Federal Watchdog Agencies Still On Guard

Donald Trump likes to give the impression that he has made great strides in dismantling regulation. While there is no doubt that his administration and Republican allies in Congress are targeting many important safeguards for consumers and workers, the good news is that those protections in many respects are still alive and well.

This conclusion emerges from the data I have been collecting for an update of Violation Tracker that will be posted later this month. As a preview of that update, here are some examples of federal agencies that are still vigorously pursuing their mission of protecting the public.

Federal Trade Commission. In June the FTC, with the help of the Justice Department, prevailed in litigation against Dish Network over millions of illegal sales calls made to consumers in violation of Do Not Call regulations. The satellite TV provider was hit with $280 million in penalties.

Drug Enforcement Administration. The DEA is a regulatory entity as well as a law enforcement agency. In July it announced that Mallinckrodt, one of the largest manufacturers of generic oxycodone, had agreed to pay $35 million to settle allegations that it violated the Controlled Substances Act by failing to detect and report suspicious bulk orders of the drug.

Federal Reserve. The Fed continues to take action against both domestic and foreign banks that fail to exercise adequate controls over their foreign exchange trading, in the wake of a series of scandals about manipulation of that market. The Fed imposed a fine of $136 million on Germany’s Deutsche Bank and $246 million on France’s BNP Paribas.

Consumer Financial Protection Bureau. Last month the beleaguered CFPB ordered American Express to pay $95 million in redress to cardholders in Puerto Rico and the U.S. Virgin Islands for discriminatory practices against certain consumers with Spanish-language preferences.

Securities and Exchange Commission. In May the SEC announced that Barclays Capital would pay $97 million in reimbursements to customers who had been overcharged on mutual fund fees.

Equal Employment Opportunity Commission. The EEOC announced that the Texas Roadhouse restaurant chain would pay $12 million to settle allegations that it discriminated against older employees by denying them front-of-the-house positions such as hosts, servers and bartenders.

Justice Department Antitrust Division. The DOJ announced that Nichicon Corporation would pay $42 million to resolve criminal price-fixing charges involving electrolytic capacitors.

Federal agencies are also finishing up cases dating back to the financial meltdown. For example, in July the Federal Housing Finance Agency said that it had reached a settlement under which the Royal Bank of Scotland will pay $5.5 billion to settle litigation relating to the sale of toxic securities to Fannie Mae and Freddie Mac. And the National Credit Union Administration said that UBS would pay $445 million to resolve a similar case.

It remains to be seen whether federal watchdogs can continue to pursue these kinds of cases, but for now they are not letting talk of deregulation prevent them from doing their job.

Note: The new version of Violation Tracker will also include an additional ten years of coverage back to 2000.

Should Taxpayers Foot the Bill for Rebuilding the Gulf Coast’s Petrochemical Industry?

Much of the Gulf region remains flooded, people are still being rescued, and the full magnitude of the damage is not yet known. But soon the center of attention will be the rebuilding effort and how to pay for it.

Texas Gov. Greg Abbott is talking about the need for a federal aid package well in excess of $100 billion. Whatever the amount turns out to be, the critical issue will be how the money is distributed.

It’s already clear that the petrochemical facilities clustered in southeastern Texas have been hard hit by the flooding, and there will no doubt be calls to use both federal and state financial resources to help repair these plants.

While there should be no hesitation about using public funds to help the people of the Gulf rebuild their lives, we shouldn’t automatically do the same for the petro giants.

The first reason is that these companies can well afford to rebuild on their own dime. Exxon Mobil, which owns the giant refinery in Baytown, earned more than $130 billion in profits during the past five years. The Motiva refinery in Port Arthur, another massive facility, is owned by Aramco, which in turn is owned by the fabulously wealthy government of Saudi Arabia.

Second, taxpayers made enormous financial contributions to the construction and operation of these facilities. As shown in Subsidy Tracker, the Motiva refinery was awarded a $257 million state and local subsidy package in 2006 to help underwrite its expansion. Earlier this year, Exxon and SABIC, another Saudi company, were granted a $460 million package to jointly build a petrochemical plant near Corpus Christi.

Apart from being subsidized, many of the Gulf region’s petrochemical plants have horrible compliance records regarding toxic emissions and worker safety. The most notorious example is the refinery in Texas City between Houston and Galveston that was previously owned by BP and subsequently sold to Marathon Petroleum. In the wake of a 2005 explosion at the facility that killed 15 workers, BP was fined a then record amount of $21 million by OSHA for a pattern of egregious safety violations in Texas City. The company failed to make the necessary corrections and was later hit with an even larger penalty. BP also had to pay nearly $180 million to settle a federal environmental case involving the refinery.

