Tuesday, February 23, 2010

The Health Care Follies Continue

Clive Crook details the Presidential strategery behind the health-care summit while discussing President Obama's new proposal...

It's true that the proposal entrenches Democratic preferences rather than saying, "we are open to new ideas." But Republicans can hardly complain. Who believes they would have brought open minds to the summit in any event? But if Obama has decided on a Democrats-only strategy, one interesting question is what purpose Thursday's "bipartisan summit" is intended to serve.

The idea must be to put pressure on Democrats to fall into line--sweetening the pill of a measure many don't like (for any number of reasons) by making Republicans look ill-prepared and obstructionist for the cameras. Democrats might decide this works for them, but the Republicans will have to screw up quite badly on Thursday for voters at large to buy it. Going in, the whole event now looks too much like an ambush. Obama needed a bipartisan gesture or two for camouflage--some sign of good faith, sure to be rebuffed. The thinking must be that any such gestures would have made Democratic unity impossible. In other words, get the reform passed first; worry about public opinion later.
The proposal itself doesn't add much to the debate. The biggest new idea in the plan isn't tort reform or some other attempt to reach across the aisle -- it's a plan to stop excessive rate increases by health insurers without government approval. Peter Suderman does a nice job of summarizing the problem with price caps...

And given the widespread public frustration with insurers, it's probably politically savvy, too. It's also hard to oppose: Who could be against blocking excessive rate increases? After all, they are, by definition, excessive (or, depending on who's talking, unreasonable).

But the problem, of course, is that what constitutes excessive or unreasonable isn't easy to define. I was at a conference with a number of lawyers this weekend, and one of them joked about how great words like "reasonable" were for the profession. (How many lawyers does it take to define what "unreasonable" means? Well, how many do you have?) The idea is to create some legal wiggle room, but you tend to end up with absurdly circular definitions like Arizona's, which defined excessive insurance rate hikes as those that "are likely to produce an underwriting profit that is unreasonably high." It's excessive if it's unreasonable! Unreasonable if it's excessive! Feel free to ride this definitional merry-go-round until you puke.

Fun as that sounds, let's go ahead and answer some key cable-news questions in advance: Is Obama's proposed rate-review commission a death panel? Nope! But it could result in insurance companies denying coverage more than they would otherwise in order to meet premium requirements. Is it a government takeover of the country's health care system? Not exactly. But it gives the federal government a lot more authority over health insurers. So what is it then? If you guessed "a form of price controls," you're today's lucky winner. And, just like when Bill Clinton proposed them, medical price controls are a deeply problematic idea.
Cato's Michael Cannon points to a great line from the President's own economic advisor, Larry Summers...
Price and exchange controls inevitably create harmful economic distortions. Both the distortions and the economic damage get worse with time.
But I'm sure price controls will solve the problem of rising health care costs! In the believing in the tooth fairy department, Jon Chait is convinced there's a coming health-care "freakout" (annoying song possibility!) among conservatives...
Brian Darling at Red State speculates that the Democrats will fire or overrule the parliamentarian in order to pass their plan through reconciliation. Republicans actually did fire the parliamentarian in 2001, after he complicated their plans to push tax cuts through reconciliation, but this caused virtually no outcry. But Democrats aren't going to need to do so. The paranoia stems in part from a failure to understand the technicalities of what's going on here -- liberal policy wonks have been following this closely for the last month, but hardly anybody else has. There was some discussion last year of using reconciliation to pass the entire health care bill and avoid the filibuster. This ran into technical difficulties -- reconciliation can only be used for measures that principally effect revenues or outlays. So instead the Democrats passed a health care bill through the Senate using regular order.

Now, of course, the problem is that they can't mesh the Senate bill with the House bill using regular order, because Republicans will filibuster it. But most of the points of negotiation between House and Senate concern taxes and spending -- exactly the kinds of things that reconciliation is designed for. So it's fairly easy to just have the House pass the Senate bill, then use reconciliation to eliminate the Nebraska Medicaid subsidy and change the mix of taxes that pay for new coverage. Indeed, this process is probably easier than getting another 60 votes in the Senate would have been even if Martha Coakley had won.

