Republican U.S. senators opposed to Obamacare said the best alternative would be a narrower system of tax credits for Americans to buy health insurance without any of the mandates for people or companies to participate.
The proposal today by Senators Orrin Hatch of Utah, Richard Burr of North Carolina and Tom Coburn of Oklahoma is a response to criticism from President Barack Obama that Republicans have offered no credible alternatives to his $1.4 trillion expansion of the U.S. health-care system. The senators’ plan came with no estimate of its costs or a timetable for formal legislation.
Aides to the senators said they don’t expect any Obamacare replacement plan to be seriously considered by Congress before the next U.S. presidential election, which is more than two years away. In the meantime, they need to build a base for what that alternative may be, said Robert Blendon, a professor of health policy at the Harvard School of Public Health in Boston.
The Fate of Obamacare
“There’s no way a Republican can run for president in 2016 without having a major health-care plan,” Blendon said in a phone interview.
The 2010 Patient Protection and Affordable Care Act known as Obamacare mandated an end to discrimination against people with pre-existing health conditions and required that all insurance policies this year meet minimum coverage rules in return for an obligation that most Americans obtain insurance or pay a fine. It also requires companies with 50 or more workers to offer “affordable” coverage by 2015 or pay a penalty.
Tax Credits
The law set up government-run insurance exchanges where Americans can buy private health plans with the help of federal tax credits and expanded eligibility in some state-run Medicaid programs for the poor.
The Republicans’ proposal would do away with the mandates while providing tax credits to purchase insurance for people earning less than three times the poverty level, or about $70,650 for a family of four. Obamacare’s expansion of Medicaid would be repealed and states would receive a capped amount for the program based on their populations of women, children and families under the poverty level.
To raise money for the tax credits, the plan would cap the value of employer-sponsored insurance exempt from federal income tax. There is currently no such cap, which the senators’ aides said would lead to pressure from workers and their employers to reduce health insurance premiums.
The senators said they would guarantee that private insurance could be obtained without consideration of illness or pre-existing conditions for Americans who maintain continuous coverage. People who experience a gap in their coverage would be subject to medical underwriting, in which insurers would charge them more based on their health.
The senators’ aides said the new law’s sputtering start and complaints about rising premiums and coverage requirements will build pressure for an alternative. A Democratically controlled Congress passed the law in 2010 with no Republican support.
Obama’s term as president doesn’t expire until January 2017. His fellow Democrats now have a 10-seat majority in the U.S. Senate, while Republicans control the House of Representatives.

Last week, the New York Times reported that venerable Dow Jones Industrial Average component Coca-Cola Co. was awakening to the impact of climate change on its business.
The increase in unpredictable weather, droughts, floods and other climate-related events was disrupting the company’s product supply. Some of their “essential ingredients” are now under threat. Global warming, according to the article, is being seen “as a force that contributes to lower gross domestic products, higher food and commodity costs, broken supply chains and increased financial risk.”
This debate is no longer about whether global warming is real (it is) or whether humans are the most likely cause (you are), but rather, some very interesting and different questions that might be more professionally relevant to finance: How is this going to affect business? What are the investing consequences? Who will be the financial winners and losers of climate change?
Investors should be considering this as a fight over market share, not a scientific debate. That is the approach taken by McKenzie Funk in a new book, “Windfall: The Booming Business of Global Warming.” The impact is across many industries. It’s time to throw out your preconceptions of climate change as a fight between green hippies and Big Oil. This is far broader and more complex. And it goes far beyond energy, to include agriculture, insurance, transportation, construction, recreation, real estate, energy exploration, food production, health care, minerals and even finance.
The culturally constructed ignorance known as “agnotology” has been driven primarily by the oil and coal industries. Funk argues that we are about to move beyond that faux debate to a more important battle between even larger interests. Consider:
Insurers stand to make larger payouts because of more severe weather and more frequent natural disasters. However, this will inevitably lead to appreciable higher insurance premiums and potentially rising profits.
The travel and hotel industry is facing specific challenges. Ski resorts that were in prime snow making areas may find themselves no longer ideally located; warm weather destinations boasting access to reefs for snorkeling and scuba diving have troubles as reefs die out.
Energy exploration and mining is about to get a huge boost as formerly inaccessible Arctic regions are soon to have huge untapped resources exposed. Shipping across formerly unnavigable seas could alter transportation costs and ship designs.
Energy should no longer be thought of as a fight between clean sources (wind, solar) and dirty carbon (oil, coal) but rather a hierarchy of energy, with natural gas likely to be the big winner.
Agriculture is turning to genetically modified crops to create drought-resistant and heat-tolerant varieties. Disease carrying insects are now traveling farther north, creating a potential health-care problem.
