(This guest post originally appeared at New Deal 2.0)
The Senate and the Obama Administration want to pass the Senate version of health care reform by Christmas Eve. In the end, the Senate probably will pass a bill. The nation, however, would be a lot better off if the Senate did not vote. Here’s why.
First, this legislation has become no more than a (bad) effort at insurance reform. It does not encompass any serious approach to reforming health care itself, which is by far the bigger problem.
Second, as health insurance itself it is a bad approach. As a small example, it does not even increase competition by allowing cross-state competition by insurers. So it guarantees 50 smaller state markets, each run by a somewhat different state insurance bureaucracy, most of the markets being too small to support real competition. Progressives wasted immense time touting a public option as a competitive measure — which it never could have been; but completely ignored dealing with markets directly so as to make them more competitive. The direction I have pointed to in previous blogs — making the exchanges the true centre of reform — was never considered or never understood. (That’s another topic. It is scary how little is ever really understood about complicated legislation by the members of Congress who vote on it. In talking to several members a few months ago about health care, one told me that he estimated less than 10% of the members of the House could actually tell you the difference between Medicare and Medicaid.)
Third, the myriad of small projects and experiments included in the bill and intended to try out various approaches to health care reform all add up to nothing. There will be a few earnest efforts, but they will point to difficult health care choices which the House and the Senate have indicated they do not want to make. I do not have anything against most of these efforts, I just think that like the poem, “they don’t do any good, and they don’t do any harm.” They certainly are not a reason to pass legislation this important.
Fourth, as this bill, if it were to pass, heads toward conference with the House bill — which is worse — none of us know what will emerge, but we know one thing with great certainty. The result will be worse than the Senate bill. The conference is part of the process to produce anything, but no one has ever thought it made anything any better. The process is dedicated to testing the lowest limits of the barely acceptable.
Fifth, this bill will not slow down health care cost growth. There is absolutely no one in the known universe whether for or against this bill who in private would not agree with that statement. It is possible for the CBO, working on a very carefully phrased question and doing a static analysis, to conclude that the revenue raised by the bill will very slightly exceed the costs imposed. But even that is probably not the case. So the bill will increase the deficit; therefore cut into every other public program you might care about — kiss goodbye to any real infrastructure investment; and make even worse our long run debt problem without improving anything. One or two people commenting on my blogs have called me a “deficit terrorist,” a phrase I love and am having tee shirts made for; but the long run deficit and debt problems we face really do impose a different kind of discipline on us.
Sixth, all of the political dynamics I have ever seen work against any future effort — after this bill passes — to improve its direction. Senator Rockefeller has said that he expects annual efforts to improve legislation after it passes. That is a complete fantasy. This bill gives everything away up front, and does not face up to any of the really difficult questions of cost and reform. There is no theory anyone can state with a straight face that gets you to a reasonable expectation that if we let this one go by, it will become steadily better.
Finally, we have begun to hear the dreaded song. When a supporter of something says with a sense of irritation and superior practicality that we “can’t let the best be the enemy of the good,” you know that he or she has run out of arguments and is reverting to shouting. If you play poker — I have played fairly seriously for 45 years — you learn to read the “tells.” This song is a completely dependable “tell.”
The best process going forward would start with the Senate not voting. Then the Obama Administration, which now has a more fully matured policy process with much firmer grounding then it did when this health issue began — prematurely in my view — last spring, could put forward a clear set of views regarding what it wanted and did not want in terms of policy. Ideally, we could then start with a sense of how to alter the fundamental incentives of the system; and we could make the changes step by step. An early step, for example, could be to insure all minors below the age of 18. In any case, I do not think it is wise to try to change in a fundamental way 17% of the largest economy in the world all at one jump.
Roosevelt Institute Braintruster Bo Cutter is formerly a managing partner of Warburg Pincus, a major global private equity firm. Recently, he served as the leader of President Obama’s Office of Management and Budget (OMB) transition team.
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