The search for elusive common ground on health care reform

Will Democrats and Republicans be able to find common ground on healthcare reform the second time around

The White House presented their proposal for health care reform Monday with a good deal of virtual fanfare on their very impressive webpage devoted to the much-hyped “health care meeting.” (For the real live show and audience participation/crowd reaction, we’ll have to wait until Thursday.)

The proposal is supposed to be somewhat a compromise between the House and Senate versions of health reform. But it’s a very familiar kind of compromise in that instead of encouraging both sides to give up something that they want (but is costly), it trims the fiscally responsible pay-fors that make the most economic sense but that politicians (on both sides of the aisle actually) would rather not swallow. In the case of health reform, the number one smartest thing to include is the higher taxation of employer-provided health benefits. The Senate proposal included this feature via an indirect excise tax levied on insurance providers, which was already somewhat of a “second best” solution from an economic perspective because it didn’t allow the tailoring to households’ ability to pay that a tax levied directly through the personal income tax would. The Senate’s indirect tax, in an attempt to look like it didn’t burden anyone who wasn’t truly rich, had already been diluted by exempting all but the most expensive insurance policies, and it wouldn’t take effect until 2013. But the President’s proposal reduces the tax further by delaying the tax another five years, to 2018.

If you look at the section on the White House’s health meeting webpage that highlights the “Republican Ideas” the Administration supports/includes and compare it with the subsection on the aspects of the President’s proposal for “Ensuring Fiscal Sustainability” (implying the proposals that actually lower the deficit), you’ll find no overlap. That’s because the only thing both sides agree on is in cutting things that sound like they’re just “waste, fraud, and abuse” – which doesn’t get us far enough to count as “ensuring” “fiscal sustainability.”

Given what the White House reveals/admits on their health meeting webpage, we shouldn’t expect to be dazzled by all the “bipartisan fiscal responsibility” we’ll see on Thursday.

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