The Take

The Take: Size of Government Is Subtext of Health-Care Reform Debate

By Dan Balz
Wednesday, August 12, 2009

President Obama took the bully pulpit to New Hampshire on Tuesday to counter what he called scare tactics from opponents of his health-care reform efforts, but it's clear that the health debate has become a proxy for a bigger fight over whether the federal government is assuming too much control over the economy.

Obama is on the defensive over health care because his initiative -- especially his advocacy of a public insurance option -- is an easy target for opponents who say his administration is behind the most significant enlargement of the federal government since the Great Society programs.

In contrast to the raucous disruptions at some town hall meetings this month, Obama's session in Portsmouth was polite and restrained. Demonstrators on both sides were massed outside, but inside Obama was allowed to make his case that change in the health-care system is less risky than the status quo. But that's only part of the job: He still needs a way to make the terms of the debate more favorable to regain the momentum that seemed to exist a few months ago.

Obama might not be in this position were it not for the unusual circumstances that greeted him when he took office. Over the past 10 months, under two administrations, Washington has assumed a central role in major sectors of the economy in an effort to prevent a potentially calamitous collapse.

Under the Bush administration came the bailouts for Fannie Mae and Freddie Mac. Next was the bailout for AIG and later more money for banks. Then came Obama's stimulus package -- almost $800 billion in new spending and some tax cuts. That legislation made Washington the engine of economic recovery, a substitute for a private sector immobilized by lack of credit and low consumer confidence.

Then came the auto industry bailout, which gave the federal government a sizable equity share of the new General Motors -- to the dismay of many Americans. Obama has said repeatedly that he has no interest in having the government be a long-term overseer of the company, but his administration ordered the firing of GM's chief executive and dictated other terms as the price of government support.

White House officials argue that each of those decisions was necessary, given the fragile state of the economy and the potential consequences of allowing those big firms to fail. The lessons of letting Lehman Brothers go bankrupt in September weighed heavily first on Bush administration officials as they prepared the initial bailouts last fall and then on Obama and his team as they took over in January.

Whatever the rationale, Obama is asking the public to accept a significant expansion of the government's role in the private economy. One of the biggest factors in the ultimate success of his administration is whether he can persuade people to accept the amount of government he has proposed -- along with his argument that what he has done has been a product of necessity, not ideology.

Do a majority of Americans see his decisions as necessary -- and short term -- or do they conclude that Obama is, at heart, a big-government liberal in a country that is still skeptical toward too much centralized power in Washington? That debate continues, and Republicans believe it is one of the president's biggest vulnerabilities.

Obama was mindful of this issue as he was about to assume the presidency. He did not regard his election as a mandate for big government. President Ronald Reagan, he said in an interview during his transition, ushered in an era of "skepticism toward government solutions to every problem" -- a lasting legacy of the conservative movement that was not undone by the 2008 election.

He said he believed his election represented the end of knee-jerk reaction against big government, but not an embrace of big government. "What we don't know yet is whether my administration and this next generation of leadership is going to be able to hew to a new, more pragmatic approach," he explained.

The issue of how much government is too much has crystallized in the health-care debate around the proposal for a public insurance option. Advocates say such a government-run plan would give people more choices and would hold down costs by providing stiffer competition for private insurance companies. Opponents argue that it represents a step toward a government takeover of the health-care system that will limit choice and affect quality of care.

The public option is dear to the left in the Democratic Party. But some party leaders appear willing to jettison it to get a bill through Congress and onto Obama's desk. Senate Majority Whip Richard J. Durbin (D-Ill.) signaled Sunday on CNN's "State of the Union" that he would not let the public option bring down the entire health-care bill.

Durbin's views echo hints that have been coming from the White House for weeks, but for Obama, the choice at this moment may be starker than his Democratic friends anticipated. Has the health-care debate reached a point at which he must make clearer what he regards as essential in a final bill, including the public option? That is likely to become a topic for debate inside the administration in coming weeks.

Obama might prefer to use the public option as a bargaining chip late in the legislative process. But would he be better off trying to reshape the debate now by saying he is prepared to take the public option off the table? Some of his staunchest allies believe that course would be prudent and might change the dynamic of the debate in the administration's favor.

Obama can hope to affect the debate with rhetoric and salesmanship, which was the purpose of his trip to New Hampshire. But he also will have to take concrete action to steer the legislation toward success. Many of his allies believe the time for such action has now arrived.

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