These changes haven’t gone unnoticed by financial service firms. As Wired magazine reported in its February issue, firms such as Schroders Plc and Summit Global Management Inc. have plowed into water rights and farmland. The expectations are that “drought and food shortages can mean big profit.” Jeremy Grantham has made similar observations and GM crops.
My perspective on global warming is different than some. As a car and boat enthusiast, the various gasoline-powered vehicles I own crank out a few thousand horsepower and generate a not-insignificant amount of pollution. However, I don’t pretend climate change is a hoax or that it won’t matter in the future. So long as creating pollution is cheap and legal, we won’t see many people changing personal behavior. The most likely fix for this is some form of a carbon tax.
But the bigger issue is the financial consequences. Investors are going to see companies increasingly affected by climate change. For those of you who still are fighting the science — sorry to tell you, the debate has moved on. This is rapidly becoming a fight over market share, with big shifts in cost structure, revenue and profits.
Too many people have had their heads in the sand. It is time to start making some decisions based on possible investing outcomes, not pseudo-science. To those who figure this out, a green fortune awaits — in both senses of the word.

Deep cuts in U.S. food-stamp spending sought by House Republicans were averted in a tentative agreement on a much-delayed agriculture bill, according to a congressional aide familiar with the matter.
The proposed farm legislation crafted by U.S. lawmakers, billed as saving $24 billion through food-stamp cuts and the end of a direct-payment program for farmers, may advance to the Senate after a vote in the House of Representatives that could take place as soon as Jan. 29.
By approving a plan that largely keeps food stamps intact and preserves most farm subsidies, an urban-rural coalition has been maintained amid a tough political environment that saw an earlier plan rejected in the House. If it passes, the agreement would be another bipartisan achievement by a Congress faulted for a lack of legislative success.
Members of the House and Senate agriculture conference committee are being asked to sign off on the plan today, after weekend talks. The House plans to act before leaving town this week for party strategy meetings.
Some of the savings may go to compensate counties with large swaths of untaxed federal land, a $450 million item House Speaker John Boehner assured lawmakers earlier this month would be in the bill.
Bunge, Ace
The bill to reauthorize U.S. Department of Agriculture programs governs farm subsidies, which encourages planting of soybeans, cotton and other crops that lower materials costs for commodity processors including Bunge Ltd. (BG) The bill subsidizes crop-insurers such as Ace Ltd. (ACE) and funds purchases at Kroger Co. (KR) and other grocers through food stamps, its biggest expense.
The farm-bill accord would be a third bipartisan deal by the current Congress, which passed a budget last month and cleared a $1.1 trillion spending bill on Jan. 16. The five-year farm legislation would end an aid program that makes direct payments to farmers and cost about $50 billion over 10 years, and reduces food stamps. Much of the subsidy spending was restored in other programs.
The agreement reached on food stamps would cut spending by $8 billion over 10 years, or about one-fifth of the $40 billion sought by House Republicans. Negotiators agreed to tighten a provision that let states give residents as little as $1 a year in heating assistance to qualify them for an average of $1,080 in additional nutrition aid.
Target, Supervalu
Republicans successfully sought to lift the “heat and eat” threshold to $20, while Democrats proposed $10. The higher level creates almost $9 billion in savings, some of would be plowed back into a $200 million pilot program that lets 10 states toughen work requirements and boosts spending for food banks by about $200 million for 10 years, said the congressional aide who requested anonymity to discuss internal talks.
Food stamps used at retailers such as Target Corp. (TGT) and Supervalu Inc. (SVU) cost a record $76.1 billion in fiscal 2013, or about 12 percent of the $650 billion a year Americans spend on groceries. About 47.4 million Americans used the program in October, the most recent month available, the U.S. Department of Agriculture said Jan. 10.
Almost half of all food-stamp redemptions are in big-box supercenters such as Wal-Mart Stores Inc., while most of the rest are in chains such as Safeway Inc., (SFY) according to data collected by Bloomberg.
Lottery Ban
The farm bill would also forbid food stamps for lottery winners, an idea supported in both chambers, and restrict aid for college students. Not included was a Republican plan to tighten state eligibility requirements, a projected savings of $11.6 billion, or a $19 billion reduction by reducing waivers states can give childless adults who would otherwise face work requirements or time limits under the Supplemental Nutrition Assistance Program, the technical name for food stamps.
Contested proposals over meat labeling and state laws governing farming practices are still being negotiated, while a plan to involve the government in managing dairy supplies will be modified to gain support from House Speaker John Boehner.
