost all conceivable use except as a
“deterrent” against a highly unlikely first-strike attack by an enemy power. For Russia, however, lacking the means to compete on
equal terms with the West in conventional weaponry, this no longer seems reasonable. So Russian strategists, feeling
threatened by the way NATO has moved ever closer to its borders, are now calling for the early use of
“tactical” nuclear munitions to overpower stronger enemy forces. Under Russia’s latest military doctrine, major
combat units are now to be trained and equipped to employ such weapons at the first sign of impending defeat, either to blackmail
enemy countries into submission or annihilate them.

Following this doctrine, Russia has developed the nuclear-capable Iskander ballistic missile (a successor to the infamous “Scud”
missile used by Saddam Hussein in attacks on Iran, Israel, and Saudi Arabia) and forward deployed it to Kaliningrad, a small sliver
of Russian territory sandwiched between Poland and Lithuania. In response, NATO strategists are discussing ways to more
forcefully demonstrate the West’s own capacity to use tactical nuclear arms in Europe, for example by including more nuclear-
capable bombers in future NATO exercises. As a result, the “firebreak” between conventional and nuclear warfare -- that theoretical
barrier to escalation -- seems to be narrowing, and you have a situation in which every crisis involving a nuclear
state may potentially prove to be a nuclear crisis .
With that in mind, consider the four most dangerous potential flashpoints for the new Trump administration.

North Korea

North Korea’s stepped-up development of nuclear weapons and long-range ballistic missiles may present the Trump administration with its first great international challenge.
In recent years, the North Koreans appear to have made substantial progress in producing such missiles and designing small nuclear warheads to fit on them. In 2016, the
country conducted two underground nuclear tests (its fourth and fifth since 2006), along with numerous tests of various missile systems. On September 20th, it also tested a
powerful rocket engine that some observers believe could be used as the first stage of an intercontinental ballistic missile (ICBM) that might someday be capable of delivering a
nuclear warhead to the western United States.

North Korea’s erratic leader, Kim Jong-un, has repeatedly spoken of his determination to acquire nuclear weapons and the ability to use them in attacks on his adversaries,
including the U.S. Following a series of missile tests last spring, he insisted that his country should continue to bolster its nuclear force “both in quality and quantity,” stressing
“the need to get the nuclear warheads deployed for national defense always on standby so as to be fired at any moment.” This could mean, he added, using these weapons “in a
preemptive attack.” On January 1st, Kim reiterated his commitment to future preemptive nuclear action, adding that his country would soon test-fire an ICBM.

President Obama responded by imposing increasingly tough economic sanctions and attempting -- with only limited success -- to persuade China, Pyongyang’s crucial ally, to
use its political and economic clout to usher Kim into nuclear disarmament talks. None of this seemed to make the slightest difference, which means President Trump will be
faced with an increasingly well-armed North Korea that may be capable of fielding usable ICBMs within the coming years.

How will Trump respond to this peril? Three options seem available to him: somehow persuade China to compel Pyongyang to abandon its nuclear quest; negotiate a
disarmament deal directly with Kim, possibly even on a face-to-face basis; or engage in (presumably nonnuclear) preemptive strikes aimed at destroying the North’s nuclear and
missile-production capabilities.

Imposing yet more sanctions and talking with China would look suspiciously like the Obama approach, while obtaining China’s cooperation would undoubtedly mean
compromising on trade or the South China Sea (either of which would undoubtedly involve humiliating concessions for a man like Trump). Even were he to recruit Chinese
President Xi as a helpmate, it’s unclear that Pyongyang would be deterred. As for direct talks with Kim, Trump, unlike every previous president, has already indicated that he’s
willing. “I would have no problem speaking to him,” he told Reuters last May. But what exactly would he offer the North in return for its nuclear arsenal? The withdrawal of U.S.
forces from South Korea? Any such solution would leave the president looking like a patsy (inconceivable for someone whose key slogan has been “Make America Great Again”).

That leaves a preemptive strike. Trump appears to have implicitly countenanced that option, too, in a recent tweet. (“North Korea
just stated that it is in the final stages of developing a nuclear weapon capable of reaching parts of the U.S. It won’t happen!”) In
other words, he is open to the military option, rejected in the past because of the high risk of triggering an unpredictable response
from the North, including a cataclysmic invasion of South Korea (and potential attacks on U.S. troops stationed there). Under the
circumstances, the
unpredictability not just of Kim Jong-un but also of Donald Trump leaves
North Korea in the highest alert category of global crises as the new era begins.
The South China Sea

The next most dangerous flashpoint? The ongoing dispute over control of the S outh
C hina S ea, an area bounded by China, Vietnam, the Philippines, and the island of Borneo. Citing ancient ties to islands in those
waters, China now claims the entire region as part of its national maritime territory. Some of the same islands are, however, also
claimed by Brunei, Malaysia, Vietnam, and the Philippines. Although not claiming any territory in the region itself, the U.S. has a
defense treaty with the Philippines, relies on free passage through the area to move its warships from bases in the Pacific to war
zones in the Middle East, and of course considers itself the preeminent Pacific power and plans to keep it that way.
In the past, China has clashed with local powers over possession of individual islands, but more recently has sought control over all of them. As part of that process, it has begun
to convert low-lying islets and atolls under its control into military bases, equipping them with airstrips and missile defense systems. This has sparked protests from Vietnam
and the Philippines, which claim some of those islets, and from the United States, which insists that such Chinese moves infringe on its Navy’s “freedom of navigation” through
international waters.

President Obama responded to provocative Chinese moves in the South China Sea by ordering U.S. warships to patrol in close proximity to the islands being militarized. For
Trump, this has been far too minimal a response. “China’s toying with us,” he told David Sanger of the New York Times last March. “They are when they’re building in the South
China Sea. They should not be doing that but they have no respect for our country and they have no respect for our president.” Asked if he was prepared to use military force in
response to the Chinese buildup, he responded, “Maybe.”

The South China Sea may prove to be an early test of Trump’s promise to fight what he views as China’s predatory trade behavior and Beijing’s determination to resist bullying
by Washington. Last month, Chinese sailors seized an American underwater surveillance drone near one of their atolls. Many observers interpreted the move as a response to
Trump’s decision to take a phone call of congratulations from the president of Taiwan, Tsai Ing-wen, shortly after his election victory. That gesture, unique in recent American
presidencies, was viewed in Beijing, which considers Taiwan a renegade province, as an insult to China. Any further moves by Trump to aggravate or punish China on the
economic front could result in further provocations in the South China Sea, opening the possibility of a clash with U.S. air and naval forces in the region.

All this is worrisome enough, but the prospects for a clash in the South China Sea increased significantly on January 11th, thanks to comments made by Rex Tillerson, the former
CEO of ExxonMobil and presumptive secretary of state, during his confirmation hearing in Washington. Testifying before the Senate Foreign Relations Committee, he said,
“We’re going to have to send China a clear signal that, first, the island-building stops and, second, your access to those islands also is not going to be allowed.” Since the Chinese
are unlikely to abandon those islands -- which they consider part of their sovereign territory -- just because Trump and Tillerson order them to do so, the only kind of "signal"
that might carry any weight would be military action.

What form would such a confrontation take and where might it lead? At this point, no one can be sure, but once
such a
conflict began, room for maneuver could prove limited indeed. A U.S. effort to
deny China access to the islands could involve anything from a naval blockade to air and
missile attacks on the military installations built there to the sinking of Chinese
warships. It’s hard to imagine that Beijing would refrain from taking retaliatory
steps in response, and as one move tumbled onto the next, the two nuclear-armed countries might
suddenly find themselves at the brink of full-scale war. So consider this our se

cond global high alert.

The Baltic Sea Area

If Hillary Clinton had been elected, I would have placed the region adjoining the Baltic Sea at the top of my list of potential
flashpoints, as it’s where Vladimir Putin would have been most likely to channel his hostility to her in particular and the West more
generally. That’s because NATO forces have moved most deeply into the territory of the former Soviet Union in the Baltic states of
Latvia, Estonia, and Lithuania. Those countries are also believed to be especially vulnerable to the kind of “hybrid” warfare --
involving covert operations, disinformation campaigns, cyberattacks, and the like -- that Russia perfected in Crimea and Ukraine.
With Donald Trump promising to improve relations with Moscow, it’s now far less likely that Putin would launch such attacks,
though the Russians continue to strengthen their military assets (including their nuclear
war-fighting capabilities ) in the region, and so the risk of a future clash cannot be ruled out.
The danger there arises from geography, history, and policy. The three Baltic republics only became independent after the breakup of the USSR in 1991; today, they are members
of both the European Union and NATO. Two of them, Estonia and Latvia, share borders with Russia proper, while Lithuania and nearby Poland surround the Russian enclave of
Kaliningrad. Through their NATO membership, they provide a theoretical bridgehead for a hypothetical Western invasion of Russia. By the same token, the meager forces of the
three republics could easily be overwhelmed by superior Russian ones, leaving the rest of NATO to decide whether and in what fashion to confront a Russian assault on member
nations.

Following Russia’s intervention in eastern Ukraine, which demonstrated both Moscow’s willingness and ability to engage in hybrid warfare against a neighboring European
state, the NATO powers decided to bolster the alliance’s forward presence in the Baltic region. At a summit meeting in Warsaw in June 2016, the alliance agreed to deploy four
reinforced multinational battalions in Poland and the three Baltic republics. Russia views this with alarm as a dangerous violation of promises made to Moscow in the wake of
the Cold War that no NATO forces would be permanently garrisoned on the territory of the former Soviet Union. NATO has tried to deflect Russian complaints by insisting that,
since the four battalions will be rotated in and out of the region, they are somehow not “permanent.” Nevertheless, from Moscow’s perspective, the NATO move represents a
serious threat to Russian security and so justifies a comparable buildup of Russian forces in adjacent areas.

Adding to the obvious dangers of such a mutual build-up, NATO and Russian forces have been conducting military “exercises,” often in close proximity to each other. Last
summer, for example, NATO oversaw Anaconda 2016 in Poland and Lithuania, the largest such maneuvers in the region since the end of the Cold War. As part of the exercise,
NATO forces crossed from Poland to Lithuania, making clear their ability to encircle Kaliningrad, which was bound to cause deep unease in Moscow. Not that the Russians have
been passive. During related NATO naval exercises in the Baltic Sea, Russian planes flew within a few feet of an American warship, the USS Donald Cook, nearly provoking a
shooting incident that could have triggered a far more dangerous confrontation.

Will Putin ease up on the pressure he’s been exerting on the Baltic states once Trump is in power? Will Trump agree to cancel or
downsize the U.S. and NATO deployments there in return for Russian acquiescence on other issues? Such questions will be on the
minds of many in Eastern Europe in the coming months. It’s reasonable to predict a period of relative calm as Putin tests Trump’s
willingness to forge a new relationship with Moscow, but the
underlying stresses will remain as long as
the Baltic states stay in NATO and Russia views that as a threat to its security . So chalk
the region up as high alert three on a global scale.

The Middle East

The Middle East has long been a major flashpoint . President Obama, for instance, came to office
hoping to end U.S. involvement in wars in Iraq and Afghanistan, yet U.S. troops are still fighting in both countries today. The
question is: How might this picture change in the months ahead?
Given the convoluted history of the region and its demonstrated capacity for surprise, any predictions should be offered with caution. Trump has promised to intensify the war
against ISIS, which will undoubtedly require the deployment of additional American air, sea, and ground forces in the region. As he put it during the election campaign, speaking
of the Islamic State, “I would bomb the shit out of them.” So expect accelerated air strikes on ISIS-held locations, leading to more civilian casualties, desperate migrants, and
heightened clashes between Shiites and Sunnis. As ISIS loses control of physical territory and returns to guerilla-style warfare, it will surely respond by increasing terrorist
attacks on “soft” civilian targets in neighboring Iraq, Jordan, and Turkey, as well as in more distant locations. No one knows how all this will play out, but don’t be surprised if
terrorist violence only increases and Washington once again finds itself drawn more deeply into an endless quagmire in the Greater Middle East and northern Africa.

