Sunday, November 22, 2009

health care 60, republicans 2010?

Celebrations were muted for the vote to allow the health care debate to proceed, and rightly so. It isn't a terribly big accomplishment for a party with 60 seats to control the legislative agenda, even on an issue as controversial as health care reform. Nor does it guarantee that a bill will pass, or (if it does) what it will contain: InTrade, the online predictions market, is citing odds of about 25:1 against a public option being approved by December 31, although this might change if a later date were chosen.

The InTrade odds suggest a key point about the health care debate: the question is not so much if a bill will pass as what the bill that eventually does pass will consist of. The question of whether the Democrats can "get to 50" on the bill is in this sense as meaningless as whether they can "get to 60" on cloture: legislation being a changing rather than a fixed quantity (especially in the Senate), it is nearly always possible to draft some bill that will get the required number of votes. The issue, properly conceived, is whether the legislation so drafted will be worth having, and whether it will help or hurt the Democrats--not to mention the country--in the long run.

A big sleeper, I think, is the issue of revenue estimates. The budget police have, amazingly, scored health care reform as a revenue gainer, but only because it (i) is intentionally set up to move many of the costs into the "out years," and (ii) assumes substantial reductions in existing health care spending, the precise terms of which have yet to be agreed on. Both of these tricks are well known to tax experts, as is the fact that--as legislation progresses--it tends to add more spending rather than more revenues, which must then be offset by further trickery. The bottom line with health care remains this: it is simply not credible that tens of millions of people can receive quality health care with no meaningful cost to anyone else, nor that it makes sense to enact a huge tax and regulatory framework at a time when the nations's overwhelming concern remains unemployment and slow or nonexistent economic growth. Sooner or later these issues will catch up with the Democrats: for many of them, probably sooner.


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