Monthly Archives: November 2013

“Nuclear Option” Does Enable Democrats To Ensure One-Party Authoritarian Control of Health Care

By Michael F. Cannon

Last week, I explained that the U.S. Senate’s deployment of the “nuclear option” — lowering the threshold for approval of non-Supreme Court presidential nominees from 60 votes to 51 votes — does not make it easier for President Obama to use ObamaCare’s Independent Payment Advisory Board. I need to add this caveat: during his tenure. The nuclear option does enhance the ability of the president and his party to control the health care sector well after he leaves office.

It’s true that the rules change will make it easier for the president to have his IPAB nominees approved by the Senate, particularly through January 2015, when the Democratic caucus holds 55 seats. But if the president and Senate fail to seat anyone on the IPAB, the board’s sweeping legislative powers fall to the Secretary of Health and Human Services. If President Obama wants to use IPAB’s powers during his term, therefore, he need only retain Kathleen Sebelius as his HHS secretary.

ObamaCare permits IPAB to exercise its powers, however, only if Medicare’s actuaries project the program’s outlays will grow faster than a specified rate. A number of readers note that Medicare’s actuaries reported earlier this year that their projections currently do not show Medicare spending exceeding that target rate, and that their projections likely will not do so during the remainder of President Obama’s term. Those projections and the resulting determination could change next year. If so, and if the president and Senate have not placed confirmed any IPAB members, Secretary Sebelius could use IPAB’s powers during President Obama’s term. Those powers include the ability to raise taxes, to ration care to Medicare enrollees, and to appropriate funds to her own department, without the consent of the people’s elected representatives. (Critics will object that IPAB has none of these powers. In this study, Diane Cohen and I explain why we think they are incorrect.) Sebelius’ “proposal” would take effect during 2016.

Regardless of whether Medicare’s actuaries pull that trigger, however, President Obama and Senate Democrats face a huge incentive to nominate and confirm as many IPAB members as they can, as quickly as they can: with the nuclear option, Democrats now have it within their power to ensure Democratic control of IPAB — and with it, essentially the entire health care sector — at least through the first term of President Obama’s successor and the next three Congresses, even if Republicans capture the presidency, retain the House, and take control of the Senate. Consider.

  • Despite requirements that the president consult with the leaders of both parties in Congress on his IPAB picks, there is no obligation for the president to select members from both parties. The president can stack IPAB entirely with members of his own party and ideological persuasion.
  • IPAB members serve terms that are nominally six years, but actually serve until they are replaced. So a board member who is confirmed in 2014 will serve at least through 2020, and possibly longer.
  • If President Obama and Senate Democrats seat even one IPAB member, they can maintain Democratic control of IPAB for as long as they retain control of the Senate. If a Republican wins the White House in 2016, the fact that there is one sitting IPAB member is enough to prevent a Republican HHS secretary (Paul Ryan, maybe?) from wielding IPAB’s powers. Only one member need be seated for the “board” itself to do business. A Democratic Senate could then keep that one-member IPAB 100-percent Democratic by blocking any Republican nominees to the board.
  • If President Obama and Senate Democrats seat only eight IPAB members, they will guarantee a Democratic majority on the board through at least 2020 (and beyond if they then control the Senate and/or the presidency).
  • If President Obama and Senate Democrats seat all 15 IPAB members, his successor will not be able to appoint any members during her first term. Even if Republicans take the White House and the Senate. Nor would a Republican successor be able to remove any Obama appointees. The president may remove IPAB members “for neglect of duty or malfeasance in office, but for no other cause.”

Here’s where things get scary.

ObamaCare mandates certain procedures that Congress must follow if it wants to overrule IPAB’s, ahem, “proposals.” The people’s elected representatives must clear certain hurdles — some as high as IPAB wishes to set them — if they want to retain their authority as the ones who write laws regarding health care. (The Congress that enacted ObamaCare had no lawful power to enact such requirements, but no matter. George F. Will writes that Diane Cohen and I “well described” IPAB as “the most anti-constitutional measure ever to pass Congress.”)

