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The costs and benefits of the Republican strategy on health-care reform

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David Frum's post lambasting the Republicans for their unyielding obstructionism has been getting linked around, and for good reason. Whether you think it's right in the sense that Republicans should indeed have done something different, it's undoubtedly right in the sense that this was one of the central dynamics in the health-care debate:

At the beginning of this process we made a strategic decision: unlike, say, Democrats in 2001 when President Bush proposed his first tax cut, we would make no deal with the administration. No negotiations, no compromise, nothing. We were going for all the marbles. This would be Obama’s Waterloo – just as healthcare was Clinton’s in 1994.

Only, the hardliners overlooked a few key facts: Obama was elected with 53% of the vote, not Clinton’s 42%. The liberal block within the Democratic congressional caucus is bigger and stronger than it was in 1993-94. And of course the Democrats also remember their history, and also remember the consequences of their 1994 failure.

This time, when we went for all the marbles, we ended with none.

Could a deal have been reached? Who knows? But we do know that the gap between this plan and traditional Republican ideas is not very big. The Obama plan has a broad family resemblance to Mitt Romney’s Massachusetts plan. It builds on ideas developed at the Heritage Foundation in the early 1990s that formed the basis for Republican counter-proposals to Clintoncare in 1993-1994.

Barack Obama badly wanted Republican votes for his plan. Could we have leveraged his desire to align the plan more closely with conservative views? To finance it without redistributive taxes on productive enterprise – without weighing so heavily on small business – without expanding Medicaid? Too late now. They are all the law.

But you have to balance that against something Mitch McConnell has said: "What I tried to do and what John [Boehner] did very skillfully, as well, was to unify our members in opposition to it. Had we not done that, I don't think the public would have been as appalled as they became over the fact that the government was now running banks, insurance companies, car companies, taking over the student-loan business, which they're going to try to do in this health care bill, and taking over one-sixth of the economy. Public opinion can change, but it is affected by what elected officials do."

Put simply, if Republicans had worked with Democrats on health-care reform, the bill would not have been as unpopular. There was a zero-sum game between the politics and the policy. The strategy to make a moderate bill look like an extreme document relied on the optics of total Republican opposition coloring perceptions of the underlying legislation. Any move to exchange Republican votes for legislative concessions would have undercut the political case against the bill.

The normal way Republicans square that circle is that they're successful in blocking the legislation. Then it doesn't matter if the bill didn't include their ideas. But that strategy was disrupted by the 60 votes Democrats temporarily wielded. Happily for them, that didn't mean the bill became a more liberal document: As it turned out, conservative Democrats were willing to do a lot of the Republicans' policy work for them: They removed the public option and cut down the subsidies and killed the employer mandate. And the administration began with a proposal that was broadly centrist anyway. So though Republicans convinced themselves they hated this bill, most of their specific concerns were addressed. Their remaining arguments were largely wrong (it's a government takeover!) or disingenuous (it makes modest cuts in Medicare!).

Going forward, though, I doubt you'll see much cooperation on issue so long the odds remain on the side of obstructionism and inaction. For the minority party, opposing and killing the majority's initiatives is always the first-best political outcome. If the rules that make that a likely outcome are dismantled, then they're left with ineffective obstructionism, and I wonder how long their constituents and interest group supporters will tolerate that strategy.

Photo credit: Melina Mara/the Washington Post Photo.

By Ezra Klein  |  March 23, 2010; 7:55 AM ET
Categories:  Health Reform  
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Comments

the one difference that you don't bring up Ezra (and not in defense but in explanation) is that there don't seem to be any Democrats that want the government to run the financial sector from soup to nuts.

You do though have a large bloc of Dems that want single payer, Medicare for all. You can say all that you want that this is a conservative piece of legislation (and it absolutely is) but when you've got a fairly substantial bloc of the governing party (including the speaker and several key members of the Senate) that want the "government takeover" then its not wrong of republicans to be concerned about that IF their party stands for smaller government. Now there's plenty of hypocrisy there because if Republicans were all for smaller government they'd be for it in all situations (including the military).

I think this reason is why you saw all the rhetoric on healthcare (and the fact that its very personal and affects each and every one of us) while you do see faint glimmers of hope on bipartisanship on financial reform, cap and trade etc.

Again not an excuse, just an explanation and to that end Republicans did a LOT wrong in this healthcare debate.


now the same argument doesn't work for the idiotic blocking of judges, cabinet members, secretaries etc. That's just a sore loser from the 2008 election and they need to get over it.

