Health Care Consolidation and Competition After PPACA

Testimony before 

Committee on the Judiciary Subcommittee on Intellectual Property

United States House of Representatives 

Edmund F. Haislmaier

Senior Research Fellow

The Heritage Foundation

May 18, 2012

Mr. Chairman and members of the Committee, thank you for inviting me to testify on the subject of "Health Care Consolidation and Competition after PPACA."

My name is Edmund F. Haislmaier.  I am Senior Research Fellow in Health Policy at The Heritage Foundation.  The views I express in this testimony are my own, and should not be construed as representing any official position of The Heritage Foundation.

My testimony today focuses on how I expect competition and consolidation to play out in the health insurance sector under the new rules and regulations established in the Patient Protection and Affordable Care Act (PPACA).

The PPACA significantly expands, both in scope and in detail, the federal regulation of commercial health insurers.  A number of its provisions are likely, over time, to reduce competition in that sector. The reduction in competition will result from provisions in the PPACA that standardize coverage, increase premiums, raise barriers to market entry, and encourage industry consolidation.

Standardizing coverage

The first set of relevant provisions are those that have the effect of standardizing health insurance coverage.

When government imposes regulations that standardize a product, producers of the item are, obviously, less able to compete on the basis of product differentiation.  The product becomes more of a commodity and competition among suppliers becomes focused mainly on price. Other factors, such as convenience or brand identity, may enable some producers to charge marginally higher prices, but even that pricing power is fairly limited in a commoditized market.

At least five provisions of the PPACA will intentionally standardize health insurance to varying degrees:

Section 1302 instructs the Department of Health and Human Services (HHS) to set, and periodically update, an “essential health benefits package” of minimum health insurance coverage requirements. Section 1302 also limits deductibles for employer plans in the small-group market and limits total enrollee cost-sharing for all health plans to the levels specified in the tax code for qualified High Deductible Health Savings Account plans.Section 1201(4) requires all individual and small group health insurance policies to provide coverage for the essential health benefits package.Section 1001(5) requires health insurers and employer plans to cover numerous preventive services with no enrollee cost-sharing.Section 1001(5) prohibits health insurers and employer plans from setting annual or lifetime coverage limits “on the dollar value of benefits.”

In a commodity market where competition is focused principally on price, firms that are able to reduce their costs through economies of scale can generally offer better prices and thus gain market share at the expense of their competitors.  As a result, markets for commodities tend to be dominated by a few, large firms.  Those firms achieve their dominant size by either under-pricing smaller rivals or acquiring competitors.

The provisions of the PPACA that standardize and commoditize coverage are likely to drive a similar dynamic in the health insurance market.  Furthermore, because these are new, federal standards, the effects will be national in scope.  Even carriers that have long been dominant in a particular state or region will find it harder to maintain their position and keep larger, national players at bay.

Increasing coverage costs

The above provisions will not only standardize coverage, but in many cases will increase coverage costs as well.  For example:

The Administration conducted an economic analysis of the effects of their regulations implementing the PPACA's preventive services coverage requirement. They concluded that, "The Departments estimate that premiums will increase by approximately 1.5 percent on average for enrollees in non-grandfathered plans. This estimate assumes that any changes in insurance benefits will be directly passed on to the consumer in the form of changes in premiums."[1]In its regulations implementing the PPACA's provision that prohibits plans imposing annual limits on the dollar value of benefits after 2014, and sets minimum annual limits for prior years, HHS established a waiver process for years before 2014, "if compliance with these interim final regulations would result in a significant decrease in access to benefits or a significant increase in premiums."[2]  HHS has granted temporary waivers of the annual limits provision to plans with a total of over 4 million enrollees.[3]  Thus, when the complete prohibition on annual limits takes effect in 2014, at least 4 million individuals will be priced out of their current coverage, and it is likely that this provision will increase premiums for millions more.Congress instructed HHS to define and periodically update an "essential health benefits package." HHS has not yet proposed regulations specifying the initial design of the essential health benefits package and has only issued “bulletins” outlining the approaches that it is considering. Given that the statute requires coverage for some categories of benefits not typically included in most current health plans -- such as "habilitative" services -- it is likely that the eventual package of required benefits will increase premiums.

The significance of these increased costs is that they generate a dynamic for further plan standardization. The more expensive the required coverage becomes the more insurers will look to keep premiums in check by limiting or cutting benefits that are not required. Indeed, State governments have behaved exactly this way in managing their Medicaid programs.  As the cost to states of paying for mandatory Medicaid benefits has increased, states have responded by limiting or discontinuing optional Medicaid benefits. 

Similarly, it was fear of this same dynamic occurring that led Congress to amend the PPACA provision requiring coverage of preventive services so as to overrule the US Preventive Services Task Force's recommendation on breast cancer screening. At that time the USPSTF had just revised its recommendation on breast cancer screening from starting at age 40 to starting at age 50.  Breast cancer groups were concerned that making coverage mandatory at age 50 would induce plans to no longer pay for screening for women between the ages of 40 and 50.  Congress responded by amending the PPACA to require coverage of breast cancer screening using the prior recommendation of age 40.[4]

The foregoing example also illustrates another effect of the benefit mandates in the PPACA.  Over time there is likely to be ever more detailed standardization of health insurance coverage as provider and patient groups lobby HHS and Congress to expand coverage requirements, while insurers and employers, looking to control rising plan costs, seek greater regulatory certainty with respect to the limits they may impose on required benefits. Thus, by giving HHS authority that is both broad and discretionary to define what constitutes "essential benefits," Congress set in motion a dynamic that will result in increasing standardization of health insurance coverage. That increasing standardization shrinks the scope for competition among insurers and is likely to result in industry consolidation, as the regulated product becomes more of an undifferentiated commodity.

The "minimum loss ratio" regulation

Another provision of the PPACA that will likely have a major effect in reducing insurer competition and driving consolidation within the health insurance industry is the so-called "minimum loss ratio" (MLR) regulation.[5]  This provision established, effective January 1, 2011, new federal rules governing how health insurers spend premium dollars. These rules are commonly referred to as “minimum loss ratio” regulations—meaning that they specify the minimum share of premium income that an insurer must spend on claims costs and "activities that improve health care quality.”

The minimum levels are set in the PPACA at 85 percent for large group plans and 80 percent for small group and individual plans. The PPACA further stipulates that if an insurer spends less than the required minimum in a given year, then the insurer must refund the difference to policyholders. Thus, for example, if an insurer is required to spend 80 percent of premium income on claims costs for a particular product but only spends 75 percent, the insurer is required to rebate five percent of the premium collected to policyholders.

New barrier to market entry

One of the effects of the minimum loss ratio regulations is that they create a barrier to market entry for new carriers. As with many start-up companies, a substantial initial capital investment is required to create a new insurer. That investment is needed to fund initial marketing and sales efforts to attract paying customers, and to build-out the operational and administrative infrastructure for billing customers, paying claims, etc. Similar to other new businesses, a new insurer initially operates at a loss until it achieves enough "scale" -- that is, it acquires enough customers -- that revenues exceed expenses, and it become profitable.

The MLR regulations effectively constrain the amount, and delay the timing, of any excess premium revenues that a start-up health insurer could plan to either reinvest in growing its business (say, through additional marketing) or repaying its initial investors. Thus, the MLR regulations push further into the future a new company's projected "break-even" point, and may also necessitate additional start-up capital beyond what was previously projected. Of course, it is uncertain whether a particular start-up insurer would succeed, even without having to deal with the constraints imposed by the MLR regulations. However, what is certain is that imposing the new MLR regulations raises the bar for an "in-process" start-up, and increases the risk and initial capital requirements for an "in-planning" start-up venture.

In at least one reported case investors decided to terminate an "in-process" start-up health insurer, at least in part, due to the effects of the new MLR regulations on its business plan.[6]  What is unknowable are how many attempts to create new health insurers that were still in the planning stage were simply abandoned once investors determined that the added burden of complying with the new minimum loss ratio regulations make it too expensive or too risky to go forward.

Market consolidation

A number of established companies that currently provide health insurance can also be expected to exit the market over the next several years.  The ones most likely to leave are those with multiple lines of coverage, for which offering health insurance is just part of their larger business.  In general, the minimum loss ratio regulations will make offering health insurance less profitable while, as previously noted, the benefit requirements will also make it more of a commodity business. Companies offering multiple lines of insurance will be inclined to discontinue, or sell to competitors, their health plans and focus instead on the other lines of insurance that they offer -- such as life, auto, property, or liability coverage -- or on non-insurance business opportunities. 

