The Speech

People like Obama, and people don't like Congress. That's generally why the President needed to give a big speech about health care instead of all 435 members of Congress having a turn ("Charles Boustany" is going to be a historical footnote right up there with Al Downing). And the President we elected is a great communicator but not instinctually a progressive. So given all that, the best that last night's speech could do is rally the public to the side of reform, and let Congress and the truly engaged members of the public do the heavy lifting on specifics of the policy.

And he unquestionably did that. He laid out in specific enough language what the policy would do: Security and stability for the insured, affordable coverage for the uninsured, and lower cost for everyone. Whether or not the actual plans can deliver on these goals remains to be seen. But everyone can agree on them. He did an extremely effective job in detailing why we need reform. There were statistics and horror stories and plain language put to use for this purpose. There was an element of shame to the data points that we're the only democracy on Earth that allows people to go broke because they get sick, that forces the uninsured to endure their hardships, that lets insurance companies deny care because it doesn't meet with their bottom line.

Then he said something that I'm sure was very reassuring to a lot of Americans not named D-Day: "I believe it makes more sense to build on what works and fix what doesn’t, rather than try to build an entirely new system from scratch." There was a gratuitous straw-man shot at single payer right before that, which I certainly didn't welcome. But health care reform lost the plot the last few months. The conservative noise machine deeply confused people and had them wondering about all sorts of radical imaginings. Having laid out the principles for a long time, he needed to reinforce that, and reject the lies being peddled by the other side. Some of these lies I wish were not lies: I think legitimate and legal medical services like abortions should be part of public health insurance coverage like any other legitimate medical service, and I think that germs don't know borders and undocumented immigrants can spread disease in the same way as anyone else, and so they should be able to get care in the most efficient way possible - and that's not going to the ER.

As to the policy, there was some actual news made here. He endorsed an individual mandate and an employer mandate; the latter doesn't appear in the Senate Finance bill, suggesting that it will not be rubber stamped. Obama endorsed the plan to tax insurance companies for high-end plans, a roundabout way of decreasing or limiting the employer deduction, a big pot of money in health care that leads to an inefficient system. He also added a concept from the McCain campaign known as "high-risk pools." In the time it takes to ramp up the insurance exchanges and eliminate denial on the grounds of pre-existing conditions, Obama would use a public program to provide catastrophic insurance to those who cannot otherwise get it right away. That will be expensive, but it will have an immediate impact on the system, which is hugely important. If we pass health care reform and nobody sees the benefits immediately, people will wonder why anyone would agree to doing it.

That high-risk pool will cost money, and Obama put the price tag at $900 billion, which isn't enough to provide affordable coverage under this framework even without the high-risk pools for four years. That's very worrying, and I hope it's not the upper bound of the possible. However, the main veto threat in the speech was a vow to nix anything that increased the deficit, so unless more revenue can be found, I don't see how that number balloons. And it needs to:

Later, Obama makes clear that health reform should cost about $900 billion. He's put that much money on the table before, but it wasn't clear whether he would try to seek more funding. Clearly he won't. On the other hand, given the current political environment, $900 billion is--just barely--what you need to reach universal coverage, or at least put us on a trajectory to it.

The test run for medical malpractice reform is a bone to the right, and if Texas is any indication, it won't work, and Republicans will be confronted by the reality of their own distortions. When medmal fails to bring down costs whatsoever, I hope Obama makes a big show of it, and we have ammunition to rebut the endless cries of "tort reform." As long as nobody gets denied justice when harmed by their doctor, I'm fine with that.

Then there's the public option. Obama kept it alive tonight, devoting seven paragraphs to it. That simply would not have happened if progressives didn't mobilize and engage on that issue. The public option also appears in the Obama plan released yesterday. Again, no way that happens otherwise. I know many of my friends are concerned that he did not make it a deal-breaker, but that's not how Obama rolls. That will be up to us. What he did was provide a solid set of arguments for it, and challenged those ideologically opposed to come up with something that provides choice in the same way - which isn't going to be very possible.

