Let’s begin with a quote from the New York Times:
In the great health care debate of 2009, President Obama has cast himself as a cold-eyed pragmatist, willing to compromise in exchange for votes. Now ideology — an uprising on the Democratic left — is smacking the pragmatic president in the face.
Stung by the intense White House effort to court the votes of moderate holdouts like Senator Joseph I. Lieberman, independent of Connecticut, and Senator Ben Nelson, Democrat of Nebraska, liberals are signaling that they have compromised enough. Grass-roots groups are balking, liberal commentators are becoming more critical of the president, some unions are threatening to withhold support and Howard Dean, the former Democratic Party chief, is urging the Senate to kill its health bill.
This description of the debate over the Senate version of health insurance reform reproduces conventional journalistic wisdom about politics in America. On one side are the moderates, the compromisers, the policy wonks. These are the good guys.
On the other side of the ledger, are the lefty villains: the unreasonable, the unserious, those who are moved more by ideology than understanding.
Meanwhile, Joe Lieberman is never an ideologue; neither is Ben Nelson. They’re moderate centrists resisting the vicious Hard Left. It’s grass-roots groups, unions, and complainers like Howard Dean who are thwarting the pragmatism of the president.
The problem with this narrative is that — if you judge based on the conversations happening in the blogoverse — both groups claim to be wonky, pragmatic, clear-eyed undeceived realists; both sides accuse the other of not seeing the forest for the trees. As Steve Benen argues, this is a serious debate.
Serious is fine, but who’s right?
* * *
For me, the bottom line is this: if you’re an anti-corporate liberal — and I’m probably more in this camp, though I am willing to be convinced to support the Senate version of the bill — who thinks that the system in Washington is oriented toward the interests of large companies, at the expense of the needs of people, then the Senate version of this bill will confirm all your fears about how Washington works.
Those who argue — as most who advocate for the bill do — that yes the technical details of the Senate bill are more or less as bad as everyone is saying but that it will be improved over time have the harder argument to make. Take Ezra Klein, who argues:
In a world with an individual mandate, large premium increases are Congress’ problem. It focuses the mind on cost control. Given a choice between passively letting people become uninsured and taking on providers and insurers, Congress will choose the path of inaction. But given a choice between voting to take people’s insurance away and taking on providers and insurers? That’s a harder decision. Right now, the pressure in the political system comes from organized interests. The mandate levels the playing field.
Advocates of imperfect reform assume what they need to argue for: that when it comes time to reform the inadequate bill, to address its lingering structural problems, there will be no choice but progressive change, or an increased likelihood for improvement. Instead of stripping care from people, serious cost cutting measures will be implemented. But why? What will have changed in Washington? The main difference will be that health care corporations will earn more income — their stocks are rightly soaring now — Democratic politicians will depend more than ever on donations by the insurance and Pharma industries to win reelection, and there will be companies on the exchanges that are now “too big to fail.”
Klein offers the most detailed and persuasive case for supporting the bill that I have found, but I think his claims are based on a lot of supposition and incorrect analysis. After all, wouldn’t a private exchange system packed with high-deductable, low-care “coverage” be cheaper, a very plausible way to control costs? What if this is what universal “coverage” will ultimately look like? Is there anything in the Senate bill that does anything to undermine this outcome?
If I had to put on my speculative hat, I would guess that insurance companies on the exchange will cut costs by technically following the letter of the law, and lobbying to make coverage universal but effectively meaningless for many poor people. If you have insurance but can’t afford to pay your high deductible, aren’t you back to square one in some sense? No, haven’t you been pushed back a few squares, since you’re out of that money you’re being forced to pay for inadequate care?
Question for Lee: Do you believe Democratic Senators should vote for the latest version of the bill? You haven’t answered that question, although the last few paragraphs of your post suggest it would be a mistake for this bill to pass.
