January 20, 2010 Economic Scene
Centrist, and Yet Not Unified
By DAVID LEONHARDT, The New York Times

The stunning victory of Scott Brown, the Massachusetts Republican who will have Ted Kennedy's old Senate seat, suggests that public opinion has turned against the proposal. It's hard to know exactly how Democrats will respond. But given the sudden uncertainty over health reform's fate, this does seem to be an important time to boil down its substance.

Here's my attempt: The bills before Congress are politically partisan and substantively bipartisan.

What does that mean? The first part is obvious. All 60 Senate Democrats and independents voted for the bill, and all 40 Republicans voted against it. The second part is the counterintuitive one. Yet it's true.

The current versions of health reform are the product of decades of debate between Republicans and Democrats. The bills are more conservative than Bill Clinton's 1993 proposal. For that matter, they're more conservative than Richard Nixon's 1971 plan, which would have had the federal government provide insurance to people who didn't get it through their job.

Today's Congressional Republicans have made the strategically reasonable decision to describe President Obama's health care plan, like almost every other part of his agenda, as radical and left wing. And the message seems to be at least partly working, based on polls and the Massachusetts surprise. But a smart political strategy isn't the same thing as accurate policy analysis.

The better way to describe the Obama agenda, I think, is that it's ambitious (even radical) in its scope and sharply different in direction from the Reagan-Bush era, but mostly moderate in terms of how far it goes on any single issue.

Mr. Obama wants to undo George W. Bush's high-income tax cuts, but would keep the basic Reagan tax structure intact. The administration is trying to re-regulate financial markets, but has rejected the sweeping ideas favored by the former Federal Reserve chairman Paul Volcker, British regulators and many liberals. The pattern is especially clear on Afghanistan and Iraq.

Now, a centrist approach isn't necessarily the best one — no matter how good it may sound to call yourself a centrist. Sometimes, Republicans are right about an issue (whether the welfare system was broken) and sometimes Democrats are (whether to respond to an economic crisis with fiscal stimulus or a Hooverite approach).

Maybe the country would be better off with a big-government health care plan, like a Medicare for all. Or maybe we'd be better off with a free-market version, in which people shopped for their own plans in an open marketplace. Those are interesting enough arguments. They also make it clear that the bills before Congress are not particularly radical.

A little history is useful here. The first modern attempt at health reform, as you've probably heard, came from Harry Truman. After World War II, he proposed a government insurance plan that would cover everyone. Republicans and the American Medical Association labeled the plan "socialistic" — which, in some ways, it was.

Opponents instead called for expanding the private insurance system. Nixon, then a young California representative, and others suggested government subsidies for people who couldn't afford insurance, as Paul Starr explains in his Pulitzer Prize-winning book, "The Social Transformation of American Medicine." But the socialism critique was strong enough to defeat Truman's plan without need for compromise.

The next push came from John F. Kennedy and Lyndon B. Johnson, who tried to cover only the elderly. Critics cried socialism about Medicare, too. "Behind it will come other federal programs that will invade every area of freedom as we have known it in this country," as Reagan, who was then working as the American Medical Association's spokesman, said in a widely circulated speech. This time, though, big Congressional majorities and sympathy for the elderly let the Democrats prevail.

Once Nixon was president, the focus switched from expanding access to controlling costs, as you might expect with a Republican. He favored giving doctors incentives to set up prepaid group practices, which had the potential to provide better, cheaper care than the fee-for-service system. Ted Kennedy often said he regretted not making a deal with Nixon on health reform.

The current bills, for better and worse, are akin to a negotiated settlement to this six-decade debate. It would try to end our status as the only rich country with tens of millions of uninsured people, as liberals have long urged. And it would do so using private insurers and government subsidies, as conservatives prefer. (I realize that some liberals argue that a more liberal bill would have fared better, but the history of the health reform — not to mention this country's conservative instincts — offers reason for doubt.)

On cost control, the bill is similarly centrist. In 1993, Mr. Clinton pushed for putting a cap on the growth of insurance premiums — an idea similar to having a national health budget, which conservative governments in other countries have done. Today's Democrats saw that move as too radical. Instead, they have borrowed Nixon's old push for prepaid group practices, which are now called accountable care organizations.

Together, the cost-control measures are serious enough that the Congressional Budget Office estimates they would save the government $1 trillion in the next 20 years, over and above the cost of covering the uninsured. Some experts remain doubtful of these projections. Others, though, think the budget office is underestimating the savings, as it has with past Medicare changes.

The one big conservative idea that's largely missing is malpractice reform. But the White House said several times that it was willing to negotiate on this issue. And think about it: Rahm Emanuel, the Obama chief of staff, likes to say the only thing that's not negotiable is success. Don't you think Mr. Obama would have gladly taken some heat from trial lawyers in exchange for passing health reform with bipartisan support and making himself look like a transformational leader?

The obvious question, then, is how the current bill could have inspired such skepticism from voters.

The unified Republican message is part of the answer. So is the fact that Mr. Obama never found a strong, consistent way to sell the bill. That said, health reform was never going to be easy.

Something like 90 percent of voters already have insurance. Many imagine that they will never lose it. Many people even believe they don't pay for their insurance, because the money comes out of their paycheck before they see it. (They do pay in lost income.) Polls also show that Americans are more aware of our medical system's strengths than its weaknesses (like needlessly high error rates). As for Medicare being on course to break the bank — voters rarely get excited about future fiscal problems.

So health reform was probably destined to inspire more fear than hope. It's been that way since Truman.

In the wake of Mr. Brown's victory, the decision facing Democrats is not whether to start with a blank slate and try to write a bill based on both liberal health care ideas and conservative ones. They've already tried that.

The decision is whether to expand insurance and try to control costs, despite the political risks, or whether that project will once again be put off until another day.