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Once more into the breach

The president is fighting 'til the bitter end on health care reform. Today, he unveiled his own $950 billion health care legislation. So not only do we have competing bills in the House and Senate, there's yet another proposal for Congress to bicker over.

The president's plan is posted on the White House website. It's pretty similar to the Senate bill passed on Christmas Eve, with a few notable changes. The special deal for Nebraska, where the federal government would pay for a full expansion of Medicaid in that state, is gone. Instead, the government would help all states deal with the cost of Medicaid expansion for the first three years, starting in 2014.

The president also went with the Senate's approach on paying for reform, notably the increase in the payroll tax for individuals making more than $200,000 a year and couples earning more than $250,000. But he delays the tax on high-end health care ("Cadillac Plans") until 2018.

And seemingly in response to significant rate hikes proposed by insurance companies in California, the president would give the federal government new powers over insurance rate increases, even though the states are supposed to have that authority already. More on the bill from the New York Times:

In one sense, the release of the bill marks an extraordinary reversal for a president who has long said he would leave legislating to the legislators. Mr. Obama made clear from the outset of the health care debate that he would not follow the footsteps of the last Democratic president, Bill Clinton, who presented Congress with a sweeping health care proposal -- only to see it fall flat on Capitol Hill.

Instead, Mr. Obama left it to Congress to produce its own measure. But after months of work, the House and Senate have been unable to close the gap between their bills. So the president, who had promised to post a Democratic measure on the Internet 72 hours in advance of Thursday's health care meeting, was forced to take matters into his own hands.

While that may seem like a president on a mission -- given the nature of politics in Washington -- it might just make things worse for him. In the Washington Post, Ezra Klein points out research that shows whenever a president takes a stand, it only makes the opposition dig in that much harder:

The more that health-care reform is associated with the president, the less likely it is that any Republicans will support it. At best, (Thursday's) summit won't worsen the situation; the issue is so linked to Obama already that, for GOP lawmakers, supporting him on it would be tantamount to throwing the next election.

In theory, all this suggests that Obama might want to back off a bit. But we've come to expect more from our president. The voters, the media and members of Congress complain if he isn't smack in the center of every legislative initiative. That leaves us two choices: Either we let him fade into the background, or we're going to have to change the rules so that the majority can govern successfully even when it is not in the minority's interest to let that happen.

While there seems to be little progress on health care reform, at least Congress is making up for it by doing little to nothing on energy, financial regulation or other important issues.

Jane B's picture
Jane B - Feb 22, 2010

It's hard to see how much intractable the Republicans could be. Maybe this deeper involvement will make the Democrats stand up and make at least some of these business reforms happen. Otherwise, we'll just keep sliding into the abyss the way we have been. I have no illusion that these changes will be enough, and some may be a mistake. But the larger mistake is to do nothing. That makes Obama digging into seem the right play, to me.

And J Hayes -- you are right. It's not health CARE reform. It's a good idea for us all to start calling it what it is. That might also make people understand what's really at stake.

Allen's picture
Allen - Feb 22, 2010

@JPM you forgot the third most likely outcome of that economically obtuse proposal --> the flow of resources into the business would drpp precipitously.

JPM's picture
JPM - Feb 23, 2010

I don't see your reasoning. I tend to think about a company like Exxon where they would get 10%+ profits when gas prices are high and oil prices are low. I suspect they would be looking for avenues to spend money within the business or huge bonuses which would be under public scrutiny.

foo's picture
foo - Feb 22, 2010

"But he delays the tax on high-end health care (“Cadillac Plans”) until 2018."

Why doesn't congress adopt a rule that all legislation take effect after those who pass it and the rest of us are dead? Who would object to what was passed? Government and elections would be more transparently symbolic than now. Since their work is then largely symbolic we can pay them in Monopoly money; they like gorging on money from monopolies. I'm not sure that would make it easeir for them to agree but we would no longer feel a civic obligation to take it seriously.

J Hayes's picture
J Hayes - Feb 23, 2010

Scott has it right:
"While there seems to be little progress on health care reform, at least Congress is making up for it by doing little to nothing on energy, financial regulation or other important issues."
Government in the US and many states (esp here in CA) is totally dysfunctional. Is it because of corporate lobbying setting the agenda, elected reps focusing on re-election (or Tweeting?) instead of their work, or have we just elected a bunch of spineless idiots?
I hope America turns out like Italy, where a business associate there one said "The reason Italy's doing so well is we have not had a government that lasted longer than 8 months since WW2, so they are not around long enough to screw things up!"
Maybe having a do-nothing government ain't so bad!

foo's picture
foo - Feb 23, 2010

Italy has had a shadow government since the 19th century: the Mafia. The official government does its work so the Mafia needn't spend money on PR, advertising or polling. In America we now realize that Goldman Sachs, et al is our shadow equivalent.

Last year Wall St. banksters paid themselves $20.9 billion in bonuses while according to today's FDIC announcement the entire banking sector made $12.5 billion in profit. Our government is involved in wholesale wealth transfer from us to the banksters none of which ameliorates the global recession they caused.
http://www.reuters.com/article/idUSN2324181420100223
http://www.nytimes.com/2010/02/24/business/24fdic.html

Our government's acts do not even rise to the level of taxation without representation. It's just theft.

joey's picture
joey - Feb 22, 2010

Health care reform has never been about health care.

JPM's picture
JPM - Feb 22, 2010

It seems more like insurance reform.

I see this already failing. The government having the authority over the rates companies charge seems like a great business plan to me.

A better idea would tax the profits of insurance companies. You make more then 10% profit then you have a steeper tax, 15% much steeper tax, and so on. Companies would push for more stable growth and avenues to spend money within the business.

J Hayes's picture
J Hayes - Feb 22, 2010

Scott,
Please stop calling it "health care" reform. It has little to do with health care; it's the "profit-making medical business" we're talking about. If it were health care reform, we'd be hearing from doctors, nutritionists, nurses and other health workers about how to reduce costs by making people healthier. Instead, we have medical companies and suppliers doing obfuscating PR and spending billions on lobbying to ensure nothing adversely affects the profits of the "med biz."