June 30, 2015 Leave a comment
Policy and Regulatory Insights in the Healthcare and Insurance Industries
June 30, 2015 Leave a comment
June 29, 2015 Leave a comment
Meet the Democrat in D.C. who is cutting taxes for the rich – and for everyone else
By Aaron C. Davis, Washington Post, June 28 at 8:08 PM
Phil Mendelson could be a comic-book caricature of a bleeding-heart D.C. liberal.
He drives an aging Ford Focus because it was union-made. He tried to keep Wal-Mart from moving into the nation’s capital unless it agreed to boost wages. And he has voted against tax cuts for the wealthy as many times as he has fingers.
Picture D.C.’s version of Bernie Sanders — only balding and with a mustache.
But Mendelson (D) is now fighting a title as improbable as any in his nearly two decades in public office — and one that is anathema to almost every other elected Democrat in the District. Mendelson has been labeled by Mayor Muriel E. Bowser (D) as a man cutting taxes for the city’s wealthy and its businesses. What’s more, Bowser charges, he’s on the verge of a power play to rush into law those tax cuts for the rich.
In truth, the District’s most powerful politician you’ve probably never heard of is in the middle of a once-in-a-generation campaign to cut taxes for almost every D.C. resident. A council vote Tuesday could be a litmus test, not only for Mendelson’s power as chairman, but also for the mayor’s — and for the identity of a rapidly gentrifying city.
The District, facing bankruptcy 20 years ago, is now flush with cash. An explosion of lucrative government contracting jobs and industry leaders choosing to relocate in proximity to the nation’s power brokers have pushed tax revenue up 50 percent over the past decade. D.C. now spends $13 billion a year — more than 15 states — but it still struggles to overcome some typical urban ills. High school graduation rates hover around 50 percent, and a crisis of more than 7,000 homeless people is evident to any resident or visitor.
The question circulating around the offices of District lawmakers ahead of Tuesday’s vote is whether the city should continue to pump its rising tax revenue into expanding city services or, with tax rates still much as they were two decades ago to stave off bankruptcy, it should instead return some of that windfall to residents.
The council seemed to answer the question last year when it approved a five-year, $162 million package of tax cuts. The first wave of relief went mostly to families making less than $60,000 a year.
But with rumblings that new, liberal members of the council and Bowser may try to stall or even kill the remainder of the cuts, Mendelson inserted a little-noticed provision into a spending bill last month to speed up and lock in a second phase of tax cuts, including controversial ones for the wealthy.
Under Mendelson’s plan, an expected uptick in city revenue would be earmarked for tax cuts, and the city’s middle- and high-income earners could see refunds next April instead of later, in 2017, under the plan the council approved last year.
Bowser said Mendelson is risking money that may be needed next year for D.C. schools or affordable housing, and she has touched off a firestorm on the council by suggesting that Mendelson has used subterfuge with colleagues to get his plan this far.
“I don’t know that there was any discussion — any debate” about accelerating the tax cuts, Bowser said in a meeting with council members last week. After the meeting, a spokeswoman for the mayor issued a statement saying Bowser did not support “arbitrarily accelerating tax cuts for upper-income earners without any discussion and ahead of existing spending pressures for schools, public safety, transportation and other critical investments.”
The pending cuts, first proposed by an independent tax review commission last year, would create a lower tax bracket for D.C. residents making $350,000 to $1 million a year. The city also would lower tax rates for its 43,000 businesses, eventually equaling franchise taxes in neighboring Maryland. And over two years, the District would lower the estate tax to the same as the federal government, beginning by doubling to $2 million the threshold for collecting inheritance taxes.
Mendelson charged repeatedly last week that Bowser was ignoring the fact that his fast-track plan also would accelerate further tax cuts for those making $40,000 to $60,000 a year. He said that by labeling the tax cuts as being for high-income earners, Bowser was distorting the aim of the overall package. According to one study, the plan would by 2020 make the District’s tax code more progressive than that in any of the 50 states.
The chairman also questioned the mayor’s commitment to carrying out the remainder of the cuts, saying he can only surmise that by trying to delay them, her intent is to ultimately subvert all or part of the package — which she voted for last year when she was a member of the council.