One other very important thing - Obama endorsed the Judy Feder/CAP proposal to implement "fail safe" policies that would kick in if the savings assumed by industry didn't materialize. This is EXTREMELY important for properly scoring the bill, and may allow the total funding to rise.

Health policy experts David Cutler and Judy Feder, however, have an innovative proposal for making them count. In a paper for the Center for American Progress, they argue for the implementation of "failsafe" policies — crude, surefire interventions — that will kick in if the expected savings don't manifest. Limiting the growth of Medicare payments, for instance. Increasing the excise tax on insurers. Moving the public plan towards Medicare rates.

You can think of a dozen with little trouble. But if you kept them looming behind the curtain — the Oddjob to your Goldfinger — in the event that the expected modernization savings didn't manifest, it would make the anticipated savings visible to CBO, and free up money for affordability. Moreover, it would make those savings more likely to manifest, as insurers wouldn't want more of tax on their heads and hospitals wouldn't want lower rates, and so there would be more of an incentive to implement some of the softer, gentler reforms.

But that's all policy. The emotional center of the speech was the revealing of the letter from Ted Kennedy and the explanation of his liberalism, and indeed the virtue of American liberalism. This was the part of the speech I needed to see - an uncompromising defense of the idea that we are all in this together, that we have a stake in one another, interestingly enough the themes I saw the very first time I saw Obama back in 2006. This is great rhetoric:

On issues like these, Ted Kennedy’s passion was born not of some rigid ideology, but of his own experience. It was the experience of having two children stricken with cancer. He never forgot the sheer terror and helplessness that any parent feels when a child is badly sick; and he was able to imagine what it must be like for those without insurance; what it would be like to have to say to a wife or a child or an aging parent – there is something that could make you better, but I just can’t afford it.

That large-heartedness – that concern and regard for the plight of others – is not a partisan feeling. It is not a Republican or a Democratic feeling. It, too, is part of the American character. Our ability to stand in other people’s shoes. A recognition that we are all in this together; that when fortune turns against one of us, others are there to lend a helping hand. A belief that in this country, hard work and responsibility should be rewarded by some measure of security and fair play; and an acknowledgement that sometimes government has to step in to help deliver on that promise.

This has always been the history of our progress. In 1933, when over half of our seniors could not support themselves and millions had seen their savings wiped away, there were those who argued that Social Security would lead to socialism. But the men and women of Congress stood fast, and we are all the better for it. In 1965, when some argued that Medicare represented a government takeover of health care, members of Congress, Democrats and Republicans, did not back down. They joined together so that all of us could enter our golden years with some basic peace of mind.

You see, our predecessors understood that government could not, and should not, solve every problem. They understood that there are instances when the gains in security from government action are not worth the added constraints on our freedom. But they also understood that the danger of too much government is matched by the perils of too little; that without the leavening hand of wise policy, markets can crash, monopolies can stifle competition, and the vulnerable can be exploited. And they knew that when any government measure, no matter how carefully crafted or beneficial, is subject to scorn; when any efforts to help people in need are attacked as un-American; when facts and reason are thrown overboard and only timidity passes for wisdom, and we can no longer even engage in a civil conversation with each other over the things that truly matter – that at that point we don’t merely lose our capacity to solve big challenges. We lose something essential about ourselves.

It's an annoying tic that Obama doesn't call out the enemies of the status quo by name, or that he tries to be inclusive with people who want no part of that inclusion. But this is what makes him appealing to independents - and in doing it, he brings people under an umbrella of liberalism, making the case for government as a valuable partner in our lives, making the case for good government as essential to progress, making the case for large-heartedness. And it makes his opponents look small by comparison. Daniel de Groot has a great post on this at Open Left.

Health care reform was on the ropes. It needed a champion. Obama did his job last night, and added a level of comfort and resolve to the debate. The details of the policy are where we can continue to fight. But very few people can walk away from that speech and say that nothing needs to be done. Ezra Klein has more.