Posted by: visionbrkr | March 23, 2010 8:45 AM | Report abuse

I liked the Frum piece and I think he is mostly right. The problem going forward is how can the problems in the bill be fixed. Those problems are severe and potentially very, very costly.

For the sake of argument, let's assume that the GOP regains control of the house this fall. And let's assume that within a year or two, it is evident that the death spiral is real and that premiums are expected to rise dramatically as are the subsidies needed to keep the system afloat. In addition, it becomes evident that millions of employees working for small to mid-size businesses will be forced into the exchanges. In order to keep the system from imploding you have to raise taxes on the middle class, strengthen the mandates and enact price controls. Ideally, you would also get rid of the tax exclusion. Who will do this politically difficult work? Will the GOP work with the Democrats to fix the problems in HCR?

Steve

Posted by: FatTriplet3 | March 23, 2010 8:59 AM | Report abuse

Do we know that "obstruction and inaction" is the best strategy? Will this maximize the number of seats Republicans pick up this fall?

In this Congress, has a single Republican Senator distinguished himself in any way, created a record that could fuel a Presidential run, or achieved anything that would get a bridge named after him back home?

Voting "no" is a pretty hard way to look Presidential or exemplify great leadership. Don't forget that one of George W. Bush's (or John McCain's) supposed electoral virtues was their bipartisanship.

Posted by: biz5th | March 23, 2010 9:12 AM | Report abuse

The party needs to split soon. The tea party looked like it might do the job, until it was co-opted by the nutjob wing of the establishment.

I think it would be good to talk about how the Democrats are mis-describing the bill as well. On the 11pm local news Sunday night – NBC News 4 (WRC) here in DC – U.S. Rep. Donna Edwards (D-MD) told a reporter that, now that it has passed, the health-care costs that until now troubled her district in Maryland “will go away.”

Maybe it's for the best though. Maybe the real work has to happen out of the spotlight. I'd really like people to take a deeper look at how popular the Indiana HSA plan for state employees became. People end up liking it better and it saves money. I think we see these very negative reactions when it's other people, whether they be faceless bureaucrats or evil Democrats and evil Republicans, or insurance companies cutting our benefits. Meanwhile, most of us are pretty used to living on a budget, stretching a dollar as far as we can, and picking services which provide us the best value. However, if we are stuck with the bronze, silver, and gold concept on the exchanges, we are going to lose our ability to innovate in the coverage market.

Posted by: staticvars | March 23, 2010 9:12 AM | Report abuse

Frum in a different part of his piece showed the Achilles' Heel of the Republicans, the 'except' factor. When it comes time to repeal the bill there will be great pressure to except the tax break for small business, then to except the possibility of boosting rates in the small group plan because one employee gets sick during the plan year and except--- , well you get the idea.

Downside of this bill? Mandates and responsibility provisions. Upside? Pretty much every other provision. And the working assumption among opponents to the left and right is that there is a deep pool of people who WANT to be uninsured. Well I don't see it. I am uninsured and in fact uninsurable (until the signing ceremony today plus 90 days) and know a lot of people in my situation. And nobody is happy about it. Will people resist paying for insurance if it means cutting back on beer, cigarette and drug money? Well yeah, I know people who chose cocaine or meth pipes and living in their car over paying rent. But most people that are functional enough to hold down regular jobs as a server or whatever want the ability to be able to go to the doctor and maybe take the day after they get released from the hospital off. As opposed to another friend of mine that after being hospitalized dragged herself to work the next day after release, she needed the tips to pay for her prescriptions.

I understand the concept of the Invincibles of being young, strong, healthy and oh not so incidentally having family resources to fall back onto in a pinch. But life is not like that for the working class. We have 50 million uninsured Americans and only a tiny fraction do so by choice because they would be happier surfing the North Shore or pursuing their dream of writing the next Great American Novel. Because Bohemia is not all it is cracked up to be.

Republicans are going to find they are trying to draw water from an empty well, once people start dealing with the law that exists (as it will later today) as opposed to the legislation that only existed in their imagination there will be no turning back.

Posted by: BruceWebb | March 23, 2010 9:18 AM | Report abuse

"For the sake of argument, let's assume" and "And let's assume that within a year or two," "are expected to rise dramatically", "In addition, it becomes evident"

Triplet if my grandmother had wheels she would be a bus. WHY should we assume or expect any of that? You need to make the reasoned argument FIRST. And then we can build some hypotheticals on top of that.