“What else could be her aim?” Mendelson asked.
Bowser denied that. Pressed by reporters last week on whether she was seeking changes to the tax package, she said she was not, and she committed to implementing the cuts on the schedule the council approved last year. She said the issue is with accelerating the cuts and the possibility that that could tie her hands on $50 million or more in possible spending next year.
The episode has exposed a fault line not only between Bowser and Mendelson, but also between the council chairman and a freshman class of five new lawmakers, many of whom are closely aligned with Bowser.
The council chairman traditionally has immense sway over the District’s final budget, and last year Mendelson made his tax-cut plan public only the night before lawmakers voted to approve it. This year, the acceleration of those cuts was included in a budget bill he released a day before the council’s first vote.
Ahead of Tuesday’s vote, aides to the mayor last week were using the issue as a wedge, between the chairman and new members as well as those up for reelection.
Some new council members, such as Elissa Silverman (I-At Large), a former advocate for the poor, are unapologetically more liberal than Mendelson and in need of a little convincing.
“My self-interest is in seeing those who need the relief the most get it,” Silverman said last week, questioning whether the timing, and perhaps the content, of the tax package should be reopened for debate.
All of that has left Mendelson, a Democrat who cut his teeth as a tenant advocate in the 1970s and has been a hero of progressives for much of the past two decades, working doubly hard to prevent a rare coup to push back the tax cuts, including those for the wealthy.
Mendelson said he’s intent on the council not reneging on the vote it took last year to cut taxes for everyone.
He also doesn’t see himself at odds with Democrats nationally, saying the dichotomy between Republicans and Democrats on the issue doesn’t apply, given the District’s vibrant local economy.
“We’re notching down our high tax rates and balancing the budget, and we can do it all at the same time because our revenues are growing faster than forecasted,” he said. “That’s not the formula in the national debate.”
Mendelson, however, also laces in some rationale that doesn’t sound like the party line. He doesn’t like the city spending its way out of every problem, he said, including the District’s increasingly high cost of housing. Bowser allocated $100 million to underwrite construction of affordable housing next year. Mendelson said some of the money should be left to residents to best figure out how to pay for their own housing.
“This is another way to address affordability. I don’t think that’s spin,” Mendelson said. “We can spend a lot of money on subsidizing affordable housing, but we can also reduce the tax burden on individuals so the city becomes a little more affordable. I would argue that we should do both.”
Ed Lazere, a tax commission member and head of the D.C. Fiscal Policy Institute, which advocates for low- and middle-
income residents, sees it differently.
Since the District is implementing the tax commission’s overhaul in pieces, he said, each cut needs to be weighed against the city’s needs at the time. Mendelson’s accelerated plan, he said, “would put tax cuts ahead of everything else.”
Gerry Widdicombe, executive director of the tax commission, said that he hoped Bowser and Mendelson could work out their differences and that he took Bowser at her word that she intends to still implement the cuts. But moving forward with cuts as soon as there is money to do so, as Mendelson has proposed, would be best, Widdicombe said. “Continuing with the tax cuts is clearly what the commission intended. Steady as she goes would be the ideal thing.”
Mendelson said he doesn’t fear Bowser’s criticism or that his reputation will be damaged.
“I’ve got too long a record on this issue,” he said. The criticism “won’t stick.”
Aaron Davis covers D.C. government and politics for The Post and wants to hear your story about how D.C. works — or how it doesn’t.
June 26, 2015 Leave a comment
A Crowded Field and a Green Team Alliance Could Keep Yvette Alexander in Office
Posted by Will Sommer, City Paper, on June 25, 2015 at 9:15 am
It’s summer in the District when the temperature shoots up, the D.C. Council’s recess looms, and Muriel Bowser and Attorney General Karl Racine can’t even scrap convincingly. It’s a time when LL’s mind turns to next year’s primaries.
Consider Ward 7, where incumbent Yvette Alexander is facing challengers and some not-so-crazy rumors about who else will take her on.