The smaller the company, or the smaller the share of a company's total business represented by health insurance, the more likely it is that the company will exit the post-PPACA health insurance market. For example, on September 30, 2010, Principal Financial Group, Inc. announced that it was exiting the major medical health insurance market and transferring its existing book of business to UnitedHealth Group.[7]  Principal will instead focus on its other lines of business, which include managing retirement and investment plans, and offering life, disability, dental and vision insurance products (none of which are subject to the PPACA's new federal insurance regulations). To be sure, such business decisions are often the product of multiple considerations, but the MLR provisions in the PPACA will certainly discourage companies with other options from continuing to offer health plans.

Favoring for-profit insurers

Still another unintended consequence of the minimum loss ratio regulations is that they will increase the competitive advantage of for-profit insurers over their non-profit rivals.  Because the MLR requirement constrains the share of premium income that an insurer can "retain," it limits an insurer's ability to accumulate the capital needed to expand, either through increased marketing and sales efforts or by purchasing business from other carriers. Non-profit insurers have no other source of investment capital beyond whatever excess premium income they can accumulate after paying claims costs and administrative expenses.  However, for-profit insurers can finance their capital needs by issuing equity shares.  Since the proceeds of a share offering are not premium income, the MLR restrictions do not apply.

Thus, the minimum loss ratio regulation is likely to not only spur increased consolidation in the health insurance industry, but to also drive that consolidation toward a market dominated by a few, very large, for-profit, insurers.  It is easy to envision large, for profit health insurers applying the same "roll-up" strategy of raising capital through equity offerings and then using the proceeds to buy smaller competitors that has been successfully applied in other sectors. Such an outcome is probably not something that the authors of the PPACA either intended or envisioned.

Multi-State plans

Another provision in the PPACA that favors large, national health insurers over smaller or regional ones is the requirement in Section 1334 that the Office of Personnel Management directly contract with a select number of insurers to offer "multi-state" plans.  Section 1334 sets a four year schedule for offering multi-state plans in all the states, and specifies that multi-state plans are "deemed to be certified by an Exchange" as qualified plans.  That deeming provision gives the multi-state plans a guarantee of access to the subsidized coverage market that is not guaranteed to their competitors.

Rate review

The insurer rate review provisions of the PPACA offer yet another incentive for smaller carriers to exit the health insurance market and big carriers to get bigger. While Congress did not give HHS authority to deny insurer rate increases, HHS has shown that it is willing to use its new rate review powers to "name and shame" insurers if they significantly increase premiums.  Secretary Sebelius has also threatened to deny uncooperative insurers access to the federally subsidized exchange markets that are scheduled to open in 2014.[8] 

The logical business strategy for surviving in that kind of a market is for a carrier to become big enough that it can retain some level of pricing power in the face of persistent government attempts to impose price regulations.  Becoming "too big" or "too important" to fail will be the best strategy for a company seeking to protect itself against the threat that government price regulation could make its business unprofitable.

Combined effects

Collectively, these regulations mean that the PPACA has unleashed a market dynamic that will drive toward greater consolidation in the health insurance industry, eventually resulting in fewer and larger carriers dominating the market -- with a consequent reduction in choice and competition for consumers.  How this new market dynamic will likely play out can be seen from past experience in other sectors where "consolidators" -- such as Staples and Office Depot -- built market-dominating firms through a strategy of raising investment capital and then deploying it to acquire small and mid-sized competitors.

Indeed, a prominent supporter of the PPACA explicitly, and correctly, wrote that the legislation "fundamentally transforms health insurance" into "a regulated industry … that, in its restructured form, will therefore take on certain characteristics of a public utility."[9] What was left unsaid is that the characteristics of public utility economics are markets dominated by a few large firms, with low rates of return and captive customers, in which the firms' pricing power is constrained by government regulation, but government's exercise of regulatory power is constrained by the need to keep the remaining firms profitable to avoid the widespread social and economic dislocation that would occur should they be driven out of existence.  In essence, this is a prescription for achieving market equilibrium through an economic "mutually assured destruction" stand off -- with little or no remaining consumer choice or product innovation.

Mr. Chairman, this concludes my prepared testimony. I thank you and the rest of the Committee for inviting me to testify before you on this issue. I will be happy to answer any questions that you or members of the Committee may have.

[1] Federal Register, Vol. 75, No. 137, July 19, 2010, p. 41738

[2] Federal Register, Vol. 75, No. 123, June 28, 2010, p. 37191.

[3] Total enrollment in plans granted waivers is 4,039,774. Lists of those waiver recipients, with enrollment figures, can be found at Annual Limits Policy: Protecting Consumers, Maintaining Options, and Building a Bridge to 2014, U.S. Department of Health and Human Services, at http://cciio.cms.gov/resources/files/approved_applications_for_waiver.html.

[4] New Section 2713(a)(5) of the Public Health Service Act (42 U.S. Code § 300gg-13(a)(5)) as added by PL 111–148 § 1001(5).

[5] New § 2718 of the Public Health Service Act (42 U.S. Code § 300gg–18) as added by PL 111-148 § 1001(5) and then amended by §10101(f).

[6] Michael Schwartz,  "Startup health insurer shutting," Richmond BizSense, June 4, 2010, at: http://www.richmondbizsense.com/2010/06/04/startup-health-insurer-shutting and Michael Schwartz,  "With healthcare reform looming, nHealth was losing millions," Richmond BizSense, June 11, 2010, at: http://www.richmondbizsense.com/2010/06/11/with-healthcare-reform-looming-nhealth-was-losing-millions/

[8] Letter of Health and Human Services Secretary Kathleen Sebelius to Karen Ignagni, President and CEO of America's Health Insurance Plans, September 9, 2010.

[9] Sara Rosenbaum, J.D., A “Broader Regulatory Scheme” — The Constitutionality of Health Care Reform, New England Journal of Medicine, 10.1056/NEJMp1010850, October 27, 2010, at NEJM .org.

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Remarks by the President After Meeting on Sexual Assault in the Military

The White House

Office of the Press Secretary

Cabinet Room

4:53 P.M. EDT

THE PRESIDENT:  I appreciate all of you coming in just for a second.  We have gathered here all the top people in not just our military but our entire national security operation.  And I want to start off by thanking all the people sitting around this table and in this room for the extraordinary service that they’ve rendered this country. 

And I want to also remind everybody that we have folks active in theater right now -- men and women in uniform -- who are making heroic sacrifices on behalf of our security.  And our thoughts and prayers are with them and their families because they are dealing with a whole lot to make sure that we are safe.

We have focused this conversation, though, on something that is at the core of our effectiveness as a military.  I told all these people that one of the great honors of my life is serving as Commander-in-Chief to what I consider to be the best military in the history of the world.  And I am in awe of the work that the vast majority of our men and women in uniform do. 

But the reason we are so good is not because of the fancy equipment.  It’s not because of our incredible weapon systems and technology.  It’s because of our people.  And the capacity for our men and women in uniform to work as a team, a disciplined unit looking out for each other in the most severe of circumstances, is premised, as Ray Odierno said, on trust.  It comes down to do people trust each other and do they understand that they’re all part of a single system that has to operate under whatever circumstances effectively.

The issue of sexual assault in our armed forces undermines that trust.  So not only is it a crime, not only is it shameful and disgraceful, but it also is going to make and has made the military less effective than it can be.  And as such, it is dangerous to our national security.  So this is not a sideshow.  This is not sort of a second-order problem that we’re experiencing.  This goes to the heart and the core of who we are and how effective we’re going to be.

Now, the good news is I am absolutely confident that everybody in this room and our leadership, starting with Chuck Hagel and Marty Dempsey and the Joint Chiefs, as well as our top enlisted men and women, they care about this.  And they’re angry about it.  And I heard directly from all of them that they’re ashamed by some of what’s happened.

But it’s not fixed yet, and that’s clear.  So even though I think there’s a level of concern and interest that is appropriate, we haven’t actually been able to ensure that our men and women in uniform are not experiencing this, and if they do experience it, that there’s serious accountability.

So what I’ve done is I’ve asked Secretary of Defense Hagel and Marty Dempsey to help lead a process to continue to get at this.  That starts with accountability, and that means at every level.  And that includes accountability not just for enforcing the law, but also training our personnel effectively, putting our best people on this challenge.

I think Secretary of the Army McHugh made a very good point, which is I’m not sure we’ve incentivized some of our top people to understand this is as core to our mission as anything else.  And we’ve got to reward them, not think of this as a sideline for anything else that they do, but incentivize ambitious folks in the ranks to make sure that they understand this is important.  So that’s part of accountability. 

Empowering victims.  We’ve got to create an environment in which victims feel that they’re comfortable coming forward and they know people have their backs, and that they will work through this process in a way that keeps the focus on justice and make right what’s been wrong as opposed to suddenly they’re on trial, it may weaken their position, it make compromise their ability to advance.  That’s going to be important.  They’ve got to know that they should have no fear of retaliation, no fear of stigma, no damage to their careers, and certainly no protection for criminals. 

