In the last few days, I’ve read and heard a lot of Massachusetts-inspired talk that funnels into two complaints about the White House: 1) Obama’s mistake in 2009 was that he never focused on jobs; and 2) Obama should have sought a simpler health care plan to get Republican support. I think both these interpretations are wrong.
First there’s the idea that Obama
messed up by focusing on health care to the exclusion of job creation.
Peggy Noonan puts it thus:
“At the exact moment the public was announcing it worried about jobs
first and debt and deficits second, the administration decided to
devote its first year to health care.”
I don’t know if this sentence is overly tricky or entirely wrong, but
it’s definitely something like both. “At the exact
moment the public was announcing it worried about jobs first” … ahem, that’s the exact moment we
passed a
$800 billion stimulus, followed by a $50 billion lifeline for the auto industry, while the Fed spent over a trillion dollars to prop up the housing sector
and make banks start lending to businesses. Maybe Obama didn’t do enough, but he certainly did something — and the Republican Party stood almost united against every part of it they could vote for. Steven Pearlstein gets this dead on.
The second myth is that the White House and the country
would have been better off if we had passed simpler health care
regulation rather than seek a $900 billion bill. These critics think we should have stuck with simple insurance regulation through taxes– such as banning rescission and rejecting coverage for preexisting conditions. But as Pearlstein writes, the problem with that
is that if you don’t require everyone
to buy insurance, then there will be lots of people who will wait to
buy their policies until they get sick and then demand coverage at the
“community” rate. That’s a great way to drive up premiums, which in
turn will drive even more healthy people to drop coverage, which will
raise premiums even further.To prevent this kind of debilitating “insurance spiral,” you could
add one more feature — a mandate requiring everyone to buy at least a
basic insurance package. Unfortunately, there are lots of low-income
households for which the newly mandated premiums could eat up as much
as a half of after-tax income, which hardly seems fair. So you’d
probably want to make sure that there’s enough competition among
insurers to keep premiums down, which is what those
government-supervised exchanges are all about. And you’d want to have
some subsidies to limit the financial hit to low-income families. To
pay for the subsidies, you’d either have to raise taxes or cut spending
in other areas.
And hey, that’s exactly the $900 billion health care reform plan on the table (er, the cutting room floor).
Obama made mistakes, but the freak upset in Massachusetts is a cause for creative reflection, not creative revisionism, among both Democrats and their critics.
