Five myths about the Affordable Care Act

Karen Bleier/AFP/Getty Images
Karen Bleier/AFP/Getty Images


The rollout of the Affordable Care Act has been a “debacle” even according to the administration, but there is more to the confusion than just poorly written code. Take a deeper dive with this quick list from the Washington Post:

“Frustrating.” A “debacle.” That is how President Obama’s own secretary of health and human services, Kathleen Sebelius, has described the rocky launch Americans were supposed to begin shopping for insurance coverage on Oct. 1, but millions have been unable to log into the federal online exchange . Congress, meanwhile, shut down the government for 16 days in a dispute over whether to fund the health-care law. As the debate continues, let’s look at some of the most persistent myths about the law — and some new ones that have cropped up.

1. Americans will be forced to buy health insurance.

The health-care law’s individual mandate, despite its name, isn’t meant to force Americans into health plans. Instead, it is supposed to encourage people to purchase coverage by giving them two options: Buy insurance or pay a fine. In 2014, that fine is $95 or 1 percent of an individual’s income, whichever is higher.

The Internal Revenue Service is responsible for collecting this penalty from individuals who indicate on their annual tax filings that they have not purchased coverage. The agency can take the penalty out of a filer’s refund, but beyond that, its ability to recoup those dollars is extremely limited. The IRS cannot, for example, send agents to people’s homes or put liens on their houses. In the health-care law, Congress specifically curtailed the ability to enforce this penalty, giving the IRS fewer ways to collect it than there are for other tax fines.

2. If you like your health plan, you can keep it.

Obama has repeatedly made this key promise about his signature legislation. “If you’re one of the more than 250 million Americans who already have health insurance, you will keep your health insurance,” he said in June 2012, shortly after the Supreme Court upheld the law.

In truth, the health-care law makes a number of changes to the insurance industry that will affect the nearly 165 million Americans covered by private plans. For one, it requires all health plans to include a wider set of benefits, among them maternity care and mental health services. Employers have responded by increasing premiums by less than 3 percent, on average, to make up for the cost of these new benefits.

The individual market, where 15 million Americans buy their own coverage, will see even bigger changes. Experts estimate that insurers will discontinue at least half of these plans in 2014 because they do not cover the benefits that the Affordable Care Act requires. Some say the number could be even higher, around 75 to 80 percent.

CBS News has reported that more than 2 million people have already received word from their insurers that the health plans they have now won’t be available next year. Customers who receive a cancellation notice will need to shop for new coverage. Those plans could have a higher price tag because they offer more benefits, although many people will receive financial help from the government to buy a new policy.

3. The exchange’s big problem is that it ’s overwhelmed by traffic.

The federal exchange did get a lot of web traffic at first; the White House estimates that 8 million people visited the site in its first four days. To put that in perspective, as one Web developer recently did, that’s more users in’s first 24 hours than Twitter had in its first 24 months.

Traffic has decreased since then, and some people have successfully purchased insurance through the online marketplace. That’s led insurance companies to discover an even more serious problem with the exchange: It’s sending inaccurate enrollment data to insurers. Companies are supposed to get a file from the exchange each time someone enrolls in one of their plans. These files include important information such as where the new subscriber lives and how many people are in her family. But insurers say these files are sometimes wrong, listing children as spouses, for instance, or including an address that doesn’t exist.

Some companies have assigned employees to hand-check each file for errors. This works now because few people are enrolling through the exchange. But at some point, insurers expect that they’ll receive thousands of files each week and won’t have the manpower to check each one. If lots of people start signing up before the problem is fixed, insurers worry that they won’t know who actually bought their plans. And without knowing who has subscribed, insurance companies won’t be able to send out membership cards, for example, or begin paying claims for trips to the doctor.

4. The exchanges will transform the insurance industry.

While the federal exchange has gotten much attention in recent weeks, only a small fraction of Americans are expected to use the new marketplace to buy health insurance. The Congressional Budget Office estimates that, by 2023, 24 million people will buy insurance through the state and federal exchanges; that’s about 7 percent of the population. It’s telling that many of the large insurance companies, such as Cigna and UnitedHealthcare, have decided to participate in only a handful of the states’ marketplaces. So far, they don’t see this segment of the market as key to their growth.

The vast majority of Americans will still get their health insurance the way they did before the Affordable Care Act: through their employers or through a public program, mainly Medicare and Medicaid.

