Obama's Nixon Moment

The other day I was listening to Sean Hannity on the radio.  It seems that “Conservatism in Exile” has come dangerously close to preaching the “He’s not MY president gospel”—something I always thought was reserved for America-hating liberals.  But they did get into some interesting questions.   Hannity had his pal Dick Morris on his show, who was calmly explaining that Obamacare would result in the mass slaughter of the elderly.  Somehow I have my doubts. Rampant hyperbole aside, I too have my doubts about Obamacare.  Namely, how are we going to cut costs while expanding coverage?  Those new medical services aren’t going to pay for themselves.  Rather than deal with these sorts of concerns directly, the President has chosen to deal in lofty parables:

“There's going to be some disagreement, but if there's broad agreement that, in this situation the blue pill works better than the red pill, and it turns out the blue pills are half as expensive as the red pill, then we want to make sure that doctors and patients have that information available to them.”

Cue Morpheus and the Matrix: welcome to the desert of the health care sector.  Notably, Obama is advocating the blue pill, the one that makes you “believe… whatever you want to believe.”  Costs will be cut.  Never mind that Congressional Budget Office report.  Look at all those other countries with single payer and more universal systems that have lower costs.

What these macro international comparisons of the percentage of GDP spent on health care across various countries neglect is the very real micro problem of US government’s finances.  Simply put, we don’t got money.  And if you’ve ever seen one of those scary ass J-shaped charts of entitlement spending, you know it’s only going to get worse.  Besides, Americans like consuming things.  Why should health care be any different?  Maybe we just like consuming health care services and thus we spend more of our aggregate national income.   I’m reminded of my elderly aunt who apparently is only capable of talking about her and her friends’ health problems.2433858145_d7324c08d8

What it really comes down to is that those systems are more cost effective because they’re better structured.  But it’s not like we can just wave a magic wand and get their health care system.  Liberal pundits are worried that delay will mean no reform, but that’s not the case.  What they really mean by reform here is change.  Delay means a lessened likelihood of substantial change to the status quo (in terms of the governments’ role).  But rushing the bill increases the likelihood that not all of the several hundred page monstrosity of legalese argot will be properly vetted.  Cough, the stimulus, cough.  Rushing means we’re more likely to get a substantial change, but it’s questionable whether that will be for the good—i.e. reform.

The situation is becoming increasingly tenuous for Obama.  His original timeline is in shambles.  Obamacare is slowly crumbling in the polls; it was only with a desperate this will cost me my presidency push that Obama was able to stop Blue Dogs from killing his pet project.  But they still have serious doubts.  And that’s not to mention the Senate or the electoral implications for 2010.  Yet, in every crisis there is an opportunity.

This could be a Nixon goes to China moment.  The public thinks Obama is focused on expanding coverage to the uninsured over cutting costs by over a 3:1 margin.  Republicans and Democrats are roughly united in their belief; the discrepancy between the percentage of Republicans and the percentage of Democrats who believe Obama is focused on expanding coverage is within the margin of error.  What if Obama jettisoned the public option and the road to single payer in favor of a narrower bill focused on cutting costs and disentangling perverse incentives?  This would immediately destroy Republicans’ best argument against him (that he’s an overspending far-left liberal) and would make real his post-partisanship rhetoric in a very tangible way.

The plan could start by eliminating the subsidy to employer-based health care, which just obfuscates the costs and benefits of health insurances.  Obama’s wonky head of Office of Management and Budget, Peter Orzag, puts the issue well: "I very firmly believe that capitalism is not founded on excessively high subsidies to private firms. That is what this system delivers right now." The now defunct wonkish Wyden bill would be another place to look for good ideas.

This could only be a victory for Obama and a much needed boost to his bipartisan credentials.  So far, his efforts at congressional bipartisanship have been mostly symbolic:

“Republicans said this White House’s effort at bipartisanship had been one of symbols — presidential calls, invitations to the White House, regular tending by such high level officials as Mr. Axelrod and Rahm Emanuel, the chief of staff — rather than substance. “We hear from them all the time,” Mr. Alexander said. “They said the right things. They are as cordial as you can be.”

More pertinently, how could Republican’s spin this into failure?  “Obama caved into our common sense pressure and abandoned his socialistic medicine agenda.”  Translated: “Obama failed in his pursuit of a leftist policy agenda and pursued a magnanimous middle ground.”  Sounds like a win to me.

Such a move would be the best possible type of compromise: not only will both sides give something up, but it would actually be in the best interest of the nation.  Our healthcare costs really are skyrocketing, and there’s a lot we can and should do on that front.  But it’s a bit disingenuous to conflate our broken healthcare system vis-à-vis its skyrocketing costs with the social justice question of whether we want universal coverage.  For Obama, the question he needs to ask himself is simple: do I care more about my legacy and post-partisanship or liberalism?