There are two questions that can be asked about the health care bill in
the Senate:
1. Is the current version of the bill better or worse than earlier drafts of the bill?
2. Is the current version of the bill better or worse than the status quo?
When it comes to the first question, most Democrats seem to beleive the current version of the bill is worse than earlier drafts which included a publicly run health insurance option and/or an expansion of Medicare. But the unpleasant fact is this: earlier versions of the bill couldn’t win the 60 votes necessary for passage. (Some say the Senate Dems could use a process called “reconciliation” to pass the bill with only 51 votes, but I’m skeptical.)
When it comes to the second question, most Democrats seem to believe the bill in its current form is better than the status quo. That’s what Harry Reid and most of his Democratic colleagues beleive, that’s what the President and his advisors think, that’s what Bill Clinton thinks. And that’s what I think.
The folks at the New York Times may also see this bill as an improvement over the status quo. That’s why they characterize Obama as a “pragmatist,” because he won’t make the perfect the enemy of the good — that is, if Obama can’t get a bill that’s awesome for the American people, he’ll still try to pass a bill that’s a marginal improvement for the American people. The New York Times characterizes the uprisers on the left as ideologues — because they’re suggesting the bill should be abandoned because it doesn’t meet their ideological standards.
I sympahize with those who wish the bill was better, but I agree that the lefties suggesting the bill should be abandoned are “the unreasonable, the unserious, those who are moved more by ideology than understanding.” Of course they claim to be reasonable, but Holocaust deniers also claim to be reasonable — claiming it doesn’t make it so.
So do you agree with me that this bill in its latest iteration is a marginal improvement over the status quo? If you do, then the pragmatist vs. ideologue frame isn’t media bias — it’s the only analysis that fits the facts. If you don’t, then we have bigger problems than media bias at the New York Times — problems like what to do with a Democratic Party that would waste this crucial year of Democratic dominance on a bill that makes things worse for the American people. In that case. the real media bias is that the New York Times and the media don’t call out this bill for what it is — a horrible scandal that would seem to justify the dissolution of the Democratic Party altogether.
Comment by Ian — December 19, 2009 @ 5:38 pm
One more thought: If this bill passes and it turns out to be a disaster, then I’ll have to give the progressives credit for having warned us beforehand.
But if the bill passes and ends up working, then I’ll lose even more faith in progressive leadership.
I lost a lot of faith in progressive leadership because of what happened about a year ago, when people such as Paul Krugman and Arianna Huffington were trashing the bank bailout, saying the bailout was insufficient to solve our problems.
I wrote this in a blog in September 2008:
It seems we on the left are nearly unanimous in our opposition to the Paulson bailout plan.
Arianna Huffington calls it “a pricey debacle,” says the plan will “do nothing for American families,” warns Congress against being “bull-rushed into disasterous public policy,” and asks “How dumb, or frightened, do they think we are?”
Matthew Yglesias calls it “a terrible policy.”
And Paul Krugman says the plan “doesn’t make sense.”
Comment by Ian — December 19, 2009 @ 6:55 pm
continuing:
This “pricey debacle” that’s “terrible” and “doesn’t make sense” has apparently righted the banks, thereby avoiding another great depression. Everyone seems to agree we’ve come back from the abyss and the cost to the taxpayer will be minimal, since the vast bulk of the bailout money we lent out will be paid back. The rate of job loss has slowed to nothing, GDP growth is on the rise again, the stock market has stabilized, and it appears we are hitting bottom about when Obama and his economic advisors suggested we would.
What should we expect from Huffington, Krugman, and other folks who were so utterly wrong about the bailout? And why are they still taken seriously as progressive leaders? Perhaps because many progressives don’t care about whether Huffington or Krugman were right or wrong — all they care about is whether Huffington and Krugman validate their preconceived notions, reality notwithstanding.
Comment by Ian — December 19, 2009 @ 7:01 pm
On the whole, though I’m ambivalent, I probably come out for passing the Senate bill, since I don’t think it’ll make matters worse than what exists today, and the bill should be given a chance to stand the light of day. Arguing counterfactually about what the bill will or won’t do won’t convince anyone.
Personally, based on what I’ve read, I don’t think it’ll do much, without significant additional reform, to fix our health care system, and we won’t even be able to assess its effectiveness until Obama’s — possible — second term. I think “coverage” will in many cases be coverage in name only, universal health care with high co-pays, deductibles, unenforced regulations, clever legal work-rounds by means of which powerful health insurance companies will avoid giving coverage, etc.