5. The health-care law will increase the deficit.

The Congressional Budget Office estimates that, over the next decade, the health-care law will reduce the deficit by $109 billion. That’s because the Affordable Care Act includes new spending cuts and tax increases, which more than offset the cost of expanding health insurance to millions of Americans.

The law’s new revenue sources fall into three main categories. First are cuts to Medicare providers, such as hospitals and doctors. Under the Affordable Care Act, the federal government will pay slightly lower rates.

Second are cuts to private health insurance plans, known as Medicare Advantage plans, that cover Medicare patients. The federal government has, in recent years, paid these private plans more to cover Medicare beneficiaries than it has spent on seniors who sign up for the traditional public program. The health law aims to reduce those differences by cutting Medicare Advantage payments.

Lastly, the law includes new taxes on a number of health-care industries, including hospitals, medical-device makers, insurers and pharmaceutical companies.


Everyone is unhappy with Obama’s budget proposal, and that’s a good thing


Reporters, politicians, and pundits all over are tearing apart the budget President  Obama has recently outlined, which he will submit to Congress Wednesday of next week.

The big takeaway is that the President is essentially offering the same policy Speaker Boehnor rejected during the fiscal cliff talks from December. The plan involves tax and spending increases, closed loopholes, and some spending reductions, the key of which involves changes to the cost-of-living adjustment for entitlement spending. The President is essentially putting his foot down with Republicans, and reaffirming this as the Democrat’s imperfect compromise plan.

Mandatory spending, mostly comprised of Social Security, Medicare, and Medicaid, is rising, and unsustainably. There are many ways of dealing with this, and using chained CPI may not be the best one, but at least it is an idea.

I don’t love the President’s budget. And I very well shouldn’t. Neither should congressional Democrats or Republicans. In attempting to compromise, neither side should or could responsibly expect to get everything they want. We have seen this dysfunction go on too long to believe a soon-to-be-lame-duck Democratic president or fingers-on-the-ledge Democratic senate majority can manhandle House Republicans. So any pragmatic hopes of getting a serious, long-term budget passed need to include major concessions to Republicans. Democrats refusing to look at ways to reform entitlements (which can and should be much more than just a reduction in benefits) are being just as obstinate as their partners in crime across the aisle.

I 100% agree that the President’s outlined budget is a bad break for progressives. But while some worry any hope for a grand bargain is pointless, I would argue that it is more unreasonable to allow two increasingly polarized political groups to act completely self-interested. Nothing will happen if both sides deem the argument all or nothing. There were periods in the past with much less polarization where compromises were business as usual. Aspiring to create such an atmosphere again seems much more useful work than continued refusal to act at all.

Check out this breakdown via the Washington Post:

President Obama will propose a budget next week that embraces a risky strategy of courting Republicans for a grand bargain on the debt while angering Democratic allies with cuts to the nation’s entitlement programs.

White House officials said Friday that Obama’s budget would cut Medicare and Social Security and ask for less tax revenue than he has previously sought. The budget, to be released Wednesday, will fully incorporate the offer Obama made to House Speaker John A. Boehner (R-Ohio) during December’s “fiscal cliff” talks — which included $1.8 trillion in deficit reduction through spending cuts and tax increases.

On Friday, liberals expressed outrage that a freshly reelected president would concede so much. Some of Obama’s allies said they were concerned that he was making a strategic mistake. Yet the president’s aides said he was intent on showing that he was not backing away from the compromise he had offered.

“The budget reflects his priorities within a budget world that is not ideal,” White House press secretary Jay Carney said. “It requires compromise, negotiation and a willingness to accept that you won’t get 100 percent of what you want.”

The budget will break with the president’s tradition of providing a sweeping vision of his ideal spending priorities, untethered from political realities. But the spirit of compromise did not win Obama much immediate support, as Republicans and Democrats questioned whether it would lead to an agreement.

Boehner accused Obama of holding entitlement cuts “hostage” in an effort to win support for more tax increases, despite warnings from congressional Republicans not to do so.

“That’s no way to lead and move the country forward,” Boehner said.

But some of the most heated commentary came from the left, which was furious that the president was enshrining cuts to Social Security as official administration policy. Obama proposed changing the cost-of-living calculation for Social Security in a way that will reduce benefits for most recipients, a key Republican request that he had earlier embraced only as part of a compromise.