You can imagine how this feels to conservatives. They've already run off the field, sprayed themselves with champagne and taunted the losing team's fans. And now the other team is saying the game is still on and they have a good chance to win. There may be nothing wrong at all with the process, but it's certainly going to feel like some kind of crime to the right-wing. The Democrats may not win, but I'm pretty sure they're going to try. The conservative freakout is going to be something to behold.
I'm starting to believe that the only people who really want the bill to pass are liberal bloggers and the President's team, if only so they have something they can point to as a success on this front. Trust me when I say this -- the freakout won't come from conservatives or even Republicans if this bill somehow passes. It'll come from independants. The conservatives, particularly the Tea Partiers, will see this as irredeemable proof that government is broken beyond belief, and will happily assist the GOP in sweeping away the Democratic House majority and getting close to evening (or even killing) the Democratic Senate majority (watching Joe Lieberamn become more powerful would be vastly entertaining). But independants who turned against health care reform and thought it was dead after Scott Brown's election will see this as evidence of dirty tricks. And conservatives who feel that way (and even others who acknowledge that politics ain't beanbag) will fan those same flames (and I'm starting to picture something akin to the Cow Days episode of South Park, when Kyle reinstates his original declaration of "Shenanigans!").

Mickey Kaus, who's in favor of reform, does a nice job mocking the idea that we're heading for a bill. I hope he's right, although I think Megan McArdle does a good job of explaining why he probably is...
Despite having declared the death of the health care bill before almost anything else, I don't want to say that the thing's impossible. But the House has lost three of the votes it used to pass their bill 220-215 . . . which means that you have to persuade someone (probably a Blue Dog) to vote for it, who already voted against it. Progressives have been making the almost-plausible argument that the public is going to treat a vote for the House or Senate bill as a vote for final passage, so Democrats might as well go ahead and pass the thing. But their best argument totally falls apart for those who originally voted no.

And that's the best case scenario. It assumes that you can keep Bart Stupak's pro-life caucus, even though it's unlikely that they'll be able to "fix" the Senate's more liberal abortion language in reconciliation. This is a pretty heroic assumption. If you lose many of the Stupak folks, then the bill's done; there is not a snowball's chance in hell that you are going to persuade any significant number of the prior "no" votes in the Democratic caucus to throw their careers on the pyre of Democratic health care ambitions.

...Reid says they'll be ready to do reconciliation within 60 days. Really? Democrats are going to pass a mongo, costly new entitlement right around tax day? The caucus might as well pass the hat for the GOP election fund. But if you delay it, you're leaving an unpopular bill very fresh in peoples' minds as they go into the 2010 elections.
I'm not quite ready to say this thing is dead, because some Democrats seem absolutely willing to drink Kool-Aid and enter the political afterlife. But it is telling that fewer and fewer of them seem willing to take big public stands on it. I assume the White House's goal for Thursday's health care summit would be to turn public opinion around enough that it rallies enough Democrats to the cause. But when the Washington Post isn't impressed with the President's proposal, it's hard to see the Democratic center (let alone the GOP) rallying behind it. The AP's reporting is probably prophetic on this one...
Starting over on health care, President Barack Obama knows his chances aren't looking much more promising. A year after he called for a far-reaching overhaul, Obama unveiled his most detailed plan yet on Monday. Realistically, he's just hoping to win a big enough slice to silence the talk of a failing presidency.

The 10-year, $1 trillion plan, like the current Democratic version in the Senate, would bring health insurance to more than 31 million Americans who now lack it. Government insurance wouldn't be included, a problem for Democratic progressives. Republicans are skeptical about where the money would come from — and about Obama's claim that the plan wouldn't raise the federal deficit.

Striking out in one fresh direction that should have wide appeal, Obama would give federal regulators new powers over the insurance industry, a reaction to a rash of double-digit premium hikes that have infuriated policy holders in California and other states.

The plan is supposed to be the starting point for Obama's televised, bipartisan health care summit Thursday — a new beginning after a year of wrangling and letting Congress take the lead. Yet Republicans were quick to dismiss it as a meld of two Democratic bills the public doesn't want. Democrats, while reaffirming their commitment to major changes, reacted cautiously, mindful that Obama is asking them to stake their political fortunes in the fall elections.

In the end, Americans who have listened to a year of talk about big changes in their health care, may see much smaller changes, if any. The president is likely to have to settle for much less than he wants — small-bore legislation that would smooth the rough edges of today's system but stop well short of coverage for nearly everyone.
Jennifer Rubin does a nice job of summarizing the possible (and hopefully likely) endgame. Personally, we thought this comment from James Taranto was particularly apt...
Obama is asking voters to believe that ObamaCare is a good idea and that the reason they think it is a bad idea is that he isn't good at persuasion. But if he can convince them of that, he can convince them of anything--which means that the claim that he is bad at persuasion is wildly false.
Maybe health care reform will be revived this week. I hope not. But you have to give the Left and the President credit for persistence, even if the persistence is politically ill-advised. Then again, that might describe a lot of things from this band of characters.

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