There is of course a lot that can be done to fix the bill between now and 2013. I don’t think Democrats will do what needs to be done, for the same reason that they didn’t pass a very good bill this time. But that’s partly up to us. If progressives mobilize and organize and eliminate Lieberman-like senators and launch primary challenges against blue dog Democrats and continue to turn red districts blue and put pressure on our elected leaders to keep their promises, we’ll be in a strong position to demand the changes that both sides of this debate — the so-called wonks and activists — both agree they want to see.
As for the progressive “leaders” you mention — I don’t consider them my “leaders,” but I suppose they lead some — they should be listened to when they make sense, and disagreed with when they don’t. (Krugman happens to be in the pro-Senate bill camp, btw, though he like everyone acknowledges its serious flaws.) As for the financial crisis, I believe that we have not addressed the fundamental problems that caused the financial crisis, and that there will be bigger and worse crises to come absent serious reform. What TARP has done is stabilize the banks in the short term, with little upside for the taxpayer, restoring the status quo ante.
TARP (and TALF and all the acronymed uses of our tax dollars) remains a pricey debacle — think of the opportunity costs; what else could that money have been spent on? what would returns have been if we had nationalized/restructured/prereprivatized/whatever the four largest banks in the country? These measures don’t make sense from the perspective of solving the problems we still need solved. The surviving financial companies are larger, more consolidated, more powerful. They remain “too big to fail” and will thus receive taxpayer bailouts next time and every time they fail.
Comment by Lee — December 21, 2009 @ 5:34 pm
TARP isn’t actually a “pricey debacle.” The cost of that plan to the taxpayer will be approximately zero. In fact, it looks as though taxpayers will make some money from TARP, as the banks who received the money are apparently close to paying it all back with interest. There is, in fact, a debate going on now about whether the government should spend the bailout money on another round of stimulus. So there were no “opportunity costs.”
It’s true that the bank bailout has restored the status quo and that more reform is needed to make sure another financial crisis doesn’t happen. Criticizing TARP for restoring the “status quo” is like criticizing firefighters for merely putting out the fire instead of renovating the property to make it fire-resistent.
You say “arguing counterfactually about what the bill will or won’t do won’t convince anyone.” You then say you don’t think the bill will do much. But I’ve heard it said in the “mainstream media” that this bill in its latest version will bring health insurance to about 30 million Americans who don’t have it currently. You may be right that this bill won’t provide perfect coverage for everyone — it won’t solve all the problems in our health care system — but isn’t it “counterfactual” to suggest this bill won’t “do much?”
I can respect the fact that you don’t follow leaders. But I’ve been following Obama since early 2008, and I have a hard time believing the he and his fellow Democrats are going to raise taxes, reduce Medicare spending by hundreds of billions over the next decade, spend hundreds of billions on healthcare over the next decade, and the result will be “not much.” What about the subsidies to help poor people afford health insurance? Surely that has to count for something, right?
If this bill turns out to be beneficial for the American people, I’ll be pretty annoyed at Dean and others who tried to spin this historic acheivement as a failure because they were pissed at having to make compromises.
Comment by Ian — December 22, 2009 @ 9:49 pm
My claim that the health bill won’t do much of substance isn’t counterfactual; it’s a prediction. Arguing that if we had gone through reconciliation we’d have gotten a better bill, or that if Obama had put more political pressure we would have a version of the public option, is counterfactual. There’s no way to prove that.
As for the various bailouts over these last two years, it has by any measure been a pricey debacle. Even assuming every penny of the TARP money gets repaid — and ignoring the opportunity costs — there’s much more taxpayer money sloshing around out there. Reporting for “Newsweek” back in April, Barrett Sheridan wrote:
“Last week, Paul Kiel over at ProPublica’s very good Eye on the Bailout blog surveyed three of the latest estimates of the total bailout “cost” thus far. I put “cost” in quotes because, as the various analyses make clear, the true cost ranges anywhere from $3.2 trillion to $12.8 trillion–leaving a gap of $9.6 trillion.”