“I am terribly disappointed and will do everything in my power to block President Obama’s proposal to cut benefits for Social Security recipients,” said Sen. Bernard Sanders (I-Vt.), who caucuses with the Democrats. “I remember when Obama said he was concerned about retirees struggling to get by and was unequivocal in his opposition to cutting cost-of-living adjustments.”

Overall, the budget request reflects Obama’s stark shift in strategy over the past month, as he has adopted a far more congenial posture toward the opposition. He has begun a charm offensive, reaching out to rank-and-file House and Senate Republicans, dining and speaking privately with them. Obama is set to have dinner with a group of Republicans on Wednesday night, just hours after his budget is released.

Obama’s aides have not been overly optimistic about the prospects for a deal. But they now argue that a strategy of private outreach, coupled with public events, offers the best path for progress not only on the deficit but also on other issues, including immigration and gun control. The White House says the concessions in Obama’s budget should not be viewed as a list of options but rather as a cohesive package.

Obama decided to incorporate the approach he had offered Boehner after a debate among his advisers and allies on Capitol Hill, according to people familiar with the discussions. Some worried that the White House was giving away concessions before Republicans agreed to make some of their own.

“I have some tactical concerns about the White House approach and some substantive concerns,” said Rep. Chris Van Hollen (Md.), the top Democrat on the House Budget Committee and a White House ally in pursuit of a broad budget deal.

“The president has essentially said this is his end point and this is a compromise proposal,” Van Hollen said. “Republicans have rejected this as a compromise. From the Republican perspective, the president’s budget is the starting point for negotiation.”

White House officials say Obama felt that, as president, it was important he stand by his original offer and include it in his budget proposal.

“We want to make clear that it’s something that we’re willing to do. To not put it in [the budget] would be a conversation disconnected with reality,” a senior White House official said. Failing to do so, the official said, would have provoked howls from Republicans that “you moved the goal posts.”

Officials also pointed out that the president’s budget goes beyond the Boehner offer. Obama’s budget would fund several new priorities, including the creation of a program offering preschool to all 4-year-olds from low- and moderate-income backgrounds.

Officials proposed an increase in tobacco taxes to pay for the early childhood education initiative and would also seek to generate revenue by limiting how much wealthy individuals can accrue in their tax-protected retirement accounts. Such accounts would be capped at $3 million in 2013 dollars — which officials say is enough to finance a $205,000-a-year income. The president would also seek to scrap a loophole in the law that lets people collect both unemployment insurance and disability payments — so called double-dipping.

The budget request comes on top of a deal struck at the start of the year to raise taxes on the wealthy by more than $600 billion over a decade.

Through that pact and earlier agreements, Congress and Obama have agreed to reduce the annual budget deficit — how much more the government spends than it collects — by $2.5 trillion over the next decade. If left in place, the deep spending cuts that took effect March 1, known as sequestration, would reduce the deficit by an additional $1.2 trillion over the same period. That would be just about enough to keep deficits from rising and to stabilize the debt, as measured as a percentage of the overall economy.

But Obama’s budget proposal would eliminate sequestration and replace it with a variety of other deficit-reduction measures, together worth $1.8 trillion, according to White House estimates.

The deficit, which is projected this year to be equal to 5.5 percent of the size of the economy, would shrink to 1.7 percent of the economy by 2023. By comparison, the House Republican budget — which would curtail spending on dozens of programs for the poor, repeal Obama’s health-care law and partially privatize Medicare for people now younger than 55 — aims to eliminate the deficit by 2023. A more liberal plan passed by Senate Democrats would make the deficit 2.2 percent of the size of the economy by that point.
The budget is more conservative than Obama’s earlier proposals, which called for $1.6 trillion in new taxes and fewer cuts to health and domestic spending programs. Obama is seeking to raise $580 billion in tax revenue by limiting deductions for the wealthy and closing loopholes for certain industries such as oil and gas.
The budget proposal slices $200 billion from already- tight defense and domestic budgets. It would cut $400 billion from Medicare and other health programs by negotiating better prescription drug prices and asking wealthy seniors to pay more, among other policies. It would also generate $200 billion in savings by scaling back farm subsidies and federal retiree programs, among other proposals.
The proposal to change the formula to calculate Social Security payments, also originally part of the offer to Boehner, would generate $130 billion in savings and $100 billion in revenue, a result of the impact of the change on other government programs.
Obama is submitting his budget two months late, after aides scrambled to deal with the end-of-year “fiscal cliff” and then the March 1 deadline for sequestration. With the House and the Senate having passed dueling budget proposals, both sides will see whether they can find a compromise.

