Republicans on Thursday used new figures regarding unemployment and the deficit to argue that the healthcare reform law is bad for the economy.

Sen. Judd Gregg (R-N.H.), the ranking member on the Senate Budget Committee, said the Congressional Budget Office's mid-year budget outlook forecasts years of red ink despite the new law.

"Today’s CBO outlook only underscores what we already know — the current pace of U.S. spending is unaffordable and unsustainable, and without a change in direction, this country is headed for fiscal calamity," Gregg said in a statement. "Democrats argued that their massive health care plan would get the deficit under control, but we can see now that was simply smoke and mirrors."

The latest figures forecast a $1.3 trillion deficit in FY 2010 and a nearly $1.1 trillion deficit in FY 2011, Gregg said — "$71 billion higher than projected in March due to newly enacted legislation."

"Over the next 10 years," he adds, "Congress' spending spree will drive the cumulative deficit to more than $6 trillion, $250 billion more than was projected just six months ago."

Congressional Democrats and the White House say they never claimed that healthcare reform by itself would turn the government's fiscal situation around.

"The fact that more action must be taken on the deficit even after enactment of the Affordable Care Act [...] is a distinct question from whether the health legislation helps to improve our fiscal course — which it does," former White House Budget Director Peter Orszag said in June.

Sen. Mike Enzi (R-Wyo.), ranking member of the Senate health panel, for his part focused his attention on a two-page analysis in the Congressional Budget Office mid-year outlook that considers the effects of the new law on labor markets.

"This week the number of unemployed Americans reached 500,000, the highest level seen in the past nine months. Unfortunately, the new health care law makes a bad job market even worse," Enzi said. "The CBO report confirms that the health care law will increase labor costs, and will discourage employers from expanding their businesses and investing in their workers."

The report does say that firms with 50 or more employees will likely pass on the penalties they will pay if they fail to provide healthcare to workers, likely in the form of lower wages and other compensation. Since firms can't pay below minimum wage, the CBO says, they may also end up hiring fewer low-wage workers or shifting to part-time and seasonal employees.

However, CBO adds, the law makes it easier for people to buy insurance on their own so they won't be tied down by their employer's health benefits, "thereby enabling workers to take jobs that better match their skills." The law may make the U.S. workforce healthier and more productive, some have argued.

But the bigger effect, the CBO says, will be on labor supply rather than demand. Since more people will have access to Medicaid or subsidized private insurance, according to the CBO, they'll be richer and therefore less motivated to work.

The report forecasts that the law could reduce the amount of labor used in the economy by "roughly half a percent."

The U.S. Chamber of Commerce this week is slamming a new White House proposal designed to ensure that career college students are trained for jobs lucrative enough to pay back their federal loans — an issue for the healthcare industry, because a huge percentage of medical professionals are trained at for-profit institutions.

"This ill-conceived regulation will work against job creation, only resulting in jobs lost and fewer Americans getting the post-secondary education and training they need to secure work in today’s economy," Thomas Donohue, the Chamber's president and CEO, wrote in a letter to the Department of Education (DOE) Wednesday.

Issued last month, the DOE proposal — dubbed the "gainful employment" rule — is a response to allegations that some for-profit colleges have exaggerated the earning potential of their programs, leaving graduates struggling to pay bills when they enter the work force.

"Some of them are saddling students with debt they cannot afford in exchange for degrees and certificates they cannot use," Secretary of Education Arne Duncan said when the proposal was released.

Loan defaults don't just harm students' credit ratings, they also affect taxpayers, who provided $24 billion in federal tuition subsidies to for-profit colleges in the 2008-2009 school year.

The administration is proposing to gauge whether a program offers gainful employment based on two separate measures: the debt-to-income ratio of the program, and the rate at which program enrollees repay their loans on time — regardless of whether they graduate or not. 

Programs showing high debt-to-earning ratios would be required to inform students and applicants of that trend. Programs could also lose their eligibility for federal student aid programs.

The administration estimates that, if the thresholds remain unchanged, 5 percent of career college programs could no longer offer their students federal aid, while 55 percent would be forced to inform students of high debt-to-income ratios.

In its letter to the DOE, the U.S. Chamber said the proposal sets "arbitrary" benchmarks that would have a "lethal" effect on programs that cater disproportionately to low-income students.

"This rule would implement sweeping change with dramatic consequences to students without an adequate and informed assessment of its full impact," Donohue wrote.

The change is one of 14 new rules proposed by the Department of Education since June. Taken together, the changes are designed to rein in the for-profit education sector amid reports that aggressive recruiting, shady marketing practices — even fraud — are common within the industry.

