RSS Feed MenuEighteen months ago, the country’s largest small business lobby, the National Federation of Independent Business, seemed poised to join the advocates of large healthcare reform. It united with the Service Employees International Union and the American Association of Retired Persons to fund the “Divided We Fail” campaign urging a universal healthcare system. The Divided We Fail website still stands, but its advertisements have vanished from television. The NFIB has resumed the fierce oppositional stance it took 16 years ago against the Clinton administration’s plans.
When they tell the story of the Obama administration, the loss of the NFIB’s support could nicely symbolize the crucial decisions of the first few months. First the stimulus, now healthcare have been written as ideological payoffs to the left-most faction of the president’s own party.
On the big issues, the president has unnecessarily multiplied the number of his opponents and grossly over-rewarded his core supporters.
Imagine this alternative:
Suppose the president had done a cheaper one-year stimulus that had cost $400 billion not $800 billion. Suppose he had written a restrained budget for 2010 that did not (as his actual budget does) threaten to overwhelm the country with debt. He’d now have a lot more room to spend money on healthcare! And if liberal Democrats in Congress had objected, he could have muscled them by counter-arguing that they were jeopardizing a once in a lifetime opportunity to insure the uninsured.
Then propose a plan that mandates all to buy insurance, that offers subsidies and a connector to help those who cannot afford it, and that funds the plan (as the Heritage Foundation recommended in 1990!) with a tax on more generous benefits. Omit the surtaxes and payroll taxes that alienate small business. Small business should have been the administration’s ally! Omit the so-called public option – that’s the left wing’s equivalent of abolishing Social Security. Hire Stuart Butler as deputy director of your White House health operation and take care to listen to him.
Write a plan that could command 70% public support. Build outward from your base, rather than digging deeper into it. That’s what Ronald Reagan did with tax reform in 1986. It’s what Bill Clinton and Newt Gingrich did together with welfare reform in the 1990s. That’s how everything important and enduring gets done.
What you’re doing now by contrast follows the model for division and failure set by Bill Clinton with healthcare and George W. Bush with Social Security reform. You are tampering with a system vitally important to tens of millions of people. They may be anxious about the system’s future, but the large majority of them want to protect what they have now – and fear that change could be for the worse. They have no comprehension of the details of your proposal, no time to study them, and no capacity to analyze them. They will be guided by their representatives, their accepted political leaders, and their trusted policy elites. They will be reassured by unanimity, frightened by division.
You’ve been doing nothing to foster unanimity. Instead, you’ve been wooing big industry players one by one – as if the most cynical left-wing caricature of capitalist politics actually described reality. (“Big business controls everything – get the manufacturers of top hats and the monocle grinders on your side, and you’ve won the battle.”)
There’s no question that your Democratic majorities in Congress will pass something by the end of the year. But as things are going, it will be something that could amount to nothing. If you fail to get a substantial reform, don’t blame the interest groups, the Republicans, or the inertia of the political system. The culprit will be your own rigidity – and a smallness of spirit that could not grow to equal your opportunities.
sinz54 // Jul 23, 2009 at 10:27 am
“….with a tax on more generous benefits.”
That was a non-starter when McCain proposed it. Because all those workers in large corporations who enjoy generous benefits didn’t take those jobs for the generous benefits. Typically they didn’t find out what was in the package until after they started work.
So what you’re proposing is to raise taxes on the middle class. That’s a political non-starter. It may also end up punishing existing union contracts, in which workers agreed to wage cuts as long as they could keep all their health insurance benefits unchanged.
Alternatively, if you raised the taxes on the employers, that would be a disincentive for new small startup companies to offer generous coverage at all.
You would be punishing both employers and workers for having been grandfathered into the FDR system of group health insurance. They weren’t responsible for it, and now they’re going to be socked for it.
Any health care reform is going to have to promise to leave the group health insurance system (with all its tax-free benefits) unchanged, or else it will totally alienate all those millions of workers.
sinz54 // Jul 23, 2009 at 10:30 am
One more thing. The cost of health care has risen so dramatically since 1990 that even if you taxed more generous benefits, you couldn’t pay for health care reform. Especially in times of high unemployment like today–all those unemployed people are going to demand subsidies to let them keep their health care even though they have no income.
joemarier // Jul 23, 2009 at 11:08 am
The Public Option is actually the left’s equivalent of creating personal accounts for Social Security. Single-payer is the left’s equivalent of abolishing Social Security.
sinz54 // Jul 23, 2009 at 12:33 pm
joemarier: On their own blogs and in their own think-tanks, the Left regards the public option as the first step to single-payer. Their plan is that the public option will draw thousands of employers and tens of millions of workers away from private insurers, so that the private insurers can no longer make a decent profit and will leave the market, leaving the public option as the only remaining general insurer.