The overriding question, of course, is how Donald Trump will behave toward Iran. He has
repeatedly affirmed his opposition to the nuclear deal signed by the United States, the European Union, Russia, and China and
insisted that he would either scrap it or renegotiate it, but it’s hard to imagine how that might come to pass. All of the other
signatories are satisfied with the deal and seek to do business with Iran, so any new negotiations would have to proceed without
those parties. As many U.S. strategists also see merit in the agreement, since it deprives Iran of a nuclear option for at least a decade
or more, a decisive shift on the nuclear deal appears unlikely.

On the other hand, Trump could be pressured by his close associates -- especially his pick for national security advisor, retired
Lieutenant General Michael Flynn, a notoriously outspoken Iranophobe -- to counter the Iranians on other fronts. This could
take a variety of forms, including stepped-up sanctions, increased aid to Saudi Arabia in its war against the Iranian-backed Houthis
in Yemen, or attacks on Iranian proxies in the Middle East. Any of these would no doubt prompt
countermoves by
Tehran, and from there a cycle of escalation could lead in numerous directions, all
dangerous, including military action by the U.S., Israel, or Saudi Arabia. So mark this one as
flash point four and take a deep breath.

Going on Watch

Starting on January 20th, as Donald Trump takes office, the clock will already be ticking in each of these flashpoint regions. No one
knows which will be the first to erupt, or what will happen when it does, but don’t
count on our escaping at
least one, and possibly more, major international crises in the not-too-distant
future.
Midterms DA – Gop Bad
 UQ
GOP win inev but gaining a filibuster proof majority is impossible
Harry Enten 17, Senior Political Analyst at FiveThirtyEight, 5/22/2017, “Why The
2018 Senate Elections Are Looking Bad For Both Parties”, FiveThirtyEight,
https://fivethirtyeight.com/features/why-the-2018-senate-elections-are-looking-bad-
for-both-parties/
The 2018 midterms are a story of two chambers. Democrats are in the best position they’ve been in since 2010 to win a majority of
seats in the House of Representatives. The Senate map, on the other hand, is so tilted toward the GOP that most political analysts
have all but dismissed Democrats’ chances of winning the chamber before 2020. It has even been suggested that
Republicans could gain enough Senate seats (eight) in 2018 to amass a filibuster-
proof majority (60 seats).¶ This is normally the part of the article where I push back on the conventional wisdom and
argue something like, actually, the 2018 Senate map isn’t that bad for Democrats. But no , it’s pretty bad: Democrats
are a long shot to take back the Senate.¶ What I will argue, however, is that it’ll also be difficult
for the GOP to pick up a bunch of seats. Republicans would need to oust incumbent
Democrats, and it’s extremely difficult to beat an incumbent senator in a midterm
when his or her party doesn’t control the White House. ¶ It may seem a little nuts to suggest that
Senate Minority Leader Chuck Schumer can keep losses to a minimum in 2018. Democrats hold 23 of the 33
seats up for a vote. There are 10 Democratic senators running in states that President Trump won, five of whom (Sens.
Joe Donnelly of Indiana, Heidi Heitkamp of North Dakota, Joe Manchin of West Virginia, Claire McCaskill of Missouri and Jon
Tester of Montana) are from states that Trump won by about 20 percentage points or more. Meanwhile, there are only two
Republican senators (Arizona’s Jeff Flake and Nevada’s Dean Heller) up for re-election in states Hillary Clinton came within 5 points
of winning in 2016.¶ But while
a lot of Democrats are up for re-election in red states, there’s
also a Republican in the White House, and incumbent senators1 in the opposition
party — for simplicity, let’s call them “opposition senators” — tend to survive in
those situations.¶ There have been 114 opposition senators who have run in a
midterm general election2 since 1982. Only four of the 114 (4 percent) lost. Most
won by wide margins, with the average opposition senator beating the candidate of
the president’s party3 by 28 percentage points. Even in the worst year for
opposition senators (1998), 86 percent were re-elected. If 86 percent of incumbent
Democrats win in 2018, the party would lose three seats.4 That would leave
Republicans with 55 seats, a more comfortable majority but far short of filibuster-
proof.
 Link Turn – GOP Base Turnout
Turn – dem turnout is inevitable but strengthening the ACA causes
GOP base backlash – swings the midterms
Jonathan Martin 17, Political Correspondent for the NY Times, co-author of the New
York Times best seller “The End of the Line: Romney vs. Obama: The 34 Days That
Decided the Election”, 2018 Dilemma for Republicans: Which Way Now on
Obamacare?, The New York Times,
https://www.nytimes.com/2017/03/28/us/politics/2018-dilemma-for-republicans-
which-way-now-on-obamacare.html
WASHINGTON — As they come to terms with their humiliating failure to undo the
Affordable Care Act, Republicans eyeing next year’s congressional campaign are
grappling with a new dilemma: Do they risk depressing their conservative base by
abandoning the repeal effort or anger a broader set of voters by reviving a deeply unpopular bill
even closer to the midterm elections?¶ The question is particularly acute in the House, where the
Republican majority could be at risk in 2018 if the party’s voters are demoralized,
and Democratic activists, energized by the chance to send a message to President
Trump, stream to the polls.¶ Sifting through the wreckage of a disastrous week, Republican strategists and elected
officials were divided over the best way forward. Some House Republicans pressed to move on to other issues and notch some
victories that could delight their own loyalists while not turning off swing voters. ¶ “We’ve got a lot of time to do real things on
infrastructure, to do real things on tax reform, on red tape reform, and really get the American economy moving,” said
Representative Steve Stivers of Ohio, chairman of the National Republican Congressional Committee, the House campaign arm. “We
do those things and we still have a lot of time to recover.” ¶ “If you’re going to fumble the ball,” he added, “better to do so in the first
quarter of a football game.Ӧ Devising
health care legislation that could appeal to both wings
of the House Republican Conference — the hard-line conservatives and more
moderate members — would require a nearly superhuman feat, added Representative Billy
Long, Republican of Missouri.¶ “Not unless Harry Houdini wins a special election to help us,” Mr. Long said about the prospects of
cobbling together a coalition that could agree on how to repeal and replace the health care law. ¶ But other longtime Republicans
warned that if the party did not address what they have derided as Obamacare, an issue
that has been central to their campaigns for the last seven years, they would incur
a heavy political price in the midterm elections.¶ Midterm campaigns have
increasingly become akin to parliamentary elections — referendums on the party
in power rather than on individual candidates, where turnout by dependable
partisan voters is the deciding factor.¶ “If they fall on their sword on this, they’re
going to get slaughtered,” said former Representative Thomas M. Davis III, a Virginia Republican who himself was
once at the helm of the House campaign committee.¶ “Where parties get hurt in midterms is when

their base collapses,” Mr. Davis said. “Democrats are going to show up regardless of
what you do. If our voters don’t see us fulfilling what we said we were going to
do, they’ll get dispirited.” ¶ What troubles many Republican strategists is the
specter of the party’s most reliable voters being bombarded by reminders of their
leaders’ failure to address the health law. Th ey fear a recurring story line sure to
pop up every time insurance premiums increase, providers leave local networks, or , most worrisome,
Republicans fund President Barack Obama’s signature achievement.
 Dem Turnout
Dem outrage is inevitable dems fail at creating momentum on
healthcare
Jeet Heer 17, Senior Editor at the New Republic, PhD Candidate at York University,
writing a dissertation on cultural politics, 6/14/2017, The Russia Scandal Is Distracting
Democrats From Trumpcare, New Republic,
https://newrepublic.com/article/143321/russia-scandal-distracting-democrats-
trumpcare
Gillibrand and Murphy are speaking to a simple point: Attention
and outrage are limited resources for
an opposition party trying to mobilize the masses , and right now, the Russia story is
dominating headlines. But not long ago, the Republicans’ Obamacare repeal efforts did command the media’s attention
and public’s outrage—specifically when the House first attempted to pass the AHCA, and when it succeeded in its second attempt.
Republican congressmen were literally running scared from angry constituents, and the press couldn’t get enough of the raucous
town hall meetings.¶ This, undoubtedly, is why Republican senators have decided to keep their own bill secret—to deprive the media
of details, and thus deprive the public of fuel for outrage. By all appearances, their strategy is working. ¶ Gillibrand and Murphy’s
rhetoric notwithstanding, Democrats in the Senate seem to be treating healthcare as a
secondary concern . A top Senate aide told Stein that “not going nuclear on AHCA also allows them to hammer out
bipartisan Russian sanctions deal.” From a parliamentary point of view, this is a defensible position. The Democrats have few cards
to play; they can’t filibuster the legislation, but they can hold a vote-a-rama. They might want to wait for a later emergency to grind
the Senate to a halt. Also, “going nuclear” might make more sense once the details of the bill are public, giving the Democrats a more
specific enemy to rally against. ¶ Still,
whatever the logic behind the Democrats’ strategy, some
activists are starting to panic, believing that the fight is being lost due to
complacency and disengagement. “There’s no shortage of passionate opposition to
Trumpcare, but there’s a profound shortage of awareness that the beast is back,” Ben Wikler,
Move On’s Washington director, told the New Republic’s Graham Vyse. “Big chunks of the American public have been lulled into a
dangerous belief that Trumpcare is not going anywhere. The fact is, we’re in a code-red emergency.” Stopping the Senate’s health
care bill will require massive mobilization, he said. “ A biblical flood of phone calls is necessary but
not sufficient to stop Trumpcare. At this point, for Republican senators to vote against the bill they would have to feel like
supporting it is an existential threat to their political careers, and that means surround-sound, defending resistance. It means
phones ringing off the hook. Emails being jammed. Protesters shouting at them when they go to the grocery store.” ¶ The
ubiquitous Russia story is a barrier to this type of political mobilization. For all the
attention the scandal deserves, it is also, from the point of view of resisting the
Trump agenda, counterproductive and politically demobilizing. The Russia story is
high political theater, with senators grilling top government officials and
damaging information leaking almost daily from the White House and law
enforcement agencies. There’s very little room in this drama for activists . At best, if the
Senate or some other branch of the government is seen as failing to do its duties, protestors might play a role in raising a stink. But
on the whole, the Russia investigation is one where the system proceeds according to its own rules, while the public looks on. ¶ The
battle over health care, by contrast, requires enflaming mass passions. Democrats
and activists were able to do so earlier this year, mobilizing voters to attend town
halls and call their congressional representatives. But as the Republicans started
working in secret and the Russia story started dominating the news, it’s been hard
to sustain the needed level of outrage. While there have been massive rallies over
the last few months focused on women, climate change, immigrants, and
impeachment, attempts to organize large marches around healthcare have fizzled .
¶ Which brings us back to the question: What is the goal of the Resistance? If the goal is to defeat Trump, then it makes sense to a
focus on finding an impeachable offense. If the goal is to defeat Trumpism, the battle should focus on dislodging Trump’s ideological
allies, like Steve Bannon and Stephen Miller, from power. And if the goal is to fight the Republican Party, then the highest priority
has to be issues like health care, where the divide between the Democrats and the GOP is stark. If the Republican health care bill
becomes law, Democrats must take some of the blame. They
are too narrowly focused on opposing
Trump—on trying to take him down over Russia—rather than opposing the policies
he’s pursuing, which couldn’t get anywhere without the Republican Party.
 Filibuster
Impact inevitable – if they don’t get a filibuster proof majority, GOP
will repeal the filibuster
Charles Lane 17, Columnist for the Washington Post, 8/13/2017, “Why the GOP may
kill the filibuster in the end”,
http://bangordailynews.com/2017/08/13/opinion/contributors/why-the-gop-may-kill-
the-%EF%AC%81libuster-in-the-end/
And, of course, McConnell shows no signs of agreeing to the rule change Trump impatiently favors. ¶ Still,
there is a
reasonable case to be made that it would be in the GOP’s interest to do what Trump
says — if not immediately, then certainly if the Republicans manage to overcome Trump’s
declining approval numbers and do well in the 2018 midterm elections. ¶ GOP
senators have made two main arguments against such a power grab: It would be
bad for the Senate and, hence, the country to convert the “world’s greatest deliberative body” into the plaything of shifting
majorities. And it would be unwise for the Republicans to risk a rule change that the
Democrats could turn to their advantage by regaining control of the chamber,
possibly in as little as two years. ¶ But the second of those two arguments may be
getting less compelling for the GOP: It’s eminently foreseeable that not only the
gerrymandered House but also the Senate will remain in GOP hands for at least
the next half-decade and maybe longer. ¶ This is due not only to the fact that the 2018 Senate electoral map
favors Republicans, in that they only have to defend eight of the 33 seats at stake, while 25 Democrats are up for re-election, 10 in
states Trump carried in 2016.¶ Even
more striking is the developing and seemingly durable
GOP edge in rural states, which have two Senate seats each just like the heavily
populated coastal states that Democrats dominate. ¶ Republican Trump carried 26 states (that’s 52
senators’ worth) with a share of the vote at least 5 percentage points larger than his national vote percentage, according to an
analysis by Dave Wasserman of the Cook Political Report. ¶ By contrast to these deep-red strongholds, there are only 14 states (with
28 senators) in which Democrat Hillary Clinton beat her national share by at least five points. Wasserman counts 10 remaining
“swing” states (20 senators).¶ Overall, the
statistical “pro-GOP bias” of Senate races is at its
highest level since the direct election of senators became the law of the land in
1913, Wasserman notes. And the 2020 map looks only slightly less favorable to the GOP than the 2018 one. ¶ The
temptation to do away with the legislative filibuster could therefore prove irresistible
if 2018 produces another GOP majority of fewer than 60 votes, especially if
Republicans also retain the House.¶ Certainly, Trump might see a once-in-a-generation
opportunity to transform a whole host of policies — taxes, spending, regulation, immigration — in
ways Democrats could not reverse until that far-off day when they manage to
capture both houses of Congress and the executive branch.¶ To be sure, this scenario depends on
a long series of assumptions, the most important of which is that public dissatisfaction with Trump, or some Trump-triggered crisis,
doesn’t drag the whole GOP down to defeat in the midterms.
 AT: EU
EU collapse inevitable for a laundry list of reasons they can’t resolve
John Feffer 15, co-director of Foreign Policy In Focus, The European Union May Be
on the Verge of Collapse, Jan 27, The Nation,
http://www.thenation.com/article/196193/european-union-may-be-verge-collapse#