Third thing is justice for the victims.  When victims do come forward, they deserve justice.  Perpetrators have to experience consequences.  And I’m pleased that Secretary Hagel has proposed reforms that would restrict the ability of commanders to overturn convictions after trial.  Those reforms have my full support. 

There are a range of ideas that are being proposed on Capitol Hill, and I know that Chuck and Marty are both engaged with those members of Congress.  But what I’ve said to them is I want to leave no stone unturned and I want us to explore every good idea that’s out there in order to fix this problem.  And I’m pleased to say that Secretary Hagel is not only consulting with Congress but is also looking at militaries around the world -- the Canadians or the Israelis or others -- that may have design systems that get at this to see if there are any lessons learned in terms of best practices. 

And Vice President Biden, who has been a champion for issues -- around issues of domestic violence for 20 years or more, he made an important point, which is that we’ve got to make sure that advocates and professionals who are in the civilian system and have been working on this problem for a long time, that we’re listening to them as well; that we don’t assume that the military has to completely recreate the wheel.  And I think that’s a very important point.

So I want to thank all the work that Congress is doing, especially our friends in the Senate.  All of us here are committed to working with them.

The last point I’m going to make, and that is that there is no silver bullet to solving this problem.  This is going to require a sustained effort over a long period of time.  And that’s why I’m very pleased to know that Secretary Hagel is going to be having weekly meetings on this.  And I want us to make sure that we’ve got effective metrics and feedback loops, so that we are continually evaluating how well we’re doing.

And one point that was made around the table is that a sign that we’re actually getting at this problem may initially be increased reporting rather than less reporting.  We may see more reporting of incidents, in part because even outside of our military, traditionally, these problems of sexual assault are vastly underreported.  And so over the next several months and years, if I start seeing data that shows that in fact we are seeing more reports, that may actually indicate to me that people are becoming more confident about moving forward.

On the other hand, I then want those trend lines to start going down because that indicates that we’re also starting to fix the problem and we’ve highlighted it, and people who are engaged in despicable behavior, they get fully punished for it.

So, again, I want to emphasize -- everybody in this room has heard from me directly.  They’ve heard from Secretary Hagel, and they’ve heard from Marty Dempsey.  They all understand this is a priority and we will not stop until we’ve seen this scourge, from what is the greatest military in the world, eliminated. 

Thank you very much, everybody.

END
5:03 P.M. EDT

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FLASHBACK: NBC's Dr. Nancy Orders Obama's IRS to Go After Catholic Bishops

The revelation that the IRS was being used by liberals as a political weapon against conservative groups like the Tea Party makes NBC's Dr. Nancy Snyderman's 2009 call on the tax agency to investigate Catholic bishops even more chilling.

During an MSNBC November 12, 2009 segment about Catholic bishops' opposition to abortion funding in ObamaCare, Snyderman joined NOW President Terry O'Neill in calling on the IRS to investigate them. (video after the jump)Snyderman first complained: "The Catholic bishops appearing and having a political voice seems to be a most fundamental violation of church and state." To which O'Neill responded: "I don't know where there Internal Revenue Service is, but I hope they're paying attention." Snyderman  agreed: "Me, too."

The following is a transcript of the November 12, 2009 MSNBC live segment as first caught by the MRC's Scott Whitlock:

NANCY SNYDERMAN: Well, the fight over abortion and health care reform is getting even hotter. Abortion rights activists are organizing dozens of groups to ban together to keep any kind of language restricting abortion access out of the Senate bill. Planned Parenthood says the House's Stupak amendment has, quote, "completely galvanized the reproductive health community and the women's community." The National Organization of [sic] Women says, "They passed health care reform for half the nation and partial health care reform for the rest of us."

Joining me now from Washington, Terry O'Neill, president of NOW. And she was among those who met with Rahm Emanuel at the White House this weekend and I should say Nancy DeParle and some other women, leading women at the White House. Thanks for being with us. Terry, let me just ask you straight off the bat, this seems to have caught you guys, and I should say the women who believe in reproductive right off guard and found you a little off balance.

TERRY O'NEILL: Oh, it definitely caught me off guard. On Saturday morning, I started getting calls and E-mails and texts saying, you know, there's a deal that's been cut and a terrible, disastrous deal. The Stupak/Pitts amendment, in fact, I believe, essentially overrules Roe v. Wade. That's the intention of the Catholic bishops who pushed it. That, I believe, is the intention Mr. Stupak and Mr. Pitts who offered it. And it's an outrage and, and we are doing everything to be sure that it does not get into the Senate bill, that it does not survive the reconciliation process, because that's not a health bill if you take- it's not acceptable to change health care for America while sending women off into the back alleys to die.

SNYDERMAN: Terry, two things have come up over the last couple days that have really sort of fascinated me. And that is, people describing the House of Representatives as no longer being pro-choice. That is quietly pro life and perhaps even in the Senate. Now, I happen to think that abortion is one of the most divisive issues and you can't get one person from one side to the other side. But I also think most of life is quite gray and we think we have adamant solutions to things until they happen to mothers and children's. And we can find ourselves changing our mind and it becomes our family. Nonetheless, this is a chip. It is an erosion. It is a very slippery slope. Seems to me, that the women of our ages have a hard time saying to the women who are 18, 28, 38 that you have a stake here. And I'm not so sure young women get that.

O'NEILL: Oh, if you listen to the young women that are calling me and that are organizing rallies all around the country even as we speak, I don't think that's really correct.

SNYDERMAN: Really?

O'NEILL: Young women are galvanized around this. Especially the young women who are able to hear the truth. There are people out there who are saying that the Stupak/Pitts amendment is no different than the status quo. Nothing could be farther from the truth. And when the young women learn the truth, they are outraged. Just as the women my age are outraged.

SNYDERMAN: This is going to be a Pollyannaish statement. The Catholic bishops appearing and having a political voice seems to be a most fundamental violation of church and state.

O'NEILL: You know, that's the first thing that I said. I don't know where the Internal Revenue Service is, but I hope they're paying attention.

SNYDERMAN: Me, too. And I just want to, sort of, say good-bye to you by pointing out that Stupak and Henry Hyde, the two amendments that restrict a woman's right to choose, are both white men telling women about reproduction. [O'Neill laughs.] So, on that happy note, I will bid you a good day and thank you for spending time with me.

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Legislative prospects after Boston

By A.B. Stoddard, columnist, The Hill - 04/23/13 06:05 PM ET

The Hill's A.B. Stoddard sits down with Pundits bloggers John Feehery and Peter Fenn to discuss what impact the Boston Marathon bombing will have on the gun control and immigration debates. 

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Remarks by the President and Amir of Qatar after Bilateral Meeting

The White House

Office of the Press Secretary

4:28 P.M. EDT

THE PRESIDENT:  Well, I just want to welcome the Amir of Qatar and thank him and the people of his country for the friendship they've shown toward the United States. There's an excellent relationship between the United States and Qatar on a whole range of levels -- with respect to security, with respect to our military cooperation, our commerce and our trade. 

Qatar has been a center of innovation. We've seen enormous progress within the country on everything ranging from education to health care. And I think His Highness has shown extraordinary leadership over the last many years in helping to guide this country. 

Obviously, Qatar is also an important country in the region, and has an influence that extends beyond its relatively small population. And so we had an opportunity to discuss a whole range of issues that directly relate to U.S. interests and U.S. security, but, more importantly, the security of the entire world.

We had a conversation about the situation in Syria. And obviously we've been cooperating closely with Qatar and other countries in seeking to bring about an end to the slaughter that's taking place there; the removal of President Assad, who has shown himself to have no regard for his own people; and to strengthen an opposition that can bring about a democratic Syria that represents all people and respects their rights regardless of their ethnicity or their religious affiliations. And I'm very pleased that we are going to be continuing to work in coming months to try to further support the Syrian opposition, and we'll be closely coordinating our strategies to bring about a more peaceful resolution to the Syrian crisis.

We also had an opportunity to discuss the situation in Egypt, where we both very much want to see success on the part of Egyptian democracy.  And both of our countries are committed to trying to encourage not only progress in this new democracy, but also economic progress that can translate into actual prosperity for the people there.

We had an opportunity to discuss the situation with respect to the Israeli-Palestinian conflict, and we both agree that peace is in the interest of everyone -- a secure Israel side-by-side with a sovereign Palestinian state.  And we exchanged ideas about how we can advance those negotiations, and I've shared the importance of providing support to President Abbas and the Palestinian Authority so that they can be in position to have fruitful negotiations with the Israelis that can bring about, in a timely fashion, a two-state solution.

And I had an opportunity to thank the Amir for the strong support that his country has provided to our efforts in Afghanistan, including the efforts that he has personally been involved with in getting a dialogue between the Afghan government and the Taliban that might potentially result in some sort of political reconciliation. 

