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States' Rights -- for the Right Ideas

By E. J. Dionne Jr.
Friday, May 12, 2006

Liberals and Democrats in search of new ideas might surprise everyone by embracing the cause of states' rights.

No, that doesn't mean abandoning federal enforcement of civil rights, or environmental or worker safety statutes. That old states' rights idea should stay dead.

The new states' rights means enhancing the ability of states to solve problems that our current federal government won't confront. These days the real opponents of allowing our 50 laboratories of democracy to step up are conservatives who fear the power grass-roots progressives can wield at the state level.

Contrast this week in our nation's capital with the week in Boston, capital of the Commonwealth of Massachusetts.

Congress was solving the enormously important problem of making sure that wealthy Americans can continue to pay low taxes on their dividends and capital gains.

In Boston, legislators were completing work on a remarkable law that -- if it works -- will provide health coverage for almost all of the state's residents. The bill passed overwhelmingly last month in the Democratic-controlled legislature and was signed into law by Republican Gov. Mitt Romney. This week the legislature was dealing with Romney's vetoes of a few of the bill's provisions.

The standard accounts of the Bay State health saga are accurate as far as they go: Romney, who is expected to seek the Republican presidential nomination, proposed that all residents of the state be required to purchase health insurance, much as they are required to buy automobile insurance.

The "individual mandate" has its critics on both the right and the left. Romney had the guts to point out that those who don't buy health insurance eventually get care anyway, but the cost of their care is shifted to those who do buy insurance, or to taxpayers.

Still, you can't require people to buy insurance if they can't afford it. That's where Salvatore DiMasi, the Massachusetts House speaker and a Democrat, came in. He suggested combining an individual mandate with an assessment on employers who do not cover their employees. Most conservatives hate "employer mandates," but why should employers who insure their workers provide an indirect subsidy to employers who don't?

The new law combines an individual mandate with innovative insurance market reforms to cut the cost of buying insurance; subsidies for the poor and near-poor; and a fee -- up to $295 per worker -- on employers with 11 or more workers who don't provide health insurance.

Romney, with an eye on tax-phobic Republican primary voters, vetoed the assessment, but it passed over his veto. The bill was structured so that Romney could cast his politically necessary veto without killing the whole idea.

What's often left out of the story, said David Ellwood, dean of Harvard's Kennedy School of Government, is that nothing would have happened if advocates of universal health care had not battled "year after year" to put the issue at the center of the politicians' agenda.

When Romney and state Senate President Robert Travaglini balked at the employer assessment, a coalition that included the Greater Boston Interfaith Organization (an affiliate of the Industrial Areas Foundation) and the advocacy group Health Care for All gathered more than 113,000 signatures to put a health-care initiative on the Massachusetts ballot. It included a substantial employer assessment.

"We filed that initiative to go further than the legislature wanted to go and to provide an option if the legislature didn't go forward," said John McDonough, executive director of Health Care for All. It's called pressure.

Good legislation is rarely achieved through immaculate conception. What happened in this case was policy innovation across ideological lines -- led by the Blue Cross Blue Shield of Massachusetts Foundation and the Urban Institute and assisted by the Heritage Foundation -- combined with political agitation.

Massachusetts has an advantage over other states, McDonough said, because it has a comparatively low number of poor people who are uninsured. But imagine if the federal government provided coverage for all poor and working-class Americans and then encouraged states to find their own market innovations to allow the rest to afford insurance.

Instead, the Senate is considering a bill this week by Sen. Mike Enzi (R-Wyo.) that would sweep away state insurance regulations. Killing some of these -- notably, limits on the premiums insurance companies can impose on older and sicker people -- could destroy the Massachusetts plan by making insurance unaffordable for many. What Boston giveth, Washington could take away.

This is a backward form of federalism. The federal government should solve problems or, failing that, give states the room, the incentives and the opportunities to solve problems for themselves. It's amazing what local politicians can accomplish when good ideas and skilled agitators come together.

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