And yet, for all this success, the European project is currently teetering on the edge of failure . Growth
is anemic at best and socio-economic inequality is on the rise. The countries of
Eastern and Central Europe, even relatively successful Poland, have failed to bridge the income gap
with the richer half of the continent. And the highly indebted periphery is in
revolt . Politically, the center may not hold and things seem to be falling apart. From the left, parties like
Syriza in Greece are challenging the EU’s prescriptions of austerity. From the right, Euroskeptic
parties are taking aim at the entire quasi-federal model. Racism and xenophobia are gaining ever more

adherents, even in previously placid regions like Scandinavia. Perhaps the primary social challenge facing Europe at
the moment, however, is the surging popularity of Islamophobia, the latest “socialism of fools.” From the killings at the Munich

Olympics in 1972 to the recent attacks at Charlie Hebdo and a kosher supermarket in Paris, wars in the Middle East have long inspired proxy battles in Europe. Today,

however, the continent finds itself ever more divided between a handful of would-
be combatants who claim the mantle of true Islam and an ever-growing contingent
who believe Islam—all of Islam—has no place in Europe. The fracturing European Union of 2015 is not the
Europe that political scientist Frances Fukuyama imagined when, in 1989, he so famously predicted “the end of history,” as well as the ultimate triumph of liberal democracy and
the bureaucracy in Brussels, the EU’s headquarters, that now oversees continental affairs. Nor is it the Europe that British Prime Minister Margaret Thatcher imagined when, in
the 1980s, she spoke of the global triumph of TINA (“there is no alternative”) and of her brand of market liberalism. Instead, today’s Europe increasingly harkens back to the
period between the two world wars when politicians of the far right and left polarized public debate, economies went into a financial tailspin, anti-Semitism surged out of the

sewer and storm clouds gathered on the horizon. Another continent-wide war may not be in the offing, but Europe does face the potential
for regime collapse: that is, the end of the Eurozone and the unraveling of regional integration. Its possible dystopian future can be glimpsed in what has
happened in its eastern borderlands. There, federal structures binding together culturally diverse people have had a lousy track record over the last quarter-century. After all, the
Soviet Union imploded in 1991; Czechoslovakia divorced in 1993; and Yugoslavia was torn asunder in a series of wars later in the 1990s. If its economic, political and social
structures succumb to fractiousness, the European Union could well follow the Soviet Union and Yugoslavia into the waste bin of failed federalisms. Europe as a continent will
remain, its nation-states will continue to enjoy varying degrees of prosperity, but Europe as an idea will be over. Worse yet, if, in the end, the EU snatches defeat from the jaws of
its Cold War victory, it will have no one to blame but itself. The Rise and Fall of TINA The Cold War was an era of alternatives. The United States offered its version of
freewheeling capitalism, while the Soviet Union peddled its brand of centralized planning. In the middle, continental Europe offered the compromise of a social market:
capitalism with a touch of planning and a deepening concern for the welfare of all members of society. Cooperation, not competition, was the byword of the European
alternative. Americans could have their dog-eat-dog, frontier capitalism. Europeans would instead stress greater coordination between labor and management and the European
Community (the precursor to the EU) would put genuine effort into bringing its new members up to the economic and political level of its core countries. Then, at a point in the
1980s when the Soviet model had ceased to exert any influence at all globally, along came TINA. At the time, British Prime Minister Margaret Thatcher and American President
Ronald Reagan were ramping up their campaigns to shrink government, while what later became known as globalization—knocking down trade walls and opening up new
opportunities for the financial sector—began to be felt everywhere. Thatcher summed up this brave new world with her TINA acronym: the planet no longer had any alternative
to globalized market democracy. Not surprisingly, then, in the post-Cold War era, European integration shifted its focus toward removing barriers to the flow of capital. As a
result, the expansion of Europe no longer came with an implied guarantee of eventual equality. The deals that Ireland (1973) and Portugal (1986) had received on accession were
now, like the post-World War II Marshall Plan, artifacts of another era. The sheer number of potential new members knocking on Europe’s door put a strain on the EU’s coffers,
particularly since the economic performance of countries like Romania and Bulgaria was so far below the European average. But even if the EU had been overflowing with funds,
it might not have mattered, since the new “neoliberal” spirit of capitalism now animated its headquarters in Brussels where the order of the day had become: cut government,
unleash the market. At the heart of Europe, as well as of this new orthodoxy, lies Germany, the exemplar of continental fiscal rectitude. Yet in the 1990s, that newly reunified
nation engaged in enormous deficit spending, even if packaged under a different name, to bring the former East Germany up to the level of the rest of the country. It did not,
however, care to apply this “reunification exception” to other former members of the Soviet bloc. Acting as the effective central bank for the European Union, Germany instead
demanded balanced budgets and austerity from all newcomers (and some old timers as well) as the only effective answer to debt and fears of a future depression. The rest of the
old Warsaw Pact has had access to some EU funds for infrastructure development, but nothing on the order of the East German deal. As such, they remain in a kind of economic
halfway house. The standard of living in Hungary, 25 years after the fall of Communism, remains approximately half that of neighboring Austria. Similarly, it took Romania
fourteen years just to regain the gross national product (GDP) it had in 1989 and it remains stuck at the bottom of the European Union. People who visit only the capital cities of
Eastern and Central Europe come away with a distorted view of the economic situation there, since Warsaw and Bratislava are wealthier than Vienna, and Budapest nearly on a
par with it, even though Poland, Slovakia and Hungary all remain economically far behind Austria. What those countries experienced after 1989—one course of “shock therapy”
after another—became the medicine of choice for all EU members at risk of default following the financial crisis of 2007 and then the sovereign debt crisis of 2009. Forget deficit
spending to enable countries to grow their way out of economic crisis. Forget debt renegotiation. The unemployment rate in Greece and Spain now hovers around 25 percent,
with youth unemployment over 50 percent and all the EU members subjected to heavy doses of austerity have witnessed a steep rise in the number of people living below the
poverty line. The recent European Central Bank announcement of “quantitative easing”—a monetary sleight-of-hand to pump money into the Eurozone—is too little, too late.
The major principle of European integration has been reversed. Instead of Eastern and Central Europe catching up to the rest of the EU, pockets of the “west” have begun to fall
behind the “east.” The GDP per capita of Greece, for example, has slipped below that of Slovenia and, when measured in terms of purchasing power, even Slovakia, both former
Communist countries. The Axis of Illiberalism Europeans are beginning to realize that Margaret Thatcher was wrong and there are alternatives—to liberalism and European
integration. The most notorious example of this new illiberalism is Hungary. On July 26, 2014, in a speech to his party faithful, Prime Minister Viktor Orban confided that he
intended a thorough reorganization of the country. The reform model Orban had in mind, however, had nothing to do with the United States, Britain, or France. Rather, he
aspired to create what he bluntly called an “illiberal state” in the very heart of Europe, one strong on Christian values and light on the libertine ways of the West. More precisely,
what he wanted was to turn Hungary into a mini-Russia or mini-China. “Societies founded upon the principle of the liberal way,” Orban intoned,“will not be able to sustain their
world-competitiveness in the following years, and more likely they will suffer a setback, unless they will be able to substantially reform themselves.” He was also eager to reorient
to the east, relying ever less on Brussels and ever more on potentially lucrative markets in and investments from Russia, China and the Middle East. That July speech
represented a truly Oedipal moment, for Orban was eager to drive a stake right through the heart of the ideology that had fathered him. As a young man more than 25 years
earlier, he had led the Alliance of Young Democrats—Fidesz—one of the region’s most promising liberal parties. In the intervening years, sensing political opportunity elsewhere
on the political spectrum, he had guided Fidesz out of the Liberal International and into the European People’s Party, alongside German Chancellor Angela Merkel’s Christian
Democrats. Now, however, he was on the move again and his new role model wasn’t Merkel, but Russian President Vladimir Putin and his iron-fisted style of politics. Given the
disappointing performance of liberal economic reforms and the stinginess of the EU, it was hardly surprising that Orban had decided to hedge his bets by looking east. The
European Union has responded by harshly criticizing Orban’s government for pushing through a raft of constitutional changes that restrict the media and compromise the
independence of the judiciary. Racism and xenophobia are on the uptick in Hungary, particularly anti-Roma sentiment and anti-Semitism. And the state has taken steps to
reassert control over the economy and impose controls on foreign investment. For some, the relationship between Hungary and the rest of Europe is reminiscent of the moment
in the 1960s when Albania fled the Soviet bloc and, in an act of transcontinental audacity, aligned itself with Communist China. But Albania was then a marginal player and
China still a poor peasant country. Hungary is an important EU member and China’s illiberal development model, which has vaulted it to the top of the global economy, now has
increasing international influence. This, in other words, is no Albanian mouse that roared. A new illiberal axis connecting Budapest to Beijing and Moscow would have far-
reaching implications. The Hungarian prime minister, after all, has many European allies in his Euroskeptical project. Far right parties are climbing in the polls across the
continent. With 25 percent of the votes, Marine Le Pen’s National Front, for instance, topped the French elections for the European parliament last May. In local elections in
2014, it also seized twelve mayoralties, and polls show that Le Pen would win the 2017 presidential race if it were held today. In the wake of the Charlie Hebdo shootings, the
National Front has been pushing a range of policies from reinstating the death penalty to closing borders that would deliberately challenge the whole European project. In
Denmark, the far-right People’s Party also won the most votes in the European parliamentary elections. In November, it topped opinion polls for the first time. The People’s
Party has called for Denmark to slam shut its open-door policy toward refugees and re-introduce border controls. Much as the Green Party did in Germany in the 1970s,
groupings like Great Britain’s Independence Party, the Finns Party and even Sweden’s Democrats are shattering the comfortable conservative-social democratic duopoly that has
rotated in power throughout Europe during the Cold War and in its aftermath. The Islamophobia that has surged in the wake of the murders in France provides an even more
potent arrow in the quiver of these parties as they take on the mainstream. The sentiment currently expressed against Islam—at rallies, in the media and in the occasional
criminal act—recalls a Europe of long ago, when armed pilgrims set out on a multiple crusades against Muslim powers, when early nation-states mobilized against the Ottoman
Empire, and when European unity was forged not out of economic interest or political agreement but as a “civilizational” response to the infidel. Please support our journalism.
Get a digital subscription for just $9.50! The Europe of today is, of course, a far more multicultural place and regional integration depends on “unity in diversity,” as the EU’s
motto puts it. As a result, rising anti-Islamic sentiment challenges the inclusive nature of the European project. If the EU cannot accommodate Islam, the complex balancing act
among all its different ethnic, religious and cultural groups will be thrown into question. Euroskepticism doesn’t only come from the right side of the political spectrum. In
Greece, the Syriza party has challenged liberalism from the left, as it leads protests against EU and International Monetary Fund austerity programs that have plunged the
population into recession and revolt. As elsewhere in Europe, the far right might have taken advantage of this economic crisis, too, had the government not arrested the Golden
Dawn leadership on murder and other charges. In parliamentary elections on Sunday, Syriza won an overwhelming victory, coming only a couple seats short of an absolute
majority. In a sign of the ongoing realignment of European politics, that party then formed a new government not with the center-left, but with the right-wing Independent
Greeks, which is similarly anti-austerity but also skeptical of the EU and in favor of a crackdown on illegal immigration. European integration continues to be a bipartisan
project for the parties that straddle the middle of the political spectrum, but the Euroskeptics are now winning votes with their anti-federalist rhetoric. Though they tend to
moderate their more apocalyptic rhetoric about “despotic Brussels” as they get closer to power, by pulling on a loose thread here and another there, they could very well unravel
the European tapestry. When the Virtuous Turn Vicious For decades, European integration created a virtuous circle—prosperity generating political support for further
integration that, in turn, grew the European economy. It was a winning formula in a competitive world. However, as the European model has become associated with austerity,
not prosperity, that virtuous circle has turned vicious. A challenge to the Eurozone in one country, a repeal of open borders in another, the reinstitution of the death penalty in a
third—it, too, is a process that could feed on itself, potentially sending the EU into a death spiral, even if, at first, no member states take the fateful step of withdrawing. In
Eastern and Central Europe, the growing crew who distrust the EU complain that Brussels has simply taken the place of Moscow in the post-Soviet era. (The Euroskeptics in the
former Yugoslavia prefer to cite Belgrade.) Brussels, they insist, establishes the parameters of economic policy that its member states ignore at their peril, while Eurozone
members find themselves with ever less control over their finances. Even if the edicts coming from Brussels are construed as economically sensible and possessed of a modicum