As Cohen and I report, during the first term of President Obama’s successor, Congress loses even those limited powers to restrain IPAB:

Worse, if Congress fails to repeal IPAB through the restrictive procedure laid out in the Act, then after 2020, Congress loses the ability even to offer substitutes for IPAB proposals…To constrain IPAB at all after 2020, Congress must repeal it between January and August in 2017.

Though this will be news even to most health policy wonks, I won’t explain here how ObamaCare produces this frightening result. I refer readers instead to the Cohen-Cannon study.

But the upshot is this. To the extent Democrats use the nuclear option to pack IPAB with Democratic appointees in 2014, and are able to retain the White House or the Senate in 2016 and beyond, they will be able to ensure one-party authoritarian control of the U.S. health care sector. That’s not just unfair or partisan or economically inefficient or unconstitutional. It’s also undemocratic.

This article appeared on Forbes.com on November 25, 2013.

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Ulstein to Build Its Largest Offshore Construction Vessel Ever

Edison Chouest Offshore and Island Offshore are ordering two new OCV vessels through the company Island Ventures II LLC. One vessel will be built at Ulstein Verft, Norway, one in USA.

Ulstein Verft has been contracted to build a new offshore construction vessel of the ULSTEIN SX165 design. This will be the largest vessel built at the yard so far, as well as its largest single shipbuilding contract. The vessel is scheduled for delivery Q3 2015.
“We are very pleased to develop the next generation of offshore vessels together with Edison Chouest Offshore and Island Offshore. They are companies with solid and extensive experience. We have worked very well together on other innovative projects, and look forward to delivering a high-quality product that will serve the ship owners well for years to come,” says CEO Gunvor Ulstein, Ulstein Group.
“This is a demanding and challenging construction project, which suits us in every respect. We have a solid organisation that will carry out all the engineering work. Our group can offer world-class yard facilities and designs which attract attention from both crews and ship owners. We are ready, and looking forward to the assignment,” says Kristian Sætre, managing director, Ulstein Verft.

First ULSTEIN design in USA

Island Ventures II LLC has also ordered design and engineering packages for the construction of an ULSTEIN SX165 design vessel at Edison Chouest’s own yard in the United States. In addition, this agreement includes options. This will be the first ULSTEIN designed vessel to be constructed in the U.S.
“We look forward to adding these vessels to our fleet. The cooperation between our companies is excellent and we look forward to working with ULSTEIN on the construction of these multifunctional vessels,” says CEO Gary Chouest, Edison Chouest Offshore.
Island Offshore’s current fleet includes four vessels from ULSTEIN. In addition, a construction vessel for Island Ventures II LLC is currently under construction at Ulstein Verft for delivery in June 2014.

Facts about the vessels
The newly developed SX165 design has many qualities. The vessel is 28 metres wide and 145.7 metres long and can accommodate 200 people. She is equipped with two cranes that can lift 400 tons and 140 tons, respectively. She has a large moon pool measuring 11.2 by 12 metres plus two smaller moon pools with ROVs installed in a centrally located hangar. The vessel has a total of three separate engine rooms to provide extreme operational reliability: if a major error occurs and one of the engine rooms goes out of service, the ship will still have two-thirds of her operational capacity.
Health, safety and the environment have been fully considered in the development of this design. For example, the vessel will be delivered in accordance with the international regulation MLC2006 that sets out the comfort and safety requirements for the crew. The ship has four lifeboats, two on each side. In addition, the vessel is equipped with SCR catalyst system for NOx emission reduction.

Press Release, October 25, 2013

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The Scheme behind the Obamacare Fraud

Lies smooth the transition to a fundamental transformation of our health-care system.

November 23, 2013 4:00 AM
By Andrew C. McCarthy

Fraud can be so brazen it takes people’s breath away. But for a prosecutor tasked with proving a swindle — or what federal law describes as a “scheme to defraud” — the crucial thing is not so much the fraud. It is the scheme.

