Historic health-care legislation narrowly passed the House of Representatives, 219-212, Sunday night. The Senate will consider a package of amendments this week and the process is likely to be messy. But the main battle has been won and congressional action from this point forward amounts to clearing the battlefield.
In the aftermath, political and media pundits and affected interest groups have taken predictable cheering-or-jeering postures, depending on their predispositions. My own emotions are conflicted and this post-mortem thus likely will disappoint both the legislation's boosters and detractors.
Was the legislation's passage a Pyrrhic victory — that is, a victory gained at too great a cost — or was it a point of departure for further legislative victories for President Obama and Democratic congressional leaders? It will be many weeks, perhaps months, before we have an indication either way.
• The substance of the policy changes which will be triggered by the legislation: I felt genuine elation after the 1965 passage of Medicare and Medicaid and satisfaction after the 1990s approval of a Medicare prescription-drug benefit. Those historic changes got bipartisan support and met clear national need.
The bill passed yesterday barely made it through the House, where a heavy Democratic majority prevails, and fills some needs while leaving others unmet. It extends health-care coverage broadly, especially to low-income citizens, but does not include catastrophic coverage, meaningful tort reform, or changes allowing insurers to sell their products across state lines. It compels insurers to cover all who want coverage and to not cap their claims. It also puts new financial burdens on state governments and cuts Medicare expenditures — mainly by further reducing fees to health-care providers and eliminating so-called Medicare Advantage coverage carried by many seniors. There are new taxes and new costs for insurers and providers, most of which will be passed along to consumers.
The premises given by Democratic congressional leaders to the Congressional Budget Office facilitated a CBO projection, just before the House vote, showing federal deficits being reduced a bit over 10 years with passage of the package. However, the premises included some shaky and downright disingenuous information that cannot stand morning-after scrutiny. I know of no serious analyst who does not believe that it will result in more, rather than less, federal red ink over the next 10 years and beyond. Only the blindest partisans believe otherwise.
My greatest concern thus is the one shared by deficit watchdogs, such as the bipartisan Concord Coalition, founded by former Sens. Paul Tsongas and Warren Rudman and now chaired by Rudman and former Sen. Bob Kerrey. The Coalition issued a statement Sunday night warning that "expanding coverage without curbing costs is a recipe for fiscal disaster," pointing out that the legislation's cost-control measures are problematic. It pointed in particular to the new tax on high-cost insurance plans, believed to be the most important cost-control component of the legislation. As a result of last-minute concessions by the White House and Democratic congressional leaders, the effective date of this tax has been moved from 2013 to 2018.
There is no doubt that the principal components of the legislation will remain public law. Even if Democrats suffer losses of congressional seats this fall (see below), President Obama would be certain to veto Republican attempts at rollback in 2011 and 2012. No one believes the GOP will make congressional gains enabling them to override a veto.
Down the road, it is clear, emergency measures will be needed to save Medicare, Medicaid, and the drug benefit from the financial hole in which they now exist. The new federal health-care "entitlement" approved Sunday will make that hole even deeper and necessitate even more drastic bailouts which, in the end, will force big benefit reductions, tax increases, or both. But that is in the future.
One historic footnote: The benefits contained in the original 1965 Medicare legislation were quite modest compared to those which have been added since to the program. President Johnson, at time of passage, foresaw this expansion and was not concerned about it. "We have established a universal program here," he told a White House staff meeting, "and from this point forward nothing will turn it back. Over the years it will expand and that is good." Johnson made this statement, however, in a time of robust national economic growth, low federal budget deficits, and a national mindset that this would be the straight-line situation into perpetuity. Only two years later LBJ would be asking for tax increases to pay for the unforeseen expenses of the Vietnam War.
Now, what about critics' charges that the new legislation — reordering 17 percent of the economy — is a dangerous step toward European socialism and/or, gasp(!), a British or Canadian health system in the United States?
Americans, time and again, have signaled that they do not want a British/Canadian, national-goverment-run health system here. They clearly want a public-private system in which the national government will be expected to fill various gaps and, in particular, help the elderly, poor, and uninsurable get care they cannot get in a wholly private system. The legislation passed Sunday gives the federal government greater reach and responsibility in the health sector but certainly less reach and responsibility, for instance, than were contained in either Medicare or Medicaid. It is evolutionary, not revolutionary.
• The political effects of the legislation's passage: It is tempting to say that President Obama wanted to pass health legislation in the worst way — and that was the way he did it.
As readers know, I was quite skeptical a year ago when — in the midst of financial and economic crisis — he launched what would be a polarizing, sometimes brutal struggle for legislation that lacked majority public support and, in the Congress, could get only Democratic votes.
Why was Obama doing this before our financial/economic house had been put in order and when billions in federal red ink were being spent on recovery? Why not wait until recovery had set in and, then, present a proposal which could get consensus support in both Congress and country — as Medicare, Medicaid, and the drug benefit had done? Further, why farm out drafting of the legislation to Democratic congressional committee chairs rather than keeping it under White House control with, of course, involvement along the way of congressional leaders, affected interest groups, and with an eye toward attracting Democratic, Republican, and independent support in the electorate? Obama proceeded as he did, apparently, because he believed he had to act immediately, while he enjoyed the traditional Presidential "honeymoon period," and because he thought it important to his historic legacy. As it turned out, of course, the debate lasted well beyond his 100-day honeymoon period and consumed a full year during which partisan and ideological lines were deepened and the country polarized.
That is where the Pyrrhic victory interpretation applies. The term originated when King Pyrrus defeated Roman armies in an epic battle in 279 BC. Some 15,000 were counted dead on both sides — a huge number considering the relatively light population of Europe at the time. Afterward, the king said another such victory would end him. He had lost his key commanders, best troops, and closest advisors in the battle and been rendered weak thereafter.
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