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The Good, the Bad and the Ugly of Health Reform

A Commentary by Froma Harrop

Thursday, July 23, 2009

It's high noon on health care reform. Time to identify the Good, the Bad and the Ugly.

Let's start with the Bad: Obama's passive leadership. The president didn't want to come down from the mount with stone tablets detailing what reform would look like. That's what Hillary Clinton did 16 years ago and is said to have sunk her plan. The alpha-dog approach angered both the economic interests and lawmakers.

But Obama still could have offered more detailed guidelines that chose which interests to disappoint and that the public could understand. Legislators would have then had something to work with.

The president's hesitancy only empowered the lobbyists. Not knowing what Obama would fight for, lawmakers turned more pliant toward the moneyed interests. So when Obama finally came down from the mountain for orderly legislation, he instead found this wild dance around the golden calf.

"We're going to have to wade in a little deeper into the nitty-gritty to keep the process going," White House chief of staff Rahm Emanuel said Tuesday. About time.

The Ugly: The Ugly is not necessarily good or bad. It just doesn't look nice. The Ugly must be either repackaged or removed.

As policy, taxing fancy health plans makes sense. It raises money for reform and discourages wasteful health care spending. But the idea of taxing gold-plated worker benefits comes off as ugly to the non-wonk public. And it doesn't sit well with the unions that won generous coverage. Obama could go to the mat on this, but he would have to do much explaining.

Also Ugly is the proposed surtax on the rich. Again, having the wealthy pay more is not a terrible idea, but they shouldn't be paying for everything. Obama's campaign line about doing away with the Bush tax cuts for the rich -- while shielding families earning less than $250,000 from any tax increases ever -- was always irritating. It is free-lunch politics.

The Bush income-tax cuts were sharply skewed toward the rich, so letting them all expire would still raise more revenues from those most able to pay. But placing a surtax on top of that is ugly. The word "surtax" is ugly. Put in place a simple, progressive tax system, and leave it at that.

The Good. The Obama administration and Congress plan to pay for health care reform. That might sound like an obvious duty of lawmaking, but such responsibilities were cast off during the past eight years.

Republicans passed the Medicare drug benefit in 2003 seemingly without a single thought of paying for it. It was all done with borrowed money. Because no one had to raise taxes, few cared how much the benefit would cost. Thus, Congress could give away the store to insurers and drugmakers while handing a new goody to seniors.

Now we have lawmakers brawling over reform's price tag, payments to providers and whose income will be tapped. It's not pretty, but it is good. The rumble means that whatever health reform emerges should be fiscally sound.

Some liberals are foolishly bashing the moderate Blue Dog Democrats for demanding that more of reform's cost be covered by better-controlled spending. The American health care system is notoriously wasteful. And the Congressional Budget Office report that none of the health care bills would notably slow spending underscores what they're lacking: cost containment.

If no one cared about paying for this thing, everyone would be holding hands and singing these bills' praises -- and future taxpayers would be left with another outrageous bag of debt. Good Dogs.

The fights may be ugly -- and over some bad ideas -- but they are happening for a good, good reason.

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