Undooming Conservatism

by Ramesh Ponnuru

Responding earlier today to a National Review article of mine published in mid-December, Josh Barro argues that conservatism is doomed because there’s nothing in it for most people. He takes aim at two of the ideas I discussed.

The first is a reform of health care that would allow the market for insurance bought by individuals, a market now inhibited by various government policies, to grow. The “biggest problem” with this idea, Barro writes, is that it would threaten existing insurance arrangements. Putting individually purchased and employer-provided insurance on an equal tax footing would cause many employers to drop coverage, he writes. This is probably true, which is why the article said that “the idea may well need modification” to avoid precisely that scenario. For example, the tax credit for individually purchased health insurance could be made available only to people who do not have access to employer-provided coverage. (I’ve advocated this approach several times in recent years, which is not to say that I expect Barro to be aware of this.)

Barro’s main additional points about health care amount to an optimism I don’t share about the likely results of Obamacare and a confidence that accurate projections of the results of the policies I advocate would show them to work badly. I am less confident than he apparently is that modelers can be trusted to predict the effect of competition on wages and premiums. But I will readily admit that if you come at his article predisposed to take his views, you’ll find him persuasive.

Second, I suggest that Republicans again take up the cause of expanding the child tax credit, which was an important part of their tax agenda in 1994 and 2000. Barro argues that Republicans have shown no interest in expanding the child tax credit, and that their aspiration to balance the budget in ten years means they would have to raise tax rates to make room for the large expansion I advocate. They have a few more options than that. They could cut spending more; they could pare back tax breaks such as the deduction for state and local taxes; and they could expand the top tax brackets to include more people without raising the top rate. They would, though, have to drop the dream of getting to a 25 percent top tax rate (unless they are prepared to go much further in cutting spending than they have ever hinted).

Will Republicans change their priorities? Will they not only support high-risk pools, as they already do, but be willing to give them the funding they will probably need to accommodate a conservative health reform (which would still reduce federal spending on net)? Probably not. But I never said that Republicans would pursue these ideas, only that they could do so to the betterment of their political standing and the country. Which is enough for one article, I should think.

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