A Wake Up Call from Massachussetts

How could the health care issue have turned from a reform that was
going to make Barack Obama ten feet tall into a poison pill for
Democratic senators? Whether or not Martha Coakley squeaks through in
Massachusetts on Tuesday, the health bill has already done incalculable
political damage and will likely do more. Polls show
that the public now opposes it by margins averaging ten to fifteen
points, and widening. It is hard to know which will be the worse
political defeat -- losing the bill and looking weak, or passing it and
leaving it as a pinata for Republicans to attack between now and
November.

The measure is so unpopular that Republican State Senator Scott
Brown has built his entire surge against Coakley around his promise to
be the 41st senator to block the bill -- this in Ted Kennedy's
Massachusetts. He must be pretty confident that the bill has become
politically radioactive, and he's right.

It has already brought down Senator Byron Dorgan of North Dakota, a
fighter for health care and other reforms far more progressive than
President Obama's. Dorgan championed Americans' right to re-import
cheaper prescription drugs from Canada, a popular provision that the
White House blocked. Dorgan, who is one of the Senate's great
populists, began the year more than twenty points ahead in the polls of
his most likely challenger, North Dakota Governor John Hoeven. By the
time he decided to call it a day, Dorgan was running more than twenty
points behind. The difference was the health bill, which North Dakotans
oppose by nearly two to one. The fact that Dorgan's own views were much
better than the Administration's cut little ice. He was fatally
associated with an unpopular bill.

So, how did Democrats get saddled with this bill? Begin with Rahm
Emanuel. The White House chief of staff, who was once Bill Clinton's
political director, drew three lessons from the defeat of Clinton-care.
All three were wrong. First, get it done early (Clinton's task force
had dithered.) Second, leave the details to Congress (Clinton had
presented Congress with a fully-baked cake.) Third, don't get on the
wrong side of the insurance and drug industries (The insurers'
fictitious couple, Harry and Louise, had cleaned Clinton's clock.)

But as I wrote in Obama's Challenge, in August 2008, it
would be a huge mistake to try to get health care done right out of the
box. Obama first needed to get his sea-legs, and focus like a laser on
economic recovery. If he got the economy back on track, he would then
have earned the chops to undertake more difficult structural reforms
like health care.

Deferring to the House and Senate was fine up to a point, but this
was an issue where the president needed to lead as only presidents can
-- in order to frame the debate and define the stakes.

Cutting a deal with the insurers and drug companies, who are not
exactly candidates to win popularity contests, associated Obama with
profoundly resented interest groups. This was exactly the wrong
framing. This battle should have been the president and the people
versus the interests. Instead more and more voters concluded that it
was the president and the interests versus the people.

As policy, the interest-group strategy made it impossible to put on
the table more fundamental and popular reforms, such as using Federal
bargaining power to negotiate cheaper drug prices, or having a true
public option like Medicare-for-all. Instead, a bill that served the
drug and insurance industries was almost guaranteed to have unpopular
core elements.

The politics got horribly muddled. By embracing a deal that required
the government to come up with a trillion dollars of subsidy for the
insurance industry, Obama was forced to pursue policies that were
justifiably unpopular -- such as taxing premiums of people with decent
insurance; or compelling people to buy policies that they often
couldn't afford, or diverting money from Medicare. He managed to scare
silly the single most satisfied clientele of our one island of
efficient single-payer health insurance -- senior citizens -- and to
alienate one of his most loyal constituencies, trade unionists.

The bill helped about two-thirds of America's uninsured, but did
almost nothing for the 85 percent of Americans with insurance that is
becoming more costly and unreliable by the day -- except frighten them
into believing that what little they have is at increased risk of being
taken away.

All of this made things easier for the right, and left people to
take seriously even preposterous allegations such as the nonsense about
death panels. It got so ass-backwards that the other day Ben Nelson,
who successfully held out for anti-abortion language and a sweetheart
deal for Nebraska's Medicaid as the price of his vote, found himself
facing a wholesale voter backlash.

Nelson began running TV spots assuring Nebraska voters that the Obama health plan is "not run by the government."
That's one hell of a slogan for a party that relies on democratically
elected government to offset the insecurity, inequality and insanity
generated by private commercial forces. If not-run-by-government is the
Democrats' credo, why bother?

So we went from a politics in which government is necessary to
provide secure health insurance -- because the private insurance
industry skims off outrageous middlemen fees and discriminates against
sick people -- to a politics in which Democrats, as a matter of
survival, feel they have to apologize for government. Thank you, Rahm
Emanuel.

The budget-obsessives around Obama also insisted that most of the
bill not take effect until 2013, so that all of the scary stuff gets
three years to fester before most people see any benefit. Call it
political malpractice.

Finally, the health insurance battle sucked out all the oxygen. When
Obama made time to work the phones personally, it wasn't to enact
serious financial reform (this was left to the tender mercies of Tim
Geithner) or to fight for a real jobs program (deficit hawks Peter
Orszag and Larry Summers got to blunt that one). No -- Obama got on the
phone and met with legislators to round up the last vote or two for a
sketchy health reform that crowded out far more urgent issues.

As a resident of Massachusetts, in the last two days I've gotten
robo calls from Barack Obama, Joe Biden, Bill Clinton, Martha Coakley,
and Angela Menino, the wife of Boston's mayor -- everyone but the
sainted Ted Kennedy. In Obama's call, he advised me that he needed
Martha Coakley in the Senate, "because I'm fighting to curb the abuses
of a health insurance industry that routinely denies care." Let's see,
would that be the same insurance industry that Rahm was cutting inside
deals with all spring and summer? The same insurance industry that
spent tens of millions on TV spots backing Obama's bill as sensible
reform?

If voters are wondering which side this guy is on, he has given them good reason.

Looking forward, one can imagine several possibilities. Suppose
Coakley loses. Obama and the House leadership may then decide that
their one shot to salvage health reform after all this effort is for
the House to just pass the Senate-approved bill and send it to the
president's desk. They can fix its deficiencies later. This is an easy
parliamentary move. But the bill passed the House by only five votes;
many House members are dead set against some of the more objectionable
provisions of the Senate bill; a Coakley loss would make the bill that
much more politically toxic; there will be Republican catcalls that
Congress is using dubious means to pass a bill that has just been
politically repudiated; and the House votes just may not be there this
time.

Alternatively, let's say Coakley narrowly wins, the Democrats have a
near death experience, and the House and Senate stop squabbling and
pass the damned bill.

Either way, the Massachusetts surprise should be a wake-up call of
the most fundamental kind. Obama needs to stop playing inside games
with bankers and insurance lobbyists, and start being a fighter for
regular Americans. Otherwise, he can kiss it all goodbye.