To be sure, it is the fraud — the individual false statements, sneaky omissions, and deceptive practices — that grabs our attention. As I’ve recounted in this space, President Obama repeatedly and emphatically vowed, “If you like your health-insurance plan, you can keep your health-insurance plan, period.” The incontrovertible record — disclosures by the Obama administration in the Federal Register, representations by the Obama Justice Department in federal court — proves that Obama’s promises were systematically deceitful. The president’s audacity is bracing, and not just because he lies so casually while looking us in the eye. Obama also insults our intelligence. It is one thing to tuck evidence of falsehood into a few paragraphs on page 34,552 of a dusty governmental journal no one may ever look at. It is quite something else to announce it in a legal brief publicly filed in a case of intense interest to millions of Americans aggrieved by Obamacare’s religious-liberty violations. To be so bold is to say, in effect, “The public is too ignorant and disengaged to catch me, and the press is too deep in my pocket to raise alarms.”

Still, to show that politicians lie is like pointing out that it gets dark at night. The lie, the fraud, does not tell us why they lied in this instance. The fraud does not tell us what the stakes are. To know that, we must understand the scheme — the design.

The point of showing that Obama is carrying out a massive scheme to defraud — one that certainly would be prosecuted if committed in the private sector — is not to agitate for a prosecution that is never going to happen. It is to demonstrate that there is logic to the lies. There is an objective that the fraud aims to achieve. The scheme is the framework within which the myriad deceptions are peddled. Once you understand the scheme, once you can put the lies in a rational context, you understand why fraud was the president’s only option — and why “If you like your plan, you can keep your plan” barely scratches the surface of Obamacare’s deceit.

In 2003, when he was an ambitious Illinois state senator from a hyper-statist district, Obama declared:

I happen to be a proponent of a single-payer universal health-care program. I see no reason why the United States of America, the wealthiest country in the history of the world, spending 14 percent of its gross national product on health care, cannot provide basic health insurance to everybody. . . . Everybody in, nobody out. A single-payer health care plan, a universal health care plan. That’s what I’d like to see. But as all of you know, we may not get there immediately.

That is the Obamacare scheme.

It is a Fabian plan to move an unwilling nation, rooted in free enterprise, into Washington-controlled, fully socialized medicine. As its tentacles spread over time, the scheme (a) pushes all Americans into government markets (a metastasizing blend of Medicare, Medicaid, and “exchanges” run by state and federal agencies); (b) dictates the content of the “private” insurance product; (c) sets the price; (d) micromanages the patient access, business practices, and fees of doctors; and (e) rations medical care. Concurrently, the scheme purposely sows a financing crisis into the system, designed to explode after Leviathan has so enveloped health care, and so decimated the private medical sector, that a British- or Canadian-style “free” system — formerly unthinkable for the United States — becomes the inexorable solution.

Once you grasp that this is the scheme, the imperative to lull the public with lies makes sense. Like all swindles, Obamacare cannot work if its targeted victims figure out the endgame before it is a fait accompli.

The president is a community organizer in the Saul Alinsky tradition. He is trained to adopt the language and co-opt the sensibilities of the masses in order to become politically viable; then, once raw power is acquired, the Alinskyite uses every component of it to thwart opposition in patient but remorseless pursuit of the given “social justice” goal. Consequently, in pursuit of health-care statism, Obama moderated his rhetoric over the years, but not his ideological goals. He stressed pragmatism: a gradual campaign that kept the ultimate prize in sight. “I don’t think we’re going to be able to eliminate employer coverage immediately,” he told his hard-Left base at a 2007 SEIU health-care forum. “There’s going to be potentially some transition process. I can envision a decade out or 15 years or 20 years out.”

There’s that word: transition. It’s the route “change” takes to reach its final destination: “fundamental transformation.” If you’re paying attention, you’ll hear the word transition a lot in Obama’s health-care speeches. You’ll also find it in that Justice Department brief the administration no doubt wishes Eric Holder’s minions had edited more furtively:

The [Affordable Care Act’s] grandfathering provision’s incremental transition does not undermine the government’s interests in a significant way. Even under the grandfathering provision, it is projected that more group health plans will transition to the requirements under the regulations as time goes on. [Officials of the Department of Health and Human Services] have estimated that a majority of group health plans will have lost their grandfather status by the end of 2013 [emphasis added].