Alexander will face her third re-election bid since being elected in a 2007 special election, but insists she isn’t worried.
“There’s no race,” Alexander says.
Some of Alexander’s constituents wish there were.
“I think some of the older residents are looking for a candidate to go up against Yvette,” says Gary Butler, a Ward 7 advisory neighborhood commissioner unhappy with Alexander.
Alexander already has two challengers, and the ward’s dissatisfied wags are looking around for more—including, potentially, disgraced former Council Chairman Kwame Brown. Thanks to all those candidates and a new alliance with Bowser’s Green Team (and the mayoral fundraising apparatus that comes with it), though, Alexander may well have reason to relax.
Any candidate hoping to challenge Alexander has to straddle both the ward’s willingness to oust incumbents and the gap between her comparatively well-off Hillcrest neighborhood and poorer areas like Nannie Helen Burroughs Ave. So far, Alexander has been able to ride that divide, thanks in part to Hillcrest’s status as one of the District’s highest-turnout precincts.
“It’s like two wards,” says pollster Ron Lester. “It’s like part Ward 4 and part Ward 8.”
Alexander’s most significant challenger so far is Ed Potillo, a D.C. Democratic State Committee bigwig. So far, Potillo’s campaign has run quietly, with a few hits accusing Alexander of missing economic opportunities (the still moribund Skyland site ranks high with Alexander detractors).
Potillo campaign manager Cinque Culver tells LL that the exploratory committee managed to raise $15,000 in three weeks. (It’s not clear how much total money Potillo has, since the campaign hasn’t yet had to report its latest figures to the Office of Campaign Finance.)
Potillo’s biggest problem may not be Alexander. Instead, come June 2016, he could find himself splitting the anti-incumbent vote with the hordes of longshot candidates who turn out whenever a seat on the Council is available.
“It’s going to be an interesting dynamic, but Ed is just staying interested on serving the people of Ward 7,” Culver says.
Check out these rumors, though: Vince Gray administration D.C. Fire and EMS Chief Kenneth Ellerbe has long been considered a potential Alexander challenger. Alexander didn’t exactly hide her concerns about Ellerbe last year, when she tweeted that Ellerbe’s visits to Ward 7 were “things that make you go hmmmm!”
Ellerbe didn’t respond to LL’s request for comment, and Alexander claimed last year that he had promised to support her in her re-election bid. And there’s one other reason Ellerbe might want to stay out of the race: his embattled term running DCFEMS. As chief, Ellerbe lasted an improbably long time in the face of labor strife, lengthy response times, and combusting ambulances.
Former Gray campaign manager Chuck Thies doesn’t see how Ellerbe could run against Alexander without getting eviscerated over his DCFEMS record during debates. Thies recalls the 2012 Ward 7 race, when Alexander asked challenger Kevin Chavous Jr. in a debate about his arrest for soliciting a prostitute. Thies says that Alexander’s cheerfulness (she dressed as Nicki Minaj at the Wilson Building for Halloween, complete with a pink wig) belies someone willing to slip her rivals a “dagger.”
“She’s a wolf in sheep’s clothing,” Thies says. “That affable appearance—do not underestimate her.”
But Alexander’s other rumored rival could make Ellerbe look like a candidate to run the ethics board. LL can’t believe he’s writing this, but somebody wants Kwame Brown to run. Brown, also a Hillcrest resident, resigned as Council chairman in 2012 over campaign finance and loan violations. Then there’s the black-on-black Lincoln Navigator, and the hundreds of thousands of dollars in unaccounted-for campaign funds.
‘He’s a guy who got a slap on the wrist when he probably could’ve been pounded with a hammer,” Thies says.
Despite all that, though, WUSA9 reports that Brown will appear at a meet and greet this weekend. There’s other, more tangible support for Brown in the form of yellow “Draft Kwame Brown” flyers handed out recently in the ward, although no official draft committee has been registered for Brown at OCF.
“The quiet chatter is he wants to be involved again,” Butler says.
Brown didn’t respond to LL’s request for comment. In November, Brown told LL that if he was going to tell anyone about his future plans, it wouldn’t be LL.