Comment by Lee — December 23, 2009 @ 3:08 pm
You insist on referring to the “opportunity costs” of the TARP. What do you mean?
The TARP — which is what people generally refer to when they talk about the bank bailout — will end up costing nothing. If you have complaints about other government programs, what are they?
Comment by Ian — December 26, 2009 @ 10:47 am
You cited a Newsweek report from April about a blog by Paul Kiel at ProPublica.
Here’s what Keil wrote in a blog post from Dec. 11, 2009:
“This week, the administration has been trumpeting the news that the $700 billion TARP is likely to ultimately cost much less than early estimates. That’s true, but far from the whole story.
The government’s best estimate, released Wednesday, is that the bailouts of AIG and the auto companies will ultimately cost taxpayers about $61 billion. It also forecast that other parts of the TARP will end up making taxpayers money. Put it all together, and the final estimated loss from the bailout’s first full year (thru September 2009) is about $41.6 billion. (See our table below.)
Projected Income ($ Bn)
Est. income from bank investments $15.033
Est. income from extra aid to BoA and Citi $4.128
Est. income from TALF $0.339
Projected Income $19.5
Projected Losses
Est. loss from AIG investments $-30.427
Est. loss from auto company bailouts $-30.477
2009 costs from foreclosure prevention program $-0.002
Administrative costs $-0.167
Projected Loss $-61.073
Est. Total Net Loss $-41.573
The projections reflect only spending through September of this year.
It’s certainly true that the picture has brightened in the past year. When the Congressional Budget Office took a look in January at the TARP’s main bank bailout program, it estimated that the government was about $32 billion in the hole from those investments. With the freshening of the economy and recent reimbursements by the major banks (Bank of America in particular), the Treasury now forecasts that the program will end up making the taxpayer about $15 billion.
But the Treasury’s numbers aren’t the whole story. The latest estimate accounts for only the first year of spending, and the TARP’s spending isn’t done. Treasury says it expects the ultimate cost to be higher. Treasury Secretary Tim Geithner extended the TARP thru Oct. 3, 2010, the TARP’s second birthday, earlier this week. He said, though, that Treasury didn’t expect to deploy more than $550 billion of the $700 billion available. As of today, Treasury has committed a total of about $407.3 billion (that’s excluding companies that have refunded their bailout money).
Because the latest estimate deals only with the TARP’s first year, it doesn’t include two big programs that recently ramped up. The foreclosure prevention program, in terms of spending, is just getting started. It’s unclear how much of the $50 billion set aside for that program will ultimately be spent, because of the program’s difficulties [10]: As of the end of October, Treasury had paid only $2.3 million in incentives to servicers. But whatever Treasury ultimately spends, none of that money will come back, since the program involves subsidies, not investments.
The $30 billion toxic asset purchase program also got started only in the past couple months. That program involves investments and loans, but it’s hard at this point to forecast how it will fare.
The second thing to keep in mind is that the Treasury has also sunk more than $110 billion into Fannie Mae and Freddie Mac. That spending wasn’t part of the administration’s estimates, because it wasn’t done via the TARP.
Treasury also forecasts big losses in other parts of the TARP. Approximately $73 billion went to auto companies; Treasury currently expects to lose about $30.5 billion of that. The AIG bailout fares much worse: $43.2 billion had been spent through September and Treasury forecasts losing $30.4 billion (about 70 percent!). And here’s another opportunity to add a caveat: The projected losses on AIG don’t include $2.1 billion that was loaned last month – and the Treasury could loan as much as $24.5 billion more.
Of course, all these are estimates. If the economy continues to improve and the car market booms, then the government might not lose quite so much in its investment in GM, for example. In the meantime, we will continue to post our monthly updates on the bailout, which rely on hard numbers to give you an accurate picture of how the taxpayer is faring.”
So how are you gettingf $3.2 trillion to $12.6 trillion out of any of this? And are you suggesting that we shouldn’t have bailed out the auto companies?
Comment by Ian — December 26, 2009 @ 11:00 am