Two upcoming debates will provide opportunities. This summer, Congress will once again be forced to raise the federal debt ceiling or risk a default on the national debt. Republicans in February decided not to mount a fight over the debt ceiling, as they had in 2011, and it is not yet clear whether they will oppose an increase this time. In addition, Congress and the White House will have to agree to a new budget plan at the end of September.

Why CPAC didn’t invite GOP star Chris Christie

Quick analysis by Peter Weber over at The Week (a bit strangely fleshed out with Tweets) on what’s up with the CPAC  snubbing one of their most visible and popular members at an important meeting of conservatives, which Charles Krauthammer calls a “vast overreaction“:

Seemingly everybody to the right of Jon Huntsman has been invited to speak at the 2013 Conservative Political Action Conference — including formerly moderate Massachusetts Gov. Mitt Romney (R). There’s one name, though, that’s conspicuously absent on the list of invitees: New Jersey Gov. Chris Christie (R). CPAC spokeswoman Laura Rigas says that, officially, the conference “schedule is still being finalized, with several more announcements pending over the next three weeks.” But multiple news organizations are reporting that Christie won’t make the list.

There are plenty of reasons conservatives might want to hear from a wildly popular Republican governor of a blue state, as Christie’s fans were quick to point out.

“CPAC won’t invite America’s most popular Republican elected official to speak. Way to rebuild a majority, guys.” – Josh Barro

“Let me get this straight.  bans @GOProud, refuses to invite @GovChristie, and invites@SarahPalinUSA. Yes, they are stupid.” –Doug Mataconis

“Chris Christie’s 2012 speech at CPAC Chicago brought the house down” –Dan McLaughlin

“Christie not invited to CPAC, a gathering for a Republican party that loves to lose elections!” – David Podhaskie

So why the snub? Conservatives have a snap answer: Christie gave up his right to the conservative label during Hurricane Sandy, first by complimenting President Obama’s handling of the super storm and then for blasting House Republicans for failing to initially approve funds to clean up from the disaster.

“Well duh… he backed Obama at the last minute of the election. Freakin traitor!!!” – The American Patriot

That’s a pretty big reversal for a politician whom Republicans begged to run for president, then vice president, in 2012, and is considered a strong contender in 2016. So this is “revenge because a GOPer dared to say something nice about President Barack Obama?” asks Joe Gandelman at The Moderate Voice.

It certainly sounds that way — and this very pointed, clearly intentional, most assuredly let’s-send-’em-a-message snub of New Jersey Gov. Chris Christie also suggests what could be in store if former Florida Gov. Jeb Bush decides to run and doesn’t embrace the conservative agenda 100 percent or shows signs he’d be willing to reach across the aisle and not be on the partisan warpath 24/7…. Wasn’t there supposed to be some kind of “rebranding” going on? [Moderate Voice]

“I have my issues with him just like you do, but c’mon,” says Allahpundit at Hot Air. Christie may not be as conservative as Gov. Rick Perry (R-Texas), but “he’s one of the few members of the party with a national profile who’s reasonably well liked by voters across the board. Leverage his popularity, if only for a day.” Still, of all the moderates and RINOs upset by the Christie snub, the New Jersey governor probably isn’t among them.

All they’re doing here, whether they realize it or not, is throwing him into the briar patch. Christie was never going to run as the conservative choice in 2016 and lord knows he’s not going to run as a conservative to get reelected in New Jersey…. CPAC’s unwittingly helping him burnish his brand as the country’s most formidable centrist Republican. Expect him to gets lots of mileage out of it in interviews over the next month. [Hot Air]

There are some other theories on CPAC’s sidelining of Christie, some verging on the conspiratorial:

“Excluding Chris Christie from CPAC reveals the character of the extreme right. They care more about making money and stirring resentment.” – Joe Scarborough 

“That Christie has a 74% approval rating and that conservatives are mad at him are closely related. What conservatives want is unpopular.” – Josh Barro

While CPAC may be burnishing Christie’s luster among Democrats, some Democratic groups are attempting to do the opposite. On the same day the CPAC snub hit the wires, EMILY’s List — a group that supports mostly pro–abortion-rights Democrats — started its campaign to sink Christie’s heavily favored bid for re-election in November: Christie “has national ambitions and a relentlessly anti-woman, anti-family record, a dangerous combination that means we have to expose his extremism now, and prevent him from trying to take his regressive agenda nationwide.”

