Reform and Trade-offs

by Ramesh Ponnuru

At The New Republic, Danny Vinik claims that Republicans are unable to deal honestly and intelligently with trade offs. Politicians do not generally excel at this, so he has some evidence for his view — even if his presentation is one-sided. (I recall a certain piece of health legislation from a few years ago that was supposed to increase coverage, reduce premiums and the deficit, and not cost anyone his health insurance.) Two of his examples, however, strike me as off the mark.

First he argues that Mike Lee’s tax reform plan has gotten a good reception among conservatives only because it reduces federal revenues by an unrealistic amount, and thus avoids inflicting much pain. Lee does, however, go after some big tax breaks. And he has reacted to estimates of the plan’s budget impact by saying he will revise the plan so it does not cause revenue to drop as much as projected. There are plenty of ways to do that without sacrificing the features of the plan many conservatives have lauded. For example, Lee could refrain from ending the AMT: a feature of his plan that has occasioned almost no comment but makes a big difference to the numbers.

Vinik also argues that Tom Coburn’s health bill is not taking off because it resembles Obamacare, especially in causing physician networks to narrow. Yuval Levin and I wrote an article in a recent NR responding to the view that the bill amounts to Obamacare Lite. We discuss the narrow-network claim in that article:

Liberals have argued . . . that under both Obamacare and the Republican proposal many Americans’ health-care plans would offer narrow networks of medical providers — even though Republicans have criticized Obamacare for narrowing networks. But the projection on which liberals rely does not say that many people will move from wide networks to narrow ones; it appears to say that many people will move from having no networks to having narrow ones. No conservative, in any case, has ever opposed letting people choose plans that provide narrow networks. What is objectionable about Obamacare in this regard is that it so constrains the marketplace that the shrinkage of networks is almost the only way insurers can offer cheaper plans.

Maybe the Coburn proposal will get more takers as some of these misconceptions get cleared up.

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