These are all very difficult issues and neither of us are under any illusions that they will be solved overnight.  But what we agree with is that if our two countries are communicating frankly and constructively, and pursuing common strategies, that we can be a force for good for the entire region and for a vision of a Middle East that is democratic, that is prosperous, that is tolerant, that is representative of all peoples, and that is a force for good around the world.

And so I want to thank the Amir for this visit and for his friendship.  And I look forward to working with him and the government of Qatar for many years to come. 

AMIR HAMAD:  (As interpreted.)  I was delighted to have this very positive meeting with the President today.  We discussed several issues of mutual concern to both our countries, especially the situation in Syria.  We also addressed issues concerning our mutual military relationship, which is good, as you know, and also exchanges in education.  As you know, there are several universities, American universities that opened branches in Qatar. 

We also discussed our economic relationship.  There are joint oil and gas projects between the two countries.  We also talked about the serious changes that are affecting the Middle East, especially countries like Egypt, which we consider to be a very important country, and also important for peace with Israel.

And for Qatar, it’s very important for us to see peace between Israel and the Palestinians, and to see also a good relationship between Arab countries and Israel once a Palestinian-Israeli peace agreement is reached.

AMIR HAMAD:  Actually, she meant by gas and oil that we will talk with the President, but we have a relation between us and America to be with American companies like ExxonMobil -- enjoy working with us in the sector of the hydrocarbon.

The other thing is the Syrian issue.  As you know -- (speaks in Arabic and then is interpreted.)  We also discussed the Syrian issue.  What’s happening in Syria is a major, horrific tragedy in the region and the world.  And we hope to find a solution for the bloodshed in Syria and for this current government to leave power to give room to others to take over.  And we hope that any party that succeeds the current regime would be supportive of democracy and the political process.We in Qatar support the peace process and finding a political peace, and Qatar supports that. 

And we once again would like to thank the President.

PRESIDENT OBAMA:  Thank you, everybody.

END                          4:38 P.M. EDT

President Obama honored Jeff Charbonneau, a science, physics and engineering teacher at Zillah High School in Washington, as the 2013 National Teacher of the Year.

National Park Week celebrates and gives back to our country’s great natural and cultural landscapes.

100 students from more than 40 states were at the White House for an all-day, hands-on celebration of the power and potential of science, technology, engineering, and math (STEM) education.

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Support for gun control slips below 50 percent after Senate vote

Fewer than 50 percent of Americans say they support stricter gun controls, according to a survey released Tuesday, the first time since December's Newtown, Conn. elementary school shooting than less than half of those surveyed say they would back a new gun law.

According to the USA Today survey, 49 percent of Americans say they support passing a new gun control law while 45 percent oppose new legislation. That's down from 55 percent who supported new regulations in April and 61 percent in February. 

Last week, Senate Democrats failed to win the 60 votes necessary to move forward on a compromise bill that would have expanded background checks and instituted new penalties on so-called straw purchasers. Senate leaders had already acknowledged they were unlikely to win enough votes on an assault weapons ban or legislation limiting the size of magazine capacities — two suggestions of President Obama's gun violence commission.

Those who support new gun reforms are likely to be disappointed with the Senate's votes. Sixty-one percent of those who support new gun laws say Congress "should only agree to a stronger version of the bill, even if it might not pass," while just three in 10 say they should back a weaker law they know can win approval. Individual measures that comprise the totality of proposed gun control tend to poll higher than the overall bill, although the USA Today survey did not break out specific provisions. A Washington Post / ABC News poll earlier this month found that 86 percent of all Americans backed an expansion of background checks to cover gun shows and online sales.

On Monday, White House press secretary Jay Carney said Obama would "continue to push" for new gun restrictions.

"So the fact is this is hard because there are institutional reasons, there are political reasons, and there are other, I'm sure, personal reasons for why senators chose to vote against the vast majority of the American people," Carney said. "But we will continue to press the case. And this President made clear on Friday that this is just round one of this fight, that this will happen because it's the right thing to do and it's entirely common sense, and it would result in lives being saved."

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GOP vows solidarity after bombings

Congressional Republicans this weekend took a break from their attacks on President Obama to mourn the casualties suffered in the Boston Marathon bombings and vow swift justice for those who would harm Americans.

In the GOP's weekly radio address – normally used to toss barbs across the aisle – Sen. Tim Scott (R-S.C.) praised the first responders to the tragedy and warned would-be terrorists that no act of violence can undermine the country's resilience.

"The Boston Marathon bombing has left us all with a heavy heart and we pray for the victims and their families," Scott said. "However, while the perpetrators of this act of terror hoped that they could shake the confidence of a city, they have instead only strengthened the resolve of our nation.

“To those who would attack America or our citizens, let me say this: There is no corner on Earth, no hiding place in America that will keep us from finding you," Scott added. “The leaders of this country will do everything in our power to bring justice for the families and the communities impacted."

Monday's back-to-back bombings near the finish line of Boston's storied marathon killed three people, injured more than 170 and horrified a nation that hasn't seen an attack of that scale since 9/11.

A manhunt came to an end just hours before Scott's address, when law enforcers apprehended the second of two chief bombing suspects in the Watertown area of Greater Boston after a tense, day-long manhunt that led to the unprecedented lockdown of much of the city and its surroundings.

Dzhokhar Tsarnaev, 19, an ethnic Chechen thought to have immigrated to the U.S. with his family roughly a decade ago, was found hiding in a boat in a residential backyard in Watertown after eluding authorities for nearly 24 hours.

His brother, 26-year-old Tamerlan Tsarnaev, was killed by police Friday morning in a violent shootout that followed a similarly bloody crime spree featuring a convenience store robbery, a car jacking, a high-speed chase and the killing of a campus police officer at the Massachusetts Institute of Technology.

That series of events began Thursday afternoon, when the FBI released to the public photos and videos of two suspects strolling near the course of the marathon Monday as unwitting spectators cheered on the racers. Officials think the two brothers put make-shift bombs, stowed in their backpacks, into trashcans near the finish line.

Obama had visited Boston Thursday to meet with first responders and preside over a prayer service for victims.

Like the Republicans, the president on Saturday dropped all politics from his weekly radio address, instead calling on the nation to set aside its differences and join Bostonians in grieving the victims and praising the heroes who rushed to help.

"Americans refuse to be terrorized," Obama said. "Ultimately, that’s what we’ll remember from this week. That’s what will remain."

Scott echoed that message, arguing that the country is at its best in times of adversity.

“The greatness of America is not seen during times of prosperity, but is crystallized by how we respond to challenges," Scott said. “We will stand strong. We will stand united. And we will stand together for Boston."

The weekly addresses were a rare instance of comity in Washington, where the parties have been in a fierce debate over Obama's gun control agenda, which was blocked this week in the Senate, and are poised to launch into an equally contentious battle over immigration reform.

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White House On Defense After Sebelius Remark On Health Law

The White House insisted on Wednesday that healthcare costs are falling after a member of President Obama’s Cabinet said some people could see their insurance premiums rise under the Affordable Care Act.

"I would actually point to the results that we're already seeing from the Affordable Care Act, which is a savings of $2.1 billion, and the analysis from the [Congressional Budget Office] that actually says, in the future, we're gonna see rates that are lower for higher benefits," deputy press secretary Josh Earnest said Wednesday.

Health and Human Service Secretary Kathleen Sebelius told reporters late Tuesday that “there may be a higher cost associated with getting into that market" where "folks will be moving into a really fully insured product for the first time," according to The Wall Street Journal.

That made Sebelius the first Obama administration official to acknowledge that insurance premiums could increase under the law.

Earnest said he had not read Sebelius’s remarks, but pointed to a blog post from Alan Krueger, the chairman of the president's Council of Economic Advisers, about the slowed growth of healthcare spending in recent years.

"[He] said that, 'Each year from 2009 to 2011 national health expenditure data shows the real rate of annual growth in overall health spending was between 3 percent and 3.1 percent,' which is actually the lowest rate of growth since reporting began in 1960," Earnest said, sidestepping the question of whether there will be an increase in premium costs for some people as a result of the law.

Earnest provided a sharper critique of a report by the Society of Actuaries that showed insurers would be on the hook an average 32 percent more per claims on individual insurance policies because of the law. The study also suggested those cost increases would be passed along to some consumers.

The White House spokesman said he wasn't "particularly surprised" that a study "conducted by a health insurance company that's critical of the Affordable Care Act" would come up with such results.

"The reason that the Affordable Care Act was put in place was to ensure that we were expanding access to healthcare for every American, but also because we wanted to actually protect consumers who were repeatedly victimized by insurance companies," Earnest said. "So it's not particularly surprising to me that an insurance company would conduct a study that was critical of a piece of legislation that was promising to hold them accountable for their actions."

