Known Skeptics

by Reihan Salam

I’m a fan of David Leonhardt, an economics columnist for the New York Times. To his credit, he published an excellent column two weeks ago that was highly critical of the House health bill. The basic gist of his latest column is very defensible: Democratic centrists who want to shave the cost of the health proposal should focus on fixing various loopholes and gimmicks.

But there are a couple of things that bugged me. Leonhardt favorably cites a detailed analysis by Ron Brownstein that is definitely worth reading. In the piece, Jonathan Gruber, an architect of the Massachusetts health reform, calls himself “a known skeptic” of cost-saving measures. It is certainly true that Gruber is a respected scholar who has raised thoughtful objections to health reform ideas. Yet he is also known as a staunch advocate, not surprisingly, of Massachusetts-style reform efforts. Moreover, he has long argued for a “coverage-first” approach to health reform, one that delays wrenching delivery-system reforms so as to achieve a political consensus. Is it possible that Gruber is letting his optimism get the better of him in service to a coverage-first approach?

My guess is that Donald Rumsfeld would characterize himself as a responsible and engaged steward of the Iraq War. Dick Cheney would presumably characterize himself as an honorable public servant. While I’m not inclined to reject these self-assessments from Rumsfeld and Cheney, it’s by no means obvious that journalists are obligated to accept them at face value. The fact that Gruber calls himself a “known skeptic” tells us very little in itself.

Cognitive biases play a role in every journalist’s work. But I do think it is worth noting that Leonhardt only cites enthusiasts for the proposed legislation. Frustratingly, his only reference to the fact that critics exist is the following:

Complaining that Congress and the White House aren’t doing enough to reduce the deficit is always a popular pundit game. So it’s no surprise that the last few weeks have been filled with knowing claims that health reform will fail to control spiraling health costs.

Leonhardt is aware that there are economists and political scientists — not “pundits” — who are not convinced that Congress will in fact make the planned cuts in Medicare spending, or who believe that the net effect of the proposal will be to accelerate cost growth. He acknowledges that, “it is the execution of the ideas that can be problematic,” which strikes me as an understatement. Granted, Leonhardt only has so many column inches, but this still rankles.

I basically think that Leonhardt is one of the good guys. But if he wants to make the case for a more transparent, workable proposal, he might want to note that both the Senate and House proposals depend on sliding-scale subsidies that might prove impossible to implement, as Eugene Steuerle (an expert and former high-level government official, not a “pundit”) recently suggested. Yes, the Democrats have drawn on deficit-improving ideas from Gruber and other health economists, just as the Medicare Modernization Act contained a variety of deficit-improving ideas. But noting that Congress cut the deficit in 1993 is a non sequitur.

Sometimes, however, Washington really does succeed in reducing the deficit. Presidents Harry Truman and Dwight Eisenhower both did it. President Bill Clinton and Congress eliminated the deficit. Their 1993 budget bill was derided by some of the same people now criticizing health reform as an economy wrecker. Instead, that budget bill created the first significant surpluses since the late 1940s (and helped make possible the 1990s economic boom).

Let’s read between the lines. It’s true that conservatives complained about Clinton’s tax hikes in 1993. But conservatives in Congress backed efforts to restrain spending. Moreover, the “peace dividend,” i.e., sharp cuts to the defense budget, played a significant role. The geopolitical environment at present is rather different than it was in the immediate aftermath of the Soviet collapse. Had efforts to reduce the deficit in 1993 relied on cuts to Medicare rather than cuts to the military budget and tax increases, who knows what would have happened? I know that these subtleties aren’t lost on Leonhardt. I also know that leaving them out of the analysis gives us a badly distorted view of reality.

The Agenda

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