Health Care's Crossroads

By E.J. Dionne Jr.
Wednesday, July 22, 2009; 8:50 PM

Talk about unexpected news: Reforming the health-care system is really hard, and Republicans want President Obama to fail.

Oh, yes, and when the public gets a look at the sausage-making process in Washington, it doesn't like what it sees. And in a bad economy, it's tough for a president to maintain approval ratings in the 60s indefinitely.

Can you imagine?

A sense of crisis pervades the nation's capital. Congress is behind schedule in pushing along reform of the health system, and the president's poll numbers have dipped slightly.

Thus Obama's prime-time news conference Wednesday, aimed at defending his actions on the economy and explaining, yet again, why reforming health care is a better idea than leaving things as they are.

When this city goes berserk, it's helpful to entertain an alternative view of reality: that certain problems were going to have to be dealt with eventually and that only the appearance of a crisis will bring them to the surface.

Let's start at the end. Despite all the dire words being spoken, some version of health reform will pass simply because failure is not an option for Democrats who care about staying in power (which happens to be all of them).

Republicans such as Sen. Jim DeMint and conversative commentator William Kristol have been immensely useful in clarifying this -- DeMint by saying defeating reform would "break" Obama, and Kristol by defining the GOP's position succinctly with the words "kill it." That's why Obama was eager to quote them last night.

But it has been obvious for months that the issue of how to finance reform would be difficult because it drives a wedge through the pro-reform coalition.

The first sign of trouble came early this year when Obama put a lot of money on the table -- $318 billion over 10 years -- by proposing to limit the value of various tax deductions for wealthy Americans. In a remarkable show of bipartisanship, Congress shot this idea down without much debate.

If not that, what? Policy wonks of various stripes argue that we should tax the value of the health insurance policies people now get, especially high-end plans. The substantive case for this is strong, since it's a tax that would, on the whole, fall on better-off people, and taxing the most generous plans could help hold down costs.

However, the levy is very unpopular, and not just with the unions, which are among the strongest supporters of universal coverage and have negotiated good health plans for their members. The tax would also have unfair regional effects because of state variations in the cost of health insurance. And Obama savaged John McCain in 2008 for putting forward a version of this scheme. Aren't politicians supposed to keep their campaign promises?

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