Health Care

Obama's Health Care Bill Threatened By Powerful Lobbies

| by Robert Reich

In an interesting piece in Sunday's New York Times Magazine,
Matt Bai suggests that the White House has learned the main lesson of
Bill Clinton's failed attempt at universal health care, which is not to
deliver a finished product to Congress but instead give Congress a set
of goals and let it decide how to reach them.

The question to my
mind is whether the Obama White House has over-learned that lesson.
Without strong White House leadership, individual members of Congress
are particularly susceptible to the threats and promises of powerful
lobbies. A statement of White House goals that leaves the details to
Congress will likely result in legislation that superficially meets
those goals but whose details undermine them. That's the biggest danger
now with the inchoate healthcare legislation.

Fortunately, the
White House now intends to get more involved in the emerging healthcare
bill. Following are the three biggest issues where powerful lobbies on
the other side are working the details to their advantage. The question
is how hard the Obama White House will push back.

1. A real public option or a public option in name only?
Big Pharma and Big Insurance are dead against, and are pressuring
lawmakers. Republicans are also opposed. The President said he wants a
public option. But the real question is whether he'll be willing to
allow the public option to be watered down into essentially nothing
(broken up into regional or state-run plans, or be required to charge
the same as private insurance, or be triggered only if private insurers
and pharma fail to bring down costs and extend coverage). If the
President wants Republicans on board even though he doesn't need them
(the bill requires only 51 Senate votes), he will have to buy a watered
down version.

2. A requirement that all businesses "pay or play," or a broad exemption for smaller businesses? Most
emerging versions of the bill require employers to supply health
insurance for workers or contribute to the cost of a plan, but exempt
small employers. The issue to watch is how "small employers" are
defined -- and how many, as a result, won't have to either pay or play.
Small business lobbies are all over the Hill arguing for a broad
exemption. Republicans agree. The White House will have to push back
very hard to include enough businesses to make "pay or play" work.

3. Additional tax revenues from taxing employer-provided benefits on higher-incomes or from limiting deductions on higher incomes? Congressional
Dems originally nixed the second and haven't supported the first.
Organized labor is dead-set against taxing any employer-provided health
benefits because it doesn't want to set a precedent that might someday
erode all such benefits. Accordingly, the White House is signaling it
won't take this route. Yet there's powerful resistance on limiting
deductions for higher incomes, from many of the beneficiaries of these
deductions (such as big charities and state and local governments).
Unless the White House demands that those deductions be limited for all
taxpayers earning over $250,000 a year, adjusted for inflation in
future years, it won't have enough revenue to support the overall bill.

So
the question right now is how hard the President will push to get a
real public option, a broad mandate, and enough revenues to support
universal health care. The Republicans are showing remarkable unity, as
they did on the stimulus package and the budget. Yet the President
seems intent on a bipartisan bill. Meanwhile, Pharma, Insurance,
charities, state and local governments, and labor are all putting
maximum pressure on individual Democrats. Yet the President seems wary
of twisting arms. What's the result? Keep your eyes on the details.