Major parts of the healthcare law are slated for implementation next year. Republican critics have argued that the bill will result in increased rates, especially in the individual and small-group insurance markets.

In the same interview where she conceded that premiums could rise, Sebelius argued individuals "are really going to see much better benefit for the money that they're spending," and said government subsidies would help offset some price increases.

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UPDATE 1-Optimer shares rise after report names Glaxo, Cubist as potential buyers

buyers@

* Co aims to get as much as $1 bln - report

* Optimer could get $15-$16/shr - analyst

* Shares up 18 pct

(Adds comments from an analyst, details)

April 2 (Reuters) - Shares of Optimer Pharmaceuticals Inc rose as much as 24 percent after a Bloomberg report said GlaxoSmithKline Plc and Cubist Pharmaceuticals Inc were among those interested in buying the antibiotic maker.

Optimer, the maker of diarrhea drug Dificid, aims to get as much as $1 billion in a possible auction, the report said, quoting two unnamed sources. (http://link.reuters.com/cys96t)

The report also named AstraZeneca PLC and Japan's Astellas Pharma Inc as potential buyers.

Robert W. Baird & Co analyst Brian Skorney said the $1 billion target implied a price of about $18 per share, which, he felt, would be difficult to achieve.

"I think we can see a $15 to $16 (per share) deal get done," Slorney said, calling the jump in Optimer's stock price a probable overreaction.

Tuesday's gains in the stock price eclipsed the 13 percent jump it had seen on Feb. 27, when the company first said it would explore a sale after replacing its CEO.

The shares were up 18 percent at $13.84 in afternoon trade on the Nasdaq, well above their closing price of $12.13 on Feb. 27.

"I think bankers are probably leaking some information to try drum up some more enthusiasm to get a higher deal value than what is already on the table," Skorney said.

Analysts have previously identified Pfizer Inc, Viropharma Inc and Cubist as potential suitors for Optimer.

"Anyone who has commercial infrastructure selling hospital-based antibiotics could be a bidder here," Skorney said.

"Astellas is already partnered with Optimer and since they already own most of the worldwide rights, it makes sense to consolidate everything."

Similarly, he said, Pfizer Inc had a number of antibiotics that would go generic over the next couple of years, so bidding for Optimer would make sense for it too.

Skorney said the cost, and the benefit, of the acquisition would be trivial for companies like Glaxo and Johnson & Johnson , but Forest Laboratories and Cubist would have to pay over 10 percent of their current valuation for Optimer.

Optimer spokesman David Walsey was unavailable for comment.

Cubist spokeswoman Julie DiCarlo said the company did not comment on speculation or rumors related to mergers and acquisitions. GSK declined to comment.

Dificid, which treats adult patients who contract infectious diarrhea in hospitals, accounted for $62.4 million in sales in 2012. The company is expected to generate sales of $310 million from the drug by 2017, according Thomson Reuters data.

Optimer is also testing to see if the drug can prevent diarrhea in patients under 18 years and whether it can treat it in patients undergoing bone marrow transplants.

(Editing by Sreejiraj Eluvangal)

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After long fight, Roche to release all Tamiflu drug data

LONDON, April 4 (Reuters) - After a lengthy fight, Swiss drugmaker Roche Holding AG said it had agreed to hand over data from all clinical trials of its best-selling flu drug Tamiflu to a group of outside researchers.

Tamiflu has been approved by regulators worldwide and stockpiled by many governments in case of a pandemic, but some scientists claim there is little evidence it works and have lobbied since 2009 for Roche to release all its trial data.

Sales of the drug hit close to $3 billion in 2009 due to the H1N1 swine flu pandemic, although they have since declined.

In an email to the Cochrane Collaboration, a non-profit group that reviews trial data to assess the value of drugs, Roche said it would provide clinical study reports on all the 74 studies into its medicine, over the next few months.

A copy of the April 2 email was supplied to Reuters on Thursday.

Roche said it would edit the study reports to ensure patient confidentiality and protect legitimate commercial interests, adding that handing over the information would take time since some of the reports ran to thousands of pages.

Campaigners who have been pushing pharmaceutical companies to be more open said they were pleased Roche had finally done the right thing, although they argued it should not have delayed access to the data in the first place.

"It shouldn't have taken the researchers years of persistence and publicity to get these Tamiflu results," said Sile Lane, director of campaigns at Sense about Science.

The Cochrane group gave Roche's move a cautious welcome but its researchers said they were still concerned that editing of the data and other problems might make analysis and interpretation difficult.

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ANALYSIS-Big Pharma down, not out, after Indian patent blow

* Glivec patent decision may deter new drug launches

* Western firms seen striking deals with local companies

* India forecast to be No.8 drug market worldwide by 2016

LONDON/MUMBAI, April 2 (Reuters) - Stung by a landmark patent defeat, Western drugmakers will be wary about launching new products in India, but they cannot afford to quit a country tipped to be the world's eighth largest market for medicines by 2016.

Makers of patented drugs will in future have to get more creative about doing business in India, including striking deals with local firms to sell cheaper versions of their drugs, industry experts believe.

The decision by India's Supreme Court on Monday not to allow a patent on Novartis AG's cancer drug Glivec angered but did not surprise U.S. and European drug companies, given past intellectual property (IP) setbacks.

And it is unlikely to send them rushing for the exit.

"India is too big to ignore," said Amit Backliwal, who heads South Asian operations for leading healthcare information provider IMS Health.

"Companies will definitely get cautious, and it definitely means a change in their business model, but I don't think they will pull out."

On paper, there is huge potential in India's rapidly growing $13 billion-a-year drugs market, which is driven these days by chronic diseases such as diabetes as well as infections.

So far, though, it has failed to become a money-spinner for the world's top pharmaceutical companies, despite a new law in 2005 allowing drug patents for the first time.

Innovative patented drugs make up no more than 5 percent of sales, according to IMS, and they have been under siege after a series of rulings allowing generics firms to over-ride patents for cancer drugs like Bayer AG's Nexavar.

New Delhi has pulled no punches in its fight with Big Pharma, both by raising the bar for patents and being ready to issue so-called compulsory licences that open the door for cheap generics when patented drugs are deemed unaffordable.

In the face of such hurdles, some companies are already building new business models.

Roche Holding, for example, plans to offer cut-price versions of two blockbuster cancer drugs Herceptin and MabThera under an alliance with Indian generics firm Emcure Pharmaceuticals.

It is a scheme that Ajay Kumar Sharma, associate director of the pharmaceutical and biotech practice at business consultancy Frost & Sullivan, believes other drugmakers could now emulate.

CALCULATED RISK

India's stance on IP has long been a thorn in the side of Western business, prompting calls by Pfizer Inc and other U.S. firms last month for more pressure on the country to reform policies that can block U.S. exports.

The argument cuts little ice in India, where officials see differential pricing - steep discounts for less well-off markets - as an obvious option for Western companies.

"It is up to them to decide on India. Don't forget, India is a large market, a country of 1.2 billion," said Raghunath Mashelkar, former director general of the Council for Scientific and Industrial Research and an architect of India's IP policies.

With differential pricing common in industries from autos to mobile phones, he argues pharmaceutical firms must find new ways to make products affordable for lower-income groups.

"Drugmakers will have to work out strategies for the lower sections, to give affordable access to medicines and make money by large volumes and smaller margins," he told Reuters. "And then they will look at the middle and the upper sections and make money through smaller volumes but higher margins."

It is a calculated risk, yet a number of drugmakers are already coming around to the view that trading volume for price is the way forward.

One of those is GlaxoSmithKline Plc, which has a large footprint in India and has just invested $900 million to raise its stake in its consumer healthcare subsidiary.

GSK's diversified approach to healthcare is shared by a number of rivals, including Novartis, that also have big interests in over-the-counter (OTC) remedies and branded generics, in addition to innovative medicines.

It is this non-prescription sector that is set to dominate in India, driving double-digit percentage growth in a market that IMS has forecast will reach $24-34 billion by 2016, vaulting the country to eighth from 14th in the global league table.

PricewaterhouseCoopers puts sales by 2020 at $49 billion.

Much of the new business will still come from cheap generics made by local companies, but Western firms are also seeking to put their brands on unpatented medicines, prompting the likes of Abbott Laboratories and Daiichi Sankyo Co Ltd to buy up Indian companies.

BETTER BETS ELSEWHERE

With sales of patented drugs in Western countries slowing, emerging markets are a vital growth driver for drugmakers. India cannot be ignored, but there are clearly better bets elsewhere.

"Emerging markets are growing at two to three times the rate of Western markets, but you've got to be in the right markets - you want to be in China and in Brazil," said Tim Race at Deutsche Bank.

"India could be a really exciting market, given its increasing middle class, but the home-grown generics industry is extremely strong, and the patent situation is very difficult."

India's patent stance also reverberates beyond its shores, since the country's generics firms export their cheap medicines across the developing world.

