Rahm Is Desperate To Cave

In The Wall Street Journal, Rahm Emanuel explained how he could live with a trigger option on the public plan:

It is more important that health-care legislation inject stiff competition among insurance plans than it is for Congress to create a pure government-run option, White House Chief of Staff Rahm Emanuel said.

"The goal is to have a means and a mechanism to keep the private insurers honest," he said in an interview. "The goal is non-negotiable; the path is" negotiable [...]

One of the most contentious issues is whether to create a public health-insurance plan to compete with private companies.

Mr. Emanuel said one of several ways to meet Mr. Obama's goals is a mechanism under which a public plan is introduced only if the marketplace fails to provide sufficient competition on its own. He noted that congressional Republicans crafted a similar trigger mechanism when they created a prescription-drug benefit for Medicare in 2003. In that case, private competition has been judged sufficient and the public option has never gone into effect.

The President quickly walked back the comment, saying that "one of the best ways to bring down costs, provide more choices, and assure quality is a public option that will force the insurance companies to compete and keep them honest."

It's curious that Emanuel cites the trigger in the prescription drug benefit. That has never been tripped, and indeed the White House needed to strike a deal with the pharmaceutical industry to lower costs under Medicare Part D. So a lack of competition unnecessarily raised profits for the industry by at least $80 billion (the cost of the deal) over a decade, and there's STILL no public drug company option. These triggers are Washington compromises designed to never meet the standard where they would have to be tapped.

Emanuel's orientation is to accommodate centrists and kick liberals. He's been doing it since he entered politics. There's plenty of elements to health care just as important as a public option, but that's the most controversial, and so the Chief of Staff wants to cave on it to reach a compromise. The other issues, like the health insurance exchanges, the subsidies for the poor, Medicaid eligibility, the baseline level of care, etc., isn't getting the same attention, so Emanuel figures he can just strangle them behind closed doors. With the public plan, a high-profile issue, Emanuel probably thinks he has to lay the groundwork for a capitulation. Or, he's maybe lowering expectations, so Chuck Schumer can rush in and dictate the process, watering down the public plan down to a "level-playing field" piece of insignificance. But Rahm's problem is exactly the same as during the Clinton Administration:

If short-term pressures to accommodate concerns about the deficit curb Obama's ambitions, the result could be not only disaffection among progressives but also disappointment among the less ideologically inclined. Despite their skepticism about government, most in this latter constituency want Washington to foster economic expansion and improve their health coverage.

The president will thus have to balance worries about losing some moderate support against the larger danger of failing to achieve the sweeping change he promised. The obvious path for Obama -- the one he is likely to take -- is first to achieve his reforms, particularly in health care, and later to pivot to dealing with the deficit, once the economy starts improving. (Obsessing about the deficit in a downturn is not a recipe for recovery.) And centrist Democrats in Congress could usefully recall that the party's inability to deliver on Bill Clinton's 1992 campaign pledges, particularly on health care, led to a stunning defeat two years later that decimated its moderates and liberals alike.

In his first six months, Obama showed he was up to the job. This summer will test his ability to make agonizing choices -- and make them stick.

The public won't be bullshitted by a bill, any bill. People will need a tangible benefit, and for better or worse, that has become the public plan. Those who stand in the way will have trouble reclaiming their legitimacy.