As shown in Violation Tracker, in 2013 Shell Oil had to pay more than $117 million to resolve Clean Air Act violations at its Deer Park refinery outside Houston. The chemical plant in Crosby, Texas owned by the French company Arkema, where flooding has caused explosions, was fined $107,918 earlier this year by OSHA for serious safety violations (company later negotiated a reduction down to $91,724).

Providing more subsidies for these facilities would in effect negate the impact of the penalties the corporations paid for their negligence.

Finally, there is the difficult question of whether all these facilities should be rebuilt at all, especially if taxpayer funds are involved. The Gulf refineries play a significant role in an energy system that exacerbates the climate crisis, which likely contributed to the intensity of Harvey. We may not be free of fossil fuels yet, but does it make sense to use public resources to prolong the life of facilities linked to extreme weather events that threaten our future?

Corporate America Doesn’t Qualify for Moral Leadership Either

It may turn out that Donald Trump’s greatest contribution to American business is allowing the chief executives of tainted corporations to take a morally superior posture toward a presidency that seems to be completely devoid of principle. Their brands are boosted as his becomes increasingly toxic.

It is a good thing that big business is taking steps to separate itself from Trump. The collapse of the two advisory councils is not only a rebuke to Trump’s offensive comments on the events in Charlottesville but also an overdue retreat from entities that were set up mainly to foster the illusion that this administration is taking serious steps to reform the economy.

Yet it is dismaying that the moral vacuum created by Trump is being filled by the likes of Walmart chief executive Douglas McMillon, who got himself featured on the front page of the New York Times for a statement criticizing Trump.

For years the giant retailer was a national symbol of discriminatory practices. In 2009 it had to pay $17.5 million to settle a lawsuit alleging that it discriminated against African-Americans in the recruitment and hiring of truck drivers. The company was also widely accusing of gender discrimination. In 2010 the company was required to pay $11.7 million to settle a case brought by the U.S. Equal Employment Opportunity Commission, and it was facing potential damages in the billions from a class action suit brought on behalf of more than 1 million female employees until the Supreme Court came to its rescue and threw out the case for what amounted to technical reasons.

In addition to discrimination, Walmart has been at the center of countless controversies involved wage theft, union-busting, tax avoidance, bribery and much more.

After Merck CEO Kenneth Frazier led the way among business critics of Trump’s embrace of white nationalism, the president struck back with a tweet referring to “ripoff drug prices.” While Trump was just being vindictive, it’s true that Merck’s reputation is far from untarnished.

In 2011 the drugmaker agreed to pay a $321 million criminal fine and a $628 million civil settlement to resolve allegations that it illegally promoted and marketed the painkiller Vioxx. This came after Merck had to remove the drug from the market in the wake of reports that the company for years covered up evidence of serious safety issues surrounding its blockbuster product. This is just one of a long list of its cases involving illegal marketing, overbilling, false claims and anti-competitive practices.

Another of the CEOs who spoke out in response to Trump’s comments was JPMorgan Chase’s Jamie Dimon. Earlier this year, the bank had to pay $53 million to settle a case brought by the U.S. Attorney in Manhattan accusing it of engaging in discrimination on the basis of race and national origin in its mortgage business.

JPMorgan Chase was one of the parties that helped bring about the financial collapse of a decade ago, and in 2013 it agreed to a $13 billion settlement of federal and state allegations relating to the packaging and sale of toxic mortgage-backed securities.

In 2015 JPMorgan had to pay a $550 million criminal fine to resolve federal charges that it and other large banks conspired to manipulate foreign exchange markets. There are many more entries in the corporate rap sheet of this company, which since the beginning of 2010 has had to pay out more than $28 billion in fines and settlements.

It would be difficult to find any members of the disbanded advisory councils whose companies have not engaged in serious misconduct of one sort or another.

Such is the peril of looking for paradigms of virtue in the business world. Corporate executives should, along with many others, speak out against Trump’s reprehensible comments, but they cannot lay claim to moral leadership.

Foreign Investment and America First

Donald Trump has built an image as a champion of workers by fomenting fear of immigrants. Get rid of the foreign-born, he vows, and native workers will prosper.

What’s odd is that this misguided notion is coupled with an embrace of foreign corporations. The administration’s America First economic policy relies to a substantial degree on promoting investment from abroad.