Even if he’s re-elected in New Jersey, though, the CPAC snub could hurt his chances with GOP primary voters in 2016, if Christie decides to run for president. Still, if that doesn’t work out, his brand of tough-talk and yelling at audiences is suited to more than just being governor of the Garden State.

“My solution to CPAC not inviting Christie to speak this year — have the Academy ask him to host the Oscars in 2014. ” –Daniel Drezner

House Science Chair’s First Action Is To Hold A Climate Change Denier Hearing




To follow up on some recent news about the new chair of the House Science and Technology Committee, Rep. Lamar Smith makes an unsurprising first move by starting his chairmanship off denying established science.  In making a call for “experts” to “create a forum for discussion”, Smith is simply creating a forum for more confusion and mistruth to be spread, and giving those voices access to national airtime.  The constant demand from climate deniers that science prove or know for certain exactly how things are happening and how they will in the future shows a blatant ignorance for how science works.  The science is as strong as it gets, and while there are as with any global phenomenon multiple factors that influence the global rise in temperature, we can know that factors under human control are the most devastating, and that is what we must know for policy action.  It is becoming almost incomprehensible to be that the US stands so firmly against all public knowledge on the subject.  I do not believe people who deny our impact on climate change as a whole are some kind of selfish sadists looking to take all they can from the earth for themselves to the detriment of the future, but more that the message of established scientists needs to be trusted as essential to making effective public policy.  Removing the mistrust factor, and decoupling climate denial from conservative political self-identification, would go a long way.  This nonsense, however, does the opposite.

Via Rebecca Leber at

Coming off of the hottest year in U.S. history and 333 months of higher-than-average global temperatures, Rep. Lamar Smith’s (R-TX) first move as the new chair of the House Science and Technology Committee includes a hearing on climate science, according to Dallas News.

For Smith, who criticized “the idea of human-made global warming,” the hearing will be an opportunity to give a platform to the committee’s climate zombies:

I believe climate change is due to a combination of factors, including natural cycles, sun spots, and human activity. But scientists still don’t know for certain how much each of these factors contributes to the overall climate change that the Earth is experiencing. It is the role of the Science Committee to create a forum for discussion so Congress and the American people can hear from experts and draw reasoned conclusions. During this process, we should focus on the facts rather than on a partisan agenda.

Smith has blasted the media as “lap dogs” for not devoting enough airtime to climate deniers and implored networks to not “hide the facts.” Unsurprisingly, he has taken $500,000 from oil and gas over his political career and $10,000 from Koch industries last year.

GOP members of the committee “keep science at farthest arm’s length” with its long list of climate deniers. “All that stuff I was taught about evolution and embryology and Big Bang theory, all that is lies straight from the pit of hell,” House Science Subcommittee Chair Paul Broun (R-GA) said. But the list also includes former Chair Ralph Hall (R-TX), Vice Chairman Dana Rohrabacher (R-CA), and subcommittee chairs Cynthia Lummis (R-WY) and Larry Bucshon (R-IN).

If climate-denying Republicans want the facts and not “a partisan agenda,” they can just read the new draft National Climate Assessment, which dives into the consequences of a hotter, drier, disaster-prone climate.

TEDTalks: How common threats can make common (political) ground


Another entry from TEDTalk all-star, Jonathan Haidt, who I’ve featured here before.  His work on the social science of morality and the connections to the political fascinate me, and his analysis of our leaders’ inability to cooperate on the disasters facing us offer clear logic for them, and perhaps possible solutions:

If an asteroid were headed for Earth, we’d all band together and figure out how to stop it, just like in the movies, right? And yet, when faced with major, data-supported, end-of-the-world problems in real life, too often we retreat into partisan shouting and stalemate. Jonathan Haidt shows us a few of the very real asteroids headed our way — some pet causes of the left wing, some of the right — and suggests how both wings could work together productively to benefit humanity as a whole.

