Obama Power Source — Centrism and Pragmatism

By Marc Seltzer; originally published on July 21, 2009, at care2.com

In a fairly strong critique of the direction of Democratic party leadership, New York Times columnist David Brooks tells us Democrats in Congress and President Obama are going too far in a liberal direction (Liberal Suicide March, July 21).  Comparing their “out of touch-ness” with that of the Republican party’s loose deficit spending in the Bush years, Brooks asserts that the current President risks losing moderate support for his agenda, if liberals hold sway.

Mr. Brooks cites the $878 billion stimulus, the 2009 federal budget and now proposed health care legislation as three examples of where the President has abandoned the moderate center, inhabited by a majority of Americans.

I have to disagree on the stimulus count.  Such stimulus was offered up by moderate economists as one reasonable approach to protecting the economy from a Depression.  Other options, such as Republicans’ suggested payroll tax cut or Professor Roubini’s capital gains tax cut, were likewise logical, but no more certain to work or free of political problems (each could also have raised the short-term deficit and might been saved rather than spent).

The U.S. economy experienced an unprecedented financial freeze in the midst of a cyclical recession.  If we escape this disaster with only a severe recession and some unfair sharing of the burdensome bailout, contributors in the economic rescue will be the heros of the early 21st century.  The fact that people cannot fathom what could have happened or gloss over it for political gain does not change financial reality.

In this light, Brook’s impatience with the speed of stimulus spending is unwarranted.  Only 10% so far?  The spending was intended to be rolled out over two years and there is no question that this is happening.  Wasn’t the clamor in April that it was going out too quickly, without enough record-keeping?

Of course, there are few things as difficult as the loss of a job and financial safety, but that doesn’t mean that the unemployment rate can be kept below 10% or even 15% by force of will.  There is no magic wand — only reasonable policies that support the private economy and time for supply and demand to correct itself.  Republicans calling the stimulus a failure, at this point, or blaming Obama for the rising unemployment rate, play politics at the expense of their integrity.

The federal budget was a closer call.  It contained many earmarks and spending habits that did not fit with the President’s campaign rhetoric.  On the other hand, the bill was prepared during the previous year and Obama only took office weeks before Congress sent it to him for approval.  It might have been a great symbol of “change,” if the President had vetoed the bill and demanded that Congress change its ways from the start of his administration.  On the other hand, in the midst of financial devastation, a budget fight and potential government shutdowns would have caused further economic harm.  This would have been the more irresponsible, if emotionally satisfying, route.

But the health care debate is President Obama’s chance to demonstrate his leadership and vision.  Here, I agree with Mr. Brooks that pragmatic centrist leadership is necessary.  If the President doesn’t tackle the very real problems with health care costs, any solution will be unsustainable.

Mr. Brooks refers to polls showing that Americans are losing confidence in Democratic proposals for health care reform. Americans are savvy enough to know that additional deficit spending is irresponsible.  Thus, while many Americans support the President’s vision of providing insurance to nearly all and forcing change upon a powerful insurance industry, the public still needs to see a coherent financial plan.  Tax increases on upper-income Americans may be part of that plan, but large tax hikes would represent a change in policy beyond what President Obama spoke of in his campaign, and too fast or two great an increase could damage the economy.

The other option is to cut costs.  After efficiency, cutting costs equals cutting back on covered medical care.  Rationing already goes on, across the system as public and private insurers choose what procedures to cover.  After that, only those with enough money are able to purchase additional care. Those without insurance or funds have only what is offered in emergency rooms and subsidized or charitable clinics.

Somehow, many Americans have come to view raising taxes and cutting costs as bad options.  That’s why we find ourselves (Congress) legislating programs and services that we can’t pay for.

Brooks credits Obama for having ideas that go in the right direction, citing his proposed cost-cutting, limits on tax hikes, and an independent commission on Medicare spending.  But Brooks laments that Obama is not feared by the Congressional leadership, and he believes they have the power in the current battle, unless “Blue Dog” conservative Democrats can force a moderate compromise.

One such idea would be to lower the subsidy for employer-provided insurance.  The current system encourages overspending, exactly what we need to remove from the system.  Another would be to provide clearer limits on coverage for end of life treatment, which is very costly and often of debatable value.

I have hope that the President is up for a fight on health care.  He can speak to the nation like few others at this time, and his forceful leadership could shape a responsible compromise.  The President may be afraid that asking too much of Congress risks failing to achieve any reform.  But there is no reason for this to be a repeat of President Clinton’s experience.

President Obama should go to the mat for a bill that restrains costs, targets fiscal balance, aids the underserved, and corrects inefficiencies in the system.  If he fails to get the bill, he should start over after the recess, asking less.  Legislators will not want to go home empty handed a second time with a popular President telling the American people that they deserve more. The President has tremendous national goodwill and strong majorities in the Congress.  Americans will accept compromise, but not without fighting for what is right.  This is the time for the President to spend his political capital.

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