Many of Trump’s supposed job creation achievements have involved Asian companies. Soon after the election Trump claimed that Japan’s SoftBank had promised to invest $50 billion in the United States and create 50,000 jobs. Soon thereafter, Trump and Chinese mogul Jack Ma vowed that the latter’s Alibaba e-commerce empire would create 1 million U.S. jobs. In June, Samsung said it would open an appliance plant in South Carolina.

More recently, Japanese automakers Toyota and Mazda said they would jointly build a $1.6 billion U.S. assembly plant with 4,000 jobs. With the blessing of the White House, Taiwan’s Foxconn announced plans for a $10 billion flat-screen plant in Wisconsin (probably in the Congressional district of Speaker Paul Ryan) that would purportedly employ up to 13,000 people. Foxconn is reported to be considering another plant in Michigan.

While these announcements are presented as a boon to American workers, there are reasons to be cautious. Companies such as Foxconn have made big promises in the U.S. before and failed to deliver. It and SoftBank and Alibaba may be simply currying favor with Trump and will be unable to make good on their extravagant job-creation projections. Their main aim may be to discourage some of Trump’s more aggressive protectionist tendencies.

And even if Foxconn’s projects do materialize this time, there are questions about the quality of the jobs it may create. Foxconn has a long reputation for abusive labor practices in China, where it has been a leading contractor for Apple.

Concerns about the U.S. labor practices of foreign companies are not just a matter of conjecture. In fact, while Foxconn’s plans have been all over the news, less coverage was given to what happened at the Nissan assembly plant in Canton, Mississippi: an organizing drive by the United Auto Workers was soundly defeated, with the union blaming the outcome on an aggressive management campaign of scare tactics, intimidation and misinformation.

What happened in Canton is nothing new. For the past three decades, Asian and European automakers have been opening U.S. assembly plants, focusing on states with low union density and a political climate hostile to labor organizing. Taking advantage of their non-union status, they have made excessive use of contingent labor and weakened the ability of workers to act collectively to improve their conditions.

Trump, of course, launched no tweet storms against Nissan and expressed no support for the workers in Canton. On the contrary, for a supposedly populist president, Trump has promoted a series of anti-worker policies. These include moves to shift the National Labor Relations Board in a pro-employer direction, reverse the overtime pay reforms adopted by the Obama Labor Department and weaken workplace safety and health rules.

In Trump’s worldview, workers are supposed to express solidarity not with each other but rather with their employers and their President. That’s a strange sort of populism.

Pitting Jobs Against the Environment Again

Jobs versus the environment: The notion that the interests of workers were inherently anti-ecological was widely held in the 1980s. Much of the world now accepts that employment and environmental protection can go hand in hand, but the Trump Administration is trying hard to turn back the clock. Dismantling safeguards is presented as the key to job creation.

That same misguided approach can be seen in the terms of the deal that Wisconsin’s Gov. Scott Walker is offering the Taiwanese electronics firm Foxconn in exchange for a commitment to build a $10 billion flat-screen plant that will supposedly create up to 13,000 jobs.

The plan — which Walker announced at the White House along with Trump, Vice President Pence and  Speaker Paul Ryan, whose district is expected to be the site of the facility — is generating a great deal of controversy in Wisconsin over the $3 billion subsidy package the governor wants to offer the company.

Yet those special tax breaks are not the only incentive being dangled in front of Foxconn. The draft bill being considered by the state legislature would also free the company from having to file an environmental impact statement and exempt it from a variety of state environmental rules. It would also ease regulations for utilities that build facilities inside the special zone that would be created for Foxconn.

Environmental groups in the Badger State are sounding the alarm, but there is no indication that their concerns are having much of an impact on Walker, who has said that critics of the Foxconn deal can go “suck lemons.”

The special regulatory breaks Wisconsin has cooked up would be troubling in any project, but they are especially worrisome in this deal, given the company involved. It’s widely known that Foxconn has a lousy record on labor rights in Asia, but it also has a troubled history when it comes to the environment.

In 2011 a coalition of Chinese environmental groups published a report listing Foxconn as one of several Apple contractors whose operations were causing serious environmental damage. Two years later, the watchdogs released a film with footage they said showed Foxconn releasing water with high levels of heavy metals into a river feeding Shanghai’s Huangpu River.

Foxconn was also said to be lax when it came to workplace safety. An explosion at its iPad plant in Chengdu that killed three workers and injured 15 others was attributed to the accumulation of combustible dust.