The changes would likely have an effect on the healthcare sector. Indeed, 42 percent of the health professionals receiving health degrees and certificates requiring two years of schooling or less came out of for-profits institutions, according to the latest survey from the National Center for Education Statistics.

The DOE is accepting public comments on the proposal through Sept. 9, with the final rule scheduled for release by Nov. 1.

The $2 billion investment will help ensure the nation has vaccines and other supplies it needs in an emergency. Read more...

Rep. Chet Edwards (D-Texas) this week is blasting his Republican challenger over the future of healthcare for the nation's veterans. 

Edwards, in a tough fight for an eleventh term, said Wednesday that Bill Flores's proposal to shift veterans into private insurance plans "would destroy the VA health care system as we know it and undermine health care for America’s veterans."

The charge came in response to comments from Flores earlier in the year that "veterans would be much better off if they could go into the private health care system and have the government pay for it."

"Typically the care in the private citizens' sector is better than the government sector," Flores said during a January debate. "The government usually doesn’t do some things very well that involve bureaucracies so they need to go into the private system."

Neither Edwards nor Flores served in the military. 

Edwards said his challenger's plan would "dilute the patient base at our VA hospitals, undermining quality care for our veterans, raising costs to taxpayers and ultimately leading to the closure of the VA hospitals in Waco, Temple and across the country."

Flores, a former oil executive, told the Dallas Morning News that Edwards's allegations were "baseless."

"Only a career politician like Chet Edwards would think that giving veterans options is a bad thing," Flores told the News.

It's likely not the end of the debate. Next week, Edwards is scheduled to kick off a five-day campaign focusing directly on veterans' issues. The "Vets for Chet" tour launches Aug. 23. 

The Cook Political Report rates the Edwards/Flores contest a toss-up.

The well is capped, but would you eat the scallops? There's some action on Capitol Hill Thursday, as members of the House Energy and Commerce Subcommittee on Energy and the Environment take a break from their summer break to examine the safety of the seafood coming out of the Gulf of Mexico. 

The White House has said repeatedly that the seafood is fine to eat, with President Obama celebrating his own birthday earlier this month with a barbecue on the White House lawn featuring Gulf shrimp. But others aren't so sure. 

A coalition of scientists and Gulf activists — uniting as the Gulf Coast Fund — is claiming that the government is undercounting the barrels of oil left to be dealt with following the BP spill. 

"Just because the oil is no longer on the surface, it does not indicate that the area is healthy," Wilma Subra, a microbiologist advising the fund said recently.

On top of that, local fishermen are questioning the legitimacy of the smell tests the government has used to test for chemicals. (No, literally.) http://bit.ly/aSPmnD

The administration will have plenty of opportunity to make its case. Appearing before the House panel Thursday will be representatives of the Environmental Protection Agency, the Food and Drug Administration (FDA) and the National Oceanic and Atmospheric Administration.

The hearing is timely: Louisiana launched its shrimp season earlier in the week. http://bit.ly/bRNHDj

Part D premiums to rise, but not by much. Seniors enrolled in Medicare's prescription drug benefit will see their premiums rise about $1 next year, to $30 per month, the Centers for Medicare and Medicaid Services (CMS) announced Wednesday. The program, launched in 2006, caters to more than 27 million seniors. http://bit.ly/91gmDz

Seniors enrolled in Medicare's prescription drug program will pay an average monthly premium of roughly $30 next year — about $1 more than the average rate in 2010, the Centers for Medicare and Medicaid Services (CMS) announced Wednesday.

The estimate doesn't represent next year's base premium — $32.34 — but anticipates that current Part D enrollees will switch to lower-cost plans in 2011. Historically, CMS officials said, that shift has dropped the average premium by about $2. (Hence, the $30 figure floated Wednesday.)

Announcing the news in a phone conference, CMS Administrator Don Berwick said the low rates "will add stability" to a prescription drug benefit currently catering to more than 27 million seniors.  

Berwick did not remain on the call to take questions from reporters.

CMS officials were also quick to note the cost-slashing benefits of the new healthcare reform law for seniors in Medicare's prescription drug program. Under a provision of the new law, for instance, roughly 750,000 Part D beneficiaries caught in the so-called "doughnut hole" have received $250 rebate checks already this year, Berwick said. 

And more help is on the way. Next year, the law will cut the cost of brand-name drugs by 50 percent for seniors in the doughnut hole — part of a gradual decrease that will close the coverage gap in full by 2020. 

Consumer advocates — critical of the doughnut hole since its creation in 2003 — have cheered the new benefits for seniors. But the National Business Group on Health (NBGH) this week issued a potential warning for those who thought that closing the coverage gap could mean only good news for seniors. 

A survey unveiled by the NBGH Wednesday found that 5 percent of the nation's largest companies plan to drop health coverage for retirees in 2011, while another 60 percent are eyeing that possibility in the future. 