MacandCheese // Jul 23, 2009 at 4:08 pm
David,
You’re entirely right about all of this. You only failed to acknowledge that Obama’s mistakes are driven not only by ideology and a desire to appease his constituencies on the far left, but by his outsized ego and his unshakable belief in his own infallibility.
dragonlady // Jul 24, 2009 at 8:47 pm
sinz, what are you willing to sacrifice to reform health care? Should the emphasis be on lowering costs or universal coverage? I prefer the former since statistically, the uninsured is comprised mostly of those who can afford care but chose not to get it to include the indestructible youth, people in between jobs, or illegals. It seems to me that we want to have our cake and eat it, too. We want everyone to be covered, want costs controlled, but no one wants to give up any of their benefits or freedom. This is pure fantasy. We have costly health care because A) we demand the best, not the cheapest treatment B) which leads to more expensive drugs and technology) and C) we have a growing elderly population. I want the govt to fix Medicare/Medicaid first and level with us. If we all need to pay a little more in taxes to fix these programs and provide the unemployed a no-frills/catastrophic type of coverage, I would be open to that. Or if the govt needs to regulate the health insurance market more, I’m open to that, provided they do in a smart manner. What I am not open to is cramming a solution down everyone’s throats that impacts nearly 20% of our economy. And I’m not open to giving up the freedom to decide with my doctor what is the best course of treatment for my care.
djj // Jul 25, 2009 at 12:33 am
Universal coverage could have been enacted a month ago if the NEA had supported it. The teachers unions had 1 out of 8 delegates at the Democratic National Convention which is more than enough clout to make sure something happens if they really want it to, but no, all they are concerned about is protecting their gold-plated state and local plans. The NEA web site says:
NEA also believes that reform must:
* Ensure the availability and security of employment-based health benefit plans. The employment-based system is a proven and effective way for workers and their employers to mutually agree upon the health benefit packages that make the most sense for them. Health care reform must not disrupt this system.
* Guarantee that the employee tax exclusion for health benefits is not limited or capped in any way. Over the course of their careers, many public education employees have traded salary increases for the long term security of a comprehensive health plan. Telling hard-working employees that benefits will be cut or that they will pay more taxes would unfairly penalize them. A tax on salaries above a certain amount would also be unfair to experienced educators who, after decades of dedicated service, have climbed to the top of their salary schedules. Limiting or capping the tax exclusion for health benefits could have a disastrous effect on public education by discouraging highly qualified workers from entering or staying in the profession.
* Maintain the ability of workers and employers to determine the appropriate level of health care benefits available to both active and retired employees, including the ability to negotiate above any basic benefit plan floor that might be legislated.
* Recognize and accommodate the specific circumstances of public sector employers, including their tax status. For example, proposals that include employer incentives to encourage continuation of employer-sponsored health care benefits should be mirrored in the public and private sectors.
(http://www.nea.org/home/19380.htm)
And Obama, Waxman, Baucus, and all the rest are but NEA sock puppets. If the Dems in Congress can’t stand up to their interest groups and at a minimum consolidate the federal direct care systems (i.e. each Service’s hospital system in DOD, the VA hospitals, the Indian Health hospitals and clinics, and the HRSA community clinics) and reap the billions in available savings there, then their bills don’t even deserve the label “health reform”
sinz54 // Jul 25, 2009 at 9:55 am
djj cites NEA: “Guarantee that the employee tax exclusion for health benefits is not limited or capped in any way. Over the course of their careers, many public education employees have traded salary increases for the long term security of a comprehensive health plan.”
It’s not just the NEA who’s worried about that. In recent years, members of many unions, including the UAW, have traded wage raises for keeping their generous health benefits. If those health benefits are taxed, reducing the real after-tax benefit, that would not only alienate these workers from the Obama administration, but it might also result in lawsuits on the grounds that taxing health benefits represents a violation of existing union contracts.