Jonathan Haidt studies how — and why — we evolved to be moral. By understanding more about our moral roots, his hope is that we can learn to be civil and open-minded.

Haidt is a social psychologist whose research on morality across cultures led up to his much-quoted 2008 TEDTalk on the psychological roots of the American culture war. He asks, “Can’t we all disagree more constructively?” In September 2009, Jonathan Haidt spoke to the TED Blog about the moral psychology behind the healthcare debate in the United States. He’s also active in the study of positive psychology and human flourishing.

Perspective on the Deal



Paul Krugman, fighting the good fight for progressives through his column at the NY Times, has my favorite analysis of the deal finally cut on the fiscal cliff of 2012/3.  Krugman comes bearing his calling card – a bit of snark, progressive fervor, and good perspective concerning the next crisis looming over the country.  While we can be very excited about what Congress was finally able to do, we must be cautiously optimistic over the battle soon to be pitched over the debt ceiling.  I’m not quite as despondent as the note Krugman leaves on, but certainly a tough few weeks that end in capitulation by Obama in that debate would crush his strongest supporters.  But we shall hope for the best for the nation that this deal is a sign of more active and cooperative government in the near future:

To make sense of what just happened, we need to ask what is really at stake, and how much difference the budget deal makes in the larger picture.

So, what are the two sides really fighting about? Surely the answer is, the future of the welfare state. Progressives want to maintain the achievements of the New Deal and the Great Society, and also implement and improve Obamacare so that we become a normal advanced country that guarantees essential health care to all its citizens. The right wants to roll the clock back to 1930, if not to the 19th century.

There are two ways progressives can lose this fight. One is direct defeat on the question of social insurance, with Congress actually voting to privatize and eventually phase out key programs — or with Democratic politicians themselves giving away their political birthright in the name of a mess of pottage Grand Bargain. The other is for conservatives to successfully starve the beast — to drive revenue so low through tax cuts that the social insurance programs can’t be sustained.

The good news for progressives is that danger #1 has been averted, at least so far — and not without a lot of anxiety first. Romney lost, so nothing like the Ryan plan is on the table until President Santorum takes office, or something. Meanwhile, in 2011 Obama was willing to raise the Medicare age, in 2012 to cut Social Security benefits; but luckily the extremists of the right scuttled both deals. There are no cuts in benefits in this deal.

The bad news is that the deal falls short on making up for the revenue lost due to the Bush tax cuts. Here, though, it’s important to put the numbers in perspective. Obama wasn’t going to let all the Bush tax cuts go away in any case; only the high-end cuts were on the table. Getting all of those ended would have yielded something like $800 billion; he actually got around $600 billion. How big a difference does that make?

Well, the CBO estimates cumulative potential GDP over the next decade at $208 trillion.So the difference between what Obama got and what he arguably should have gotten is around 0.1 percent of potential GDP. That’s not crucial, to say the least.

And on the principle of the thing, you could say that Democrats held their ground on the essentials — no cuts in benefits — while Republicans have just voted for a tax increase for the first time in decades.

So why the bad taste in progressives’ mouths? It has less to do with where Obama ended up than with how he got there. He kept drawing lines in the sand, then erasing them and retreating to a new position. And his evident desire to have a deal before hitting the essentially innocuous fiscal cliff bodes very badly for the confrontation looming in a few weeks over the debt ceiling.

If Obama stands his ground in that confrontation, this deal won’t look bad in retrospect. If he doesn’t, yesterday will be seen as the day he began throwing away his presidency and the hopes of everyone who supported him.

The Permanent Budget Crisis


Looming behind the fiscal cliff budget crisis is a repeat of the devastating debt ceiling debate that could be even more detrimental to growth the reputation of the country’s government.  Matthew Yglesias at Slate has more:

If you want to know why the fiscal-cliff talks are having such a devilishly hard time reaching resolution, you need to look behind the issues—taxes, spending, stimulus, austerity—that are dominating this month’s debate and start looking ahead to the next debate.

Specifically, gaze dolefully forward to February or March or maybe April when the total volume of nominal federal debt will reach the statutory cap on borrowing—the “debt ceiling”—setting up a repeat of the legislative brinksmanship we saw in the summer of 2011. The debt ceiling is key because conservatives believe it gives them crucial hidden leverage that they currently lack, and because Democrats are determined not to settle for a short-term deal this month without resolving the debt ceiling for a while.