the same resentments that ate

of democratic legitimacy, to the Euroskeptics they still represent a devastating loss of sovereignty. In this way,

away at the Soviet and Yugoslav federations have begun to erode popular support

for the European Union. Aside from Poland and Germany, where enthusiasm remains strong, sentiment toward the EU
remains lukewarm at best across much of the rest of the continent, despite a post-
euro crisis rebound. Its popularity now hovers at around 50 percent in many member states and below that in places like Italy and Greece. The European
Union has without question been a remarkable achievement of modern statecraft. It turned a continent that seemed destined to wallow in “ancestral hatreds” into one of the

the complex federal

most harmonious regions on the planet. But as with the portmanteau states of the Soviet Union, Yugoslavia and Czechoslovakia,

project of the EU has proven fragile in the absence of a strong external threat like the one
that the Cold War provided. Another economic shock or a coordinated political challenge could

tip it over the edge. Unity in diversity may be an appealing concept, but the EU needs more than pretty
rhetoric and good intentions to stay glued together. If it doesn’t come up with a better recipe for
dealing with economic inequality, political extremism and social intolerance, its
opponents will soon have the power to hit the rewind button on European
integration. The ensuing regime collapse would not only be a tragedy for Europe, but for all those who hope to overcome the dangerous rivalries of the past and
provide shelter from the murderous conflicts of the present.
 Pharma
Plan increases pharma profits – doesn’t
 2AC – Pharma Good
Pharma companies don’t invest in the “innovative drugs” necessary to
combat new diseases---the hard work is done by academic institutions
or start-ups that the plan doesn’t effect
James Thomas 16, correspondent at Science Based Medicine, 10-15-16, “R&D and the
High Cost of Drugs,” https://sciencebasedmedicine.org/rd-and-the-high-cost-of-drugs/

First, important innovation that leads to new drug products is often performed in
academic institutions and supported by investment from public sources such as
the N ational I nstitutes of H ealth. A recent analysis of the most transformative drugs
of the last 25 years found that more than half of the 26 products or product classes identified
had their origins in publicly funded research in such nonprofit centers. Other
analyses have highlighted the importance of small companies, many funded by
v enture c apital. These biotech startups frequently take early-stage drug development
research that may have its origins in academic laboratories and continue it until the
product and the company can be acquired by a large manufacturer , as occurred with
sofosbuvir.

Arguments in defense of maintaining high drug prices to protect the strength of

the drug industry misstate its vulnerability. The biotechnology and pharmaceutical
sectors have for years been among the very best-performing sectors in the US
economy . The proportion of revenue of large pharmaceutical companies that is invested in research and development is just
10% to 20% (Table 4); if only innovative product development is considered, that proportion is considerably lower. The

contention that high prescription drug spending in the U nited S tates is required
to spur domestic innovation has not been borne out in several analyses

. A more relevant policy opportunity would be to address the stringency of congressional funding for the National Institutes of
Health, such that its budget has barely kept up with inflation for most of the last decade. Given the evidence of the
central role played by publicly funded research in generating discoveries that lead
to new therapeutic approaches, this is one obvious area of potential intervention
to address concerns about threats to innovation in drug discovery.
Americans invest over $32 billion annually in medical research through the
National Institutes of Health (NIH) alone. To put that in perspective Pfizer’s entire
2014 R&D budget was about $7.2 billion. But even this doesn’t tell the whole story
because R&D means research and development. While NIH funding is almost
entirely for basic research , the sort of fundamental research that fuels new
understandings, opens new avenues and leads to new drugs and therapies, Big
Pharma spends most of its R&D money on the development end – clinical trials.
So of Pfizer’s $7.2 billion R&D budget, perhaps 1.5 billion goes to basic research. Even
there much of
pharmaceutical companies’ R&D feeds on publicly-funded research. In a study published in
Health Affairs, Kesselheim et al. note:

Perhaps the most common pattern of interaction involved academic scientists’

conceptualizing a therapeutic approach based on basic research about disease
mechanisms and then demonstrating the proof of concept for a given molecule .
Industry collaborators then developed the product for more extensive clinical
testing.

The point here is that pharmaceutical companies are increasingly in the business of
running clinical trials and marketing drugs rather than plowing the hard ground
for new discoveries . In this sense the basic research costs are socialized while the
profits, increasingly breathtaking profits, are privatized.
This is not to ignore the very high costs associated with clinical trials. As the Statistica chart above shows, half of pharmaceutical
company R&D spending goes to clinical trials. The curious can find a brief explanation of clinical trial phases on the NIH website.
The Biotechnology Innovation Organization, a trade association, states that less than 10% of new drugs make it
through clinical trials and are ultimately approved .

This high attrition rate magnifies the cost per drug approved . So why is the attrition rate so
high? Part of the problem is the misuse and misinterpretation of p-values. Friend of SBM David Colquhoun explored this problem at
some depth concluding that, “if you use p=0.05 as a criterion for claiming that you have discovered an effect you will make a fool of
yourself at least 30% of the time.” When
the consequences are measured in tens or hundreds of
millions of dollars, foolishness is to be discouraged . David Granger used Professor Colquhoun’s
approach to examine the impact of p=0.05 idolatry and misinterpretation specifically as it applies to drug trials and concluded that
fewer than “2 out of every three positive trial results were real.”

This would seem to demand rigorous replication of foundational laboratory and

pre-clinical results. As Errington, Nosek, et al. note, “Despite being a defining feature of science, reproducibility is more
an assumption than a practice in the present scientific ecosystem.” Without careful vetting at the earliest
stages of investigation, hundreds of millions of dollars can be wasted chasing a
false premise through the gauntlet of clinical trial. Garbage in will never produce
gospel out regardless of the amount of cash squandered in the effort . The
important point here is that this is not a failure of science and not a failure of
regulatory overreach, it is a failure of basic due diligence . Some of this procedural elision may owe
to competitive pressures. Patent law is a winner-take-all system that places absolute value on being first.

This and other market forces have driven changes in the industry. For a while the
industry went through a period of “swinging for the fences” where every company
chased blockbuster drugs. That model is changing with drug companies now trying
to produce more drugs for smaller markets and then trying to expand the
indications for which the drug is used . This is sometimes successful as it was with Novartis’ Afinitor
(everolimus). First approved for patients with advanced renal cancers, everolimus was later approved for subependymal giant cell
astrocytoma (SEGA), then for pancreatic neuroendocrine tumors, then for non-cancerous kidney tumors in patients with tuberous
sclerosis complex, then for women with ER-postive, HER2-negative breast cancer, then for certain lung and gastrointestinal tumors.
In essence this model tries to squeeze ever more toothpaste out of the same tube .
Sometimes this is tried without the niceties of clinical trials and formal approvals by promoting off-label uses. Many of Big Pharma’s
biggest players have been hit with fines running into the hundreds of millions and even the billions of dollars for promoting drugs
for unapproved indications. The judgment can be (but isn’t always) made that gambling on clinical
trials for expanded use is less expensive than attracting the ire of regulatory
authorities.
Finally, an
increasing amount of pharmaceutical innovation is done in the offices of
investment bankers where merger and acquisition (M&A) deals are cobbled together.
Small startups raise v enture c apital to develop an idea that often grew from the
academic research of one or more of the founders. As the concept matures one of
the multinational Pharma giants steps in, offers a deal that allows the v enture
c apitalists and founders to cash out, and carries the product through the final
stages of approval and marketing. Or a company like Turing or Mylan acquires a legacy product from another
manufacturer and jacks up the price without, in fact, doing much of anything else. This model is very much closer

to merchandising than to traditional pharmaceutical r esearch and d evelopment.

It is a particularly egregious form of what economists call ‘ rent-seeking’ , where resources are
employed to obtain economic gain without the concomitant reciprocal benefit to society of wealth creation. The significant
regulatory burden associated with pharmaceutical products make this sort of rent-
seeking particularly easy. And the case can be made that industry-wide rent-seeking explains the legal prohibition of
federal negotiation of drug prices. The US alone allows drug companies to charge whatever the market will bear.

