Health Care Reform Loses Its Mojo

For several weeks, every national poll has indicated that more Americans are now opposed to the various health care reform bills that have worked their way through the House and Senate than support them, and the gap has widened with each new poll.

In the face of this, Democratic leaders in the Senate have talked of various legislative strategies to get a bill passed this year, in the face of strong Republican opposition in the Senate to many features of the bill that has made its way through three separate House committees. Among the suggested approaches was splitting the bill into two pieces, with the more controversial portions (such as a new public insurance option) stuffed into a Senate version of the bill that could be passed through the reconciliation process, requiring only 51 votes. The less controversial sections would then be put into a second bill, where the normal 60 votes would be needed to end a filibuster. There has been talk of getting a single bill that is less controversial and less extensive through the Senate with some Republican support, and then using the conference committee of House and Senate members to mold a compromise final bill, in essence leaving Democrats to fight the big policy issues out among themselves, out of the public spotlight.

One of the two Senate committees with jurisdiction for the health care reform bill, the Finance Committee, is still drafting its version of a bill, and anything that comes out of this committee may be unacceptable (too weak) to satisfy progressive Democrats in the Senate and House — some of whom have threatened to vote no on any bill without a public option. An assumption that has accompanied the various approaches to Senate action is that the House will pass a final bill, since the filibuster power does not exist for the minority party in the House, and with the Democrats holding a near 80-seat margin, it would require 40 Democrats in the House to abandon their speaker and the president for the bill to fail there. While there are over 50 “Blue Dog” Democrats, it is not at all clear that near 80 percent of them will stand together to kill the bill.

So for now, it is the Senate where the gambits are being discussed.

The death of Senator Edward Kennedy on Wednesday complicates the picture for the Democrats. Kennedy was one of 60 Democrats or Democrat-leaning independents in the Senate. In an unusually cynical move in 2004, the Massachusetts legislature passed a bill that removed the power of the governor to appoint a replacement senator in the case of a vacancy. Massachusetts Democrats hoped for a win in the presidential race for Senator John Kerry, and did not want then Republican Governor Mitt Romney to appoint a Republican to succeed Kerry until the next federal election in 2006. The 2004 bill called for a special election to be held within 145 to 160 days after a vacancy occurred. With his death from brain cancer imminent, Kennedy wrote a letter to state legislative leaders in July asking them to change the law again so that the governor, now a Democrat, could appoint his successor. If the law remains as it is, a special election will not be held until January or February 2010. If that is the case, the 59 Democrats in the Senate would need at least one Republican to cross party lines to break a filibuster on health care reform in the next few months, assuming the reconciliation process was not used to kill the filibuster threat and a final bill was ready in this period.

The Obama administration, not wanting to “waste a crisis” in the words of Chief of Staff Rahm Emanuel and seeking to maximize the honeymoon period for its new charismatic leader, attempted to steamroll through an aggressive legislative agenda quickly — the near $800 billion stimulus package, cap-and-trade legislation (a watered-down bill barely passed the House and is now stalled in the Senate), and health care reform. The goal was to have both cap and trade and health care reform completed in both houses of Congress before the August recess. Unfortunately for the Obama team, his glow has faded and his approval ratings have dropped very quickly.

Many Democrats in the House and Senate were uncomfortable with the legislation taking shape on the energy and health care reform packages, created for the most part by the most left-wing members of the House and Senate — many of whom hail from the coastal states. The politics of George Miller, Henry Waxman, Nancy Pelosi, Ed Markey, and Barney Frank is not what got the Democrats their majority in the House, and Barbara Boxer and Chuck Schumer are not role models for many of the newly elected Democratic senators in 2006 and 2008. Democratic members from more conservative districts in the flyover zones slowed down the legislative process on both cap and trade and health care reform, and got some changes to the bills in the committees. But public opposition to the bills has hardened, particularly the health care reform bill, and the anxiety of Democrats in swing districts is rising. Many House Democrats are hoping that the Senate kills cap and trade, and either kills health care reform or produces a more palatable and much smaller package than the House version that made it through three committees.

In recent days, Connecticut Senator Joseph Lieberman indicated that it might not be a good idea to consider a major health care overhaul this year, given the still unsteady state of the economy. Wisconsin Senator Russ Feingold commented this week that he doubted any bill would come up before the very end of the year, and maybe there would be no bill, period. There is the appearance of a breakdown in the will of some Democrats to fight for a bill, given the public resistance to the reform effort and the diminishing returns from the expensive campaign to sell it.

The huge increase in the estimate for the federal deficit for fiscal 2010 (now $1.5 trillion) and for the next ten years (now over $9 trillion, with a much higher CBO estimate sure to follow) has also complicated the health care reform effort. The history of federal health care entitlements is that the actual cost of each expansion was far higher than the original estimate, and in some cases multiples of the estimated cost. No rational observer believes that 45 million more people can be covered with a cost to the government of “only” a trillion dollars over ten years.

Add to this that liberal Democrats are pushing for a public insurance option that would compete for the enormous book of business of over 160 million privately insured Americans — and not just to provide subsidies for the uninsured. According to estimates by the respected Lewin Group, the public option would drive many of the now privately insured out of the private insurance system. Given the cost experience of Medicare and the serious over-utilization problem that has been endemic to the Medicare system since its creation in the mid-60s, the potential for a crushing addition to entitlement spending with a public option is real.

Americans are increasingly, and rightly, concerned about federal spending.

Addressing the federal deficit is now the number one issue for Americans, with health care reform registering barely half as many mentions and cap and trade far down the list. There are approaches to health care reform that are consistent with cost control, but they are absent from the Democrats’ bill. Tort reform could take a slice out of over-utilization in both the Medicare and private insurance systems. Allowing insurance companies to sell across state lines, with far fewer mandates for covered services, could significantly reduce the cost of insurance. Taxing the value of a corporate provided health insurance benefit, and giving individuals the choice of a tax-free voucher as well as higher salary in exchange for choosing an individual policy, would lead to far more comparison shopping and lower insurance cost.

Democrats want people to think health care is free and that you can get more people covered for less. But so long as most people have rich, comprehensive insurance packages, whether government or private market, and think somebody else is paying for it (the government, the corporation, wealthy taxpayers), the delivery system won’t change, individual and physician behavior won’t change, and costs will spiral.

Americans are smart enough to understand that the government’s approach to bringing costs down will eventually have to be a sledgehammer — the rationing and delayed care which is the case in the foreign health care systems Americans are most familiar with, Canada’s and Britain’s. It is no wonder that for older Americans it was a short trip from rationing to fear of euthanasia and speeding the elderly along their way, as is already the case in Oregon.

Until this week, I thought the Democrats’ huge advantage in Congress was so strong that a health care reform bill was still likely this year, despite public opposition. Now I think the odds are 50/50 at best. I read the decision by Attorney General Eric Holder to appoint a special prosecutor to look into alleged abuses by CIA interrogators as an act of desperation — a bone for the left-wing base as the prospects for a health care bill acceptable to the base disappear. The Obama team wants to keep the base motivated and on its side. If they can’t deliver the next great entitlement, they seem to be betting that the base still hates George Bush and the Iraq war more than they love the public option. As to the impact of the investigation of CIA behavior on national security, the administration seems unconcerned. Regrettably, mistakes in this area do not just produce budget deficits.