Companies including Tyson Foods Inc. have called for country-of-origin labeling, a part of farm bills since 2002, to be weakened after complaints about the labeling from Mexico and Canada before the World Trade Organization the U.S. has lost. Last year the USDA tightened the rules, eliminating the ability for companies to merely say the beef was from North America and requiring separate disclosures to say where beef, lamb, pork, chicken and goat were born, raised and slaughtered.
Retaliation Seen
Opponents had sought to have legislators ease the label rules as part of the every-five-year rewrite of farm-policy legislation. Those efforts were unsuccessful, according to a letter today to farm-bill negotiators by groups including the National Cattlemen’s Beef Association and National Chicken Council.
On commodity subsidies, the bill combines a House push to raise so-called target prices under which the government will subsidize farmers with the Senate approach that emphasizes more insurance aid.
As the cost to farm has increased and crop acreage has shifted from wheat and cotton to soybeans and corn in the past 20 years, price and acreage calculations for aid have been seen as archaic, though tying subsidies too closely to market conditions increases the chance of trade retaliation through the World Trade Organization.
‘Family Farmer’
Payment limits under commodity programs would be capped at $125,000 per individual or $250,000 per couple, with the definition of a “family farmer” left up to the USDA for definition purposes.
Crop insurance, which paid out a record $17 billion after the 2012 drought, would include requirements that farmers follow conservation plans on their land to qualify for federal subsidies. So-called conservation compliance is included, while limits on subsidies for wealthier farmers receiving assistance on paying premiums, supported by the Senate, isn’t in the bill.
Congressional passage would put in place a new law to succeed the previous bill passed in 2008. An extension of that law expired Sept. 30, potentially forcing the USDA to re-implement farm programs governed by language the from 1949 law that underlies policy and potentially doubling dairy prices.
Agriculture Secretary Tom Vilsack has said the department is focusing on implementing a new law rather than re-creating an old one because he’s confident Congress will pass the legislation. The department won’t change paths unless he’s convinced otherwise, the secretary said earlier this month.

The vice chairman of the Bitcoin Foundation was charged by federal prosecutors with conspiring to launder more than $1 million in the virtual currency, the latest charges tied to the illicit online bazaar Silk Road.
Charlie Shrem, 24, was arrested yesterday as he arrived at John F. Kennedy International Airport in New York after giving a speech in Amsterdam. In addition to his role with the foundation, an industry representative to regulators formed to oversee the currency’s software protocol, he was also chief executive officer of BitInstant, a Bitcoin exchange company.
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By charging Shrem, a prominent evangelist for the currency who prosecutors called a “Bitcoin millionaire” at his bail hearing, the government has reached into the circle of people responsible for the promotion and standardization of the currency.
“Bitcoin is in the process of getting institutionalized,” said Gil Luria, an analyst at Wedbush Securities Inc. in Los Angeles. “Early on it was exploited by bad guys because it was still very raw and accessible,” he said. “As more investors and businesses get involved, it’s going to get harder and harder to use it for illicit purposes.”
Is Bitcoin Real Money?
Shrem, of New York, was freed on $1 million bond, subject to his remaining under house arrest, after prosecutors said he was a flight risk because of his frequent international travels, his claim to have a net worth of $6 million and to own a plane.
Photographer: Gerard Til/Hollandse Hoogte via Redux
Keynote speaker Charlie Shrem, vice chairman of the Bitcoin Foundation, at an event in… Read More
Public Ledger
Bitcoin was introduced in 2008 by a programmer or group of programmers under the name Satoshi Nakamoto. It has no central issuing authority, and uses a public ledger to verify encrypted transactions. It has gained traction with merchants selling everything from Sacramento Kings basketball tickets to kitchen mixers on
Cameron and Tyler Winklevoss, who are seeking regulatory approval for a Bitcoin exchange-traded fund, invested more than $1 million in BitInstant. The Winklevoss brothers aren’t under investigation in the case, a person familiar with the matter said.
In a statement today, the Winklevoss brothers said BitInstant “made a commitment to us that they would abide by all applicable laws,” and that they were passive investors in the company.
“Truly innovative business models don’t need to resort to old-fashioned law-breaking, and when Bitcoins, like any traditional currency, are laundered and used to fuel criminal activity, law enforcement has no choice but to act,” Manhattan U.S. Attorney Preet Bharara said today in a statement. Bitcoin had dropped by 6.4 percent at 5:36 p.m., according to the CoinDesk Bitcoin Price Index.
Brooklyn College
Shrem, of New York, discovered Bitcoins on a website in early 2011, when he was a senior at Brooklyn College, Bloomberg Businessweek reported in April. While there, he started BitInstant, which allowed its customers to purchase the digital currency via more than 700,000 stores, including Wal-Mart Stores Inc. and Walgreen Co.’s Duane Reade.