The very bottom line

The bottom line is that industry

claims that highly inflated drug prices are necessary to fuel
new drug research doesn’t bear close scrutiny. Much of the fundamental research
is done in academic settings using public money . The regulatory expense of bringing entirely new
drugs to market is high but much of that cost owes to a high attrition rate during clinical trialing which itself owes to fundamental
errors in choosing promising candidates. And a
growing trend is for pharmaceutical companies to
specialize in sales and marketing rather than r esearch and d evelopment.

R&D costs don’t justify high drug prices---pharma claims are bullshit
Merrill Goozner 16, American journalist, author and educator, editor of Modern
Healthcare a weekly news magazine and daily news website covering the healthcare
industry, 12-22-16, “Drug Prices Are Unrelated to Research and Development Costs,”
http://www.hhpronline.org/articles/2016/12/21/drug-prices-are-unrelated-to-
research-and-development-costs
The prices and escalating overall cost of prescription drugs have once again risen
to the top of the health care policy agenda . Nearly every major health care lobbying group in the nation’s
capital – representing hospitals, insurers, physicians, seniors, and consumers – have banded together in a Campaign for Sustainable
Rx Pricing. 1 About the only thing both presidential candidates in the 2016 race for the White House agreed on was the need to take
action to curb drug prices. 2 The concern encompasses both brand name drugs , which are still on
patent and command premium prices, and generics, whose makers have substantially raised
prices by flagrantly exploiting regulatory and market failures . 3 While generic drug abuses
involving Turing, Mylan, and Valeant Pharmaceuticals have generated headlines and Congressional hearings, it is the rising

price and costs of the latest branded drugs to win approval from the F ood and
D rug A dministration that are most worrisome to patients, payers, and providers.
It’s easy to understand why. While brand drugs were only 11.3% of the 4.37 billion prescriptions filled in the U.S. in 2015, they
accounted for 73.3% of the $424.8 billion in total sales and drove nearly three-fourths of the overall 12.2% increase in total costs.
Spending on the branded specialty drugs that combat cancers, hepatitis C, and a handful of rare diseases are rising the fastest.
Spending on this class of medicines rose more than 20% in 2015, and now account for 36% of total drug spending. 4
Because of the rising outrage over high prices and costs, the Pharmaceutical
Research and Manufacturers Association (PhRMA) for the first time since passage of Medicare’s
prescription drug benefit in 2003 faces a political threat to its current pricing model. It is
responding today the way it responded then – by claiming the high cost and uncertainty of
r esearch and d evelopment requires higher prices.

“Onaverage, it takes more than 10 years and $2.6 billion to research and develop a
new medicine,” it said in a recent report that cites that finding from the Tufts Center for the Study of
Drug Development, which receives more than one-third of its funding from the pharmaceutical industry. 6 And in a relatively new
the industry trade group also argues that the value delivered by these new
twist,
medicines justifies high prices. 5
There are several methodological flaws in the Tufts study, whose authors have updated its
findings several times over the past two decades. It’s a survey of selected manufacturers, who provide
data on total costs, failure rates, and research timelines for the experimental
drugs in their development pipelines. The total investment is then discounted – at a
10.5% annual discount rate in the latest study – so that fully 38% of the $2.6 billion of alleged costs come from time value of money
invested over the 10-year average course of development.

The problem with that method of accounting is that research and development is
not an investment . It is a current expense, and it is paid for and deducted dollar
for dollar from current revenue. In addition, the government provides special tax
credits , thus further reducing the current cost of R&D.

The methodology also doesn’t take into account the value of the drugs that make it
through the pipeline (the companies involved in the survey are not named and do not release the data). For instance, it
is unknown whether the drugs in the survey are given a priority review status by
the FDA, which indicates it is a significant medical advance, or a standard review,
which means the drug has no promise of being any better than existing drugs on
the market.
These so-called “me-too” drugs may give firms a competitive entry in an existing
therapeutic class, but they add little or nothing to physicians’ armamentarium for
fighting disease. In 2015, 40% of the 40 new FDA-approved drugs received a standard review. 7 A comprehensive review of
the past several decades’ approvals at U.S., Canadian, and European regulatory agencies found “ most of the new drugs
are relatively minor modifications of existing treatments .” 8
The logic behind the idea that drug companies are pegging prices to capitalized R&D
costs is also flawed. If the research costs of all failed efforts are recouped by the
prices charged for the relatively small handful of successful drugs that make it to
market, then there is no risk. There are only guaranteed returns . The only
question becomes how those returns are distributed – with winners taking all and
losers taking nothing.
For the winners, those returns have been substantial. The financial filings of the major pharmaceutical
companies, who continue to fund the vast bulk of R&D or buy drugs in the late stages of their development from start-ups and
experienced drug development firms that make up the biotechnology industry, are the envy of Wall Street. In fact,
they are consistently higher than banking and other financial institutions.
While total industry spending on R&D equaled nearly 20% of sales in 2015 and averaged between 16% and 18% for most of the past
two decades, 9 profits have been even higher. The pharmaceutical and biotechnology industries are projected to post profit margins
around 25% in 2016. The
only sectors earning higher margins, according to a recent analysis in Forbes
Magazine, were investment managers, the tobacco industry and, highest of all, generic
drug makers at a 30% margin. 10
Despite the industry’s substantial spending on R&D, which grows or shrinks in lockstep with total
sales, there is rising concern about declining return from research . One study projected falling,
even negative returns and predicted the “rewards for innovation” would be insufficient “to sustain biomedical innovation.” 11

Yet the real concern ought to be for the declining health returns from the
industry’s spending on R&D. If one looks beyond the hype around personalized medicine and cancer moonshots,
the reality is that the 71 cancer drugs approved between 2002 and 2014 had a median survival rate of 2.1 months. 12

One possible reason for that is that the U.S. has been systematically starving basic
research , which provides the scientific insights necessary for a successful drug
development program. 13 Scientists’ ability to decode the genetic make-up of cancer
and other diseases has provided a mother lode of potential drug targets. But the
basic research required to validate those targets – usually performed by university-based scientists –
remains an underfunded work in progress. The National Institutes of Health budget has shrunk in real terms by about
20% over the past decade.
 AT: Food Impact
No food wars---no causal evidence, only maybe true for the poorest
countries, and government responses solve the impact
Mark W. Rosegrant 13, Director of the Environment and Production Technology
Division at the International Food Policy Research Institute, et al., 2013, “The Future of
the Global Food Economy: Scenarios for Supply, Demand, and Prices,” in Food Security
and Sociopolitical Stability, p. 39-40
The food price spikes in the late 2000s caught the world’s attention, particularly when sharp increases in food
and fuel prices in 2008 coincided with street demonstrations and riots in many countries. For 2008
and the two preceding years, researchers identified a significant number of countries (totaling 54) with protests during what was
called the global food crisis (Benson et al. 2008). Violent protests occurred in 21 countries , and nonviolent
protests occurred in 44 countries. Both types of protest took place in 11 countries. In a separate analysis, developing countries with
low government effectiveness experienced more food price protests between 2007 and 2008 than countries with high government
effectiveness (World Bank 201la). Although the incidence of violent protests was much higher in countries with less capable
governance, many factors could be causing or contributing to these protests, such as
government response tactics, rather than the initial food price spike .
Data on food riots and food prices have tracked together in recent years. Agricultural commodity prices started strengthening in
international markets in 2006. In the latter half of 2007, as prices continued to rise, two or fewer food price riots per month were
recorded (based on World Food Programme data, as reported in Brinkman and Hendrix 2011). As prices peaked and remained high
during mid-2008, the number of riots increased dramatically, with a cumulative total of 84 by August 2008. Subsequently, both
prices and the monthly number of protests declined.

Several researchers have studied the connection between food price shocks and conflict, finding at least some relationship between
food prices and conflict. According to Dell et al. (2008), higher
food prices lead to income declines and
an increase in political instability, but only for poor countries . Researchers also found a
positive and significant relationship between weather shocks (affecting food availability, prices, and real income) and the probability
of suffering government repression or a civil war (Besley and Persson 2009). Arezki and Bruckner (2011) evaluated a constructed
food price index and political variables, including data on riots and anti-government demonstrations and measures of civil unrest.
Using data
from 61 countries over the period 1970 to 2007, they found a direct connection
between food price shocks and an increased likelihood of civil conflict, including
riots and demonstrations.

Other researchers have broadened the analysis by considering government

responses or underlying policies that affect local prices, and consequently influence outcomes and the
linkage between food price shocks and conflict. Carter and Bates (2012) evaluated
data from 30 developing countries for the time period 1961 to 2001, concluding that when
governments mitigate the impact of food price shocks on urban consumers, the
apparent relationship between food price shocks and civil war disappears . Moreover,
when the urban consumers can expect a favorable response, the protests only serve as a
motivation for a policy response rather than as a prelude to something more
serious, such as violent demonstrations or even civil war .
Many in the international development community see war and conflict as a development issue, with a war or conflict severely
damaging the local economy, which in turn leads to forced migration and dislocation, and ultimately acute food insecurity.
Brinkman and Hendrix (2011) ask if it could be the other way around, with food insecurity
causing conflict. Their answer, based on a review of the literature, is "a highly qualified yes ,"
 especially for intrastate conflict. The primary reason is that insecurity itself heightens the risk of democratic
breakdown and civil conflict. The linkage connecting food insecurity to conflict is contingent
on levels of economic development (a stronger linkage for poorer countries ), existing
political institutions, and other factors. The researchers say establishing causation directly is

elusive , considering a lack of evidence for explaining individual behavior. The debate over cause and effect
is ongoing.

Policies can nevertheless be implemented to reduce price variability. Less costly forms of
stabilization, at least in terms of government outlays, include reducing import tariffs (and quotas) to
lower prices and restricting exports to increase food availability. However, these types of
policy responses, while perhaps helping an individual country's consumers in the short run, can lead to increased international price
volatility, with potential for disproportionate adverse impacts on other countries that also may be experiencing food insecurity.
Tax Reform
 UQ
Tax reform is top priority---Trump and GOP know they have to pass it
Amber Phillips 9/13, reporter for the Washington Post, 9-13-17, “Why President
Trump is so antsy for tax reform,” https://www.washingtonpost.com/news/the-
fix/wp/2017/09/13/why-president-trump-is-so-antsy-for-tax-reform/
As evidenced by his Twitter feed on this hectic Wednesday, President
Trump really, really wants
Congress to put a tax reform bill on his desk ASAP. And he's smart to demand that:
Tax reform could be intricately tied to Republicans' political future, especially in the 23
congressional districts they hold that Hillary Clinton also won.

It's a problem Republicans in Congress acutely recognize too . “We want Americans to begin the
new year with a new tax system,” House Speaker Paul D. Ryan (R-Wis.) said on one of Congress's first days back this month. “It is
high time.”

But as many political benefits as it brings, tax reform also carries with it big political risks. Let's run down what's at stake for
Republicans as they try to do what no Congress has done in more than 30 years — substantially change the way you file your taxes.

1. They need a win

Republicans are nearly eight months into controlling all of Washington, and they
don't have a major legislative accomplishment to champion, other than putting a conservative
justice on the Supreme Court.

They do have a high-profile legislative failure, though. Obamacare is still the law of
the land after Republicans spent seven years campaigning on getting rid of it and,
this summer, fell one vote short of a deal to roll it back .