Brown and everyone else hoping to get into the seat is probably SOL, though, because Alexander has managed to cozy up to the Green Team, the most significant force in Council races these days. Alexander took her Council seat thanks in part to an endorsement from Gray, whom she replaced on the Council, and she endorsed his mayoral re-election campaign just hours after he declared his candidacy.
Ordinarily, that would put her on the wrong side of Bowser, who flexed her fundraising and organizational powers in April by putting former campaign aides in two Council seats. Since last year, though, Alexander has avoided antagonizing the mayor. That means Bowser and the business types willing to put max contributions behind whoever she wants aren’t motivated to back a challenger in the ward.
“She was a Gray supporter,” Thies says. “But within minutes of the election results being known she arrived in Bowsertown.”
Despite rumors of challengers, Alexander denies that there’s anyone more exciting than her in the race.
“The interesting name is Yvette Alexander,” she says.
Photo by Darrow Montgomery
June 25, 2015 Leave a comment
BREAKING: Supreme Court upholds subsidies in King v. Burwell
By Lisa Schencker, Modern Healthcare | June 25, 2015
Insurance premium subsidies will continue to flow to Americans in all states under the Affordable Care Act, the U.S. Supreme Court decided 6-3 in King v. Burwell on Monday.
The justices sided with the Obama administration in the historic decision, saying the healthcare law allows Americans in all states—not just those that established their own exchanges—to receive the subsidies.
An estimated 6.4 million Americans receive the subsidies in the 34 states that don’t have their own exchanges, in many cases relying on them to afford their health insurance, according to HHS.
Many had worried a decision in the opposite direction would lead to a dramatic spike in the nation’s uninsured and the disintegration of the healthcare law itself.
The challengers in the case pointed to one part of the law that says subsidies are available only to those who enroll through an “exchange established by the state.” The federal government, however, argued that the law’s purpose is clear in allowing Americans in every state to be eligible for subsidies and that other parts of the law indicate that.
The Internal Revenue Service has interpreted the law to allow subsidies in all states, but the four individual plaintiffs in the case said that interpretation was wrong. The Supreme Court disagreed with those plaintiffs Monday.
Last summer, a 4th U.S. Circuit Court of Appeals panel in Virginia unanimously ruled in favor of the administration in King v. Burwell, saying subsidies should be allowed in all 50 states.
June 25, 2015 Leave a comment
Mendelson, Bowser Clash Over Budget Amendment (UPDATE)
Posted by Morgan Baskin, City Paper, on June 24, 2015 at 8:00 am
Over fruit and coffee, some members of the D.C. Council and Muriel Bowser argued about a piece of tax reform that Chairman Phil Mendelson proposed in his fiscal year 2016 Budget Support Act.
The Council approved a package of personal and business tax cuts last year as part of the fiscal year 2015 budget. Some cuts—like a decrease in the income tax rate for residents who earn between $40,000 and $60,000 a year—took effect on Jan. 1; others are contingent on the District surpassing projected revenue. Under Mendelson’s budget amendment, more tax cuts would be “triggered” at the end of the month, rather than in Feb. 2016, as Bowser’s budget calls for.
“I think the mayor is stirring up a tempest, and I don’t understand the motive,” Mendelson said.
Mendelson estimates that $40 million in tax cuts have already been implemented, and that another $40 million would be triggered in June. He also argues that enacting the tax trigger this month will allow people to benefit from tax breaks during next spring’s tax season. If the triggers aren’t enacted until Feb. 2016, people would have to wait until 2017 to see the tax cuts.
“The question is, do we provide tax relief to residents today or do we wait a year? There’s nothing else we can do with the money, unless one wants to renege on the tax cause. There’s no reason for this debate,” Mendelson said.
Jenny Reed, D.C.’s deputy budget director, says rejecting Mendelson’s budget amendment would allow the Council to make better decisions about how much excess revenue to allocate to different programs, like WMATA improvement and boosting school enrollment, both of which are long-term goals the mayor stressed during this morning’s breakfast.
“[June tax triggers] don’t allow the mayor, Council, or public to have conversation about this dialogue. It doesn’t give us an opportunity to have a clearer picture of what our needs look like as we try to tackle them,” Reed said.
