How happy is the healthcare compromise?
Do we still like President Obama? This seems like a question many liberals have been wrestling with as the first year of the young chief’s term wraps up. He’s made gestures toward his major campaign promises, but they are showing little substance. He has managed to negotiate a turnaround in the stock market, but unemployment is still rising. He declared a plan to close Guantanamo, but detainees are still languishing in legal turmoil. And the historic ACESA bill (American Climate and Energy Security Act) has stalled out in the House. But he’s at the pulpit, pushing for its support. So why can’t a popular president, who seems to be committed to a progressive agenda, and whose party commands a once-in-a-generation majority in Congress, manage to close on any of his primary agenda items?
American power is exercised by industry and professional groups. And the most powerful ones in the country are all arrayed against Mr. Obama. He has cut the Department of Defense budget for the first time in a decade, intentionally picking a fight with the military-industrial heavy hitters; his energy policies take aim at the bread and butter of America’s oil giants and auto barons; and now, the Democrats’ health care bill threatens to squeeze the profit margins of doctors, hospitals, pharmaceutical companies, and insurance conglomerates. This makes the bill an uphill battle, and one on which Obama has been hesitant to commit. Obama is notoriously averse to being on the losing side. On multiple occasions, he has declined to stump for party allies in local races where the odds seemed grim. So while Pelosi and the left wing of the party have stated in no uncertain terms that the public option is a non-negotiable part of any healthcare bill, center-right Blue Dog Dems from Southern districts have practically jumped ship, saying that government healthcare will never pass– all the while with the President remaining rhetorically aloof. So the question becomes this: is Obama using wise tactics to allow for the development of a politically feasible compromise bill that will finally make America into a mature democracy, or is he hedging his bets, fearing that this bill, like every comprehensive healthcare reform since LBJ, will soon go belly-up, and take his political capital with it?
If the president is riding the fence to spare his boots, we all have reason to fear. Without the popular leader’s visible support, it’s difficult to imagine a successful showdown in the House, where Democratic cohesion is loose and uncertain. But the case appears to be otherwise. Obama may not want to lose face, but he is committed to victory in some form on healthcare. Which means that whatever bill seems most likely to pass in the House should have his backing. At this point, it’s neither the worst or the best of all worlds. The amount of federal involvement in proposed measures has run the gamut. The now-recessed committee in charge of drafting a bill for the House produced a bill with no public option whatsoever (the committee chairman thought any government initiative would never pass); while some versions floated in the last few months have included a full-blown federal insurance competitor, with minimal buy-in costs and the power to negotiate with Big Pharma on the cost of drugs. What we have now is somewhere in the middle. Instead of a fully government-administered agency, the House bill posits a system wherein non-profit healthcare cooperatives would receive federal subsidies to provide low-cost healthcare to millions of Americans, while simultaneously expanding Medicare to insure millions more who perhaps can’t afford private insurance. It also provides Medicare the aforementioned ability to bargain with pharmaceutical manufacturers. In limbo is the much-talked-about “trigger mechanism,” whereby if insurance rates did not decrease by sufficient margins within a certain number of years, a full-fledged public option would automatically be put in place.
And that ain’t bad. In the comparative history of government healthcare in the West, great institutions are the inheritors of small beginnings. In the UK, as you may know, the NHS developed out of wartime provision of medicine to displaced city dwellers fleeing Nazi bombs. But after the war, the service proved so popular that it eventually became one of the most central elements in British governance. It is also the most expensive.
Our most expensive budget item is warfare. One reason why military budgets have ballooned since World War II is what economist call the endowment effect: people who would not be willing to spend an extra amount of money (viz., the cost for another fighter jet) are simultaneously unwilling to give up what they believe they already have (viz., the fighter jet) in exchange for the cost. This is irrational in the abstract, but points to a fundamental condition of human behavior: risk-aversion leads us to fear change, especially in fundamental provisions for our way of life. Even if we don’t feel we could afford to buy an extra amenity, we avoid selling a current amenity (even at a fair price) for fear of unintended consequences. What load was that amenity bearing, and how will my life change once it’s gone? I can never get rid of the clothes in my closet for the same reason. And I’m betting that ten years down the line (2012 apocalypse predictions notwithstanding), conservatives who wouldn’t spend a dime on socialized medicine today wouldn’t give it up for a million bucks. So what happens to a budget that can’t shrink? The only way to go is up.
