Now ObamaCare debate moves to the real world

Via-WAPO

By Jennifer Rubin

In writing on the real problems with ObamaCare and the prospect for repeal, Ezra Klein deserves credit on several points.

First, although he briefly delves back into a defense of CBO calculations, he then turns, as many of us have, to considering how ObamaCare works in the real world. The Holy Grail of CBO accounting only gets you so far. As he puts it, the "more persuasive critique" of ObamaCare focuses on "some bad signs for the bill going forward." That is a huge concession, but a smart one since the Republicans will spend the next two years revealing and explaining the load of unintended consequences.

As an aside, the CBO's details, which make clear that repealing ObamaCare entails eliminating $540 billion in government spending and $770 billion in taxes, not including the "doc fix" and corrections for accounting gimmickry, is going to play right in the Republicans' assault on the Democrats as the tax-and-spend party. Yuval Levin explains:

Obviously it would be best to reduce spending by an even greater amount than we reduce taxes over the next decade--and of course the Republican House is proposing to do just that through its cuts in discretionary spending, and hopefully will also do so through entitlement reform. But the notion that a massive tax increase and a massive spending increase are the way to reduce the deficit hardly seems like the message the Democrats should want to be pushing just now. If they want to spend their time informing Americans that the Republican repeal bill is a huge tax cut and a huge spending cut, it seems to me Republicans ought to welcome that.

In short, Democrats probably want to stay away from the numbers argument, especially as CBO is asked to review Republican plans with far more modest outlays.

Second, Ezra concedes the bill is unpopular. ("We can argue about why it's unpopular, or what the unpopularity means. But for the moment, let's just grant the point.") That doesn't seem to be a big deal for conservatives, who have been pointing this out for two years, but it's a rather stark turn-around for liberals. They tried to convince House Democrats it would be popular and the key to their electoral survival. They told the media and voters that once Obama really explained the bill, it would be embraced. All of that was wrong. Ezra doesn't delve into why it is so unpopular -- but the massive cost, the huge tax hikes, the disruption of existing insurance arrangements and the requirement to buy insurance you don't want are part of the answer. As the House Republicans explore all that in hearings, the legislation is likely to become even more unpopular.

Third, Ezra concedes the bill has real flaws. And he correctly recognizes that Republicans are not about to fix a bill they find fundamentally flawed. Think about that: the historic legislation that Obama said would be the last word on the subject ("I am not the first President to take up this cause, but I am determined to be the last") is politically toxic. Now reality has set in that Republicans aren't about to dump their longstanding objections to the fundamental design of the bill and fix it.

Fourth, Ezra's argument is a heads up to those who would welcome the invalidation of the individual mandate. He's telling them: don't expect the GOP to fix that one. You think they will throw in the towel and pass a public option? Uh... no.

Brooks wrote in opposition to ObamaCare in December 2009:

If this bill passes, you'll have 500 experts in Washington trying to hold down costs and 300 million Americans with the same old incentives to get more and more care. The Congressional Budget Office and most of the experts I talk to (including many who support the bill) do not believe it will seriously bend the cost curve. . . . The basic political deal was, we get to have dessert (expanding coverage) but we have to eat our spinach (cost control), too. If we eat dessert now, we'll never come back to the spinach.

So what's my verdict? I have to confess, I flip-flop week to week and day to day. It's a guess. Does this put us on a path toward the real reform, or does it head us down a valley in which real reform will be less likely?

If I were a senator forced to vote today, I'd vote no. If you pass a health care bill without systemic incentives reform, you set up a political vortex in which the few good parts of the bill will get stripped out and the expensive and wasteful parts will be entrenched.

If you pass a health care bill without systemic incentives reform, you set up a political vortex in which the few good parts of the bill will get stripped out and the expensive and wasteful parts will be entrenched.

Defenders say we can't do real reform because the politics won't allow it. The truth is the reverse. Unless you get the fundamental incentives right, the politics will be terrible forever and ever.

We are now seeing that played out, precisely as Brooks predicted. So, as Ezra observes, now is the time for both sides to move from the theoretical to the actual. If the bill is vastly more expensive than advertised, causes great upset to consumers and negatively impacts care, shouldn't we repeal and replace it? Levin wrote in April, 2010:

Conservatives opposed this scheme because they believed a public insurer could not introduce efficiencies that would lower prices without brutal rationing of services. Liberals supported it because they thought a public insurer would be fairer and more effective.

But in order to gain 60 votes in the Senate last winter, the Democrats were forced to give up on that public insurer, while leaving the other components of their scheme in place. The result is not even a liberal approach to escalating costs but a ticking time bomb: a scheme that will build up pressure in our private insurance system while offering no escape. Rather than reform a system that everyone agrees is unsustainable, it will subsidize that system and compel participation in it--requiring all Americans to pay ever-growing premiums to insurance companies while doing essentially nothing about the underlying causes of those rising costs. . . .

Indeed, many conservatives, for all their justified opposition to a government takeover of health care, have not yet quite seen the full extent to which this bill will exacerbate the cost problem. It is designed to push people into a system that will not exist--a health care bridge to nowhere--and so will cause premiums to rise and encourage significant dislocation and then will initiate a program of subsidies whose only real answer to the mounting costs of coverage will be to pay them with public dollars and so increase them further. It aims to spend a trillion dollars on subsidies to large insurance companies and the expansion of Medicaid, to micromanage the insurance industry in ways likely only to raise premiums further, to cut Medicare benefits without using the money to shore up the program or reduce the deficit, and to raise taxes on employment, investment, and medical research. . . .

Of course, this scenario--for all the dark prospects it lays out--assumes things will go more or less as planned. CBO is required to assume as much. But in a program so complex and enormous, which seeks to take control of a sixth of our economy but is profoundly incoherent even in its own terms, things will surely not always go as planned. The Medicare cuts so essential to funding the new entitlement, for instance, are unlikely to occur. Congress has shown itself thoroughly unwilling to impose such cuts in the past, and if it fails to follow through on them in this case, Obamacare will add hundreds of billions of additional dollars to the deficit. By the 2012 election, we will have certainly begun to see whether the program's proposed funding mechanism is a total sham, or is so unpopular as to make Obamacare toxic with seniors. Neither option bodes well for the program's future.

We're now going to see all that ObamaCare, as designed, entails. The problem is not in the particulars but in the concept, which Brooks and Yuval warned us was fundamentally flawed. It's not fixable. And so it must be repealed and replaced.