So far, no other country has followed India with similar laws preventing the kind of secondary patent that stymied Glivec, though Michelle Childs, head of drug access policy at Medecins Sans Frontieres, said others were raising the patent bar in more subtle ways.

Argentina, for example, recently issued guidelines to patent examiners urging stricter rules for granting new patents, and other countries have used compulsory licences, she noted.

"It's putting pressure on pharmaceutical companies to realise they can't continue to charge prices which are unaffordable to the majority of people," Childs said.

(Additional reporting by Caroline Copley in Zurich; Editing by Will Waterman)

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After RNC Calls For Hispanic Outreach, Republican Governor Eliminates Latino Affairs Office

The Republican National Committee devoted much of the attention of its “autopsy” report to improving party outreach to people of color. The report noted it is “imperative that the RNC changes how it engages with Hispanic communities to welcome in new members of our Party.” Yet, if the autopsy report had any effect at all, it appears to be short-lived. Since last week, top Republicans have dodged discussing immigration reform with citizenship, while one congressman used a racial slur to describe Latinos.

North Carolina Gov. Pat McCrory’s (R) contribution to this effort is to unexpectedly close the state’s Latino Affairs office, an office that normally engaged with Latino leaders on policy, offfered bilingual assistance for disaster victims, and collected demographic statistics on the state’s 800,000 Latino residents.

The governor’s office said it will shift some of the office’s duties to a general office for community and constituent affairs. “We are committed to serving the needs of all of North Carolina’s citizens,” McCrory’s chief of staff said. “We don’t segment our constituents by race or cultural background, any more than we separate them by age or gender.”

But Latino advocates criticize the decision. Executive Director of Latin American Coalition in Charlotte Jess George told McClatchy, “The message from Raleigh is that Latinos in North Carolina don’t matter.”

Just before closing the Latino Affairs office, North Carolina pursued a controversial driver’s license design that would distinguish young undocumented immigrants’s licenses by a pink stripe and the words, “NO LAWFUL STATUS” printed across. The state somewhat modified the design when it faced community backlash.

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Remarks by the President After Meeting with African Leaders

The White House

Office of the Press Secretary

Cabinet Room

3:45 P.M. EDT

THE PRESIDENT:  Well, it is a great pleasure to welcome four leaders from Africa, all of whom are doing extraordinary work -- President Sall from Senegal, President Banda from Malawi, President Koroma from Sierra Leone, and Prime Minister Neves from Cape Verde. 

The reason that I'm meeting with these four is they exemplify the progress that we're seeing in Africa.  All of them have had to deal with some extraordinary challenges.  Sierra Leone just 10 years ago was in the midst of as brutal a civil war as we've ever seen.  And yet, now we've seen consecutive fair and free elections.  And under President Koroma's leadership, we've seen not only good governance, but also significant economic growth. 

When you talk about Malawi, there was a constitutional crisis just last year.  And yet, President Banda has not only been able to be in office and make sure that constitutional order was restored, but has also made significant progress on behalf of her people.  And her personal story of overcoming a history of abuse and leading women throughout her country I think indicates the kind of progress that can be made when you've got strong leadership.

The same is true for His Excellency President Sall.  There were some bumps in the road in terms of transition from the previous President, and yet, the Senegalese rose up at the grassroots level and sustained their democracy. 

And Cape Verde is a real success story.  We were hearing from Prime Minister Neves about the fact that just in a few decades they have moved from a per capita income of maybe $200 a year to now $4,000 a year, and are now moving into the middle of the pack in terms of development levels because of good governance and management.

So what our discussion has focused on is, number one, how do we continue to build on strong democracies; how do we continue to build on transparency and accountability.  Because what we've learned over the last several decades is that when you've got good governance -- when you have democracies that work, sound management of public funds, transparency and accountability to the citizens that put leaders in place -- it turns out that that is not only good for the state and the functioning of government, it's also good for economic development because it gives people confidence, it attracts business, it facilitates trade and commerce. 

And all of these leaders have good stories to tell on that.  They recognize that there’s still more work to be done, and so I’m very pleased that all of them are looking to move forward on the Open Government Partnership that we helped to organize through the United Nations several years ago, and that we are now seeing countries from all across the world sign up for -- setting up international norms for accountability and transparency that can lead to good governance.

We also talked about the economic situation.  And all of us recognize that, although Africa has actually been growing faster than almost every other region of the world, it started from a low baseline and it still has a lot of work to do.  And that means building human capacity and improving education and job skills for rapidly growing and young populations.  It means improving access to energy and transportation sectors.  And so we discussed how the United States can continue to partner effectively with each of these countries.

And then we finally talked about young people generally and how we can mobilize the next generation of Africa leaders.  And individuals like President Koroma have taken great interest in finding additional ways that we can recruit and engage young people not only to get involved in public service but also to get involved in entrepreneurship that helps build these countries.

And so my main message to each of these leaders is that the United States is going to be a strong partner, not based on the old model in which we are a donor and they are simply a recipient, but a new model that’s based on partnership and recognizing that no continent has greater potential or greater upside than the continent of Africa if they in fact have the kind of strong leadership that these four individuals represent. 

And we intend to continue to engage with them through a range of programs -- through the Millennium Challenge, through the USAID, through the PEPFAR programs -- but we’re also looking for new models that can potentially improve our bilateral relations even more.

The last point I’d make -- we all discussed some of the regional challenges involved.  Obviously, economic development, prosperity doesn't happen if you have constant conflict.  And nobody knows that more than these individuals.  Some like President Koroma has seen that firsthand. 

Now many of the threats are transnational.  You’ve seen terrorism infiltrate into the region.  We’ve seen drug cartels that are using West Africa in particular as a transit point.  All of this undermines some of the progress that's been made, and so the United States will continue to cooperate with each of these countries to try to find smart solutions so that they can build additional capacity and make sure that these cancers don't grow in their region.  And the United States intends to be a strong partner for that.

So I just want to say to each of them thank you for your extraordinary work.  You should know that you have a great friend in the United States, in the people of the United States, and in the President of the United States, because we believe that if you’re successful, that ultimately will help us grow our economies and contribute to a more peaceful world, as well.  So thank you very much. 

Thank you, guys.

Q    Mandela?

THE PRESIDENT:  Well, obviously we’re all deeply concerned with Nelson Mandela’s health.  He’s a hero I think to all of us.  I’m sure that I speak for the other leaders here.  And we will be keeping him in our thoughts and prayers, and his entire family.  He is as strong physically as he’s been in character and in leadership over so many decades, and hopefully he will come out of this latest challenge.

But we all recognize that he has given everything to his people, the people of South Africa, to the people of the continent, and he’s ended up being an inspiration to all of us.  When you think of a single individual that embodies the kind of leadership qualities that I think we all aspire to, the first name that comes up is Nelson Mandela, and so we wish him all the very best.

Thank you, guys.

END
3:54 P.M. EDT

Here’s a quick glimpse at what happened this week on WhiteHouse.gov.

Despite strong efforts to fix our broken national infrastructure over the past four years, much work needs to be done if we are to prove to the world that there is no better place to do business than in the United States.

The Obama Administration has harnessed new technology to engage the public, worked to disclose information more quickly, and given citizens a greater voice in decision-making. There is more work to do, and we remain committed to continuing this in the second term.

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One Day After RNC Calls For Minority Outreach, Arkansas GOP Passes Bill To Suppress Minority Vote

Monday morning, the Republican National Committee released a lengthy “autopsy” of their 2012 electoral loss, much of which was devoted to the GOP’s weak standing among people of color. “It is imperative that the RNC changes how it engages with Hispanic communities to welcome in new members of our Party” the autopsy proclaims, and “the Republican Party must be committed to building a lasting relationship within the African American community year-round, based on mutual respect and with a spirit of caring.”

One day later, Arkansas Republicans showed their mutual respect and spirit of caring for people of color by passing a law that will keep many of them from casting a vote.

Yesterday, the Arkansas Senate passed — on an entirely party-line vote — a so-called voter ID law requiring voters to show photo identification before they can cast a ballot. The same voter suppression measure already passed the state House with all but one of the votes for the bill coming from Republicans. These laws, which are popular among Republican lawmakers, accomplish little more than disenfranchisement. Even conservative estimates suggest that these laws will prevent 2 to 3 percent of registered voters from casting a ballot. And this impact is felt hardest by low-income voters, students and people of color — all of who tend to prefer Democrats to Republicans.

The most common argument raised in favor of voter ID laws is that they prevent in-person voter fraud, but this claim cannot be squared with reality. A person is more likely to be struck by lightning than to commit fraud at the polls. A Wisconsin study found that only 0.00023 percent of votes are the product of such fraud. So voter ID laws disenfranchise a large chunk of voters — between 2 and 9 percent, according to different reports on their effect — in order to prevent a virtually non-existent form of voter fraud.

