Last week, Yuval Levin made a provocative argument that hasn’t received the attention it merits:
In his book The Audacity of Hope, Obama speaks of a “time before the fall, a golden age in Washington when, regardless of which party was in power, civility reigned and government worked.” He has in mind in particular the early and middle 1960s—a period he suggests was the high-water mark of the American regime.
But in fact, that period marked a temporary but very costly failure of the adversarial controls essential to the American system. That failure did not occur (as some others have) because of a terrible war or a grave economic calamity. It happened in the midst of peace and prosperity. It had its roots in an unusual postwar elite consensus on social policy and in the catastrophic failure of the Republican party to offer a plausible alternative to that consensus in the 1964 election. The result was a brief but significant explosion of policymaking that yielded the hasty and careless creation of a massive artifice of entitlement and discretionary programs we have come to know as the Great Society. The peculiar combination of factors that enabled that spurt of reckless activism did not last long, and our politics soon returned to a more balanced state in which our governing institutions and parties staunchly resist one another’s advances and change is relatively slow and measured. But precisely that return to normality has meant that the products of the Great Society have been very hard to undo or reform. Our system of government was never supposed to allow such hyperactivity, and so is not well equipped to reverse its excesses.
Our domestic politics in the coming years will be focused intently on picking up the pieces of the terrible disaster unleashed on us by the Great Society—and especially by the design of the two large health-care entitlements created in 1965: Medicare and Medicaid. It has been clear for decades that those two programs will drive our country to fiscal ruin if they are not substantially reformed, but politicians of both parties have tried to ignore and deny the necessity of such reforms. [Emphasis added]
A few things I found notable about the passage above:
(1) Among conservatives, it is common to see the Goldwater presidential campaign in a positive light. Yet in reading contemporary accounts of the campaign by conservatives, including William F. Buckley Jr., one gets the strong impression that many who shared the Arizona senator’s core convictions were deeply concerned about the prospect of a Democratic landslide. At least some conservatives, including James Burnham, who at the time served as the de facto editor of National Review during Buckley’s long absences, insisted that the right should view the liberal Republican Nelson Rockefeller, at the time the popular, state-expanding governor of New York, as he was more likely to give LBJ a run for his money, and because his views on the cold war, which Burnham considered the most vitally important issue, were fundamentally sound. Others, who placed a heavier emphasis on domestic issues and who felt that it was important to begin the process of rolling back the centralization that had defined the New Deal era and that was consolidated under President Eisenhower, felt that Goldwater might do the cause more long-term harm than good.
I get the impression that Yuval is at least implicitly siding with the Goldwater critics, who felt that Goldwater’s campaign, which focused on themes many American voters found esoteric, in effect greased the skids for a massive expansion of the federal government.
(2) It is interesting to note the budget projections offered by advocates of the Medicare program at the time of its passage.
In 1964 the administration projected that Medicare in 1990 would cost about $12 billion in 26 years (which included an allowance for inflation); the actual cost was $110 billion.
Robert Helms wrote an essay on the origins of the Medicare system in 1999 that offers valuable context, and that lends credence to Yuval’s thesis. The postwar boom and a favorable dependency ratio helped create the elite consensus Yuval describes. Few gave due consideration to the predictable possibility that the dependency ratio, i.e., the ratio of prime-age workers to retirees, would eventually shift, or that the creation of a not-well-designed health safety net might exacerbate cost growth by, among other things, encouraging the overconsumption of medical care. One of the only lawmakers to have raised this possibility was Wilbur Mills, a Democrat who had adamantly opposed the creation of a Medicare-like program in the past. Yet it was Mills, chairman of the Ways and Means Committee at the time, who was most responsible for the program’s passage and its complex structure.
As Steven Teles has argued, in Conservatism and American Political Development and elsewhere, opponents of the expansion of the welfare state have had an impact on the shape and structure that the welfare state happens to have taken. The peculiar compound structure of PPACA, for example, reflects the imprint not so much of conservative ideas as such (the claim advanced by many of our interlocutors), but rather an effort to inoculate health-system reform against the most potent conservative and centrist criticisms.
I find the parallels between the Medicare debate of 1965 and the debate over health-system reform very interesting. Helms writes the following:
The debate over Medicare was long and bitter, and without the intense push from President Johnson and the skillful handling of the process by Wilbur Mills, Medicare might not have passed, at least not in the complicated form it did. In the fifteen-year debate prior to 1965, almost every idea that Medicare reformers are now considering—vouchers, tax credits, more consumer cost sharing, means testing, catastrophic-only coverage, prefunding, individual consumer choice—were all considered and rejected.
After thirty-four years of experience, we now know that the basic design of Medicare was fundamentally flawed. Even when the creation of a government program creates great monopoly power in the purchase of services, government does not have the ability to control the cost of the program while keeping consumers satisfied. Ever tighter and more detailed regulation of reimbursement rates and private payments is a poor, and often perverse, substitute for the discipline of the marketplace. [Emphasis added]
Goldwater’s insistence on rolling back the New Deal era expansion of the welfare state may well have been admirable and constitutionally sound, but it reflected an intransigence that may have contributed to the profoundly problematic structure of Medicare. Per Helms, had the health safety net for the elderly poor been structured in some other way, with conservative support, it is quite possible that we’d be much better off.
Perhaps this is too clever by half. The passage of Medicare itself was seen as a stepping stone to a single-payer system, as Helms notes, and that didn’t happen, so we should of course consider the counterfactual in the other, more statist direction.
I’ll end with a reminder: conservatives are engaged in a decades-long project of, as Yuval writes, undoing the damage done during a “spurt of reckless activism,” and we are, I suspect, in the middle of this project rather than at the end of it. Chairman Ryan’s maneuver — getting Republican lawmakers to back a sweeping, politically dangerous entitlement reform proposal — was important, but it was just one skirmish. What conservatives haven’t done, and must do, is make the case that the right kind of Medicare reform will make a material contribution to growth and prosperity, and to improving the quality of medical care enjoyed by all Americans.
Can you imagine any of our current presidential candidates pulling off that feat?