Posted by: BruceWebb | March 23, 2010 9:25 AM | Report abuse

Frum like usual is wrong. The Republicans given their hand did as much as anyone could hope for. Sure the bleating of those who aren't in on the lie is loud and after coming so close to killing it outright they were upset that it passed. But given the huge majorities the Democrats had and the huge popularity Obama had the Democrats end up passing Romenycare. And if the Republicans take control of the Presidency in 2012 they can likely gut the parts the really hate, the taxes and the subsidies.

And in addition since nothing big starts up until 2014 we're at least 6 years away from having a set up interest group to protect what has passed, and without a public option may never get such a group. It also means that every single health care horror story going forward becomes a result of "the Democrats and Obamacare" and the press releases will write themselves.

Posted by: endaround | March 23, 2010 9:29 AM | Report abuse

--"Put simply, if Republicans had worked with Democrats on health-care reform, the bill would not have been as unpopular."--

There is a difference, Klein, between popular/unpopular and right/wrong, a difference your career is spent ignoring.

The republicans may be hypocrites, but some of the principles to which they pay lip service are honorable ones.

Posted by: msoja | March 23, 2010 9:36 AM | Report abuse

The Republicans' behavior is making me think of the Black Knight in Monty Python's Holy Grail. "None shall pass!" They can't stop yelling belligerant insults, even after they've been reduced to a grotesque torso that might, under other circumstances, evoke empathy or pity. Time to pick up our coconuts and move on.

Posted by: durangodave | March 23, 2010 9:41 AM | Report abuse

Did any of these passed without opposition?
- Emancipation Proclamation by Lincoln
- Women's suffrage by Wilson
- Lend/Lease by FDR
- Desegregation of the military by Truman
- Civil Rights Act by Johnson

Who would stand against those today?

Posted by: RainyDayIntern | March 23, 2010 9:51 AM | Report abuse

My question is -- do you think this dynamic is really one created by our current political system (the Senate specifically), or do you think is unique to a moment of Democratic supermajority?

I mean there are two ways to see it. On one hand, the process of building a majority necessarily needs some engagement with the minority party. There is therefore always the possibility for the minority to exercise SOME leverage shifting policy. But the actual degree of that participation can vary enormously. Ted Kennedy took a major leadership role in passing NCLB, but his actual legislative changes are very hard to discern from Bush's fundamental law. Meanwhile, Chuck Grassley was able to kill the public option without even voting for the bill.

On the other hand, that variation VERY often seems to cut against the Democratic party. I will be very interested to see how a future Republican majority -- particularly one with a filibuster proof margin -- would actually govern. Will we see a "Max Baucus in the Finance committee" moment? Could you see an analogy to the influence Grassley exercised on this debate (or Graham seems likely to on climate/immigration), without ever contributing a vote? Somehow I doubt it -- which makes me wonder if the problem is NOT the structures of our government, but actually the Democratic Party.

Posted by: NS12345 | March 23, 2010 9:55 AM | Report abuse

Bruce,

I have been making those hypotheticals on these pages for weeks and weeks. For the Death Spiral see the interview with Uwe Reinhardt. There not ideas I made up. Google Mankiw, Martin Feldtein (especially his NYT piece last November), John Goodman (http://www.john-goodman-blog.com/obamacare-by-the-numbers/), Cato, Reason, etc. I think some of Goodman's links are silly BTW.

The purpose of the comment was to speculate that if things are as bad as they could be (not necassarily will be though I am pessimistic), who will make the changes. The Democrats have rammed through an unpopular and potentially dangerous piece of legislation. I agree with Frum and Yglesias and others that have pointed out the near impossibility of repeal. So who will fix these things. What will be the political calculus of the GOP?

Steve

Posted by: FatTriplet3 | March 23, 2010 10:04 AM | Report abuse

"When it comes time to repeal the bill there will be great pressure to except the tax break for small business"

What tax break for small business? There is no tax break for me whatsoever. My taxes are going to rise by a significant amount.

Estimates are that 9-17M people (CBO, Lewin Group) will lose their employee sponsored plan, as the penalty is less than the cost of coverage, meaning many of those people will move into subsidized plans, raising the cost of the bill. I am more concerned by estimates from BC/BS, AHIP, WellPoint, and the CBO that show premiums rising 50%-100%.

