By Fred Hiatt
Monday, June 8, 2009
For moderate voters clinging to some faith in government, the question over the past two decades of mostly two-party rule was: Can't Washington do anything?
Now, with one party pretty much in control, the question has become both more hopeful and more anxious: Will Washington do anything responsibly?
Yes, "responsibly" is a freighted, finger-wagging word. But it seems a fair question to ask of a radically remade capital.
The hope during the Clinton and Bush presidencies was that the two parties would come together, mix the best of their ideas and produce something constructive. Bill Clinton worked with Republicans to achieve welfare reform, George W. Bush with Sen. Edward M. Kennedy (D-Mass.) to begin to hold public education accountable through No Child Left Behind. Generally, though, both parties tended to see more advantage in failure that could be blamed on the opposition than accomplishment for which credit would have to be shared.
So anyone who believes, say, that climate change threatens the planet or that America's health-care system needs major repair has to cheer that President Obama and the Democratic Congress are determined to act.
Cheer, but worry, too. Because if you also believe that economic growth is essential to solving America's health-care problem, and just about every other problem besides, then you don't want government spending, borrowing and bureaucracy stifling the private sector. You want solutions that aren't so complex that they make problems worse. If the government is going to spend more, you want it to raise more. And so far, there's reason to worry on all those counts.
There's nothing easy about health care, but the least difficult piece is insuring the uninsured: Mandate that everyone sign up, and provide subsidies so everyone can afford it. Harder, politically, is to levy the taxes to pay for those subsidies. Even harder, both politically and substantively, is to keep costs down. No one entirely knows how to do that, but it will involve telling doctors, hospitals, drug companies and patients -- you and me -- things they don't want to hear.
Obama's plan to extend insurance would cost, by his estimate, $1.5 trillion over the next decade. He has said, rightly, that the country has to find a way to pay for that. But his proposals don't come close to showing how, and Congress doesn't like even the down payment he did suggest.
Even if lawmakers find ways to pay for the reform, it won't necessarily meet the responsibility test. Medicare spending already is growing out of control. If cost savings or revenue that might have helped Medicare instead are applied to a new entitlement, the bigger problem becomes that much more insoluble. And policymakers could identify revenue sources to pay for the first 10 years of expanded coverage but that would then grow more slowly than the program they are supposed to finance.
There's no easy answer on climate change, either, but most economists would say the sensible approach would be to levy a tax on oil, gas and coal and then get out of the way. Higher prices for those fuels would discourage use and encourage investment into wind power, conservation and other good things. To cushion the blow, you could rebate the money in a progressive or at least neutral way.
But Obama and Congress don't want to take responsibility for raising taxes any more than they do for limiting health-care options. So Democratic leaders in the House have fashioned a 946-page climate change bill that forces industries to pay to exceed a gradually declining limit on carbon emissions. It's a tax with deniability, and with huge enforcement challenges.
In theory, it could work; some economists even prefer it to a tax because you can set a clearer emissions target. But if you're going this route, design becomes crucial. During his campaign, Obama proposed to auction off the pollution permits. But to buy support in the House -- where the bill has made it through only one committee so far -- the bill's authors had to promise to give away 85 percent of the allowances.
For some industries, this is a bribe; there's no reason to expect that they would lower prices to consumers. Regulated utilities could be made to charge consumers less. But that would just postpone the behavior modification that is the point of the bill, while forcing someone else to raise prices even more to meet the overall cap.
Now, it isn't easy being a responsible majority when much of your opposition won't even admit there's a problem (as in climate change) or remains less interested in solutions than in grist for 30-second commercials warning of higher taxes or socialized medicine. If it turns out this government can't fashion workable solutions and pay for them, it won't be the fault of Democrats alone. But let's hope it doesn't come to that. Because if bipartisan government didn't work, and one-party control doesn't work, it's not clear what we might try next.