Category Domestic Policy

Could Obamacare’s Failure Lead to Single Payer?

Danny Vinik Leave a comment

Ezra Klein and Ross Douthat have both written pieces recently arguing that the failure of the Affordable Care Act could lead towards a more liberal form of universal health care. The idea goes that if HealthCare.gov doesn’t become feasible, people will begin looking at which parts of the law were successful and which weren’t. The Medicaid expansion has thus far been a success in the states that have expanded. Government-run online marketplaces? Not so much. That’s a problem for conservatives, because many of their leading health care plans would require those online marketplaces. If those are deemed a failure, what’s their next proposal? Meanwhile, the liberal fantasy – Medicare for all – is much closer to the Medicaid expansion. The appetite for universal healthcare would still exist and now single payer would be the clear solution. Klein and Douthat both see this as a distinct possibility. Is it?

There are a couple of reasons to be skeptical.

First, if Obamacare fails, it’s going to hurt Democrats badly. Time and time again House and Senate Democrats have thwarted government opposition to Obamacare. They’ve refused to defund or delay the law or the individual mandate. Republicans, of course, have done the opposite. If the exchanges don’t work, Republicans will earn major points with voters. This has been the leading battle for years now. Democratic candidates will have a lot of trouble fighting off attacks that they stuck with a partisan, unpopular law only to watch it collapse under its own weight once enrollment began. Like Klein, I don’t believe many things affect elections. This would.

Second, Klein and Douthat’s argument assume that Americans will be able to distill HealthCare.gov’s failure from the other parts of the law. Will they understand that the Medicaid expansion succeeded while the complex public-private partnership that created the exchanges failed? It’s not clear. Klein is one of the leading proponents that Americans don’t follow politics closely. They don’t know what’s going on in D.C. Obamacare’s failure would be a big story. But would it be big enough for people understand the causes of it? The CBO projects that only seven million people will sign-up on the exchanges next year. They will all undoubtedly see the website’s issues, but the vast majority of people will never try to login to HeathCare.gov. They may hear that Obamacare failed without knowing the causes.

Third, many Americans may see Obamacare’s failure as symbolic of government’s inability to regulate the health care market. Whatever the causes, Americans may conclude that getting government involved in the health insurance industry is a bad idea. They won’t spend much time thinking about why Obamacare failed and simply decide that enough government disruptions in the health care market.

Klein and Douthat’s argument is not impossible. Maybe Americans will be clamoring for single payer if the exchanges fail. But there are also a number of reasons why that won’t be the case. Klein and Douthat give Americans a lot of credit for understanding the root causes of Obamacare’s failure, evaluating the competing conservative and liberal health care ideas and using the Obamacare analysis to guide their decision-making. I believe most Americans will think more simplistically and see Obama’s failed law as nothing more than a failed program epitomizing the government’s inability to regulate the health care market. Let’s hope that the administration can get the exchanges working and we never have to find out.

Here’s Where the Tea Party’s Power Comes From

Danny Vinik 2 Comments

Sam Stein and Ryan Grimm have a great article at the Huffington Post that gives the behind-the-scenes of the shutdown and debt ceiling fights. It begins with how President Obama and Harry Reid mended their relationship and decided over the summer that they were going to play hardball. Obamacare wouldn’t be touched and they wouldn’t negotiate over a government shutdown or the debt ceiling. The piece then walks through how the negotiations unfolded and Reid and McConnell eventually came to their deal.

But there’s one minor part that exemplifies why the Tea Party has so much power in the Republican Party. Here it is:

The speaker was juggling the demands of multiple factions. His moderate members had been complaining in private that the standoff was crushing them. But they hadn’t bolted, much to the delight of the conservative wing. “At one point,” a senior House GOP aide said of one caucus meeting, “Michele Bachmann stood up and thanked the moderates for standing with us.”

Remember when the moderates were fed up with the Tea Party and ready to revolt? That fizzled very quickly. We’re not talking about the mainstream conservatives here. Instead, it’s Peter King and the 20-30 other House GOPers who could have joined up with House Democrats at any time and brought an end to the shutdown. These are the members that the Tea Party is most worried about, because they can reduce the Tea Party’s power by siding with House Dems.

But this never happened. The moderates refused to betray the Tea Party, despite repeated threats. Why? It’s not entirely clear. Maybe they fear a primary challenge. Maybe they have a deep belief in caucus unity. Whatever the reason, Boehner was rightly more afraid that the Tea Party would break off and declare war on the Republican Party than the moderates would. If the moderates were willing to commit electoral suicide by starting an intra-party civil war, they would have the power to dictate the House strategy to Boehner. Time and time again we’ve seen that’s not the case. The moderates won’t wage war against the establishment. The Tea Party, on the other hand, is more than willing to do so. If they break off from the Republican Party, it will have grave electoral effects on both. Neither would survive. But the Tea Party either isn’t considering the consequences or don’t care about them. The same dynamic exists with moderate Republicans, but they care about the consequences. The Tea Party’s blind recklessness is what gives it its true power.

Raising the Debt Ceiling Is Paying Our Bills

Danny Vinik 1 Comment

Rep. Andy Barr (R-KY) is confused:

President Barack Obama says we need to pay our bills. I agree. But raising our debt limit without reform is not paying our bills. It is asking China, bond holders and other creditors to pay our bills.

The president says we need to avert a default. I agree. But raising our debt limit without any reform is not averting default. It is merely postponing default. Instead of simply opening up a new credit card in our childrens’ name because we’ve maxed out all of our own, we must take responsibility and stop business as usual in Washington. We owe it to our children and grandchildren to end the spending spree and start making the tough choices that will finally force the government to live within its means.

Here’s how U.S. fiscal policy works: The federal government takes in a certain amount of money and spends a certain amount of money each year. Congress passed laws that dictate what people have to pay to the government and how much the government will spend. In the U.S., the federal government almost always spends more than it takes in. It makes up the difference by taking on debt, but the debt ceiling prevents us from taking on more debt. It doesn’t change how much we’re spending or taking in. When Congress refuses to pay the debt ceiling, it stops us from making up that gap. The amount we owe doesn’t change. We just aren’t paying our bills.

The part about China is particularly bad. Rep. Barr really thinks that raising the debt limit is us asking China to pay our bills? China’s decision to purchase Treasuries has nothing to do with helping the U.S. out. China makes its own fiscal policy decisions that it thinks is best for itself, not the United States.

Finally, raising the debt ceiling without reforms does nothing to our odds of a future default. In fact, the only reason there is a chance the U.S. breaches the debt limit in the future (and I don’t think there is one) is the Tea Party’s willingness to do so. In a sane world, Congress would abolish the debt ceiling and there would be zero chance of a U.S. default, but sadly we don’t live in a sane world. Raising the debt ceiling now only increases the odds of a future default in that it makes Tea Party Republicans even more anxious to commit economic suicide.