Bai Finds The Two Santa Clauses

Matt Bai, in his largely unremarkable and far from revelatory article about the Obama White House and the coming health care debate (Obama lets the legislature legislate! Sometimes he invites Senators to the White House!), does make an important point near the end. I've been talking a lot about how health care reform may crash on the rocks of having to pay for it, as enough members of Congress find fault with the multitude of options so that no consensus is reached. Bai recapitulates that nicely, and then makes a fine closing point:

THE NETTLESOME THING about leaving the details of the health care plan to Congress, though, is that this Congress, like most every other Congress, doesn’t appear inclined to pay for much of anything. And it is this part of the health care debate — where to find the money — that seems most likely to derail the process. Most discussions of America’s health care woes begin with talk of the uninsured — some 46 million of them at last count. How much a new health care system will cost depends primarily on how close to universal coverage you really want to get. On the high end of the scale, insuring every American might well cost as much as $1.5 trillion over the next decade at a time when deficits are gobbling up a greater share of the nation’s income than at any time since World War II.

The White House has focused mostly on new efficiencies in health care, insisting that lowering the costs of medical care could easily save $2 trillion in public money over the next decade. A coalition of providers, drug makers and insurance companies — no doubt looking for the best possible deal in health care legislation — helpfully vowed in a White House photo-op last month to institute changes that would lead to such savings, but their promise was maddeningly vague and utterly unenforceable (and in any event, the industry groups almost immediately distanced themselves from it). Short of realizing these projected savings, there are only so many ways to pay for health care — and, not surprisingly, congressmen and senators aren’t exactly lining up to embrace them. One way, as McCain proposed, is to rescind the tax exemption for some workers who receive health care benefits from their employers; Baucus is open to at least capping the exemption, but labor unions are adamantly opposed, and Rangel has publicly renounced it (though he and other House Democrats appear to be re-evaluating that stance). Another way is to slap new taxes on some of the products that cause health problems in the first place, like soft drinks, but industry lobbyists are already spending satchels of cash to head that off. Congress can always choose to slash Medicare benefits or the payments that doctors receive, but that idea generates about as much enthusiasm as you might find for putting George W. Bush’s face on the $5 bill.

In a larger sense, this may be the nagging flaw in Obama’s notion of the Congressional presidency, this strategy that leaves the lawmaking to Congress, even as it enables him to claim credit for one legislative success after another. Professional legislators can be great at devising complex language and finding creative ways to get a deal. What they are not especially good at — at least not in the current era — is making the difficult decisions that governing responsibly often requires. Left to their own devices, legislators rarely seem to ask the voters to sacrifice anything by way of taxes or entitlements or services, if only because voters don’t find the entreaties of legislators all that persuasive. And so, absent his own engagement, Obama’s vow to reverse our “collective failure to make hard choices,” as he put it in his inaugural address, may well be pushed aside for another day.

Bai's wrong about McCain, who wanted to eliminate the employer deduction entirely for all workers and replace it with a refundable tax credit to buy insurance. But overall he gets the dynamic right.

Obama actually has waded into this debate this week by announcing his support for using MedPAC to cut Medicare costs. But even that doesn't get you all the way to a deficit-neutral bill. And Bai is completely correct in arguing that Congress so often punts the tough decisions in the face of concerted lobbying efforts. He views it in the context of "sacrifice," which is the dead wrong way to sell it to the public, especially if he intends to mean that the best way to achieve health care reform is to inform the public that the government will take their Medicare away. But yes, he is basically laying out the Two Santa Claus Theory, the idea sold to the public by Republicans that Americans can have endlessly lower taxes and endlessly increased services with no parallel cost. That DOES have to change, and he's right that only a President can call on the American people to change their views on the matter. Democrats have refused to show leadership in this area for so long. Obama actually campaigned on it, at least in part. Health care reform probably hangs in the balance.