Bold Post-Partisan Leadership In California

As mentioned by Robert in Monterey on Calitics, Governor Schwarzenegger's (it still takes you back for a second to write that) intransigence and stubbornness has led to the end of any meaningful health care in this special session.

Abandoning their facade of cooperation, a coalition of California labor unions and consumer groups says it is gearing up a campaign to discredit Gov. Arnold Schwarzenegger's healthcare proposal as too expensive for many workers.

Organizers say they will trail Schwarzenegger throughout California to challenge and rebut him, hold prayer vigils and news conferences, press elected officials to oppose his proposal and run critical ads on television. They plan to deride the governor's program as the "Arnold Middle-Class Gouge."

The coalition, which includes most major unions and two prominent consumer groups -- Health Access California and Consumers Union -- has hired one of the nation's most aggressive Democratic strategists to run the campaign.

The campaign represents a break from labor leaders' strategy, which had been to encourage Schwarzenegger's efforts while gently prodding him in their direction. Leaders say they no longer believe that the governor will ever agree to their priorities without pressure.

Let's be clear on who's at fault. The Governor had an entire year to formulate a plan and begin negotiations aimed at providing something meaningful for Californians. He waited until calling the special session, and put out the same exact language that he did in January. He was adamant on indulging in the same kind of forced-market failure that is already leading Massachusetts to call for exemptions because nobody can afford their mandatory health insurance. Arnold's goal is to embolden an insurance market that already has stolen $15 billion in prescription drug costs on a national level. And no Democrats or progressive organizations would go for it. But he didn't care, he put out the same proposal, and now he's going to be surprised, after ten months of not negotiating, that nobody wants his vision of health care reform.

Furthermore, I think the unions are being a little shortsighted in approaching a ballot measure as how to skin employers the most:

The labor groups are threatening to bring their own proposal to the voters in a ballot initiative next year. Itwould place on employers most of the financial responsibility for providing insurance on employers, as did the Democratic healthcare overhaul vetoed by Schwarzenegger last week.

A similar measure that passed the Legislature in 2003 was narrowly rejected the following year in a referendum brought by business groups, but labor groups thinks Californians' concern about health care has risen to the extent that the public would accept such a measure now.

That ballot measure looks just as crappy to me. We need to sever the employer-health care relationship, not strengthen it. Not only does that place an undue burden on economic competitiveness, it puts workers in peril in a time when we don't have cradle-to-the-grave job security. You would actually strengthen the perversity of people hanging on to a bad job simply for the health care. If Andy Stern is true to his word, the SEIU will not support this. This is exactly the kind of retro union thinking that he decried in his book "A Country That Works."

The idea of health care that is untethered to employment is rooted in the very American concepts of entrepreneurship and innovation, which allow people to take risks and not be afraid of having nowhere to turn in the event of catastrophe. It also does absolutely nothing for the problem of global competitiveness. We put $1,500 on the hood of American-made cars right off the bat due to burdening employers with health care costs. Employer-based health care was a historical accident based on a wartime tax quirk that allowed health care purchased by an employer to be deductible. It's a horrible basis for a modern system where that tax benefit is swamped by rising costs and a grossly unequal playing field is created globally. And furthermore, a tax on employers will inevitably carry over to wages.

This debate among the politicians, however, ignores a point upon which almost all economists agree: employers don't really pay for health care now, and they won't be paying for it no matter what kind of new law the state passes. We as workers pay for our own health care, and if more people understood this fact, the debate over the issue would probably play out in an entirely different fashion.

Sure, employers often negotiate with insurance companies on our behalf, and they cut a check for their "share" of the premiums. They deduct our share from our paychecks and list it right there on the stub. So how can anyone argue that we, the workers, are actually paying the entire amount?

Because, ultimately, employers roll health insurance premiums into a package with wages, retirement benefits and any other cost associated with hiring an employee. The employer considers the entire amount to be the cost of each additional worker.

You can come up with the most innovative way to pay for employees, but it makes no sense rather than just signing everyone up and paying for it out of broad general fund expenditures shared by society. (I guess the full disclosure should be that, as a freelancer, employer mandates won't help me one bit.)

If you're going to the ballot anyway, you might as well start building the coalition necessary for a Sheila Kuehl-like SB840 solution. Some grafted on plan that rewards the for-profit insurance industry and takes the money from employers seems to me like the worst of all possible worlds.