Posted by: staticvars | March 23, 2010 10:05 AM | Report abuse

The notion that Romneycare somehow is imbued with Republican principles because the gadfly politician whose name is attached to it is a Republican is nonsense. Romney is a fraud and should be shamed out of any intentions he has to further muddle what's left of the Grand Old Party.

Posted by: msoja | March 23, 2010 10:08 AM | Report abuse

Bruce,

Megan McCardle does a nice job explaining a lot of these issues in her March 21st chat in the NYT. You can find it here:

http://www.theatlantic.com/business/archive/2010/03/chat-tastic-blogger-megan-mcardle-explains-it-all-to-you/37792/

This from Clive Crook recently:

"Even so, the Democrats' claims for the reform have been dishonest in one crucial respect, and most voters understood this. It is right to provide guaranteed health insurance, but wrong to claim this great prize could be had, in effect, for nothing. Broadly based tax increases and fundamental reform to health care delivery will be needed to balance the books. Denying this was a mistake. What was worse--an insult to one's intelligence, really--was to argue as Obama has in the past few days that this reform was, first and foremost, a cost-reducing initiative, and a way to drive down premiums."

I really like Ezra as a political blogger but his writing on HCR has been disingenuous at best. The tone of so many progressives as it relates to this legislation has been that it will be costless and that their will be no trade-offs. Just in the last few days, Ezra has had more than one post on "who will gain" from this legislation. Has he ever done a post on who the losers will be? I don't believe in a world of no trade-offs. There are always winners and losers. Who are the losers? I believe the losers are the median US taxpayer and the good faith and credit of the US government.

Steve

Posted by: FatTriplet3 | March 23, 2010 10:13 AM | Report abuse

Bruce,

I would also recommend Holtz-Eakins recent piece on the CBO scoring and this piece in Reason on the CBO scoring process:

http://reason.com/archives/2009/12/10/legislative-reality-vs-politic

Steve

Posted by: FatTriplet3 | March 23, 2010 10:20 AM | Report abuse

I think we are all forgetting an important part of the legislation that was central to John Boehner's opposition, a 10% tax on tanning services!

Posted by: kentduffy | March 23, 2010 10:27 AM | Report abuse

"As it turned out, conservative Democrats were willing to do a lot of the Republicans' policy work for them: They removed the public option..."

Why do you continue with this fiction? The public option was killed by the White House in a backroom deal with industry interests.

http://www.huffingtonpost.com/miles-mogulescu/ny-times-reporter-confirm_b_500999.html

This is not a matter which is up for debate. Please be honest about this in your future writings.

Posted by: TGChicago | March 23, 2010 11:50 AM | Report abuse

Frum is babbling nonsense, and Ezra is whistling past the graveyard. The fact is that the Republican strategy has been far more successful than they had any reason to hope, after the huge Democratic win in 2008. They're the minority party; they were never expected to win legislatively (although they did gut the public option).

Where they succeeded, however, was in winning public opinion. They killed public support for this bill and totally stifled the Democratic message machine. Ezra wants us to think that that's magically going to change, now. but you'll notice that he can't provide any reason why that's so.

There's every reason to believe that John Boehner is going to be sworn in as Speaker at the beginning of next year. the question that Democrats ought to be asking is whether this bill and this legislative strategy was worth a return to minority status.

Posted by: tomtildrum | March 23, 2010 12:14 PM | Report abuse

Obama said at the very beginning he wanted to create a brand new healthcare entitlement program. Exactly what part of that could a true Republican have signed onto and kept his limited government cred? Maybe Obama would have been willing to tinker around the edges and throw a few bones to the Republicans but in the end you would have been left with the largest expansion of government since the great society. It's no suprise that the Republicans were in total opposition to this bill, the only suprise was how many toyed with the idea of voting for it at the beginning of the process. The Republicans already went down this road before when they went along with Bush's Medicare drug coverage entitlement and look where that got them.

Also, as someone posted earlier here the Republicans have zero vested interest in Obamacare. So in the future, hopefully near future, when they get back the congress and the presidency they will have zero interest in supporting Obamcare in any fashion. If the program starts to go down the tubes with massive insurance premium hikes, insurance companies going out of business, companies dumping their employee's heathcare coverage, huge cost over runs of the various subsidies, etc. what incentive do they have to fix a program they to a man didn't vote for? In actuallity they will want to do the opposite which is undermine it in any way they can especially if they can do it before most of the "benefits" of Obamacare starty kicking in in 2014. Before 2014 people won't have become dependent on Obamacare and repealing large chunks of it won't be that disruptive.