Understand what this studiously unthreatening, gradualist gobbledygook means. A “group health plan” is employer-provided insurance; the phrase thus blithely refers to the “transition” of 156 million Americans who get health insurance for themselves and their families through work. It does not mention the so-called individual market, consumers who buy health insurance on their own. That’s because the administration assumes the “transition” of those 25 million Americans from their preferred plans to Obamacare will already have progressed well toward completion. And indeed it has, as we have seen in the millions of cancellation notices reported in the last six weeks.

The Justice Department’s assertion, based on the administration’s internal analyses, conveys that by the third year of Obamacare’s implementation — “the end of 2013,” which has since been extended by a year due to Obama’s “waiver” of the employer mandate — more than half of those 156 million group policies will have lost their “grandfather status.” “Grandfathering” is the mirage Obama projected for his illusory “if you like your plan, you can keep your plan” guarantee.

You couldn’t keep your plan because Obamacare mandates made it impossible for private insurers to offer it. The mandates essentially require that everything and everyone be covered — even though you do not need coverage for everything (e.g., 23-year-old men do not need birth-control pills, neo-natal care, and periodic colonoscopies), and even though mandatory coverage for preexisting conditions is not insurance but welfare. The mandates are simply cost-shifting from the young and healthy to the older and sicklier — just as you would find in any universal, single-payer system. But Obamacare is camouflaged to make it look like the insurers are deciding not to offer your plan anymore, rather than that the government is forcing their hand.

Of course, that’s not the half of the deceit — not in a program the president publicly insisted was not a tax even as his Justice Department insisted to the Supreme Court that it was one. Obama also said, “If you like your doctor, you will be able to keep your doctor, period.” As Hot Air’s Ed Morrissey noted this week, that promise too is fraudulent. If your doctor is not part of the network offered on the plans in your exchange, you will lose your doctor. To keep costs down, exchanges will limit their provider networks. Top doctors and hospitals are already being cut out. Moreover, the onerous regulations, reporting requirements, and constant threat of fee-slashing are beginning to drive doctors out of the profession.

Then there is the Independent Payment Advisory Board. Stanley Kurtz described the IPAB in all its frightening detail in a 2011 National Review cover story: “An unelected and unaccountable bureaucratic entity with nearly limitless power over federal Medicare spending, [it] will have the power to effectively ration health care through price controls.”

Put aside that the IPAB, which Obamacare insulates from judicial review, is an unconstitutional delegation of Congress’s legislative power — a model that, if adopted in spheres of activity beyond health care, would effectively end popular self-governance. As the rising costs driven by our health-care system’s suffocating regulations compound our astronomical debt, pressure is mounting for the IPAB to oversee cost-cutting — i.e., rationing — not only in Medicare but across the whole Obamacare framework. In fact, as Stanley recounts, the bipartisan Simpson-Bowles commission appointed by Obama made just such a recommendation — giving the president political cover to push hard for IPAB expansion. “Once IPAB’s rules govern America’s health-care system as a whole,” Stanley concludes, “we will be most of the way down the road to a British-style single-payer system.”

So how does Obama get all the way down that road? That is where the scheme’s manufactured crisis comes in. Obamacare commands that all Americans purchase health insurance, whether they want it or not. This is essential: If young healthy people refused to buy overpriced, largely superfluous coverage to underwrite the cost of insuring older and sick people, premiums would further skyrocket. As Powerline’s John Hinderaker explains, insurance companies would either have to fold or shift the costs to whatever employer plans still remained. This, in turn, would spur employers to cancel plans, dumping ever more people into the government exchanges.

The individual mandate is what is supposed to prevent that death spiral. There’s just one thing: The individual mandate is legally unenforceable.

Yes, there is a penalty for failing to purchase insurance — starting at $95 or 1 percent of income the first year and rising sharply thereafter. But the designers of Obamacare went out of their way to prohibit the IRS from using its usual array of civil and criminal processes (fines, liens, etc.) to confiscate it. The government may only collect the penalty by deducting it from tax refunds — meaning people who prudently structure their tax withholding so that no refund accumulates can avoid paying with impunity.