The reason? NBGH attributes it, at least in part, to "making Medicare Part D benefits richer as the 'doughnut hole' closes."

The Democratic National Committee (DNC) paid almost $1 million to the Nebraska Democratic Party in the weeks immediately following Senate passage of healthcare reform — funds used largely to run ads defending Sen. Ben Nelson's (D-Neb.) vote in favor of the controversial bill, the National Journal reported Wednesday.

On Jan. 11 — less than three weeks after the Christmas Eve passage of the Senate bill — the DNC transferred $809,000 to the local party chapter, the National Journal found, citing Federal Election Commission records. A month later, another $169,000 was transferred. 

In turn, the Nebraska Democrats bought $779,000 in local airtime, "enough to blanket the state with pro-Nelson ads for weeks at a time," the Journal said, adding that production costs totaled another $95,000.

Nelson was a central figure through the healthcare reform debate, siding with Republicans in opposition to the bill for much of the discussion, thereby preventing the Democrats from getting the 60 votes needed to defeat a GOP filibuster. 

The centrist Nebraska Democrat — formerly the head of an insurance company — changed his tune after Democratic leaders eliminated language creating a public insurance option, and tweaked another provision related to abortion coverage.  

It also didn't hurt that the Senate bill included language requiring the federal government to cover 100 percent of Nebraska's Medicaid expansion — the notorious "Cornhusker Kickback" provision that was later cut from the final bill.

A Nelson spokesman told the National Journal that the Nebraska senator didn't request the DNC money. 

This post was updated at 5:07 p.m.

The Department of Health and Human Services (HHS) is scheduled to release a new report Thursday proposing strategies to combat bioterrorism and other public health threats. 

The Obama administration has raised questioned with an existing program called BioShield that is aimed at spurring the private sector to develop new drugs and vaccines that protect against biological, chemical and radiological weapons. The president in his 2010 State of the Union address announced a new initiative to respond faster and more effectively to bioterrorism, and HHS's review of the current medical countermeasures system, ordered in December, is expected to provide insights into what the administration has in mind.

The report comes as Democrats on Capitol Hill have tried repeatedly to cut funding for the BioShield program to pay for other domestic priorities. The House cut $2 billion from the program to pay for its war supplemental legislation, but that was replaced in the Senate version with another pay-for.

Senators had proposed cutting the program to pay for Pell Grant legislation and a settlement with minority farmers, an industry source said, but other pay-fors were eventually found.

A bipartisan group of 16 senators led by Sens. Joseph Lieberman (I-Conn.) and Judd Gregg (R-N.H.) wrote to the top Democrat and Republican in the Senate last month urging them not to cut the program.

A $2 billion cut "would devastate the BioShield program," their letter says, "and, ultimately, damage our national security."

And former Sens. Bob Graham (D-Fla.) and Jim Talent (R-Miss.), who served as chairman and co-chairman of the Commission on the Prevention of Weapons of Mass Destruction, wrote to President Obama last month urging him not to cut the program. The panel gave the administration an "F" in its Jan. 26 report card on the U.S. government's "capabilities to rapidly respond to biological attacks."

"If the BioShield program is defunded now, before your new strategy is even given a chance to work, we will have to find a grade lower than 'F' for our next report card." 

The HHS report is expected to strengthen the hand of those opposed to raiding the fund, the industry source said, but the industry still has concerns with long-term funding for the program.

Encouraged by the U.S. Chamber of Commerce, conservatives have blasted the Democrats' healthcare law as a business-killing threat to the national economy. But don't tell that to Silicon Valley.

Information technology firms are lining up to reap the benefits of a $10 billion provision of the reform law designed to cut costs and improve care by incentivizing innovative new tech products, the San Jose Mercury News reports. 

"The law, for all its complexity, provided investors and entrepreneurs with greater clarity about opportunities in an industry facing dramatic transformation," Scott Duke Harris wrote. 

And those opportunities have arrived quickly. 

"During the second quarter," Harris noted, "investments totaling more than $2.2 billion surged into biotechnology, medical device and health-related information technology, about 66 percent above the previous quarter. Funding into health-related information technology alone totaled more than $150 million during the quarter, nearly doubling the year-ago quarter."

Some young companies see the new law as an opportunity to shift the focus of medical care away from a strategy of simply treating diseases to one of preventing them, Harris writes. 

SeeChange Health, for instance, a San Francisco-based insurer that emphasizes preventive care, had gotten the cold shoulder from many hospitals leery of its business strategy, the company's CEO told Harris. 

"But since the adoption of the health reform law, [the CEO] said, SeeChange has received a warmer reception as institutions prepare for changes to come," Harris wrote.