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Obama's smart play on healthcare

By first outlining how he would fund the healthcare plan he wants, President Obama gained political advantage.

March 01, 2009|Doyle McManus

Barack Obama makes no small plans.

Until last week, there was still skepticism in Washington that the president really meant to tackle all of his big domestic goals at the same time: healthcare reform, alternative energy, education projects, plus a tax hike on the well-off to pay for it all. Congress isn't used to bickering about that many thorny issues at once.

But Obama's budget proposal Thursday made it clear that he expects action on all of his priorities this year -- beginning with health insurance, which has been on the wish list of every Democratic president since Harry Truman.

Obama's innovation was outlining how he would pay for his health plan before he had fully formulated the plan itself. Earlier presidents were always a bit vague on the funding question. Obama proposed at the outset to increase taxes on high-income earners by cutting their deductions for such items as state taxes, mortgage interest and charitable deductions.

That was smart politics, and it gives his plan a much better shot at getting passed than President Clinton's had 16 years ago. A tax hike will be easier for members of Congress to support if it's going to a popular cause, and fiscal hawks will be happier about voting for health reform if they know it's being paid for.

When Clinton proposed universal medical insurance in 1993, his pitch focused on giving middle-class families more security and covering the uninsured (who numbered 34 million then and are at least 46 million now). When Obama's budget chief, Peter R. Orszag, outlined this year's proposal, he never even uttered the word "uninsured." The program was cast as a way to put the nation on a sounder long-term fiscal trajectory and also help working families enjoy higher take-home pay. Obama wants his proposal to be seen as a fiscally responsible, pro-business economic necessity, not a touchy-feely big-government scheme.

That's one of several lessons Obama and his advisors have taken from Clinton's debacle. Another is tactical. Hillary Rodham Clinton designed a detailed proposal behind closed doors and sent it to Congress as a finished package; as a result, even Democratic support for the plan was weak. Obama sent Congress a list of eight broad "principles" he wants it to follow, but says it's Congress' role to write the law.

Other lessons from the Clinton era show up in Obama's eight principles. One is to "guarantee choice" -- a promise that people will be able to keep their current doctors and employer-provided insurance. The Clintons didn't do that, and it left their plan open to attack. Two other principles are to "make health coverage affordable" and "protect families' financial health"; those keep the emphasis on controlling costs.

As for the liberals' cherished goal of universal healthcare, that shows up this way, with a dose of ambiguity: "The plan must put the United States on a clear path to cover all Americans." That's not the same as promising universal coverage -- but it's closer than Obama got during the presidential campaign, when his clearest domestic policy disagreement with Hillary Clinton was on this issue. (She insisted on universal coverage; he said it was an impractical goal.)

One reason for that shift is that Obama is relying on Sens. Edward M. Kennedy (D-Mass.) and Max Baucus (D-Mont.) to take the lead in writing a healthcare law. Both Kennedy and Baucus want universal coverage; both have been working on legislation for months as they waited for a Democrat to take office.

Will this debate be any more bipartisan than the argument over Obama's economic stimulus plan? Not in the House of Representatives. House Republican leader John A. Boehner of Ohio immediately denounced Obama's call for higher taxes. He also quickly reprised the Republican chorus that sank Hillary Clinton's health plan, saying Obama's plan would allow "government bureaucrats to tell doctors and patients ... what to do."

The Senate will be more complicated; Republicans there have said they want a chance to help write a plan with bipartisan support. Sen. Charles E. Grassley of Iowa, the senior Republican on the Senate Finance Committee, even praised Orszag for tying health reform to fiscal responsibility -- although he cautioned that he was wary of the spending Obama's plan would require.

And, of course, as the plan becomes more concrete, lobbyists for every participant in healthcare, from drug companies and doctors to consumers, will enter the fray.

So get ready to learn a lot more about risk pools, adverse selection and Medicare reimbursement rates. This will be the national-policy Olympics of 2009. Obama has seized the offensive. So far, he faces no organized resistance; that won't last.

But round one goes to Obama.

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doyle.mcmanus@latimes.com

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