The debt ceiling, recall, is a curious American institution that we share exclusively with Denmark. Back in the 19th century, Congress specifically authorized each issuance of federal bonds. When World War I came along, this became tedious, so Congress simply appropriated the funds it thought would be required for the war and authorized the federal government to borrow a bunch more money as needed to spend what Congress had directed it to spend, up to a certain cap—the debt ceiling.

Over the years, this evolved into a fun exercise in congressional hypocrisy and partisan grandstanding. Congress would pass laws setting the tax code, laws shaping entitlement spending, and annual appropriations for the military and civilian functions of government. When a gap arose, as it often did, the Treasury Department would, obviously, borrow the money. But every so often the combination of economic growth and inflation would guarantee that the government would run up against the authorized borrowing cap. At this point opposition party members of Congress would take potshots at the president. Back in 2006 when George W. Bush had to ask for an increase in the debt ceiling, then-Sen. Barack Obama called it “a sign of leadership failure” and proclaimed “Americans deserve better.” West Wing did a jokey segment about it.

But after the sweeping GOP wins in the 2010 midterms, this took a darker turn.

Republicans began making noises about using the debt ceiling as leverage to force spending cuts. The Obama administration miscalculated that they could turn lemons into lemonade by forging a broad deficit-reduction deal involving spending cuts and more revenue, metaphorically “breaking” the GOP dogma on taxes. What we got instead was total Republican intransigence, a panic that crushed consumer confidence, and ultimately a kludgy deal that helped set the stage for today’s fiscal cliff.

The White House, naturally, doesn’t want to do it again. Once the debt ceiling has been weaponized as a tool for extracting real policy concessions, it creates a dangerous situation. Sooner or later one party or the other will set off the bomb, and actually send the United States into default.

To prevent this, the Obama administration has embraced a plan once floated by Mitch McConnell that will replace actual debt-ceiling threats with symbolic grandstanding. The Treasury Department will say it needs to borrow more, Congress can pass a resolution of disapproval if it disapproves, and then the president can veto the resolution. All the grandstanding, none of the white-knuckle panic.

What’s not been adequately appreciated by the press is the extent to which the Obama administration is deadly serious that this arrangement or one like it must be in any fiscal cliff deal. That’s not a bargaining posture. The administration’s analysts believe that going over the fiscal cliff temporarily would be damaging to the economy, but that having a debt-ceiling fight hanging over the first quarter of 2013 would be equally damaging. If resolving the fiscal cliff doesn’t also resolve the debt ceiling, then nothing is accomplished for the short-term economy and any long-term deal is meaningless since Republicans will issue new demands in February when they have leverage.

But for Republicans, a debt-ceiling showdown increasingly seems to be their favorite plan. The simple fact of the matter is that there’s nothing they can do this month to prevent Obama from getting his way on income-tax rates for the rich. He insists higher rates must be part of any plan to avert the cliff, and the cliff itself includes the rate hikes.

Yet while conceding as much, Senate Republican leader Mitch McConnell recently told reporters that “we’ll have another opportunity later, when the debt ceiling issue arrives” to address tax and spending concerns that the GOP likely can’t win on in December.

What makes this so tricky to resolve is that Republicans, with some justice, see a debt-ceiling concession as a major one on their part. Holding it in their back pocket gives them a lot of leverage, leverage they don’t want to give up for free. But Democrats, with some justice, see a debt-ceiling resolution as an apolitical good government measure separate from ideological disagreement over the size and scope of government. The 2011 hostage-taking was unprecedented, and if it becomes routine it won’t systematically advantage either party—it’ll just hurt the country.

And unlike on taxes, military spending, Medicare eligibility, or anything else it’s hard to split the difference on the debt ceiling. The administration feels, as a matter of process and sound policy, that there’s no point in a deal that doesn’t defuse the debt ceiling. Republicans feel that the debt ceiling is the best bargaining chip they have. But to bargain for it would undermine the whole point of the administration’s new stance, namely that the debt ceiling is too dangerous to be used as a negotiating ploy.

Long story short, don’t expect this key sticking point to be resolved in the next three weeks, even if something is worked out to delay the implementation of the cliff. And don’t expect the parties to resolve their fundamental disagreement about American public policy either. Crisis politics will be with us for months to come, at least.