President Obama's healthcare plan, the centerpiece of his domestic agenda, has run into serious trouble. Only a month ago, the president cajoled labor unionists and business lobbyists into joining hands at the White House, and some aides suggested that success was right around the corner. But now that improbable consensus is eroding, and the path toward a healthcare bill looks much tougher.
The immediate problem is money: How much will it cost to launch a new healthcare system, and who will pay for it?
Last week, the nonpartisan Congressional Budget Office stunned Democrats on Capitol Hill with its initial estimates of the cost of healthcare reform. The CBO told Senate Finance Committee Chairman Max Baucus (D-Mont.) that the bill he is working on would cost roughly $1.6 trillion over 10 years -- far more than the $1 trillion Baucus was aiming for.
As a result, Baucus abruptly announced that he was going back to the drawing board and would postpone unveiling his bill until July. Another top Democrat, Sen. Kent Conrad (D-N.D.), suggested that the new cost estimate would require cutting money aimed at covering the uninsured.
White House officials insisted manfully that the CBO numbers weren't a setback. But the stiffer-than-expected tab sharpened divisions among Democrats about what a healthcare plan should include and how to pay for it. And it allowed Senate Republican leader Mitch McConnell (R-Ky.), who has declared war on Obama's plan, to crow that the Democrats' initiative was in "a chaotic state."
The president himself was mostly silent. He has deliberately stayed out of the messy business of negotiating legislative proposals. At this point, he prefers to remain above it, laying out a broad list of goals for Congress to turn into a plan.
But the president needs to get more involved, both to save his Democrats from self-induced chaos and to rescue his signature initiative from becoming an unappealing combination of higher taxes and meager help for the uninsured -- the Amazing Shrinking Healthcare Plan.
By hanging back, Obama sought to avoid the trap that Bill and Hillary Clinton fell into in 1993: drawing up a White House plan that gave Congress no sense of ownership. But Obama runs the risk of reaping a different problem: a stack of competing congressional proposals, none of them quite coherent.
The underlying problem, of course, is that everyone has conflicting goals. Obama's priorities are lowering the nation's healthcare costs and keeping a new plan "deficit neutral." He wants to base the new program on the existing private insurance system so he can promise consumers that they won't be forced to give up plans they like. He wants to avoid raising taxes on the middle class or taxing employer-provided insurance benefits, two promises he made in his presidential campaign. Only then, almost as an afterthought, comes the traditional Democratic goal of extending coverage to the estimated 47 million uninsured.
Obama's non-commitment to covering all the uninsured was the most important domestic policy difference that separated him from his rivals for the Democratic nomination last year. So it's no wonder that, in the crunch, the uninsured may come up short.
But that trade-off makes liberals unhappy. To them, covering the uninsured has been the central point of the exercise, and they don't mind raising taxes -- or moving away from reliance on private insurance companies -- to get that done. Republicans are also divided. Their conservative leaders say the problem can be solved by more reliance on the private insurance market, but a few doughty moderates are trying to devise a limited, private-sector version of Obama's plan.
Is a bipartisan bill possible? So far, neither Baucus nor anyone else has succeeded in bridging the issues that divide moderate Democrats from moderate Republicans, much less the parties' liberal and conservative wings. Most Democrats still want consumers to have the option of a government-run "public plan" as an alternative to private insurance. They want stiff taxes on employers that don't provide coverage. And many want a tax increase on high-income families to help cover the cost. Those ideas are all anathema to Republicans -- and to the U.S. Chamber of Commerce, which has launched a campaign to stop them.
For conservative Republican leaders, the decision has been easy: They don't have the votes to pass a plan of their own, but for the first time they see a real chance of stopping the Obama juggernaut. McConnell has set out to undo the president's plans the same way his predecessors demolished Clinton's in 1993: with a relentless barrage of charges that it will impose a federal bureaucracy between patients and their doctors and lead to healthcare "rationing." Obama and the Democrats say they're doing no such thing, of course.