Posted by: RobT1 | March 23, 2010 12:26 PM | Report abuse

Republicans want to allow Insurance Companies drop your coverage if you get sick! Republicans want Seniors to pay more for life-saving medication! Republicans want to increase the deficit by increasing Government health insurance costs. Republicans want to take away health insurance from 30 million Americans

Now tell me again how Republicans are going run on that platform in November????

What a bunch of hypocritical losers!

Posted by: thebobbob | March 23, 2010 12:42 PM | Report abuse

Bobbob,

I imagine that a large part of the Republican message will be that the reform is fiscally irresponsible (which it is), that it will likely cause millions to lose the employer coverage that they like (which it will) and means draconian cuts in Medicare (which it will and should). Of course, coming from the GOP these arguments are a bit of a joke. But they very will might work.

Steve

Posted by: FatTriplet3 | March 23, 2010 1:35 PM | Report abuse

staticvars,

The Lewin Group is OWNED by United Healthcare.

Their impartiality and credibility involving Insurance reform is about... ZERO.

Rather like asking Beijing University to report on the way the Chinese Government handles dissent.

Posted by: lmb02 | March 23, 2010 1:37 PM | Report abuse

--"[W]e do know that the gap between this plan and traditional Republican ideas is not very big. The Obama plan has a broad family resemblance to Mitt Romney’s Massachusetts plan."--

That's like saying Stupak's D affiliation makes "pro-life" a Democrat idea.

Posted by: msoja | March 23, 2010 1:45 PM | Report abuse

BruceWebb,

mandates and responsibility are downsides? And there are no others?

REALLY?

Mandates are what make it go. Let's use many of your precious Medicare for example. If no taxes (premiums) were paid in to fund Medicare then nothing gets paid out.

There's no secret money tree that people have stashed anywhere.

Its simple 1 + 1 = 2.

Its amazing how some of you don't get that.

Posted by: visionbrkr | March 23, 2010 1:47 PM | Report abuse

and let's forget about the couple hundred billion in taxes (you know the one that liberals proudly proclaimed the "LARGEST TAX INCREASE IN HISTORY!!)

other than that its just peachy!

Posted by: visionbrkr | March 23, 2010 1:53 PM | Report abuse

Frum's post is exactly on target.

Despite all the talk of socialism, visionbrker is correct, HCR "is a conservative piece of legislation (and it absolutely is)," and it is in fact the rescue of the private sector-based health care system. It is the antithesis of socialism, and in a sane world Republicans would be proud to claim a share of the credit.

But today's Republicans don't live in a sane world.

Democrats now own HCR 100%, every voter will know friends or family who will directly benefit from the reforms, and the climate of hysteria that the Republicans built around the bill, with all the phony death panel and socialist rhetoric will only melt away in time, and make the Republicans appear ever more obviously ridiculous in retrospect.

No Republican is going to win a general election calling for the return of barring coverage because of pre-exisiting conditions, the return of recission, or the return of caps on lifetime pay-outs.

The Republicans gambled they could kill the bill with fear and obstructionism, and now they are painted into a very tight corner as the enemies of fairness and expansion of affordable health care.

Game, Set, Match to the Democrats. At least David Frum is not as delusional as 99% of his fellow Republicans. He can appreciate the direction of the arc of history, and he can see his party ended up on the wrong side, just as they did with civil rights in the 1960's.


Posted by: Patrick_M | March 23, 2010 7:01 PM | Report abuse

Frum left out any comparison of Republicans now and at the times of momentous legislation and/or bipartisanship. Ezra could do a better character analysis here, but
I think there were simply 'better' Republicans then. Representative rarities now being Graham, Snowe, McCain (depending on his cranky level at the time)...there were more of this calibre.
I'd like to see McConnell and Boehner RUN on that quote...masters of NO. Wow.
Did that get us jobs? Stop foreclosures? Keep major businesses from failing and increasing dramatically unemployment?
End the two wars?
What have you done FOR us lately??

Posted by: dcunning1 | March 23, 2010 8:00 PM | Report abuse

"just as healthcare was Clinton’s in 1994."

It's a big mistake to forget that people learn.

It may not always be fast. It may not be the first time. But people learn. It's a common mistake to underestimate this.

The Democrats and their advisers and supporters, Ezra included, learned from 1994, that you're hurt far more from letting the bill die, than instead having a big highly positive achievement that will actually be very popular once people learn what it really is and does.

Posted by: RichardHSerlin | March 23, 2010 11:56 PM | Report abuse

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