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The Agenda

NRO’s domestic-policy blog, by Reihan Salam.

The Right’s Missed Opportunity?



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One of the best postmortems on the health reform debate comes from Patrick Ruffini, the leading Republican new media strategist. As a strategist, his take is centered on the conservative failure to develop a coherent narrative regarding the sources of dysfunction in our health system. This lack of clarity contrasts sharply with the simplicity, coherence, and normative appeal of the progressive call for universal access, which then defined the terms of the debate. Ruffini uses stronger language than yours truly, but there his analysis is compelling in many respects. 

The left has had a far greater number of health care analysts devising grand plans for the eventual takeover. And they have invested more political capital in this issue than any other. It should surprise no one that the conservative effort in this space has been paltry in comparison. We just haven’t had as many people thinking about health care, and we didn’t actively move legislation on it when we were in power. 

Perhaps you might say that’s beside the point of the awfulness of this plan, and that our full efforts must go towards repeal. Be that as it may, Republican inattention to health care and the failure to develop a compelling free market narrative on the issue led to the place we are now. By pounding home the notion that the uninsured were the central problem with the health care system, and pointing to the fact that their numbers were growing each and every year, liberals built a sense of urgency that conservatives didn’t have and were able to demand action — even if that action was political suicide. 

Ruffini then goes on to offer a frustrating counterfactual.

Imagine if instead of the Medicare Part D entitlement, the Bush administration had moved a smart, substantive health care bill that addressed cost as the key to unlocking access, making health plans dramatically more affordable, addressing medical liability, and moving away from employer-based plans by giving any group — whether an employer or not — the ability to organize their own health insurance pools? 

I was there, and I can attest that the Bush Administration did make good faith efforts to move medical liability and association health plans, but it was never the central, overarching focus. It was clear they would never expend political capital like they did on the prescription drug issue that they let themselves get baited on by Al Gore in the 2000 campaign, or the war, or tax cuts. 

A well-developed Republican health reform effort could have addressed the high cost of health care — actually the most glaring issue in our system — in a way that would have served as a kind of tax cut for the already insured. And in lowering costs, we could have covered the people who wanted health care but couldn’t afford it — the nub of the uninsured problem.  

Though this counterfactual appeals to me, lowering costs is a long and arduous process that would require trimming if not eliminating the tax exclusion for employer-provided health insurance, a step that would create a great deal of immediate disruption in exchange for a far-from-immediate gain. 

To his credit, President Bush offered a sober health reform proposal that would have increased the progressivity of the tax code while helping a large number of working and middle class households. Sheryl Gay Stolberg and Robert Pear, two of the most knowledgeable reporters on domestic policy, offered the following characterization of the plan: 

The basic concept is that employer-provided health insurance, now treated as a fringe benefit exempt from taxation, would no longer be entirely tax-free. Workers could be taxed if their coverage exceeded limits set by the government. But the government would also offer a new tax deduction for people buying health insurance on their own.

“I will propose a tax reform designed to help make basic private insurance more affordable,” Mr. Bush said in his weekly radio address on Saturday, “whether you get it through your job or on your own.” He did not offer specifics, but an administration official provided details of the plan.

The proposed plan is a startling move for a president who has repeatedly vowed not to raise taxes. And it is certain to run into opposition from business groups, labor unions and, most of all, the Democrats who now run Capitol Hill.

Unfortunately, congressional Democrats were not terribly helpful at the time. 

“It’s a bad policy,” Representative Charles B. Rangel, the New York Democrat who is chairman of the House committee that writes tax legislation, said in an interview Friday night. “We are trying to bring tax relief to the middle class. The president is trying to increase their tax liability. This proposal is inconsistent with what the majority is seeking in the House and the Senate.”

Granted, the Bush White House should have advanced a proposal along these lines earlier on, perhaps as part of the push for the Medicare Modernization Act. But opposition from congressional Democrats would have been no less intense. One is reminded of how Democrats blame the deficiencies of the new health law on the ferocity of Republican opposition. Sadly, two can play that decidedly unedifying game. 

White House officials say the health tax plan would neither increase spending nor reduce tax revenues. Supporters say it would expand coverage to some of the 47 million uninsured. But critics say it would, in effect, tax people with insurance to provide coverage to those without it.

Note that the “Cadillac” tax and the use of planned cost savings in Medicare to fund premium subsidies can also be characterized as an effort to “tax people with insurance to provide coverage to those without it.” Many policy thinkers have concluded, reluctantly or not-so-reluctantly, that this is the best and most appropriate way forward. Given that, as the president and his allies have explained, the cost growth problem gets worse with each passing year, one wonders if congressional Democrats who opposed the Bush reform plan now intend to apologize to the former president and indeed to the country for their shortsightedness.

Then again, they could blame it on the natural heat of political competition, a bottomless source of energy that, like geothermal energy, might eventually represent a badly-needed alternative to fossil fuels. 



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