November may be the month that the national Democrats lose their congressional majorities, and the month that Barack Obama increased his chances of being a one term president.
Obama supporters - and I was one - I voted for him - can rightfully point to a number of small but significant achievements of the young administration. As but one example is the passing of the SCHIP program, which provides health insurance to children. But when the rubber has hit the road, Obama has too often continued Bush administration policies and caved to interests that Democrats thought they were dispensing with in the November 2008 elections. I realize that the administration is only 10 months old, and there are some retrograde Democrats in congress. Neverthless, we didn't send them to Washington to give the appearance of change - we sent them for real change. Sure, Obama is much better than Bush or McCain. But who wouldn't be?
What Obama and the Democrats don't seem to understand is , as Lester Thurow would put it, many of the political issues under consideration present a zero-sum game. For citizens to win someone has to lose. The prime example is the attempted compromise with health insurers in the debate over health care reform, where for consumers to win insurance companies must lose.
In other areas Obama has rewarded failure in a way that compromises him politically while providing little actual benefit. Examples include rescuing banks and insurance companies in a way that privatized profits but socialized losses, to defending Bush administration rendition and secrecy in the courts. And the Democrats have for some reason dropped the single most important issue to organized labor, one of its most steadfast constituencies, card check for union elections. Now Obama is apparently going to escalate the war in Afghanistan, even as leading voices are providing him cover if he decided to reverse course there.
Note that these compromises have not gained them support from those they compromised with nor from his left and young base, which are both growing increasingly disenchanted with Democratic leadership.
Health care is the perfect example of the folly of attempted compromise. Here are the incontrovertible facts: We spend double on health care in the U.S. over any other country in the world, yet get worse results. Tens of millions have no health insurance, and treating them helps drive up costs for those who do pay. So-called "insurance" companies specialize in denying coverage to their policy holders who actually use the insurance. Nearly every other Western democracy has either single-payer or socialized medicine. The problem in this country is so obviously the dominance of the insurance companies that the only way you couldn't see it was if your job required you not to see it.
It's the same with Medicare Part D, possibly one of the worst government programs ever enacted. Part D was so stupid that insurance companies had to be bribed with $8 billion in government money to even provide the policies. The government was also forbidden from using its huge buying power to negotiate lower prices with drug companies. The laws were stacked against the consumer. Insurers are free to change their drug formulary at will any time, but consumers can only change plans once a year, in a set "window."
But President Obama has refused to directly take on the interests that must lose in this debate for us to win. He and Rahm Emanuel reportedly negotiated a secret deal with the drug companies before debate even began that included $80 billion in profit concessions in exchange for not addressing the inequities in the drug marketplace. Similarly he has tried to negotiate with the health insurance industry, promising them more profits if they agree to help cover nearly everyone.
Make no mistake: The health insurance reform passed by the Democrats in the House will lead to Democratic congressional losses. Here's why: The bill will not, cannot work. Take the individual mandate. The bill specifies that individuals who do not purchase insurance from the private companies will pay a tax penalty in lieu of their purchase. Buried in the bill are the specifics of those penalties. It specifies that individuals will pay a 2.5 percent surtax on their adjusted gross income, up to some specified average cost of insuring that individual through the health insurance exchange. Let me say that again, the maximum penalty will be the average cost of the insurance. The minimum will be 2.5 percent of adjusted gross income.
Take a 50 year old who has $50,000 in adjusted gross income but doesn't buy insurance. That person would pay a penalty of $1,250. Ask yourself what insurance company is going to provide full medical insurance to a 50 year old for $1,250? They wouldn't. So that 50 year old goes without insurance until he gets sick, after which he merely buys insurance, since the companies cannot discriminate against pre-existing conditions. After he gets better he dumps the insurance.
Multiply that perverse incentive to NOT buy insurance times millions of people and you understand that the insurance companies will hike premiums beyond all recognition. I understand that not all citizens will be getting their insurance in this way, but at some point fewer and fewer people will buy insurance, driving rates higher and higher. The bill pays lip service to some government agency approving rate increases, but how could they be denied when the insured will over time primarily be only sick people?
You get the picture. Compare what was passed to the simplicity of just adding Medicare Part E that would allow everyone to buy into, or a single payer system. Legislation for those two plans would be under 200 pages, I bet, and would be easy to understand. But that would take away the insurance companies' control of the market, and with it much of their profits, and that is something the Obama administration and the Democrats in congress are loathe to do. So, after all this fighting about health care reform, the final product may very well end up being a giant fail. And if and when it does, the Democrats will have no one to blame but themselves.