Passing tax reform could ease that sting a lot . If there's only one thing you could
campaign on as a politician, putting more money in people's pockets is probably it.
Research by conservative groups suggests independent voters in some key states
are eager to hear more about simplifying the tax code and how it could grow the
economy.
That's why many urged the party to regroup quickly after it fell flat on its face on
Obamacare. Tim Phillips, president of the conservative Koch network group Americans for Prosperity, reeaally wanted
Obamacare gone. But when Republicans failed, he immediately switched gears: “It’s time to pivot to tax reform,” he said. “There’s no
time to pout.”

2. Republicans will be forced to work together again

One reason Republicans have yet to make good on a major campaign promise is
because they have yet to build a trusting, working relationship with each other. The
Republican Party is fractured nearly half a dozen ways — between conservatives and moderates, between moderates and Trump,
between conservatives and Trump, between Trump's top aides and himself.

But, no rest for the weary. Republicans may need to pass a bill that doesn't require
any Democratic votes through a budget process called reconciliation that lets them
duck a Democratic filibuster in the Senate.
Which means they will have to figure out a way over and through all those
divisions if they want to get tax reform done. So consider this a silver lining benefit
for tackling this: If Republicans can find a way to do this, they can do just about
anything.
3. Trump can look like a dealmaker
Other than avoiding a government shutdown and debt ceiling catastrophe this
September, Trump has yet to strike a deal with Congress that leads to a tangible
legislative victory . That's not good, since history suggests that presidents who don't have a working relationship with
Congress by their first six months or so struggle to get much else done.

And it's really not a good image for Trump, who campaigned on literally writing
“The Art of the Deal.”
 L/T
Debates over the plan will push tax reform off the docket
Politico 8/13, Think Obamacare repeal was hard? Wait for tax reform,
http://www.politico.com/story/2017/08/13/trump-congress-tax-reform-241506

Returning to health care would take precious time away from tax reform efforts.
But on the flip side, the GOP's failure to enact a health care bill is complicating their tax
reform efforts. Obamacare includes hundreds of billions of dollars in taxes, which the
GOP spent months vowing to repeal.
Now, opponents of policies like the medical device tax will be seeking relief in tax
reform. And because Republicans couldn't roll back an Obamacare tax on higher
earners' investment income, they likely won't be able to reduce capital gains rates as
much as they would like.
Crammed congressional calendar
Even if health care is sidelined, tax reform will have competition this fall for
Republicans' attention.

The White House has said a tax package will get marked up in September, pass the
House in October and clear the Senate by Thanksgiving. But most Hill GOP insiders
know that's unlikely — if not impossible — because of the busy fall schedule.
Upon returning from August recess, lawmakers will have to raise the debt ceiling and
avert a government shutdown by the end of September. Both votes are tough and will
require bipartisan negotiations, sucking up GOP leadership's energy to the point
that tax reform will have to take a backseat.

Hill insiders and the White House have also begun talks about a major bipartisan
budget deal to raise strict spending caps on the Pentagon and domestic programs — yet
another distraction from a tax bill. Both chambers will also need to pass a unified
budget, a difficult feat given the divisions in the party.

Meanwhile, the clock is ticking on tax reform . GOP insiders say they have
approximately four months to pass a bill before the 2018 election season kicks
into high gear in January or February. Passage after that becomes even more
precarious, as vulnerable Republicans turn skittish about taking tough votes.

" Time's the most precious commodity they have," said Liam Donovan, a former top
aide at the National Republican Senatorial Committee who is now legislative director for
Associated Builders and Contractors.
 AT: Israel Econ
No Israeli nuclear use---they’ll be restrained
T.V. Paul 9, James McGill professor of International Relations in the department of
Political Science at McGill University, The Tradition of Non-Use of Nuclear Weapons,
Google Books, no page numbers

In the post—Cold War era, Israel also appears to have taken a leaf from U.S. policy with
regard to the threat of use of nuclear weapons to deter the use of chemical and
biological weapons by opponents. The Israeli response during the 1991 Persian Gulf War
suggests that the tradition of non-use does exist for Israel , albeit in a weakened form. This crisis
implies that by 1991, Israel had expanded the role of nuclear weapons to deter the use of chemical and biological weapons by its adversaries. Israel
desisted from responding militarily to Iraqi aggression due to a combination of factors. First, the
United States pressured it not to intervene , as the Israeli intervention would have broken the coalition against Saddam
Hussein, which involved many Arab states. Second, Israel would not have done a better job in locating and
destroying the Scud missiles than the United States did. Third, the Iraqi Scud attacks resulted in low fatalities, reducing the
pressure to counterattack disproportionately. Despite these constraints, Israel was reported to have rolled out a Jericho missile, capable of carrying
nuclear weapons, a week after the first Scud missile attack, before pulling it back. The objectives appear to have been to encourage Moscow to exert
pressure on Saddam Hussein to stop the attacks and demonstrate to the United States that "Israel's patience was wearing thin." Others believe this was
intended "primarily as a sign of Israeli frustration ."22

Prior to the 2003 Gulf War, there were calls on Israel to threaten or use nuclear weapons if
Saddam Hussein used chemical or biological weapons against Israel. It was argued that in order to make Israel's
nuclear deterrent credible, such a threat was necessary. However, such proposals generated some amount of debate within

Israel. According to a critic of this policy, if Israel broke the tradition of non-use, "it might lose its

international legitimacy ," and "violating the nuclear taboo without facing a clear and
immediate threat to our existence is one of the worst possible crimes aga

inst humanity .
Although the nuclear weapons issue is a prohibited subject for the Israeli public and officials, public opinion consistently and increasingly supported
Israel's possession and possible use of nuclear arms. According to one annual survey, the support for nuclear use in the face of a major security threat
increased steadily from 36 percent in 1986 to 80 percent in 1998. On a separate question on the possible contingencies in which Israel could use
nuclear weapons, the answers in 1998 were: 99 percent in response to nuclear attack, 86 percent in response to gas or biological attack, 45 percent to
avoid defeat in a conventional war, and 25 percent to save many lives. In 1986, 91 percent agreed with the idea of use of nuclear weapons in a desperate
military situation. 24 Further, it was reported that Israel had developed low- situation. yield neutron bombs which could destroy troops but not
property, and in 1990 it was suggested that Israel might already be developing mini-nukes to destroy hardened command-and-control centers in enemy
states.25

The discussion above suggests that although Israel has observed the tradition of non-use and has been partially
influenced by it, the country remains perhaps one of the leading candidates to use nuclear weapons against a non-nuclear state and thereby break the
tradition of non-use. The fact that none of its opponents among the Arab and Gulf states hold nuclear weapons precludes the mutual nuclear deterrent
scenario (until Iran obtains the capability). Israel made ambiguous nuclear threats in 1973, 1991, and 2002—03. Israel is also a likely target of future
weapons of mass destruction (WMD) attacks by non-state actors, raising the possibility of Israel resorting to preventive or preemptive attacks on

countries that harbor such groups. However, the reluctance of Israel to use its nuclear weapons in past
crises and wars involving nonnuclear states offers some comfort that the
tradition of non-use may have reasonably entrenched itself even in this hard test
case . One can also argue that many of their nuclear threats have been meant to deter
adversaries or to elicit cooperation from the United States, but this kind of situation could give rise to a "commitment trap"—a temptation to
resort to nuclear use to lend credibility to the declared policy—in a severe crisis situation, a problem identified 26 by Scott Sagan.

Israel econ resilient – empirics, energy reserves, and service sector

all overwhelm startups
Aberdeen 16, Aberdeen is an investment fund providing access to emerging markets,
“Israel: A Country of Opportunity,” Feb 10, http://marketrealist.com/2016/02/israel-
country-opportunities/
3. Energy Independence
The future health of the Israeli economy received a substantial boost in 2009 with
the discovery of substantial natural gases reserves offshore. The largest of these
discoveries, the Leviathan field in the Levant basin, contains an estimated 16 trillion
cubic feet of gas.

Israel is expected to become an energy exporter by the end of this decade and the
government is planning to establish a sovereign wealth fund to ensure that the
windfall proceeds from this unanticipated source of public revenue are wisely
invested.

4. A Resilient, Growing Economy

The country’s economy displayed great resilience during the worldwide economic
crisis, growing by 1.3% in 2009 while other economies were contracting sharply.
This reflected structural differences in the Israeli economy that set it apart from
many others. The country’s banks were relatively well capitalized and steep deposit
requirements for would-be homeowners prevented the development of a debt financed
housing bubble of the kind that occurred in the United States.
Also worth noting is that Israel’s government debt as a proportion of gross national
product has declined steadily this century , to 67.6% in 2014 from 96.7% in 1998,
according to the Bank of Israel.

Market Realist – Israel’s economy remains resilient.

Israel (ISL)(EIS) boasts a resilient economy. As you can see from the graph above, the
economy didn’t slump into a recession in 2009, unlike most other developed markets
(VEA)(EFA). Since 2010, Israel’s average year-over-year GDP growth rate has been
3.7%, which is pretty solid. The service sector accounts for as much as 80% of the
country’s GDP. Plus, Israel is a relatively young country with a median age of ~30, and
this boosts its economy.
1AR
T-Public
 Penalty
The mandate is a tax now but raising it makes it a penalty---this is
what the court ruled so it answers their Jost card
Trevor Burrus 16, research fellow in the Cato Institute’s Center for Constitutional
Studies and managing editor of the Cato Supreme Court Review, 10/28/16, “Could It Be
Unconstitutional to Raise the Obamacare “Tax” for Not Purchasing Health Insurance?,”
https://www.cato.org/blog/could-it-be-unconstitutional-raise-obamacare-tax-not-
purchasing-health-insurance
As many predicted, especially us at Cato, the Affordable Care Act is beginning to make
health insurance less affordable for many Americans. Part of the problem, in a nutshell, is precisely
what my colleague Michael Cannon described in 2009, the young and the healthy avoiding signing up
for health insurance and choosing to pay the fine, or, as Chief Justice John Roberts
would call it, a tax.
MIT economist Jonathan Gruber, often described as an architect Obamacare, recently said that some of these problems can be
alleviated by increasing the “tax” on those without insurance. “I think probably the most important thing experts
would agree is we need a larger mandate penalty ,” said Gruber.

Depending on how high the penalty goes, there

could be a constitutional problem with that . In the
opinion that converted the “penalty” into a constitutional “tax,” Chief Justice
Roberts described the characteristics of the “shared responsibility payment” that
made it, constitutionally speaking, a tax rather than a penalty. One of those characteristics is
that the penalty was not too high : “for most Americans the amount due will be
far less than the price of insurance, and, by statute, it can never be more. It may often be a reasonable
financial decision to make the payment rather than purchase insurance, unlike the ‘prohibitory’ financial punishment in Drexel
Furniture.” In
Drexel Furniture, also known as the Child Labor Tax Case, the Court
struck down a 10 percent tax on the profits of employers who used child labor in
certain businesses. One reason the Court struck it down was because its
“prohibitory and regulatory effect and purpose are palpable.”
Roberts actually went out of his way to describe paying the “tax” as a voluntary and permissible act. Even though they won, this
should have irked the government a bit because the Chief was essentially giving millions of people permission to not buy insurance,
which the government knew would severely undermine the law. In Roberts’s words:

Neither the Act nor any other law attaches negative legal consequences to not buying health insurance, beyond requiring a payment
to the IRS. The Government agrees with that reading, confirming that if someone chooses to pay rather than obtain health
insurance, they have fully complied with the law.

Indeed, it is estimated that four million people each year will choose to pay the IRS rather than buy insurance. We would expect
Congress to be troubled by that prospect if such conduct were unlawful. That Congress apparently regards such extensive failure to
comply with the mandate as tolerable suggests that Congress did not think it was creating four million outlaws. It suggests instead
that the shared responsibility payment merely imposes a tax citizens may lawfully choose to pay in lieu of buying health insurance.