As with its record of abusive labor practices, Foxconn has claimed that it has cleaned up its act on environmental matters. Maybe so, but any plant of the size that the company is promising will have an enormous impact on water and air quality in Wisconsin. Rather than weakening environmental safeguards, the state should be tightening them for this project.

Walker, who has a terrible track record on environmental issues, may be treating the Foxconn deal as an experiment in deregulation. Letting Walker — and by extension Trump, Pence and Ryan — use the Foxconn deal to bring back the bad old days of jobs-versus-the-environment would do no one any good.

Is Foxconn a Con?

It’s common for governors to stage publicity events to announce major job-creating investments in their state. This allows them to take implicit credit for a project that was probably helped along with tax breaks and other financial giveaways.

When it came to the Taiwanese company Foxconn’s plan to build a $10 billion flat-screen plant in Wisconsin, the hype was taken to a new level. Gov. Scott Walker and Foxconn’s Chairman Terry Gou made the announcement not at the state capitol but at the White House, where they were joined by President Trump, Vice President Pence, Speaker Paul Ryan and a host of other high-level officials of the federal government.

As you might expect, the event quickly turned into a celebration of the Trump Administration. Walker, Pence and Ryan, in whose Congressional district the massive plant is to be sited, gushed about Trump’s economic leadership, with Pence declaring: “Under President Donald Trump, America is back.”

That apparently was not enough for Trump, who found it necessary to celebrate himself even more. Referring to Gou, the President declared: “If I didn’t get elected, he definitely would not be spending $10 billion” in the United States.

The creation of numerous new manufacturing jobs is something that will be welcomed by the working people of Wisconsin, but there are reasons, beyond Trump’s political exploitation of the deal, to remain suspicious.

The first matter of concern is the company itself. Foxconn has a long history of abusive labor practices in its overseas plants, including those used to supply Apple. Conditions in the company’s Chinese plants were so bad that in 2010 there was a rash of suicides among overworked employees. The company installed nets on its plants to discourage workers from jumping to their deaths. Foxconn later claimed to improve its labor conditions but the company is far from a high-road employer.

Then there are the claims about the terms of the Wisconsin deal. Gov. Walker claimed that the plant would directly create 13,000 jobs. That was good for generating excitement, but it is a dubious figure. Manufacturing establishments no longer employ anything close to that number of workers.

Out of curiosity, I checked with the Bureau of Labor Statistics to see how many plants currently exist with 10,000 or more workers. It turns out the BLS does not have that information because, as an analyst told me, there are so few facilities of that size. The trend, of course, is toward higher levels of automation and much smaller workforces.

Then there’s the issue of who is paying for the plant. While Trump and the others praised the deal as an example of private sector vitality, Foxconn’s plant will be underwritten in large part by the taxpayers of Wisconsin. Walker said that the state would “invest” $3 billion in the project. That would be the fourth largest economic development subsidy package ever offered by a state.

Despite the promises of public officials, extravagant subsidies rarely provide economic benefits equal to the loss of tax revenue. Wisconsin has a particularly bad record in this regard. The Walker Administration and its privatized economic development agency have been at the center of a long string of controversies about cronyism and poor job-creation outcomes.

The Foxconn deal will provide political benefits for Walker, Ryan and Trump, but it is unclear how much good it will actually do for the people of Wisconsin.

Capital Punishment or Capital Reward?

When Betsy DeVos  was nominated to head the Department of Education, the main concern was what harm a “choice” crusader would bring to K-12 public schools. Recently we’ve seen that she can also cause damage with regard to post-secondary education.

DeVos announced plans to delay the implementation of rules on for-profit colleges that the Obama Administration fought long and hard to bring into being. Calling the plan unfair, DeVos said she wants to redo the rulemaking process from scratch – a clear sign that she wants to weaken or eliminate the restrictions.  That’s the premise of a lawsuit just filed against DeVos by the attorneys general of 18 states and the District of Columbia.

The Obama campaign against predatory colleges was one of the most consequential initiatives of the administration on corporate misconduct. In addition to the rules – one of which is designed to bar federal loans at schools whose graduates don’t earn enough to pay off their debt and another that would make it easier to erase debt incurred at bogus institutions – the Obama Education Department and the Consumer Financial Protection Bureau brought enforcement actions that helped bring about the demise of flagrant abusers such as Corinthian Colleges and ITT Educational Services.

And this came after the Obama Administration pushed Congress to get commercial banks out of the student loan business.

