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Time for Obama to Stand Tall

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Wednesday, September 9, 2009

In his speech to Congress on Wednesday night, President Obama will try to regain control over a national conversation on health care that has been hijacked by ranters and ravers of all stripes and members of Congress who don't know their own minds and cower before their own constituents.

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It's disappointing that Obama must also overcome the timidity of some of his own political advisers who seem to have succumbed to the dreaded Washington disease, whose symptoms are a fixation on polls and an unnatural gullibility for conventional wisdom. It is one thing to accommodate political reality but quite another to sacrifice first principles, embrace bad policy in the name of compromise and capitulate to political thuggery.

At the memorial service for Ted Kennedy in Boston last month, Vice President Biden remarked that Kennedy's strength as a leader was that he never acted in a small or petty way, so "people didn't want to look small in front of him -- even the people who were small." Obama's task Wednesday is to demonstrate the same sort of leadership, not only by laying down the moral and economic imperative of health-care reform but by coming clean on some of the tradeoffs that will be necessary in achieving it.

What makes reform such a difficult puzzle is that the fundamental policy goals of universal coverage and cost containment are inconsistent with the political instincts to assure Americans who already have health insurance that they will be able to keep everything they already have, to assure that nobody will get a tax or cost increase and to assure those in the health-care industry that there will be no reduction in their income. Obama's mistake so far is not that he left it to Congress to hammer out the details of competing reform plans, but that he failed to give Congress political cover by helping people understand that there can be no gain from reform without at least some fairly apportioned pain.

Deals negotiated with doctors, hospitals, health insurers and drug companies represented a good running start on the path of shared sacrifice, but the president failed to follow through with other key players. From a business community that wants to preserve the employer-based system, he failed to get a commitment that all employers should participate. He kowtowed to organized labor by backing away from a reasonable cap on the favorable tax treatment of health benefits. And he folded like a cheap suit when right-wing attack dogs scared the elderly with talk of euthanasia and death panels rather than aggressively defending the logic of living wills and evidence-based medicine.

By signaling that he was willing to stand up to some interests but not others, Obama gave up the moral and political high ground that would have made the opponents of reform look "small" by contrast.

Bend the 'Cost Curve'

The president's approach needs to be simple and direct: The health-care system we now have is wasteful and expensive and leaves the United States with the moral stain of being the only rich country to ration medical care on the basis of income. Runaway health spending is the main reason the average American worker hasn't gotten a real pay raise in a decade. And it is the big reason the government is looking at huge budget deficits for years to come.

That's why the "cost" figures being tossed around are so misleading: The money needed to subsidize health insurance for low-income workers is supposed to more than offset by the savings in Medicare and Medicaid and additional taxes. If reform doesn't "bend the cost curve," as the budgeteers like to say, then it's not worth doing. And if it does, then there is no need to scale back the program and compromise on universal coverage just so the annual subsidies can be reduced from $110 billion a year to $70 billion.

An equally silly compromise comes from the Senate's "Gang of Six," which seeks to avoid riling the local chamber of commerce with a mandate that all businesses contribute something toward health insurance for their workers. Instead, the centrists would only dun employers for whatever subsidies their low-income workers need to help them meet their new obligation to buy health insurance. Aside from creating an administrative nightmare, this provision would have the perverse effect of encouraging employers to fire, or not to hire, low-wage workers with children or spouses who are unemployed. Republican Olympia Snowe is said to be particularly enamored of this idea. I'd bet a two-pound lobster and bowl of Maine's best chowder that she can't find a labor economist back home who thinks this is a good policy.

Start With the Basics

While there are no silver bullets in health-care reform, there are plenty of promising ideas on the table for reforming insurance markets and bending the cost curve. It will take time to test and implement these ideas on a national scale. What the president needs from Congress is succinct legislation that guarantees that every American will have a basic health insurance policy and sets reasonable caps on the growth of government health-care spending. The details should be left to the regional exchanges and a new board of independent health experts to oversee Medicare and Medicaid. Their recommendations could be subject to an up-or-down vote from Congress, as advocates of entitlement reform have long suggested.

After a summer that exposed a virulent strain of public cynicism and distrust, the president's challenge is to rededicate himself to restoring faith in government and rekindling the "yes we can" spirit that swept him into office. And at some point he needs to look straight into the eyes of those who would have him fail and promise to do whatever it takes to break the partisan stranglehold and make health-care reform a reality.

Steven Pearlstein will host a Web discussion today at 11 a.m. at washingtonpost.com. He can be reached at pearlsteins@washpost.com.



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