The bill will now go to Gov. Mike Beebe (D-AR), who should veto it.

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Remarks by President Obama and President Peres After Meeting

The White House

Office of the Press Secretary

President’s Residence
Jerusalem

5:10 P.M. IST

PRESIDENT PERES:  President Obama, it is a great privilege for me and for the people of Israel to host you here in Jerusalem. 

It was a real pleasure to sit with a true friend -- very knowledgeable, fortunately -- and sit candidly and discuss issues openly and freely. 

After the meeting we just had, I have all confidence that your vision can transform the Middle East.  Your vision is achievable.  You arrived here already with an impressive record of answering our needs, particularly -- and unforgettably -- in the domain of security.  I want to thank you personally, dear friend, for the long days and for many long, sleepless nights -- you know about them -- which you spend caring for our country and for our future.

We live in an age that is both global and domestic, inseparably.  Interest may divide people; vision may unite them. There is common vision uniting us to confront the dangers, to bring peace closer as soon as possible.  The greatest danger is a nuclear Iran -- so you said, so you do.  We trust your policy, which calls to, first, by non-military -- to fight by non-military means with a clear statement that other options remain on the table.  You made it clear that your intention is not to contain but to prevent.

We are trying together to start negotiations with the Palestinians.  We already agreed that the goal is a two states for the two people solution.  There is no better one, or more achievable one.  We consider that the President of the Palestinian Authority, Abu Mazen, is our partner in that effort to stop terror and bring peace. 

Hamas remains a terror organization that targets innocent people.  On our northern border, Iran’s proxy, Hezbollah, continues to stockpile arms and threaten our civilians while they target innocent people across the world.  Hezbollah is destroying Lebanon and supporting the brutal massacre of the Syrian people by President Assad.  Fortunately, the Syrian nuclear capacity was destroyed.  But unfortunately, thousands of chemical weapons remain.  We cannot allow those weapons to fall in the terrorists’ hands.  It could lead to an epic tragedy. 

There is an attempt to bring spring to the Arab world.  It is an Arab choice.  It is an Arab initiative.  It may bring peace to the region, freedom to the people, economic growth to the Arab states.  If realized, it can lead to a better tomorrow.  We pray it will become a reality. 

I really believe the vision is within skeptics and those who believe in peace.  Your voice will encourage belief.  You came to us with a clear message that no one should let skepticism win the day -- a vision that states clearly that peace is not only a wish, but a possibility.  I fully support your call.  There is no other way to make the future better.  There is no better leader to make it possible. 

Your visit is a historic step in that direction.  We shall journey with you all the way.  Thank you.

PRESIDENT OBAMA:  Thank you so much.

Well, thank you, President Peres, for your very generous words and your warm welcome.  It is wonderful to be here once again.  I first visited you when I was still a senator and had the opportunity to visit the lovely garden, and for me to be able to bring a tree from the United States that will find a home in that garden I think is symbolic of not only the friendship between our two nations, but between the two of us personally.

Mr. President, you once remarked that a prime minister’s job is to rule, a president’s job is to charm.  Well, as with all our visits together, I have once again succumbed to your charms and I'm grateful to your hospitality.

It is wonderful to be back in Jerusalem, the Eternal City.  And I’m pleased to begin my visit with a son of Israel who’s devoted his life to keeping Israel strong and sustaining the bonds between our two nations.  President Peres knows that this is a work of generations.  Just as he joined the struggle for Israeli independence in his early 20s, he’s always looking ahead, connecting with young people.  And I’m especially grateful for the time he allowed me to share with those extraordinary Israeli boys and girls. 

Their dreams are much the same as children everywhere.  In another sense, though, their lives reflect the difficult realities that Israelis face every single day.  They want to be safe.  They want to be free from rockets that hit their homes or their schools.  They want a world where science and technology is created to build and not destroy.  They want to live in peace, free from terror and threats that are so often directed at the Israeli people.  That’s the future that they deserve.  That’s the vision that is shared by both our nations.  And that is Shimon Peres's life work.

And, Mr. President, Michelle and I have such fond memories of your visit to the White House last spring, when I was honored to present you with America's highest civilian honor -- our Medal of Freedom.  And that medal was a tribute to your extraordinary life, in which you have held virtually every position in the Israeli government.

So today was another opportunity for me to benefit from the President’s perspective on a whole range of topics -- from the historic changes that are taking place across the region to the perils of a nuclear-armed Iran, to the imperatives of peace between Israelis and Palestinians, to the promise of our digital age. 

And I should note that one of the advantages of talking to President Peres is not only does he have astonishing vision, but he’s also a pretty practical-minded politician and consistently has good advice in terms of how we can approach many of these problems.

I reaffirmed to President Peres, as I will throughout my visit, that in this work, the State of Israel will have no greater friend than the United States.  And the work we do in our time will make it more likely that the children that we saw today alongside children from throughout the region have the opportunity for security and peace and prosperity.
This obligation to future generations I think was well symbolized by the tree planting that we started our meeting with. The Talmud recounts the story of Honi, the miracle worker, who saw a man planting a carob tree.  And he asked the man, how long before this tree yields fruit?  To which the man responded, “Seventy years.”  And so Honi asked, “Are you sure you'll be alive in another 70 years to see it?”  And the man replied, “When I came into the world, I found carob trees.  As my forefathers planted for me, so will I plant for my children.”

President Peres I think understands that story well.  And so we want to all thank you for all the seeds you’ve planted -- the seeds of progress, the seeds of security, the seeds of peace --  all the seeds that have helped not only Israel grow but also the relationship between our two nations grow.  And I believe that if we tend to them, if we nurture them, they will yield fruit in every hill and valley of this land, not only for the children we met today but for Israelis, for Palestinians, for Arabs across the region.  That's not only good for the children of this region, but it’s good for my children and the children of America.

I deeply believe that.  And I couldn't ask for a more wise or more thoughtful partner in that process.  I'm very grateful for you hospitality, and I look forward to our continued work in the future.

END   
5:19 P.M. IST

The first stop on President Obama's trip to the Middle East marks the first time the President has visited Israel since taking office, and comes as its citizens celebrate the 65th anniversary of a free and independent State of Israel.

On the third anniversary of the Affordable Care Act, Secretary Kathleen Sebelius lays out some of the ways in which the health reform has lowered costs.

We will be posting regular updates from the road and livestreaming several of the President's events on whitehouse.gov/live

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Judge Bars Man From Saying ‘Bingo’ For Six Months After False Call Causes Chaos

In the Ohio Valley, where bingo night is serious business, false “bingo” calls can get you 90 days in the pokey.

Austin Whaley, an 18-year-old from Covington, Kentucky, learned this the hard way when he and several friends entered a local bingo hall and yelled “bingo” for comic effect. According to the Cincinnati Enquirer, “the crowd of mostly elderly women did not take kindly to Whaley’s bingo call.” The room filled with groans from those who’d thought they lost; upon realizing they’d been duped, “they started hooting and hollering and yelling and cussing.”

Park Hills Police Sgt. Richard Webster reported that Whaley’s antics “delayed the game by several minutes” and “caused alarm to patrons.” When Whaley refused to apologize after being caught, Whaley cited him for second-degree disorderly conduct.

“Just like you can’t run into a theater and yell ‘fire’ when it’s not on fire, you can’t run into a crowded bingo hall and yell ‘bingo’ when there isn’t one,” said Park Hills Police Sgt. Richard Webster, the officer who cited Whaley. [...]

“He seemed to think he could say whatever he wanted because it was a public building. I tried to explain that that’s not the case. Just because it’s a public building doesn’t give you the right to run into a theater and yell ‘fire.’ You can’t go into a ballpark and yell ‘out,’ because people could stop the game.”

When Whaley appeared in Kenton District Court last week, the judge ordered Whaley: “Do not say the word ‘bingo’ for six months.”

As comical as it may be, sentencing someone to not utter the word “bingo” is likely a violation of the First Amendment.

The 1919 Supreme Court case Schenck v. U.S. introduced the “clear and present danger” test, which allows punishment for speech that would knowingly cause a panic, such as shouting “fire” in a crowded theater (this test has also been largely superseded by more speech-protective decisions). But yelling “bingo” in a bingo hall hardly lives up to the standard. Nobody flees for their life when they think they’ve lost the whimsical game of chance.

Bingo players may consider Whaley a jerk, but even jerks have constitutional rights.

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Affymax cuts jobs, mulls options after recall

PALO ALTO, Calif. -- Affymax Inc. shares tumbled in after-hours trading Monday after the biopharmaceutical company said it will cut 75 percent of its workforce following the recall of an anemia drug that caused severe allergic reactions and deaths among some users.

It is also considering further cuts, a possible sale or bankruptcy protection for the company.