Taken together, the Obama era measures against predatory for-profit education represent one of the rare instances in which government action targeted not just an illegitimate practice or a miscreant company but an entire industry. The message was not simply that for-profit colleges needed to be reformed but rather that they should not continue to exist. It was capital punishment for capital.

It comes as no surprise that the billionaire DeVos, who has had personal involvement with dubious business ventures, is seeking to undo the crackdown on for-profit colleges. And it is yet another example of how the Trump Administration is working against the interests of those lower-income voters who put him in office.

The same dynamic can be seen in the healthcare arena. The Republican “solution” to the problems of the Affordable Care Act is to make it easier for insurance companies to offer bare-bones junk insurance while dismantling Medicaid, both in its traditional form and its expansion under the ACA. The latest version of the Senate bill is willing to retain the hated taxes on high-income earners as long as the assault on the socialistic Medicaid program moves forward.

It appears that the right’s desire to protect the interests of corporations – including the most predatory – is even greater than its wish to redistribute income upward. Thus the one thing that Republicans have made sure to do with their stranglehold on the federal government has been to roll back as many business regulations as possible.

It remains to be seen how long Trump and Congressional Republicans can get away with telling their working class supporters that predatory corporations are the ones that deserve relief.

 

 

The Insurance Industry’s No-Lose Situation

Many voices are speaking out about the Republican effort to undo the Affordable Care Act, but one party diligently refrains from public comment: the insurance industry. While the industry is undoubtedly exerting its influence in the closed-door negotiations to restructure the wildly unpopular GOP bill, it is not airing those views more widely.

It doesn’t have to, because the healthcare debate between the two major parties is largely a disagreement on how best to serve the needs of Aetna, Anthem and the other big players.

The ACA, of course, was built on the premise that government should expand coverage largely by providing subsidies to help the uninsured purchase plans from private companies. When those companies became dissatisfied with the composition of their new client base and starting jacking up premiums in response, ACA supporters were put in the position of advocating for new insurer financial incentives.

Meanwhile, the Republicans are seeking to help the industry by rolling back Medicaid expansion and allowing it to return to the pre-Obamacare practice of selling bare-bones junk insurance, which would be the only kind that many people could afford after subsidies are decimated.

This is probably a no-lose situation for the insurers: either they get paid more to provide decent coverage or they are freed to sell highly profitable lousy plans.

All those legislators catering to insurers one way or the other are forgetting that healthcare reform was made necessary by the ruthless behavior of that same industry. If those companies had not been denying coverage whenever possible, it would not have been necessary for the ACA to set minimum standards. And if those firms had not been raising premiums relentlessly, it would not have been necessary for the ACA to take steps — which turned out to be inadequate — to try to restrain costs.

The industry’s unethical practices are not limited to the individual marketplace. The big insurers have also exploited the decision by policymakers to give them a foothold in the big federally funded programs: Medicaid and Medicare.

As Senate Republicans were cooking up their repeal and replace bill, the U.S. Attorney’s Office in Los Angeles joined two cases against one of the industry’s giants, UnitedHealth Group. The whistleblower suits accuse the company of systematically overcharging the federal government for services provided under the Medicare Advantage Program.

The complaints in the cases allege that UnitedHealth routinely scoured millions of medical records, searching for data it could use to make patients seem sicker than they actually were and thus justify bigger payments for the company, which was also accused of failing to correct invalid diagnoses made by providers. Either way, the complaints argue, UnitedHealth was bilking Medicare Advantage, which was created on the assumption that bringing the private sector into a government program would cut costs.

Such assumptions continue to afflict federal health policy as a whole. Too many members of Congress continue to worship the market in the face of all the evidence that the private insurance industry cannot be the foundation of a humane healthcare system.

Exporting Hazards or Globalizing Regulation?

Americans may have initially felt a bit smug upon learning that the combustible material responsible for the Grenfell Tower disaster in London is largely banned in the United States. Perhaps our regulatory system is not as deficient as we thought.

That moral superiority went out the window when it came to light that the deadly cladding was purchased from an American-based company. Some of the outrage being exhibited toward public officials in Britain should also be aimed at Arconic, a company created from the break-up of the aluminum giant Alcoa. Arconic has announced that it will suspend sales of the cladding, known as Reynobond PE, for high-rises, but that does little good for the scores of people killed in the Grenfell fire or the thousands of others who have been forced to leave other apartment houses now found to contain the material.

