Whittling It Down To Nothing

by dday

Unlike in 1994, when The New Republic allowed an abominable article by Betsy McCaughey to codify the Villager mindset on health care, this year they have one of the brightest wonks in the business, Jon Cohn, driving their coverage. And this article about the pitfalls of a “just pass any bill” strategy is required reading.

Notwithstanding the predictable fits-and-starts of the legislative process, it seems likely that Obama will have a bill to sign by year’s end, thereby accomplishing what the Clintons famously could not. But then what? Having crafted a bill that can pass Congress, will Obama be signing a bill that people actually like? It’s a question best answered by examining another episode of the past–one that, although a mere footnote in political history, is fraught with warnings for today’s reformers.

The episode is the fight over the Medicare Catastrophic Coverage Act, which President Reagan signed in 1988. Its purpose was to plug some of the emerging gaps in the Medicare program: If you stayed in the hospital too long, Medicare just stopped paying the bills. The Act extended hospital coverage indefinitely, capped out-of-pocket spending for beneficiaries, and offered partial coverage of prescription drugs, among other things.

Or at least that’s what the law was supposed to do. After the bill passed with overwhelming, bipartisan support, a backlash developed, memorably culminating in a “riot” of angry seniors who chased a beleaguered Dan Rostenkowski–then chairman of the House Ways and Means Committee–into his car after a Chicago meeting. Less than two years after passage, before the bill’s implementation, Congress voted to repeal the act, again with sweeping margins.

Basically, the program only provided a catastrophic care benefit to a small amount of seniors who faced extended hospital stays, and because of a desire to keep the bill revenue-neutral, all seniors paid for the program in premiums and surcharges. Those charges were modest, but people got the perception that they were paying more for nothing. As Cohn explains, the parallels are eerie.

Fast forward two decades, take a closer look at what’s happening on Capitol Hill, and you may notice some familiar storylines. In order to make sure reform can pay for itself, lawmakers are talking about slowing down implementation, so that the program is not fully on line until 2014. They’re also talking about offering fewer subsidies to help people obtain insurance. In a nod to centrists who don’t like the idea of too much government, there’s a strong push to gut or even eliminate proposals for the public insurance plan, which was supposed to provide security for individuals and competition for private insurers […]

Put aside, for a moment, the policy merits of these moves. The politics are lousy. Obama would be in danger of producing legislation that seems to offer little up-front benefit, particularly for the electorally vital middle class. And if some of these people end up paying even modestly higher taxes to help finance reform they’re not likely to be happy about it. It’s hard to imagine such legislation provoking a backlash that could produce total repeal. It’s not so hard to imagine such legislation creating bad political feelings, the kind that linger around until the next Election Day and pave the way for legislative retrenchment later on.

Let’s bring back the policy merits: they too are lousy. Smaller subsidies along with an individual mandate will strain individual budgets, and a lack of a check on the insurance companies with no public option and a weak national insurance exchange will allow that strain to worsen with ever-expanding premiums. Slowing implementation just keeps in place a broken system causing 18,000 Americans to die every year.

Whatever mash of policies that come out of Washington, in health care – unlike some other legislation – practically the entire population will be intimately familiar with the consequences. It would be nearly impossible to distort the benefits or demonize the negative effects. It will be what it will be. And so designing a policy based on bipartisanship rather than effectiveness is a complete folly. Democrats and the White House have basically put forward this health care reform as a signature accomplishment. If they design something where the benefits aren’t readily apparent, and people’s premiums remain high, the public will get the message.

If Harry Reid and Nancy Pelosi muscle health reform through Congress, if President Barack Obama signs a bill in the Rose Garden and hands the pen to an ailing Sen. Ted Kennedy, if health reform, in other words, passes with fanfare and attention, Democrats own it. This will not be a quiet accomplishment. They will have told the American people that on this historic day, under this historic administration, they have begun to bend the curve and and tame the insurers and guarantee coverage and generally fix this huge problem that so many before have promised action on but so few have succeeded in tackling.

And if, 10 years down the road, the plight of the middle class has worsened and cost growth hasn’t slowed and the only real difference is that more tax dollars go towards low-income subsidies, Democrats will be blamed for that. Their arguments will have less credibility. Republicans will run ads about “the last time a Democrat told you he could reform American health care.” […] If Democrats pass a bill that gets the policy wrong, they run a real risk of losing trust on what’s arguably their core issue. This is high-stakes stuff.

It’s not that I disagree with Digby at all – now is a rare chance to enact universal health care, and we should not shy away from it because it doesn’t meet every single proper contour. But there are undeniable consequences to a bad policy. And, I would add, needless consequences. For once, the most popular policies line up with what will likely be the most cost-effective ones that provide the greatest tangible benefits. I suspect that the CBO will score a public option that uses Medicare rates, like the one in the House, in such a way that proves it would save both the federal budget and ordinary Americans hundreds of billions of dollars. Heck, the studies have already been done. The same with adding subsidies, which would attract more people into compliance with the system and lower the hidden cost of treating the uninsured.

Considering the fact that Democrats need only 50 votes to enact this reform, a fact that even the White House acknowledges, and considering the statistical fact of 60 Democratic Senators, there is absolutely no reason to build the policy around bipartisan support in Washington, but bipartisan support in the COUNTRY. Not only will there be massive goodwill for enacting decent health care reform, but a massive political backlash if that reform is wanting or if conservative Democrats, who are the only ones that can stop the policy at this point, shut it down. Bernie Sanders has this absolutely right.

Look, the Democrats said give us 60 votes so we can come up with something. They gave it to us! I’m not a Democrat, I’m an Independent, but I caucus with the Democrats. They gave us 60 votes. So how many do we need? Seventy? Eighty? I understand that there are some Democrats, without ascribing motives, who are not comfortable voting for a strong public plan period. But I think it is not asking too much that they vote against the Republican filibuster […]

Look, I like Chuck Grassley. But people in the country are not sitting around saying, “We need a good bipartisan bill! That’s what we need!'” They’re saying we need good, universal coverage for every American, man, woman, and child. And it needs to be affordable. If Chuck Grassley and Olympia Snowe and these other nice people I know decide to vote against it, that’s fine. People in America aren’t sitting up nights worrying how they’ll vote. The goal should not be bipartisanship. It’s passing something that is strong and good.

There is good reason for short-term political optics to pass whatever can be passed. But limiting the possible, and sacrificing the long-term benefits of the policy, makes no sense. The Democratic leadership seems to have forgotten how to pressure its caucus, or at least the moderate members. They can withhold re-election funding. They can change committee assignments. They can deny legislation written by particular Senators to come to the floor. They can impose all sorts of hardships, and the threats can be wildly larger than the exchange – just vote against a Republican filibuster. Then you can vote against the bill if you like.

Capitulating to that moderate axis will mean a poor bill that will lose the support of the public. When life and death is at stake, we cannot afford an outcome, nor do we need to.

Update:

from digby…

I hope that nobody thinks I disagree with this on the basis of the post dday links above or this one about the Jon Cohn article he references. Of course we should pass the best possible bill we can pass and we should pressure the Democrats in whatever way we can to do so. I just draw the line at saying that if can’t have single payer there’s no point in passing a bill at all. It’s not just optics. It’s getting universal health care on the books after 65 years of trying. If they can get that with a public option and a legitimate financing framework, we would, in my view, be foolish to say it isn’t good enough and wait for another 20 years for the next bite of the apple.

And for those who say the public option is bullshit and nobody really knows what it is, read this by Jacob Hacker, one of the people who conceived of the idea in the first place. He isn’t an insurance company hack, he’s a progressive professor at Berkeley.

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