Obviously, it would be far less expensive for young people — who are already disproportionately strained by Obama’s no-growth, high-unemployment economy — to opt for a penalty they are not actually required to pay than to purchase prohibitively costly coverage. After all, under Obamacare, they can wait until they are sick to buy “insurance.” That is, Obamacare’s architects consciously created the incentive to destroy the program’s own insurance exchanges.

By the time that problem erupts, private insurance will already be gutted. Coverage requirements will already be dictated by government, as will pricing, with a subsidy structure that builds in progressive wealth redistribution. And doctors will already be beholden to government for patient access, treatment options, record-keeping requirements, and payment. That is, much of the single-payer infrastructure will be in place.

The manufactured financial crisis will be portrayed as a demonstration that exchanges based on the assumption that individuals will take responsibility for their own “private” insurance arrangements do not work. It will be time to solve the crisis by a seamless transition — there’s that word again — to a fully socialized health-care system, now overtly controlled by the government. “Free” health care for everyone — with all the substandard treatment, absurd wait times, and rationing that entails — will be supported by a few “tweaks” to our progressive tax system . . . no more unwieldy, unpredictable premium payments.

That’s the scheme. Or maybe you still believe that if you like your private medical system, you can keep your private medical system, period.

— Andrew C. McCarthy is a senior fellow at the National Review Institute. He is the author, most recently, of Spring Fever: The Illusion of Islamic Democracy.

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BP Brings Two Rigs to Deepwater Gulf of Mexico

BP  has added two drilling rigs to the deepwater Gulf of Mexico, bringing its fleet to a company record nine rigs as it continues to develop its strong portfolio of assets in the key U.S. offshore basin.

One of the rigs is a new ultra-deepwater drillship known as the West Auriga that is under long-term contract to BP from Seadrill Ltd, a leading international offshore drilling contractor. The vessel, capable of operating in up to 12,000 feet of water, has begun development drilling work at BP’s Thunder Horse field.

The other is a reconstructed drilling rig on BP’s Mad Dog oil and gas production platform. It replaces the original rig on the platform that was badly damaged and left inoperable by Hurricane Ike in 2008. With the new, state-of-the art rig, the platform recently resumed development drilling at the massive Mad Dog field complex.

“The addition of these two rigs reflects the vital importance of the deepwater Gulf of Mexico to the future of BP,” said Richard Morrison, Regional President of BP’s Gulf of Mexico business. “It also clearly demonstrates BP’s commitment to the American economy and to U.S. energy security.”

BP currently anticipates investing on average at least $4 billion in the Gulf of Mexico each year for the next decade. The company plans to concentrate future activity and investment in the Gulf on growth opportunities around its four major operated production hubs – Thunder Horse, Na Kika, Atlantis and Mad Dog – and three non-operated production hubs – Mars, Ursa and Great White – in the deepwater, as well as on significant exploration and appraisal opportunities in the Paleogene and elsewhere.

BP is also advancing a strong pipeline of future development projects in the deepwater Gulf. In April, the company started up the Atlantis North expansion, the first of seven additional wells to be tied back to the existing Atlantis platform. At Na Kika, another field expansion is planned, following the successful startup last year of the Galapagos development, a subsea tieback to the Na Kika production facility. BP is also pursuing plans for a second phase of the Mad Dog field.

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Gulf of Mexico: BP Extends Discoverer Enterprise Drillship Contract

Transocean has secured a contract extension for its Discoverer Enterprise drillship in the U.S. Gulf of Mexico.

The nine-month contract extension has been awarded by BP. The extension begins in January next year, with the expiration date set for October 2014. The new dayrate for the drilling unit has been set at $615.000 ($166 million estimated backlog).  The rig’s prior dayrate was $515,000.

Discoverer Enterprise is a fifth generation deepwater double hulled dynamically positioned drillship, capable of operating in moderate environments and water depths up to 3,049 m (10,000 ft).   From 1998 to 2005 the vessel was Panama-flagged and currently flies the flag of convenience of the Marshall Islands.

Also, the company said it sold the standard jackup, GSF Rig 127, which was previously held for sale. The details of the transaction have not been disclosed.

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