“This is our moment,” President Obama proclaimed this weekend, shortly after the House passed H.R. 3962, a sprawling, 1,990-page version of the health care reform that has become the president’s chief policy goal.
The moment, though, proved fleeting. The House bill, which imposes punishing new taxes even as it dramatically expands the federal government’s reach into health care, is now set to limp into the Senate with little realistic chance of passage.
The most salient flaw of the House bill is that it radically expands government intrusion into health care. For instance, it would create a new standard of benefits that would be applied to almost all health plans in the country. To determine those standards, the bill would also create a new bureaucracy within the Department of Health and Human Services to impose regulations on the private insurers.
Big government would also enter the insurance business through the creation of a federal health insurance program known as the “public option.” A sticking point for left-wing activists, the government program nevertheless remains politically radioactive. Though touted as a means to increase competition in the U.S. insurance market, the public option could actually stifle competition by undermining the private insurance market to the benefit of the federal insurance program. That some on the Left have openly advocated the public option as a preliminary step toward a more expansive, Canadian-style “universal health care” system has only heightened fears that the likeliest beneficiary of health care “reform” will be the federal government.
The public option is thus a political non-starter. With its inclusion in the House bill – a sop, perhaps, to left-wing activist groups like MoveOn.org, which has pledged to oppose any Democrat who fails to support the public option – the public option all but dooms the House version of the legislation in the Senate. Republican Senator Lindsey Graham has declared the House bill “dead on arrival in the Senate.” Worse still for Democratic backers of the public option, Senator Joe Lieberman, the tie-breaking vote that Democrats need to beat a Republican filibuster, has said that he would not allow a bill with a government plan to come up for a final vote in the Senate. Democrats may still be in the majority, but they don’t seem to have the clout to push through the government plan.
Just as unpalatable politically are the tax increases in the House bill. According to Americans for Tax Reform, H.R. 3962 includes 13 tax hikes. Among them are “mandates” on businesses that fail to provide a fixed amount of their employees’ health care, as well as penalties, as much as 2.5 percent of adjusted gross income in some cases, on individuals who fail to obtain required coverage. Seizing on these features of the House bill, Republicans like Wisconsin’s Rep. Paul Ryan have argued that the mandates amount to a tax on small businesses and workers at a time when unemployment is on the rise and economic recovery elusive. More damningly, the conservative Heritage Foundation has estimated that the House bill would impose $700 billion in new taxes over the next decade.
Taxes are just one measure of the exorbitant price tag of the House bill. Early estimates of the bill’s cost exceed $1.2 trillion over the next 10 years – this at a time when the country is running record deficits. The Senate version of the bill has been estimated at a more modest but still daunting $900 billion. But in the aftermath of last week gubernatorial election defeats in New Jersey and Virginia – defeats fueled in part by voter outrage over taxes and spending by state governments – Democrats have become increasingly cost conscious. Moderate Blue Dog Democrats in the House signaled repeatedly that they could not support the kind of bill favored by the Democratic leadership, and 39 Democrats ultimately ended up voting against this weekend’s legislation. (The only Republican to support the House bill, Rep. Anh “Joseph” Cao of Louisiana, hails from a largely Democratic leaning district and is in serious danger of losing his seat.) The bill will have an even higher hurdle to clear in the Senate.
The prospect of difficult passage ahead did not detain House Democrats, particularly Nancy Pelosi, from claiming credit for the bill’s supposedly historic weekend victory. Yet, flattering news headlines apart, it’s not clear what has been achieved. At little personal cost, House Democrats have saddled their Senate counterparts with a difficult political calculation: Either they must incur the Left’s wrath by scaling back the more radical elements of the House bill, or else they must risk a voter backlash at a bill that would increase government’s role in health care.
As for their actual accomplishments, perhaps the most that can be said for the House Democratic leadership is that it has muscled through an ambitious bill that will be most remembered for how quickly it became obsolete. The House bill was indeed the Democrats’ moment. But a moment, it appears, is all it was.