So could raising the “tax” turn it into a “penalty” and thus make it
unconstitutional? Possibly. At some point, the tax would take on a punitive character , and, if
people like Gruber get their way, the tax might have to be pretty stiff . With health insurance
prices going up, it can still be cheaper to pay the “tax” rather than purchase insurance. And that tax might have to go up a lot to make
some people change their minds. If the government ever tries to attach criminal penalties to noncompliance, then the argument is
even stronger that it would become an unconstitutional regulation of commerce, given that the Court held that the individual
mandate isn’t a valid use of the commerce power.
 Universal
Universality means at least 90% of the population Is covered
David Stuckler 10, Professor of Political Economy and Sociology at Oxford
University, et al, “The political economy of universal health coverage”, Background
paper for the First Global Symposium on Health Systems Research,
http://www.pacifichealthsummit.org/downloads/UHC/the%20political%20economy
%20of%20uhc.PDF

We have defined UHC as the existence of a legal mandate for universal access to health
services and evidence that suggests the vast majority of the population has
meaningful access to these services. Out of 192 countries studied, 75 had legislation mandating universal access
to healthcare services independent of income. Of these, 58 met the criteria based on available measures of coverage ( including

>90% of the population having access to skilled birth attendance and insurance coverage)
which serve as broader proxies for access to care.

NHI means nearly all are covered but doesn’t require every single
person get coverage
The Law Dictionary No Date – “What is NATIONAL HEALTH INSURANCE?,”
http://thelawdictionary.org/national-health-insurance/

What is N ATIONAL H EALTH I NSURANCE?

A federal government's insurance benefits system established to cover all or

almost all national citizens. The United States is developing such a program. Tax
money funds these systems entirely or partially.
States CP
 AT Follow on
No follow on – SCHIP proves
Alan Weil 8, Editor-in-Chief of Health Affairs, “How Far Can States Take Health
Reform?” May, http://content.healthaffairs.org/content/27/3/736.full

Basic principles of federalism suggest the need for a strong federal role in certain
circumstances. National uniformity promotes efficiency, while state-by-state
variation can be costly for interstate actors. National standards minimize border
issues and reduce the likelihood of negative externalities—letting the problems in
one state flow “downstream” to the next. Higher levels of government are better
able to redistribute resources because they can reach a broader tax base and need
not be as concerned that businesses and taxpayers will flee to other jurisdictions.

Federalism principles also describe situations where there is a need for state and local
involvement. A state role is warranted when circumstances vary around the country and
when local values and preferences need to be reflected in public policy. State
government can be more responsive to local conditions and adopt policies that are more
closely tailored to those circumstances.6
The U.S. health care system has attributes that fall into each of these categories.
Patients, doctors, and other health professionals routinely cross state lines.
Pharmaceutical and medical supply companies operate in national and international
markets, while many hospitals, nursing homes, and other institutions are owned by
multistate organizations. Employers and insurance companies operate in multiple
states. And extending coverage to those without health insurance involves redistribution
of resources at the individual and regional levels.7 Meanwhile, health care markets,
practice patterns, availability of health care services, and design of delivery systems all
vary around the country. Decisions regarding the role and scale of government in
financing coverage, design of benefits for public insurance programs, and willingness to
regulate private markets all reflect values that vary from place to place.
Previous Section
Next Section
Can States Lead Reform Efforts?
Despite its many strengths, there is overwhelming evidence that the U.S. health care
system underperforms its potential along all major dimensions: access, quality,
efficiency, and equity.8 How, within our federal system, can we create an environment
with the greatest likelihood for improvement?
Theories of federalism say little about which level of government should lead the way
when policy changes are needed. Federalism analysis is largely static: a certain level of
government should play a particular role because it is more efficient or effective than
another. Yet one of the most compelling federalism metaphors is dynamic. When
people argue that states should function as the “laboratories of democracy,” state
action is not viewed as an end in itself but, rather, as a mechanism for determining
effective policy, which can then be adopted or rejected by other states or the nation
as a whole.9

This pragmatic approach to federalism is compelling—but only if it accurately describes

reality. If the nation is going to rely upon state laboratories as the favored path to solve
what ails the health care system, we should consider whether the metaphor is apt and,
where it falls short, what could be done to make it so.
Previous Section
Next Section
Do States Function As Laboratories?
While states have accomplished a great deal with their reform efforts targeting
access and quality, there is little about state health policy that resembles the
conditions of a laboratory. Scientists in laboratories develop hypotheses, conduct
experiments, collect and analyze data, and reach conclusions that are then applied to
real-world conditions. State health policy development, by contrast, is episodic.
Sometimes the spread of ideas is based on political trends that shift much more
rapidly than the knowledge base that would support a policy shift. Examples can
be found in state-level adoption of managed care regulation, regulation of the
small-group insurance market, the wholesale adoption of managed care in
Medicaid, and the growing application of cost sharing in public programs.

Limited use of experiments.

Very few state health policy changes are studied using experimental methods.
Despite the fact that Medicaid Section 1115 waivers are for the purpose of “research and
demonstration,” these waivers are often granted primarily to enable states to make
program changes with a very small research component. Indeed, the Deficit Reduction
Act (DRA) of 2006 converted options that once required a waiver into authority to act
without a waiver, despite the fact that no experiments have ever been conducted
regarding the likely effects of many of the changes the DRA anticipates. For example, no
experiments have been conducted on the effects of providing very-low-income
people with scaled-back benefit packages; carving out Early and Periodic
Screening, Diagnosis, and Treatment (EPSDT) benefits from overall Medicaid
coverage for children; or denial of services when enrollees fail to pay a copayment
at the point of service.
The state of health care experimentation stands in stark contrast to the experience
prior to the adoption of national welfare reform in 1996. With much federal funding
and guidance, states truly experimented with their welfare programs in the early 1990s.
Starting with well-defined hypotheses about the possible effects of various changes in
welfare policy—most notably, a shift away from supporting general skill development to
requiring work upon enrollment—state policies were subject to random-assignment
experiments in multiple locations with extensive data on outcomes collected over a
period of years. These experiments led to a change in thinking about what made for
effective welfare policies, and that new thinking was embodied in the new federal
welfare law.10 There is no comparable story for state health policy .

None of this is to minimize the tremendous contribution to our understanding of health

policy made by the large volume of high-quality health services research—much of it
supported by private foundations. However, researchers are constrained in the methods
they can use when the research endeavor is not built into the program design. The
continued extensive reliance upon the twenty-five-year-old RAND Health Insurance
Experiment (HIE) for evidence regarding the effects of cost sharing is a sign of how
infrequently critical health policy topics are subjected to formal evaluation.11
Limited knowledge transfer.
The laboratory metaphor also implies the transfer of knowledge learned—either to
shape national policy or to shape other states’ choices. Here again, the metaphor
is more powerful than the reality. The diffusion of policy innovations is slow
and sometimes does not occur at all.

Marked

Federal health policy certainly learns from and follows state experiences. Medicare Part
D, the prescription drug benefit, was enacted only after almost half of the states had
developed pharmacy assistance programs.12 But the learning ended there. Two key
features of the federal law—the doughnut hole benefit design and the instantaneous
enrollment of 6.4 million dually eligible (Medicare and Medicaid) enrollees 1 January
2006—diverge sharply from the lessons states learned implementing their programs.
The current impasse over the State Children’s Health Insurance Program (SCHIP)
also demonstrates the limitations of federal learning from state
experience . SCHIP has been evaluated through a congressionally mandated
study and a number of privately funded initiatives.13 By every criterion set forth in
the original statute, the program is a success. Yet reauthorization of the program
has been held up because of major ideological disagreements regarding the
program’s design. Thus, even in the best case, evidence from state experience
does not necessarily pave the way for prompt federal action.
States frequently look to each other when deciding on their own policies. The Centers
for Medicare and Medicaid Services (CMS) and the Agency for Healthcare Research and
Quality (AHRQ) Office of Communications and Knowledge Transfer support a variety of
evaluation and interstate communication efforts. Private foundations and dues-paying
states support a handful of organizations that devote sizeable resources to promoting
transfer of knowledge from one state to another. Unfortunately, the scale of these efforts
does not match the number of natural experiments that varied state policies would
permit. A recent analysis of one area ripe for interstate learning—Section 1115 waivers—
found little evidence of that occurring.14
 Uncertainty---1AR
Causes insurers to bail from the market
Nicholas Bagley 16, Professor of Law at the University of Michigan, 12/16/16,
“Patching Obamacare at the state level,”
http://theincidentaleconomist.com/wordpress/patching-obamacare-at-the-state-level/
If Congress zeroes out the individual mandate—and my hunch is that it will—it’s game over for the exchanges, even if subsidies
continue to flow for years. In
many states, the exchanges are already precarious . Without the
spur to get healthy people into the market, adverse selection will do its inexorable
work.
Congress may try to devise an alternative—a continuous-coverage requirement, perhaps, or maybe auto-
enrollment. But those alternatives probably can’t be passed in a reconciliation bill because they don’t involve revenues or outlays.
Even if one or the other is adopted, it’s unlikely to be effective enough to forestall huge
premium spikes for 2018 coverage.

So unless Republicans opt to retain the mandate for several years, the states should
brace themselves for the collapse of their individual insurance markets . It’s that
simple.
But here’s a wild idea. Nothingprevents state legislatures from adopting their own
individual mandates. What if California, say, passed a law with the same structure as the federal
mandate, to go into effect when and if the federal mandate lapsed?

The gambit might not work . Insurers might still head for the hills because they
doubt that the Republicans will pass a viable replacement. But the California exchange is healthy and,
if a mandate replacement is in place by mid-2017, the economic picture for insurers in 2018 and 2019 won’t look all that different
than it does today. There’s a chance that California could save 1.6 million people from losing coverage.
Midterms DA
 UQ---GOP Win
Urban clusters, gerrymandering---makes turnout irrelevant
Rebecca Shabad 8/8, Reporter, 8/8/2017, Report: Political map doesn't look good for
Democrats in 2018, https://www.cbsnews.com/news/report-political-map-doesnt-look-
good-for-democrats-in-2018/
The political map doesn't look very good for Democrats ahead of the 2018 midterm
elections, according to a new analysis published by FiveThirtyEight.
The analysis, written by Cook Political Report's David Wasserman, says that if
Democrats were to win every
single House and Senate race next year in places that Hillary Clinton won or that
President Trump by less than 3 percentage points last November, they could still lose the

House and lose five Senate seats .

Democrats, for example, hold six seats in the Senate out of the 26 Republican-leaning
states and six are at risk next year, the report notes. Democrats will have to defend 25 of
the 48 seats they currently occupy in the upper chamber while Republicans only
have to defend eight of their 52 seats.

The political map, Wasserman wrote, is a product of Democratic clusters in urban areas
and Republican gerrymandering .