The company and its partner, Takeda Pharmaceutical Co., said in February that of the 25,000 people who took its drug Omontys, about 50 reported severe allergic reactions and five died. The serious hypersensitivity reactions happened within 30 minutes of the drug being administered for the first time.

Affymax said it will lay off 230 employees to focus the company's resources on the ongoing product investigation. The cuts include jobs in its commercial and medical affairs field organizations, as well as other officers and employees.

CEO John Orwin said the decision was extremely difficult but using the company's limited resources for the product investigation is its top priority.

Affymax also announced that it will hire a bank to evaluate strategic alternatives, including a possible sale or merger. The company said it is considering all its alternatives, including further restructuring, winding down operations and bankruptcy proceedings.

Shares of the Palo Alto, Calif. company dropped $1.56, or 53.4 percent, to $1.36 in after-hours trading. The stock had already lost more than 80 percent of its value since the recall announcement last month.

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Rove hits back after Palin criticism at CPAC

GOP strategist and fundraiser Karl Rove on Sunday hit back at Sarah Palin, after the former Alaska governor criticized him over his record backing GOP candidates in 2012 primaries.

“If she can play in primaries, other people can play in primaries,” said Rove on “Fox News Sunday.”

Palin had mocked Rove, a former George W. Bush aide and top GOP consultant, at the Conservative Political Action Conference (CPAC) on Saturday.

“These experts, who keep losing elections and keep getting rehired, raking in millions, if they feel that strongly about who gets to run in the party, then they should buck up or stay in the truck. Buck up and run,” said Palin.

Rove founded American Crossroads and Crossroads GPS, major outsider donor in the 2012 election cycle. But most candidates backed by the groups faltered, leading to criticism from Tea Party groups, who claimed Rove wrongly backed more establishment candidates at the expensive of conservative contenders./p>

Undaunted, Rove announced in February the launch of the Conservative Victory Project, which he said would engage in 2014 primary races with the aim of backing “the most conservative candidate who can win.”

Palin also was a force in last year’s primaries, backing a number of candidates, including Sen. Ted Cruz (R-Texas) who pulled off an upset victory in the Texas Republican primary.

Rove on Sunday, pushed back against Palin’s criticisms.

“Sarah Palin should be agreeing with this,” he said. “She didn't support Todd Akin, and when he said the reprehensible things he said, she wisely came out and said he ought to get out of the race.

“I appreciate her encouragement that I ought to go home to Texas and run for office,” Rove added. “I would be enthused if I ran for office to have her support. I will say this, though, I don't think I'm a particularly good candidate. Sort of a balding, fat guy.”

Rove also took a shot at Palin’s decision to step down from the Alaska governorship in 2009.

“If I did run for office and win, I would serve out my term. I wouldn't leave office midterm,” he said.

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The Nukes of Hazard: Two Years After $500 Billion Fukushima Disaster, Nuclear Power Remains Staggeringly Expensive

On March 11, 2011, the Fukushima Daiichi nuclear power plant north of Tokyo was hit by a wall of water 43 feet high that destroyed or disabled enough equipment to cause three reactors to melt down.

Two years later, the people of Japan are bouncing back. The nuclear industry, not so much.

The United States has not (yet) built a new nuclear reactor since 1996 — new U.S. nuclear capacity has essentially flatlined. The U.S. still has far more nuclear power generation than any other country, though China, Russia, India, and Korea are actively constructing new reactors. A few U.S. building permits have trickled in since 2007, when an energy bill with incentives for new nuclear plants passed Congress. The Wall Street Journal reported in December that:

The first newly licensed nuclear-power plant to be built in the U.S. in decades, the Vogtle project in Georgia, has run into construction problems and may be falling years behind schedule, according to an engineering expert advising the state.

Nuclear power may continue to be a small wedge of our energy pie, but it is still not going to be more than a small wedge of the solution to human-caused climate change. Here’s why.

COST

A new nuclear reactor will set you back a cool $10 billion or more. The Department of Energy is promoting a plan to build as many as 50 small modular reactors per year starting in 2040. Constructed in factories, these reactors would cost “only” $3-5 billion each.

But before they even get to building a new reactor, the nuclear industry has relied upon about ten times as much in federal subsidies compared to those reluctantly offered to renewable energy developers. This is important to keep in mind as the industry complains about wind energy subsidies lowering electricity prices.

One of the arguments the nuclear industry has made over the last several decades is that though it is expensive right now, once the industry learns how to construct plants again, the financial structure changes as costs drop. This appears to be the opposite of true: Nuclear power has a negative learning curve.

Average and min/max reactor construction costs per year of completion date for US and France versus cumulative capacity completed.

Nuclear power has always been very expensive, and will continue to be staggeringly so, especially if we are to build in safety and redundancy measures needed to avoid future Fukushimas.

SAFETY

Japan faces combined clean up and compensation costs at Fukushima estimated to reach $500 billion. The timeline for decommissioning the ruined plant is 30-40 years. There is a $6 million robot deployed to inspect the damaged hallways that got lost in the plant and has not been seen for 17 months. And the cost estimates are just guesswork:

Cleaning up the mess will mean total demolition of the four damaged reactor facilities and disposal of the nuclear waste in a yet-to-be determined site, an end-game likely to face opposition from potential host communities.

Japan has rejected the “sarcophagus” option used at Chernobyl, where the damaged reactor was encased in a massive concrete envelope. This is partly because of the difficulty of monitoring an entombed facility to ensure safety, said Kentaro Funaki, director of the industry ministry’s office in charge of decommissioning.

Estimates for total costs are mostly guesswork. “Only God knows,” said Chuo University’s Annen.

Whatever the final bill, Japanese consumers are likely to end up paying much of it, either through taxes, higher electricity rates or both, even as Japan’s government struggles with massive public debt and the costs of an ageing population.

If you ask the Nuclear Regulatory Commission about the safety record of U.S. reactors (as the Associated Press did), they would say “the performance is quite good.” Only five out of 104 reactors had safety issues at the end of the year. However, a Union of Concerned Scientists report found that during the whole year, 40 out of the 104 had at least one serious safety incident. This map shows you the locations of 12 reactors that almost melted down in 2012.

Are U.S. reactors learning from the Fukushima accident? Not really:

Even before the new rules are completely in place, the NRC is considering a new regulation related to the Japan disaster: requiring nuclear operators to spend tens of millions of dollars to install filtered vents at two dozen reactors.

NRC staff recommended the filters as a way to prevent radioactive particles from escaping into the atmosphere after a core meltdown. The filters are required in Japan and throughout much of Europe, but U.S. utilities say they are unnecessary and expensive.

The Nuclear Energy Institute said filters may work in some situations, but not all. … “We’re not against filtering. It’s how you achieve it,” said Marvin Fertel, the group’s president and CEO. …

“It’s not the time to be rash with hasty new rules, especially when the NRC has added 40-plus ‘safety enhancements’ ” to its initial requirements following the Japan disaster, said Sen. David Vitter, R-La., senior Republican on the Senate Environment and Public Works Committee.

Emissions

The only reason people consider nuclear as an alternative to fossil fuels is due to relatively low lifecycle emissions. Greenhouse gas emissions from nuclear energy are low enough to be in the range of many other renewable forms of electricity generation. Their emissions occur not during electricity production, but through everything else required to commission and decommission a nuclear plant: “plant construction, operation, uranium mining and milling, and plant decommissioning.”

The problem is you couldn’t build the reactors fast enough to make a difference. Even prior to the disaster at the Fukushima reactor, nuclear power was never a climate cure-all as we reported back in 2007: If the world built about 2 nuclear plants each month for 50 years — along with some 10 Yucca Mountains to store the waste – nuclear power would still be under one-tenth of the solution to global warming.”

Those numbers make clear nuclear power will not be a large piece of the pie in lowering emissions to stabilize below 450ppm.

Waste

The availability and security of nuclear waste storage are unresolved problems. The courts have decided that the executive branch and the states need to resolve the issue of where to put the waste, and all they appear to have concluded in three decades is “not in Nevada.”

The issue of where to put the growing national pile of nuclear waste (2,000 tons a year in spent fuel alone) is unlikely to be resolved in the next three decades. Whatever the solution ultimately is, it won’t come cheap.

What do proponents say about waste concerns? “Blah, blah, blah.”

Water

One nuclear reactor uses 35-65 million litres of water each day. Large mounts of water are also used in the uranium mining process.

Two plants in Georgia use more water than all the water used by people living in Atlanta, Augusta and Savannah combined.

* * *

Climate hawks have always had an ambivalent relationship with electricity powered by nuclear fission, primarily because, while it is low-carbon, it is so damn expensive. So although we have a hundred or so plants in the U.S. that will be with us for the foreseeable future, it is much more cost-effective to continue to promote and rely on truly clean, cost-effective renewable energy and energy efficiency.

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