Another of BitInstant’s investors was Roger Ver, who ran for California State Assembly in 2000 as a Libertarian. Shrem called Ver “Bitcoin Jesus” for the way he promoted the currency by giving away coins to anyone who would take them.
Federal prosecutors first charged Ross William Ulbricht, the alleged operator of Silk Road who used the name “Dread Pirate Roberts,” last October for running the online marketplace from January 2011 to last September. Last month, Bharara’s office charged three more former Silk Road employees with helping run the website. All of the defendants have pleaded not guilty in Manhattan federal court.
Robert Faiella
Also charged today was Robert Faiella, accused of being an underground Bitcoin exchanger tied to Silk Road. The two men are accused of engaging in a scheme to sell Bitcoins to Silk Road users, allowing them to buy and sell illegal drugs anonymously and beyond the reach of law enforcement authorities.
They are charged with conspiring to commit money laundering and operating an unlicensed money-transmitting business. Shrem is also charged with willfully failing to file suspicious activity reports about Faiella’s transactions through his company, in violation of the Bank Secrecy Act.
Prosecutors said the men could face more than a decade in prison if convicted.
“Working together, Shrem and Faiella exchanged over $1 million in cash for Bitcoins for the benefit of Silk Road users, so that the users could, in turn, make illegal purchases on Silk Road,” Bharara said, adding that the probe is “ongoing.”
Bail Hearing
Shrem, whose company ceased operations around July 2013, made his initial court appearance today before U.S. Magistrate Judge Henry Pitman in Manhattan. The judge said he may be freed on bail and remain at his parents’ Brooklyn home under electronic monitoring. Shrem didn’t enter a plea.
With close-cropped hair and a beard, Shrem wore a charcoal gray hooded sweatshirt, jeans and loafers at his bail hearing, with his parents and other relatives in the courtroom.
Assistant U.S. Attorney Serrin Turner argued that Shrem shouldn’t be freed on bond, calling him a “Bitcoin millionaire” who has “a strong incentive to flee.”
Turner said Shrem had bragged he owned his own plane and told court officials in an interview after his arrest that he had a net worth of more than $6 million. Defense lawyer Keith Miller told the judge that the government had miscalculated his client’s wealth.
‘Strong Intent’
“Not only does he face a strong incentive to flee, Mr. Shrem has voiced a strong intent to flee,” Serrin told Pitman, and played an October 2012 video in which Shrem discusses the government’s probe of Bitcoin operators.
“The thing is, what the government can also do is try to arrest or take down companies that help push Bitcoin ahead. So our company, which acts as a bridge between Bitcoin and dollars, were it taken out, it’ll be, you know, Bitcoin would take a hit,” Shrem said. “But we have contingency plans,” Shrem tells the interviewer. “I have a plane ticket ready to take me to Singapore. There’s another corporation already set up.”
Turner said Shrem has taken at least 16 international trips since 2007, and has traveled to at least nine countries since 2012, including Turkey, Panama, Aruba, Mexico, the Netherlands, Bahamas and Iceland. The judge ordered Shrem to surrender his passport and other travel documents.
Faiella, who was arrested today at his Florida home, was ordered held in custody until a hearing Jan. 29 in Fort Myers.
Russell Rosenthal, a federal defender who represented Faiella today, declined to comment about his client’s case.
Faiella, 52, is accused of running his illegal exchange on the Silk Road website. Using the name “BTCKing” he sold the currency to users seeking to buy illegal drugs on the site, the U.S. said. Shrem bought drugs on Silk Road, and was “fully aware that Silk Road was a drug-trafficking website,” the government said.
“Shrem knowingly facilitated Faiella’s business with the company in order to maintain Faiella’s business as a lucrative source of company revenue,” Bharara said.
Shrem was accused of knowingly allowing Faiella to use his company’s services to buy Bitcoins for Silk Road customers, and also of personally processing Faiella’s orders, giving him discounts on his high-volume transactions and failing to file any suspicious activity reports.
Parted Ways
Shrem and Faiella parted ways after the company stopped accepting cash payments for Bitcoins in late 2012, the U.S. alleged. Faiella temporarily shut down his service as a result and later resumed operating on Silk Road in April 2013 without Shrem’s company’s assistance, exchanging tens of thousands of dollars a week until Silk Road’s website was shut down by law enforcement authorities in October, prosecutors alleged.
Earlier this month, about 29,600 Bitcoins worth $28 million were seized from Silk Road. The forfeiture order, signed Jan. 15 by U.S. District Judge J. Paul Oetken, was the largest forfeiture of Bitcoins, according to the government.
Jinyoung Englund, a spokeswoman for the Bitcoin Foundation, said in an e-mailed statement that the group was “surprised and shocked” by the charges.
“We take these allegations seriously and do not condone illegal activity,” she said.