Their odds don't look strong: the last time the Senate had such a strong Republican
bias, it was 1913 when direct Senate elections were ratified , the report said. Democrats, however,
did win back control of the House and Senate in 2006 when a GOP bias existed that year.
 GOP Demoralization---1AR
The link turn outweighs – angering the base by flipping on repeal is
worse than alienating other voters
Jonathan Martin 17, Political Correspondent for the NY Times, co-author of the New
York Times best seller “The End of the Line: Romney vs. Obama: The 34 Days That
Decided the Election”, 2018 Dilemma for Republicans: Which Way Now on
Obamacare?, The New York Times,
https://www.nytimes.com/2017/03/28/us/politics/2018-dilemma-for-republicans-
which-way-now-on-obamacare.html
WASHINGTON — As they come to terms with their humiliating failure to undo the
Affordable Care Act, Republicans eyeing next year’s congressional campaign are
grappling with a new dilemma: Do they risk depressing their conservative base by
abandoning the repeal effort or anger a broader set of voters by reviving a deeply unpopular bill
even closer to the midterm elections?¶ The question is particularly acute in the House, where the
Republican majority could be at risk in 2018 if the party’s voters are demoralized,
and Democratic activists, energized by the chance to send a message to President
Trump, stream to the polls.¶ Sifting through the wreckage of a disastrous week, Republican strategists and elected
officials were divided over the best way forward. Some House Republicans pressed to move on to other issues and notch some
victories that could delight their own loyalists while not turning off swing voters. ¶ “We’ve got a lot of time to do real things on
infrastructure, to do real things on tax reform, on red tape reform, and really get the American economy moving,” said
Representative Steve Stivers of Ohio, chairman of the National Republican Congressional Committee, the House campaign arm. “We
do those things and we still have a lot of time to recover.” ¶ “If you’re going to fumble the ball,” he added, “better to do so in the first
quarter of a football game.Ӧ Devising
health care legislation that could appeal to both wings
of the House Republican Conference — the hard-line conservatives and more
moderate members — would require a nearly superhuman feat, added Representative Billy
Long, Republican of Missouri.¶ “Not unless Harry Houdini wins a special election to help us,” Mr. Long said about the prospects of
cobbling together a coalition that could agree on how to repeal and replace the health care law. ¶ But other longtime Republicans
warned that if the party did not address what they have derided as Obamacare, an issue
that has been central to their campaigns for the last seven years, they would incur
a heavy political price in the midterm elections.¶ Midterm campaigns have
increasingly become akin to parliamentary elections — referendums on the party
in power rather than on individual candidates, where turnout by dependable
partisan voters is the deciding factor.¶ “If they fall on their sword on this, they’re
going to get slaughtered,” said former Representative Thomas M. Davis III, a Virginia Republican who himself was
once at the helm of the House campaign committee.¶ “ Where parties get hurt in midterms is when

their base collapses ,” Mr. Davis said. “Democrats are going to show up regardless of
what you do. If our voters don’t see us fulfilling what we said we were going to
do, they’ll get dispirited.” ¶ What troubles many Republican strategists is the
specter of the party’s most reliable voters being bombarded by reminders of their
leaders’ failure to address the health law. Th ey fear a recurring story line sure to
pop up every time insurance premiums increase, providers leave local networks, or, most worrisome,
Republicans fund President Barack Obama’s signature achievement.
 Impact
No scenario for Europe war
Wright 12
Thomas Wright is a fellow at the Brookings Institution in the Managing Global Order
project. “What if Europe fails?” Spring, The Washington Quarterly, 35:3, pp. 23-41,
http://csis.org/files/publication/twq12SummerWright.pdf
The contemporary international economic order is in a state of crisis, which may be akin to the crisis of the interwar economic order from 1929—1932. We have yet to see if the crisis deepens even further, as it did

The 1930s was a

then, but the early stages have been similar.15 However, the effect of an economic order’s collapse depends upon the geopolitical climate in which it occurs.

particularly harsh, vulnerable, and unforgiving period. Odd as it seems, it is our great fortune that the
current once-a-century economic crisis takes place in a much more benign geopolitical
environment , at least as far as Europe is concerned. Europe has invaluable antibodies
today which would slow the effects of any political cancer stemming from a second
great depression. Fortunately, European politics today is not dominated by ideological
competition between the extremes. Voters do not have to choose one evil over
another. Western Europe has enjoyed over half a century of stable liberal
democracy

, widely perceived as the only legitimate means of government. No major party

calls openly for a new authoritarian system of government , although it is important to add the caveat that some small
extremist parties, such as the Greek Nazi party Golden Dawn, do seek to overthrow democracy (they have been condemned and isolated by the rest of the Greek political system). Europe has long struggled with a
‘‘democratic deficit,’’ whereby technocratic elites operate without a popular mandate, but it is not remotely comparable in scale to the legitimacy crisis of the early 1930s or even the 1920s. The

strength of democracy means fringe parties have a far higher mountain to climb. The
Great Depression led to Europe’s apocalypse, at least in part, because the basis of the post-World War I order, the Treaty of Versailles, was generally regarded by Germans as punitive and unjust. Thankfully,

there is no European geopolitical grievance remotely comparable to Versailles. The

European Union is a security community where war between its member states is
unthinkable and unplanned for. By contrast with the interwar period, Europe’s fringe parties appeal to
domestic issues rather than rearmament and a more assertive foreign policy. Even if the E uropean
U nion fell apart , one could safely assume that Europe’s leaders would still make
strenuous efforts to preserve the peace. The U.S. commitment through NATO also
has a positive pacifying effect. In a greater Europe, only Russia would like to revise the order in its favor. Yet, Moscow has
significant constraints preventing its resurgence , including a weak economy,
demographic trends, and NATO’s enlargement.
 Diplomact
Non uq
Bathsheba Crocker 17, was the assistant secretary of state for international
organization affairs from 2014 to 2017. Earlier in the Barack Obama administration, she
was the principal deputy director in the State Department’s office of policy planning and
chief of staff to the deputy secretary. Prior to this, Crocker was a senior policy and
advocacy officer at the Bill & Melinda Gates Foundation, senior advisor in the U.N.’s
peacebuilding support office, and deputy chief of staff to the U.N. special envoy for
tsunami recovery. She also worked on post-conflict issues at the Center for Strategic and
International Studies and was a Council on Foreign Relations international affairs
fellow. Previously, Crocker was an attorney and deputy U.S. special representative for
Southeast Europe affairs at the State Department; she also served as executive assistant
to the deputy national security advisor. 3/10/17, “Trump Shouldn’t Slash Diplomacy.
He’ll Need It.” http://foreignpolicy.com/2017/03/10/trump-shouldnt-slash-diplomacy-
hell-need-it/
“President
U.S. Ambassador to the United Nations Nikki Haley put out this statement after the president’s remarks:
Trump spoke for a strong America that is engaged internationally. That’s the kind
of new American leadership our friends around the world have been waiting for.”
It’s succinct and pithy, but it has two major flaws.

For one, whateverviews one holds on President Barack Obama’s foreign policy, the
last eight years saw robust U.S. engagement around the world, and leadership that
America’s friends and partners welcomed and deeply appreciated. My colleagues and I
heard this time and again from diplomatic counterparts, who welcomed the Obama administration’s reengagement as a constructive
partner on a broad range of issues. In fact, in 2016, according to one index, the United States led the world in ability to use
“ soft power ” to influence other countries.

Second, and more fundamentally, the

ability for the United States to engage and show
leadership on the world stage depends on a strong State Department and on the
ability to influence and persuade. That ability, in turn, relies on the United States
being a committed partner in solving the world’s problems, so that when America
comes calling for help — to build a coalition to fight the Islamic State, to rally
together to fight Ebola, to build the strongest set of sanctions ever imposed on Iran
and North Korea, or to make commitments to shore up U.N. peacekeeping — it is
knocking on an open door. It’s easy, but ultimately facile , to think that a small
group of advisors in the White House could take the place of the thousands of men
and women who serve on the diplomatic front lines. Yet between Trump’s statement
last week that he may not fill many of the currently open positions throughout the federal
government to his request that State cut back its work by almost 40 percent ,

Marked
it seems like
Trump and his team believe that they will be able to lead on the world
stage, and be strongly engaged, even without a team of diplomats to do that work
around the world every day, armed with the resources needed to exert influence
and leverage.
Even a cursory review shows why the Trump administration can’t accomplish its
own stated objectives without a fully funded State Department . Just this week, the president
signed version 2.0 of his refugee/immigration/travel ban executive order. But the proposed huge cutback of U.S. humanitarian and
development assistance will actually lead to more migrants and refugees seeking refuge in Europe, Canada, and the United States.
The Trump administration has put an early focus on a renewed counter-Islamic
State efforts, which less funding for digital diplomacy will hurt. Indeed, any
effective counter-Islamic State strategy necessarily requires the State Department
to step in, to help rebuild cities retaken from the group, to create counter-
messaging, and to do the diplomacy to keep the 60-plus member anti-Islamic State
coalition together and committed. Trump often speaks about persuading partners
to step up and shoulder more of the burden, but if the United States cuts back on
foreign military financing, it will have fewer capable partners around the world,
leading ultimately to more burden on America. Diplomacy, crisis management,
and conflict prevention — all led by the State Department and the United States
Agency for International Development — are essential to preventing wars. Put
simply, less diplomacy means more war, which is something Trump has said he
wants to avoid.
Some detail about what the White House has proposed cutting have now leaked, but we still don’t know enough about what might be
on the chopping block. Secretary of State Rex Tillerson is reportedly sympathetic to the president’s goal of major cutbacks at State,
but is asking for flexibility in how, where, and when to make budget cuts. Although several Republican senators have indicated they
will not support massive cuts to State’s budget, what will now follow is some sort of negotiation, during which parts of the State
Department and USAID are in fact likely to face substantial cuts, even if not on the order of 40 percent.

The combined State Department/USAID budget for fiscal year 2016 was $54.6 billion, of which around $17 billion was for operating
expenses, including embassy security, staff salaries, recurring expenditures (for example, treaty-based assessed contributions to
international organizations), protecting American citizens overseas, diplomatic and consular activities, and more.

Bureaus at State have reportedly been asked to find ways to cut back on their operating expenses, though there is little detail about
where a 37 percent decrease might be found. News reports indicate a possible intention to cut back on embassy security personnel,
perhaps in conjunction with closing down certain overseas missions altogether. If the Trump administration is serious about
deconstructing the administrative state, in the words of White House chief strategist Steve Bannon, we should expect staff cuts at
State and USAID, and obviously if entire programs are wiped out, as is expected, layoffs will follow. Word is that the administration
is also looking for serious cuts to U.N. peacekeeping contributions and to some of the assessed funding for international
organizations. (This includes U.S. treaty-based commitments to the U.N., NATO, and the other 60-plus international organizations
in which the United States is a member.)

The remaining almost $36 billion of the fiscal year 2016 State/USAID budget represents the foreign assistance portion, and here a
bit more detail has gotten out about where the administration is considering making cuts. The OMB reportedly asked for a 60
percent reduction in economic and development assistance, a 36 percent cut in humanitarian funding, and a 20 percent cut in global
health funding. Climate related financing , including for the Green Climate Fund,
could be zeroed out altogether. Everything from funding for climate and
environment-related activities, funding for programs for women and girls,
voluntary contributions to international organizations, development and
humanitarian assistance, migration and refugee assistance, global health funding,
human rights funding, education and cultural exchange programs, and more could
be at risk under the White House plan.
We have fewer specifics on some other foreign assistance accounts, though they
are presumably all on the chopping block to some extent . These encompass
funding for USAID’s operations (including the Peace Corps and the Millennium Challenge Corporation),
international security assistance (including counter-narcotics and law enforcement, nonproliferation, peacekeeping and other
international military training, and foreign military sales); counter-Islamic State efforts, multilateral development banks, food aid,
and more.

Even without knowing specifics, several things about the OMB’s opening gambit to the State Department are clear and troubling. It
suggests rather plainly how little value the White House places on the Department’s work. But foreign policy is hard, nuanced, and
the best in
sensitive, and as Jim Goldgeier and Elizabeth Suanders noted in a smart piece for Foreign Affairs last week,
foreign policy is frequently invisible, carried out by diplomats under the radar,
often over a period of years. It isn’t conducted via tweet, and can’t rely solely on a
small set of political advisors. You may never see clear results — but the results are
nonetheless critical to U.S. national security. It’s not only that the funded
programs and activities help protect against state collapse, resolve conflicts, fight
terrorism, protect the climate, save lives, and pull people out of poverty, but also
that the United States’s ability to influence and persuade overseas is based on the
investments it makes, the people it sends abroad to represent the country in
embassies and missions around the world, and the power of example.