Mendelson pointed out that regardless of how much extra revenue the District might see in the next year, Bowser wouldn’t be able to spend any of it because she can only allocate money through the city’s budget, which has already been tentatively approved for fiscal year 2016.
“There is no reason to delay implementation of tax relief unless the mayor’s goal is to cancel the tax reform in order to unnecessarily increase spending on discretionary programs,” Mendelson said in a statement.
In a show of solidarity with Bowser, At-Large Councilmember Elissa Silverman argued that with five new members on the Council, it’s time for a fresh discussion about the tax trigger timeline.
“I fear that this is going to turn into an argument of who gets to spend the money—the Council or the mayor,” Silverman said.
Update, June 24: LaToya Foster, a spokeswoman for Bowser, adds by email: "Mayor Bowser has long championed middle class tax cuts—that’s why she voted for them as a member of the Council and made them a cornerstone of her first budget. What Mayor Bowser does not support is arbitrarily accelerating tax cuts for upper income earners without any discussion and ahead of existing spending pressures for schools, public safety, transportation and other critical investments."
June 24, 2015 Leave a comment
A promising plan for bike lanes in Montgomery County
By The Washington Post Editorial Board June 21
NO ISSUE polarizes D.C. residents and suburban commuters quite like bicyclists during rush hour. Bike lanes hit the District years ago, and a Montgomery County plan to scale up the region’s bike network is next in line to cause a fuss. Planners should make sure the many benefits of bike lanes do not come at too high a cost for the county’s drivers.
The District counts itself as one of the country’s most bike-friendly cities, and its expansive bike network seems to have gotten people out of their cars and onto two wheels. Bicycle commuting grew by a whopping 290 percent from 2000 to 2013, while automobile traffic volume has stayed steady — even with more people commuting into the District every day. Alexandria and Arlington have experienced similar results.
Taken together, these facts suggest that bike lanes may have prevented an increase in traffic and carbon emissions. And as young people search for new places to work and live, a bikeable environment is appealing. It’s a big payoff for a small price: Compared with other transit projects, putting new markings on pavement and even building the occasional bridge costs little, and the environmental and economic gains seem great.
Montgomery County seeks to bring these same advantages into its own territory with a project for which the local government has earmarked $170 million in its six-year capital budget. Right now, the county is home to long stretches of bike path such as the Capital Crescent and Bethesda Trolley trails. But safe places for biking are separated by big roads with high-volume, high-speed traffic. The county’s planning committee aims to build connecting bike lanes on these roads, along with other cycling thoroughfares that will facilitate both long commutes to work and short rides for errands.
Of course, more often than not the roads where bicycling is most difficult are the same roads that carry the most traffic. Critics of the project fear that adding bike lanes at the expense of lanes for cars or buses could clog an already-congested area. It’s a valid concern, but there are ways for Montgomery to ease the conflict. Where there is room, the county can narrow existing lanes to make way for bicyclists on the side of the roadway. It can also put bike lanes on quieter streets that run parallel to busy corridors. And planners can remove car lanes primarily on roads that have excess traffic capacity.
If implemented poorly, Montgomery County’s plan might prove more of a burden to drivers than a boon to bikers — while raising polarization to Congress-like levels. If done well, the project could do more than make life easier for cyclists: It could ease traffic, cut carbon emissions, and spur economic growth by drawing residents and visitors to newly accessible areas.
June 21, 2015 Leave a comment
BREAKING: Cigna rejects Anthem takeover bid
By Associated Press | June 21, 2015
Cigna’s board says the proposal is inadequate and not in the interests of its shareholders, according to a letter released Sunday by Cigna, which is based in Bloomfield, Conn. The letter outlined several objections to the deal.
Anthem has had talks with Cigna about a deal since last year. After failing to reach agreement on earlier proposals, Indianapolis-based Anthem went public with its latest offer on Saturday.
Anthem’s latest offer was a cash and stock deal that amounted to $184 for each Cigna share, or about 18% more than Cigna shares closed on Friday.