Although most of the attention is on Arconic’s cladding and its role in spreading the conflagration, it turns out that fire itself was caused by another American product, a refrigerator made by Whirlpool under its Hotpoint brand. The appliance had a back made out of flammable plastic rather than the metal typically used in models sold in the United States. The London Fire Brigade had long lobbied, to no avail, to require new appliances to have fire-resistant backing.

The sale of banned products in offshore markets is, unfortunately, a longstanding practice among U.S-based multinational corporations. What’s unusual in this case is that the offshore market is a wealthy country such as Britain, whereas the dumping is normally done in poor countries.

As Russell Mokhiber points out in his 1988 book Corporate Crime and Violence, one of the earliest examples was that of the now defunct company A.H. Robins, which in the 1970s sold thousands of its Dalkon Shield intrauterine contraceptive devices in 42 countries even after it became apparent that thousands of U.S. women were experiencing severe and sometimes deadly ailments linked to the IUDs.

In 1972 the U.S. Environmental Protection Agency prohibited most uses of the insecticide DDT, yet American producers continued to sell in foreign markets for years until most other countries adopted their own bans.

U.S. companies also continued to export dangerous products such as asbestos, flammable children’s pajamas and lead-based house paint after being barred from selling them in domestic markets.

These practices illustrate the perverse way that most large companies regard the regulation of their business. They are not willing to admit that restrictions are legitimate — even when imposed in the wake or injuries and deaths — and will adhere to them only to the extent absolutely necessary. If they can continue to sell products they have been told are harmful to some customers, they will do so.

This mindset seems to result from both a knee-jerk ideological opposition to all regulation and an amoral pursuit of profits. The persistence of corporate crime suggests that attempting to reform big business from within — the dubious promise of corporate social responsibility — is far from adequate. Just as markets have superseded borders, so must regulation be globalized.

The Crappy Coverage Solution

If Congressional Republicans succeed in enacting either the Senate or the House bill to repeal the Affordable Care Act, they will have carried out one of the most brazen bait and switch moves in the history of U.S. public policy.

They and Donald Trump campaigned on the idea that Obamacare exchange premiums were rising uncontrollably, yet neither of the bills does anything to address that problem. They did not vow to repeal and replace Medicaid — Trump, in fact, promised not to touch it or Medicare or Social Security — yet that is what the bills would in effect do, both for the ACA’s Medicaid expansion and traditional Medicaid.

It’s been widely noted that the Republicans seem preoccupied with repealing the taxes the ACA imposed on high earners to help pay for the cost of expanding coverage. Yet less attention is being paid to the other giveaway in the bills: the repeal of the ACA’s employer mandate. This provision should be called the Wal-Mart Windfall Act, because it would allow large low-road employers to avoid ACA rules that oblige firms with 50 or more full-time employees to provide health coverage or else pay a penalty.

The mandate is far from draconian, yet it was at least a partial remedy for the situation in which millions of workers at big-box retailers, fast-food outlets and similar workplaces were not provided affordable coverage and were encouraged to enroll in programs such as Medicaid. Now the Republicans seek to remove any obligation on the part of employers to provide coverage while also undermining the social safety net alternative.

To the extent that the Republicans have a solution to the healthcare problem it is this: bring back junk insurance. It is often forgotten that the ACA was designed not just to address the problem of the uninsured but also the underinsured.

Starting in the 1990s, large insurers such as Aetna began selling bare-bones individual policies to low-income individuals who did not get employer coverage and could not qualify for Medicaid. These policies had relatively low premiums but sky-high deductibles and numerous exclusions. In cases of a serious accident or illness, they were all but worthless. The ACA put an end to this predatory market by establishing a set of essential benefits that all plans would have to include.

Republicans don’t like to admit that they are promoting a return to crappy coverage, so they dress up their arguments with misleading phrases such as “patient-centered reforms.” Many of them also realized that the idea of lowering standards directly was not very popular, so they have returned to their favorite panacea of giving states more flexibility. This allows them to pretend they are not scrapping essential benefits while knowing that many governors and state legislatures would be all too willing to do so if given the opportunity.

The cynicism of Congressional Republicans is matched by that of the big insurance companies, for whom the ACA was tailored and are now doing nothing to defend the law. Instead, they still seem to be sulking about the two anti-competitive mergers (Aetna-Humana and Anthem-Cigna) that were opposed by Obama Administration and shot down in the courts. Having seen their oligopolistic dreams go up in smoke, they now seem to want to give up the ACA market in favor of selling bare-bones policies.

It is unclear whether the dystopian vision of the ACA opponents will come to pass, but in the meantime the wellbeing of millions of Americans is being unnecessarily endangered.